Farmers & Merchants Bancorp Files Q2 2024 10-Q

TL;DR

**FMB files Q2 10-Q. Check financials.**

AI Summary

Farmers & Merchants Bancorp filed its 10-Q for the period ending June 30, 2024. The filing covers financial performance and operational details for the second quarter of 2024. Key financial data and disclosures relevant to investors and stakeholders are presented.

Why It Matters

This filing provides crucial financial insights into Farmers & Merchants Bancorp's performance, helping investors assess its stability and growth prospects.

Risk Assessment

Risk Level: low — The filing is a standard quarterly report with no immediate red flags indicating high risk.

Key Players & Entities

• FARMERS & MERCHANTS BANCORP (company) — Filer of the 10-Q
• 20240630 (date) — End of reporting period
• 20240809 (date) — Filing date

FAQ

Key Financial Figures

• $0.01 — Section 12(g) of the Act: Common Stock, $0.01 Par Value Per Share Indicate by check

Filing Documents

• ef20029679_10q.htm (10-Q) — 5875KB
• ef20029679_ex31-a.htm (EX-31.(A)) — 9KB
• ef20029679_ex31-b.htm (EX-31.(B)) — 9KB
• ef20029679_ex32.htm (EX-32) — 7KB
• 0001140361-24-036649.txt ( ) — 22405KB
• fmcb-20240630.xsd (EX-101.SCH) — 44KB
• fmcb-20240630_cal.xml (EX-101.CAL) — 104KB
• fmcb-20240630_def.xml (EX-101.DEF) — 263KB
• fmcb-20240630_lab.xml (EX-101.LAB) — 700KB
• fmcb-20240630_pre.xml (EX-101.PRE) — 445KB
• ef20029679_10q_htm.xml (XML) — 6617KB

- FINANCIAL INFORMATION

PART I. - FINANCIAL INFORMATION Page

- Financial Statements

Item 1 - Financial Statements Unaudited Consolidated Balance Sheets 3 Unaudited Consolidated Statements of Income 4 Unaudited Consolidated Statements of Comprehensive Income 5 Unaudited Consolidated Statements of Changes in Shareholders' Equity 6 Unaudited Consolidated Statements of Cash Flows 7 Notes to Unaudited Consolidated Financial Statements 8

- Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 32

- Quantitative and Qualitative Disclosures about Market Risk

Item 3 - Quantitative and Qualitative Disclosures about Market Risk 54

- Controls and Procedures

Item 4 - Controls and Procedures 56

- OTHER INFORMATION

PART II. - OTHER INFORMATION

– Legal Proceedings

Item 1 – Legal Proceedings 56

– Risk Factors

Item 1A – Risk Factors 56

– Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds 57

– Defaults upon Senior Securities

Item 3 – Defaults upon Senior Securities 57

– Mine Safety Disclosures

Item 4 – Mine Safety Disclosures 57

– Other Information

Item 5 – Other Information 57

– Exhibits

Item 6 – Exhibits 58

Signatures

Signatures 59 2 Table of Contents PART 1. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements FARMERS & MERCHANTS BANCORP UNAUDITED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share and per share amounts) June 30, 2024 December 31, 2023 ASSETS Cash and due from banks $ 70,260 $ 72,267 Interest bearing deposits with banks 225,676 338,375 Total cash and cash equivalents 295,936 410,642 Securities available-for-sale, amortized cost $ 271,970 and $ 199,374 , respectively 251,413 182,512 Securities held-to-maturity, fair value $ 638,718 and $ 671,585 , respectively 794,797 817,688 Allowance for credit losses - securities held-to-maturity ( 450 ) ( 450 ) Total investment securities 1,045,760 999,750 Non-marketable securities 15,549 15,549 Loans and leases held for investment, net of unearned income 3,682,370 3,654,689 Allowance for credit losses - loans and leases ( 75,032 ) ( 74,965 ) Loans and leases held for investment, net 3,607,338 3,579,724 Bank-owned life insurance 73,654 74,931 Premises and equipment, net 51,306 51,907 Deferred income tax assets and income taxes receivable 43,821 50,071 Accrued interest receivable 27,195 28,520 Goodwill 11,183 11,183 Other intangibles 1,962 2,236 Other real estate owned 873 873 Other assets 92,908 83,542 TOTAL ASSETS $ 5,267,485 $ 5,308,928 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Non-interest bearing $ 1,377,514 $ 1,482,571 Interest bearing: Demand 856,713 933,417 Savings and money market 1,609,334 1,607,479 Certificates of deposit 753,494 644,628 Total interest bearing 3,219,541 3,185,524 Total deposits 4,597,055 4,668,095 Subordinated debentures 10,310 10,310 Interest payable and other liabilities 83,900 80,768 TOTAL LIABILITIES 4,691,265 4,759,173 SHAREHOLDERS' EQUITY Preferred shares, no par value, 1,000,000 shares authorized and, none issued or outstanding - - Common shares, $ 0.01 par value, 7

financial statements

financial statements. 4 Table of Contents FARMERS & MERCHANTS BANCORP UNAUDITED CONSOLIDATED COMPREHENSIVE INCOME Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2024 2023 2024 2023 Net income $ 21,767 $ 21,308 $ 44,490 $ 44,855 Other comprehensive income Unrealized (losses)/gains on available-for-sale securities ( 1,095 ) ( 1,191 ) ( 3,695 ) 1,171 Reclassification adjustment for losses on available-for-sale securities - - - 5,685 Amortization of unrealized loss on securities transferred to held-to-maturity ( 22 ) ( 47 ) ( 49 ) ( 77 ) Net unrealized (losses)/gains on available-for-sale securities ( 1,117 ) ( 1,238 ) ( 3,744 ) 6,779 Income tax benefit/(expense) 330 375 1,107 ( 2,004 ) Other comprehensive (loss)/income, net of tax ( 787 ) ( 863 ) ( 2,637 ) 4,775 Total comprehensive income $ 20,980 $ 20,445 $ 41,853 $ 49,630 See accompanying notes to the unaudited consolidated financial 5 Table of Contents FARMERS & MERCHANTS BANCORP UNAUDITED CONSOLIDATED CHANGES IN SHAREHOLDERS' EQUITY For the three and six months ended June 30, 2024 and 2023 (Dollars in thousands, except share amounts) Common Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive (Loss)/Income Total Balance as of March 31, 2024 742,770 $ 7 $ 31,401 $ 548,123 $ ( 14,314 ) $ 565,217 Net income - - - 21,767 - 21,767 Other comprehensive loss, net of tax - - - - ( 787 ) ( 787 ) Cash dividends declared ($ 8.80 per share) - - - ( 6,507 ) - ( 6,507 ) Repurchase of common stock ( 3,462 ) - ( 3,470 ) - - ( 3,470 ) Balance as of June 30 , 2024 739,308 $ 7 $ 27,931 $ 563,383 $ ( 15,101 ) $ 576,220 Balance as of March 31, 2023 762,931 $ 8 $ 51,615 $ 4

financial statements

financial statements. 6 Table of Contents FARMERS & MERCHANTS BANCORP UNAUDITED CONSOLIDATED CASH FLOWS Six Months Ended June 30, (Dollars in thousands) 2024 2023 Cash flows from operating activities: Net income $ 44,490 $ 44,855 Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses - 4,057 Depreciation and amortization 1,443 1,196 Net (accretion) amortization of securities premiums and discounts ( 780 ) 35 Increase (decrease) in cash surrender value of BOLI 1,276 ( 950 ) Gain on BOLI death benefit - ( 4,346 ) Decrease in deferred income taxes, net 7,854 1,773 Loss on sale of securities available-for-sale - 5,686 Net changes in: Other assets ( 6,714 ) ( 2,636 ) Other liabilities 7,526 16,671 Net cash provided by operating activities 55,095 66,341 Cash flows from investing activities: Net change in loans and leases held for investment ( 27,594 ) 6,388 Purchase of available-for-sale securities ( 83,361 ) ( 4,515 ) Purchase of held-to-maturity securities ( 2,028 ) ( 2,071 ) Proceeds from sales, maturities, calls and pay downs of available-for-sale securities 11,667 43,885 Proceeds from maturities, calls and pay downs of held-to-maturity securities 25,054 23,498 Purchase of premises and equipment ( 844 ) ( 3,239 ) Purchase of other investments ( 11,227 ) ( 2,166 ) Redemption of other investments 5,000 - Proceeds from bank-owned life insurance - 11,752 Proceeds from sale of assets - 27 Net cash (used in) provided by investing activities ( 83,333 ) 73,559 Cash flows from financing activities: Net decrease in deposits ( 71,040 ) ( 120,956 ) Cash dividends paid ( 6,507 ) ( 6,286 ) Net cash used in share repurchases of common stock ( 8,921 ) ( 13,943 ) Net cash (used in) financing activities ( 86,468 ) ( 141,185 ) Net change in c

financial statements. All significant intercompany transactions and balances have been eliminated

financial statements. All significant intercompany transactions and balances have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Various elements of the Company's accounting policies, by their nature, are inherently significant to an understanding of Bank's financial statements. These policies relate to: (i) the methodology for the recognition of interest income; (ii) the determination of the provision and allowance for credit losses; (iii) the valuation of financial assets and liabilities recorded at fair value; (iv) the valuation of intangibles, such as goodwill and core deposit intangibles ("CDI"); (v) the valuation of other real estate owned ("OREO"); and (vi) the valuation or recognition of deferred tax assets and liabilities. These policies and judgments, estimates and assumptions are described in greater detail in subsequent notes to the Unaudited Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations, Summary of Critical Accounting Policies and Estimates, in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 14, 2024 and Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Summary of Critical Accounting Policies and Estimates included in this Quarterly Report on Form 10-Q. The information included in this Form 10-Q should be read in conjunction with our 2023 Form 10-K. Interim results are not necessarily indicative of results for a full year or any other interim period. Recently Adopted Accounting Standards — The Ac

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