Farmers & Merchants Bancorp Files Q3 2024 10-Q

TL;DR

F&M Bancorp dropped its Q3 10-Q. Check financials for 9 months ending Sept 30.

AI Summary

Farmers & Merchants Bancorp filed its 10-Q for the period ending September 30, 2024. The filing covers the third quarter and the first nine months of the fiscal year. Key financial data and business operations for the period are detailed within the report.

Why It Matters

This 10-Q filing provides investors and analysts with a detailed look at the financial health and performance of Farmers & Merchants Bancorp for the third quarter of 2024.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing financial updates, not indicating any immediate or significant new risks.

Key Players & Entities

• FARMERS & MERCHANTS BANCORP (company) — Filer
• 20240930 (date) — Period of Report
• 20241108 (date) — Filing Date
• LODI, CA (location) — Business Address

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

• ef20034572_10q.htm (10-Q) — 6070KB
• ef20034572_ex31-a.htm (EX-31.A) — 9KB
• ef20034572_ex31-b.htm (EX-31.B) — 8KB
• ef20034572_ex32.htm (EX-32) — 7KB
• 0001140361-24-045878.txt ( ) — 23331KB
• fmcb-20240930.xsd (EX-101.SCH) — 47KB
• fmcb-20240930_cal.xml (EX-101.CAL) — 104KB
• fmcb-20240930_def.xml (EX-101.DEF) — 280KB
• fmcb-20240930_lab.xml (EX-101.LAB) — 730KB
• fmcb-20240930_pre.xml (EX-101.PRE) — 467KB
• ef20034572_10q_htm.xml (XML) — 6889KB

- FINANCIAL INFORMATION

PART I. - FINANCIAL INFORMATION Page

- Consolidated Financial Statements (Unaudited)

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

Notes to Consolidated Financial Statements

Notes to 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 37

- Quantitative and Qualitative Disclosures about Market Risk

Item 3 - Quantitative and Qualitative Disclosures about Market Risk 60

- Controls and Procedures

Item 4 - Controls and Procedures 62

- OTHER INFORMATION

PART II. - OTHER INFORMATION

– Legal Proceedings

Item 1 – Legal Proceedings 62

– Risk Factors

Item 1A – Risk Factors 63

– Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds 63

– Defaults upon Senior Securities

Item 3 – Defaults upon Senior Securities 63

– Mine Safety Disclosures

Item 4 – Mine Safety Disclosures 64

– Other Information

Item 5 – Other Information 64

– Exhibits

Item 6 – Exhibits 64

Signatures

Signatures 65 2 Table of Contents PART 1. FINANCIAL INFORMATION Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) FARMERS & MERCHANTS BANCORP CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands, except share and per share amounts) September 30, 2024 December 31, 2023 ASSETS Cash and due from banks $ 94,613 $ 72,267 Interest bearing deposits with banks 198,637 338,375 Total cash and cash equivalents 293,250 410,642 Securities available-for-sale, amortized cost $ 414,094 and $ 199,374 , respectively 401,563 182,512 Securities held-to-maturity, fair value $ 652,701 and $ 671,585 , respectively 780,510 817,688 Allowance for credit losses - securities held-to-maturity ( 450 ) ( 450 ) Total investment securities 1,181,623 999,750 Non-marketable securities 15,549 15,549 Loans and leases held for investment, net of unearned income 3,704,109 3,654,689 Allowance for credit losses - loans and leases ( 75,816 ) ( 74,965 ) Loans and leases held for investment, net 3,628,293 3,579,724 Bank-owned life insurance 73,453 74,931 Premises and equipment, net 51,127 51,907 Deferred income tax assets and income taxes receivable 33,689 50,071 Accrued interest receivable 30,155 28,520 Goodwill 11,183 11,183 Other intangibles 1,824 2,236 Other real estate owned 873 873 Other assets 97,113 83,542 TOTAL ASSETS $ 5,418,132 $ 5,308,928 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Non-interest bearing $ 1,465,859 $ 1,482,571 Interest bearing: Demand 888,793 933,417 Savings and money market 1,596,678 1,607,479 Certificates of deposit 757,352 644,628 Total interest bearing 3,242,823 3,185,524 Total deposits 4,708,682 4,668,095 Subordinated debentures 10,310 10,310 Interest payable and other liabilities 96,444 80,768 TOTAL LIABILITIES 4,815,436 4,759,173 COMMITMENTS AND CONTINGENCIES (Note 8) SHAREHOLDERS' EQUITY Preferred shares, no par value, 1,000,000 shares authorized and, none issue

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1—Basis of Presentation and Significant Accounting Policies The accompanying unaudited consolidated financial statements include the accounts of Farmers & Merchants Bancorp ("FMCB" or "Bancorp"), a bank holding company incorporated in the State of Delaware and its wholly owned subsidiary, Farmers & Merchants Bank of Central California ("F&M Bank" or the "Bank") collectively (the "Company"). These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission ("SEC"). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. Certain information and note disclosures have been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim 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 subject to estimation techniques, valuation assumptions and other subjective assessments. In particular, management has identified several accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 1—Basis of Presentation and Significant Accounting Policies—Continued The Company's methodology is set forth in a formal policy and takes into consideration the need for a valuation allowance for loans evaluated on a collective (pool) basis, which have similar risk characteristics as well as allowances to individual loans that do not share similar risk characteristics. The methodology for determining the allowance for credit losses ("ACL") on loans is considered a critical accounting policy by management because of the high degree of judgment involved. The subjectivity of the assumptions used and the potential for changes in the economic environment could result in changes to the amount of the recorded ACL. Among the material estimates required to establish the ACL are: (i) a weighted average loss estimate categorized by loan segmentation; (ii) average duration calculations in order to assess the loss factors over the life of the loan segment; (iii) an economic report to assess macro and micro-economic factors influencing loss potential; (iv) value of collateral and strength of borrowers; (v) the amount and timing of future cash flows for loans individually evaluated; and (vi) the determination of the qualitative loss factors. All of these estimates are susceptible to significant change. The Company extends loans to commercial and consumer customers primarily in Central California. These lending activities expose the Company to the risk borrowers will default, causing loan losses. The Company's lending activities are exposed to various qualitative risks. All loan segments are exposed to risks inherent in the economy and market conditions. Significant risk characteristics related to the commercial and industrial loan segment include the borrowers' business performance and financial condition, and the value of collateral for secured loans. Significant risk characteristics related to the comm

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 1—Basis of Presentation and Significant Accounting Policies—Continued Management incorporates reasonable and supportable information in order to calculate the ACL. This includes the ability to reliably forecast and document exogenous events that may affect the credit performance of the Company's loan portfolio. Management utilizes the seventeen loan segments used in preparing regulatory Call Reports to segment its portfolio and to extract the relevant information needed to calculate its ACL. This allows management the ability to obtain historical loss information for itself as well as its peer groups. Additionally, management's third party ALM application also utilizes a similar loan segmentation in calculating weighted average remaining life and duration including estimated prepayments. Management uses the duration of each loan segment to estimate the remaining life of loans to ensure that the model covers credit losses over the expected life of such loans. The foundation of CECL modeling is the ability to estimate expected credit losses over the lifetime of a loan. Management must use relevant available information about past events (e.g. historical losses) current conditions, and economic forecasts about future conditions. Historical annual loss rates serve as the starting point to estimate expected credit losses. Management uses a "through-the-cycle" historical credit loss experience as its baseline for historical credit losses. Prior to the third quarter of 2024 the representative period used for the full economic credit cycle was the period from 2009 to 2023 for all loan segments. In the third quarter of 2024, the representative period was updated to be from the first quarter of 2008 to the fourth quarter of 2017 for all segments except farmland and agriculture for which the first quarter of 1985 to the fourth quarter of 1994 was used. These updated periods were deemed to be more comp

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Note 1—Basis of Presentation and Significant Accounting Policies—Continued In addition to the quantitative calculations described above, management employs the use of qualitative factors as defined by the Interagency Policy Statement on Allowance for Credit Losses ("SR 20-12"). Management considers qualitative or environmental factors that are likely to cause estimated credit losses associated with our existing portfolio to differ from historical loss experience, as defined in

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View this 10-Q filing on SEC EDGAR