FARMERS & MERCHANTS BANCORP INC [FMAO] Filings

10-Q 1 fmao-10q_20220331.htm 10-Q fmao-10q_20220331.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period March 31, 2022

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number 001-38084

FARMERS & MERCHANTS BANCORP, INC.

(Exact name of registrant as specified in its charter)

Ohio

34-1469491

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

307 North Defiance Street, Archbold, Ohio	43502
(Address of principal executive offices)	(Zip Code)

(419) 446-2501

Registrant’s telephone number, including area code

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of Each Exchange
Common Stock, No Par Value	FMAO	NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares of each of the issuers’ classes of common stock, as of the latest practicable date:

Common Stock, No Par Value	13,065,883
Class	Outstanding as of April 22, 2022

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10Q

FARMERS & MERCHANTS BANCORP, INC.

INDEX

Form 10-Q Items		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets - March 31, 2022 and December 31, 2021	3

	Condensed Consolidated Statements of Income - Three Months Ended March 31, 2022 and March 31, 2021	4

	Condensed Consolidated Statements of Comprehensive Loss - Three Months Ended March 31, 2022 and March 31, 2021	5

	Condensed Consolidated Statements of Changes to Stockholders’ Equity - Three Months Ended March 31, 2022 and March 31, 2021	6-7

	Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2022 and March 31, 2021	8-9

	Notes to Condensed Consolidated Financial Statements	10

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	46-61

Item 3.	Qualitative and Quantitative Disclosures About Market Risk	62

Item 4.	Controls and Procedures	63

PART II.	OTHER INFORMATION	63

Item 1.	Legal Proceedings	63

Item 1A.	Risk Factors	63

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

Item 3.	Defaults Upon Senior Securities	63

Item 4.	Mine Safety Disclosures	63

Item 5.	Other Information	63

Item 6.	Exhibits	64

Signatures		65

101.INS	Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.⁽¹⁾
101.SCH	Inline XBRL Taxonomy Extension Schema Document ⁽¹⁾
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document ⁽¹⁾
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document ⁽¹⁾
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document ⁽¹⁾
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document ⁽¹⁾

⁽¹⁾

Pursuant to Rule 406T of Regulation S-T, the interactive Data Files in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

PART 1 - FINANCIAL INFORMATION

ITEM 1 FINANCIAL STATEMENTS

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	(in thousands of dollars)
	March 31, 2022			December 31, 2021
	(Unaudited)
Assets
Cash and due from banks	$	94,118		$	135,485
Federal funds sold		45,404			45,338
Total cash and cash equivalents		139,522			180,823
Interest-bearing time deposits		8,677			10,913
Securities - available-for-sale		413,996			429,931
Other securities, at cost		8,568			8,162
Loans held for sale		6,060			7,714
Loans, net		1,945,449			1,841,177
Premises and equipment		26,653			26,913
Goodwill		80,434			80,434
Mortgage servicing rights		3,336			3,157
Other real estate owned		-			159
Bank owned life insurance		27,715			27,558
Other assets		25,735			21,359
Total Assets	$	2,686,145		$	2,638,300

Liabilities and Stockholders' Equity

Liabilities
Deposits
Noninterest-bearing	$	497,249		$	473,689
Interest-bearing
NOW accounts		681,975			650,466
Savings		626,787			597,828
Time		447,586			471,479
Total deposits		2,253,597			2,193,462
Federal funds purchased and securities sold under agreements to repurchase		31,680			29,268
Federal Home Loan Bank (FHLB) advances		22,656			24,065
Other borrowings		40,000			40,000
Subordinated notes, net of unamortized issuance costs		34,499			34,471
Dividend payable		2,462			2,461
Accrued expenses and other liabilities		14,773			17,406
Total liabilities		2,399,667			2,341,133

Commitments and Contingencies

Stockholders' Equity
Common stock - No par value 20,000,000 shares authorized; issued and outstanding 14,063,999 shares 3/31/22 and 12/31/21		122,886			122,674
Treasury stock - 997,916 shares 3/31/22, 997,766 shares 12/31/21		(11,739	)		(11,724	)
Retained earnings		195,057			189,401
Accumulated other comprehensive loss		(19,726	)		(3,184	)
Total stockholders' equity		286,478			297,167
Total Liabilities and Stockholders' Equity	$	2,686,145		$	2,638,300

See Notes to Condensed Consolidated Unaudited Financial Statements.

Note: The December 31, 2021, Condensed Consolidated Balance Sheet has been derived from the audited Consolidated Balance Sheet as of that date.

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	(in thousands of dollars, except per share data)
	Three Months Ended
	March 31, 2022			March 31, 2021
Interest Income
Loans, including fees	$	20,455		$	15,612
Debt securities:
U.S. Treasury and government agencies		1,023			751
Municipalities		300			308
Dividends		42			50
Federal funds sold		10			5
Other		69			39
Total interest income		21,899			16,765
Interest Expense
Deposits		1,360			1,340
Federal funds purchased and securities sold under agreements to repurchase		152			166
Borrowed funds		335			222
Subordinated notes		269			-
Total interest expense		2,116			1,728
Net Interest Income - Before Provision for Loan Losses		19,783			15,037
Provision for Loan Losses		580			1,700
Net Interest Income After Provision for Loan Losses		19,203			13,337
Noninterest Income
Customer service fees		2,648			2,814
Other service charges and fees		998			838
Net gain on sale of loans		697			1,046
Net gain on sale of available-for-sale securities		-			293
Total noninterest income		4,343			4,991
Noninterest Expense
Salaries and wages		5,502			4,390
Employee benefits		2,054			1,994
Net occupancy expense		598			577
Furniture and equipment		1,056			791
Data processing		604			505
Franchise taxes		418			446
ATM expense		532			449
Advertising		237			235
Net gain on sale of other assets owned		(5	)		(25	)
FDIC assessment		114			236
Mortgage servicing rights amortization		26			505
Consulting fees		178			223
Other general and administrative		2,179			2,033
Total noninterest expense		13,493			12,359
Income Before Income Taxes		10,053			5,969
Income Taxes		1,951			1,060
Net Income	$	8,102		$	4,909
Basic and Diluted Earnings Per Share	$	0.62		$	0.44
Dividends Declared	$	0.19		$	0.17

See Notes to Condensed Consolidated Unaudited Financial Statements

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	(in thousands of dollars)
	Three Months Ended
	March 31, 2022			March 31, 2021
Net Income	$	8,102		$	4,909
Other Comprehensive Income (Net of Tax):
Net unrealized loss on available-for-sale securities		(20,939	)		(6,737	)
Reclassification adjustment for realized gain on sale of available-for-sale securities		-			(293	)
Net unrealized loss on available-for-sale securities		(20,939	)		(7,030	)
Tax benefit		(4,397	)		(1,476	)
Other comprehensive loss		(16,542	)		(5,554	)
Comprehensive Loss	$	(8,440	)	$	(645	)

See Notes to Condensed Consolidated Unaudited Financial Statements

[ Remainder of this page intentionally left blank ]

Farmers & Merchants Bancorp, Inc. and Subsidiaries

CONDENSED Consolidated StatementS of Changes TO Stockholders’ Equity

For the THREE Months Ended March 31, 2022

(000’s Omitted, Except Per Share Data)

(Unaudited)

													Accumulated
	Shares of												Other			Total
	Common			Common			Treasury			Retained			Comprehensive			Stockholders'
	Stock			Stock			Stock			Earnings			Income			Equity
Balance - January 1, 2022		13,066,233		$	122,674		$	(11,724	)	$	189,401		$	(3,184	)	$	297,167
Net income											8,102						8,102
Other comprehensive loss														(16,542	)		(16,542	)
Issuance of 500 shares of restricted stock (Net of forfeitures - 650)		(150	)		(1	)		(15	)		16						-
Stock-based compensation expense					213												213
Cash dividends declared - $0.19 per share											(2,462	)					(2,462	)
Balance - March 31, 2022		13,066,083		$	122,886		$	(11,739	)	$	195,057		$	(19,726	)	$	286,478

See Notes to Condensed Consolidated Unaudited Financial Statements

Farmers & Merchants Bancorp, Inc. and Subsidiaries

CONDENSED Consolidated StatementS of Changes TO Stockholders’ Equity

For the THREE months Ended March 31, 2021

(000’s Omitted, Except Per Share Data)

(Unaudited)

											Accumulated
	Shares of										Other			Total
	Common			Common		Treasury			Retained		Comprehensive			Stockholders'
	Stock			Stock		Stock			Earnings		Income			Equity
Balance - January 1, 2021		11,197,544		$	81,804	$	(11,932	)	$	173,591	$	5,697		$	249,160
Net income										4,909					4,909
Other comprehensive loss												(5,554	)		(5,554	)
Purchase of treasury stock		(950	)				(23	)							(23	)
Issuance of 750 shares of restricted stock (Net of forfeitures - 600)		150

FARMERS & MERCHANTS BANCORP INC [FMAO] Filings
10-Q	[2022-04-29]
10-K	[2022-02-22]
10-Q	[2021-10-26]
10-Q	[2021-08-02]
10-Q	[2021-04-27]
10-K	[2021-02-24]
10-Q	[2020-10-28]
10-Q	[2020-07-29]
10-Q	[2020-04-29]
10-K	[2020-02-26]
10-Q	[2019-10-30]
10-Q	[2019-07-24]
10-Q	[2019-05-01]
10-K	[2019-02-27]
10-Q	[2018-10-24]
10-Q	[2018-07-25]
10-Q	[2018-04-25]
10-K	[2018-02-28]
10-Q	[2017-10-25]
10-Q	[2017-07-26]
10-Q	[2017-04-26]
10-K	[2017-02-22]
10-Q	[2016-10-26]
10-Q	[2016-07-27]
10-Q	[2016-04-27]
10-K	[2016-02-24]
10-Q	[2015-10-28]
10-Q	[2015-07-29]
10-Q	[2015-04-29]
10-K	[2015-02-25]
10-Q	[2014-10-29]
10-Q	[2014-07-28]
10-Q	[2014-04-28]
10-K	[2014-02-26]
10-Q	[2013-10-30]
10-Q	[2013-07-31]
10-Q	[2013-04-26]
10-K	[2013-02-25]
10-Q	[2012-10-29]
10-Q	[2012-08-01]
10-Q	[2012-04-30]
10-K	[2012-02-24]