Farmers & Merchants Bancorp, Inc. Reports Strong 2016

New Post Public Reply Private Reply Replies (0) Message Board
News Desk 2018
Farmers & Merchants Bancorp, Inc. Reports Strong 2016 Third-Quarter Financial Results

ARCHBOLD, Ohio, Oct. 19, 2016 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (OTCQX:FMAO) today reported financial results for the 2016 third quarter ended September 30, 2016.

2016 Third Quarter Financial Highlights Include (on a year-over-year basis unless noted):

  • 54 consecutive quarters of profitability
  • Total assets up 9.1% to $1,044,447,000
  • Total loans increased 16.3% to $738,682,000
  • Net interest income after provision for loan losses increased 12.6% to $8,183,000
  • Net income increased 15.1% to $3,015,000
  • Earnings per basic and diluted shares increased 14.0% to $0.65
  • Return on average assets increased 7 basis points to 1.17%
  • Return on average equity increased 71 basis points to 9.58%
  • July quarterly dividend increased 4.5% to $0.23 per share

“Our financial results continued to demonstrate strong improvements in the 2016 third quarter as a result of strong loan growth, higher net interest margin, controlled operating expenses, and increased fee based income,” stated Paul S. Siebenmorgen, President and Chief Executive Officer.  “The double-digit loan growth we achieved in the third quarter, was a result of higher commercial real estate and commercial and industrial loans, which increased 22.7% and 25.6%, respectively from the prior year period. Our loan to deposit ratio at the end of the 2016 third quarter was 88.1%, which has increased 540 basis points from 82.7% at September 30, 2015. I am encouraged by these strong growth trends, which reflect the team of experienced commercial lenders we have assembled over the past several years, and F&M’s focus on managing risk with quick underwriting decisions and superior customer service.  Our local markets continue to show stable economic trends and we are cautiously optimistic 2016 will be another good year for the bank.” 

Income Statement Net income for the 2016 third quarter ended September 30, 2016 was $3,015,000, or $0.65 per basic and diluted share compared to $2,620,000, or $0.57 per basic and diluted share for the same period last year. The 15.1% improvement in net income for the 2016 third quarter was primarily due to a 12.6% increase in interest income after provision for loan losses and a 3.1% increase in noninterest income, partially offset by a 6.3% increase in noninterest expense. 

Loan Portfolio and Asset Quality Total loans at September 30, 2016 increased 16.3% to a record $738,682,000, compared to $635,239,000 at September 30, 2015, and up 7.7% from $685,878,000 at December 31, 2015.  Year-over-year loan growth was strong across the company’s lending areas and included a 22.7% increase in commercial real estate loans, a 15.7% increase in consumer loans, a 9.3% increase in agricultural real estate loans, an 8.2% increase in agricultural, and a 25.6% increase in commercial and industrial loans, offset by a 1.1% reduction in consumer real estate loans, and an 11.4% decrease in industrial development bonds. 

The company’s provision for loan losses for the 2016 third quarter was $308,000, compared to $234,000 for the 2015 third quarter. Year-to-date, the provision for loan losses was $924,000, compared to $540,000 for the same period last year. The third quarter increase in provision expense was a result of the significant growth the company has experienced in its loan portfolio. 

F&M’s loan quality remains strong as the allowance for loan losses to nonperforming loans was 584.2% at September 30, 2016, compared to 266.7% at September 30, 2015.  Net charge-offs for the third quarter ended September 30, 2016 were $189,000, or 0.03% of average loans, compared to $5,000 or 0.00% of average loans, at September 30, 2015. Year-to-date, net charge-offs were $369,000, or 0.05% of average loans outstanding, compared to $280,000, or 0.05% of average loans outstanding for the same period last year. 

Stockholders’ Equity and Dividends Tangible stockholders’ equity increased to $122,048,000 at September 30, 2016, compared to $114,960,000 at December 31, 2015, and $114,276,000 at September 30, 2015.  On a per share basis, tangible stockholders’ equity at September 30, 2016 was $26.41, compared with $24.92 at December 31, 2015, and $24.71 at September 30, 2015. The increase in tangible stockholders’ equity is the result of growth in retained earnings due to increased profitability. At September 30, 2016, the company had a Tier 1 leverage ratio of 11.74%, compared to 11.98% at September 30, 2015.  The 24 basis point year-over-year decline was a result of the company’s average assets increasing at a faster pace than the company’s Tier 1 capital. 

For the 2016 third quarter, the company declared and raised the cash dividend by 4.5% to $0.23 per share, which represented a dividend payout ratio of 34.9% compared to 38.5% for the same period last year.

Mr. Siebenmorgen concluded, “We continue to work hard on extending our leadership position in our existing core-markets, while developing new markets, such as Ft. Wayne, Indiana and Bowling Green, Ohio.  We look forward to opening our Bowling Green location this month, after several construction-related delays. Home to Bowling Green State University and its nearly 17,000 students and more than 2,000 faculty members, Bowling Green is an exciting market supported by compelling demographics and a strong economic anchor.  In addition, the majority of deposits in this market are located at large, super-regional financial institutions.  We are optimistic, F&M’s customer focus, and community banking orientation will be a welcomed addition to the Bowling Green market, and we have assembled an experienced team to roll out F&M’s full suite of financial products and services.  I am encouraged by the direction we are headed as we execute our growth strategies, and focus on creating value for our customers, employees, and shareholders.”

About Farmers & Merchants State Bank: The Farmers & Merchants State Bank is a local independent community bank that has been serving Northwest Ohio and Northeast Indiana since 1897. The Farmers & Merchants State Bank provides commercial banking, retail banking and other financial services through its 23 offices. Our locations are in Fulton, Defiance, Henry, Lucas, Williams, and Wood counties in Northwest Ohio. In Northeast Indiana we have offices located in DeKalb, Allen and Steuben counties.

Safe harbor statement Farmers & Merchants Bancorp, Inc. ("F&M") wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995. Statements by F&M, including management's expectations and comments, may not be based on historical facts and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21B of the Securities Act of 1934, as amended. Actual results could vary materially depending on risks and uncertainties inherent in general and local banking conditions, competitive factors specific to markets in which F&M and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions or capital market conditions. F&M assumes no responsibility to update this information. For more details, please refer to F&M's SEC filing, including its most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q. Such filings can be viewed at the SEC's website, www.sec.gov . 

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME
(Unaudited; in thousands of dollars, except per share data)
 
    Three  Months Ended   Nine Months Ended
    September 30, 2016   September 30, 2015   September 30, 2016   September 30, 2015
Interest Income                            
Loans, including fees   $ 8,629   $ 7,341     $ 24,997   $ 21,598  
Debt securities:                            
U.S. Treasury and government agencies     559     603       1,734     1,819  
Municipalities     344     456       1,093     1,361  
Dividends     36     37       111     111  
Federal funds sold     7     2       9     7  
Other     15     5       37     21  
Total interest income     9,590     8,444       27,981     24,917  
Interest Expense                            
Deposits     947     841       2,686     2,446  
Federal funds purchased and securities sold                          
under agreements to repurchase     115     94       346     218  
Borrowed funds     37     -       110     -  
Total interest expense     1,099     935       3,142     2,664  
Net Interest Income - Before Provision for Loan Losses   8,491     7,509       24,839     22,253  
Provision for Loan Losses       308     243       924     540  
Net Interest Income After Provision                            
For Loan Losses     8,183     7,266       23,915     21,713  
Noninterest Income                            
Customer service fees     1,711     1,388       4,497     4,171  
Other service charges and fees     941     1,084       2,850     2,963  
Net gain on sale of loans     216     183       619     531  
Net gain on sale of available for sale securities   47     172       503     418  
Total noninterest income     2,915     2,827       8,469     8,083  
Noninterest Expense            
Salaries and Wages     2,981     2,714       8,661     8,083  
Employee benefits     849     804       2,426     2,555  
Net occupancy expense     359     289       1,083     1,012  
Furniture and equipment     438     475       1,293     1,324  
Data processing     360     318       1,132     967  
Franchise taxes     219     186       658     560  
Net (gain) loss on sale of other assets owned   (6 )   32       39     43  
FDIC Assessment     126     126       368     364  
Mortgage servicing rights amortization   123     93       311     276  
Other general and administrative     1,473     1,475       4,594     4,274  
Total noninterest expenses     6,922     6,512       20,565     19,458  
Income Before Income Taxes     4,176     3,581       11,819     10,338  
Income Taxes     1,161     961       3,349     2,770  
Net Income     3,015     2,620       8,470     7,568  
Other Comprehensive Income (Net of Tax):                            
Net unrealized gain on available for sale securities     58     1,210       2,652     1,116  
Reclassification adjustment for gain on sale of available for sale securities     (47 )   (172 )     (503 )   (418 )
Net unrealized gain on available for sale securities     11     1,038       2,149     698  
Tax expense     4     353       731     237  
Other comprehensive income     7     685       1,418     461  
             
Comprehensive Income   $ 3,022   $ 3,305     $ 9,888   $ 8,029  
Earnings Per Share - Basic and Diluted $ 0.65   $ 0.57     $ 1.84   $ 1.64  
Dividends Declared     $ 0.23   $ 0.22     $ 0.68   $ 0.65  
                             
FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
      (in thousands of dollars)
         
      September 30, 2016   December 31, 2015
      (Unaudited)    
Assets                
Cash and due from banks   $ 30,896   $ 21,333  
Federal funds sold       602       685  
  Total cash and cash equivalents   31,498     22,018  
                 
Interest-bearing time deposits     1,915     -  
Securities - available-for-sale     224,473     235,115  
Other securities, at cost     3,717     3,717  
Loans, net     732,070     679,821  
Premises and equipment     21,356     20,587  
Goodwill     4,074     4,074  
Mortgage servicing rights     2,143     2,056  
Other real estate owned     1,412     1,175  
Other assets       21,789       20,505  
                 
Total Assets   $   1,044,447   $   989,068  
  Liabilities and Stockholders' Equity            
Liabilities              
Deposits              
  Noninterest-bearing   $ 176,180   $ 171,112  
  Interest-bearing              
  NOW accounts     209,264     190,890  
  Savings     240,615     225,052  
  Time       212,042       184,285  
                 
  Total deposits     838,101     771,339  
                 
Federal Funds purchased and              
securities sold under agreements to repurchase   59,487     78,815  
Federal Home Loan Bank (FHLB) advances   10,000     10,000  
Dividend payable     1,053     1,007  
Accrued expenses and other liabilities     8,863       7,810  
                 
  Total liabilities       917,504       868,971  
                 
Commitments and Contingencies              
                 
Stockholders' Equity              
Common shares - no par value - 6,500,000 shares 12/31/15            
Common shares - no par value - 10,000,000 shares 9/30/16            
  authorized, 5,200,000 shares issued and outstanding   11,841     12,086  
Treasury Stock - 578,705 shares 2016, 587,466 shares 2015   (12,251 )   (12,389 )
Retained earnings     125,723     120,188  
Accumulated other comprehensive income     1,630       212  
                 
  Total stockholders' equity       126,943       120,097  
                 
Total Liabilities and Stockholders' Equity $   1,044,447   $   989,068  
                 
    For the Three Months Ended   For the Nine Months Ended
    September 30   September 30
                                     
Selected financial data   2016     2015   2016     2015
Return on average assets     1.17 %       1.10 %     1.11 %       1.06 %
Return on average equity     9.58 %       8.87 %     9.13 %       8.64 %
Yield on earning assets     4.03 %       3.96 %     4.00 %       3.92 %
Cost of interest bearing liabilities     0.60 %       0.57 %     0.59 %       0.54 %
Net interest spread     3.42 %       3.39 %     3.41 %       3.38 %
Net interest margin     3.57 %       3.53 %     3.56 %       3.52 %
Efficiency     60.09 %       62.73 %     61.70 %       63.69 %
Dividend payout ratio     34.93 %       38.51 %     36.71 %       39.36 %
Tangible book value per share $   26.41     $   24.71            
Tier 1 capital to average assets     11.74 %       11.98 %          
                     
    September 30        
Loans   2016     2015          
(Dollar amounts in thousands)                    
Commercial real estate $   370,315     $   301,841            
Agricultural real estate     60,206         55,059            
Consumer real estate     87,222         88,222            
Commercial and industrial     105,961         84,371            
Agricultural     79,191         73,193            
Consumer     30,585         26,440            
Industrial development bonds     5,892         6,649            
Less: Net deferred loan fees and costs     (690 )       (536 )          
Total loans $   738,682     $   635,239            
                     
    September 30        
Asset quality data   2016     2015          
(Dollar amounts in thousands)                    
Nonaccrual loans $   1,132     $   2,294            
Troubled debt restructuring $   704     $   1,239            
90 day past due and accruing $   -     $   -            
Nonperforming loans $   1,132     $   2,294            
Other real estate owned $   1,412     $   1,133            
Non-performing assets $   2,544     $   3,427            
                     
(Dollar amounts in thousands)                    
Allowance for loan and lease losses $   6,612     $   6,165            
Allowance for loan and lease losses/total loans     0.90 %       0.97 %          
Net charge-offs:                    
Quarter-to-date $   189     $   5            
Year-to-date $   369     $   280            
Net charge-offs to average loans                    
Quarter-to-date     0.03 %       0.00 %          
Year-to-date     0.05 %       0.05 %          
Non-performing loans/total loans     0.15 %       0.36 %          
Allowance for loan and lease losses/nonperforming loans     584.18 %       266.69 %          
                             

Company Contact: Marty Filogamo Senior Vice President – Marketing Manager Farmers & Merchants Bancorp, Inc. (419) 445-3501 ext. 15435 mfilogamo@fm-bank.com Investor and Media Contact: Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com

Scroll down for more posts ▼

Top 10 Most Recent News Articles

Nevada Organic Phosphate's Latest Drilling Success Insight

Updated Category News Views 100

Striking Continuity in Murdock Mountain Drilling Ah, the thrill when a junior explorer delivers juicy results! Nevada Organic Phosphate (CSE: NOP) just scored big with its latest drilling escapades, adding flesh to the bone of this Murdock Mountain project. The company's confidence rides high with the beat as core samples from MM26-14 and MM26-15 drilled into the...

Continue Reading
DeepL's Aure AI: Revolutionizing Real-Time Voice Translation

Updated Category News Views 43

When language meets technology, the game can change dramatically, and DeepL's newest breakthrough with Aure might be the ultimate game-changer for voice translation. The technology landscape just got a little more interesting as DeepL launched its most lifelike AI voice model yet, promising to capture the emotional essence behind words like never before. Now, what exactly...

Continue Reading
Aspen Dental's Record-Breaking Day Serves Veterans

Updated Category News Views 11

Setting a New Benchmark in Charity Care Well, hold onto your hats, because Aspen Dental just smashed it out of the park with their latest Day of Service effort, a barnburner of an event held on November 7, 2026. These folks went all out, delivering free dental care to more than 6,400 veterans in a single day—yeah, you read that right. The whole shebang was valued at a...

Continue Reading
ACR Poker's $20M Series Sparks Player Excitement

Updated Category News Views 27

ACR Poker Lights Up the Felt Again Jump into the buzz, folks—ACR Poker's gone all-in with a whopping $20 million guaranteed Online Super Series (OSS). Now, they're no strangers to the high stakes and the whirlwind of adrenaline that comes with it. From November 8th to 24th, the action's hotter than the sun in Costa Rica, and every player wants a piece of the pie. Turbo...

Continue Reading
ISMP Cheers Awards Honor Vital Medication Safety Efforts

Updated Category News Views 44

Honoring Progress in Medication Safety Boy, if there's one thing that's clear in the world of healthcare, it's that nothing's more vital than patient safety. The Institute for Safe Medication Practices (ISMP) is more than a fine-toothed comb in that realm; it's basically the gold standard. Every year, they shine a light on folks and organizations wrestling with the beast...

Continue Reading
EverSmith Launches EverSERVE for Veteran Franchisees

Updated Category News Views 28

EverSmith Brands Leads the Way EverSmith Brands, a commercial facility services franchise platform, is rolling out its latest initiative, EverSERVE, and let me tell you, it’s as timely as it is ambitious. Launched on Veterans Day, this move is all about creating a community for franchisee owners who wear their military or first responder badges with pride. Now, you...

Continue Reading
Gilat's Revenue Dip Spurs Legal Scrutiny for Investors

Updated Category News Views 51

Gilat Satellite's Surprise Revenue Shortfall If anybody thought the satellite business was all about science fiction-esque technology, here's a reality check: when earnings don't meet expectations, shareholders get jittery. This seems to be exactly what's happening with Gilat Satellite Networks Ltd. (NASDAQ: GILT). After twice reaffirming their fiscal 2026 revenue...

Continue Reading
OpenAI Ties Drive Strategy for Microsoft's Growth

Updated Category News Views 69

OpenAI's Expanding Influence on Tech Firms Buckle up, because this one's a wild ride down the tech highway. We're diving into how OpenAI isn't merely dabbling in business with major players; it's reshaping how these giants operate and innovate. Five publicly-traded companies are kicking up a storm this earnings season thanks to their ties to the powerhouse behind ChatGPT....

Continue Reading
Kia's Landmark Triple Win at 2026 Car Awards

Updated Category News Views 119

Kia Makes History Well, folks, Kia has pulled off what many might have thought impossible. They snagged not one, not two, but three of Germany's Golden Steering Wheel awards. That's a real hat trick and a first for any non-European auto brand. With competition hotter than a stolen Tesla, Kia's not just keeping pace but setting it. The Golden Steering Wheel is one of those...

Continue Reading
International Tower Hill's Q3 Results: Gold Updates

Updated Category News Views 90

An Eye on International Tower Hill's Latest Moves You've got International Tower Hill Mines (TSX: ITH, NYSE American: THM) laying their cards on the table for the third quarter. This ain't just any routine check-in—it's a glimpse at their Livengood Gold Project, standing tall on the promise of gold beyond the horizon. A cool $106 million in cash? Not too shabby, folks....

Continue Reading

Top 5 Most Recently Viewed Articles

Innovative Alliance Targets Global Carbon Capture Solutions

Updated Category News Views 146

Strategic Partnership for Carbon Capture Innovation Technip Energies (PARIS: TE) and Shell Catalysts & Technologies are embarking on a significant journey of collaboration, aiming to establish an exclusive global alliance focused on the advancement of amine-based post-combustion carbon capture. This initiative is centered around Shell’s state-of-the-art CANSOLV CO?...

Continue Reading
PTC Therapeutics Announces Participation at Major Healthcare Event

Updated Category News Views 115

PTC Therapeutics to Present at Upcoming Conference Recently, PTC Therapeutics, Inc. (NASDAQ: PTCT) revealed that its Chief Executive Officer, Matthew B. Klein, M.D., will present at a significant healthcare event. This will take place during the 44th Annual J.P. Morgan Healthcare Conference. The scheduled slot for PTC's presentation is on January 12, 2026, at 9 a.m. PST,...

Continue Reading
Celebrating Excellence: 241 Student-Athletes Honored at Florida Southern

Updated Category News Views 212

Record Achievement in Academic Accomplishments Florida Southern College has recently achieved an astounding milestone by recognizing 241 student-athletes for their remarkable academic achievements. This accolade comes from the Division 2 Athletics Directors Association (D2 ADA) Academic Achievement Awards for the year 2024-25, marking the fourth-highest total for any...

Continue Reading
Talisker Boosts Private Placement Target to $7 Million

Updated Category News Views 325

Talisker Enhances Private Placement to Meet Investor Demand Talisker Resources Ltd. (TSX: TSK, OTCQX: TSKFF) has made an exciting announcement about its private placement. Due to overwhelming interest from investors, the Company has raised the maximum gross proceeds of its placement from C$6.5 million to C$7 million. This increase reflects the robust support and...

Continue Reading
VetsForever: Empowering Veterans with Legal Support Nationwide

Updated Category News Views 242

VetsForever's Commitment to Veteran Advocacy VetsForever, a dedicated law group focused on aiding veterans, has made significant strides in ensuring that those who served our nation can access the benefits they deserve. Founded in 2022 and co-led by U.S. Navy veteran Trinidad Aguirre, this firm specializes in providing expert legal representation to service-disabled...

Continue Reading