FMAO Farmers and Merchants Bancorp Inc

Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2024 second quarter and year-to-date ended June 30, 2024.

2024 Second Quarter Financial and Operating Highlights (on a year-over-year basis unless noted):

• 85 consecutive quarters of profitability
• Net income was $5.7 million, or $0.42 per basic and diluted share
• Proceeds from collateral sales of $6.4 million were received from an agricultural based relationship. The proceeds enabled paydowns and payoffs on nonaccrual loans during the second quarter that included $5.3 million in principal paydown, and $1.0+ million pre-tax benefit to interest and fee income
• Net interest income after provision for credit losses increased 6.8% from December 31, 2023, primarily due to a stabilizing net interest margin, solid asset quality and the collection of a nonaccrual loan
• Net interest margin, adjusted for the collection of a nonaccrual loan, improved 2 basis points from the 2024 first quarter
• Total loans increased 1.75% to $2.56 billion at June 30, 2024
• Total cash and cash equivalents increased by $121.9 million, or 171% to $193.1 million
• Total assets increased 5.6% to a record $3.32 billion
• Deposits increased 7.0% to a record $2.64 billion
• F&M joins OHIO HOMEBUYER PLUS Saver program, helping perspective Ohio home buyers save for a home purchase over the next five years by offering a higher than market interest rate to qualified depositors
• Stockholders’ equity increased 5.9% to a record $322.7 million
• Asset quality at historically strong levels with nonperforming loans of only $2.5 million at June 30, 2024, compared to $19.4 million at March 31, 2024 and $6.3 million at June 30, 2023
• Allowance for credit losses was 1,016% of nonperforming loans

Lars B. Eller, President and Chief Executive Officer, stated, “Our second quarter results reflect the talent of our associates, as we continue to work hard to drive operating improvements at F&M, serve our local Ohio, Indiana, and Michigan communities, and position F&M for long-term success. As a result, F&M produced its 85th consecutive quarter of profitability, ended the quarter with a historically low level of nonperforming loans, and we are on pace to pay a record amount of dividends per share in 2024.”

Mr. Eller continued, “As expected, profitability and asset quality benefited during the second quarter from a refinance and paydown on a $16.2 million agricultural based relationship that was in nonaccrual status. Even without this added benefit, core levels of profitability, including our net interest margin, improved over the past three months as we remain focused on maintaining excellent underwriting standards, managing our cost of funds, and controlling operating expenses. In addition, I am encouraged by the year-over-year and sequential improvement in our efficiency ratio as we continue to pursue opportunities that manage operating costs and expand productivity.”

Income StatementNet income for the 2024 second quarter ended June 30, 2024, was $5.7 million, compared to $6.0 million for the same period last year. Net income per basic and diluted share for the 2024 second quarter was $0.42, compared to $0.44 for the same period last year. Net income for the 2024 first half ended June 30, 2024, was $11.0 million, compared to $12.5 million for the same period last year. Net income per basic and diluted share for the 2024 first half was $0.81, compared to $0.92 for the same period last year.

“I am pleased with the progress we are making in a difficult operating environment managing our cost of funds, loan pricing, deposit growth and overall net interest margin. Since the December 31, 2023 quarter, our yield on earning assets has increased by 29 basis points, compared to a 16 basis point increase in our cost of interest bearing liabilities. In fact, over the past three consecutive quarters, our yield on earning assets has outpaced our cost of interest bearing liabilities. We expect this trend will continue as more of our loan portfolio reprices in 2024. In addition, with expected flat loan growth in 2024, we continue to enhance liquidity levels and at June 30, 2024, we had $193.1 million in cash and cash equivalents, compared to $71.2 million at June 30, 2023. We also continue to make progress growing deposits with a prudent focus on managing the interest rates on deposit accounts. On a year-over-year basis, total deposits increased 7.0% to a record $2.64 billion,” continued Mr. Eller.

DepositsAt June 30, 2024, total deposits were $2.64 billion, an increase of 7.0% from June 30, 2023. The Company’s cost of interest-bearing liabilities was 3.18% for the quarter ended June 30, 2024, compared to 2.35% for the quarter ended June 30, 2023, and 3.02% for the 2023 fourth quarter ended December 31, 2023.

Loan Portfolio and Asset QualityMr. Eller concluded, “Our asset quality remains at historically strong levels, with only $2.5 million of nonperforming assets, compared to total assets of $3.32 billion at June 30, 2024. With nonperforming assets at unprecedented low levels, we expect trends to normalize in the coming quarters, especially as economic uncertainty remains elevated. In addition, we are starting to see some early signs of stress within our consumer lending and home loan portfolios, as higher insurance premiums and larger property taxes compound inflationary trends that have impacted consumers over the past several years. We continue to proactively monitor our loan portfolio for any signs of stress, including engaging independent third parties to review our loan portfolio. Overall, F&M is in a strong financial and operating position that we believe is well positioned to create lasting value for our communities, customers, team members, and shareholders.”

Total loans, net at June 30, 2024, increased 1.75%, or by $43.9 million to $2.56 billion, compared to $2.52 billion at June 30, 2023. The year-over-year improvement resulted from the contribution of continued organic loan growth.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $2.5 million, or 0.10% of total loans at June 30, 2024, compared to $6.3 million, or 0.25% of total loans at June 30, 2023, and $22.4 million, or 0.87% at December 31, 2023. As expected, one large relationship in nonaccrual status last quarter was made current in the second quarter, resulting in a $5.3 million paydown in principal on the relationship, with another $3.8 million in principal balances expected to be retired in the third quarter.

F&M maintains a well-balanced, diverse and high performing CRE portfolio. CRE loans represented 50.9% of the Company’s total loan portfolio at June 30, 2024. In addition, F&M’s commercial real estate office credit exposure represented 5.3% of the Company's total loan portfolio at June 30, 2024, with a weighted average loan-to-value of approximately 63.1% and an average loan of approximately $900,000.

F&M’s CRE portfolio included the following categories at June 30, 2024:

CRE Category		Dollar Balance			Percent of CRE Portfolio(*)		Percent of Total Loan Portfolio(*)
Industrial		$	261,436		20.1%		10.2%
Multi-family		$	225,638		17.3%		8.8%
Retail		$	221,011		17.0%		8.6%
Hotels		$	144,548		11.1%		5.6%
Office		$	135,607		10.4%		5.3%
Gas Stations		$	63,077		4.8%		2.5%
Food Service		$	45,976		3.5%		1.8%
Development		$	34,757		2.7%		1.4%
Senior Living		$	30,050		2.3%		1.2%
Auto Dealers		$	25,025		1.9%		1.0%
Other		$	116,473		8.9%		4.5%
Total CRE		$	1,303,598		100.0%		50.9%

* Numbers have been rounded

At June 30, 2024, the Company’s allowance for credit losses to nonperforming loans was 1,016%, compared to 395.71% at June 30, 2023, and 111.95% at December 31, 2023. The allowance to total loans was 0.99% at June 30, 2024, compared to 0.99% at June 30, 2023. Including accretable yield adjustments, associated with the Company’s recent acquisitions, F&M’s allowance for credit losses to total loans was 1.10% at June 30, 2024, compared to 1.20% at June 30, 2023.

Stockholders’ Equity and DividendsTotal stockholders’ equity increased 5.9% to $322.7 million at June 30, 2024, from $304.7 million at June 30, 2023. At June 30, 2024, the Company had a Tier 1 leverage ratio of 8.02%, compared to 9.85% at June 30, 2023.

Based on a regulatory basis, tangible stockholders’ equity increased to $259.9 million at June 30, 2024, compared to $248.3 million at June 30, 2023. On a per share basis, tangible stockholders’ equity at June 30, 2024, was $19.00 per share, compared to $18.21 per share at June 30, 2023.

For the six months ended June 30, 2024, the Company has declared cash dividends of $0.44 per share, which is a 4.8% increase over the same period last year. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 29 consecutive years. For the six months ended June 30, 2024, the dividend payout ratio was 53.89% compared to 45.44% for the same period last year.

About Farmers & Merchants State Bank: Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) is the holding company of F&M Bank, a local independent community bank that has been serving its communities since 1897. F&M Bank provides commercial banking, retail banking and other financial services. Our locations are in Butler, Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood counties in Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben and Wells counties. The Michigan footprint includes Oakland County, and we have Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; and Perrysburg and Bryan, Ohio.

Safe Harbor StatementFarmers & Merchants Bancorp, Inc. (“F&M”) wishes to take advantage of the Safe Harbor provisions included in thePrivate 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 Exchange 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, capital market conditions, or the effects of the COVID-19 pandemic, and its impacts on our credit quality and business operations, as well as its impact on general economic and financial 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 or through F&M’s website www.fm.bank.

Non-GAAP Financial Measures This press release includes disclosure of financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers & Merchants Bancorp, Inc. believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers & Merchants Bancorp, Inc.’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. A reconciliation of GAAP to non-GAAP financial measures is included within this press release.

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME
(Unaudited) (in thousands of dollars, except per share data)
			Three Months Ended																				Six Months Ended
				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				June 30, 2024				June 30, 2023
Interest Income
Loans, including fees			$	36,593			$	35,200			$	34,493			$	33,783			$	31,365			$	71,793			$	61,068
Debt securities:
U.S. Treasury and government agencies				1,148				1,045				987				1,005				1,030				2,193				2,098
Municipalities				389				394				397				392				401				783				809
Dividends				327				333				365				246				148				660				271
Federal funds sold				7				7				8				6				9				14				30
Other				2,702				1,675				2,020				927				424				4,377				903
Total interest income				41,166				38,654				38,270				36,359				33,377				79,820				65,179
Interest Expense
Deposits				16,488				15,279				15,015				13,323				10,434				31,767				18,585
Federal funds purchased and securities sold under agreements to repurchase				276				284				293				349				427				560				832
Borrowed funds				2,742				2,689				2,742				2,741				2,113				5,431				3,393
Subordinated notes				285				284				285				284				285				569				569
Total interest expense				19,791				18,536				18,335				16,697				13,259				38,327				23,379
Net Interest Income - Before Provision for Credit Losses				21,375				20,118				19,935				19,662				20,118				41,493				41,800
Provision for Credit Losses - Loans				605				(289	)			278				460				143				316				960
Provision for Credit Losses - Off Balance Sheet Credit Exposures				(18	)			(266	)			189				(76	)			(129	)			(284	)			(67	)
Net Interest Income After Provision for Credit Losses				20,788				20,673				19,468				19,278				20,104				41,461				40,907
Noninterest Income
Customer service fees				189				598				415				248				369				787				669
Other service charges and fees				1,085				1,057				1,090				1,133				1,092				2,142				2,120
Interchange income				1,330				1,429				1,310				1,266				1,323				2,759				2,742
Loan servicing income				513				539				666				502				1,179				1,052				3,237
Net gain on sale of loans				314				107				230				294				108				421				175
Increase in cash surrender value of bank owned life insurance				236				216				216				221				201				452				397
Net loss on sale of available-for-sale securities				-				-				-				-				-				-				(891	)
Total noninterest income				3,667				3,946				3,927				3,664				4,272				7,613				8,449
Noninterest Expense
Salaries and wages				7,589				7,846				6,981				6,777				6,500				15,435				13,157
Employee benefits				2,112				2,171				1,218				2,066				2,071				4,283				4,236
Net occupancy expense				999				1,027				1,187				950				840				2,026				1,696
Furniture and equipment				1,407				1,353				1,370				1,189				1,211				2,760				2,463
Data processing				448				500				785				840				796				948				1,522
Franchise taxes				265				555				308				434				379				820				745
ATM expense				397				473				665				640				683				870				1,306
Advertising				519				530				397				865				830				1,049				1,344
Net (gain) loss on sale of other assets owned				(49	)			-				86				49				-				(49	)			-
FDIC assessment				507				580				594				586				496				1,087				802
Servicing rights amortization - net				187				168				182				106				164				355				323
Loan expense				251				229				246				241				233				480				568
Consulting fees				198				186				192				179				231				384				461
Professional fees				527				445				331				358				325				972				741
Intangible asset amortization				444				445				446				445				444				889				889
Other general and administrative				1,495				1,333				1,532				1,319				1,641				2,828				3,522
Total noninterest expense				17,296				17,841				16,520				17,044				16,844				35,137				33,775
Income Before Income Taxes				7,159				6,778				6,875				5,898				7,532				13,937				15,581
Income Taxes				1,477				1,419				1,332				1,121				1,531				2,896				3,114
Net Income				5,682				5,359				5,543				4,777				6,001				11,041				12,467
Other Comprehensive Income (Loss) (Net of Tax):
Net unrealized gain (loss) on available-for-sale securities				2,531				(1,995	)			13,261				(4,514	)			(5,996	)			536				2,034
Reclassification adjustment for realized loss on sale of available-for-sale securities				-				-				-				-				-				-				891
Net unrealized gain (loss) on available-for-sale securities				2,531				(1,995	)			13,261				(4,514	)			(5,996	)			536				2,925
Tax expense (benefit)				531				(418	)			2,784				(947	)			(1,260	)			113				614
Other comprehensive income (loss)				2,000				(1,577	)			10,477				(3,567	)			(4,736	)			423				2,311
Comprehensive Income			$	7,682			$	3,782			$	16,020			$	1,210			$	1,265			$	11,464			$	14,778
Basic Earnings Per Share			$	0.42			$	0.39			$	0.41			$	0.35			$	0.44			$	0.81			$	0.92
Diluted Earnings Per Share			$	0.42			$	0.39			$	0.41			$	0.35			$	0.44			$	0.81			$	0.92
Dividends Declared			$	0.22			$	0.22			$	0.22			$	0.21			$	0.21			$	0.44			$	0.42

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (in thousands of dollars, except share data)
			June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
			(Unaudited)				(Unaudited)								(Unaudited)				(Unaudited)
Assets
Cash and due from banks			$	191,785			$	186,541			$	140,917			$	151,711			$	69,760
Federal funds sold				1,283				1,241				1,284				1,471				1,433
	Total cash and cash equivalents			193,068				187,782				142,201				153,182				71,193
Interest-bearing time deposits				3,221				2,735				2,740				2,989				3,485
Securities - available-for-sale				365,209				347,516				358,478				348,255				363,225
Other securities, at cost				14,721				14,744				17,138				16,995				17,535
Loans held for sale				1,628				2,410				1,576				1,039				1,459
Loans, net of allowance for credit losses of $25,270 6/30/24 and $25,024 12/31/23				2,534,468				2,516,687				2,556,167				2,504,329				2,490,883
Premises and equipment				34,507				35,007				35,790				31,723				30,398
Construction in progress				38				9				8				3,044				2,290
Goodwill				86,358				86,358				86,358				86,358				86,358
Loan servicing rights				5,504				5,555				5,648				5,687				5,635
Bank owned life insurance				34,359				34,123				33,907				33,691				33,470
Other assets				49,552				54,628				43,218				47,388				41,512
Total Assets			$	3,322,633			$	3,287,554			$	3,283,229			$	3,234,680			$	3,147,443
	Liabilities and Stockholders' Equity
Liabilities
Deposits
	Noninterest-bearing		$	479,069			$	510,731			$	528,465			$	505,358			$	488,678
	Interest-bearing
	NOW accounts			821,145				829,236				816,790				778,133				770,113
	Savings			673,284				635,430				599,191				591,344				581,192
	Time			667,592				645,985				663,017				700,445				628,757
	Total deposits			2,641,090				2,621,382				2,607,463				2,575,280				2,468,740
Federal funds purchased and securities
sold under agreements to repurchase				27,218				28,218				28,218				30,527				51,567
Federal Home Loan Bank (FHLB) advances				266,102				256,628				265,750				266,286				266,818
Subordinated notes, net of unamortized issuance costs				34,759				34,731				34,702				34,673				34,644
Dividend payable				2,975				2,975				2,974				2,838				2,834
Accrued expenses and other liabilities				27,825				25,930				27,579				21,892				18,177
	Total liabilities			2,999,969				2,969,864				2,966,686				2,931,496				2,842,780
Commitments and Contingencies
Stockholders' Equity
Common stock - No par value 20,000,000 shares authorized; issued and
outstanding 14,564,425 shares 6/30/24 and 12/31/23				135,829				135,482				135,515				135,171				135,647
Treasury stock - 884,481 shares 6/30/24 and 899,784 shares 12/31/23				(11,006	)			(10,851	)			(11,040	)			(11,008	)			(11,298	)
Retained earnings				226,430				223,648				221,080				218,510				216,236
Accumulated other comprehensive loss				(28,589	)			(30,589	)			(29,012	)			(39,489	)			(35,922	)
	Total stockholders' equity			322,664				317,690				316,543				303,184				304,663
Total Liabilities and Stockholders' Equity			$	3,322,633			$	3,287,554			$	3,283,229			$	3,234,680			$	3,147,443

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
SELECT FINANCIAL DATA
			For the Three Months Ended																			For the Six Months Ended
Selected financial data		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				June 30, 2024				June 30, 2023
Return on average assets			0.69	%			0.66	%			0.67	%			0.59	%			0.77	%		0.67	%			0.81	%
Return on average equity			7.13	%			6.76	%			7.27	%			6.26	%			7.84	%		6.94	%			8.21	%
Yield on earning assets			5.22	%			5.00	%			4.93	%			4.79	%			4.53	%		5.11	%			4.47	%
Cost of interest bearing liabilities			3.18	%			3.06	%			3.02	%			2.82	%			2.35	%		3.12	%			2.10	%
Net interest spread			2.04	%			1.94	%			1.91	%			1.97	%			2.18	%		1.99	%			2.37	%
Net interest margin			2.71	%			2.60	%			2.57	%			2.59	%			2.73	%		2.66	%			2.87	%
Efficiency			69.03	%			74.08	%			69.23	%			73.07	%			69.06	%		71.50	%			66.04	%
Dividend payout ratio			52.35	%			55.52	%			54.23	%			60.07	%			47.22	%		53.89	%			45.44	%
Tangible book value per share (1)		$	19.00			$	18.75			$	18.60			$	18.36			$	18.21
Tier 1 leverage ratio			8.02	%			8.40	%			8.20	%			8.02	%			9.85	%
Average shares outstanding			13,681,501				13,671,166				13,665,773				13,650,823				13,632,440			13,676,333				13,624,094
Loans		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
(Dollar amounts in thousands)
Commercial real estate		$	1,303,598			$	1,304,400			$	1,337,766			$	1,304,118			$	1,280,902
Agricultural real estate			222,558				227,455				223,791				225,672				230,837
Consumer real estate			525,902				525,178				521,895				512,973				506,866
Commercial and industrial			268,426				256,051				254,935				250,891				253,444
Agricultural			142,909				127,670				132,560				123,735				128,344
Consumer			70,918				74,819				79,591				83,024				88,312
Other			26,449				26,776				30,136				31,083				28,996
Less: Net deferred loan fees, costs and other (2)			(1,022	)			(982	)			517				(1,890	)			(1,908	)
Total loans,net		$	2,559,738			$	2,541,367			$	2,581,191			$	2,529,606			$	2,515,793
Asset quality data		June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023
(Dollar amounts in thousands)
Nonaccrual loans		$	2,487			$	19,391			$	22,353			$	22,447			$	6,295
90 day past due and accruing		$	-			$	-			$	-			$	-			$	-
Nonperforming loans		$	2,487			$	19,391			$	22,353			$	22,447			$	6,295
Other real estate owned		$	-			$	-			$	-			$	-			$	-
Nonperforming assets		$	2,487			$	19,391			$	22,353			$	22,447			$	6,295
Allowance for credit losses		$	25,270			$	24,680			$	25,024			$	25,277			$	24,910
Allowance for unfunded			1,928				1,946				2,212				2,023				2,099
Total Allowance for Credit Losses		$	27,198			$	26,626			$	27,236			$	27,300			$	27,009
Allowance for credit losses/total loans			0.99	%			0.97	%			0.97	%			1.00	%			0.99	%
Adjusted credit losses with accretable yield/total loans			1.10	%			1.11	%			1.13	%			1.18	%			1.20	%
Net charge-offs:
Quarter-to-date		$	15			$	55			$	454			$	93			$	(133	)
Year-to-date		$	70			$	55			$	551			$	97			$	(73	)
Net charge-offs to average loans
Quarter-to-date			0.00	%			0.00	%			0.02	%			0.00	%			-0.01	%
Year-to-date			0.00	%			0.00	%			0.02	%			0.00	%			-0.00	%
Nonperforming loans/total loans			0.10	%			0.76	%			0.87	%			0.89	%			0.25	%
Allowance for credit losses/nonperforming loans			1016.08	%			127.28	%			111.95	%			112.61	%			395.71	%
NPA coverage ratio			1016.08	%			127.28	%			111.95	%			112.61	%			395.71	%
(1) Tangible Equity = Stockholder Equity less goodwill, other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities) plus CECL adjustment
(2) Includes carrying value adjustments of $612 thousand as of June 30, 2024, $969 thousand as of March 31, 2024 and $2.7 million as of December 31, 2023 related to interest rate swaps associated with fixed rate loans

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES
(in thousands of dollars, except percentages)
		For the Three Months Ended											For the Three Months Ended
		June 30, 2024											June 30, 2023
Interest Earning Assets:		Average Balance				Interest/Dividends				Annualized Yield/Rate			Average Balance				Interest/Dividends				Annualized Yield/Rate
Loans		$	2,556,417			$	36,593			5.73	%		$	2,476,795			$	31,365			5.07	%
Taxable investment securities			391,439				1,782			1.82	%			399,257				1,486			1.49	%
Tax-exempt investment securities			20,907				82			1.99	%			24,259				93			1.94	%
Fed funds sold & other			187,682				2,709			5.77	%			49,160				433			3.52	%
Total Interest Earning Assets			3,156,445			$	41,166			5.22	%			2,949,471			$	33,377			4.53	%
Nonearning Assets			156,239											169,599
Total Assets		$	3,312,684										$	3,119,070
Interest Bearing Liabilities:
Savings deposits		$	1,492,831			$	10,193			2.73	%		$	1,356,798			$	6,238			1.84	%
Other time deposits			668,583				6,295			3.77	%			612,929				4,196			2.74	%
Other borrowed money			265,229				2,742			4.14	%			215,884				2,113			3.92	%
Fed funds purchased & securities
sold under agreement to repurch.			27,721				276			3.98	%			39,966				427			4.27	%
Subordinated notes			34,740				285			3.28	%			34,625				285			3.29	%
Total Interest Bearing Liabilities		$	2,489,104			$	19,791			3.18	%		$	2,260,202			$	13,259			2.35	%
Noninterest Bearing Liabilities			504,821											552,867
Stockholders' Equity		$	318,759										$	306,001
Net Interest Income and Interest Rate Spread						$	21,375			2.04	%						$	20,118			2.18	%
Net Interest Margin										2.71	%										2.73	%
Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts
		For the Six Months Ended											For the Six Months Ended
		June 30, 2024											June 30, 2023
Interest Earning Assets:		Average Balance				Interest/Dividends				Annualized Yield/Rate			Average Balance				Interest/Dividends				Annualized Yield/Rate
Loans		$	2,566,765			$	71,793			5.60	%		$	2,437,148			$	61,068			5.01	%
Taxable investment securities			388,225				3,468			1.79	%			398,383				2,985			1.50	%
Tax-exempt investment securities			21,196				168			2.01	%			25,303				193			1.93	%
Fed funds sold & other			149,035				4,391			5.89	%			58,853				933			3.17	%
Total Interest Earning Assets			3,125,221			$	79,820			5.11	%			2,919,687			$	65,179			4.47	%
Nonearning Assets			157,510											174,702
Total Assets		$	3,282,731										$	3,094,389
Interest Bearing Liabilities:
Savings deposits		$	1,467,669			$	19,600			2.67	%		$	1,378,518			$	11,181			1.62	%
Other time deposits			659,581				12,167			3.69	%			596,168				7,404			2.48	%
Other borrowed money			264,217				5,431			4.11	%			174,171				3,393			3.90	%
Fed funds purchased & securities
sold under agreement to repurch.			28,089				560			3.99	%			39,409				832			4.22	%
Subordinated notes			34,726				569			3.28	%			34,610				569			3.29	%
Total Interest Bearing Liabilities		$	2,454,282			$	38,327			3.12	%		$	2,222,876			$	23,379			2.10	%
Noninterest Bearing Liabilities			510,453											567,878
Stockholders' Equity		$	317,996										$	303,635
Net Interest Income and Interest Rate Spread						$	41,493			1.99	%						$	41,800			2.37	%
Net Interest Margin										2.66	%										2.87	%
Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES
(in thousands of dollars, except percentages)
	For the Three Months Ended June 30, 2024																		For the Three Months Ended June 30, 2023
	As Reported						Excluding Acc/Amort						Difference						As Reported						Excluding Acc/Amort						Difference
	$			Yield			$			Yield			$			Yield			$			Yield			$			Yield			$			Yield
Interest Earning Assets:
Loans	$	36,593		5.73	%		$	35,914		5.62	%		$	679		0.11	%		$	31,365		5.07	%		$	30,697		4.96	%		$	668		0.11	%
Taxable investment securities		1,782		1.82	%			1,782		1.82	%			-		0.00	%			1,486		1.49	%			1,486		1.49	%			-		0.00	%
Tax-exempt investment securities		82		1.99	%			82		1.99	%			-		0.00	%			93		1.94	%			93		1.94	%			-		0.00	%
Fed funds sold & other		2,709		5.77	%			2,709		5.77	%			-		0.00	%			433		3.52	%			433		3.52	%			-		0.00	%
Total Interest Earning Assets		41,166		5.22	%			40,487		5.13	%			679		0.09	%			33,377		4.53	%			32,709		4.44	%			668		0.09	%
Interest Bearing Liabilities:
Savings deposits	$	10,193		2.73	%		$	10,193		2.73	%		$	-		0.00	%		$	6,238		1.84	%		$	6,238		1.84	%		$	-		0.00	%
Other time deposits		6,295		3.77	%			6,295		3.77	%			-		0.00	%			4,196		2.74	%			4,291		2.80	%			(95	)	-0.06	%
Other borrowed money		2,742		4.14	%			2,747		4.14	%			(5	)	0.00	%			2,113		3.92	%			2,130		3.95	%			(17	)	-0.03	%
Federal funds purchased and
securities sold under agreement to
repurchase		276		3.98	%			276		3.98	%			-		0.00	%			427		4.27	%			427		4.27	%			-		0.00	%
Subordinated notes		285		3.28	%			285		3.28	%			-		0.00	%			285		3.29	%			285		3.29	%			-		0.00	%
Total Interest Bearing Liabilities		19,791		3.18	%			19,796		3.18	%			(5	)	0.00	%			13,259		2.35	%			13,371		2.37	%			(112	)	-0.02	%
Interest/Dividend income/yield		41,166		5.22	%			40,487		5.13	%			679		0.09	%			33,377		4.53	%			32,709		4.44	%			668		0.09	%
Interest Expense / yield		19,791		3.18	%			19,796		3.18	%			(5	)	0.00	%			13,259		2.35	%			13,371		2.37	%			(112	)	-0.02	%
Net Interest Spread		21,375		2.04	%			20,691		1.95	%			684		0.09	%			20,118		2.18	%			19,338		2.07	%			780		0.11	%
Net Interest Margin				2.71	%					2.62	%					0.09	%					2.73	%					2.63	%					0.10	%
	For the Six Months Ended June 30, 2024																		For the Six Months Ended June 30, 2023
	As Reported						Excluding Acc/Amort						Difference						As Reported						Excluding Acc/Amort						Difference
	$			Yield			$			Yield			$			Yield			$			Yield			$			Yield			$			Yield
Interest Earning Assets:
Loans	$	71,793		5.60	%		$	70,439		5.49	%		$	1,354		0.11	%		$	61,068		5.01	%		$	59,733		4.90	%		$	1,335		0.11	%
Taxable investment securities		3,468		1.79	%			3,468		1.79	%			-		0.00	%			2,985		1.50	%			2,985		1.50	%			-		0.00	%
Tax-exempt investment securities		168		2.01	%			168		2.01	%			-		0.00	%			193		1.93	%			193		1.93	%			-		0.00	%
Fed funds sold & other		4,391		5.89	%			4,391		5.89	%			-		0.00	%			933		3.17	%			933		3.17	%			-		0.00	%
Total Interest Earning Assets		79,820		5.11	%			78,466		5.03	%			1,354		0.08	%			65,179		4.47	%			63,844		4.38	%			1,335		0.09	%
Interest Bearing Liabilities:
Savings deposits	$	19,600		2.67	%		$	19,600		2.67	%		$	-		0.00	%		$	11,181		1.62	%		$	11,181		1.62	%		$	-		0.00	%
Other time deposits		12,167		3.69	%			12,167		3.69	%			-		0.00	%			7,404		2.48	%			7,958		2.67	%			(554	)	-0.19	%
Other borrowed money		5,431		4.11	%			5,454		4.13	%			(23	)	-0.02	%			3,393		3.90	%			3,428		3.94	%			(35	)	-0.04	%
Federal funds purchased and
securities sold under agreement to
repurchase		560		3.99	%			560		3.99	%			-		0.00	%			832		4.22	%			832		4.22	%			-		0.00	%
Subordinated notes		569		3.28	%			569		3.28	%			-		0.00	%			569		3.29	%			569		3.29	%			-		0.00	%
Total Interest Bearing Liabilities		38,327		3.12	%			38,350		3.13	%			(23	)	-0.01	%			23,379		2.10	%			23,968		2.16	%			(589	)	-0.06	%
Interest/Dividend income/yield		79,820		5.11	%			78,466		5.03	%			1,354		0.08	%			65,179		4.47	%			63,844		4.38	%			1,335		0.09	%
Interest Expense / yield		38,327		3.12	%			38,350		3.13	%			(23	)	-0.01	%			23,379		2.10	%			23,968		2.16	%			(589	)	-0.06	%
Net Interest Spread		41,493		1.99	%			40,116		1.90	%			1,377		0.09	%			41,800		2.37	%			39,876		2.22	%			1,924		0.15	%
Net Interest Margin				2.66	%					2.57	%					0.09	%					2.87	%					2.74	%					0.13	%

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATION OF TANGIBLE BOOK VALUE
		Actual End of Period								Regulatory End of Period
Non-GAAP Reconciliation of Tangible Book Value		Year to Date								Year to Date
		June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Shares Outstanding			13,679,944				13,634,912				13,679,944				13,634,912
Tangible Equity
Equity		$	322,664			$	304,663			$	322,664			$	304,663
Goodwill			86,358				86,358				86,358				86,358
Other Intangible			6,658				8,437				6,658				8,437
Comprehensive Loss Adjustment*			-				-				28,589				35,922
CECL Adjustment**			-				-				1,685				2,528
Tangible Equity		$	229,648			$	209,868			$	259,922			$	248,318
Shares Outstanding			13,680				13,635				13,680				13,635
Tangible Book Equity per Share		$	16.79			$	15.39			$	19.00			$	18.21
		Actual Average								Regulatory Average
		Year to Date								Year to Date
		June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Net Income		$	11,041			$	12,467			$	11,041			$	12,467
Acquisition Costs - Tax Adjusted			-				147				-				147
Average Shares Outstanding			13,676,333				13,624,094				13,676,333				13,624,094
Average Tangible Equity
Average Equity		$	317,996			$	303,635			$	317,996			$	303,635
Average Goodwill			86,358				86,358				86,358				86,358
Average Other Intangible			7,167				8,942				7,167				8,942
Average Comprehensive Loss Adjustment*			-				-				31,346				34,921
Average CECL Adjustment**			-				-				1,685				2,528
Average Tangible Equity		$	224,471			$	208,335			$	257,502			$	245,784
Average Shares Outstanding			13,676				13,624				13,676				13,624
Average Tangible Book Equity per Share		$	16.41			$	15.29			$	18.83			$	18.04
Return on Average Tangible Equity			9.84	%			11.97	%			8.58	%			10.14	%
Return on Average Tangible Equity w/o Acquisition			9.84	%			12.11	%			8.58	%			10.26	%
*The Bank has adopted the Accumulated Other Comprehensive Income (AOCI) opt out election which removed AOCI from the
calculation of tangible equity for regulatory purposes.
**ASU 2016-13 adopted during the first quarter of 2023. The Bank has elected to spread the capital adjustment over three years.
The first year permits 75% of the capital adjustment and the second year permits 50% of the capital adjustment to be removed
from the calculation of tangible equity for regulatory purposes.

Company Contact:	Investor and Media Contact:
Lars B. EllerPresident and Chief Executive OfficerFarmers & Merchants Bancorp, Inc.(419) 446-2501 leller@fm.bank	Andrew M. BergerManaging DirectorSM Berger & Company, Inc. (216) 464-6400andrew@smberger.com