Farmers & Merchants Bancorp, Inc. Reports 2024 Fourth-Quarter and Full-Year Financial Results

Farmers & Merchants Bancorp, Inc.

Wed, Feb 12, 2025, 2:30 PM 18 min read

87 consecutive quarters of profitability
Net income increased 51.2% to $8.4 million, or $0.61 per basic and diluted share, from $5.5 million, or $0.41 per basic and diluted share
Asset quality remains at historically strong levels with nonperforming loans of only $3.1 million at December 31, 2024, compared to $22.4 million at December 31, 2023
Net charge-offs to average loans were 0.00%
Allowance for credit losses was 826.70% of nonperforming loans
Tier 1 leverage ratio was 8.12%
Net interest margin increased 27 basis points to 2.84%
Efficiency ratio improved to 59.82%, compared to 69.23% for the same period a year ago

2024 Full-Year Financial Highlights Include (on a year-over-year basis unless noted):

Total loans, net were $2.56 billion at December 31, 2024, compared to $2.58 billion at December 31, 2023 and $2.54 billion at September 30, 2024
Total assets increased 2.5% to $3.36 billion
Deposits increased 3.0% to a record $2.69 billion
Stockholders’ equity increased 5.9% to $335.2 million
Net interest income after provision for credit losses increased 7.5% to $85.6 million
Return on average tangible equity was 8.91%
F&M ended 2024 with excellent liquidity levels, and over $690 million in contingent funding sources, and a cash-to-assets ratio of 5.3%, compared to 4.3% at December 31, 2023
Dividend raised 3.8% year-over-year, representing the 30^th consecutive annual increase in the Company’s regular dividend payment since 1994

Lars B. Eller, President and Chief Executive Officer, stated, “Our strong 2024 financial performance reflects solid execution of our multi-year strategic plan, as we have remained focused on continual improvements, managing the items under our control, and providing our customers and communities with outstanding, and local financial services. Thanks to the unwavering dedication of our team and the trust of our customers, F&M’s financial and operating results strengthened throughout 2024. This performance creates a solid foundation and further solidifies F&M’s position as a leading community bank in the Ohio, Indiana and Michigan markets we serve.”

Mr. Eller continued, “Strong earnings growth in 2024 was driven by the success of ongoing strategies aimed at expanding our net interest margin, maintaining excellent asset quality, and driving efficiencies across our business. Core earnings for the 2024 fourth quarter were strong as net interest income after provision for credit losses increased 16.1% year-over-year to a quarterly record of $22.6 million, and noninterest income expanded 4.1% year-over-year to $4.0 million. We believe these trends highlight the improvements we have made to profitability, and we expect these trends to continue in the second half 2025.”

Income Statement
Net income for the 2024 fourth quarter ended December 31, 2024, was $8.4 million, compared to $5.5 million for the same period last year. Net income per basic and diluted share for the 2024 fourth quarter was $0.61, compared to $0.41 for the same period last year. Net income for the 2024 twelve months ended December 31, 2024, was $25.9 million, compared to $22.8 million for the same period last year. Net income per basic and diluted share for the 2024 twelve months was $1.90, compared to $1.67 for the same period last year.

Deposits
At December 31, 2024, total deposits were a record $2.69 billion, an increase of 3.0% from December 31, 2023. The Company’s cost of interest-bearing liabilities was 3.01% for the quarter ended December 31, 2024, compared to 3.02% for the quarter ended December 31, 2023. For the 2024 twelve months ended December 31, 2024, F&M’s cost of interest-bearing liabilities was 3.12%, compared to 2.53% in the prior year reflecting the higher rate environment and growth in interest-bearing checking and savings accounts.

Mr. Eller commented, “Throughout 2024, we pursued strategies aimed at optimizing our deposit base and growing low-cost checking (DDA) deposits. Since the beginning of 2024, we added nearly 7,500 new checking accounts, and benefited from new and expanded relationships at offices that were opened in 2023. As a result, we ended 2024 with a loan-to-deposit ratio of 94.4%, compared to 98.0% at December 31, 2023.”

Loan Portfolio and Asset Quality
“While the demand for loans is high across our markets, our approach to risk and pricing remains prudent. This strategy has contributed to historically strong asset quality over the past two quarters and is a testament to F&M’s risk, lending, and compliance capabilities and high-performing teams. We expect loan growth to increase modestly in 2025, with growth weighted in the back half of the year. In addition, 31.4% of our loan portfolio is subject to reprice in the next 12 months. We believe these favorable trends will contribute to higher net interest income in 2025,” continued Mr. Eller.

Total loans, net at December 31, 2024, decreased 0.7%, or by $19.3 million to $2.56 billion, compared to $2.58 billion at December 31, 2023. The year-over-year decline was driven primarily by lower consumer real estate, consumer, and agricultural real estate loans, partially offset primarily by higher commercial and industrial and agricultural loans. Compared to the quarter ended September 30, 2024, total loans, net at December 31, 2024 increased by 0.9% or $23.5 million.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $3.1 million, or 0.12% of total loans at December 31, 2024, compared to $22.4 million, or 0.87% of total loans at December 31, 2023, and $2.9 million, or 0.11% at September 30, 2024.

F&M maintains a well-balanced, diverse and high performing CRE portfolio. CRE loans represented 51.2% of the Company’s total loan portfolio at December 31, 2024. In addition, F&M’s commercial real estate office credit exposure represented 5.2% of the Company's total loan portfolio at December 31, 2024, with a weighted average loan-to-value of approximately 64% and an average loan of approximately $958,100.

F&M’s CRE portfolio included the following categories at December 31, 2024:

CRE Category	Dollar Balance		Percent of CRE Portfolio⁽^*)	Percent of Total Loan Portfolio⁽^*)

Industrial	$	269,315	20.6%	10.5%
Multi-family		233,868	17.8%	9.1%
Retail		219,395	16.7%	8.6%
Hotels		141,514	10.8%	5.5%
Office		134,139	10.2%	5.2%
Gas Stations		70,767	5.4%	2.8%
Food Service		49,246	3.8%	1.9%
Senior Living		31,799	2.4%	1.3%
Development		29,491	2.3%	1.2%
Auto Dealers		28,081	2.1%	1.1%
Other		103,196	7.9%	4.0%
Total CRE	$	1,310,811	100.0%	51.2%

* Numbers have been rounded

At December 31, 2024, the Company’s allowance for credit losses to nonperforming loans was 826.70%, compared to 111.95% at December 31, 2023. The allowance to total loans was 1.07% at December 31, 2024, compared to 1.06% at December 31, 2023. Including accretable yield adjustments, associated with the Company’s prior acquisitions, F&M’s allowance for credit losses to total loans was 1.08% at December 31, 2024, compared to 1.13% at December 31, 2023.

Mr. Eller concluded, “Throughout the new year, we will leverage F&M’s strong banking platform, while continuing to make strategic investments that expanded our operations, capabilities, and services. We believe this will expand operating efficiencies and produce better outcomes for our customers. I am proud of our strong performance in 2024, and expect 2025 to be another good year for F&M.”

Stockholders’ Equity and Dividends
Total stockholders’ equity increased 5.9% to $335.2 million, or $24.47 per share at December 31, 2024, from $316.5 million, or $23.17 per share at December 31, 2023. The Company’s Tier 1 leverage ratio of 8.12%, remained stable compared to December 31, 2023.

Tangible stockholders’ equity increased to $270.0 million at December 31, 2024, compared to $254.2 million at December 31, 2023. On a per share basis, tangible stockholders’ equity at December 31, 2024, was $17.74 per share, compared to $16.29 per share at December 31, 2023.

For the twelve months ended December 31, 2024, the Company declared cash dividends of $0.8825 per share, representing a 3.8% increase over the same period last year. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 30 consecutive years. For the twelve months ended December 31, 2024, the dividend payout ratio was 46.07% compared to 50.65% for the same period last year.

About Farmers & Merchants State Bank:
F&M Bank is 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 Troy, Michigan; Muncie, Indiana; and Perrysburg and Bryan, Ohio.

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 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															Twelve Months Ended
	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Interest Income
Loans, including fees	$	36,663		$	36,873		$	36,593		$	35,200		$	34,493		$	145,329		$	129,344
Debt securities:
U.S. Treasury and government agencies	1,882			1,467			1,148			1,045			987			5,542			4,090
Municipalities	384			387			389			394			397			1,554			1,598
Dividends	367			334			327			333			365			1,361			882
Federal funds sold	24			7			7			7			8			45			44
Other	2,531			2,833			2,702			1,675			2,020			9,741			3,850
Total interest income	41,851			41,901			41,166			38,654			38,270			163,572			139,808
Interest Expense
Deposits	15,749			16,947			16,488			15,279			15,015			64,463			46,923
Federal funds purchased and securities sold under agreements to repurchase	274			277			276			284			293			1,111			1,474
Borrowed funds	2,713			2,804			2,742			2,689			2,742			10,948			8,876
Subordinated notes	285			284			285			284			285			1,138			1,138
Total interest expense	19,021			20,312			19,791			18,536			18,335			77,660			58,411
Net Interest Income - Before Provision for Credit Losses	22,830			21,589			21,375			20,118			19,935			85,912			81,397
Provision for (Recovery of) Credit Losses - Loans	346			282			605			(289		)	278			944			1,698
Provision for (Recovery of) Credit Losses - Off Balance Sheet Credit Exposures	(120		)	(267		)	(18		)	(266		)	189			(671		)	46
Net Interest Income After Provision for Credit Losses	22,604			21,574			20,788			20,673			19,468			85,639			79,653
Noninterest Income
Customer service fees	237			300			189			598			415			1,324			1,332
Other service charges and fees	1,176			1,155			1,085			1,057			1,090			4,473			4,343
Interchange income	1,322			1,315			1,330			1,429			1,310			5,396			5,318
Loan servicing income	771			710			513			539			666			2,533			4,405
Net gain on sale of loans	223			215			314			107			230			859			699
Increase in cash surrender value of bank owned life insurance	248			265			236			216			216			965			834
Net gain (loss) on sale of other assets owned	22			-			49			-			(86		)	71			(135		)
Net loss on sale of available-for-sale securities	-			-			-			-			-			-			(891		)
Total noninterest income	3,999			3,960			3,716			3,946			3,841			15,621			15,905
Noninterest Expense
Salaries and wages	7,020			7,713			7,589			7,846			6,981			30,168			26,915
Employee benefits	2,148			2,112			2,112			2,171			1,218			8,543			7,520
Net occupancy expense	1,072			1,054			999			1,027			1,187			4,152			3,833
Furniture and equipment	1,032			1,472			1,407			1,353			1,370			5,264			5,022
Data processing	160			339			448			500			785			1,447			3,147
Franchise taxes	312			410			265			555			308			1,542			1,487
ATM expense	328			472			397			473			665			1,670			2,611
Advertising	498			597			519			530			397			2,144			2,606
FDIC assessment	505			516			507			580			594			2,108			1,982
Servicing rights amortization - net	244			219			187			168			182			818			611
Loan expense	236			244			251			229			246			960			1,055
Consulting fees	242			251			198			186			192			877			832
Professional fees	368			453			527			445			331			1,793			1,430
Intangible asset amortization	446			445			444			445			446			1,780			1,780
Other general and administrative	1,465			1,128			1,495			1,333			1,532			5,421			6,373
Total noninterest expense	16,076			17,425			17,345			17,841			16,434			68,687			67,204
Income Before Income Taxes	10,527			8,109			7,159			6,778			6,875			32,573			28,354
Income Taxes	2,146			1,593			1,477			1,419			1,332			6,635			5,567
Net Income	8,381			6,516			5,682			5,359			5,543			25,938			22,787
Other Comprehensive Income (Loss) (Net of Tax):
Net unrealized gain (loss) on available-for-sale securities	(7,403		)	11,664			2,531			(1,995		)	13,261			4,797			10,781
Reclassification adjustment for realized loss on sale of available-for-sale securities	-			-			-			-			-			-			891
Net unrealized gain (loss) on available-for-sale securities	(7,403		)	11,664			2,531			(1,995		)	13,261			4,797			11,672
Tax expense (benefit)	(1,554		)	2,449			531			(418		)	2,784			1,008			2,451
Other comprehensive income (loss)	(5,849		)	9,215			2,000			(1,577		)	10,477			3,789			9,221
Comprehensive Income	$	2,532		$	15,731		$	7,682		$	3,782		$	16,020		$	29,727		$	32,008
Basic Earnings Per Share	$	0.61		$	0.48		$	0.42		$	0.39		$	0.41		$	1.90		$	1.67
Diluted Earnings Per Share	$	0.61		$	0.48		$	0.42		$	0.39		$	0.41		$	1.90		$	1.67
Dividends Declared	$	0.22125		$	0.22125		$	0.22		$	0.22		$	0.22		$	0.88250		$	0.85

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands of dollars, except per share data)

	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
				(Unaudited)			(Unaudited)			(Unaudited)
Assets
Cash and due from banks	$	174,855		$	244,572		$	191,785		$	186,541		$	140,917
Federal funds sold	1,496			932			1,283			1,241			1,284
Total cash and cash equivalents	176,351			245,504			193,068			187,782			142,201

Interest-bearing time deposits	2,482			2,727			3,221			2,735			2,740
Securities - available-for-sale	426,556			404,881			365,209			347,516			358,478
Other securities, at cost	14,400			15,028			14,721			14,744			17,138
Loans held for sale	2,996			1,706			1,628			2,410			1,576
Loans, net of allowance for credit losses of $25,826 12/31/24 and $25,024 12/31/23	2,536,043			2,512,852			2,534,468			2,516,687			2,556,167
Premises and equipment	33,828			33,779			34,507			35,007			35,790
Construction in progress	-			35			38			9			8
Goodwill	86,358			86,358			86,358			86,358			86,358
Loan servicing rights	5,656			5,644			5,504			5,555			5,648
Bank owned life insurance	34,872			34,624			34,359			34,123			33,907
Other assets	45,181			46,047			49,552			54,628			43,218
Total Assets	$	3,364,723		$	3,389,185		$	3,322,633		$	3,287,554		$	3,283,229

Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing	$	516,904		$	481,444		$	479,069		$	510,731		$	528,465
Interest-bearing
NOW accounts	850,462			865,617			821,145			829,236			816,790
Savings	671,818			661,565			673,284			635,430			599,191
Time	647,581			676,187			667,592			645,985			663,017
Total deposits	2,686,765			2,684,813			2,641,090			2,621,382			2,607,463

Federal funds purchased and securities
sold under agreements to repurchase	27,218			27,292			27,218			28,218			28,218
Federal Home Loan Bank (FHLB) advances	246,056			263,081			266,102			256,628			265,750
Subordinated notes, net of unamortized issuance costs	34,818			34,789			34,759			34,731			34,702
Dividend payable	2,996			2,998			2,975			2,975			2,974
Accrued expenses and other liabilities	31,659			40,832			27,825			25,930			27,579
Total liabilities	3,029,512			3,053,805			2,999,969			2,969,864			2,966,686

Commitments and Contingencies

Stockholders' Equity
Common stock - No par value 20,000,000 shares authorized; issued
14,564,425 shares 12/31/24 and 12/31/23; outstanding 13,699,536	135,565			135,193			135,829			135,482			135,515
shares 12/31/24 and 13,664,641 shares 12/31/23
Treasury stock - 864,889 shares 12/31/24 and 899,784 shares 12/31/23	(10,985		)	(10,904		)	(11,006		)	(10,851		)	(11,040		)
Retained earnings	235,854			230,465			226,430			223,648			221,080
Accumulated other comprehensive loss	(25,223		)	(19,374		)	(28,589		)	(30,589		)	(29,012		)
Total stockholders' equity	335,211			335,380			322,664			317,690			316,543

Total Liabilities and Stockholders' Equity	$	3,364,723		$	3,389,185		$	3,322,633		$	3,287,554		$	3,283,229

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES SELECT FINANCIAL DATA

	For the Three Months Ended										For the Twelve Months Ended
Selected financial data	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Return on average assets		0.99%		0.78%		0.69%		0.66%		0.67%		0.78%		0.71%
Return on average equity		10.00%		7.93%		7.13%		6.76%		7.27%		7.98%		7.46%
Yield on earning assets		5.20%		5.27%		5.22%		5.00%		4.93%		5.17%		4.67%
Cost of interest bearing liabilities		3.01%		3.21%		3.18%		3.06%		3.02%		3.12%		2.53%
Net interest spread		2.19%		2.06%		2.04%		1.94%		1.91%		2.05%		2.14%
Net interest margin		2.84%		2.71%		2.71%		2.60%		2.57%		2.72%		2.72%
Efficiency		59.82%		67.98%		69.03%		74.08%		69.23%		67.54%		68.48%
Dividend payout ratio		35.75%		45.99%		52.35%		55.52%		54.23%		46.07%		50.65%
Tangible book value per share	$	17.74	$	17.72	$	16.79	$	16.39	$	16.29
Tier 1 leverage ratio		8.12%		8.04%		8.02%		8.40%		8.20%
Average shares outstanding		13,699,869		13,687,119		13,681,501		13,671,166		13,665,773		13,679,955		13,641,336

Loans	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
(Dollar amounts in thousands)
Commercial real estate	$	1,310,811	$	1,301,160	$	1,303,598	$	1,304,400	$	1,337,766
Agricultural real estate		216,401		220,328		222,558		227,455		223,791
Consumer real estate		520,114		524,055		525,902		525,178		521,895
Commercial and industrial		275,152		260,732		268,426		256,051		254,935
Agricultural		152,080		137,252		142,909		127,670		132,560
Consumer		63,009		67,394		70,918		74,819		79,591
Other		24,978		25,916		26,449		26,776		30,136
Less: Net deferred loan fees, costs and other ⁽¹⁾		(676)		1,499		(1,022)		(982)		517
Total loans, net	$	2,561,869	$	2,538,336	$	2,559,738	$	2,541,367	$	2,581,191


Asset quality data	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
(Dollar amounts in thousands)
Nonaccrual loans	$	3,124	$	2,898	$	2,487	$	19,391	$	22,353
90 day past due and accruing	$	-	$	-	$	-	$	-	$	-
Nonperforming loans	$	3,124	$	2,898	$	2,487	$	19,391	$	22,353
Other real estate owned	$	-	$	-	$	-	$	-	$	-
Nonperforming assets	$	3,124	$	2,898	$	2,487	$	19,391	$	22,353


Allowance for credit losses	$	25,826	$	25,484	$	25,270	$	24,680	$	25,024
Allowance for unfunded		1,541		1,661		1,928		1,946		2,212
Total allowance for credit losses	$	27,367	$	27,145	$	27,198	$	26,626	$	27,236
Total allowance for credit losses/total loans		1.07%		1.07%		1.06%		1.05%		1.06%
Adjusted credit losses with accretable yield/total loans		1.08%		1.10%		1.10%		1.11%		1.13%
Net charge-offs:
Quarter-to-date	$	4	$	68	$	15	$	55	$	531
Year-to-date	$	142	$	138	$	70	$	55	$	551
Net charge-offs to average loans
Quarter-to-date		0.00%		0.00%		0.00%		0.00%		0.02%
Year-to-date		0.01%		0.01%		0.00%		0.00%		0.02%
Nonperforming loans/total loans		0.12%		0.11%		0.10%		0.76%		0.87%
Allowance for credit losses/nonperforming loans		826.70%		879.37%		1016.08%		127.28%		111.95%
NPA coverage ratio		826.70%		879.37%		1016.08%		127.28%		111.95%

⁽¹⁾ Includes carrying value adjustments of $1.1 million as of December 31, 2024, $3.0 million as of September 30, 2024, $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

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
	December 31, 2024						December 31, 2023
Interest Earning Assets:	Average Balance		Interest/ Dividends		Annualized Yield/Rate		Average Balance		Interest/ Dividends		Annualized Yield/Rate
Loans	$	2,543,628	$	36,663	5.77	%	$	2,553,023	$	34,493	5.41	%
Taxable investment securities	450,648		2,554		2.27	%	386,931		1,660		1.72	%
Tax-exempt investment securities	18,571		79		2.15	%	24,145		89		1.87	%
Fed funds sold & other	209,307		2,555		4.88	%	142,642		2,028		5.69	%
Total Interest Earning Assets	3,222,154		$	41,851	5.20	%	3,106,741		$	38,270	4.93	%

Nonearning Assets	174,172						189,202

Total Assets	$	3,396,326					$	3,295,943

Interest Bearing Liabilities:
Savings deposits	$	1,548,638	$	9,459	2.44	%	$	1,392,304	$	8,570	2.46	%
Other time deposits	666,896		6,290		3.77	%	701,347		6,445		3.68	%
Other borrowed money	255,490		2,713		4.25	%	265,948		2,742		4.12	%
Fed funds purchased & securities
sold under agreement to repurchase	27,341		274		4.01	%	28,739		293		4.08	%
Subordinated notes	34,799		285		3.28	%	34,683		285		3.29	%
Total Interest Bearing Liabilities	$	2,533,164	$	19,021	3.01	%	$	2,423,021	$	18,335	3.02	%

Noninterest Bearing Liabilities	527,751						567,813

Stockholders' Equity	$	335,411					$	305,109

Net Interest Income and Interest Rate Spread			$	22,830	2.19	%			$	19,935	1.91	%

Net Interest Margin					2.84	%					2.57	%

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 Twelve Months Ended						For the Twelve Months Ended
	December 31, 2024						December 31, 2023
Interest Earning Assets:	Average Balance		Interest/ Dividends		Annualized Yield/Rate		Average Balance		Interest/ Dividends		Annualized Yield/Rate
Loans	$	2,557,213	$	145,329	5.68	%	$	2,491,502	$	129,344	5.19	%
Taxable investment securities	410,764		8,129		1.98	%	394,424		6,204		1.57	%
Tax-exempt investment securities	20,154		328		2.06	%	24,686		366		1.88	%
Fed funds sold & other	176,307		9,786		5.55	%	85,018		3,894		4.58	%
Total Interest Earning Assets	3,164,438		$	163,572	5.17	%	2,995,630		$	139,808	4.67	%

Nonearning Assets	164,464						197,726

Total Assets	$	3,328,902					$	3,193,356

Interest Bearing Liabilities:
Savings deposits	$	1,502,365	$	39,750	2.65	%	$	1,376,318	$	27,424	1.99	%
Other time deposits	663,320		24,713		3.73	%	640,390		19,499		3.04	%
Other borrowed money	262,094		10,948		4.18	%	220,175		8,876		4.03	%
Fed funds purchased & securities
sold under agreement to repurchase	27,750		1,111		4.00	%	35,421		1,474		4.16	%
Subordinated notes	34,755		1,138		3.27	%	34,640		1,138		3.29	%
Total Interest Bearing Liabilities	$	2,490,284	$	77,660	3.12	%	$	2,306,944	$	58,411	2.53	%

Noninterest Bearing Liabilities	513,588						580,931

Stockholders' Equity	$	325,030					$	305,481

Net Interest Income and Interest Rate Spread			$	85,912	2.05	%			$	81,397	2.14	%

Net Interest Margin					2.72	%					2.72	%

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 December 31, 2024													For the Three Months Ended December 31, 2023
	As Reported				Excluding Acc/Amort				Difference					As Reported				Excluding Acc/Amort				Difference
	$		Yield		$		Yield		$			Yield		$		Yield		$		Yield		$			Yield
Interest Earning Assets:
Loans	$	36,663	5.77	%	$	36,039	5.67	%	$	624		0.10	%	$	34,493	5.41	%	$	33,769	5.29	%	$	724		0.12	%
Taxable investment securities	2,554		2.27	%	2,554		2.27	%	-			0.00	%	1,660		1.72	%	1,660		1.72	%	-			0.00	%
Tax-exempt investment securities	79		2.15	%	79		2.15	%	-			0.00	%	89		1.87	%	89		1.87	%	-			0.00	%
Fed funds sold & other	2,555		4.88	%	2,555		4.88	%	-			0.00	%	2,028		5.69	%	2,028		5.69	%	-			0.00	%
Total Interest Earning Assets	41,851		5.20	%	41,227		5.12	%	624			0.08	%	38,270		4.93	%	37,546		4.84	%	724			0.09	%

Interest Bearing Liabilities:
Savings deposits	$	9,459	2.44	%	$	9,459	2.44	%	$ -			0.00	%	$	8,570	2.46	%	$	8,570	2.46	%	$ -			0.00	%
Other time deposits	6,290		3.77	%	6,290		3.77	%	-			0.00	%	6,445		3.68	%	6,381		3.64	%	64			0.04	%
Other borrowed money	2,713		4.25	%	2,710		4.24	%	3			0.01	%	2,742		4.12	%	2,760		4.15	%	(18		)	-0.03	%
Federal funds purchased and
securities sold under agreement to
repurchase	274		4.01	%	274		4.01	%	-			0.00	%	293		4.08	%	293		4.08	%	-			0.00	%
Subordinated notes	285		3.28	%	285		3.28	%	-			0.00	%	285		3.29	%	285		3.29	%	-			0.00	%
Total Interest Bearing Liabilities	19,021		3.01	%	19,018		3.00	%	3			0.01	%	18,335		3.02	%	18,289		3.02	%	46			0.00	%

Interest/Dividend income/yield	41,851		5.20	%	41,227		5.12	%	624			0.08	%	38,270		4.93	%	37,546		4.84	%	724			0.09	%
Interest Expense / yield	19,021		3.01	%	19,018		3.00	%	3			0.01	%	18,335		3.02	%	18,289		3.02	%	46			0.00	%
Net Interest Spread	22,830		2.19	%	22,209		2.12	%	621			0.07	%	19,935		1.91	%	19,257		1.82	%	678			0.09	%
Net Interest Margin			2.84	%			2.76	%				0.08	%			2.57	%			2.48	%				0.09	%

	For the Twelve Months Ended December 31, 2024													For the Twelve Months Ended December 31, 2023
	As Reported				Excluding Acc/Amort				Difference					As Reported				Excluding Acc/Amort				Difference
	$		Yield		$		Yield		$			Yield		$		Yield		$		Yield		$			Yield
Interest Earning Assets:
Loans	$	145,329	5.68	%	$	142,627	5.58	%	$	2,702		0.10	%	$	129,344	5.19	%	$	126,133	5.06	%	$	3,211		0.13	%
Taxable investment securities	8,129		1.98	%	8,129		1.98	%	-			0.00	%	6,204		1.57	%	6,204		1.57	%	-			0.00	%
Tax-exempt investment securities	328		2.06	%	328		2.06	%	-			0.00	%	366		1.88	%	366		1.88	%	-			0.00	%
Fed funds sold & other	9,786		5.55	%	9,786		5.55	%	-			0.00	%	3,894		4.58	%	3,894		4.58	%	-			0.00	%
Total Interest Earning Assets	163,572		5.17	%	160,870		5.09	%	2,702			0.08	%	139,808		4.67	%	136,597		4.57	%	3,211			0.10	%

Interest Bearing Liabilities:
Savings deposits	$	39,750	2.65	%	$	39,750	2.65	%	$ -			0.00	%	$	27,424	1.99	%	$	27,424	1.99	%	$ -			0.00	%
Other time deposits	24,713		3.73	%	24,713		3.73	%	-			0.00	%	19,499		3.04	%	19,839		3.10	%	(340		)	-0.06	%
Other borrowed money	10,948		4.18	%	10,964		4.18	%	(16		)	0.00	%	8,876		4.03	%	8,947		4.06	%	(71		)	-0.03	%
Federal funds purchased and
securities sold under agreement to
repurchase	1,111		4.00	%	1,111		4.00	%	-			0.00	%	1,474		4.16	%	1,474		4.16	%	-			0.00	%
Subordinated notes	1,138		3.27	%	1,138		3.27	%	-			0.00	%	1,138		3.29	%	1,138		3.29	%	-			0.00	%
Total Interest Bearing Liabilities	77,660		3.12	%	77,676		3.12	%	(16		)	0.00	%	58,411		2.53	%	58,822		2.55	%	(411		)	-0.02	%

Interest/Dividend income/yield	163,572		5.17	%	160,870		5.09	%	2,702			0.08	%	139,808		4.67	%	136,597		4.57	%	3,211			0.10	%
Interest Expense / yield	77,660		3.12	%	77,676		3.12	%	(16		)	0.00	%	58,411		2.53	%	58,822		2.55	%	(411		)	-0.02	%
Net Interest Spread	85,912		2.05	%	83,194		1.97	%	2,718			0.08	%	81,397		2.14	%	77,775		2.02	%	3,622			0.12	%
Net Interest Margin			2.72	%			2.63	%				0.09	%			2.72	%			2.60	%				0.12	%

Company Contact:	Investor and Media Contact:
Lars B. Eller President and Chief Executive Officer Farmers & Merchants Bancorp, Inc. (419) 446-2501 leller@fm.bank	Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com

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