8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT Pursuant

to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 26, 2023

Farmers & Merchants Bancorp, Inc.

(Exact Name of Registrant as Specified in its Charter)

Ohio	001-38084	34-1469491
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

307 North Defiance Street, Archbold, Ohio	43502
(Address of Principal Executive Offices)	(Zip Code)

Registrant's Telephone Number, including Area Code (419) 446-2501

N/A

(Former Name or Former Address, 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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17-CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

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. ☐

ITEM 2.02. Results of Operation and Financial Condition

On October 26, 2023, Farmers & Merchants Bancorp, Inc. issued a press release (the “Release”) announcing its earnings for the three and nine months ended September 30, 2023. A copy of the press release is attached hereto as Exhibit 99 and is incorporated by reference herein.

ITEM 9.01. Financial Statements and Exhibits

(d) Exhibits.

Exhibit Number	Exhibit
99	Company Press Release dated October 26, 2023

104 The Cover Page Interactive Data File (embedded within the Inline XBRL document)

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto authorized.

	FARMERS & MERCHANTS BANCORP, INC.
		(Registrant)
Dated: October 26, 2023		/s/ Lars B. Eller
		Lars B. Eller
		President and Chief Executive Officer
		/s/ Barbara J. Britenriker
		Barbara J. Britenriker
		Executive Vice President and Chief Financial Officer

EX-99

Exhibit 99

  Post Office Box 216 307 North Defiance Street Archbold, Ohio 43502 NEWS RELEASE

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

Farmers & Merchants Bancorp, Inc. Reports

2023 Third-Quarter and Year-to-Date Financial Results

ARCHBOLD, OHIO, October 26, 2023, Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2023 third quarter and year-to-date September 30, 2023.

2023 Third Quarter Financial and Operating Highlights (on a year-over-year basis unless noted):

•82 consecutive quarters of profitability

•Net income was $4.8 million, or $0.35 per basic and diluted share

•Stockholders’ equity increased 8.1% to $303.2 million

•Regulatory tangible book value per share increased 2.8% to $18.36 per share

•Total loans were a record of $2.53 billion and increased 7.2%from $2.36 billion at December 31, 2022

•Total assets increased 16.2% to a record $3.23 billion

•Deposits increased 4.3% to a record $2.58 billion

•Asset quality remains strong as nonperforming loans were 0.89% of total loans

•Net charge-offs to average loans were 0.00%

•Allowance for credit losses was 112.61% of nonperforming loans

•Tier 1 leverage ratio decreased to 8.02% from 9.11% last year

•Strategic investments to support long-term growth continue as F&M has opened new offices, unveiled new branding and a new logo, launched new deposit products, and implemented new features across its website and online banking platform

Lars B. Eller, President and Chief Executive Officer, stated, “Throughout 2023, we have been focused on executing against our strategic growth plan, while simultaneously navigating a challenging banking environment. I am pleased with the progress we are making as F&M opened two full-service offices in Oxford and Toledo, Ohio last quarter and since the end of the third quarter, the Bank has opened additional offices in Fort Wayne, Indiana and Birmingham, Michigan. We have also recently launched a new shared services group formation, invested in new internal audit and marketing capabilities, and restructured our HR department.”

Mr. Eller continued, “With most of the planned investments behind us, we are focused on scaling our new offices by expanding relationships within these new and existing markets. Early indications are encouraging and reflect F&M’s strong team of local bankers. As a result of our efforts across our new and existing offices, third-quarter deposits increased 4.3% from the second quarter to a record $2.58 billion, which included a 3.3% increase in non-interest-bearing deposits. We expect future deposit growth over the next quarters as our growth strategies accelerate and we benefit from new checking accounts that have been opened since the start of the year.”

Income Statement

Net income for the 2023 third quarter ended September 30, 2023, was $4.8 million, compared to $9.0 million for the same period last year. Net income per basic and diluted share for the 2023 third quarter was $0.35, compared to $0.68 for the same period last year. Net income for the 2023 nine months ended September 30, 2023, was $17.2 million, compared to $25.3 million for the same period last year. Net income per basic and diluted share for the 2023 nine months was $1.26, compared to $1.94 for the same period last year.

“The rapid rise in the Federal Funds Rate continued to impact our cost of funds and increase the competition for deposits. As a result, our cost of interest-bearing liabilities has increased to 2.82% at September 30, 2023, from 0.68% at September 30, 2022. Our loan portfolio has also lagged in capturing sufficient yield to match the higher cost of funds mainly due to the timing to reprice our commercial real estate adjustable-rate mortgages. 13.3% of the loan portfolio will be subject to repricing next quarter with 22.3% subject to repricing in the next twelve months. These trends during the third quarter caused a 12.9% year-over-year decline in net interest income and impacted overall profitability. As we navigate a challenging rate environment over the near term, we continue to believe we are well positioned for net income growth to re-accelerate in 2024 and beyond, as we benefit from continued strong asset quality, and the contribution of our growth initiatives,” continued Mr. Eller.

Deposits

At September 30, 2023, total deposits were $2.58 billion, an increase of 12.8% from September 30, 2022, and an increase of 4.3% from December 31, 2022. The Company’s cost of interest-bearing liabilities was 2.82% for the quarter ended September 30, 2023, compared to 0.68% for the quarter ended September 30, 2022, and 1.32% for the quarter ended December 31, 2022.

At September 30, 2023, F&M’s average deposit account had an average balance of $25,426. In addition, uninsured deposits to total deposits were approximately 9.1% for the quarter ended September 30, 2023, and the percentage of uninsured by the FDIC was 18.84%.

Loan Portfolio and Asset Quality

Total loans, net at September 30, 2023, increased 18.1%, or by $3.87 million to $2.53 billion, compared to $2.14 billion at September 30, 2022, and up 7.2% from $2.36 billion at December 31, 2022. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Peoples acquisition. Not including the Peoples acquisition, total net loans increased 13.2% organically, or by $282.8 million from the same period a year ago.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $22.4 million, or 0.89% of total loans at September 30, 2023, compared to $5.5 million, or 0.26% at September 30, 2022. At September 30, 2023, nonperforming loans increased by $16.2 million from June 30, 2023, which was primarily due to one agricultural relationship where the Bank is well collateralized and does not foresee a loss.

F&M maintains a well-balanced, diverse and high performing CRE portfolio. CRE loans represented 51.6% of the Company’s total loan portfolio at September 30, 2023. In addition, F&M’s commercial real estate office credit exposure represented 5.1% of the Company's total loan portfolio at September 30, 2023, with a weighted average loan-to-value of approximately 64% and an average loan of $870,000.

F&M’s CRE portfolio included the following categories at September 30, 2023:

CRE Category	Dollar Balance	Percent of CRE Portfolio(*)	Percent of Total Loan Portfolio(*)
Multi-family	$ 241,804	18.5%	9.5%
Industrial	$ 228,644	17.5%	9.0%
Retail	$ 212,383	16.3%	8.4%
Hotels	$ 133,579	10.2%	5.3%
Office	$ 129,619	9.9%	5.1%
Gas Stations	$ 61,484	4.7%	2.4%
Food Service	$ 49,578	3.8%	2.0%
Mixed Use	$ 39,842	3.1%	1.6%
Senior Living	$ 35,788	2.7%	1.4%
Other	$ 171,387	13.1%	6.8%
Total CRE	$ 1,304,118	100.0%	51.4%

* Numbers have been rounded

At September 30, 2023, the Company’s allowance for credit losses to nonperforming loans was 112.61%, compared to 365.44% at September 30, 2022. The allowance to total loans was 1.00% at September 30, 2023, compared to 0.93% at September 30, 2022. As a result of F&M’s recent acquisitions, the Company had an accretable yield adjustment of $4.6 million at September 30, 2023, which further enhances F&M’s allowance, compared to $6.0 million at September 30, 2022. Including the accretable yield adjustment, F&M’s allowance for credit losses to total loans was 1.18% at September 30, 2023, compared to 1.21% at September 30, 2022.

Mr. Eller concluded, “At September 30, 2023, we saw nonperforming loans increase to 0.89% primarily due to one agricultural relationship where the Bank is well collateralized and does not foresee a loss. As we work through this credit, we are closely monitoring our loan portfolio for signs of stress, but overall, we expect our conservative credit culture and pricing will allow us to maintain excellent asset quality throughout various economic cycles. In addition, at September 30, 2023, we had the lowest level of loans over 30 days past due this year. While we continue to believe 2023 will be a transitional year, we believe we are well positioned to emerge from this period with increased market share and higher profitability and I look forward to reporting on our success in the coming quarters. Our financial performance ratios reflect the pressure on the net interest margin and the cost of the strategic investments we have made. We are cognizant of the short-term expense and are confident it will enable long-term gains.”

Stockholders’ Equity and Dividends

Total stockholders’ equity increased 8.1% to $303.2 million at September 30, 2023, from $280.6 million at September 30, 2022. At September 30, 2023, the Company had a Tier 1 leverage ratio of 8.02%, compared to 9.11% at September 30, 2022.

Based on a regulatory basis, tangible stockholders’ equity increased to $250.9 million at September 30, 2023, compared to $234.1 million at September 30, 2022. On a per share basis, tangible stockholders’ equity at September 30, 2023, was $18.36 per share, compared to $17.86 per share at September 30, 2022.

For the nine months ended September 30, 2023, the Company has declared cash dividends of $0.63 per share, which is a 4.6% increase over the same period last year. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for over 28 consecutive years. For the nine months ended September 30, 2023, the dividend payout ratio was 60.07% compared to 30.45% 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 F&M has Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; 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													Nine Months Ended
	September  30, 2023			June  30, 2023			March  31, 2023			December  31, 2022		September  30, 2022		September  30, 2023			September  30, 2022
Interest Income
Loans, including fees	$	33,783		$	31,365		$	29,703		$	27,302	$	24,119	$	94,851		$	66,962
Debt securities:
U.S. Treasury and    government    agencies		1,005			1,030			1,068			1,118		1,049		3,103			3,107
Municipalities		392			401			408			420		373		1,201			995
Dividends		246			148			123			126		93		517			192
Federal funds sold		6			9			21			2		-		36			19
Other		927			424			479			524		213		1,830			382
Total interest income		36,359			33,377			31,802			29,492		25,847		101,538			71,657
Interest Expense
Deposits		13,323			10,434			8,151			4,978		2,166		31,908			4,905
Federal funds purchased    and securities sold    under agreement to    repurchase		349			427			405			463		416		1,181			734
Borrowed funds		2,741			2,113			1,280			1,209		398		6,134			951
Subordinated notes		284			285			284			285		284		853			837
Total interest    expense		16,697			13,259			10,120			6,935		3,264		40,076			7,427
Net Interest Income -    Before Provision for    Credit Losses*		19,662			20,118			21,682			22,557		22,583		61,462			64,230
Provision for Credit    Losses - Loans*		460			143			817			755		1,637		1,420			3,845
Provision for Credit    Losses - Off Balance    Sheet Credit Exposures*		(76	)		(129	)		62			-		-		(143	)		-
Net Interest Income    After Provision for    Credit Losses*		19,278			20,104			20,803			21,802		20,946		60,185			60,385
Noninterest Income
Customer service fees		2,208			2,361			2,447			2,862		2,300		7,016			7,096
Other service charges    and fees		1,162			1,803			2,554			1,115		1,105		5,519			3,111
Net gain on sale of loans		294			108			67			165		327		469			1,188
Net loss on sale of    available-for-sale    securities		-			-			(891	)		-		-		(891	)		-
Total noninterest    income		3,664			4,272			4,177			4,142		3,732		12,113			11,395

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME (continued)

(Unaudited) (in thousands of dollars, except per share data)

Noninterest Expense
Salaries and wages		6,777			6,500			6,657		6,353			5,479			19,934			16,347
Employee benefits		2,066			2,071			2,165		1,911			1,392			6,302			4,992
Net occupancy expense		950			840			856		753			693			2,646			1,813
Furniture and equipment		1,189			1,211			1,252		1,096			1,047			3,652			3,111
Data processing		840			796			726		1,917			781			2,362			2,039
Franchise taxes		434			379			366		(45	)		254			1,179			1,429
ATM expense		640			683			623		561			580			1,946			1,656
Advertising		865			830			514		531			578			2,209			1,115
Net (gain) loss on sale    of other assets owned		49			-			-		12			-			49			(271	)
FDIC assessment		586			496			306		250			271			1,388			655
Mortgage servicing    rights amortization - net		106			164			159		110			(50	)		429			35
Consulting fees		179			231			230		637			254			640			665
Other general and    administrative		2,363			2,643			3,077		2,964			2,192			8,083			6,613
Total noninterest    expense		17,044			16,844			16,931		17,050			13,471			50,819			40,199
Income Before Income    Taxes		5,898			7,532			8,049		8,894			11,207			21,479			31,581
Income Taxes		1,121			1,531			1,583		1,706			2,253			4,235			6,254
Net Income		4,777			6,001			6,466		7,188			8,954			17,244			25,327
Other Comprehensive    Income (Loss) (Net of    Tax):
Net unrealized gain (loss)    on available-for-sale    securities		(4,514	)		(5,996	)		8,030		(628	)		(8,197	)		(2,480	)		(43,738	)
Reclassification    adjustment for realized    loss on sale of    available-for-sale    securities		-			-			891		-			-			891			-
Net unrealized gain (loss)    on available-for-sale    for-sale securities		(4,514	)		(5,996	)		8,921		(628	)		(8,197	)		(1,589	)		(43,738	)
Tax expense (benefit)		(947	)		(1,260	)		1,874		(132	)		(1,721	)		(333	)		(9,185	)
Other comprehensive    income (loss)		(3,567	)		(4,736	)		7,047		(496	)		(6,476	)		(1,256	)		(34,553	)
Comprehensive Income    (Loss)	$	1,210		$	1,265		$	13,513	$	6,692		$	2,478		$	15,988		$	(9,226	)
Basic Earnings    Per Share	$	0.35		$	0.44		$	0.47	$	0.53		$	0.68		$	1.26		$	1.94
Diluted Earnings    Per Share	$	0.35		$	0.44		$	0.47	$	0.53		$	0.68		$	1.26		$	1.94
Dividends Declared	$	0.2100		$	0.2100		$	0.2100	$	0.2100		$	0.2100		$	0.6300		$	0.6025
(2) ASU 2016-13 adopted during the first quarter of 2023; therefore, prior period's provision amount reflects the incurred loss        method.

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited) (in thousands of dollars, except share data)

	September  30, 2023			June  30, 2023			March  31, 2023			December  31, 2022			September  30, 2022
	(Unaudited)			(Unaudited)			(Unaudited)						(Unaudited)
Assets
Cash and due from banks	$	151,711		$	69,760		$	62,780		$	83,085		$	69,680
Federal funds sold		1,471			1,433			1,545			1,324			990
Total cash and cash equivalents		153,182			71,193			64,325			84,409			70,670
Interest-bearing time deposits		2,989			3,485			4,435			4,442			5,187
Securities - available-for-sale		348,255			363,225			372,975			390,789			395,485
Other securities, at cost		16,995			17,535			11,543			9,799			8,227
Loans held for sale		1,039			1,459			951			827			2,182
Loans, net		2,504,329			2,490,883			2,422,018			2,336,074			2,122,626
Premises and equipment		31,723			30,398			28,679			28,381			26,484
Construction in progress		3,044			2,290			1,565			278			-
Goodwill		86,358			86,358			86,358			86,358			80,434
Loan servicing rights		5,687			5,635			4,985			3,549			3,583
Bank owned life insurance		33,691			33,470			33,269			33,073			28,051
Other assets		47,388			41,512			38,972			37,372			40,831
Total Assets	$	3,234,680		$	3,147,443		$	3,070,075		$	3,015,351		$	2,783,760
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing	$	505,358		$	488,678		$	520,145		$	532,794		$	506,928
Interest-bearing
NOW accounts		778,133			770,113			800,230			750,887			705,888
Savings		591,344			581,192			590,854			627,203			607,375
Time		700,445			628,757			601,939			557,980			462,845
Total deposits		2,575,280			2,468,740			2,513,168			2,468,864			2,283,036
Federal funds purchased and securities    sold under agreements to repurchase		30,527			51,567			30,496			54,206			55,802
Federal Home Loan Bank (FHLB)    advances		266,286			266,818			164,327			127,485			102,147
Other borrowings		-			-			-			10,000			10,000
Subordinated notes, net of unamortized    issuance costs		34,673			34,644			34,615			34,586			34,557
Dividend payable		2,838			2,834			2,831			2,832			2,727
Accrued expenses and other liabilities		21,892			18,177			18,881			19,238			14,913
Total liabilities		2,931,496			2,842,780			2,764,318			2,717,211			2,503,182
Commitments and Contingencies
Stockholders' Equity
Common stock - No par value 20,000,000    shares authorized; issued and outstanding    14,564,425 shares 9/30/23 and 12/31/22		135,171			135,647			135,241			135,497			121,811
Treasury stock - 898,843 shares 9/30/23    and 956,003 shares 12/31/22		(11,008	)		(11,298	)		(11,310	)		(11,573	)		(11,547	)
Retained earnings		218,510			216,236			213,012			212,449			208,051
Accumulated other comprehensive    loss		(39,489	)		(35,922	)		(31,186	)		(38,233	)		(37,737	)
Total stockholders' equity		303,184			304,663			305,757			298,140			280,578
Total Liabilities and Stockholders' Equity	$	3,234,680		$	3,147,443		$	3,070,075		$	3,015,351		$	2,783,760

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA

	For the Three Months Ended															For the Nine Months Ended
Selected financial data	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September  30, 2022			September 30, 2023			September 30, 2022
Return on average assets		0.59	%		0.77	%		0.84	%		0.96	%		1.31	%		0.73	%		1.25	%
Return on average equity		6.26	%		7.84	%		8.59	%		10.00	%		12.53	%		7.52	%		11.72	%
Yield on earning assets		4.79	%		4.53	%		4.41	%		4.18	%		4.00	%		4.57	%		3.76	%
Cost of interest bearing   liabilities		2.82	%		2.35	%		1.85	%		1.32	%		0.68	%		2.35	%		0.53	%
Net interest spread		1.97	%		2.18	%		2.56	%		2.86	%		3.32	%		2.22	%		3.23	%
Net interest margin		2.59	%		2.73	%		3.01	%		3.20	%		3.49	%		2.77	%		3.37	%
Efficiency		73.07	%		69.06	%		63.53	%		50.46	%		51.19	%		68.24	%		53.16	%
Dividend payout ratio		60.07	%		47.22	%		43.79	%		39.39	%		30.45	%		49.50	%		40.58	%
Tangible book value    per share (1)	$	18.36		$	18.21		$	17.92		$	17.69		$	17.86
Tier 1 leverage ratio		8.02	%		9.85	%		8.36	%		8.39	%		9.11	%
Average shares outstanding		13,650,823			13,632,440			13,615,655			13,606,876			13,083,145			13,633,101			13,071,859
(1)  Tangible Equity = Stockholder Equity less goodwill, other intangibles (core deposit intangible, mortgage servicing rights
and unrealized gain/loss on securities) plus CECL adjustment

Loans	September  30, 2023			June  30, 2023			March  31, 2023			December  31, 2022			September  30, 2022
(Dollar amounts in thousands)
Commercial real estate	$	1,304,118		$	1,280,902		$	1,225,315		$	1,152,603		$	1,063,661
Agricultural real estate		225,672			230,837			227,897			220,819			205,089
Consumer real estate		512,973			506,866			502,974			494,423			416,001
Commercial and industrial		250,891			253,444			241,598			242,360			229,388
Agricultural		123,735			128,344			131,467			128,733			128,615
Consumer		83,024			88,312			89,588			89,147			70,602
Other		31,083			28,996			29,316			29,818			30,662
Less: Net deferred loan fees       and costs		(1,890	)		(1,908	)		(1,503	)		(1,516	)		(1,402	)
Total loans, net	$	2,529,606		$	2,515,793		$	2,446,652		$	2,356,387		$	2,142,616

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA (continued)

Asset quality data	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September  30, 2022
(Dollar amounts in thousands)
Nonaccrual loans	$	22,447		$	6,295		$	7,717		$	4,689		$	5,470
90 day past due and accruing	$	-		$	-		$	-		$	-		$	-
Nonperforming loans	$	22,447		$	6,295		$	7,717		$	4,689		$	5,470
Other real estate owned	$	-		$	-		$	-		$	-		$	-
Nonperforming assets	$	22,447		$	6,295		$	7,717		$	4,689		$	5,470
Allowance for credit losses(2)	$	25,277		$	24,910		$	24,507		$	20,313		$	19,990
Accretable yield adjustment		4,565			5,209			5,754			6,427			5,959
Adjusted credit losses with    accretable yield included(2)	$	29,842		$	30,119		$	30,261		$	26,740		$	25,949
Allowance for credit losses/    total loans(2)		1.00	%		0.99	%		1.00	%		0.86	%		0.93	%
Adjusted credit losses with    accretable yield/total loans(2)		1.18	%		1.20	%		1.24	%		1.13	%		1.21	%
Net charge-offs:
Quarter-to-date	$	93		$	(133	)	$	60		$	431		$	71
Year-to-date	$	97		$	(73	)	$	60		$	529		$	97
Net charge-offs to average loans
Quarter-to-date		0.00	%		-0.01	%		0.00	%		0.02	%		0.00	%
Year-to-date		0.00	%		0.00	%		0.00	%		0.03	%		0.00	%
Nonperforming loans/total loans		0.89	%		0.25	%		0.32	%		0.20	%		0.26	%
Allowance for credit losses/    nonperforming loans(2)		112.61	%		395.71	%		319.22	%		273.67	%		365.44	%
(2) ASU 2016-13 adopted during the first quarter of 2023; therefore, prior period's provision amount reflects the incurred loss        method.

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
	September 30, 2023							September 30, 2022
Interest Earning Assets:	Average Balance		Interest/ Dividends		Annualized Yield/Rate			Average Balance		Interest/ Dividends		Annualized Yield/Rate
Loans	$	2,536,885	$	33,783		5.33	%	$	2,082,486	$	24,119		4.63	%
Taxable investment securities		393,910		1,559		1.58	%		422,250		1,426		1.35	%
Tax-exempt investment securities		23,986		84		1.77	%		25,169		89		1.79	%
Fed funds sold & other		85,515		933		4.36	%		58,266		213		1.46	%
Total Interest Earning Assets		3,040,296	$	36,359		4.79	%		2,588,171	$	25,847		4.00	%
Nonearning Assets		180,193							150,044
Total Assets	$	3,220,489						$	2,738,215
Interest Bearing Liabilities:
Savings deposits	$	1,367,168	$	7,673		2.24	%	$	1,328,344	$	1,586		0.48	%
Other time deposits		667,880		5,650		3.38	%		423,668		580		0.55	%
Other borrowed money		266,467		2,741		4.11	%		60,455		398		2.63	%
Fed funds purchased & securities
sold under agreement to repurchase		34,128		349		4.09	%		63,388		416		2.63	%
Subordinated notes		34,654		284		3.28	%		34,538		284		3.29	%
Total Interest Bearing Liabilities	$	2,370,297	$	16,697		2.82	%	$	1,910,393	$	3,264		0.68	%
Noninterest Bearing Liabilities		544,801							542,077
Stockholders' Equity	$	305,391						$	285,745
Net Interest Income and    Interest Rate Spread			$	19,662		1.97	%			$	22,583		3.32	%
Net Interest Margin						2.59	%						3.49	%
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 Nine Months Ended							For the Nine Months Ended
	September 30, 2023							September 30, 2022
Interest Earning Assets:	Average Balance		Interest/ Dividends		Annualized Yield/Rate			Average Balance		Interest/ Dividends		Annualized Yield/Rate
Loans	$	2,470,770	$	94,851		5.12	%	$	1,997,081	$	66,962		4.47	%
Taxable investment securities		396,917		4,544		1.53	%		424,882		4,065		1.28	%
Tax-exempt investment securities		24,865		277		1.88	%		21,794		229		1.77	%
Fed funds sold & other		67,869		1,866		3.67	%		101,922		401		0.52	%
Total Interest Earning Assets		2,960,421	$	101,538		4.57	%		2,545,679	$	71,657		3.76	%
Nonearning Assets		176,568							158,378
Total Assets	$	3,136,989						$	2,704,057
Interest Bearing Liabilities:
Savings deposits	$	1,373,110	$	18,854		1.83	%	$	1,315,793	$	2,951		0.30	%
Other time deposits		620,071		13,054		2.81	%		439,534		1,954		0.59	%
Other borrowed money		204,927		6,134		3.99	%		54,184		951		2.34	%
Fed funds purchased & securities
sold under agreement to repurchase		37,649		1,181		4.18	%		42,584		734		2.30	%
Subordinated notes		34,625		853		3.28	%		34,509		837		3.23	%
Total Interest Bearing Liabilities	$	2,270,382	$	40,076		2.35	%	$	1,886,604	$	7,427		0.53	%
Noninterest Bearing Liabilities		561,001							529,439
Stockholders' Equity	$	305,606						$	288,014
Net Interest Income and    Interest Rate Spread			$	61,462		2.22	%			$	64,230		3.23	%
Net Interest Margin						2.77	%						3.37	%
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 (continued)

(in thousands of dollars, except percentages)

	For the Three Months Ended																	For the Three Months Ended
	September 30, 2023																	September 30, 2022
	As Reported					Excluding Accretion/Amortization						Difference						As Reported					Excluding Accretion/Amortization						Difference
	$		Yield				$		Yield			$			Yield			$		Yield				$		Yield			$			Yield
Interest Earning Assets:
Loans	$	33,783		5.33	%		$	32,631		5.15	%	$	1,152			0.18	%	$	24,119		4.63	%		$	23,437		4.50	%	$	682			0.13	%
Taxable investment securities		1,559		1.58	%			1,559		1.58	%		-			0.00	%		1,426		1.35	%			1,426		1.35	%		-			0.00	%
Tax-exempt investment securities		84		1.77	%			84		1.77	%		-			0.00	%		89		1.79	%			89		1.79	%		-			0.00	%
Fed funds sold & other		933		4.36	%			933		4.36	%		-			0.00	%		213		1.46	%			213		1.46	%		-			0.00	%
Total Interest Earning Assets		36,359		4.79	%			35,207		4.64	%		1,152			0.15	%		25,847		4.00	%			25,165		3.89	%		682			0.11	%
Interest Bearing Liabilities:
Savings deposits	$	7,673		2.24	%		$	7,673		2.24	%	$	-			0.00	%	$	1,586		0.48	%		$	1,586		0.48	%	$	-			0.00	%
Other time deposits		5,650		3.38	%			5,500		3.29	%		150			0.09	%		580		0.55	%			1,199		1.13	%		(619	)		-0.58	%
Other borrowed money		2,741		4.11	%			2,759		4.14	%		(18	)		-0.03	%		398		2.63	%			419		2.77	%		(21	)		-0.14	%
Fed funds purchased and securities
sold under agreement to repurchase		349		4.09	%			349		4.09	%		-			0.00	%		416		2.63	%			416		2.63	%		-			0.00	%
Subordinated notes		284		3.28	%			284		3.28	%		-			0.00	%		284		3.29	%			284		3.29	%		-			0.00	%
Total Interest Bearing Liabilities		16,697		2.82	%			16,565		2.80	%		132			0.02	%		3,264		0.68	%			3,904		0.81	%		(640	)		-0.13	%
Interest/Dividend income/yield		36,359		4.79	%			35,207		4.64	%		1,152			0.15	%		25,847		4.00	%			25,165		3.89	%		682			0.11	%
Interest Expense / yield		16,697		2.82	%			16,565		2.80	%		132			0.02	%		3,264		0.68	%			3,904		0.81	%		(640	)		-0.13	%
Net Interest Spread		19,662		1.97	%			18,642		1.84	%		1,020			0.13	%		22,583		3.32	%			21,261		3.08	%		1,322			0.24	%
Net Interest Margin				2.59	%					2.46	%					0.13	%				3.49	%					3.29	%					0.20	%
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 (continued)

(in thousands of dollars, except percentages)

	For the Nine Months Ended																	For the Nine Months Ended
	September 30, 2023																	September 30, 2022
	As Reported					Excluding Accretion/Amortization						Difference						As Reported					Excluding Accretion/Amortization						Difference
	$		Yield				$		Yield			$			Yield			$		Yield				$		Yield			$			Yield
Interest Earning Assets:
Loans	$	94,851		5.12	%		$	92,364		4.99	%	$	2,487			0.13	%	$	66,962		4.47	%		$	65,504		4.38	%	$	1,458			0.09	%
Taxable investment securities		4,544		1.53	%			4,544		1.53	%		-			0.00	%		4,065		1.28	%			4,065		1.28	%		-			0.00	%
Tax-exempt investment securities		277		1.88	%			277		1.88	%		-			0.00	%		229		1.77	%			229		1.77	%		-			0.00	%
Fed funds sold & other		1,866		3.67	%			1,866		3.67	%		-			0.00	%		401		0.52	%			401		0.52	%		-			0.00	%
Total Interest Earning Assets		101,538		4.57	%			99,051		4.47	%		2,487			0.10	%		71,657		3.76	%			70,199		3.68	%		1,458			0.08	%
Interest Bearing Liabilities:
Savings deposits	$	18,854		1.83	%		$	18,854		1.83	%	$	-			0.00	%	$	2,951		0.30	%		$	2,951		0.30	%	$	-			0.00	%
Other time deposits		13,054		2.81	%			13,458		2.89	%		(404	)		-0.08	%		1,954		0.59	%			3,812		1.16	%		(1,858	)		-0.57	%
Other borrowed money		6,134		3.99	%			6,187		4.03	%		(53	)		-0.04	%		951		2.34	%			1,014		2.50	%		(63	)		-0.16	%
Fed funds purchased and securities
sold under agreement to repurchase		1,181		4.18	%			1,181		4.18	%		-			0.00	%		734		2.30	%			734		2.30	%		-			0.00	%
Subordinated notes		853		3.28	%			853		3.28	%		-			0.00	%		837		3.23	%			837		3.23	%		-			0.00	%
Total Interest Bearing Liabilities		40,076		2.35	%			40,533		2.38	%		(457	)		-0.03	%		7,427		0.53	%			9,348		0.66	%		(1,921	)		-0.13	%
Interest/Dividend income/yield		101,538		4.57	%			99,051		4.47	%		2,487			0.10	%		71,657		3.76	%			70,199		3.68	%		1,458			0.08	%
Interest Expense / yield		40,076		2.35	%			40,533		2.38	%		(457	)		-0.03	%		7,427		0.53	%			9,348		0.66	%		(1,921	)		-0.13	%
Net Interest Spread		61,462		2.22	%			58,518		2.09	%		2,944			0.13	%		64,230		3.23	%			60,851		3.02	%		3,379			0.21	%
Net Interest Margin				2.77	%					2.64	%					0.13	%				3.37	%					3.19	%					0.18	%
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

NON-GAAP RECONCILIATION OF NET INCOME

	(in thousands of dollars)				(in thousands of dollars)
Non-GAAP Reconciliation of Net Income	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023			September 30, 2022
	(Unaudited)				(Unaudited)
Net income as reported	$	4,777	$	8,954	$	17,244		$	25,327
Acquisition expenses		-		319		184			530
Tax effect on acquisition expenses		-		25		(37	)		(67	)
Net income excluding acquisition expenses and tax effect	$	4,777	$	9,298		17,391			25,790
Weighted average common shares outstanding    including participating securities		13,650,823		13,083,145		13,633,101			13,071,859
Basic and diluted earnings per share	$	0.35	$	0.71	$	1.28		$	1.97

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
	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Shares Outstanding		13,665,582			13,107,500			13,665,582			13,107,500
Tangible Equity
Equity	$	303,184		$	280,578		$	303,184		$	280,578
Goodwill		86,358			80,434			86,358			80,434
Other Intangible		7,992			3,744			7,992			3,744
Comprehensive Loss Adjustment*		-			-			39,489			37,737
CECL Adjustment**		-			-			2,528			-
Tangible Equity	$	208,834		$	196,400		$	250,851		$	234,137
Shares Outstanding		13,666			13,108			13,666			13,108
Tangible Book Equity per Share	$	15.28		$	14.98		$	18.36		$	17.86
	Actual Average						Regulatory Average
	Year to Date						Year to Date
	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Net Income	$	17,244		$	25,327		$	17,244		$	25,327
Acquisition Costs - Tax Adjusted		147			463			147			463
Average Shares Outstanding		13,633,101			13,071,859			13,633,101			13,071,859
Average Tangible Equity
Average Equity	$	305,606		$	288,014		$	305,606		$	288,014
Average Goodwill		86,358			80,434			86,358			80,434
Average Other Intangible		8,717			4,119			8,717			4,119
Average Comprehensive Loss Adjustment*		-			-			35,497			21,181
Average CECL Adjustment**		-			-			2,528
Average Tangible Equity	$	210,531		$	203,461		$	248,556		$	224,642
Average Shares Outstanding		13,633			13,072			13,633			13,072
Average Tangible Book Equity per Share	$	15.44		$	15.56		$	18.23		$	17.19
Return on Average Tangible Equity		10.92	%		16.60	%		9.25	%		15.03	%
Return on Average Tangible Equity w/o Acquisition		11.01	%		16.90	%		9.33	%		15.31	%
*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; therefore, prior period's provision amount reflects the incurred loss method and the Bank has elected to spread the capital adjustment over three years. The first year permits 75% of the capital adjustment to be removed from the calculation of tangible equity for regulatory purposes.

XML

Document and Entity Information	Oct. 26, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 26, 2023
Entity Registrant Name	Farmers & Merchants Bancorp, Inc.
Entity Central Index Key	0000792966
Entity Emerging Growth Company	false
Entity File Number	001-38084
Entity Incorporation State Country Code	OH
Entity Tax Identification Number	34-1469491
Entity Address, Address Line One	307 North Defiance Street
Entity Address, City or Town	Archbold
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43502
City Area Code	(419)
Local Phone Number	446-2501
Written Communications	false
Soliciting Material	false
Pre commencement Tender Offer	false
Pre commencement Issuer Tender Offer	false
Security 12b Title	Common Stock, No Par Value
Trading Symbol	FMAO
Security Exchange Name	NASDAQ