# EDGAR Filing Document

**Accession Number:** 0000792966
**File Stem:** 0000950170-23-002051
**Filing Date:** 2023-2
**Character Count:** 58765
**Document Hash:** 72b18f81632c7ec7d986afaa5b16985e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-23-002051.hdr.sgml**: 20230208

**ACCESSION NUMBER**: 0000950170-23-002051

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230208

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230208

**DATE AS OF CHANGE**: 20230208

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** FARMERS & MERCHANTS BANCORP INC
- **CENTRAL INDEX KEY:** 0000792966
- **STANDARD INDUSTRIAL CLASSIFICATION:** SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035]
- **IRS NUMBER:** 341469491
- **STATE OF INCORPORATION:** OH
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38084
- **FILM NUMBER:** 23597180

**BUSINESS ADDRESS:**
- **STREET 1:** 307-11 N DEFIANCE ST
- **CITY:** ARCHBOLD
- **STATE:** OH
- **ZIP:** 43502
- **BUSINESS PHONE:** 4194462501

**MAIL ADDRESS:**
- **STREET 1:** 307-11 NORTH DEFIANCE ST
- **CITY:** ARCHBOLD
- **STATE:** OH
- **ZIP:** 43502

?xml version="1.0" encoding="ASCII"? 8-K

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

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**FORM** 8-K

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**CURRENT REPORT Pursuant**

**to Section 13 or 15(d) of the**

**Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported)** February 8, 2023

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Farmers & Merchants Bancorp, Inc.

**(Exact Name of Registrant as Specified in its Charter)**

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Ohio | &nbsp;&nbsp;001-38084 | &nbsp;&nbsp;34-1469491 |
| &nbsp;&nbsp;**(State or Other Jurisdiction** | &nbsp;&nbsp;**(Commission** | &nbsp;&nbsp;**(IRS Employer** |
| &nbsp;&nbsp;**of Incorporation)** | &nbsp;&nbsp;**File Number)** | &nbsp;&nbsp;**Identification No.)** |

---

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| | |
|:---|:---|
| &nbsp;&nbsp;307 North Defiance Street**,** Archbold**,** Ohio | &nbsp;&nbsp;43502 |
| &nbsp;&nbsp;**(Address of Principal Executive Offices)** | &nbsp;&nbsp;**(Zip Code)** |

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

**N/A**

**(Former Name or Former Address, if Changed Since Last Report)**

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

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Title of each class | &nbsp;&nbsp;Trading Symbol(s) | &nbsp;&nbsp;Name of Each Exchange |
| &nbsp;&nbsp;Common Stock, No Par Value | &nbsp;&nbsp;FMAO | &nbsp;&nbsp;NASDAQ Capital Market |

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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. ☐

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ITEM 2.02. Results of Operation and Financial Condition

On February 8, 2023, Farmers & Merchants Bancorp, Inc. issued a press release (the "Release") announcing its earnings for the three and twelve months ended December 31, 2022. 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Exhibits.

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| | |
|:---|:---|
| &nbsp;&nbsp;**Exhibit**<br>**<u>Number</u>** | &nbsp;&nbsp;**<u>Exhibit</u>** |
| &nbsp;&nbsp;99 | &nbsp;&nbsp;[<u>Company Press Release dated February 8, 2023</u>](fmao-ex99.htm) |

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

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**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.

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| | |
|:---|:---|
| &nbsp;&nbsp;**FARMERS & MERCHANTS BANCORP, INC.** | &nbsp;&nbsp;**FARMERS & MERCHANTS BANCORP, INC.** |
|  | &nbsp;&nbsp;(Registrant) |
| &nbsp;&nbsp;Dated: February 8, 2023 | &nbsp;&nbsp;/s/ Lars B. Eller |
|  | &nbsp;&nbsp;Lars B. Eller |
|  | &nbsp;&nbsp;President and Chief Executive Officer |
|  | &nbsp;&nbsp;/s/ Barbara J. Britenriker |
|  | &nbsp;&nbsp;Barbara J. Britenriker |
|  | &nbsp;&nbsp;Executive Vice President and Chief Financial Officer |

---

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## Ex-99

**Exhibit 99**

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| | |
|:---|:---|
| &nbsp;&nbsp;![img27245342_0.jpg](img27245342_0.jpg) <br>Post Office Box 216<br>307 North Defiance Street<br>Archbold, Ohio 43502 | **NEWS RELEASE** |

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

---

**Farmers & Merchants Bancorp, Inc. Reports**

**Record 2022 Full-Year Financial Results**

ARCHBOLD, OHIO, February 8, 2023, Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2022 fourth quarter and twelve months ended December 31, 2022.

**2022 Fourth Quarter Financial Highlights Include** (on a year-over-year basis unless noted):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Net income was $7.2 million compared to $7.7 million for the same period last year

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Earnings were $0.53 per basic and diluted share, compared to $0.59 per basic and diluted share

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Adjusted net income, excluding one-time tax adjusted acquisition expenses, was $8.8 million, compared to $8.7 million

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Adjusted earnings, excluding one-time tax adjusted acquisition expenses, were $0.65 per basic and diluted share, compared to $0.66 per basic and diluted share

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Efficiency rate improved to 50.46% for the 2022 fourth quarter

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Strong asset quality continues as nonperforming loans declined 41.9% to $4.7 million, or 0.20% of total loans

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Net charge-offs to average loans were 0.02%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Allowance for loan and lease losses, adjusted for credit marks from recent acquisitions, of 570.3% of nonperforming loans

**2022 Full-Year Financial Highlights Include** (on a year-over-year basis unless noted):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Total loans increased 26.9% to a record $2.36 billion

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Organic loan growth of 21.4%, excluding PPP loans and loan balances at time of the Peoples-Sidney Financial Corporation acquisition

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Total assets increased 39.2% to a record $3.02 billion

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Deposits increased to 12.6% to $2.47 billion

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Net interest income after provision for loan losses increased 24.4% to $82.2 million

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Net income increased 38.4% to an annual record of $32.5 million

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Earnings increased 22.4% to an annual record of $2.46 per basic and diluted share

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Adjusted net income, excluding one-time tax adjusted acquisition expenses, increased 29.9% to $34.6 million

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Adjusted earnings, excluding one-time tax adjusted acquisition expenses, increased 14.9% to $2.62 per basic and diluted share

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Efficiency rate improved to 55.95% for the 2022 full year

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Adjusted return on average tangible equity, excluding one-time tax adjusted acquisition expenses, increased to 17.06% from 13.01% on a year-over-year basis

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Annual dividend payment increased 14.4% to $0.8125 per share, which included a $0.0125 special dividend in honor of the Company's 125<sup>th</sup>year anniversary

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Provided a record $642,000 of charitable donations to support organizations throughout Indiana and Ohio

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Lars B. Eller, President and Chief Executive Officer, stated, "2022 was a historic year for F&M as we celebrated our 125<sup>th</sup> year anniversary, achieved record financial results, completed the fifth acquisition in the past three years, and continued to invest in our community banking platform. We experienced strong organic loan growth across our Ohio, Indiana and Michigan markets during 2022 as loans increased organically by $397.0 million, or 21.4% on a year-over-year basis. Robust loan growth, combined with our recent acquisitions, excellent asset quality, and stable net interest margin, drove a 24.4% increase in annual net interest income after the provision for loan losses. These outstanding trends and our focus on prudently controlling operating expenses offset a $2.1 million decline in annual noninterest income and helped F&M achieve another year of record net income and earnings per share. I am proud of our record financial results for 2022, which enabled us to increase our annual cash dividend by 14.4%. This reflects the 28<sup>th</sup> consecutive year F&M has increased its annual cash dividend and our long-standing commitment to create value for our shareholders."

Mr. Eller continued, "I am also pleased to announce that F&M ended the year with total assets of over $3.0 billion for the first time in our history as we successfully achieved the goals of our previous multi-year strategic growth plan. In fact, since 2019 total assets have increased 87.6%, while GAAP net income has increased 76.7%. This performance is a direct result of the financial services we provide our Ohio, Indiana, and Michigan communities, the successful acquisitions we have completed and the hard work of our committed and experienced team members. During 2022, we continued to expand our team by promoting over 45 employees and hiring over 150 new employees. We also added capabilities by adding a new Regional Vice President to lead our Northern Indiana region and hiring F&M's first ever Chief Risk Officer. Our 2022 financial and operating results reflect the success of our growth initiatives and the powerful franchise we are creating."

**Income Statement**

Net income for the 2022 fourth quarter ended December 31, 2022, was $7.2 million, compared to $7.7 million for the same period last year. Net income per basic and diluted share for the 2022 fourth quarter was $0.53, compared to $0.59 for the same period last year. Net income for the 2022 twelve-month period ended December 31, 2022, was $32.5 million, compared to $23.5 million for the same period last year. Net income per basic and diluted share for the 2022 twelve months was $2.46, compared to $2.01 for the same period last year.

Adjusted net income for the 2022 fourth quarter was $8.8 million, or $0.65 per diluted share, compared to $8.7 million, or $0.66 per diluted share in the prior year quarter. Adjusted net income accounts for the impact of one-time acquisition expenses. Adjusted net income for the year ended December 31, 2022, was $34.6 million, or $2.62 per diluted share, compared to $26.6 million, or $2.28 per diluted share in the prior year.

Profitability for the 2022 fourth quarter and full year benefitted from F&M's larger scale, strong asset quality, and prudent expense management. The Company's efficiency ratio improved to 50.46% during the 2022 fourth quarter, and 55.95% for the 2022 twelve-month period. Strong profitability also drove higher annual returns, and ROAA, ROAE, and ROATCE all expanded on a year-over-year basis when adjusted for one-time, tax adjusted acquisition expenses.

**Deposits**

At December 31, 2022, total deposits were $2.47 billion, an increase of 12.6% from December 31, 2021. In addition, F&M continues to see growing customer preferences to more stable and secure saving instruments as deposits have increased since the COVID-19 crisis began. The Company's cost of interest-bearing liabilities was 1.32% for the quarter ended December 31, 2022, compared to 0.51% for the quarter ended December 31, 2021. For the 2022 twelve-month period, F&M's cost of interest-bearing liabilities was 0.74%, compared to 0.48% for the 2021 twelve-month period.

**Loan Portfolio and Asset Quality**

Total net loans, at December 31, 2022, increased 26.9% to $2.356 billion, compared to $1.857 billion at December 31, 2021. The year-over-year improvement resulted primarily from the contribution of continued organic loan growth and the completion of the Peoples acquisitions. Not including the Peoples acquisition and PPP loans, total net loans increased 21.4% organically, or by $397.0 million from the same period a year ago. Additionally, there were only $7,000 of PPP loans within F&M's loan portfolio at December 31, 2022.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $4.7 million, or 0.20% of total loans at December 31, 2022, compared to $8.1 million, or 0.43% at December

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31, 2021. Due to loan growth, F&M continues to prudently fund its allowance for loan and lease losses which has increased 25.1% on a year-over-year basis.

At December 31, 2022, the Company's allowance for loan and lease losses to nonperforming loans was 273.67%, compared to 201.11% at December 31, 2021. As a result of F&M's recent acquisitions, the Company has a total gross credit mark of $6.4 million, which further enhances F&M's allowance at December 31, 2022. Including the total gross credit mark, F&M's allowance for loan and lease losses to total loans was 1.13% at December 31, 2022.

Mr. Eller concluded, "We believe F&M remains well positioned for an increasingly challenging economic cycle as our asset quality is strong, and we continue to be well capitalized. This will allow us to continue to focus on serving our local communities, while investing in our infrastructure and pursuing long-term expansion opportunities under the new three-year strategic growth plan we finalized in the fourth quarter of 2022. As a result, we plan to make approximately $7 million of strategic investments during 2023 across our business. This includes new offices in Ohio, Indiana, and Michigan, and additions to our team, as well as investments in our IT infrastructure, loan operations, and credit and payments group. While we expect investments to temporarily impact the level of profitability we are accustomed to, these investments are necessary to support our long-term growth initiatives and maintain F&M's high level of services as we drive sustainable growth and value creation. I look forward to updating shareholders on the progress we are making throughout 2023."

**Stockholders' Equity and Dividends**

Total stockholders' equity increased to $298.1 million at December 31, 2022, from $297.2 million at December 31, 2021. At December 31, 2022, the Company had a Tier 1 leverage ratio of 8.39%, compared to 8.47% at December 31, 2021.

Based on a regulatory basis, tangible stockholders' equity increased to $240.7 million at December 31, 2022, compared to $215.5 million at December 31, 2021. On a per share basis, tangible stockholders' equity at December 31, 2022, was $17.69 per share, compared to $16.49 per share at December 31, 2021. A non-GAAP reconciliation is provided as a table in this press release.

For the twelve months ended December 31, 2022, the Company declared cash dividends of $0.8125 per share, which is a 14.4% increase over the 2021 twelve-month declared cash dividend payment of $0.71 per share. Dividends declared for the 2022 twelve months included a special one-time cash dividend of $0.0125 to honor F&M's 125<sup>th</sup>anniversary, and a 10.5% year-over-year increase for the 2022 fourth quarter dividend payment to $0.21 per share. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 28 consecutive years. For the twelve months ended December 31, 2022, the dividend payout ratio was 33.06% compared to 35.08% for the same period last year.

**About Farmers & Merchants State Bank:** 

The Farmers & Merchants State Bank is a local independent community bank that has been serving Northwest Ohio and Northeast Indiana since 1897. The Farmers & Merchants State Bank provides commercial banking, retail banking and other financial services. Our locations are in Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood counties in Western Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben and Wells counties, and we have a Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; and Bryan and Oxford, 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

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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.

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME

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

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Twelve Months Ended** | **Twelve Months Ended** |
|  | December<br> 31, 2022 | September<br> 30, 2022 | June<br>30, 2022 | March<br>31, 2022 | December<br>31, 2021 | December<br> 31, 2022 | December<br>31, 2021 |
| **Interest Income** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loans, including fees | $27302 | $24119 | $22388 | $20455 | $21008 | $94264 | $71645 |
| &nbsp;&nbsp;&nbsp;Debt securities: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. Treasury and <br> government <br> agencies | 1118 | 1049 | 1035 | 1023 | 964 | 4225 | 3496 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Municipalities | 420 | 373 | 322 | 300 | 289 | 1415 | 1170 |
| &nbsp;&nbsp;&nbsp;Dividends | 126 | 93 | 57 | 42 | 49 | 318 | 174 |
| &nbsp;&nbsp;&nbsp;Federal funds sold | 2 | - | 9 | 10 | 10 | 21 | 31 |
| &nbsp;&nbsp;&nbsp;Other | 524 | 213 | 100 | 69 | 103 | 906 | 324 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest income | 29492 | 25847 | 23911 | 21899 | 22423 | 101149 | 76840 |
| **Interest Expense** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits | 4978 | 2166 | 1379 | 1360 | 1581 | 9883 | 5418 |
| &nbsp;&nbsp;&nbsp;Federal funds purchased <br> and securities sold <br> under agreement to <br> repurchase | 463 | 416 | 166 | 152 | 155 | 1197 | 649 |
| &nbsp;&nbsp;&nbsp;Borrowed funds | 1209 | 398 | 218 | 335 | 361 | 2160 | 785 |
| &nbsp;&nbsp;&nbsp;Subordinated notes | 285 | 284 | 284 | 269 | 291 | 1122 | 490 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest <br> expense | 6935 | 3264 | 2047 | 2116 | 2388 | 14362 | 7342 |
| **Net Interest Income - <br> Before Provision for <br> Loan Losses** | 22557 | 22583 | 21864 | 19783 | 20035 | 86787 | 69498 |
| **Provision for Loan <br> Losses** | 755 | 1637 | 1628 | 580 | 444 | 4600 | 3444 |
| **Net Interest Income <br> After Provision for <br> Loan Losses** | 21802 | 20946 | 20236 | 19203 | 19591 | 82187 | 66054 |
| **Noninterest Income** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Customer service fees | 2862 | 2300 | 2148 | 2648 | 2417 | 9958 | 9671 |
| &nbsp;&nbsp;&nbsp;Other service charges<br> and fees | 1115 | 1105 | 1008 | 998 | 1026 | 4226 | 3748 |
| &nbsp;&nbsp;&nbsp;Net gain on sale of loans | 165 | 327 | 164 | 697 | 1074 | 1353 | 3897 |
| &nbsp;&nbsp;&nbsp;Net gain on sale of <br> available-for-sale <br> securities | - | - | - | - | - | - | 293 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest <br> income | 4142 | 3732 | 3320 | 4343 | 4517 | 15537 | 17609 |

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME (continued)

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

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Noninterest Expense** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Salaries and wages | 6353 | 5479 | 5366 | 5502 | 5761 | 22700 | 20184 |
| &nbsp;&nbsp;&nbsp;Employee benefits | 1911 | 1392 | 1546 | 2054 | 1792 | 6903 | 7322 |
| &nbsp;&nbsp;&nbsp;Net occupancy expense | 753 | 693 | 522 | 598 | 532 | 2566 | 2184 |
| &nbsp;&nbsp;&nbsp;Furniture and equipment | 1096 | 1047 | 1008 | 1056 | 782 | 4207 | 3324 |
| &nbsp;&nbsp;&nbsp;Data processing | 1917 | 781 | 654 | 604 | 1020 | 3956 | 3501 |
| &nbsp;&nbsp;&nbsp;Franchise taxes | (45) | 254 | 757 | 418 | 361 | 1384 | 1473 |
| &nbsp;&nbsp;&nbsp;ATM expense | 561 | 580 | 544 | 532 | 478 | 2217 | 1846 |
| &nbsp;&nbsp;&nbsp;Advertising | 531 | 578 | 300 | 237 | 431 | 1646 | 1436 |
| &nbsp;&nbsp;&nbsp;Net (gain) loss on sale <br> of other assets owned | 12 | - | (266) | (5) | 13 | (259) | 434 |
| &nbsp;&nbsp;&nbsp;FDIC assessment | 250 | 271 | 270 | 114 | 265 | 905 | 1073 |
| &nbsp;&nbsp;&nbsp;Mortgage servicing <br> rights amortization | 110 | (50) | 59 | 26 | 266 | 145 | 1580 |
| &nbsp;&nbsp;&nbsp;Consulting fees | 637 | 254 | 233 | 178 | 761 | 1302 | 1634 |
| &nbsp;&nbsp;&nbsp;Other general and <br> administrative | 2964 | 2192 | 2242 | 2179 | 1964 | 9577 | 8175 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest <br> expense | 17050 | 13471 | 13235 | 13493 | 14426 | 57249 | 54166 |
| **Income Before Income<br> Taxes** | 8894 | 11207 | 10321 | 10053 | 9682 | 40475 | 29497 |
| **Income Taxes** | 1706 | 2253 | 2050 | 1951 | 1999 | 7960 | 6002 |
| **Net Income** | 7188 | 8954 | 8271 | 8102 | 7683 | 32515 | 23495 |
| **Other Comprehensive <br> Income (Loss) (Net of <br> Tax):** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net unrealized loss on <br> available-for-sale<br> securities | (628) | (8197) | (14602) | (20939) | (5170) | (44366) | (10948) |
| &nbsp;&nbsp;&nbsp;Reclassification <br> adjustment for realized <br> gain on sale of <br> available-for-sale <br> securities | - | - | - | - | - | - | (293) |
| &nbsp;&nbsp;&nbsp;Net unrealized loss on <br> available-for-sale<br> for-sale securities | (628) | (8197) | (14602) | (20939) | (5170) | (44366) | (11241) |
| &nbsp;&nbsp;&nbsp;Tax benefit | (132) | (1721) | (3067) | (4397) | (1085) | (9317) | (2360) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive<br> loss | (496) | (6476) | (11535) | (16542) | (4085) | (35049) | (8881) |
| **Comprehensive Income <br> (Loss)** | $6692 | $2478 | $(3264) | $(8440) | $3598 | $(2534) | $14614 |
| **Basic Earnings <br> Per Share** | $0.53 | $0.68 | $0.63 | $0.62 | $0.59 | $2.46 | $2.01 |
| **Diluted Earnings<br> Per Share** | $0.53 | $0.68 | $0.63 | $0.62 | $0.59 | $2.46 | $2.01 |
| **Dividends Declared** | $0.2100 | $0.2100 | $0.2025 | $0.1900 | $0.1900 | $0.8125 | $0.7100 |

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | December<br> 31, 2022 | September<br> 30, 2022 | June<br>30, 2022 | March<br>31, 2022 | December<br>31, 2021 |
|  | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) |  |
| **Assets** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and due from banks | $83085 | $69680 | $69955 | $94118 | $135485 |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal funds sold | 1324 | 990 | 1484 | 45404 | 45338 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cash and cash equivalents | 84409 | 70670 | 71439 | 139522 | 180823 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing time deposits | 4442 | 5187 | 6684 | 8677 | 10913 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities - available-for-sale | 390789 | 395485 | 399687 | 413996 | 429931 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other securities, at cost | 9799 | 8227 | 8735 | 8568 | 8162 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans held for sale | 827 | 2182 | 4230 | 6060 | 7714 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, net | 2336074 | 2122626 | 2016394 | 1945449 | 1841177 |
| &nbsp;&nbsp;&nbsp;&nbsp;Premises and equipment | 28381 | 26484 | 26492 | 26653 | 26913 |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction in progress | 278 | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Goodwill | 86358 | 80434 | 80434 | 80434 | 80434 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage servicing rights | 3549 | 3583 | 3426 | 3336 | 3157 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other real estate owned | - | - | - | - | 159 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bank owned life insurance | 33073 | 28051 | 27874 | 27715 | 27558 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | 37372 | 40831 | 29321 | 25735 | 21359 |
| **Total Assets** | $3015351 | $2783760 | $2674716 | $2686145 | $2638300 |
| **Liabilities and Stockholders' Equity** |  |  |  |  |  |
| **Liabilities** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noninterest-bearing | $532794 | $506928 | $503395 | $497249 | $473689 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW accounts | 750887 | 705888 | 678552 | 681975 | 650466 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Savings | 627203 | 607375 | 617850 | 626787 | 597828 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time | 557980 | 462845 | 424249 | 447586 | 471479 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | 2468864 | 2283036 | 2224046 | 2253597 | 2193462 |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal funds purchased and securities <br> sold under agreements to repurchase | 54206 | 55802 | 71944 | 31680 | 29268 |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal Home Loan Bank (FHLB) <br> advances | 127485 | 102147 | 42635 | 22656 | 24065 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other borrowings | 10000 | 10000 | - | 40000 | 40000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subordinated notes, net of unamortized<br> issuance costs | 34586 | 34557 | 34528 | 34499 | 34471 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividend payable | 2832 | 2727 | 2626 | 2462 | 2461 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 19238 | 14913 | 18064 | 14773 | 17406 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 2717211 | 2503182 | 2393843 | 2399667 | 2341133 |
| **Commitments and Contingencies** |  |  |  |  |  |
| **Stockholders' Equity** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock - No par value 20,000,000 <br> shares authorized; issued and outstanding <br> 14,564,425 shares 12/31/22 and 14,063,999 <br> shares 12/31/21 | 135497 | 121811 | 123145 | 122886 | 122674 |
| &nbsp;&nbsp;&nbsp;&nbsp;Treasury stock - 956,003 shares 12/31/22 <br> and 997,766 shares 12/31/21 | (11573) | (11547) | (11822) | (11739) | (11724) |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 212449 | 208051 | 200811 | 195057 | 189401 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive <br> loss | (38233) | (37737) | (31261) | (19726) | (3184) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 298140 | 280578 | 280873 | 286478 | 297167 |
| **Total Liabilities and Stockholders' Equity** | $3015351 | $2783760 | $2674716 | $2686145 | $2638300 |

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------

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** |
| **Selected financial data** | December<br>31, 2022 | September<br> 30, 2022 | June<br>30, 2022 | March<br>31, 2022 | December<br>31, 2021 | December<br>31, 2022 | December<br>31, 2021 |
| Return on average assets | 0.96% | 1.31% | 1.23% | 1.21% | 1.17% | 1.17% | 1.05% |
| Return on average equity | 10.00% | 12.53% | 11.66% | 11.00% | 10.94% | 11.30% | 9.09% |
| Yield on earning assets | 4.18% | 4.00% | 3.79% | 3.47% | 3.59% | 3.87% | 3.66% |
| Cost of interest bearing <br> liabilities | 1.32% | 0.68% | 0.44% | 0.45% | 0.51% | 0.74% | 0.48% |
| Net interest spread | 2.86% | 3.32% | 3.35% | 3.02% | 3.08% | 3.13% | 3.18% |
| Net interest margin | 3.20% | 3.49% | 3.47% | 3.14% | 3.21% | 3.32% | 3.31% |
| Efficiency | 50.46% | 51.19% | 50.17% | 55.44% | 58.76% | 55.95% | 62.39% |
| Dividend payout ratio | 39.39% | 30.45% | 30.02% | 30.64% | 32.03% | 33.06% | 35.08% |
| Tangible book value <br> per share (1) | $17.69 | $17.86 | $17.43 | $16.96 | $16.49 |  |  |
| Tier 1 capital to <br> average assets | 8.39% | 9.11% | 8.75% | 8.51% | 8.47% |  |  |
| Average Shares Outstanding | 13606876 | 13083145 | 13065975 | 13066272 | 13046299 | 13206713 | 11664852 |
| (1) Tangible Equity = Stockholder Equity less goodwill and other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities) | (1) Tangible Equity = Stockholder Equity less goodwill and other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities) | (1) Tangible Equity = Stockholder Equity less goodwill and other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities) | (1) Tangible Equity = Stockholder Equity less goodwill and other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities) | (1) Tangible Equity = Stockholder Equity less goodwill and other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities) | (1) Tangible Equity = Stockholder Equity less goodwill and other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities) | (1) Tangible Equity = Stockholder Equity less goodwill and other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities) | (1) Tangible Equity = Stockholder Equity less goodwill and other intangibles (core deposit intangible, mortgage servicing rights and unrealized gain/loss on securities) |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Loans** | December<br> 31, 2022 | September<br> 30, 2022 | June<br>30, 2022 | March<br>31, 2022 | December<br>31, 2021 |
| (Dollar amounts in thousands) |  |  |  |  |  |
| Commercial real estate | $1152603 | $1063661 | $979176 | $910839 | $848477 |
| Agricultural real estate | 220819 | 205089 | 199972 | 196223 | 198343 |
| Consumer real estate | 494423 | 416001 | 410450 | 410120 | 395873 |
| Commercial and industrial | 242360 | 229388 | 232975 | 216918 | 208270 |
| Agricultural | 128733 | 128615 | 127143 | 140709 | 118368 |
| Consumer | 89147 | 70602 | 55411 | 57521 | 57737 |
| Other | 29818 | 30662 | 31243 | 31573 | 32089 |
| Less: Net deferred loan fees <br>&nbsp;&nbsp;&nbsp;&nbsp; and costs | (1516) | (1402) | (1552) | (1683) | (1738) |
| Total loans, net | $2356387 | $2142616 | $2034818 | $1962220 | $1857419 |

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------

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

SELECT FINANCIAL DATA (continued)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Asset quality data** | December<br>31, 2022 | September<br> 30, 2022 | June<br>30, 2022 | March<br>31, 2022 | December<br>31, 2021 |
| (Dollar amounts in thousands) |  |  |  |  |  |
| Nonaccrual loans | $4689 | $5470 | $5247 | $8581 | $8076 |
| Troubled debt restructuring | $3645 | $3978 | $2748 | $7268 | $7614 |
| 90 day past due and accruing | $- | $- | $- | $- | $- |
| Nonperforming loans | $4689 | $5470 | $5247 | $8581 | $8076 |
| Other real estate owned | $- | $- | $- | $- | $159 |
| Nonperforming assets | $4689 | $5470 | $5247 | $8581 | $8235 |
| Allowance for loan and lease losses <br> (ALLL) | $20313 | $19990 | $18424 | $16771 | $16242 |
| &nbsp;&nbsp;Total credit mark | 6427 | 5959 | 6724 | 7201 | 7616 |
| Adjusted ALLL with credit mark <br> included | $26740 | $25949 | $25148 | $23972 | $23858 |
| Allowance for loan and lease<br> losses/total loans | 0.86% | 0.93% | 0.91% | 0.85% | 0.87% |
| Adjusted ALLL with credit mark/total <br> loans | 1.13% | 1.21% | 1.24% | 1.22% | 1.28% |
| Net charge-offs: |  |  |  |  |  |
| Quarter-to-date | $431 | $71 | $(25) | $51 | $(101) |
| Year-to-date | $529 | $97 | $26 | $51 | $874 |
| Net charge-offs to average loans |  |  |  |  |  |
| Quarter-to-date | 0.02% | 0.00% | 0.00% | 0.00% | -0.01% |
| Year-to-date | 0.03% | 0.00% | 0.00% | 0.00% | 0.06% |
| Nonperforming loans/total loans | 0.20% | 0.26% | 0.26% | 0.44% | 0.43% |
| Allowance for loan and lease <br> losses/nonperforming loans | 273.67% | 365.44% | 351.44% | 198.29% | 201.11% |

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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** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** |
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
| Interest Earning Assets: | Average <br>Balance | Average <br>Balance | Interest/<br>Dividends | Interest/<br>Dividends | Annualized<br>Yield/Rate | Average <br>Balance | Average <br>Balance | Interest/<br>Dividends | Interest/<br>Dividends | Annualized<br>Yield/Rate |
| Loans | $| 2301204 | $| 27302 | 4.75% | $| 1843942 | $| 21008 | 4.56% |
| Taxable investment securities |  | 422247 |  | 1556 | 1.47% |  | 421676 |  | 1228 | 1.16% |
| Tax-exempt investment securities |  | 28522 |  | 108 | 1.92% |  | 18303 |  | 74 | 2.05% |
| Fed funds sold & other |  | 74876 |  | 526 | 2.81% |  | 218481 |  | 113 | 0.21% |
| Total Interest Earning Assets |  | 2826849 | $| 29492 | 4.18% |  | 2502402 | $| 22423 | 3.59% |
| Nonearning Assets |  | 173048 |  |  |  |  | 125930 |  |  |  |
| Total Assets | $| 2999897 |  |  |  | $| 2628332 |  |  |  |
| Interest Bearing Liabilities: |  |  |  |  |  |  |  |  |  |  |
| Savings deposits | $| 1394663 | $| 3427 | 0.98% | $| 1262214 | $| 767 | 0.24% |
| Other time deposits |  | 485461 |  | 1551 | 1.28% |  | 481119 |  | 814 | 0.68% |
| Other borrowed money |  | 135013 |  | 1209 | 3.58% |  | 64008 |  | 361 | 2.26% |
| Fed funds purchased & securities |  |  |  |  |  |  |  |  |  |  |
| sold under agreement to repurchase |  | 53506 |  | 463 | 3.46% |  | 29403 |  | 155 | 2.11% |
| Subordinated notes |  | 34567 |  | 285 | 3.30% |  | 34451 |  | 291 | 3.38% |
| Total Interest Bearing Liabilities | $| 2103210 | $| 6935 | 1.32% | $| 1871195 | $| 2388 | 0.51% |
| Noninterest Bearing Liabilities |  | 609253 |  |  |  |  | 476122 |  |  |  |
| Stockholders' Equity | $| 287434 |  |  |  | $| 281015 |  |  |  |
| Net Interest Income and <br> Interest Rate Spread |  |  | $| 22557 | 2.86% |  |  | $| 20035 | 3.08% |
| Net Interest Margin |  |  |  |  | 3.20% |  |  |  |  | 3.21% |
| 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 |

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------

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (continued)

(in thousands of dollars, except percentages)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** |
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
| Interest Earning Assets: | Average <br>Balance | Average <br>Balance | Interest/<br>Dividends | Interest/<br>Dividends | Annualized<br>Yield/Rate | Average <br>Balance | Average <br>Balance | Interest/<br>Dividends | Interest/<br>Dividends | Annualized<br>Yield/Rate |
| Loans | $| 2073737 | $| 94264 | 4.55% | $| 1522088 | $| 71645 | 4.71% |
| Taxable investment securities |  | 424229 |  | 5621 | 1.32% |  | 377887 |  | 4514 | 1.19% |
| Tax-exempt investment securities |  | 23472 |  | 337 | 1.82% |  | 18365 |  | 326 | 2.25% |
| Fed funds sold & other |  | 95301 |  | 927 | 0.97% |  | 187003 |  | 355 | 0.19% |
| Total Interest Earning Assets |  | 2616739 | $| 101149 | 3.87% |  | 2105343 | $| 76840 | 3.66% |
| Nonearning Assets |  | 158361 |  |  |  |  | 124649 |  |  |  |
| Total Assets | $| 2775100 |  |  |  | $| 2229992 |  |  |  |
| Interest Bearing Liabilities: |  |  |  |  |  |  |  |  |  |  |
| Savings deposits | $| 1335271 | $| 6378 | 0.48% | $| 1145636 | $| 2467 | 0.22% |
| Other time deposits |  | 451013 |  | 3505 | 0.78% |  | 306600 |  | 2951 | 0.96% |
| Other borrowed money |  | 74379 |  | 2160 | 2.90% |  | 29479 |  | 785 | 2.66% |
| Fed funds purchased & securities |  |  |  |  |  |  |  |  |  |  |
| sold under agreement to repurchase |  | 45314 |  | 1197 | 2.64% |  | 29831 |  | 649 | 2.18% |
| Subordinated notes |  | 34524 |  | 1122 | 3.25% |  | 14777 |  | 490 | 3.32% |
| Total Interest Bearing Liabilities | $| 1940501 | $| 14362 | 0.74% | $| 1526323 | $| 7342 | 0.48% |
| Noninterest Bearing Liabilities |  | 546731 |  |  |  |  | 445144 |  |  |  |
| Stockholders' Equity | $| 287868 |  |  |  | $| 258525 |  |  |  |
| Net Interest Income and <br> Interest Rate Spread |  |  | $| 86787 | 3.13% |  |  | $| 69498 | 3.18% |
| Net Interest Margin |  |  |  |  | 3.32% |  |  |  |  | 3.31% |
| 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 |

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------

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** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** |
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **As Reported** | **As Reported** | **Excluding Accretion/Amortization** | **Excluding Accretion/Amortization** | **Difference** | **Difference** | **As Reported** | **As Reported** | **Excluding Accretion/Amortization** | **Excluding Accretion/Amortization** | **Excluding Accretion/Amortization** | **Difference** | **Difference** |
|  | $ | Yield | $ | Yield | $ | Yield | $ | Yield | $ | $Yield | Yield | $ | Yield |
| Interest Earning Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Loans | 27302 | 4.75% | 26628 | 4.63% | 674 | 0.12% | 21008 | 4.56% | $|  | 4.47% |  | 0.09% |
| Taxable investment securities | 1556 | 1.47% | 1556 | 1.47% | - | 0.00% | 1228 | 1.16% |  |  | 1.16% |  | 0.00% |
| Tax-exempt investment securities | 108 | 1.92% | 108 | 1.92% | - | 0.00% | 74 | 2.05% |  |  | 2.05% |  | 0.00% |
| Fed funds sold & other | 526 | 2.81% | 526 | 2.81% | - | 0.00% | 113 | 0.21% |  |  | 0.21% |  | 0.00% |
| Total Interest Earning Assets | 29492 | 4.18% | 28818 | 4.08% | 674 | 0.10% | 22423 | 3.59% |  |  | 3.52% |  | 0.07% |
| Interest Bearing Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Savings deposits | 3427 | 0.98% | 3427 | 0.98% | - | 0.00% | 767 | 0.24% | $|  | 0.24% |  | 0.00% |
| Other time deposits | 1551 | 1.28% | 2010 | 1.66% | (459) | -0.38% | 814 | 0.68% |  |  | 0.68%) |  | 0.00% |
| Other borrowed money | 1209 | 3.58% | 1227 | 3.64% | (18) | -0.06% | 361 | 2.26% |  |  | 2.26%) |  | 0.00% |
| Fed funds purchased & securities |  |  |  |  |  |  |  |  |  |  |  |  |  |
| sold under agreement to repurchase | 463 | 3.46% | 463 | 3.46% | - | 0.00% | 155 | 2.11% |  |  | 2.11% |  | 0.00% |
| Subordinated notes | 285 | 3.30% | 285 | 3.30% | - | 0.00% | 291 | 3.38% |  |  | 3.38% |  | 0.00% |
| Total Interest Bearing Liabilities | 6935 | 1.32% | 7412 | 1.41% | (477) | -0.09% | 2388 | 0.51% |  |  | 0.65%) |  | -0.14% |
| Interest/Dividend income/yield | 29492 | 4.18% | 28818 | 4.08% | 674 | 0.10% | 22423 | 3.59% |  |  | 3.52% |  | 0.07% |
| Interest Expense / yield | 6935 | 1.32% | 7412 | 1.41% | (477) | -0.09% | 2388 | 0.51% |  |  | 0.65%) |  | -0.14% |
| Net Interest Spread | 22557 | 2.86% | 21406 | 2.67% | 1151 | 0.19% | 20035 | 3.08% |  |  | 2.87% |  | 0.21% |
| Net Interest Margin |  | 3.20% |  | 3.03% |  | 0.17% |  | 3.21% |  |  | 3.04% |  | 0.17% |
| 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 |  |  |  |  |

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (continued)

(in thousands of dollars, except percentages)

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| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** | **For the Twelve Months Ended** |
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **As Reported** | **As Reported** | **Excluding Accretion/Amortization** | **Excluding Accretion/Amortization** | **Difference** | **Difference** | **As Reported** | **As Reported** | **Excluding Accretion/Amortization** | **Excluding Accretion/Amortization** | **Excluding Accretion/Amortization** | **Difference** | **Difference** |
|  | $ | Yield | $ | Yield | $ | Yield | $ | Yield | $ | $Yield | Yield | $ | Yield |
| Interest Earning Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Loans | 94264 | 4.55% | 92132 | 4.45% | 2132 | 0.10% | 71645 | 4.71% | $|  | 4.67% |  | 0.04% |
| Taxable investment securities | 5621 | 1.32% | 5621 | 1.32% | - | 0.00% | 4514 | 1.19% |  |  | 1.19% |  | 0.00% |
| Tax-exempt investment securities | 337 | 1.82% | 337 | 1.82% | - | 0.00% | 326 | 2.25% |  |  | 2.25% |  | 0.00% |
| Fed funds sold & other | 927 | 0.97% | 927 | 0.97% | - | 0.00% | 355 | 0.19% |  |  | 0.19% |  | 0.00% |
| Total Interest Earning Assets | 101149 | 3.87% | 99017 | 3.79% | 2132 | 0.08% | 76840 | 3.66% |  |  | 3.63% |  | 0.03% |
| Interest Bearing Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Savings deposits | 6378 | 0.48% | 6378 | 0.48% | - | 0.00% | 2467 | 0.22% | $|  | 0.22% |  | 0.00% |
| Other time deposits | 3505 | 0.78% | 5822 | 1.29% | (2317) | -0.51% | 2951 | 0.96% |  |  | 1.17%) |  | -0.21% |
| Other borrowed money | 2160 | 2.90% | 2241 | 3.01% | (81) | -0.11% | 785 | 2.66% |  |  | 2.17% |  | 0.49% |
| Fed funds purchased & securities |  |  |  |  |  |  |  |  |  |  |  |  |  |
| sold under agreement to repurchase | 1197 | 2.64% | 1197 | 2.64% | - | 0.00% | 649 | 2.18% |  |  | 2.18% |  | 0.00% |
| Subordinated notes | 1122 | 3.25% | 1122 | 3.25% | - | 0.00% | 490 | 3.32% |  |  | 3.32% |  | 0.00% |
| Total Interest Bearing Liabilities | 14362 | 0.74% | 16760 | 0.86% | (2398) | -0.12% | 7342 | 0.48% |  |  | 0.51%) |  | -0.03% |
| Interest/Dividend income/yield | 101149 | 3.87% | 99017 | 3.79% | 2132 | 0.08% | 76840 | 3.66% |  |  | 3.63% |  | 0.03% |
| Interest Expense / yield | 14362 | 0.74% | 16760 | 0.86% | (2398) | -0.12% | 7342 | 0.48% |  |  | 0.51%) |  | -0.03% |
| Net Interest Spread | 86787 | 3.13% | 82257 | 2.93% | 4530 | 0.20% | 69498 | 3.18% |  |  | 3.12% |  | 0.06% |
| Net Interest Margin |  | 3.32% |  | 3.15% |  | 0.17% |  | 3.31% |  |  | 3.25% |  | 0.06% |
| 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 | 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 |  |  |  |  |

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATION OF NET INCOME

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| | | | | |
|:---|:---|:---|:---|:---|
|  | (in thousands of dollars) | (in thousands of dollars) | (in thousands of dollars) | (in thousands of dollars) |
| **Non-GAAP Reconciliation of Net Income** | Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended |
|  | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 |
|  | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) |
| Net income as reported | $7188 | $7683 | $32515 | $23495 |
| Acquisition expenses | 2019 | 1192 | 2511 | 3859 |
| Tax effect on acquisition expenses | (386) | (216) | (445) | (728) |
| Net income excluding acquisition expenses and tax effect | 8821 | 8659 | 34581 | 26626 |
| Weighted average common shares outstanding<br> including participating securities | 13606876 | 13046299 | 13206713 | 11664852 |
| Basic and diluted earnings per share | $0.65 | $0.66 | $2.62 | $2.28 |

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FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES

NON-GAAP RECONCILIATION OF TANGIBLE BOOK VALUE

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| | | | | |
|:---|:---|:---|:---|:---|
|  | Actual End of Period | Actual End of Period | Regulatory End of Period | Regulatory End of Period |
| **Non-GAAP Reconciliation of Tangible Book Value** | Year to Date | Year to Date | Year to Date | Year to Date |
|  | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 |
| Shares Outstanding | 13608422 | 13066233 | 13608422 | 13066233 |
| Tangible Equity |  |  |  |  |
| Equity | $298140 | $297167 | $298140 | $297167 |
| Goodwill | 86358 | 80434 | 86358 | 80434 |
| Other Intangible | 9327 | 4433 | 9327 | 4433 |
| Comprehensive Adjustment\* | - | - | 38233 | 3184 |
| Tangible Equity | $202455 | $212300 | $240689 | $215484 |
| Shares Outstanding | 13608 | 13066 | 13608 | 13066 |
| Tangible Book Equity per Share | $**14.88** | $**16.25** | $**17.69** | $**16.49** |
|  | Actual Average | Actual Average | Regulatory Average | Regulatory Average |
|  | Year to Date | Year to Date | Year to Date | Year to Date |
|  | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 |
| Net Income | $32515 | $23495 | $32515 | $23495 |
| Acquisition Costs - Tax Adjusted | 2066 | 3131 | 2066 | 3131 |
| Average Shares Outstanding | 13206713 | 11664852 | 13206713 | 11664852 |
| Average Tangible Equity |  |  |  |  |
| Average Equity | $287868 | $258525 | $287868 | $258525 |
| Average Goodwill | 80164 | 49790 | 80164 | 49790 |
| Average Other Intangible | 4997 | 4005 | 4997 | 4005 |
| Average Comprehensive Adjustment\* | - | - | 26393 | (1280) |
| Average Tangible Equity | $202707 | $204730 | $229100 | $203450 |
| Average Shares Outstanding | 13207 | 11665 | 13207 | 11665 |
| Average Tangible Book Equity per Share | $**15.35** | $**17.55** | $**17.35** | $**17.44** |
| Return on Average Tangible Equity | **16.04%** | **11.48%** | **14.19%** | **11.55%** |
| Return on Average Tangible Equity w/o Acquisition | **17.06%** | **13.01%** | **15.09%** | **13.09%** |
| \*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. | \*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. | \*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. | \*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. | \*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. |

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