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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For three months ended March 31, 1996
Commission file number 014492
FARMERS & MERCHANTS BANCORP, INC.
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(Exact name of registrant as specified in its charter)
Ohio 34-1469491
- --------------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
307-11 North Defiance Street 43502
- --------------------------------- ------------------------------
(Address of principal executive (Zip Code)
offices)
Registrant's Telephone Number, including area code 419/446-2501
------------
Not applicable
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Former name, former address, and former fiscal year,
if changed since last year
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares of each of the issuers classes of common stock,
as of the lastest practicable date:
Class Outstanding as of March 31, 1996
- --------------------------------- ------------------------------------------
Common Stock, No Par Value 260,000
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SECURITES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
FARMERS & MERCHANTS BANKCORP, INC.
INDEX
<TABLE>
<CAPTION>
Form 10-Q Items Page #
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<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial statements (unaudited)
Condensed consolidated balance sheets -- March 31, 1996
and December 31, 1995 1
Condensed consolidated statements of net earnings -- three
months ended March 31, 1996 and March 31, 1995 2
Condensed consolidated statements of cash flows -- three
months ended March 31, 1996 and March 31, 1995 3
Notes to condensed financial statements 4
Item 2. Management's discussion and analysis of Financial
Condition and Results of Operations 5
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 6
SIGNATURES 7
</TABLE>
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FARMERS & MERCHANTS BANCORP, INC.
ARCHBOLD, OHIO
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands of dollars)
<TABLE>
<CAPTION>
Quarter Ended Market Value Year Ended Market Value Quarter Ended
March 3 March 31 December 31 December 31 March 31
ASSETS 1996 1996 1995 1995 1995
- ------ ------------- ------------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Cash and due from banks $ 11,996 $ 14,951 $ 12,945
Interest bearing deposits in other banks 145 100 145
Federal Funds Sold & Securities Purchased
Under Agreement to Resell 14,335 10,710 360
Investment Securities
U. S. Treasury 22,719 22,719 22,757 22,757 16,806
U. S. Government Agencies 34,475 34,475 31,237 31,237 25,958
State & Political Subdivisions 21,464 21,464 19,926 19,926 17,924
All Others 10,777 10,777 10,795 10,795 9,285
Loans and leases 349,205 339,676 309,607
Bank premises and equipment 7,216 7,198 6,952
Accrued interest and other assets 7,241 6,740 6,867
-------- ------- -------- ------- --------
TOTAL ASSETS $479,573 $89,435 $464,090 $84,715 $406,849
- ------------ ======== ======= ======== ======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
LIABILITIES
- -----------
Deposits:
Demand $ 35,873 $ 37,436 $ 27,744
Time and savings 383,824 366,554 323,262
Federal Funds Purchased & Securities Sold
Under Agreement to Repurchase 6,450 6,919 6,819
Other Borrowed Money 9,523 9,662 9,726
Accrued interest and other liabilities 3,710 3,898 3,287
-------- ------- -------- ------- --------
TOTAL LIABILITIES 439,380 0 424,469 0 370,838
- ----------------- -------- ------- -------- ------- --------
SHAREHOLDERS' EQUITY
- --------------------
Common Stock, no par value - Authorized
300,000 shares; issued 260,000 shares
in 1993 & 1992 12,677 12,677 12,677
Undivided profits 27,516 26,944 23,334
-------- ------- -------- ------- --------
TOTAL SHAREHOLDERS' EQUITY 40,193 0 39,621 0 36,011
- -------------------------- -------- ------- -------- ------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $479,573 $0 $464,090 $0 $406,849
- ------------------------------------------ ======== ======= ======== ======= ========
</TABLE>
See notes to condensed consolidated unaudited financial statements
Note: The balance sheet at December 31, 1995 has been derived from the audited
financial statements of that date.
1
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FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF NET EARNINGS
(In thousands of dollars)
<TABLE>
<CAPTION>
Three Months Ended
March 30
1996 1995
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<S> <C> <C>
INTEREST INCOME:
Loans and leases $7,971 $6,524
Investment Securities
U. S. Treasury 315 218
U. S. Gov't Agencies 496 429
States & Political Subdiv. 287 284
Other 159 136
Federal funds sold 167 71
Deposits with other banks 0 0
------ ------
Total Interest Income 9,395 7,662
------ ------
INTEREST EXPENSE:
Deposits 4,888 3,460
Short-term borrowings 90 116
Other borrowed money 152 179
------ ------
Total Interest Expense 5,130 3,755
------ ------
NET INTEREST INCOME 4,265 3,907
PROVISION FOR LOAN LOSSES 145 0
------ ------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 4,120 3,907
OTHER INCOME:
Service charges 259 228
Other 380 238
Securities gains (losses) 0 (12)
------ ------
639 454
------ ------
OTHER EXPENSE:
Salaries 1,203 938
Pension and Employee Benefits 232 175
Occupancy 349 281
Other operating 886 1,037
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2,670 2,431
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EARNINGS BEFORE INCOME TAX 2,089 1,930
PROVISION FOR FEDERAL INCOME TAX 606 564
------ ------
NET EARNINGS $1,483 $1,366
====== ======
Net income per share (Based upon the
weighted average number of shares
outstanding of 260,000 for 1996 and
1995) 5.70 5.25
====== ======
</TABLE>
2
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Farmers and Merchants Bancorp, Inc.
Cash Flows From Operating Activities
(In Thousands)
<TABLE>
<CAPTION>
Mar 31 Mar 31
1996 1995
------ ------
<S> <C> <C>
Net Earnings 1,483 1,366
Adj To Reconcile Net Earnings to Cash
provided by Operating activities
Depreciation and Amortization 198 150
Premium Amortization 161 32
Discount Amortization (39) (213)
Provision for Loan Losses 145 0
Provision for Deferred Taxes 87 23
(Gain)Loss on Sale of Fixed Assets 0 0
(Gain)Loss on Sale of Securities 0 12
Changes in Assets and Liabilities
Accrued Int Receivable & Other Assets (415) (620)
Accrued Int Payable & Other Liabilities 136 614
Net Cash Provided By Operating Act 1,756 1,364
Cash Flows from Investing Activities
Capital Expenditures (216) (845)
Proceeds from Sale of Fixed Assets 0 0
Proceeds from Sale of Securities 0 0
Proceeds from Maturities of Securities 0 7,745
Purchase of Securities (4,358) 0
Net (Increase)Decrease in Loans (9,538) (8,026)
Net (Increase)Decrease in Leases 9 (1)
Net Cash Used by Investing Activities (14,103) (1,127)
Cash Flows from Financing Activities
Net Increase(Decrease) in Deposits 15,707 6,942
Net Increase(Decrease) in Short Term
Borrowings (469) (7,579)
Net Increase in Long Term Borrowings 0 0
Payments on Long Term Borrowings (139) (149)
Payments of Dividends (650) (520)
Unrealized Gains/Losses on Securities (387) 67
Net Cash Provided by Financing Act 14,062 (1,239)
Net Change in Cash & Cash Equivelants 1,715 (1,002)
Cash & Cash Equivelants at Beginning of Year 24,761 14,452
Cash & Cash Equivelants at end of year 26,476 13,450
Reconcilements of Cash & Cash Equivalents
Cash and Due from Banks 11,996 12,945
Interest Bearing Deposits 145 145
Federal Funds Sold 14,335 360
Total Cash and Cash Equivelants 26,476 13,450
</TABLE>
3
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FARMERS & MERCHANTS BANCORP, INC.
Notes to Condensed Consolidated Financial Statements
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions for Form 10-Q and
rule 10-1 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments, consisting of normal recurring accruals, considered necessary for
a fair presentation have been included. Operating results for the three months
ended March 31, 1996 are not necessarily indicative of the results that are
expected for the year ended December 31, 1996. For further information, refer
to the consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended December 31, 1995.
4
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
Farmers & Merchants Bancorp, Inc., was incorporated on February 25, 1985, under
the laws of the State of Ohio. Farmers and Merchants Bancorp, Inc., and its
subsidiary, The Farmers & Merchants State Bank are engaged only in commercial
banking. The executive officers of Farmers & Merchants Bancorp, Inc., are
located at 307-11 North Defiance Street, Archbold Ohio 43502.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity has continued to be enhanced by the generation of cash through
operations primarily be reduction in expenses, and the collection of interest
income from productive assets.
The rate of increase on Capital Expenditures has slowed with the completion of
the renovation of the main office and the implementation of the new proof
system. There will be reasonable increase in this area due to the major
renovation of one of the branch offices.
The following is a list of 5 capital ratios as they are calculated from the
March 31, 1996 financial statements.
<TABLE>
<S> <C>
Primary Ratio 9.42%
Total Capital Ratio 11.38%
Risk Based Capital Tier 1 8.27%
Risk Based Capital Tier 2 11.36%
Stockholders Equity/Total Assets 8.38%
</TABLE>
During the first three months of 1996 the bank's loan portfolio has increased
$9,529,000. This represents a 3% increase. This was the primary use of cash
over the period. An increase of $15,707,000 in deposits was noted at the
quarter ended March 31, 1996. This represents a 4% increase. This increase was
do in part to the fact that the bank offers very competitive rates for its
deposit products. In addition a concerted marketing effort has been
impletmented to attract more "core" deposits to help with the maintaining of an
acceptable net interest margin.
5
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PART II
OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Listing of Exhibits (numbered as in Item 601 of Regulation S-K):
27. Financial Data Schedule.
(b) The Company has filed no reports on Form 8-K during the quarter ended
March 31, 1996.
6
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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 duly authorized.
Farmers & Merchants Bancorp, Inc.
Date: May 9, 1996 By: /s/ Joe E. Crossgrove
------------------------------
Joe E. Crossgrove
Executive Vice President
and Cashier
Date: May 9, 1996 By: /s/ Randal H. Schroeder
------------------------------
Randal H. Schroeder
Asst. Vice President
and Chief Accounting Officer
7
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 11,996
<INT-BEARING-DEPOSITS> 145
<FED-FUNDS-SOLD> 14,335
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 89,435
<LOANS> 349,205
<ALLOWANCE> 5,500
<TOTAL-ASSETS> 479,573
<DEPOSITS> 419,697
<SHORT-TERM> 6,450
<LIABILITIES-OTHER> 3,710
<LONG-TERM> 9,523
0
0
<COMMON> 12,677
<OTHER-SE> 27,516
<TOTAL-LIABILITIES-AND-EQUITY> 40,193
<INTEREST-LOAN> 7,971
<INTEREST-INVEST> 1,257
<INTEREST-OTHER> 167
<INTEREST-TOTAL> 9,395
<INTEREST-DEPOSIT> 4,888
<INTEREST-EXPENSE> 5,130
<INTEREST-INCOME-NET> 4,265
<LOAN-LOSSES> 145
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,670
<INCOME-PRETAX> 639
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,089
<EPS-PRIMARY> 5.70
<EPS-DILUTED> 5.70
<YIELD-ACTUAL> 8.38
<LOANS-NON> 3,377
<LOANS-PAST> 3,257
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 6,634
<ALLOWANCE-OPEN> 5,500
<CHARGE-OFFS> 312
<RECOVERIES> 167
<ALLOWANCE-CLOSE> 5,500
<ALLOWANCE-DOMESTIC> 145
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 5,500
</TABLE>
