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Previous: ACAP CORP, 10QSB, 1997-11-13 |
Next: ASTEC INDUSTRIES INC, 10-Q, 1997-11-13 |
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ______________________ to
_______________________
Commission file number 014492
FARMERS & MERCHANTS BANCORP, INC.
(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, Archbold, Ohio 43502
(Address of principal executive offices) (Zip Code)
(419) 446-2501
Registrant's Telephone Number, including area code
Not applicable
(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 period 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 latest practicable date:
Common Stock, No Par Value 1,300,000
Class Outstanding as of November 1, 1997
<PAGE> 2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
FARMERS & MERCHANTS BANCORP, INC.
INDEX
<TABLE>
<CAPTION>
FORM 10-Q ITEMS PAGE NO.
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets-
September 30, 1997, December 31, 1996 and September 30, 1996 1
Condensed Consolidated Statements of Income-
Three Months and Year to Date Ended September 30, 1997 and September 30, 1996 2
Condensed Consolidated Statements of Cash Flows-
Nine Months Ended September 30, 1997 and September 30, 1996 3
Notes to Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition
Results of Operations 5
PART II.OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8K 6
SIGNATURES 7
</TABLE>
<PAGE> 3
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>
Sep 30, 1997 Dec 31, 1996 Sep 30, 1996
<S> <C> <C> <C>
ASSETS:
Cash and due from banks $ 12,315 $ 15,871 $ 14,233
Interest bearing deposits in other banks 145 100 145
Investment Securities:
U.S. Treasury 23,434 27,827 26,975
U.S. Government Agencies 30,440 32,896 32,254
State & political obligations 23,604 21,678 23,991
All others 12,849 19,320 17,247
Loans and leases 387,454 369,219 369,216
Bank premises and equipment 7,351 7,576 7,521
Accrued interest and other assets 7,705 6,962 7,306
TOTAL ASSETS $505,297 $501,449 $498,888
LIABILITIES AND SHAREHOLDERS' EQUITY:
LIABILITIES:
Deposits:
Demand $ 36,958 $ 50,019 $ 38,210
Time and savings 403,943 388,358 393,758
Federal funds purchased and securities
sold under agreement to repurchase 3,202 6,763 11,903
Other borrowed money 8,473 8,998 9,193
Accrued interest and other liabilities 4,859 3,930 3,948
TOTAL LIABILITIES 457,435 458,068 457,012
SHAREHOLDERS' EQUITY:
Common stock, no par value - authorized
1,500,000 shares, issued 1,300,000 shares in
1997 and 1996 12,677 12,677 12,677
Undivided profits 35,185 30,704 29,199
TOTAL SHAREHOLDERS' EQUITY 47,862 43,381 41,876
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $505,297 $501,449 $498,888
</TABLE>
See Notes to Condensed Consolidated Unaudited Financial Statements.
Note: The December 31, 1996 Balance Sheet has been derived from the audited
financial statements of that date.
1
<PAGE> 4
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Sep 30, 1997 Sep 30, 1996 Sep 30, 1997 Sep 30, 1996
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans and leases $ 8,860 $ 8,144 $ 25,717 $ 23,885
Investment Securities:
U.S. Treasury 373 418 1,146 1,094
U.S. Government Agencies 486 537 1,548 1,569
States & Political Subdivisions 304 331 913 915
Other 255 272 959 579
Federal funds sold 8 2 112 303
TOTAL INTEREST INCOME 10,286 9,704 30,395 28,345
INTEREST EXPENSE:
Deposits 5,034 5,058 15,139 14,887
Short-term borrowings 74 362 209 284
Other borrowed money 286 147 867 449
TOTAL INTEREST EXPENSE 5,394 5,567 16,215 15,620
NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES 4,892 4,137 14,180 12,725
PROVISION FOR LOAN LOSSES 374 377 836 790
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,518 3,760 13,344 11,935
OTHER INCOME:
Service charges 294 285 863 818
Other 469 424 1,233 1,192
Securities gains (losses) 6 -- (4) --
TOTAL OTHER INCOME 769 709 2,092 2,010
OTHER EXPENSE:
Salaries 1,065 1,241 3,165 3,639
Pension and employee benefits 279 273 823 738
Occupancy 332 332 966 949
Other operating 1,014 781 2,985 2,882
TOTAL OTHER EXPENSES 2,690 2,627 7,939 8,208
NET INCOME BEFORE INCOME TAX 2,597 1,842 7,497 5,737
PROVISION FOR INCOME TAX 750 492 2,182 1,653
NET INCOME $ 1,847 $ 1,350 $ 5,315 $ 4,084
NET INCOME PER SHARE (Based upon
weighted average number of shares
outstanding of 1,300,000 for 1997 and 1996 $ 1.42 $ 1.04 $ 4.09 $ 3.14
DIVIDENDS PER SHARE DECLARED $ 0.25 $ 0.25 $ 0.25 $ 0.25
</TABLE>
See Notes to Condensed Consolidated Unaudited Financial Statements.
2
<PAGE> 5
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>
Nine Months Ended
Sep 30, 1997 Sep 30, 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,315 $ 4,084
Adjustments to Reconcile Net Income to
Cash Provided by Operating Activities:
Depreciation & amortization 498 549
Premium amortization 354 463
Discount accretion (123) (131)
Provision for loan losses 836 790
Provision for deferred taxes 47 (209)
(Gain) loss on sale of securities 4 --
Changes in Operating Assets & Liabilities:
Accrued interest receivable and other assets (790) (389)
Accrued interest payable and other payables 1,124 406
TOTAL CASH PROVIDED BY OPERATING ACTIVITIES 7,265 5,563
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (273) (872)
Proceeds from sale of available for sale securities 7,045 --
Proceeds from maturities of available for sale securities 58,078 --
Purchase of available for sale securities (53,823) (16,939)
Net change in loans and leases (19,071) (30,328)
TOTAL CASH USED BY INVESTING ACTIVITIES (8,044) (48,139)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits 2,524 27,978
Net change in short-term borrowings (3,561) 4,984
Payment on long-term borrowings (525) (469)
Payment of dividends (1,170) (1,300)
TOTAL CASH PROVIDED (USED) BY FINANCING ACTIVITIES (2,732) 31,193
NET CHANGE IN CASH FLOWS (3,511) (11,383)
CASH AND CASH EQUIVALENTS BEGINNING OF YEAR 15,971 25,761
CASH AND CASH EQUIVALENTS END OF PERIOD $ 12,460 $ 14,378
RECONCILEMENT OF CASH AND
CASH EQUIVALENTS
Cash and due from banks $ 12,315 $ 14,233
Interest bearing deposits 145 145
TOTAL CASH AND CASH EQUIVALENTS $ 12,460 $ 14,378
</TABLE>
See Notes to Condensed Consolidated Unaudited Financial Statements.
3
<PAGE> 6
FARMERS & MERCHANTS BANCORP, INC.
Notes to Condensed Consolidated Unaided 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 10Q and Rule 10-01 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 nine months ended September 30, 1997 are not
necessarily indicative of the results that are expected for the
year ended December 31, 1997. 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, 1996.
On June 28, 1996, the Board of Directors authorized a five-for-one
stock split, thereby increasing the total number of shares authorized
to 1,500,000 and the total number of shares issued and outstanding to
1,300,000. All references in the accompanying financial statements
have been restated to reflect the stock split.
4
<PAGE> 7
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 & Merchants
Bancorp, Inc., and its subsidiaries The Farmers & Merchants State Bank
and Farmers & Merchants Life Insurance Company are engaged in
commercial banking and life and disability insurance, respectively.
The executive offices 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 by reduction in expenses, and the
collection of interest income from productive assets.
The rate of increase for 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 increases in this
area due to the major renovation of one of the branch offices.
During the first nine months of 1997 the bank's loan portfolio has
increased $18,235,000. This represents a 5% increase. This was the
primary use of cash over the period. An increase of $2,524,000 in
deposits was noted for the nine months ended September 30, 1997. This
represents a 1% increase. A concerted effort is being implemented to
attract more "core" deposits.
The following is a list of five capital ratios as they are calculated
from the September 30, 1997 financial statements:
<TABLE>
<S> <C>
Primary Ratio 10.33%
Total Capital Ratio 11.99%
Risk Based Capital Tier 1 13.33%
Risk Based Capital Tier 2 17.37%
Stockholders' Equity/Total Assets 9.31%
</TABLE>
5
<PAGE> 8
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) The following documents are filed as part of this Report:
Exhibit No. Description
27 Financial Data Schedule
(B) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the
quarter ended September 30, 1997.
6
<PAGE> 9
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Farmers & Merchants Bancorp, Inc.,
Date: November 11, 1997 By: /s/ Joe E. Crossgrove
Joe E. Crossgrove
President and Cashier
Date: November 11, 1997 By: /s/ Randal H. Schroeder
Randal H. Schroeder
Asst. Vice-President
and Chief Operating Officer
7
<PAGE> 10
EXHIBIT INDEX
EXHIBIT 27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 12,315
<INT-BEARING-DEPOSITS> 145
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 90,327
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 387,454
<ALLOWANCE> 0
<TOTAL-ASSETS> 505,297
<DEPOSITS> 440,901
<SHORT-TERM> 3,202
<LIABILITIES-OTHER> 4,859
<LONG-TERM> 8,473
0
0
<COMMON> 12,677
<OTHER-SE> 35,185
<TOTAL-LIABILITIES-AND-EQUITY> 505,297
<INTEREST-LOAN> 25,717
<INTEREST-INVEST> 4,566
<INTEREST-OTHER> 112
<INTEREST-TOTAL> 30,395
<INTEREST-DEPOSIT> 15,139
<INTEREST-EXPENSE> 1,076
<INTEREST-INCOME-NET> 14,180
<LOAN-LOSSES> 836
<SECURITIES-GAINS> (4)
<EXPENSE-OTHER> 7,939
<INCOME-PRETAX> 7,497
<INCOME-PRE-EXTRAORDINARY> 7,497
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,315
<EPS-PRIMARY> 4.09
<EPS-DILUTED> 4.09
<YIELD-ACTUAL> 3.61
<LOANS-NON> 1,947
<LOANS-PAST> 3,786
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 5,733
<ALLOWANCE-OPEN> 5,500
<CHARGE-OFFS> 1,172
<RECOVERIES> 618
<ALLOWANCE-CLOSE> 5,782
<ALLOWANCE-DOMESTIC> 5,782
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
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