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Previous: AMERICANA GOLD & DIAMOND HOLDINGS INC, 10QSB, 1998-05-13 |
Next: CARLYLE INCOME PLUS LTD, 10-Q, 1998-05-13 |
<PAGE> 1
SECURTIES 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 March 31, 1998
OR
Transition Report Pursuant to Section 13 or 15(d)
---
of the Securities Exchange Act of 1934
For the transition period from to
-------- --------
Commision File Number 0-14492
-----------------------------
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
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or Section 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 May 1, 1998
<PAGE> 2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
FARMERS & MERCHANTS BANCORP, INC.
INDEX
<TABLE>
<CAPTION>
Form 10-Q Items Page
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets-
March 31, 1998, December 31, 1997 and March 31, 1997 1
Condensed Consolidated Statements of Net Earnings-
Three Months Ended March 31, 1998 and March 31, 1997 2
Condensed Consolidated Statements of Cash Flows-
Three Months Ended March 31, 1998 and March 31, 1997 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 8K 6
Signatures 7
</TABLE>
<PAGE> 3
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997 March 31, 1997
<S> <C> <C> <C>
ASSETS:
Cash and due from banks $ 14,502 $ 16,213 $ 13,956
Interest bearing deposits with banks 100 100 145
Federal funds sold 2,495 6,485 1,320
Investment Securities:
U.S. Treasury 22,541 22,372 24,558
U.S. Government 30,103 31,313 33,459
State & political obligations 26,241 25,618 23,613
All others 14,749 20,584 21,555
Loans and leases 407,606 390,806 370,312
Bank premises and equipment-net 7,772 7,665 7,460
Accrued interest and other assets 7,314 7,117 6,878
TOTAL ASSETS $533,423 $528,273 $503,256
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Demand $ 40,400 $ 51,163 $ 37,774
Time and savings 424,243 410,135 405,740
Federal funds purchased and securities
sold under agreement to repurchase 2,566 2,598 2,860
Other borrowed money 11,108 11,292 8,826
Accrued interest and other liabilities 4,561 4,241 3,740
Total Liabilities 482,878 479,429 458,940
SHAREHOLDERS' EQUITY:
Common stock, no par value - authorized 1,500,000
shares; issued 1,300,000 shares 12,677 12,677 12,677
Undivided profits 36,897 35,164 31,427
Accumulated other comprehensive income 971 1,003 212
Total Shareholders' Equity 50,545 48,844 44,316
LIABILITIES AND SHAREHOLDERS' EQUITY $533,423 $528,273 $503,256
</TABLE>
See Notes to Condensed Consolidated Unaudited Financial Statements.
Note: The December 31, 1997 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>
<S> <C> <C>
INTEREST INCOME:
Loans and leases $ 8,909 $ 8,400
Investment Securities:
U.S. Treasury securities 340 388
Securities of U.S. Government agencies 482 541
Obligations of states and political subdivisions 338 301
Other 373 388
Federal funds 59 68
Deposits in banks 1 0
Total Interest Income 10,502 10,086
INTEREST EXPENSE:
Deposits 5,218 5,025
Borrowed funds 219 376
Total Interest Expense 5,437 5,401
NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES 5,065 4,685
PROVISION FOR LOAN LOSSES 139 213
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,926 4,472
OTHER INCOME:
Service charges 297 295
Other 734 465
Net securities gains (losses) 0 (7)
1,031 753
OTHER EXPENSES:
Salaries and wages 1,274 1,239
Pension and other employee benefits 297 254
Occupancy expense (net) 121 311
Other operating expenses 1,269 966
2,961 2,770
INCOME BEFORE FEDERAL INCOME TAX 2,996 2,455
FEDERAL INCOME TAXES 875 723
NET INCOME 2,121 1,732
OTHER COMPREHENSIVE INCOME (NET OF TAX):
Unrealized gains (losses) on securities (32) (479)
COMPREHENSIVE INCOME $ 2,089 $ 1,253
NET INCOME PER SHARE (Based upon
weighted average nmber of shares outstanding of 1,300,000 $ 1.63 $ 1.33
DIVIDENDS DECLARED $ 0.30 $ 0.25
</TABLE>
See Notes to Condensed Consolidated Unaudited Financial Statements.
<PAGE> 5
2
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED STATMENTS OF CASH FLOWS
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,121 $ 1,735
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and amortization 171 163
Premium amortization 116 120
Discount amortization (35) (47)
Provision for loan losses 139 213
Provision for deferred income taxes (8) 5
(Gain) loss on sale of fixed assets 8 -
(Gain) loss on sale of investment securities - 7
Changes in Operating Assets and Liabilities:
Accrued interest receivable and other assets (189) 312
Accrued interest payable and other liabilities 320 5
Net Cash Provided by Operating Activities 2,643 2,513
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (286) (47)
Proceeds from sale of fixed assets - -
Proceeds from maturities of investment securities: 41,558 35,488
Proceeds from sale of investment securities: - 1,979
Purchase of investment securities- (35,155) (35,773)
Net increase in loans and leases (16,939) (5,252)
Net Cash Used by Investing Activities (10,822) (3,605)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits 3,344 5,137
Net change in short-term borrowings (32) (3,903)
Increase in long-term borrowings - -
Payments on long-term borrowings (184) (172)
Payments of dividends (650) (520)
Net Cash Provided by Financing Activities 2,478 542
Net change in cash and cash equivalents (5,701) (550)
Cash and cash equivalents - Beginning of year 22,798 15,971
CASH AND CASH EQUIVALENTS - END OF THE YEAR $ 17,097 $ 15,421
RECONCILIATION OF CASH AND CASH EQUIVALENTS:
Cash and cash due from banks $ 14,502 $ 13,956
Interest bearing deposits 100 145
Federal funds sold 2,495 1,320
$ 17,097 $ 15,421
</TABLE>
See Notes to Condensed Consolidated Unaudited Financial Statements.
<PAGE> 6
3
FARMERS & MERCHANTS BANCORP, INC.
Notes to Condensed Consolidated Unaudited 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
three months ended March 31, 1998 are not necessarily
indicative of the results that are expected for the year ended
December 31, 1998. 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, 1997.
<PAGE> 7
4
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 for the three months ended March 31, 1998
comes primarily from net income from operations of $2.1 million
and increases in deposits of $3.3 million. This compares with
net income of $1.7 million and deposit increases of $5.1
million for the same period for 1997. Total deposits as of
March 31, 1998 were $464 million compared to $461 million as of
December 31, 1997. A concerted marketing effort continues to be
made in order to attract more core deposits to help maintain an
acceptable net interest margin.
The principal uses of these funds were for granting
loans. Loans as of March 31, 1998 were $407.6 million compared
to $390.8 million as of December 31, 1997, a $16.8 million or
4.3% increase after reclassification of $7.8 million of
commercial paper from the loan category to other investments.
December 31, 1997 and March 31, 1997 loans and investments have
been restated to reflect this change in classification.
Capital expenditures amounted to $286 thousand for the
first three months of 1998.
The following is a summary of five capital ratios as they
are calculated from the March 31, 1998 financial
statements:
Primary Ratio 10.46%
Total Capital Ratio 12.52%
Risk Based Capital Tier 1 14.26%
Risk Based Capital Tier 2 19.07%
Stockholders' Equity/Total Assets 9.46%
<PAGE> 8
5
PART II
ITEM 6 EXHIBIT 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 March 31, 1998.
<PAGE> 9
6
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, theeunto duly authorized.
Farmers & Merchants Bancorp, Inc.,
Date: May 12, 1998 By: /s/ Joe E. Crossgrove
Joe E. Crossgrove
President and Cashier
Date: May 12, 1998 By: /s/ Randal H. Schroeder
Randal H. Schroeder
Asst. Vice-President
and Chief Operating Officer
<PAGE> 10
7
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 14,502
<INT-BEARING-DEPOSITS> 100
<FED-FUNDS-SOLD> 2,495
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 93,634
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 407,606
<ALLOWANCE> 5,938
<TOTAL-ASSETS> 533,423
<DEPOSITS> 464,643
<SHORT-TERM> 2,566
<LIABILITIES-OTHER> 4,561
<LONG-TERM> 11,108
0
0
<COMMON> 12,677
<OTHER-SE> 37,868
<TOTAL-LIABILITIES-AND-EQUITY> 533,423
<INTEREST-LOAN> 8,909
<INTEREST-INVEST> 1,533
<INTEREST-OTHER> 60
<INTEREST-TOTAL> 10,502
<INTEREST-DEPOSIT> 5,218
<INTEREST-EXPENSE> 219
<INTEREST-INCOME-NET> 5,065
<LOAN-LOSSES> 139
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,961
<INCOME-PRETAX> 2,996
<INCOME-PRE-EXTRAORDINARY> 2,121
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,121
<EPS-PRIMARY> 1.63
<EPS-DILUTED> 1.63
<YIELD-ACTUAL> 2.33
<LOANS-NON> 5,530
<LOANS-PAST> 5,404
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 10,934
<ALLOWANCE-OPEN> 5,850
<CHARGE-OFFS> 354
<RECOVERIES> 303
<ALLOWANCE-CLOSE> 5,938
<ALLOWANCE-DOMESTIC> 5,938
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
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