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Previous: DATAWATCH CORP, 10-Q, 1999-08-16 |
Next: DIVERSIFIED HISTORIC INVESTORS III, NT 10-Q, 1999-08-16 |
<PAGE> 1
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 June 30, 1999
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 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.)
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 July 1, 1999
<PAGE> 2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
FARMERS & MERCHANTS BANCORP, INC.
INDEX
Form 10-Q Items Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets-
March 31, 1999, December 31, 1998 and June 30, 1999 1
Condensed Consolidated Statements of Net Earnings-
Six Months Ended June 30, 1999 and June 30, 1999 2
Condensed Consolidated Statements of Cash Flows-
Six Months Ended June 30, 1999 and June 30, 1999 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
<PAGE> 3
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998 June 30, 1998
<S> <C> <C> <C>
ASSETS:
Cash and due from banks $ 14,101 $ 18,549 $ 13,699
Interest bearing deposits with banks 100 100 100
Federal funds sold 0 19,045 21,050
Investment Securities:
U.S. Treasury 10,956 17,112 20,590
U.S. Government 52,751 49,567 33,275
State & political obligations 33,453 35,520 28,771
All others 16,229 21,712 24,361
Loans and leases 425,285 407,721 385,111
Bank premises and equipment-net 9,491 9,430 8,152
Accrued interest and other assets 8,647 7,113 7,373
TOTAL ASSETS $571,013 $585,869 $542,482
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Demand $ 60,883 $ 52,631 $ 47,692
Time and savings 429,721 459,552 424,521
Federal funds purchased and securities
sold under agreement to repurchase 8,968 2,916 2,833
Other borrowed money 10,846 11,240 10,922
Accrued interest and other liabilities 4,186 4,180 4,230
Total Liabilities 514,604 530,519 490,198
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 43,598 41,002 38,559
Accumulated other comprehensive income 134 1,671 1,048
Total Shareholders' Equity 56,409 55,350 52,284
LIABILITIES AND SHAREHOLDERS' EQUITY $571,013 $585,869 $542,482
</TABLE>
See Notes to Condensed Consolidated Unaudited Financial Statements.
Note: The December 31, 1998 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 Six Months Ended
June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans and leases $ 8,827 $ 8,932 $ 17,329 $ 17,842
Investment Securities:
U.S. Treasury securities 198 337 443 676
Securities of U.S. Government agencies 821 473 1,624 954
Obligations of states and political subdivisions 418 353 844 691
Other 304 316 785 689
Federal funds 9 143 75 202
Deposits in banks 1 - 2 2
Total Interest Income 10,578 10,554 21,102 21,056
INTEREST EXPENSE:
Deposits 4,852 5,223 10,024 10,441
Borrowed funds 243 238 469 456
Total Interest Expense 5,095 5,461 10,493 10,897
NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES 5,483 5,093 10,609 10,159
PROVISION FOR LOAN LOSSES 183 331 598 470
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,300 4,762 10,011 9,689
OTHER INCOME:
Service charges 398 347 714 644
Other 378 755 893 1,490
Net securities gains (losses) - - 11 -
776 1,102 1,618 2,134
OTHER EXPENSES:
Salaries and wages 1,503 1,227 2,966 2,501
Pension and other employee benefits 354 277 713 574
Occupancy expense (net) 155 125 263 246
Other operating expenses 1,586 1,312 3,128 2,581
3,598 2,941 7,070 5,902
INCOME BEFORE FEDERAL INCOME TAX 2,478 2,923 4,559 5,921
FEDERAL INCOME TAXES 627 871 1,172 1,746
NET INCOME 1,851 2,052 3,387 4,175
OTHER COMPREHENSIVE INCOME (NET OF TAX):
Unrealized gains (losses) on securities (723) 77 (1,538) 45
COMPREHENSIVE INCOME $ 1,128 $ 2,129 $ 1,849 $ 4,220
NET INCOME PER SHARE (Based upon
weighted average number of shares outstanding of $ 1.42 $ 1.58 $ 2.61 $ 3.21
DIVIDENDS DECLARED $ 0.30 $ 0.30 $ 0.60 $ 0.60
</TABLE>
See Notes to Condensed Consolidated Unaudited Financial Statements.
2
<PAGE> 5
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>
Three Months Ended
June 30, 1999 June 30, 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,387 $ 2,121
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and amortization 622 171
Premium amortization 210 116
Discount amortization (83) (35)
Provision for loan losses 598 139
Provision for deferred income taxes (52) (8)
(Gain) loss on sale of fixed assets 6 8
(Gain) loss on sale of investment securities (11) -
Changes in Operating Assets and Liabilities:
Accrued interest receivable and other assets (1,482) (189)
Accrued interest payable and other liabilities 6 320
Net Cash Provided by Operating Activities 3,201 2,643
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (689) (286)
Proceeds from sale of fixed assets - -
Proceeds from maturities of investment securities: 25,521 41,558
Proceeds from sale of investment securities: 9,825 -
Purchase of investment securities- (26,475) (35,155)
Net increase in loans and leases (18,162) (16,939)
Net Cash Used by Investing Activities (9,980) (10,822)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits (21,579) 3,344
Net change in short-term borrowings 6,052 (32)
Increase in long-term borrowings - -
Payments on long-term borrowings (394) (184)
Payments of dividends (790) (650)
Net Cash Provided by Financing Activities (16,711) 2,478
Net change in cash and cash equivalents (23,490) (5,701)
Cash and cash equivalents - Beginning of year 37,694 22,798
CASH AND CASH EQUIVALENTS - END OF THE YEAR $ 14,204 $ 17,097
RECONCILIATION OF CASH AND CASH EQUIVALENTS:
Cash and cash due from banks $ 14,101 $ 14,502
Interest bearing deposits 100 100
Federal funds sold - 2,495
$ 14,201 $ 17,097
</TABLE>
3
<PAGE> 6
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 six months ended June 30, 1999
are not necessarily indicative of the results that are
expected for the year ended December 31, 1999. 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, 1998.
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 for the six months ended June 30, 1999 comes
primarily from net income from operations of $3.4 million.
This compares with net income of $4.2 million for the same
period in 1998. In addition the excess in Federal Funds
sold was used to help fund the additional loan growth.
The principal uses of these funds were for granting loans.
Loans as of June 30, 1999 were $425.3 million compared to
$407.7 million as of December 31, 1998, a $17.6 million or
4.3% increase after reclassification of $1.7 million of
commercial paper from the loan category to other
investments. December 31, 1998 and June 30, 1998 loans and
investments have been restated to reflect this change in
classification.
Capital expenditures amounted to $689 million for the first
six months of 1999.
The following is a summary of five capital ratios as they
are calculated from the June 30, 1999 financial statements:
<TABLE>
<CAPTION>
<S> <C>
Primary Ratio 10.87%
Total Capital Ratio 12.74%
Risk Based Capital Tier 1 14.11%
Risk Based Capital Tier 2 18.40%
Stockholders' Equity/Total Assets 9.88%
</TABLE>
5
<PAGE> 8
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.
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: Aug 12, 1999 By: /s/ Joe E. Crossgrove
Joe E. Crossgrove
President and Cashier
Date: Aug 12, 1999 By: /s/ Randal H. Schroeder
Randal H. Schroeder
Asst. Vice-President
and Chief Operating Officer
7
<PAGE> 10
Exhibit Index
-------------
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 14,101
<INT-BEARING-DEPOSITS> 100
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 113,389
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 425,285
<ALLOWANCE> 6,324
<TOTAL-ASSETS> 571,013
<DEPOSITS> 490,604
<SHORT-TERM> 8,968
<LIABILITIES-OTHER> 4,186
<LONG-TERM> 10,846
0
0
<COMMON> 12,677
<OTHER-SE> 43,732
<TOTAL-LIABILITIES-AND-EQUITY> 571,013
<INTEREST-LOAN> 17,329
<INTEREST-INVEST> 3,696
<INTEREST-OTHER> 77
<INTEREST-TOTAL> 21,102
<INTEREST-DEPOSIT> 10,024
<INTEREST-EXPENSE> 469
<INTEREST-INCOME-NET> 10,609
<LOAN-LOSSES> 598
<SECURITIES-GAINS> 11
<EXPENSE-OTHER> 7,070
<INCOME-PRETAX> 4,559
<INCOME-PRE-EXTRAORDINARY> 3,387
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,387
<EPS-BASIC> 2.61
<EPS-DILUTED> 2.61
<YIELD-ACTUAL> 0
<LOANS-NON> 7,731
<LOANS-PAST> 6,222
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 13,953
<ALLOWANCE-OPEN> 5,850
<CHARGE-OFFS> 1,324
<RECOVERIES> 709
<ALLOWANCE-CLOSE> 5,833
<ALLOWANCE-DOMESTIC> 5,833
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
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