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Previous: ATALANTA SOSNOFF CAPITAL CORP /DE/, 10-Q, 1999-05-12 |
Next: BRAUVIN INCOME PROPERTIES LP 6, SC 14D1, 1999-05-12 |
<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 March 31, 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 preceeding 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:
<TABLE>
<S> <C>
Common Stock, No Par Value 1,300,000
- -------------------------------------------- -----------------------------------------
Class Outstanding as of April 1, 1999
</TABLE>
<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, 1999, December 31, 1998 and March 31, 1998 1
Condensed Consolidated Statements of Net Earnings-
Three Months Ended March 31, 1999 and March 31, 1998 2
Condensed Consolidated Statements of Cash Flows-
Three Months Ended March 31, 1999 and March 31, 1998 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
1
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998 March 31, 1998
<S> <C> <C> <C>
ASSETS:
Cash and due from banks $ 13,407 $ 18,549 $ 14,502
Interest bearing deposits with banks 100 100 100
Federal funds sold 0 19,045 2,495
Investment Securities:
U.S. Treasury 15,096 17,112 22,541
U.S. Government 54,298 49,567 30,103
State & political obligations 34,485 35,520 26,241
All others 24,135 21,712 14,749
Loans and leases 411,580 407,721 407,606
Bank premises and equipment-net 9,644 9,430 7,772
Accrued interest and other assets 8,009 7,113 7,314
TOTAL ASSETS $ 570,754 $ 585,869 $ 533,423
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Demand $ 41,699 $ 52,631 $ 40,400
Time and savings 450,104 459,552 424,243
Federal funds purchased and securities
sold under agreement to repurchase 7,994 2,916 2,566
Other borrowed money 11,044 11,240 11,108
Accrued interest and other liabilities 4,268 4,180 4,561
Total Liabilities 515,109 530,519 482,878
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 42,111 41,002 36,897
Accumulated other comprehensive income 857 1,671 971
Total Shareholders' Equity 55,645 55,350 50,545
LIABILITIES AND SHAREHOLDERS' EQUITY $ 570,754 $ 585,869 $ 533,423
</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.
<PAGE> 4
2
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1999 March 31, 1998
<S> <C> <C>
INTEREST INCOME:
Loans and leases $ 8,502 $ 8,909
Investment Securities:
U.S. Treasury securities 245 340
Securities of U.S. Government agencies 803 482
Obligations of states and political subdivisions 426 338
Other 480 373
Federal funds 66 59
Deposits in banks 1 1
Total Interest Income 10,523 10,502
INTEREST EXPENSE:
Deposits 5,172 5,218
Borrowed funds 226 219
Total Interest Expense 5,398 5,437
NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES 5,125 5,065
PROVISION FOR LOAN LOSSES 416 139
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,709 4,926
OTHER INCOME:
Service charges 316 297
Other 515 734
Net securities gains (losses) 0 -
831 1,031
OTHER EXPENSES:
Salaries and wages 1,463 1,274
Pension and other employee benefits 359 297
Occupancy expense (net) 133 121
Other operating expenses 1,542 1,269
3,497 2,961
INCOME BEFORE FEDERAL INCOME TAX 2,043 2,996
FEDERAL INCOME TAXES 545 875
NET INCOME 1,498 2,121
OTHER COMPREHENSIVE INCOME (NET OF TAX):
Unrealized gains (losses) on securities (814) (32)
COMPREHENSIVE INCOME $ 684 $ 2,089
NET INCOME PER SHARE (Based upon
weighted average number of shares outstanding of 1,300,000 $ 1.15 $ 1.63
DIVIDENDS DECLARED $ 0.30 $ 0.30
</TABLE>
See Notes to Condensed Consolidated Unaudited Financial Statements.
<PAGE> 5
3
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands of dollars)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1999 March 31, 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,498 $ 2,121
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and amortization 304 171
Premium amortization 8 116
Discount amortization 34 (35)
Provision for loan losses 416 139
Provision for deferred income taxes (9) (8)
(Gain) loss on sale of fixed assets - 8
(Gain) loss on sale of investment securities - -
Changes in Operating Assets and Liabilities:
Accrued interest receivable and other assets (887) (189)
Accrued interest payable and other liabilities 88 320
Net Cash Provided by Operating Activities 1,452 2,643
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (518) (286)
Proceeds from sale of fixed assets - -
Proceeds from maturities of investment securities: 20,137 41,558
Proceeds from sale of investment securities: - -
Purchase of investment securities- (25,092) (35,155)
Net increase in loans and leases (4,275) (16,939)
Net Cash Used by Investing Activities (9,748) (10,822)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits (20,380) 3,344
Net change in short-term borrowings 5,078 (32)
Increase in long-term borrowings - -
Payments on long-term borrowings (196) (184)
Payments of dividends (390) (650)
Net Cash Provided by Financing Activities (15,888) 2,478
Net change in cash and cash equivalents (24,184) (5,701)
Cash and cash equivalents - Beginning of year 37,694 22,798
CASH AND CASH EQUIVALENTS - END OF THE YEAR $ 13,510 $ 17,097
RECONCILIATION OF CASH AND CASH EQUIVALENTS:
Cash and cash due from banks $ 13,407 $ 14,502
Interest bearing deposits 100 100
Federal funds sold - 2,495
$ 13,507 $ 17,097
</TABLE>
See Notes to Condensed Consolidated Unaudited Financial Statements.
<PAGE> 6
4
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, 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.
<PAGE> 7
5
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 nine months ended March 31, 1999 comes
primarily from net income from operations of $1.5 million.
This compares with net income of $2.1 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 March 31, 1999 were $411.5 million compared to
$407.7 million as of December 31, 1998, a $3.8 million or
1% increase after reclassification of $1.7 million of
commercial paper from the loan category to other
investments. December 31, 1998 and March 30, 1998 loans and
investments have been restated to reflect this change in
classification.
Capital expenditures amounted to $243 million for the first
three months of 1999.
The following is a summary of five capital ratios as they are
calculated from the March 31, 1999 financial statements:
<TABLE>
<CAPTION>
<S> <C>
Primary Ratio 10.71%
Total Capital Ratio 12.62%
Risk Based Capital Tier 1 13.92%
Risk Based Capital Tier 2 18.22%
Stockholders' Equity/Total Assets 9.75%
</TABLE>
<PAGE> 8
6
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
7
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: May 10, 1999 By: /s/ Joe E. Crossgrove
Joe E. Crossgrove
President and Cashier
Date: May 10, 1999 By: /s/ Randal H. Schroeder
Randal H. Schroeder
Asst. Vice-President
and Chief Operating Officer
<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> 13,407
<INT-BEARING-DEPOSITS> 100
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 128,014
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 411,580
<ALLOWANCE> 6,140
<TOTAL-ASSETS> 570,754
<DEPOSITS> 491,803
<SHORT-TERM> 7,994
<LIABILITIES-OTHER> 4,268
<LONG-TERM> 11,044
0
0
<COMMON> 12,677
<OTHER-SE> 42,968
<TOTAL-LIABILITIES-AND-EQUITY> 570,754
<INTEREST-LOAN> 8,502
<INTEREST-INVEST> 1,954
<INTEREST-OTHER> 67
<INTEREST-TOTAL> 10,523
<INTEREST-DEPOSIT> 5,172
<INTEREST-EXPENSE> 226
<INTEREST-INCOME-NET> 5,125
<LOAN-LOSSES> 416
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,497
<INCOME-PRETAX> 2,043
<INCOME-PRE-EXTRAORDINARY> 1,498
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,498
<EPS-PRIMARY> 1.15
<EPS-DILUTED> 1.15
<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> 5,651
<ALLOWANCE-DOMESTIC> 5,651
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
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