Page 1

F FARMERS & MERCHANTS LM BANCORP , INC . Farmers & Merchants Bancorp , Inc. Reports 2021 Third - Quarter and Year - to - Date Financial Results October 20 , 2021 ARCHBOLD , Ohio , Oct. 20 , 2021 ( GLOBE NEWSWIRE ) -- Farmers & Merchants Bancorp , Inc. ( Nasdaq : FMAO ) today reported financial results for the 2021 third quarter and year - to - date September 30 , 2021 . 2021 Third Quarter Financial Highlights Include ( compared to the 2020 third quarter period unless noted ) : • Net income increased 34.2 % to $ 5.9 million • Earnings increased 32.5 % to $ 0.53 per basic and diluted share • Adjusted net income , excluding one - time tax adjusted acquisition expenses , increased 60.8 % to $ 7.1 million • Adjusted earnings increased 57.5 % to $ 0.63 per basic and diluted share • Net interest income , after provision for loan losses , increased by 36.5 % to a quarterly record of $ 17.8 million • Net interest margin increased slightly to 3.53 % , from 3.51 % for the same period last year • Third quarter after - tax income benefited from $ 1.98 million of accelerated fees associated with the Paycheck Protection Program ( " PPP " ) compared to $ 329.4 thousand in same quarter 2020 . • Loans have increased 13.6 % organically year - to - date , not including recent acquisitions or PPP loans • Third quarter net charge - offs to average loans were 0.00 % for the second consecutive quarter • Adjusted return on average tangible equity increased to 10.94 % from 9.68 % on a year over year basis • Increased the regular quarterly cash dividend payment by 5.9 % to $ 0.18 per share , representing the 27th consecutive annual dividend increase • Completed a $ 35.0 million subordinated note offering , increasing F & M's Total Risk Based Capital Ratio to 15.57 % • Added two new strong Board members to Farmers & Merchants ' Board of Directors representing our expansion into the Detroit and Urbana markets • F & M's fourth annual Charity Golf Classic raised over $ 32,000 in support for its local communities " 2021 is shaping up to be a transformative year as we focus on bringing our individualized , local , and comprehensive financial products and services to more customers across Ohio , Indiana , and Michigan , " stated Lars B. Eller , President and Chief Executive Officer . " We are well on our way to becoming a $ 3.0 billion asset bank , and when including Perpetual's assets , we will have almost $ 2.6 billion in total assets . Our success is a testament to our strategic growth plan , the value we provide our local communities , and the commitment of F & M's team members . " On October 1 , 2021 , F & M successfully closed the acquisition of Perpetual Federal Savings Bank , Inc. ( " PFSB " ) . PFSB is F & M's third acquisition within the last twelve months and immediately enhances the Company's growing franchise within compelling Ohio markets including Urbana , Columbus , Dayton , Springfield , Piqua , Tipp City , Troy , and Sidney . The integration and system conversions were completed on October 18 , 2021 , and PFSB's financial metrics will be included in F & M's fourth - quarter results . Mr. Eller continued , “ These three acquisitions , combined with our Michigan LPO and expansion plans have increased our presence in Indiana , Michigan , and Ohio , while diversifying our revenue streams and immediately contributing to earnings . I am proud of our team's ability to quickly complete and successfully integrate these acquisitions . In addition , we have simultaneously been growing organically and I am encouraged by the 8.3 % organic loan growth F & M produced during the quarter which is evidence of our talented local lenders , and the success of our recently opened offices and LPOS . " Income Statement Net income for the 2021 third quarter ended September 30 , 2021 , was $ 5.9 million , compared to $ 4.4 million for the same period last year . Net income per basic and diluted share for the 2021 third quarter was $ 0.53 , compared to $ 0.40 for the same period last year . Net income for the 2021 nine months ended September 30 , 2021 , was $ 15.8 million , compared to $ 13.3 million for the same period last year . Net income per basic and diluted share for the 2021 nine months was $ 1.41 , compared to $ 1.20 for the same period last year . Adjusted net income , excluding one - time tax adjusted acquisition expenses , was $ 7.1 million , or $ 0.63 per share for the 2021 third quarter , compared to $ 4.4 million , or $ 0.40 per share for the 2020 third quarter . Adjusted net income was $ 18.2 million , or $ 1.62 per share for the 2021 nine months , compared to $ 13.3 million , or $ 1.20 per share for the 2020 nine months . Included in the financial table section of this press release is a non - GAAP reconciliation . Mr. Eller continued , " We ended the quarter with record quarterly net income and earnings per share , when adjusted for one - time acquisition expenses . Adjusted ROACE was 9.78 % , compared to 7.28 % for the same period last year , while adjusted ROA was 1.17 % during the 2021 third quarter , and 1.11 % year - to - date . In addition , the Bank has had 16 consecutive months with an operating efficiency ratio in the 50 % range when removing affiliate and acquisition expenses . Our strong third - quarter financial results and profitability reflect the benefits of our larger scale , diverse revenue streams , strong asset quality , and prudent expense management , and we believe earnings growth will accelerate in the coming quarters . " Deposits At September 30 , 2021 , total deposits were $ 1.87 billion , an increase of 22.9 % from September 30 , 2020 , and an increase of 16.9 % from December 31 , 2020. The significant organic deposit growth being experienced is a result of continued strength in expanding relationships with new and existing