Farmers & Merchants Bancorp Reports Record Third Quarter and Year-to-Date 2020 Earnings - Seite 3

Designated as an “essential business”, Farmers & Merchants Bank of Central California continues to keep all branches open and maintain regular business hours during this difficult time. Our staffing levels have remained stable during the COVID-19 crisis, and our employees have been committed to serving the banking needs of our local communities.

We actively participated in the federal government’s Small Business Administration’s Paycheck Protection Program (“PPP”) and we are now working with these customers as they file their applications to have the loans forgiven by the SBA.

From a financial perspective, as reflected by the following September 30, 2020 measures, we remain in a strong financial position as we continue to face this period of economic uncertainty:

• Liquidity of $938 million consisting of Fed Funds Sold and high quality Investment Securities;
• Strong Asset Quality as reflected by only $498,000 of non-performing loans, and a negligible delinquency ratio of .036% of total loans;
• Risk Based Capital Ratio of 13.12%;
• Allowance for Credit Losses of $56.8 million or 2.05% of loans and leases (exclusive of government guaranteed SBA PPP loans); and
• ROAA of 1.40% and ROAE of 14.40% in third quarter 2020.
  

Our credit exposure to the “Hospitality” (primarily hotels) and “Entertainment” (primarily restaurants, health clubs and movie theaters) industries totals $147.4 million in loans and leases outstanding at September 30, 2020. Most of these loans: (i) were underwritten with an original LTV of 50-70% on the underlying real estate, providing us with what should be adequate collateral coverage; and (ii) have financially strong guarantors with liquidity that provides additional protection. Over and above the impact on the Hospitality and Entertainment industries, there continues to be a general economic slowdown as a result of the Governor’s restrictions on business and other activities. The Central Valley of California may be in a better position than other areas to weather this impact because agricultural activity has substantially continued. We are monitoring the impact on our borrowers, and working closely with them using all of the tools at our disposal to help them successfully move through this period of reduced business activity.