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

LODI, Calif., Oct. 26, 2020 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp (OTCQX: FMCB) today announced record third quarter and year-to-date net income.

For the quarter ending September 30, 2020, Farmers & Merchants Bancorp reported net income of $14.8 million, or $18.66 per share, a 7.8% increase from net income of $13.7 million earned in the third quarter of 2019. Additionally, the Company’s net income over the trailing twelve months was $57.9 million ($73.03 per share as reported), as compared to $54.4 million for the same period in the prior year.  

Net interest income for the quarter ended September 30, 2020 was $37.7 million, up 6.9% from the same quarter in 2019. The Company’s net interest margin on a tax equivalent basis was 3.80% in the third quarter of 2020, compared to 4.31% in the third quarter of 2019. The net interest margin in the third quarter of 2020 was impacted by the overall decline in market interest rates, as well as the inclusion of over $347 million in Small Business Administration Paycheck Protection Program loans (11.16% of total portfolio) originated during the second quarter which are accruing interest income at only 1% per annum (plus accreted loan fees). For the third quarter of 2020 the Company’s efficiency ratio was 49.20%. Return on average assets for the third quarter of 2020 was 1.40%, and return on average equity was 14.40%.

Total assets at quarter-end were $4.3 billion, up 20.52% from the third quarter of 2019. Total loans and leases outstanding reached $3.1 billion, an increase of 18.9% from September 30, 2019, and total deposits of $3.8 billion increased 21.5% from September 30, 2019. A portion of this balance sheet growth was due to the Bank’s participation in the Small Business Administration’s Paycheck Protection Program under which we funded over $347 million of loans. At quarter-end, total checking deposits represented 56.4% of total deposits compared to 53.0% at September 30, 2019.

The Company’s credit quality remained strong with only $498,000 of non-performing loans and leases as of September 30, 2020. Importantly, of the $276.9 million of loans we restructured under the CARES Act guidelines, only $24.1 million have not yet returned to payment status, whether interest-only or full principal and interest. The provision for credit losses was $1.7 million for the third quarter 2020, and at quarter-end the Company’s allowance for credit losses was $56.8 million, or 1.83% of total loans and leases (2.05% exclusive of government fully guaranteed loans issued under the SBA’s Paycheck Protection Program).