Farmers & Merchants Bancorp reports 2023 EPS $116.61 vs. $96.55 last year

The Company’s and Bank’s regulatory capital ratios remain strong and meet the highest possible regulatory classification of “Well Capitalized”. At December 31, 2023, the Company’s preliminary total risk-based capital ratio was 13.84%, the common equity tier 1 capital ratio was 12.36% and the tier 1 leverage capital ratio was 10.43% an increase from 13.06%, 11.57% and 9.36% as of December 31, 2022, respectively. At December 31, 2023, the tangible common equity ratio was 10.13% an increase of 126 basis points from 8.87% at December 31, 2022. Tangible book value per share increased to $717.05 per share at December 31, 2023, up 16.89% compared with $613.42 a year ago. Kent Steinwert, CEO, stated, “After being named the #1 performing bank in 2022 by Bank Director Magazine, we are very pleased to announce another record setting year with record net income of $88.3 million and earnings per diluted share of $116.61, up 20.78% from 2022. We achieved this record net income despite taking $8.2 million in losses on the sale of investment securities during the year as we repositioned our portfolio to respond to the evolving interest rate environment, while also taking $9.4 million in provisions for credit losses to further strengthen our balance sheet for the uncertain economic environment that may lie ahead. We generated $142.3 million, or 4.05% in loan growth over the past year as we continued to serve the needs of our customers. Total deposits ebbed and flowed during the year as illustrated by a decline in the first quarter, followed by growth in the second and third quarters, before declining in the fourth quarter and ultimately ending the year slightly down from the prior year as customers sought higher yielding deposit products or investment opportunities. Our ability to maintain our deposit balances without the need for brokered deposits is attributable to the efforts of our employees and their focus on serving our customers. The Company’s strong core deposit franchise also allowed us to manage our cost of deposits, resulting in an average total cost of deposits for the year of 0.80%. This combined with an increase in our average loan yield from 5.00% to 5.84% improved our net interest margin, which increased from 3.81% in 2022 to 4.30% in 2023. Looking forward, our strong liquidity and capital position, which were beneficial to us during the industry turbulence in the first half of 2023, continues to provide us with flexibility and growth opportunities in the future. We are well-positioned to continue our strong growth both in our established markets in the mid-Central Valley and newer markets in the east and north-bay area of San Francisco.”