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 June 30, 2007
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ________ to ________
Commision 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.)
307-11 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 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the
Exchange Act).
Large accelerated filer [ ] Accelerated filer [X] Non-accelerated filer [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate the number of shares of each of the issuers classes of common stock, as
of the latest practicable date:
Common Stock, No Par Value 5,096,702
Class Outstanding as of July 20, 2007
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
FARMERS & MERCHANTS BANCORP, INC.
INDEX
Form 10-Q Items Page
--------------- ------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets- June 30, 2007,
December 31, 2006 1
Condensed Consolidated Statements of Net Income-
Three Months and Six Months Ended June 30, 2007 and June
30, 2006 2
Condensed Consolidated Statements of Cash Flows- Six Months
Ended June 30, 2007 and June 30, 2006 3
Notes to Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 4-6
Item 3. Qualitative and Quantitative Disclosures About Market Risk 7
Item 4. Controls and Procedures 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 1A. Risk Factors 8
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote of Security Holders 8-9
Item 5. Other Information 9
Item 6. Exhibits 9
Signatures 10
Exhibit 31. Certifications Under Section 302 11-12
Exhibit 32. Certifications Under Section 906 13
ITEM 1 FINANCIAL STATEMENTS
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of dollars)
June 30, Dec 31,
2007 2006
-------- --------
ASSETS:
Cash and due from banks $ 15,309 $ 23,583
Interest bearing deposits with banks 303 311
Federal funds sold 1,282 13,353
Investment Securities:
U.S. Treasury 389 388
U.S. Government 117,449 122,231
State & political obligations 41,905 45,495
All others 4,063 4,063
Loans and leases (Net of reserve for loan losses of
$5,296 and $5,594 respectively) 498,277 498,580
Bank premises and equipment-net 14,584 14,189
Accrued interest and other assets 20,012 14,903
-------- --------
TOTAL ASSETS $713,573 $737,096
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest bearing $ 50,422 $ 60,211
Interest bearing 502,346 525,198
Federal funds purchased and securities
sold under agreement to repurchase 44,523 34,818
Other borrowed money 22,868 23,233
Accrued interest and other liabilities 5,211 5,904
-------- --------
Total Liabilities 625,370 649,364
SHAREHOLDERS' EQUITY:
Common stock, no par value - authorized 6,500,000
shares; issued 5,200,000 shares 12,677 12,677
Treasury Stock - 93,478 shares 2007, 36,180 shares 2006 (2,362) (1,060)
Unearned Stock Awards 9,820 for 2007 and 2006
Undivided profits 79,520 77,089
Accumulated other comprehensive income (expense) (1,632) (974)
-------- --------
Total Shareholders' Equity 88,203 87,732
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY $713,573 $737,096
======== ========
See Notes to Condensed Consolidated Unaudited Financial Statements.
Note: The December 31, 2006 Balance Sheet has been derived from the audited
financial statements of that date.
1
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands of dollars, except per share data)
Three Months Ended Six Months Ended
----------------------- -----------------------
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
---------- ---------- ---------- ----------
INTEREST INCOME:
Loans and leases $ 9,468 $ 8,654 $ 18,967 $ 16,742
Investment Securities:
U.S. Treasury securities 4 18 9 36
Securities of U.S. Government agencies 1,394 1,109 2,718 2,359
Obligations of states and political subdivisions 409 538 831 1,118
Other 65 51 128 109
Federal funds 26 31 77 101
Deposits in banks 3 3 29 6
---------- ---------- ---------- ----------
Total Interest Income 11,369 10,404 22,759 20,471
INTEREST EXPENSE:
Deposits 4,626 3,733 9,022 7,301
Borrowed funds 744 652 1,524 1,243
---------- ---------- ---------- ----------
Total Interest Expense 5,370 4,385 10,546 8,544
---------- ---------- ---------- ----------
NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES 5,999 6,019 12,213 11,927
PROVISION FOR LOAN LOSSES 154 15 135 (35)
NET INTEREST INCOME AFTER
---------- ---------- ---------- ----------
PROVISION FOR LOAN LOSSES 5,845 6,004 12,078 11,962
OTHER INCOME:
Service charges 795 952 1,556 1,746
Other 762 698 1,377 1,308
Net securities gains (losses) -- (29) -- (9)
---------- ---------- ---------- ----------
1,557 1,621 2,933 3,045
OTHER EXPENSES:
Salaries and wages 2,062 2,100 4,151 4,100
Pension and other employee benefits 742 604 1,559 1,233
Occupancy expense (net) 122 159 271 294
Other operating expenses 1,707 2,074 3,368 3,926
---------- ---------- ---------- ----------
4,633 4,937 9,349 9,553
---------- ---------- ---------- ----------
INCOME BEFORE FEDERAL INCOME TAX 2,769 2,688 5,662 5,454
FEDERAL INCOME TAXES 778 721 1,592 1,468
---------- ---------- ---------- ----------
NET INCOME 1,991 1,967 4,070 3,986
========== ========== ========== ==========
OTHER COMPREHENSIVE INCOME (NET OF TAX):
Unrealized gains (losses) on securities (948) (624) (658) (774)
---------- ---------- ---------- ----------
COMPREHENSIVE INCOME (EXPENSE) $ 1,043 $ 1,343 $ 3,412 $ 3,212
NET INCOME PER SHARE $ 0.39 $ 0.38 $ 0.79 $ 0.77
Based upon average weighted shares outstanding of: 5,117,901 5,192,689 5,133,846 5,194,304
DIVIDENDS DECLARED $ 0.16 $ 0.15 $ 0.32 $ 0.28
No disclosure of diluted earnings per share is required as shares are
antidiluted as of quarter end.
See Notes to Condensed Consolidated Unaudited Financial Statements.
2
FARMERS & MERCHANTS BANCORP, INC.
CONDENSED CONSOLIDATED STATMENTS OF CASH FLOWS
(Unaudited)
(in thousands of dollars)
Six Months Ended
-------------------
June 30, June 30,
2007 2006
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,070 $ 3,986
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and amortization 594 554
Premium amortization 161 404
Discount amortization (96) (148)
Provision for loan losses 135 (35)
(Gain) Loss on sale of fixed assets (1) (31)
(Gain) Loss on sale of investment securities -- 9
Changes in Operating Assets and Liabilities:
Accrued interest receivable and other assets (1,664) 964
Accrued interest payable and other liabilities (843) 163
-------- --------
Net Cash Provided by Operating Activities 2,356 5,866
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (988) (156)
Proceeds from sale of fixed assets -- --
Proceeds from maturities of investment securities: 33,684 35,431
Proceeds from sale of investment securities: -- 4,777
Purchase of investment securities (26,373) (5,318)
Purchase of Bank Owned Life Insurance (3,000) --
Net (increase) decrease in loans and leases 167 (26,470)
-------- --------
Net Cash Provided (Used) by Investing Activities 3,490 8,264
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits (32,641) (32,933)
Net change in short-term borrowings 9,705 19,616
Increase in long-term borrowings -- --
Payments on long-term borrowings (365) (5,390)
Purchase of Treasury stock (1,302) (164)
Payments of dividends (1,596) (1,494)
-------- --------
Net Cash Provided (Used) by Financing Activities (26,199) (20,365)
-------- --------
Net change in cash and cash equivalents (20,353) (6,235)
Cash and cash equivalents - Beginning of year 37,247 22,589
-------- --------
CASH AND CASH EQUIVALENTS - END OF THE YEAR $ 16,894 $ 16,354
======== ========
RECONCILIATION OF CASH AND CASH EQUIVALENTS:
Cash and cash due from banks $ 15,309 $ 15,221
Interest bearing deposits 303 311
Federal funds sold 1,282 822
-------- --------
$ 16,894 $ 16,354
======== ========
See Notes to Condensed Consolidated Unaudited Financial Statements.
3
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 six months ended June 30, 2007 are not necessarily indicative of the
results that are expected for the year ended December 31, 2007. 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, 2006.
The Company's Board of Directors declared a 4 for 1 stock split effective
May 12, 2006. Therefore, all references in the financial statements and
other disclosures related to the number of shares and per share amounts of
the Company's stock have been retroactively restated to reflect the
increased number of shares outstanding.
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS
Statements contained in this portion of the Company's report may be
forward-looking statements, as that term is defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements may be
identified by the use of words such as "intend," "believe," "expect,"
"anticipate," "should," "planned," "estimated," and "potential." Such
forward-looking statements are based on current expectations, but may
differ materially from those currently anticipated due to a number of
factors, which include, but are not limited to, factors discussed in
documents filed by the Company with the Securities and Exchange Commission
from time to time. Other factors which could have a material adverse effect
on the operations of the company and its subsidiaries which include, but
are not limited to, changes in interest rates, general economic conditions,
legislative and regulatory changes, monetary and fiscal policies of the
U.S. Government, including policies of the U.S. Treasury and the Federal
Reserve Board, the quality and composition of the loan or investment
portfolios, demand for loan products, deposit flows, competition, demand
for financial services in the Bank's market area, changes in relevant
accounting principles and guidelines and other factors over which
management has no control. The forward-looking statements are made as of
the date of this report, and the Company assumes no obligation to update
the forward-looking statements or to update the reasons why actual results
differ from those projected in the forward-looking statements.
CRITICAL ACCOUNTING POLICY AND ESTIMATES
The Company's consolidated financial statements are prepared in accordance
with accounting principles generally accepted in the United States of
America, and the Company follows general practices within the industries in
which it operates. At times the application of these principles requires
Management to make assumptions estimates and judgments that affect the
amounts reported in the financial statements. These assumptions, estimates
and judgments are based on information available as of the date of the
financial statements. As this information changes, the financial statements
could reflect different assumptions, estimates and judgments. Certain
policies inherently have a greater reliance on assumptions, estimates and
judgments and as such have a greater possibility of producing results that
could be materially different than originally reported. Examples of
critical assumptions, estimates and judgments are when assets and
liabilities are required to be recorded at fair value, when a decline in
the value of an asset not required to be recorded at fair value warrants an
impairment write-down or valuation reserve to be established, or when an
asset or liability must be recorded contingent upon a future event.
Based on the valuation techniques used and the sensitivity of financial
statement amounts to assumptions, estimates, and judgments underlying those
amounts, management has identified the determination of the Allowance for
Loan and Lease Losses (ALLL) and the valuation
4
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (Continued)
of its Mortgage Servicing Rights as the accounting areas that requires the
most subjective or complex judgments, and as such have the highest
possibility of being subject to revision as as new information becomes
available.
The ALLL represents management's estimate of credit losses inherent in the
Bank's loan portfolio at the report date. The estimate is composite of a
variety of factors including past experience, collateral value and the
general economy. ALLL includes a specific portion, a formula driven
portion, and a general nonspecific portion.
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, CAPITAL RESOURCES AND MATERIAL CHANGES IN FINANCIAL CONDITION
We had decreases in cash and federal funds sold of $6.4 million from the
prior quarter and a year to date decrease of $26.3 million since December
2006. The Bank experienced a decrease in in the second quarter loans of $10
million which offset the same increase that was gained in the first quarter
leaving the Bank $302 thousand short of the December 2006 year end balance.
To break out loans by type we will begin with Consumer Loans, which for
this quarter were $390 thousand ahead of the first quarter, but are $1.2
million behind the prior year end total. Real estate loans were $1.1
million lower this quarter than the previous first quarter and are $153
thousand under year end. All other loan types were $9 million less than the
first quarter but remain $1 million better than the year end total. Loan
demand remains sluggish and competition is intense. The local economics of
our communities appears to be leveling out though the Bank has yet to see a
change in loan demands. The next question, naturally, what are we doing to
create improvements? The Bank has broken ground on a new Branch location in
Perrysburg, Ohio which should give us a new market to enter for growth. We
have created two new positions for mortgage originators, their primary
duties are to hit the road and cover our current market areas establishing
contacts with new businesses or customers. We have 9 apprentice teams
generating promotions in all different areas of banking that we provide to
generate new income. Finally, we have chosen a vendor to help us establish
a better sales culture here at the Bank. This represents a commitment to an
on-going process rather than a one-time seminar. It will take time, but
eventually every employee will be involved in the training process to
enhance their sales abilities.
Loan quality continues to remain strong as the past due 30+ days has been
below the 1.0% target range for five out of the six month end time frames
this year. Loan quality is also evidenced by the reserve for possible loan
loss balance at the end of the second quarter 2007 being $269 thousand less
than at the end of December 2006.
Deposit accounts have declined by $33 million year to date with $25 million
of that occurring in this second quarter. The NOW accounts in the demand
deposit group contributed $10 million of the quarter decline and savings
deposit were $12 million lower from quarter to quarter. The Bank continues
to offer higher rates for short term CD's with an incentive rate for
continuing or establishing a relationship (checking) account with the Bank.
The Bank has also started to offer Health Savings accounts and the year to
date balance at the end of the second quarter was $220 thousand on deposit.
To offset the decline in deposit notice that one area that growth occurred
was in the Fed Funds Purchased. June month end the balance was almost $10
million and in the first week of July, we borrowed from our FHLB line of
credit as the Fed Funds Purchased balance was close to $15 million. We try
to maintain a position of +/- under $10 million in Fed Funds for liquidity
purposes. Along with the 110 day CD we have been offering, a new 11 month
has been added in June for high balance CD's of $50,000 which carries the
highest rate on our deposit rate sheet. We have heard the request from our
CD customers for a longer term than the 110 day promotion. This CD also
requires a checking account relationship.
The Company purchased 39,853 shares of Treasury stock during the second
quarter for an outlay of nearly $907 thousand for the transactions. These
transactions are a continuation of the buyback agreement authorized in the
fourth quarter of 2006 and may continue throughout 2007.
5
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (Continued)
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Loan income in the first quarter 2007 generated $1.4 million over the same
three months prior year period. As mentioned in the previous discussion on
loans being lower in the second quarter, the quarter only reflected $814
thousand improvement over same prior year three months. Interest generated
from securities of U.S. Government Agencies generated $74 thousand over the
first three months of 2006 and $285 thousand over the second quarter for a
year to date improvement in 2007 of $359 thousand. The Bank has experienced
higher interest expense on deposit accounts both the first and second
quarters when compared to prior year. The Bank has had to use higher CD
offering rates in efforts to maintain core deposits with our customers.
Net interest income increased $286 thousand for the six months ended June
2007 as compared to June 2006. As the Federal Reserve has left rates
unchanged since June 2006, the Bank has been able to hold the net interest
margin steady with only a slight decrease in the percentage. The 2.4%
increase in net interest income compares to a 1.4% increase in assets over
the same time periods. Thus the margin has been controlled by a change in
the mix of the funding source. The bank has seen a good return of interest
from its commercial and commercial real estate portfolios when compared to
the same time period a year ago. This is a very positive point since the
loan growth for this year has been relatively flat when compared to year
end 2006 balances. Continual maintenance or improvement of the net interest
margin is an important part of the on going profitability of the Company.
As was mentioned in the first quarter results, the Bank remained in a
Federal Funds Purchased position for much of the year. This correlates to
the higher Interest expense for borrowed funds. This also explains the
lower interest income reported for Federal Funds Sold.
Other non-interest income has been lagging behind the same six month ended
of a year ago. Primarily, the area to note is nonsuffucient funds checking
charges lower by $195 thousand. Other components within non-interest income
have generated some additional income to help offset this decrease.
One operating expense that is currently greater than the same time period
one year ago is salaries and benefits by $377 thousand. The Bank continues
to see the high cost of health insurance fueling this increase, first
quarter 2007 to 2006 increase was $105 thousand while the second quarter
2007 to 2006 increase amounted to $156 thousand for a total increase year
to year $261 thousand, even while the number of employees continues to
decrease. The Bank is partially self insured and a larger number of claims
has occurred during 2007, costing the Bank more dollars.
In June 2006 the Bank was in a negative position of $35 thousand for bad
debt expense but this year $135 thousand has been expensed to fund the
provision. This represents a swing of $170 thousand of additional expense
compared to a year ago.
In efforts to offset the increased expenses mentioned above, the Bank has
been able to control expenses in consulting, down $141 thousand,
advertising down $54 thousand, auditing down $32 thousand and miscellaneous
expense down $58 thousand compared to a year ago. These are but a few of
the expenses the Bank incurs. The Bank continues to monitor all expenses to
seek improvements to operate as efficiently as possible.
The company continues to be well-capitalized as the capital ratios below
show:
Primary Ratio 12.45%
Tier I Leverage Ratio 12.43%
Risk Based Capital Tier 1 16.34%
Total Risk Based Capital 17.33%
Stockholders' Equity/Total Assets 12.36%
6
ITEM 3 QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the exposure to loss resulting from changes in interest
rates and equity prices. The primary market risk to which the Company is
subject is interest rate risk. The majority of the Company's interest rate
risk arises from the instruments, positions and transactions entered into
for purposes, other than trading, such as lending, investing and securing
sources of funds. Interest rate risk occurs when interest bearing assets
and liabilities reprice at different times as market interest rates change.
For example, if fixed rate assets are funded with variable rate debt, the
spread between asset and liability rates will decline or turn negative if
rates increase.
Interest rate risk is managed within an overall asset/liability framework
for the Company. The principal objectives of asset/liability management are
to manage sensitivity of net interest spreads and net income to potential
changes in interest rates. Funding positions are kept within predetermined
limits designed to ensure that risk-taking is not excessive and that
liquidity is properly managed. The Company employs a sensitivity analysis
in the form of a net interest rate shock as shown in the table following.
Interest Rate Shock on Interest Rate Shock on
Net Interest Margin Net Interest Income
Net Interest % Change to Rate Rate Cumulative % Change to
Margin (Ratio) Flat Rate Direction Changes by Total ($000) Flat Rate
-------------- ----------- --------- ---------- ------------ -----------
2.91% -17.508% Rising 3.000% 10,886 -18.090%
3.12% -11.597% Rising 2.000% 11,695 -12.001%
3.33% -5.761% Rising 1.000% 12,496 -5.972%
3.53% 0.000% Flat 0.000% 13,290 0.000%
3.73% 5.623% Falling -1.000% 14,067 5.851%
3.94% 11.507% Falling -2.000% 14,818 11.498%
3.97% 12.532% Falling -3.000% 14,920 12.270%
As the balance sheet mix changes, the predicted net interest margin
improves as compared to March 2007's interest rate shock table. The net
interest margin represents the forecasted twelve month margin. The Bank is
still determined to improve the profitability through growth. Changing the
mix and yields by planned growth is the strategy the Bank will continue to
follow.
There have been no indications by the Federal Reserve that they intend to
raise or lower rates in the near future based upon the current economic
environment or indicators. Net interest margin shows 3.53% as of end of
quarter compared to showing 3.48% as of December 31, 2006 in the predicted
flat rate environment. The Bank will continue to focus on controlling the
cost of funds through deposit promotions aimed at gaining more
relationships per customer. Fierce competition continues to pressure the
yield and the Bank has focused on using a combination of rate and fees to
attract new business. The addition of another banking location will help
the expansion of the market though its completion will be late 2007.
7
ITEM 4 CONTROLS AND PROCEDURES
As of June 30, 2007, an evaluation was performed under the supervision and
with the participation of the Company's management including the CEO and
CFO, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures. Based on that evaluation, the Company's
management, including the CEO and CFO, concluded that the Company's
disclosure controls and procedures were effective as of June 30, 2007.
There have been no significant changes in the Company's internal controls
that occurred for the quarter ended June 30, 2007.
PART II
ITEM 1 LEGAL PROCEEDINGS
None
ITEM 1A RISK FACTORS
There have been no material changes in the risk factors disclosed by
Registrant in its Report on Form 10-K for the fiscal year ended December
31, 2006.
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(c) Total Number of Shares (d) Maximum Number of Shares
(a) Total Number (b) Average Price Purchased as Part of Publicly that may yet be purchased under
Period of Shares Purchased Paid per Share Announced Plan or Progams the Plans or Programs
--------- ------------------- ------------------- ----------------------------- -------------------------------
4/1/2007
to 228,000
4/30/2007
5/1/2007
to 24,653 $22.81 24,653 203,347
5/31/2007
6/1/2007
to 15,200 $22.37 15,200 188,147
6/30/2007
------ ------ ------ -------
Total 39,853 $22.64 39,853(1) 210,555
------ ------ ------ -------
(1) The Company purchased these shares in the market pursuant to a stock
repurchase program publicly announced on October 20, 2006. On that date,
the Board of Directors authorized the repurchase of 250,000 common shares
between October 20, 2006 and December 31, 2007.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
The Annual Meeting of Shareholders of Farmers & Merchants Bancorp, Inc. was
held on April 21, 2007. The following directors were elected to a new term
of office:
Dexter L. Benecke David P. Rupp Jr.
Joe E. Crossgrove James C. Saneholtz
Steven A. Everhart Kevin J. Sauder
Robert G. Frey Merle J. Short
Jack C. Johnson Paul S. Siebenmorgen
Dean E. Miller Steven J. Wyse
Anthony J. Rupp Betty K. Young
8
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS (Continued)
1. A proposal to elect fourteen (14) directors of the Corporation The
results of the voting on the proxy items are as follows:
For Withhold
--------- --------
Dexter L. Benecke 3,781,635 64,772
Joe E. Crossgrove 3,767,375 79,032
Steven A. Everhart 3,769,635 76,772
Robert G. Frey 3,772,183 74,224
Jack C. Johnson 3,761,699 84,708
Dean E. Miller 3,781,935 64,472
Anthony J. Rupp 3,755,499 90,908
David P. Rupp Jr. 3,769,717 76,690
James C. Saneholtz 3,776,215 70,192
Kevin J. Sauder 3,754,397 92,010
Merle J. Short 3,780,715 65,692
Paul S. Siebenmorgen 3,762,205 84,202
Steven J. Wyse 3,756,653 89,754
Betty K. Young 3,677,347 169,060
2. To transact such other business as may have properly come before the
meeting or any adjournment thereof.
ITEM 5 OTHER INFORMATION
ITEM 6 EXHIBITS
3.1 Amended Articles of Incorporation of the Registrant (incorporated by
reference to Registrant's Quarterly Report on Form 10-Q filed with the
Commission on August 1, 2006)
3.2 Code of Regulations of the Registrant (incorporated by reference to
Registrant's Quarterly Report on Form 10-Q filed with the Commission
on May 10, 2004)
31.1 Rule 13-a-14(a) Certification -CEO
31.2 Rule 13-a-14(a) Certification -CFO
32.1 Section 1350 Certification - CEO
32.2 Section 1350 Certification - CFO
9
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: July 25, 2007 By: /s/ Paul S. Siebenmorgen
------------------------------------
Paul S. Siebenmorgen
President and CEO
Date: July 25, 2007 By: /s/ Barbara J. Britenriker
------------------------------------
Barbara J. Britenriker
Exec. Vice-President and CFO
10