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Farmers and Merchants Bank & Trust

Hagerstown, MD · Cert 9694

FDIC

Q3 2008

$3.7BAssets
$2.8BLoans
$2.5BDeposits
$273.5MEquity
Loan mix
80%RE $1.8B19%C&I $0.4B0%Consumer $0.0BQ3 2007Q3 2008
Deposit mix
86%Interest-bearing $2.1B14%Noninterest $0.4BQ3 2007Q3 2008

NIM

6.27%Q3 ’066.41%Q3 ’075.45%Q3 ’08+1%-4%

Non-interest income vs. expense

2.29%Q3 ’062.37%Q3 ’072.07%Q3 ’08+10%+7%

Executive Summary

  • Earnings: ROA of -0.10%, down 141 bps year over year; NIM at 3.18%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.10%.
  • Funding: loans stand at 113.18% of deposits as of Q3 2008.

Financial Results

Return on Assets (quarter, annualized)

-0.10%-141 bps YoY

Net Interest Margin (quarter, annualized)

3.18%-15 bps YoY

Efficiency Ratio (quarter, annualized)

57.46%+47 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ3 2007Q4 2007Q1 2008Q2 2008Q3 2008YoY ΔTrend
Earnings
Return on Assets1.31%1.28%0.81%1.10%-0.10%-141 bps
Return on Equity14.86%14.83%9.57%13.16%-1.28%-1,614 bps
Net Interest Margin3.33%3.33%3.29%3.31%3.18%-15 bps
Efficiency Ratio57.00%57.22%53.94%49.89%57.46%+47 bps
Non-Interest Burden1.57%1.58%1.45%1.28%1.68%+11 bps
Growth
Asset Growth (YoY)8.89%12.56%12.21%11.95%15.57%+669 bps
Loan Growth (YoY)7.69%14.13%16.63%16.68%23.40%+1,571 bps
Deposit Growth (YoY)1.56%8.24%7.62%7.72%8.43%+687 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.19%0.23%0.04%0.49%0.10%-9 bps
Allowance / Loans0.74%0.71%0.93%0.94%1.10%+36 bps
Allowance Coverage of NPLsn/an/an/an/an/an/an/a
Capital
Tier 1 Leverage Ration/an/an/an/an/an/an/a
Total Risk-Based Capital10.77%10.71%11.19%10.94%10.48%-30 bps
Equity / Assets8.74%8.52%8.51%8.16%7.44%-130 bps
Liquidity & Funding
Loans / Deposits99.45%102.92%101.86%104.46%113.18%+1,373 bps
Liquid Assets / Assets0.31%0.25%0.33%0.49%0.33%+2 bps
CRE / Total Capitaln/an/an/an/an/an/an/a