FARMERS & MERCHANTS BANCORP 10-K

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The common stock of Farmers & Merchants Bancorp is not widely held or listed on any exchange. However, trades are reported on the OTCQX under the symbol “FMCB.” The following tables summarize the actual high, low, and close sale prices for the Company's common stock since the first quarter of 2021. These figures are based on activity posted on the OTCQX: Year Ended December 31, 2022 High Low Close Dividend Declared First quarter $ 960 $ 913 $ 950 $ - Second quarter 960 914 927 7.85 Third quarter 975 922 956 - Fourth quarter 1,088 952 1,050 8.30 Year Ended December 31, 2021 High Low Close Dividend Declared First quarter $ 788 $ 731 $ 778 $ - Second quarter 925 773 862 7.50 Third quarter 920 862 897 - Fourth quarter 1,156 897 960 7.80 As of February 28, 2023, there were approximately 1,315 stockholders of record of the Company’s common stock. The Company and, before the Company was formed, the Bank, has paid cash dividends for the past 87 consecutive years. There are limitations under Delaware corporate law as to the amounts of cash dividends that may be paid by the Company. Additionally, if we decided to defer interest on our 2003 subordinated debentures, we would be prohibited from paying cash dividends on the Company’s common stock. The Company is dependent on cash dividends paid by the Bank to fund its cash dividend payments to its stockholders. There are regulatory limitations on cash dividends that may be paid by the Bank. See “Item 1. Business – Supervision and Regulation.” On November 8, 2022, the Board of Directors authorized an extension to its share repurchase program through December 31, 2024 for an additional $20.0 million of the Company’s common stock (“Repurchase Plan”), which represents approximately 3% of outstanding shareholders’ equity. Repurchases by the Company under the Repurchase Plan may be made from time to time through open market purchases, trading plans established in accordance with SEC rules, privately negotiated transactions, or by other means. Beginning in 2023 under the Inflation Reduction Act of 2022 (IRA), a 1% excise tax will be imposed on certain public company stock repurchases. The actual means and timing of any repurchases, the quantity of purchased shares and prices will be subject to certain limitations, including, without limitation, market prices of the Company’s common shares, general market and economic conditions, the Company’s financial performance, capital position, and applicable legal and regulatory requirements, and at the discretion of the Chief Executive Officer and Chief Financial Officer. Repurchases under the Repurchase Plan may be initiated, discontinued, suspended, or restarted at any time in the Company’s discretion. The Company is not obligated to repurchase any shares under the Repurchase Plan. No shares may be repurchased pursuant to the authority granted in the Repurchase Plan after December 31, 2024. Repurchased shares are to be used to fund the Company’s non-qualified retirement plans or may be returned to the status of authorized but unissued common shares of the Company. 36 Table of Contents On May 24, 2018, stockholders approved a proposal to increase our authorized shares of common stock from 7,500,000 to 40,000,000. In approving this proposal the stockholders also granted the Board discretionary authority (i.e., without further stockholder action) to determine whether to delay the proposed amendment. The Company has no immediate plans to effect the increase in the authorized shares of common stock. On August 5, 2008, the Board of Directors approved a Share Purchase Rights Plan (the “Rights Plan”), pursuant to which the Company entered into a Rights Agreement dated August 5, 2008, with Computershare as Rights Agent, and the Company declared a dividend of a right to acquire one preferred share purchase right (a “Right”) for each outstanding share of the Company’s common stock, $0.01 par value per share, to stockholders of record at the close of business on August 15, 2008. Generally, the Rights are only triggered and become exercisable if a person or group (the “Acquiring Person”) acquires beneficial ownership of 10 percent or more of the Company’s common stock or announces a tender offer for 10 percent or more of the Company’s common stock. The Rights Plan is similar to plans adopted by many other publicly traded companies. The effect of the Rights Plan is to discourage any potential acquirer from triggering the Rights without first convincing the Company’s Board of Directors that the proposed acquisition is fair to, and in the best interest of, all of the stockholders of the Company. The provisions of the Plan, if triggered by the Acquiring Person, will substantially dilute the equity and voting interest of any potential acquirer unless the Board of Directors approves of the proposed acquisition (under Article XV of the Company’s Certificate of Incorporation, the Board of Directors has the authority to consider any and all factors in determining whether an acquisition is in the best interests of the Company and its stockholders). Each Right, if and when exercisable, will entitle the registered holder to purchase from the Company one one-hundredth of a share of Series A Junior Participating Preferred Stock, no par value, at a purchase price of $1,600 for each one one-hundredth of a share, subject to adjustment. Each holder of a Right (except for the Acquiring Person, whose Rights will be null and void upon such event) shall thereafter have the right to receive, upon exercise, that number of Common Shares of the Company having a market value of two times the exercise price of the Right. At any time before a person becomes an Acquiring Person, the Rights can be redeemed, in whole, but not in part, by the Company’s Board of Directors at a price of $0.001 per Right. The Rights Plan was set to expire on August 5, 2018. On November 19, 2015, the Board of Directors approved a seven-year extension of the term of the Rights Plan. Pursuant to an Amendment to the Rights Agreement dated February 18, 2016, the term of the Rights Plan was extended from August 5, 2018 to August 5, 2025. The extension of the term of the Rights Plan was intended as a means to continue to guard against abusive takeover tactics and was not in response to any particular proposal. The Board also increased the purchase price under the Rights Plan to $1,600 per one one-hundredth of a preferred share from $1,200, to reflect the increase in the market price of the Company’s common stock over the past several years. During 2022, the Company repurchased 21,309 shares under the Repurchase Plan, for a total of $20.31 million. All of these shares were purchased at prices ranging from $925.00 to $990.00 per share, based upon the then current price on the OTCQX. The Company did not issue any shares of common stock during 2022. 37 Table of Contents The following table reports information regarding repurchases of our common stock during the year ended December 31, 2022: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of shares that may yet purchased under the plans or programs ( In thousands ) (1) Total 1st Quarter 2022 4,500 $ 945.00 4,500 $ 15,748 Total 2nd Quarter 2022 7,956 954.32 7,956 8,155 Total 3rd Quarter 2022 6,368 951.68 6,368 2,095 October 1, 2022 to October 31, 2022 1,465 $ 962.22 1,465 $ 685 November 1, 2022 to November 30, 2022 709 973.47 709 19,995 December 1, 2022 to December 31, 2022 311 979.84 311 19,690 Total 4th Quarter 2022 2,485 $ 967.64 2,485 $ 19,690 Total 2022 21,309 $ 953.12 21,309 $ 19,690 (1) As of November 8, 2022 the Board approved an extension to the repurchase program through December 31, 2024 and for an additional $20 million of the Company's common stock. The Company did not issue or purchase any shares of common stock during 2021. 38 Table of Contents Performance Graphs The following graph compares the Company’s cumulative total stockholder return on common stock from December 31, 2017 to December 31, 2022 to that of: (i) the S&P 600 Regional Banks (Sub Ind) (TR) Index (which replaces the Morningstar Banks Index - Regional (US) Industry Group going forward through 2020, since the data is no longer accessible); and (ii) the cumulative total return of the New York Stock Exchange market index. The graph assumes an initial investment of $100 on December 31, 2017 and reinvestment of dividends. The stock price performance set forth in the following graph is not necessarily indicative of future price performance. The Company’s stock price data is based on activity posted on the OTCQX and on private transactions between individual stockholders that are reported to the Company. This data was furnished by Zacks SEC Compliance Services Group. This graph shall not be deemed filed or incorporated by reference into any filing under the Securities Act. 39 Table of Contents Item 6. Reserved