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<SEC-DOCUMENT>0000950124-04-003657.txt : 20040809
<SEC-HEADER>0000950124-04-003657.hdr.sgml : 20040809
<ACCEPTANCE-DATETIME>20040806180409
ACCESSION NUMBER:		0000950124-04-003657
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20040630
FILED AS OF DATE:		20040809

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FARMERS & MERCHANTS BANCORP INC
		CENTRAL INDEX KEY:			0000792966
		STANDARD INDUSTRIAL CLASSIFICATION:	SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035]
		IRS NUMBER:				341469491
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-14492
		FILM NUMBER:		04959101

	BUSINESS ADDRESS:	
		STREET 1:		307-11 N DEFIANCE ST
		CITY:			ARCHBOLD
		STATE:			OH
		ZIP:			43502
		BUSINESS PHONE:		4194462501

	MAIL ADDRESS:	
		STREET 1:		307-11 NORTH DEFIANCE ST
		CITY:			ARCHBOLD
		STATE:			OH
		ZIP:			43502
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>k86618e10vq.txt
<DESCRIPTION>QUARTERLY REPORT FOR PERIOD ENDED JUNE 30, 2004
<TEXT>
<PAGE>

                        SECURTIES 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, 2004
                                       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 the number of shares of each of the issuers classes of common stock, as
of the latest practicable date:

    Common Stock, No Par Value                         1,300,000
- --------------------------------------    --------------------------------------
              Class                          Outstanding as of August 2, 2004

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10Q

                        FARMERS & MERCHANTS BANCORP, INC.
                                      INDEX

Form 10-Q Items

<TABLE>
<CAPTION>
                                                                                                     Page
<S>                                                                                                  <C>
PART I.      FINANCIAL INFORMATION

Item   1.    Financial Statements (Unaudited)

             Condensed Consolidated Balance Sheets-
                  June 30, 2004, December 31, 2003 and June 30, 2003                                   1

             Condensed Consolidated Statements of Net Income-
                  Three Months and Six Months Ended June 30, 2004 and June 30, 2003                    2

             Condensed Consolidated Statements of Cash Flows-
                  Six Months Ended June 30, 2004 and June 30, 2003                                     3

             Notes to Condensed Financial Statements                                                   4

Item   2.    Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                                           4-5

Item   3.    Market Risk                                                                              5-6

Item   4.    Controls and Procedures                                                                   6

PART II.     OTHER INFORMATION

Item   1.    Legal Proceedings                                                                         6

Item   2.    Changes in Securities and Use of Proceeds                                                 6

Item   3.    Defaults Upon Senior Securities                                                           6

Item   4.    Submission of Matters to an Vote of Security Holders                                     6-7

Item   5.    Other Information                                                                         7

Item   6.    Exhibits and Reports on form 8K                                                          7-8

Signatures                                                                                             8

Certifications Under Section 302                                                                      9-10

Exhibit 32.  Additional Exhibit - Certifications Under Section 906                                   11-12
</TABLE>

<PAGE>

ITEM 1 FINANCIAL STATEMENTS

                        FARMERS & MERCHANTS BANCORP, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                            (in thousands of dollars)

<TABLE>
<CAPTION>
                                                             June 30, 2004      December 31, 2003     June 30, 2003
<S>                                                          <C>                <C>                   <C>
ASSETS:
Cash and due from banks                                        $  15,914            $  18,873           $  23,423
Interest bearing deposits with banks                               1,237                  662                 509
Federal funds sold                                                     0                    0                   0
Investment Securities:
   U.S. Treasury                                                   2,899                6,637               3,852
   U.S. Government                                               121,508              111,011             115,619
   State & political obligations                                  52,783               51,016              54,649
   All others                                                      3,579                2,028               2,006
Loans and leases (Net of reserve for loan losses of
  $7,800, $7,300 and $8,840, respectively)                       483,172              480,339             492,004
Bank premises and equipment-net                                   15,748               15,874              16,088
Accrued interest and other assets                                 15,473               19,263              16,610
                                                               ---------            ---------           ---------
                   TOTAL ASSETS                                $ 712,313            $ 705,703           $ 724,760
                                                               =========            =========           =========

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
   Deposits:
                   Noninterest bearing                         $  47,256            $  50,710           $  45,977
                   Interest bearing                              536,771              524,356             536,074
   Federal funds purchased and securities
     sold under agreement to repurchase                           25,698               27,319              30,339
   Other borrowed money                                           23,885               24,374              27,929
   Accrued interest and other liabilities                          3,375                4,088               4,816
                                                               ---------            ---------           ---------
        Total Liabilities                                        636,985              630,847             645,135

SHAREHOLDERS' EQUITY:
   Common stock, no par value - authorized 1,500,000
                   shares; issued  1,300,000 shares               12,677               12,677              12,677
   Undivided profits                                              63,073               60,196              63,259
   Accumulated other comprehensive income (expense)                 (422)               1,983               3,689
                                                               ---------            ---------           ---------
        Total Shareholders' Equity                                75,328               74,856              79,625

LIABILITIES AND SHAREHOLDERS' EQUITY                           $ 712,313            $ 705,703           $ 724,760
                                                               =========            =========           =========
</TABLE>

See Notes to Condensed Consolidated Unaudited Financial Statements.

Note: The December 31, 2003 Balance Sheet has been derived from the audited
financial statements of that date.

                                       1

<PAGE>

                        FARMERS & MERCHANTS BANCORP, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
                           (in thousands of dollars)

<Table>
<Caption>
                                                                        Three Months Ended               Six Months Ended
                                                                  June 30, 2004   June 30, 2003    June 30, 2004   June 30, 2003
<S>                                                               <C>             <C>              <C>             <C>
INTEREST INCOME:
   Loans and leases                                                  $  7,757        $  8,880         $ 15,492        $ 17,510
   Investment Securities:
            U.S. Treasury securities                                        4              40               31              84
            Securities of U.S. Government agencies                      1,043           1,076            2,020           2,241
            Obligations of states and political subdivisions              504             565            1,014           1,143
            Other                                                          35              37               72              74
   Federal funds                                                           15              14               32              17
   Deposits in banks                                                        7              15               10              17
                                                                     --------        --------         --------        --------
                        Total Interest Income                           9,365          10,627           18,671          21,086
INTEREST EXPENSE:
   Deposits                                                             2,454           3,470            4,919           7,115
   Borrowed funds                                                         304             403              607             822
                        Total Interest Expense                          2,758           3,873            5,526           7,937
NET INTEREST INCOME BEFORE
     PROVISION FOR LOAN LOSSES                                          6,607           6,754           13,145          13,149
PROVISION FOR LOAN LOSSES                                                 375             760              791           4,698
NET INTEREST INCOME AFTER
     PROVISION FOR LOAN LOSSES                                          6,232           5,994           12,354           8,451
OTHER INCOME:
   Service charges                                                        539             547            1,064           1,061
   Other                                                                  688           1,120            1,300           1,861
   Net securities gains                                                     1             480              127             522
                                                                     --------        --------         --------        --------
                                                                        1,228           2,147            2,491           3,444
OTHER EXPENSES:
   Salaries and wages                                                   1,836           1,621            3,796           3,446
   Pension and other employee benefits                                    549             519            1,047             981
   Occupancy expense (net)                                                185             142              358             351
   Other operating expenses                                             1,969           1,821            3,898           3,558
                                                                        4,539           4,103            9,099           8,336
                                                                     --------        --------         --------        --------
INCOME BEFORE FEDERAL INCOME TAX                                        2,921           4,038            5,746           3,559
FEDERAL INCOME TAXES                                                      879             939            1,700             591
                                                                     --------        --------         --------        --------
NET INCOME                                                              2,042           3,099            4,046           2,968
                                                                     ========        ========         ========        ========
OTHER COMPREHENSIVE INCOME (NET OF TAX):
   Unrealized gains (losses) on securities                             (2,857)            214           (2,405)            (27)
COMPREHENSIVE INCOME (EXPENSE)                                       $   (815)       $  3,313         $  1,641        $  2,941
NET INCOME PER SHARE (Based upon
     weighted average number of shares
     outstanding of 1,300,000)                                       $   1.57        $   2.38         $   3.11        $   2.28
DIVIDENDS DECLARED                                                   $   0.45        $   0.40         $   0.90        $   0.80
</TABLE>

See Notes to Condensed Consolidated Unaudited Financial Statements.

                                       2

<PAGE>

                        FARMERS & MERCHANTS BANCORP, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                            (in thousands of dollars)

<TABLE>
<CAPTION>
                                                                                                     Six Months Ended
                                                                                               June 30, 2004   June 30, 2003
<S>                                                                                            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                                    $  4,046         $  2,968
   Adjustments to Reconcile Net Income to Net
            Cash Provided by Operating Activities:
                                  Depreciation and amortization                                       688              724
                                  Premium amortization                                                725              426
                                  Discount amortization                                               (61)             (54)
                                  Provision for loan losses                                           791            4,698
                                  Provision (Benefit) for deferred income taxes                     1,239             (882)
                                  Loss on sale of fixed assets                                         73               32
                                  Gain on sale of investment securities                              (127)            (522)
                                  Changes in Operating Assets and Liabilities:
                                             Accrued interest receivable and other assets           2,551              629
                                             Accrued interest payable and other liabilities        (2,598)            (663)
                                                                                                 --------         --------
            Net Cash Provided by Operating Activities                                               7,327            7,356
CASH FLOWS FROM INVESTING ACTIVITIES
   Capital expenditures                                                                              (635)          (1,810)
   Proceeds from sale of fixed assets                                                                   0                0
   Proceeds from maturities of investment securities:                                              28,798           13,160
   Proceeds from sale of investment securities:                                                    10,500           26,954
   Purchase of investment securities                                                              (50,301)         (37,338)
   Net increase (decrease) in loans and leases                                                     (3,624)             813
                                                                                                 --------         --------
            Net Cash Provided (Used) by Investing Activities                                      (15,262)           1,779
CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase in deposits                                                                         8,961            5,678
   Net change in short-term borrowings                                                             (1,621)          (7,861)
   Increase in long-term borrowings                                                                     0                0
   Payments on long-term borrowings                                                                  (489)            (767)
   Payments of dividends                                                                           (1,300)          (1,040)
            Net Cash Provided (Used) by Financing Activities                                        5,551           (3,990)
                                                                                                 --------         --------
Net change in cash and cash equivalents                                                            (2,384)           5,145
Cash and cash equivalents - Beginning of year                                                      19,535           18,787
                                                                                                 --------         --------
CASH AND CASH EQUIVALENTS - END OF THE YEAR                                                      $ 17,151         $ 23,932
                                                                                                 ========         ========
RECONCILIATION OF CASH AND CASH EQUIVALENTS:
  Cash and cash due from banks                                                                   $ 15,914         $ 23,423
  Interest bearing deposits                                                                         1,237              509
                                                                                                 --------         --------

                                                                                                 $ 17,151         $ 23,932
                                                                                                 ========         ========
</TABLE>

See Notes to Condensed Consolidated Unaudited Financial Statements.

                                       3

<PAGE>

                        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, 2004 are not necessarily
                  indicative of the results that are expected for the year ended
                  December 31, 2004. 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, 2003.

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.

                  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 AND CAPITAL RESOURCES

                  Liquidity continues to remain strong as the investment
                  portfolio continues to build. Deposit growth was moderate
                  during the first six months and has grown slightly as compared
                  to June 30, 2003. The second quarter of 2004 shows an increase
                  in loans of approximately $2.8 million compared to December
                  31, 2003, but remains behind the loans balances of June 30,
                  2003 by $8.8 million. This decrease in loans coupled with the
                  increase in deposits has funded the investment growth.
                  Overall, company asset growth has been slow.

                  Loan demand has remained sluggish throughout the first half of
                  2004 with improvement projected as the economy continues to
                  strengthen. Financial results for the agricultural community,
                  which comprises approximately 13% of the overall portfolio,
                  were strong during 2003 after two rough years. This has helped
                  to strengthen the asset quality of the portfolio. Past dues
                  (over 30 days) in the total loan portfolio have hit historical
                  lows for the company. This is a postive indicator for future
                  loan losses to remain low during 2004.

                                       4

<PAGE>

ITEM 2            MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
                  AND RESULTS OF OPERATIONS (Continued)

                  Deposits increased compared to both year-end and a year ago
                  totaling $9 and $2 million, respectively. During 2003 a great
                  deal of depositers invested short term in the hopes of rising
                  rates. Fifty percent of the certificate of deposit portfolio
                  matured during the first half. The goal was to extend the
                  duration of the portfolio while maintaining the balances. The
                  bank has been successful with promotions to encourage
                  depositors to invest longer. The bank has seen the most growth
                  in time deposits during 2004 and is striving to maintain its
                  net interest margin by controlling the liabilities repricing.

                  The additional liquidity was put to use in the investment
                  portfolio. Investments grew by over $4.6 million from June
                  2003 and by $10 million from December of 2003. As loan growth
                  develops, the investment portfolio will be used to fund the
                  growth if deposit growth is slower. Additional funds are
                  available in short-term borrowings as they have decreased $4
                  and $.7 million compared to June and December 2003,
                  respectively.

                  The income statement shows yields on all portfolios have
                  decreased compared to 2003, but the overall net interest
                  income is lower by only $4,000 for the six months ended June
                  2004 from 2003 income. Maintaining the margin is an important
                  part of the ongoing profitability of the company. The
                  discussion on market risk to follow will document the exposure
                  of margin and earnings to interest rate risk.

                  The largest determinant for the improved profitability in 2004
                  is the lower loan loss provision. Approximately $4.7 million
                  was the provision for June 2003 compared to $.8 million as of
                  June 2004. The reduction in provision offset the loss of other
                  noninterest income that had been derived from real estate
                  refinancing during 2003.

                  The company continues to be well-capitalized as the capital
                  ratios below show:

<TABLE>
<S>                                      <C>
Primary Ratio                            11.54%
Tier I Leverage Ratio                    10.62%
Risk Based Capital Tier 1                14.69%
Total Risk Based Capital                 15.95%
Stockholders' Equity/Total Assets        10.58%
</TABLE>

ITEM 3            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 the
                  purposes other than trading such as loans, available for sale
                  securities, interest bearing deposits, short term borrowings
                  and long term borrowings. 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.

                                       5

<PAGE>

ITEM 3            MARKET RISK (Continued)

Interest Rate Shock on Net Interest         Interest Rate Shock on Net Interest
                                            Margin Income

<TABLE>
<CAPTION>
Net Interest        % Change to          Rate           Rate          Cumulative          % Change to
Margin (Ratio)       Flat Rate         Direction     Changes by       Total ($000)         Flat Rate
- --------------      -----------        ---------     ----------       ------------        -----------
<S>                 <C>                <C>           <C>              <C>                 <C>
    4.23%             -3.005%           Rising          3.000%           16,323              -3.585%
    4.24%             -2.755%           Rising          2.000%           16,425              -2.982%
    4.25%             -2.419%           Rising          1.000%           16,537              -2.321%
    4.36%              0.000%           Flat            0.000%           16,930               0.000%
    4.36%             -2.600%           Falling        -1.000%           16,906              -0.138%
    4.12%             -5.532%           Falling        -2.000%           15,976              -5.633%
    3.75%            -13.929%           Falling        -3.000%           14,645             -13.496%
</TABLE>

                  As the table shows, should rates increase as predicted, the
                  bank's exposure to interest rate risk is minimal. To the
                  extent that the bank has the ability not to instantly reprice
                  the liability side of the balance sheet, the risk would
                  decrease even more. The falling rate scenario shows the
                  highest risk on a 300 basis point drop. With the Federal
                  Reserve upward movement that occurred at the end of June, this
                  scenario seems most unlikely.

ITEM 4            CONTROLS AND PROCEDURES

                  As of June 30 2004, 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, 2004. There have been no significant changes in
                  the Company's internal controls subsequent to June 30, 2004.

                  The bank has hired David Kowalski as Senior Internal Auditor.
                  His educational background includes a MBA in Finance and he is
                  a CPA. He heads up the auditing department and also has
                  experience in the banking industry.

PART II

ITEM 1            LEGAL PROCEEDINGS

                  None

ITEM 2            CHANGES IN SECURITIES AND USE OF PROCEEDS

                  None

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 3, 2004. The following
                  directors were elected to a new term of office:

                                       6

<PAGE>

ITEM 4            SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
                  (Continued)

<TABLE>
<S>                                  <C>
Eugene D. Bernath                    Dean E. Miller
Dexter L. Benecke                    Anthony J. Rupp
Jerry L Boyers                       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                      Steven J. Wyse
</TABLE>

                  Matters scheduled for consideration at this meeting were:

                  1.    To elect fourteen (14) directors of the Corporation; and

                  2.    To transact such other business as may have properly
                        come before the meeting or any adjournment thereof.

                  The results of the voting for the election of directors are as
                  follows:

<TABLE>
<CAPTION>
     Director                        For          Withhold Authority
     --------                        ---          ------------------
<S>                                <C>            <C>
Eugene D. Bernath                  897,884                 1
Dexter L. Benecke                  897,885                 0
Jerry L Boyers                     897,882                 3
Joe E. Crossgrove                  897,883                 2
Steven A. Everhart                 897,884                 1
Robert G. Frey                     897,884                 1
Jack C. Johnson                    897,882                 3
Dean E. Miller                     897,884                 1
Anthony J. Rupp                    897,881                 4
David P. Rupp Jr.                  897,881                 4
James C. Saneholtz                 897,870                15
Kevin J. Sauder                    897,879                 6
Merle J. Short                     897,885                 0
Steven J. Wyse                     897,875                10
</TABLE>

ITEM 5            OTHER INFORMATION

                  Paul Siebenmorgen has joined the bank as Senior Executive Vice
                  President and Chief Lending Officer. Mr. Siebenmorgen brings
                  many years of banking experience and strengthens the executive
                  management team.

ITEM 6            EXHIBITS AND REPORTS ON FORM 8-K

                  3.1  Articles of Incorporation of the Registrant
                        (incorporated by reference to Registrant's Quarterly
                        Report on Form 10-Q filed with the Commission on May 10,
                        2004)

                   3.2  Code of Regulations of the Registrant (incorpoated 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

                                       7

<PAGE>

ITEM 6            EXHIBITS AND REPORTS ON FORM 8-K (Continued)

                  32.1  Section 1350 Certification - CEO

                  32.2  Section 1350 Certification - CFO

                  No reports on Form 8-K were filed by the registrant during the
                  quarter ended June 30, 2004.

                                   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, theeunto duly authorized.

                                            Farmers & Merchants Bancorp, Inc.,

Date: August 2, 2004                        By:   /s/ Joe E. Crossgrove
                                                 Joe E. Crossgrove
                                                President and CEO

Date: August 2, 2004                        By: /s/ Barbara J. Britenriker
                                                Barbara J. Britenriker
                                                Senior Vice-President and CFO

                                       8

<PAGE>
                               10-Q EXHIBIT INDEX

EX- 31.1  Certification of Chief Executive Officer pursuant to Section 302

EX- 31.2  Certification of Chief Financial Officer pursuant to Section 302

EX- 32.1  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002

Ex- 32.2  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>k86618exv31w1.txt
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302
<TEXT>
<PAGE>

Exhibit 31.1

                                 CERTIFICATIONS

I, Joe E. Crossgrove, President and CEO of Farmers & Merchants Bancorp, Inc.,
certify that:

      1     I have reviewed this quarterly report on Form 10-Q of Farmers &
            Merchants Bancorp, Inc.;

      2     Based on my knowledge, this report does not contain any untrue
            statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this report;

      3     Based on my knowledge, the financial statements, and other financial
            information included in this quarterly report, fairly present in all
            material respects the financial condition, results of operations and
            cash flows of the registrant as of, and for, the periods presented
            in this report;

      4     The registrant's other certifying officer(s) and I are responsible
            for establishing and maintaining disclosure controls and procedures
            (as defined in Exchange Act Rules 13a-15(e) and 15d-(e)) for the
            registrant and have:

            a.    Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

            b.    [This paragraph intentionally left blank.]

            c.    Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period convered by this
                  report based on such evaluation; and

            d.    Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect the registrant's internal control over financial
                  reporting; and

      5     The registrant's other certifying officer(s) and I have disclosed,
            based on our most recent evaluation of internal control over
            financial reporting, to the registrant's auditors and the audit
            committee of registrant's board of directors (or persons performing
            the equivalent functions):

            a.    All significant deficiencies and material weaknesses in the
                  design or operation of internal controls over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

            b.    Any fraud, whether or not material, that involves management
                  or other employees who have significant role in the
                  registrant's internal control over financial reporting.

Date: August 2, 2004                      /s/ Joe E. Crossgrove
                                          --------------------------------
                                          Joe E. Crossgove
                                          President and Chief Executive Officer

                                       9


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>k86618exv31w2.txt
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302
<TEXT>
<PAGE>

Exhibit 31.2

                                 CERTIFICATIONS

I, Barbara J. Britenriker, Senior Vice-President and CFO of Farmers & Merchants
Bancorp, Inc., certify that:

      1     I have reviewed this quarterly report on Form 10-Q of Farmers &
            Merchants Bancorp, Inc.;

      2     Based on my knowledge, this report does not contain any untrue
            statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this report;

      3     Based on my knowledge, the financial statements, and other financial
            information included in this quarterly report, fairly present in all
            material respects the financial condition, results of operations and
            cash flows of the registrant as of, and for, the periods presented
            in this report;

      4     The registrant's other certifying officer(s) and I are responsible
            for establishing and maintaining disclosure controls and procedures
            (as defined in Exchange Act Rules 13a-15(e) and 15d-(e)) for the
            registrant and have:

            a.    Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

            b.    [This paragraph intentionally left blank.]

            c.    Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period convered by this
                  report based on such evaluation; and

            d.    Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect the registrant's internal control over financial
                  reporting; and

      5     The registrant's other certifying officer(s) and I have disclosed,
            based on our most recent evaluation of internal control over
            financial reporting, to the registrant's auditors and the audit
            committee of registrant's board of directors (or persons performing
            the equivalent functions):

            a.    All significant deficiencies and material weaknesses in the
                  design or operation of internal controls over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

            b.    Any fraud, whether or not material, that involves management
                  or other employees who have significant role in the
                  registrant's internal control over financial reporting.

Date: August 2, 2004                               /s/ Barbara J. Britenriker
                                                   --------------------------
                                                   Barbara J Britenriker
                                                   Senior Vice President and
                                                   Chief Financial Officer

                                       10


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>k86618exv32w1.txt
<DESCRIPTION>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
<TEXT>
<PAGE>

Exhibit 32.1

                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Farmers & Merchants Bancorp, Inc. on
Form 10-Q for the period ending June 30, 2004, as filed with the Securities and
Exchange Commission ("the report"), I, Joe E. Crossgrove, President and Chief
Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

      1     The Report fully complies with the requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      2     The information contained in the Report fairly presents, in all
            material respects, the financial condition and results of operations
            of Farmers & Merchants Bancorp, Inc. as of the dates and for the
            periods expressed in the Report.

Date: August 2, 2004                         /s/ Joe E. Crossgrove
                                             -----------------------------------
                                             Joe E. Crossgrove, President and
                                              Chief Executive Officer

                                       11


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>k86618exv32w2.txt
<DESCRIPTION>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
<TEXT>
<PAGE>

Exhibit 32.2

                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
                       PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Farmers & Merchants Bancorp, Inc. on
Form 10-Q for the period ending June 30, 2004, as filed with the Securities and
Exchange Commission ("the report"), I, Barbara J. Britenriker, Senior
Vice-President and Chief Financial Officer, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:

      1     The Report fully complies with the requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      2     The information contained in the Report fairly presents, in all
            material respects, the financial condition and results of operations
            of Farmers & Merchants Bancorp, Inc. as of the dates and for the
            periods expressed in the Report.

Date: August 2, 2004           /s/ Barbara J. Britenriker
                               ------------------------------------------
                               Barbara J. Britenriker, Senior Vice President and
                                Chief Financial Officer

                                       12

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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