<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>k82212exv99.txt
<DESCRIPTION>LETTER TO SHAREHOLDERS
<TEXT>
<PAGE>


                                                                      EXHIBIT 99

                       [Farmers & Merchants Bancorp, Inc.]


January 20, 2004


Dear Shareholder,

Enclosed please find your regular quarterly dividend of forty cents ($.40) per
share, PLUS AN ADDITIONAL DIVIDEND of fifteen cents ($.15) per share. This
results in a total fourth quarter dividend of fifty-five cents ($.55) per share
payable to shareholders of record as of December 20, 2003. This was made
possible by our performance for the year and our continued confidence that we
will maintain our revenue generation, credit quality, and cost control momentum.

Since you will be receiving the 2003 Annual Report for examination in early
March, the quarterly statement has not been included with the dividend. The
highlights of the report will be reviewed at our Annual Shareholders Meeting to
be held on April 3, 2004.

The media reminds us almost daily of the strength and safety of various
financial institutions in our area. Your confidence in our institution and your
continued support has enabled us to retain a strong capital position, which is
the true barometer of financial strength.

Once again, we would like to offer Direct Deposit of your dividends. This
service means you will no longer have to wait for your dividend to arrive in the
mail. Instead, funds are deposited directly into your bank account. THIS IS A
FREE SERVICE TO YOU AND A COST SAVING MEASURE FOR THE BANK. To enroll, simply
complete the enclosed authorization card and return it to The Farmers &
Merchants State Bank or call your nearest banking center.

With the beginning of the new year, I would personally like to thank all of the
Directors, Advisory Boards, Shareholders, fellow employees and friends that have
made all this possible. 2004 will again present many challenges; however, with
your support and continued promotion of your Bank, we will meet our goals.

Sincerely,

/s/ Joe E. Crossgrove

Joe E. Crossgrove
President/CEO


</TEXT>
</DOCUMENT>
