FMAO · Farmers & Merchants Bancorp, Inc.

Farmers & Merchants Bancorp, Inc. delivered a record first quarter in 2026, with net income rising 37.8% to $9.6 million, or $0.70 per diluted share. This performance was primarily driven by a significant 39 basis point expansion in net interest margin to 3.42%, supported by a reduction in the cost of interest-bearing liabilities to 2.54% from 2.76% in the prior year. The improvement in funding costs, combined with disciplined expense management, resulted in an efficiency ratio of 60.08%, a notable improvement from 66.79% in the same quarter last year. Return on average assets (ROAA) strengthened to 1.14% compared to 0.85% in the prior year period.

Balance sheet growth remained solid, with total loans increasing 3.9% to $2.68 billion and total deposits growing 4.1% to $2.81 billion. Management highlighted the early success of a new three-year strategic plan focused on core deposit generation and treasury management. Asset quality metrics remained robust, with nonperforming loans stable at 0.42% of total loans and net charge-offs to average loans at a minimal 0.01%. The allowance for credit losses to total loans was 1.08%.

Capital position strengthened, with total stockholders' equity increasing 9.1% to $375.9 million and the Tier 1 leverage ratio improving to 9.02% from 8.44%. The company declared a quarterly dividend of $0.23 per share, representing a 4.0% increase and marking 31 consecutive years of dividend increases. Management expressed optimism regarding continued earnings expansion, citing a pipeline of approximately $60 million in approved loans.