ARCHBOLD, Ohio, July 27, 2026 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2026 second quarter and year-to-date ended June 30, 2026, on a consolidated basis.
2026 Second-Quarter Financial and Operating Highlights
(at June 30, 2026, and on a year-over-year basis unless noted)
- 93 consecutive quarters of profitability
- Net income increased 53.0% to a quarterly record of $11.8 million, or $0.86 per basic and diluted share
- Strong profitability drives ROAA to 1.34%, compared to 0.92%
- Net charge-offs to average loans of 0.00%
- Tier 1 leverage ratio was 8.99%
- Cost of interest-bearing liabilities improved to 2.56%, from 2.83%
- Net interest margin increased by 26 basis points to 3.48%
- Efficiency ratio improved to 56.08%, compared to 64.93%
- Second quarter dividend per share increased 4.0% to $0.92 annualized
Lars B. Eller, President and Chief Executive Officer, stated, “I am proud to report the second quarter of 2026 was the most profitable quarter in our 129-year history. Our record performance builds upon the strong start we established in the first quarter and demonstrates the meaningful operating leverage across our business. With growing earnings momentum, a solid balance sheet and continued investments in our people, technology, and markets, we believe F&M is well positioned to deliver sustained profitable growth and long-term value for our shareholders.”
Income Statement
Net income for the quarter ended June 30, 2026, was $11.8 million, compared to $7.7 million for the same period last year. Net income per basic and diluted share for the 2026 second quarter was $0.86, compared to $0.56 for the same period last year. Net income for the 2026 first half ended June 30, 2026, was $21.4 million, compared to $14.7 million for the same period last year. Net income per basic and diluted share for the 2026 first half was $1.55, compared to $1.07 for the same period last year.
“Second quarter 2026, net income increased 53% year-over-year and 23% sequentially, reflecting continued net interest margin expansion, strong levels of noninterest income, disciplined expense management, and effective balance sheet execution. Record levels of net income drove a significant expansion in our return on average assets at June 30, 2026, to 1.34%, the highest quarterly level in 23 quarters. We achieved these levels of profitability, while maintaining excellent credit quality, underscoring the strength and consistency of our core banking franchise,” continued Mr. Eller.
Deposits
At June 30, 2026, total deposits were $2.87 billion, an increase of 5.9%, or $159.1 million from June 30, 2025. For the three months ended June 30, 2026, F&M’s cost of interest-bearing liabilities was 2.56%, compared to 2.83% in the same period last year.
Mr. Eller continued: “We continue to see favorable business and economic trends across our Ohio, Indiana, and Michigan markets, supporting higher year-over-year levels of both loans and deposits. We believe this growth reflects the value customers place on our relationship-based approach, local decision-making and ability to deliver responsive, tailored financial solutions. Our deposit growth was also accompanied by improved funding costs, with the cost of interest-bearing liabilities declining 27 basis points from the prior-year period. Together, these trends demonstrate the strength of our local franchise and our continued ability to attract, retain, and deepen high-quality customer relationships across the communities we serve.”
Loan Portfolio and Asset Quality
Total loans, net at June 30, 2026, increased 3.0%, or by $79.5 million to $2.70 billion, compared to $2.62 billion at June 30, 2025. The year-over-year increase was driven primarily by higher consumer real estate, commercial and industrial, and agricultural loans, partially offset by lower commercial real estate, agricultural real estate, and consumer loans.
F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans continue to normalize on a quarter-over-quarter basis and were $7.4 million, or 0.27% of total loans at June 30, 2026, compared to $11.1 million, or 0.42% of total loans at March 31, 2026, and $3.7 million, or 0.14% of total loans at June 30, 2025.
F&M maintains a well-balanced, diverse, and high performing CRE portfolio. CRE loans represented 48.4% of the Company’s total loan portfolio at June 30, 2026. F&M’s CRE portfolio included the following categories at June 30, 2026 (*):
CRE Category
Dollar
Balance Percent of CRE
Portfolio Percent of Total Loan Portfolio Multi-family $241,662 18.5% 8.9%Retail 233,404 17.8% 8.6%Industrial 216,907 16.6% 8.0%Hotels 165,848 12.7% 6.1%Office 134,215 10.3% 5.0%Gas Stations 77,758 5.9% 2.9%Food Service 50,067 3.8% 1.9%Development 37,698 2.9% 1.4%Auto Dealers 25,347 1.9% 0.9%Senior Living 20,843 1.6% 0.8%Other 104,851 8.0% 3.9%Total CRE $1,308,600 100.0% 48.4%
* Numbers have been rounded; totals may not foot due to rounding; and dollar amounts in thousands.
At June 30, 2026, the Company’s total allowance for credit losses to total loans was 1.08%, compared to 1.08% at June 30, 2025.
Mr. Eller concluded, “Our record second-quarter and year-to-date profitability demonstrate the strength of the platform we have built and the progress we are making across F&M. As we execute our new three-year strategic plan, we remain focused on building upon this momentum, while preserving the relationship-based service, local decision-making and tailored financial solutions that distinguish F&M across our markets. We believe this combination positions us to achieve the next level of profitable growth and create increasing long-term value for our customers, communities, and shareholders.”
Stockholders’ Equity and Dividends
Total stockholders’ equity increased 9.7% to $384.7 million, or $27.92 per share at June 30, 2026, from $350.8 million, or $25.56 per share at June 30, 2025. The Company had a Tier 1 leverage ratio of 8.99% at June 30, 2026, compared to 8.50% at June 30, 2025.
Tangible stockholders’ equity increased to $295.0 million at June 30, 2026, compared to $259.6 million at June 30, 2025. On a per share basis, tangible stockholders’ equity at June 30, 2026, was $21.41 per share, compared to $18.91 per share at June 30, 2025. Tangible stockholders’ equity and tangible book value per share are non-GAAP financial measures; see “Use of Non-GAAP Financial Measures.”
F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 31 consecutive years. For the six months ended June 30, 2026, the Company declared cash dividends of $0.46 per share, representing a 4.0% increase over the same period last year. For the six months ended June 30, 2026, the dividend payout ratio was 29.27% compared to 40.90% for the same period last year.
About Farmers & Merchants Bancorp, Inc.
Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) is a financial holding company headquartered in Archbold, Ohio, and the parent company of The Farmers & Merchants State Bank.
About Farmers & Merchants State Bank:
F&M Bank is a local independent community bank that has been serving its communities since 1897. F&M Bank provides commercial banking, retail banking, and other financial services. Our locations are in Butler, Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood counties in Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben, and Wells counties. The Michigan footprint includes Oakland County, and we have Loan Production Offices in Muncie, Indiana; and Perrysburg and Bryan, Ohio.
Use of Non-GAAP Financial Measures
This release contains certain non-GAAP financial measures, including tangible stockholders’ equity and tangible book value per share. Management believes these measures facilitate period-to-period comparisons of the Company’s performance and provide useful supplemental information to investors; however, they should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Basis of Presentation
The financial information in this release is preliminary, based on management’s current expectations, and is subject to change pending completion of customary quarterly closing processes and review. Unless otherwise indicated, all figures are presented on a consolidated basis and comparisons are to the same period of the prior year. Averages may be annualized. Totals may not foot due to rounding.
Safe Harbor Statement
Farmers & Merchants Bancorp, Inc. (“F&M”) wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995. Statements by F&M, including management’s expectations and comments, may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “seek,” “estimate,” “project,” “target,” “goal,” “will,” “would,” and similar expressions. Actual results could vary materially depending on risks and uncertainties inherent in general and local banking conditions, competitive factors specific to markets in which F&M and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions, capital market conditions, deposit flows and pricing, liquidity and access to wholesale funding, interest rate and asset-liability management, credit quality (including commercial real estate exposures), collateral values, inflation and macroeconomic conditions, changes in laws and regulations (including capital and liquidity requirements and the implementation of “Basel III Endgame”), FDIC assessments, stress testing and supervisory expectations, cybersecurity and third-party/vendor risks, competition and technological change, geopolitical events, severe weather and natural disasters, agricultural sector conditions, the accuracy of CECL estimates and other accounting judgments, capital and dividend restrictions, and other risks described in F&M’s filings with the SEC. F&M undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. For more details, please refer to F&M’s SEC filing, including its most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q. Such filings can be viewed at the SEC’s website, www.sec.gov or through F&M’s website www.fm.bank.
2026 March 31,
2026 December 31,
2025 September 30,
2025 June 30,
2025 June 30,
2026 June 30,
2025Interest Income Loans, including fees$40,839 $39,827 $40,999 $41,013 $39,530 $80,666 $76,602 Debt securities: U.S. Treasury and government agencies 2,712 2,305 2,259 2,224 2,231 5,017 4,328 Municipalities 347 349 362 366 369 696 751 Dividends 239 245 250 309 311 484 649 Federal funds sold and other 1,510 572 696 572 1,051 2,082 2,164 Total interest income 45,647 43,298 44,566 44,484 43,492 88,945 84,494 Interest Expense Deposits 14,432 13,249 14,318 15,060 14,813 27,681 28,801 Federal funds purchased and securities sold under agreements to repurchase 118 145 226 273 272 263 543 Borrowed funds 1,894 2,176 1,966 1,966 2,411 4,070 4,961 Subordinated notes 285 284 285 284 285 569 569 Total interest expense 16,729 15,854 16,795 17,583 17,781 32,583 34,874 Net Interest Income - Before Provision for Credit Losses 28,918 27,444 27,771 26,901 25,711 56,362 49,620 Provision for Credit Losses - Loans 173 302 567 557 661 475 1,472 Provision for (Recovery of) Credit Losses - Off Balance Sheet Exposures 148 6 (1) (272) 27 154 (233)Net Interest Income After Provision for Credit Losses 28,597 27,136 27,205 26,616 25,023 55,733 48,381 Noninterest Income Customer service fees 544 483 337 370 330 1,027 711 Other service charges and fees 1,301 1,283 1,311 1,349 1,206 2,584 2,330 Interchange income 1,347 1,513 1,275 1,273 1,259 2,860 2,680 Loan servicing income 846 838 814 674 629 1,684 1,391 Net gain on sale of loans 683 575 306 444 257 1,258 541 Increase in cash surrender value of bank owned life insurance 681 655 640 247 239 1,336 483 Gain (loss) on sale of other assets owned 30 - (2) - 15 30 (39)Loss on sale of available-for-sale securities - (347) - - - (347) - Total noninterest income 5,432 5,000 4,681 4,357 3,935 10,432 8,097 Noninterest Expense Salaries and wages 8,381 8,267 8,037 8,108 7,567 16,648 15,445 Employee benefits 2,338 2,379 2,386 2,273 2,265 4,717 4,669 Net occupancy expense 931 1,169 1,052 1,104 1,075 2,100 2,274 Furniture and equipment 1,594 1,566 1,352 1,532 1,414 3,160 2,692 Data processing 778 994 964 1,109 1,057 1,772 1,614 Franchise taxes 395 400 397 397 397 795 794 ATM expense 561 576 676 665 761 1,137 1,252 Advertising 363 472 666 674 356 835 859 FDIC assessment 389 396 377 428 448 785 913 Servicing rights amortization - net 328 523 637 586 234 851 361 Loan expense 578 309 292 362 328 887 556 Consulting fees 325 254 182 242 494 579 1,239 Professional fees 425 500 352 516 502 925 1,061 Intangible asset amortization 304 305 446 445 444 609 889 Other general and administrative 1,574 1,691 1,237 1,298 1,918 3,265 3,402 Total noninterest expense 19,264 19,801 19,053 19,739 19,260 39,065 38,020 Income Before Income Taxes 14,765 12,335 12,833 11,234 9,698 27,100 18,458 Income Taxes 2,968 2,757 3,040 2,380 1,988 5,725 3,796 Net Income 11,797 9,578 9,793 8,854 7,710 21,375 14,662 Other Comprehensive Income (Loss) (Net of Tax): Net unrealized gain (loss) on available-for-sale securities (545) (2,420) 2,657 6,610 1,149 (2,965) 7,613 Reclassification adjustment for realized loss on sale of available-for-sale securities - 347 - - - 347 - Net unrealized gain (loss) on available-for-sale securities (545) (2,073) 2,657 6,610 1,149 (2,618) 7,613 Tax expense (benefit) (115) (435) 558 1,388 241 (550) 1,599 Other comprehensive income (loss) (430) (1,638) 2,099 5,222 908 (2,068) 6,014 Comprehensive Income$11,367 $7,940 $11,892 $14,076 $8,618 $19,307 $20,676 Basic Earnings Per Share$0.86 $0.70 $0.71 $0.64 $0.56 $1.55 $1.07 Diluted Earnings Per Share$0.86 $0.70 $0.71 $0.64 $0.56 $1.55 $1.07 Dividends Declared$0.23000 $0.23000 $0.23000 $0.22750 $0.22125 $0.46000 $0.44250
2026 March 31,
2026 December 31,
2025 September 30,
2025 June 30,
2025 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Assets Cash and due from banks$155,879 $172,847 $97,249 $116,448 $87,596 Federal funds sold 511 623 469 582 635 Total cash and cash equivalents 156,390 173,470 97,718 117,030 88,231 Interest-bearing time deposits 518 1,253 1,498 1,498 1,992 Securities - available-for-sale 441,254 429,623 422,072 422,773 431,102 Other securities, at cost 10,681 12,672 13,032 11,509 13,994 Loans held for sale 2,994 5,579 3,934 3,003 6,359 Loans, net of allowance for credit losses 2,677,072 2,654,135 2,685,990 2,632,668 2,599,917 Premises and equipment 30,334 31,534 31,864 32,321 32,885 Goodwill 86,358 86,358 86,358 86,358 86,358 Loan servicing rights 5,085 4,972 5,175 5,537 5,810 Other real estate owned - 319 Bank owned life insurance 48,021 45,407 47,410 35,602 35,355 Other assets 43,411 40,247 39,331 42,453 43,760 Total Assets$3,502,118 $3,485,569 $3,434,382 $3,390,752 $3,345,763 Liabilities and Stockholders' Equity Liabilities Deposits Noninterest-bearing$506,119 $520,348 $527,327 $500,742 $497,804 Interest-bearing NOW accounts 898,902 910,723 876,151 920,099 899,602 Savings 771,379 753,289 729,472 713,391 691,468 Time 693,008 625,302 597,785 617,679 621,455 Total deposits 2,869,408 2,809,662 2,730,735 2,751,911 2,710,329 Federal funds purchased and securities sold under agreements to repurchase 14,771 14,762 37,718 22,718 27,562 Federal Home Loan Bank (FHLB) advances 168,447 218,987 227,377 187,913 188,445 Subordinated notes, net of unamortized issuance costs 34,991 34,962 34,933 34,904 34,875 Dividend payable 3,130 3,128 3,125 3,091 3,000 Accrued expenses and other liabilities 26,655 28,120 29,632 28,435 30,760 Total liabilities 3,117,402 3,109,621 3,063,520 3,028,972 2,994,971 Commitments and Contingencies Stockholders' Equity Common stock - No par value; authorized 40,000,000 shares; issued 14,564,425 shares; outstanding 13,779,385 shares 6/30/26 and 13,748,074 shares 12/31/25 135,510 135,270 135,531 135,170 135,805 Treasury stock - 785,040 shares 6/30/26 and 816,351 shares 12/31/25 (10,293) (10,403) (10,636) (10,584) (10,674)Retained earnings 273,455 264,607 257,855 251,181 244,870 Accumulated other comprehensive loss (13,956) (13,526) (11,888) (13,987) (19,209)Total stockholders' equity 384,716 375,948 370,862 361,780 350,792 Total Liabilities and Stockholders' Equity$3,502,118 $3,485,569 $3,434,382 $3,390,752 $3,345,763
SELECT FINANCIAL DATA
For the Three Months Ended For the Six Months EndedSelected financial data June 30,
2026 March 31,
2026 December 31,
2025 September 30,
2025 June 30,
2025 June 30,
2026 June 30,
2025Return on average assets 1.34% 1.14% 1.14% 1.05% 0.92% 1.24% 0.88%Return on average equity 12.37% 10.31% 10.55% 9.83% 8.88% 11.29% 8.55%Yield on earning assets 5.48% 5.38% 5.55% 5.62% 5.45% 5.44% 5.32%Cost of interest-bearing liabilities 2.56% 2.54% 2.69% 2.83% 2.83% 2.55% 2.84%Net interest spread 2.92% 2.84% 2.86% 2.79% 2.62% 2.89% 2.48%Net interest margin 3.48% 3.42% 3.46% 3.40% 3.22% 3.45% 3.13%Efficiency ratio 56.08% 60.08% 58.38% 63.11% 64.93% 58.18% 65.84%Dividend payout ratio 26.53% 32.62% 31.90% 34.90% 38.91% 29.27% 40.90%Tangible book value per share $21.41 $20.76 $20.40 $19.71 $18.91 Tier 1 leverage ratio 8.99% 9.02% 8.81% 8.74% 8.50% Average shares outstanding 13,773,387 13,754,684 13,749,420 13,733,858 13,720,339 13,764,087 13,713,211 Loans June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 (Dollar amounts in thousands) Commercial real estate $1,308,600 $1,315,549 $1,355,571 $1,355,166 $1,345,953 Agricultural real estate 208,223 215,846 217,034 222,145 221,004 Consumer real estate 533,438 534,987 526,439 522,416 523,781 Commercial and industrial 337,487 309,046 314,405 296,084 293,826 Agricultural 244,611 228,730 218,050 179,361 157,870 Consumer 50,953 55,576 58,838 60,469 59,348 Other 22,574 22,564 23,133 24,086 24,653 Less: Net deferred loan fees, costs and other(1) (1,419) (1,436) (1,511) (1,452) (1,488) Total loans, net $2,704,467 $2,680,862 $2,711,959 $2,658,275 $2,624,947 Asset quality data June 30,
2026 March 31,
2026 December 31,
2025 September 30,
2025 June 30,
2025 (Dollar amounts in thousands) Nonaccrual loans $7,383 $11,070 $11,256 $5,155 $3,745 90 day past due and accruing $- $- $- $- $- Nonperforming loans $7,383 $11,070 $11,256 $5,155 $3,745 Other real estate owned $- $319 $- $- $- Nonperforming assets $7,383 $11,389 $11,256 $5,155 $3,745 Allowance for credit losses - loans $27,941 $27,830 $27,688 $27,475 $26,977 Allowance for credit losses - off balance sheet credit exposures 1,189 1,041 1,035 1,037 1,308 Total allowance for credit losses $29,130 $28,871 $28,723 $28,512 $28,285 Total allowance for credit losses/total loans 1.08% 1.08% 1.06% 1.07% 1.08% Net charge-offs: Quarter-to-date $62 $160 $354 $59 $36 Year-to-date $222 $160 $734 $380 $321 Net charge-offs to average loans Quarter-to-date 0.00% 0.01% 0.01% 0.00% 0.00% Year-to-date 0.01% 0.01% 0.03% 0.01% 0.01% Nonperforming loans/total loans 0.27% 0.42% 0.42% 0.19% 0.14% Allowance for credit losses/nonperforming loans 378.45% 251.40% 245.98% 532.98% 720.35% NPA coverage ratio 378.45% 244.36% 245.98% 532.98% 720.35% (1)Excludes carrying value adjustments of $546 thousand as of June 30, 2026, $1.1 million as of March 31, 2026, $1.7 million as of December 31, 2025, $1.9 million as of September 30, 2025 and $1.9 million as of June 30, 2025 related to interest rate swaps associated with fixed rate loans.
Yield/Rate Average Balance Interest/Dividends Annualized
Yield/RateLoans$2,690,938 $40,839 6.07% $2,617,278 $39,530 6.04%Taxable investment securities 458,152 3,231 2.82% 459,298 2,837 2.47%Tax-exempt investment securities 12,746 67 2.66% 16,682 74 2.25%Fed funds sold & other 170,491 1,510 3.54% 99,964 1,051 4.21%Total Interest Earning Assets 3,332,327 $45,647 5.48% 3,193,222 $43,492 5.45% Nonearning Assets 193,132 175,969 Total Assets$3,525,459 $3,369,191 Interest-Bearing Liabilities: NOW accounts and savings deposits$1,708,669 $9,398 2.20% $1,599,067 $9,479 2.37%Time deposits 666,485 5,034 3.02% 626,036 5,334 3.41%Other borrowed money 187,035 1,894 4.05% 228,708 2,411 4.22%Fed funds purchased & securities sold under agreement to repurchase 14,818 118 3.19% 27,301 272 3.99%Subordinated notes 34,972 285 3.26% 34,856 285 3.27%Total Interest-Bearing Liabilities$2,611,979 $16,729 2.56% $2,515,968 $17,781 2.83% Noninterest-Bearing Liabilities 530,896 505,129 Stockholders' Equity$382,584 $348,094 Net Interest Income and Interest Rate Spread $28,918 2.92% $25,711 2.62% Net Interest Margin 3.48% 3.22% Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts For the Six Months Ended For the Six Months Ended June 30, 2026 June 30, 2025Interest Earning Assets:Average Balance Interest/Dividends Annualized
Yield/Rate Average Balance Interest/Dividends Annualized
Yield/RateLoans$2,695,268 $80,666 5.99% $2,598,011 $76,602 5.90%Taxable investment securities 448,472 6,061 2.70% 458,903 5,576 2.43%Tax-exempt investment securities 12,988 136 2.65% 17,501 152 2.20%Fed funds sold & other 118,892 2,082 3.50% 102,851 2,164 4.21%Total Interest Earning Assets 3,275,620 $88,945 5.44% 3,177,266 $84,494 5.32% Nonearning Assets 192,946 171,324 Total Assets$3,468,566 $3,348,590 Interest-Bearing Liabilities: NOW accounts and savings deposits$1,667,233 $17,929 2.15% $1,524,965 $18,043 2.37%Time deposits 634,430 9,752 3.07% 626,767 10,758 3.43%Other borrowed money 201,463 4,070 4.04% 237,185 4,961 4.18%Fed funds purchased & securities sold under agreement to repurchase 16,051 263 3.28% 27,391 543 3.96%Subordinated notes 34,958 569 3.26% 34,842 569 3.27%Total Interest-Bearing Liabilities$2,554,135 $32,583 2.55% $2,451,150 $34,874 2.84% Noninterest-Bearing Liabilities 534,662 553,686 Stockholders' Equity$379,769 $343,754 Net Interest Income and Interest Rate Spread $56,362 2.89% $49,620 2.48% Net Interest Margin 3.45% 3.13% Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts
2026 March 31,
2026 December 31,
2025 September 30,
2025 June 30,
2025Stockholders' Equity $384,716 $375,948 $370,862 $361,780 $350,792Less Goodwill and Other Intangibles 89,738 90,043 90,347 90,792 91,237Tangible Common Equity $294,978 $285,905 $280,515 $270,988 $259,555 Average Stockholders' Equity $382,584 $376,923 $368,235 $357,394 $348,094Less average Goodwill and Other Intangibles 89,933 90,234 90,629 91,076 91,516Average Tangible Common Equity $292,651 $286,689 $277,606 $266,318 $256,578
President and Chief Executive Officer Farmers & Merchants Bancorp, Inc.
(419) 446-2501
[email protected] M. Berger
Managing Director
SM Berger & Company, Inc.
(216) 464-6400
[email protected]