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Farmers & Merchants Bancorp, Inc. Reports听2025 Second-Quarter and Year-to-Date Financial Results

ARCHBOLD, Ohio, July 28, 2025 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2025 second quarter and year-to-date ended June 30, 2025.

2025 Second Quarter Financial and Operating Highlights
(at June 30, 2025 and on a year-over-year basis unless noted)

• 89 consecutive quarters of profitability
• Net income increased 35.7% to $7.7 million, or $0.56 per basic and diluted share
• Net interest margin expands for fourth consecutive quarter, up 51 basis points year-over-year to 3.22%
• Total loans increased by $67.2 million, or 2.6% to $2.63 billion
• Total assets increased by $23.1 million, or 0.7% to $3.35 billion
• Total deposits increased by $69.2 million, or 2.6% to $2.71 billion
• Efficiency ratio improved to 64.93%, compared to 69.03%
• Asset quality remains at historically strong levels with nonperforming loans of only $3.7 million
• Net charge-offs to average loans of 0.00%
• Tier 1 leverage ratio was 8.50%

Lars B. Eller, President and Chief Executive Officer, stated, 鈥淣et income for the 2025 second quarter was one of the most profitable quarters and our second-strongest second quarter in F&M鈥檚 128-year history. This performance was driven by strong levels of core profitability, continued growth in our net interest margin, and the successful execution of our multi-year strategic plan. Over the past 12 months, we have enhanced our product offerings, simplified account openings, and continued our focus on attracting and developing proven talent across our regions. The positive momentum we are experiencing today is a direct result of these efforts, as well as our team鈥檚 commitment to helping people in our communities live their best lives.鈥�

Mr. Eller continued, 鈥淭otal revenue growth, which is defined by net interest income plus noninterest income, grew by 18.2% year-over-year in the 2025 second quarter, compared to 16.7% in the 2025 first quarter. This growth continues to significantly outpace the rise in noninterest expenses, contributing to a more favorable efficiency ratio and ongoing improvements in core profitability.鈥�

鈥淪upporting this revenue momentum is the ongoing expansion of our net interest margin, which increased 51 basis points year-over-year and 19 basis points from the 2025 first quarter. Net interest margin is benefiting from higher asset yields as existing loans reprice and new originations are booked at more favorable rates. At the same time, our growing customer relationships and a more stable interest rate environment have improved our cost of funds.鈥�

Income Statement
Net income for the 2025 second quarter ended June 30, 2025, was $7.7 million, compared to $5.7 million for the same period last year. Net income per basic and diluted share for the 2025 second quarter was $0.56, compared to $0.42 for the same period last year. Net income for the 2025 first half ended June 30, 2025, was $14.7 million, compared to $11.0 million for the same period last year. Net income per basic and diluted share for the 2025 first half was $1.07, compared to $0.81 for the same period last year.

Deposits
At June 30, 2025, total deposits were $2.71 billion, an increase of 2.6% from June 30, 2024. The Company鈥檚 cost of interest-bearing liabilities was 2.83% for the quarter ended June 30, 2025, compared to 3.18% for the quarter ended June 30, 2024.

Mr. Eller commented, 鈥淲e ended the second quarter with $2.71 billion in deposits, reflecting the success of our efforts to expand relationship-based banking across the Ohio, Indiana, and Michigan markets. Building on recent product enhancements, we are also investing in new tools and capabilities to expand our marketing efforts and better communicate the value of F&M鈥檚 offerings.鈥�

Loan Portfolio and Asset Quality
鈥淟oan demand remains strong, with total loans, net increasing sequentially by $45.0 million, or at a 7.0% annualized rate. We are managing growth with disciplined pricing and remain focused on maintaining strong asset quality. Net charge offs to average loans have been under 0.03% for 17 consecutive quarters, demonstrating the growing sophistication of our credit cultural and risk management capabilities,鈥� continued Mr. Eller.

Total loans, net at June 30, 2025, increased 2.6%, or by $67.2 million to $2.63 billion, compared to $2.56 billion at June 30, 2024. The year-over-year increase was driven primarily by higher commercial real estate, commercial and industrial, and agricultural loans, partially offset primarily by lower agricultural real estate, consumer real estate, and consumer loans. Compared to the quarter ended December 31, 2024, total loans, net at June 30, 2025, increased by 2.5% or $65.0 million.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $3.7 million, or 0.14% of total loans at June 30, 2025, compared to $2.5 million, or 0.10% of total loans at June 30, 2024, and $3.1 million, or 0.12% at December 31, 2024.

F&M maintains a well-balanced, diverse and high performing CRE portfolio. CRE loans represented 51.2% of the Company鈥檚 total loan portfolio at June 30, 2025. F&M鈥檚 CRE portfolio included the following categories at June 30, 2025:

At June 30, 2025, the Company鈥檚 allowance for credit losses to nonperforming loans was 720.35%, compared to 1,016% at June 30, 2024, and up from 586.38% at March 31, 2025. The allowance to total loans was 1.08% at June 30, 2025, compared to 1.06% at June 30, 2024. Including accretable yield adjustments, associated with the Company鈥檚 prior acquisitions, F&M鈥檚 allowance for credit losses to total loans was 1.07% at June 30, 2025, compared to 1.10% at June 30, 2024.

Mr. Eller concluded, 鈥淲e continue to believe F&M is in a strong position because of the platform we have built and the strategies we are pursuing to grow our business profitability. We expect continued loan growth, stable asset quality, and further expansion in our net interest margin to support increasing levels of profitability in the back half of 2025. As a result, we continue to believe 2025 will be another good year for F&M.鈥�

Stockholders鈥� Equity and Dividends
Total stockholders鈥� equity increased 8.7% to $350.8 million, or $25.56 per share at June 30, 2025, from $322.7 million, or $23.59 per share at June 30, 2024. The Company had a Tier 1 leverage ratio of 8.50% at June 30, 2025, compared to 8.02% at June 30, 2024.

Tangible stockholders鈥� equity increased to $259.6 million at June 30, 2025, compared to $229.6 million at June 30, 2024. On a per share basis, tangible stockholders鈥� equity at June 30, 2025, was $18.91 per share, compared to $16.79 per share at June 30, 2024.

For the six months ended June 30, 2025, the Company declared cash dividends of $0.44250 per share, representing a 0.6% increase over the same period last year. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 30 consecutive years. For the six months ended June 30, 2025, the dividend payout ratio was 40.90% compared to 53.89% for the same period last year.

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 Troy, Michigan; Muncie, Indiana; and Perrysburg and Bryan, Ohio.

Safe Harbor Statement
Farmers & Merchants Bancorp, Inc. (鈥淔&M鈥�) wishes to take advantage of the Safe Harbor provisions included in the听Private Securities Litigation Reform Act of 1995. Statements by F&M, including management鈥檚 expectations and comments, may not be based on historical facts and are 鈥渇orward-looking statements鈥� within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21B of the Securities Exchange Act of 1934, as amended. 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, or the effects of the COVID-19 pandemic, and its impacts on our credit quality and business operations, as well as its impact on general economic and financial market conditions. F&M assumes no responsibility to update this information. For more details, please refer to F&M鈥檚 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鈥檚 website, www.sec.gov or through F&M鈥檚 website .