Farmers & Merchants Bancorp, Inc. Reports 2025 First-Quarter Financial Results

Rhea-AI Summary

Farmers & Merchants Bancorp reported strong financial results for Q1 2025, marking its 88th consecutive quarter of profitability. The bank's net income increased 29.7% to $7.0 million ($0.51 per share), while total assets grew 3.1% to $3.39 billion.

Key highlights include:

• Total interest income up 6.1% to $41.0 million
• Loans increased 1.6% to $2.58 billion
• Deposits grew 3.0% to $2.70 billion
• Efficiency ratio improved to 66.79%
• Strong asset quality with nonperforming loans at just 0.17%

The bank's commercial real estate portfolio remains well-balanced at 51.3% of total loans, with office exposure at 5.4%. F&M maintained its 30-year tradition of increasing annual cash dividends, declaring $0.22125 per share for Q1 2025. The company's strategic focus on enhancing profitability and operational efficiency positions it well for continued growth in 2025.

Positive

• Net income increased 29.7% to $7.0 million ($0.51 per share vs $0.39 YoY)
• Total interest income up 6.1% to $41.0 million with improved yield on earning assets
• Pre-tax, pre-provision income surged 49.6% to $9.3 million
• Efficiency ratio improved to 66.79% from 74.08%
• Strong asset quality with nonperforming loans at just 0.17% of total loans
• Total deposits grew by $78.9 million (3.0%) to $2.70 billion
• Cost of interest-bearing liabilities decreased to 2.76% from 3.06% YoY
• 88 consecutive quarters of profitability maintained
• 30 consecutive years of increased annual cash dividends

Negative

• Tier 1 leverage ratio remains relatively flat at 8.44% vs 8.40% YoY
• CRE exposure represents 51.3% of total loan portfolio, indicating concentration risk
• Office real estate exposure at 5.4% of loan portfolio amid market concerns

Insights

Financial Banking Analyst

FMAO reports exceptional Q1 with 29.7% net income growth, 49.6% pre-tax income surge, and significantly improved asset quality metrics.

Farmers & Merchants Bancorp has delivered exceptional Q1 2025 results, showcasing substantial improvement across all key banking metrics. The 29.7% net income growth to $7.0 million ($0.51 per share) represents strong execution of the bank's strategic priorities.

The bank's efficiency ratio improved dramatically to 66.79% from 74.08% year-over-year, demonstrating excellent expense management as total revenue increased 16.7% while noninterest expenses grew just 5.2%. This positive operating leverage drove a remarkable 49.6% jump in pre-tax, pre-provision income to $9.3 million.

Net interest margin expanded 43 basis points to 3.03%, reflecting successful loan repricing strategies and disciplined funding cost management. The balance sheet shows quality growth with loans increasing 1.6% to $2.58 billion and deposits growing 3.0% to $2.70 billion.

Asset quality metrics have improved substantially, with nonperforming loans falling to just $4.5 million (0.17% of total loans) compared to $19.4 million (0.76%) a year ago. The allowance for credit losses provides robust coverage at 586.38% of nonperforming loans.

Capital levels remain solid with an 8.44% Tier 1 leverage ratio and 8.5% growth in stockholders' equity to $344.6 million. The bank maintained its 30-year streak of dividend increases with a 0.6% increase in the quarterly dividend to $0.22125 per share.

The bank's strategic deposit initiatives have successfully shifted its mix toward lower-cost core deposits while reducing more expensive time accounts by $19.5 million, contributing to funding cost improvements and better margins.

ARCHBOLD, Ohio, April 28, 2025 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2025 first quarter ended March 31, 2025.

2025 First Quarter Financial and Operating Highlights
(at March 31, 2025 and on a year-over-year basis unless noted)

• 88 consecutive quarters of profitability
• Total interest income increased 6.1% to $41.0 million, driven by a 19-basis point improvement in the yield on earning assets and a higher average loan balance
• Total loans increased by $40.5 million, or 1.6% to $2.58 billion
• Total assets increased by $101.2 million, or 3.1% to $3.39 billion
• Total deposits increased by $78.9 million, or 3.0% to $2.70 billion
• Efficiency ratio improved to 66.79%, compared to 74.08%
• Pre-tax, pre-provision income increased 49.6% to $9.3 million, from $6.2 million
• Net income increased 29.7% to $7.0 million, or $0.51 per basic and diluted share
• Asset quality remains at historically strong levels with nonperforming loans of only $4.5 million and net charge-offs to average loans of 0.01%
• Tier 1 leverage ratio was 8.44%

Lars B. Eller, President and Chief Executive Officer, stated, “2025 is off to a solid start, reflecting the positive impacts our strategic priorities are having on our financial performance. Throughout the first quarter we made progress enhancing profitability, controlling growth, driving innovation, and achieving greater operational efficiency. Most importantly, our strong first-quarter results underscore the excellent execution by our team and F&M’s ongoing commitment to delivering local, personalized financial services to our communities in Ohio, Indiana, and Michigan.”

Mr. Eller continued, “For the first quarter of 2025 our net interest margin grew 43-basis points year-over year to 3.03% and increased 19-basis points from the fourth quarter of 2024. This growth demonstrates the benefits of continued loan repricing, as well as our disciplined approach to new loan originations and strategic efforts underway to improve our cost of funds. Total revenue – defined by net interest income plus noninterest income – increased 16.7% year-over-year, while noninterest expense rose 5.2%. This favorable spread strengthened our efficiency ratio and drove a 49.6% increase in pre-tax, pre-provision income. As we continue to successfully execute against our 2025 strategic priorities, we expect continued year-over-year growth in net income.”

Income Statement
Net income for the 2025 first quarter ended March 31, 2025, was $7.0 million, compared to $5.4 million for the same period last year. Net income per basic and diluted share for the 2025 first quarter was $0.51, compared to $0.39 for the same period last year.

Deposits
At March 31, 2025, total deposits were $2.70 billion, an increase of 3.0% from March 31, 2024. The Company’s cost of interest-bearing liabilities was 2.76% for the quarter ended March 31, 2025, compared to 3.06% for the quarter ended March 31, 2024.

Mr. Eller commented, “We continue to pursue opportunities that optimize our deposit base and grow low-cost checking deposits. As a result, more expensive time-account balances have declined year-over-year by $19.5 million, while total deposits have increased by $78.9 million reflecting growth in lower cost core deposits. These trends have reduced our cost of funds, while improving our loan-to-deposit ratio.”

Loan Portfolio and Asset Quality
“Offices opened in 2023 continue to add new loans and new deposits at a faster pace than our legacy locations, which we believe demonstrates the need for the local community banking services F&M provides. Overall, we are experiencing stable demand across all of our markets, as a result of the addition of proven bankers to our team, our regional structure, new financial products, and growing commercial relationships. Positive demand trends allow us to control growth, expand our yield on loans, and maintain excellent asset quality. Our credit quality remains strong with nonperforming loans to total loans of just 0.17% at March 31, 2025 – the fourth quarter in a row this metric has remained below 0.20%,” continued Mr. Eller.

Total loans, net at March 31, 2025, increased 1.6%, or by $40.5 million to $2.58 billion, compared to $2.54 billion at March 31, 2024. The year-over-year increase was driven primarily by higher agricultural, commercial and industrial, and commercial real estate loans, partially offset primarily by lower consumer, agricultural real estate, and consumer real estate loans. Compared to the quarter ended December 31, 2024, total loans, net at March 31, 2025, increased by 0.8% or $20.0 million.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $4.5 million, or 0.17% of total loans at March 31, 2025, compared to $19.4 million, or 0.76% of total loans at March 31, 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 51.3% of the Company’s total loan portfolio at March 31, 2025. In addition, F&M’s commercial real estate office credit exposure represented 5.4% of the Company's total loan portfolio at March 31, 2025, with a weighted average loan-to-value of approximately 63% and an average loan of approximately $965,366.

F&M’s CRE portfolio included the following categories at March 31, 2025:

CRE Category		Dollar Balance			Percent of CRE Portfolio(*)		Percent of Total Loan Portfolio(*)
Industrial		$	281,484		21.2%		10.9%
Multi-family			217,903		16.4%		8.4%
Retail			213,281		16.1%		8.3%
Hotels			157,139		11.8%		6.1%
Office			139,069		10.5%		5.4%
Gas Stations			70,983		5.3%		2.7%
Food Service			52,827		4.0%		2.0%
Senior Living			31,400		2.4%		1.2%
Development			29,907		2.3%		1.2%
Auto Dealers			27,294		2.1%		1.1%
Other			104,411		7.9%		4.0%
Total CRE		$	1,325,698		100.0%		51.3%

* Numbers have been rounded

At March 31, 2025, the Company’s allowance for credit losses to nonperforming loans was 586.38%, compared to 127.28% at March 31, 2024. The allowance to total loans was 1.07% at March 31, 2025, compared to 1.05% at March 31, 2024. Including accretable yield adjustments, associated with the Company’s prior acquisitions, F&M’s allowance for credit losses to total loans was 1.08% at March 31, 2025, compared to 1.11% at March 31, 2024.

Mr. Eller concluded, “While the near-term economic environment has become more fluid, we believe F&M is in a strong position because of the platform we have built and the strategies we are pursuing to transform our business in 2025. As a result, we continue to believe 2025 will be another good year for F&M.”

Stockholders’ Equity and Dividends
Total stockholders’ equity increased 8.5% to $344.6 million, or $25.12 per share at March 31, 2025, from $317.7 million, or $23.22 per share at March 31, 2024. The Company had a Tier 1 leverage ratio of 8.44%, compared to 8.40% at March 31, 2024.

Tangible stockholders’ equity increased to $263.0 million at March 31, 2025, compared to $256.5 million at March 31, 2024. On a per share basis, tangible stockholders’ equity at March 31, 2025, was $19.17 per share, compared to $18.75 per share at March 31, 2024.

For the three months ended March 31, 2025, the Company declared cash dividends of $0.22125 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 three months ended March 31, 2025, the dividend payout ratio was 43.10% compared to 55.52% 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. (“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 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’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.

Non-GAAP Financial Measures
This press release includes disclosure of financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers & Merchants Bancorp, Inc. believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers & Merchants Bancorp, Inc.’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. A reconciliation of GAAP to non-GAAP financial measures is included within this press release.

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME
(Unaudited) (in thousands of dollars, except per share data)
	Three Months Ended
	March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024
Interest Income
Loans, including fees	$	37,072			$	36,663			$	36,873			$	36,593			$	35,200
Debt securities:
U.S. Treasury and government agencies		2,097				1,882				1,467				1,148				1,045
Municipalities		382				384				387				389				394
Dividends		338				367				334				327				333
Federal funds sold		-				24				7				7				7
Other		1,113				2,531				2,833				2,702				1,675
Total interest income		41,002				41,851				41,901				41,166				38,654
Interest Expense
Deposits		13,988				15,749				16,947				16,488				15,279
Federal funds purchased and securities sold under agreements to repurchase		271				274				277				276				284
Borrowed funds		2,550				2,713				2,804				2,742				2,689
Subordinated notes		284				285				284				285				284
Total interest expense		17,093				19,021				20,312				19,791				18,536
Net Interest Income - Before Provision for Credit Losses		23,909				22,830				21,589				21,375				20,118
Provision for (Recovery of) Credit Losses - Loans		811				346				282				605				(289	)
Recovery of Credit Losses - Off Balance Sheet Exposures		(260	)			(120	)			(267	)			(18	)			(266	)
Net Interest Income After Provision for Credit Losses		23,358				22,604				21,574				20,788				20,673
Noninterest Income
Customer service fees		381				237				300				189				598
Other service charges and fees		1,124				1,176				1,155				1,085				1,057
Interchange income		1,421				1,322				1,315				1,330				1,429
Loan servicing income		762				771				710				513				539
Net gain on sale of loans		284				223				215				314				107
Increase in cash surrender value of bank owned life insurance		244				248				265				236				216
Net gain (loss) on sale of other assets owned		(54	)			22				-				49				-
Total noninterest income		4,162				3,999				3,960				3,716				3,946
Noninterest Expense
Salaries and wages		7,878				7,020				7,713				7,589				7,846
Employee benefits		2,404				2,148				2,112				2,112				2,171
Net occupancy expense		1,199				1,072				1,054				999				1,027
Furniture and equipment		1,278				1,032				1,472				1,407				1,353
Data processing		557				160				339				448				500
Franchise taxes		397				312				410				265				555
ATM expense		491				328				472				397				473
Advertising		503				498				597				519				530
FDIC assessment		465				505				516				507				580
Servicing rights amortization - net		127				244				219				187				168
Loan expense		228				236				244				251				229
Consulting fees		745				242				251				198				186
Professional fees		559				368				453				527				445
Intangible asset amortization		445				446				445				444				445
Other general and administrative		1,484				1,465				1,128				1,495				1,333
Total noninterest expense		18,760				16,076				17,425				17,345				17,841
Income Before Income Taxes		8,760				10,527				8,109				7,159				6,778
Income Taxes		1,808				2,146				1,593				1,477				1,419
Net Income		6,952				8,381				6,516				5,682				5,359
Other Comprehensive Income (Loss) (Net of Tax):
Net unrealized gain (loss) on available-for-sale securities		6,464				(7,403	)			11,664				2,531				(1,995	)
Reclassification adjustment for realized loss on sale of available-for-sale securities		-				-				-				-				-
Net unrealized gain (loss) on available-for-sale securities		6,464				(7,403	)			11,664				2,531				(1,995	)
Tax expense (benefit)		1,358				(1,554	)			2,449				531				(418	)
Other comprehensive income (loss)		5,106				(5,849	)			9,215				2,000				(1,577	)
Comprehensive Income	$	12,058			$	2,532			$	15,731			$	7,682			$	3,782
Basic Earnings Per Share	$	0.51			$	0.61			$	0.48			$	0.42			$	0.39
Diluted Earnings Per Share	$	0.51			$	0.61			$	0.48			$	0.42			$	0.39
Dividends Declared	$	0.22125			$	0.22125			$	0.22125			$	0.22			$	0.22

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (in thousands of dollars, except share data)
	March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024
	(Unaudited)								(Unaudited)				(Unaudited)				(Unaudited)
Assets
Cash and due from banks	$	172,612			$	174,855			$	244,572			$	191,785			$	186,541
Federal funds sold		425				1,496				932				1,283				1,241
Total cash and cash equivalents		173,037				176,351				245,504				193,068				187,782
Interest-bearing time deposits		1,992				2,482				2,727				3,221				2,735
Securities - available-for-sale		438,568				426,556				404,881				365,209				347,516
Other securities, at cost		14,062				14,400				15,028				14,721				14,744
Loans held for sale		2,331				2,996				1,706				1,628				2,410
Loans, net of allowance for credit losses		2,555,552				2,536,043				2,512,852				2,534,468				2,516,687
Premises and equipment		33,163				33,828				33,779				34,507				35,007
Construction in progress		-				-				35				38				9
Goodwill		86,358				86,358				86,358				86,358				86,358
Loan servicing rights		5,805				5,656				5,644				5,504				5,555
Bank owned life insurance		35,116				34,872				34,624				34,359				34,123
Other assets		42,802				45,181				46,047				49,552				54,628
Total Assets	$	3,388,786			$	3,364,723			$	3,389,185			$	3,322,633			$	3,287,554
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing	$	502,318			$	516,904			$	481,444			$	479,069			$	510,731
Interest-bearing
NOW accounts		874,881				850,462				865,617				821,145				829,236
Savings		696,635				671,818				661,565				673,284				635,430
Time		626,450				647,581				676,187				667,592				645,985
Total deposits		2,700,284				2,686,765				2,684,813				2,641,090				2,621,382
Federal funds purchased and securities
sold under agreements to repurchase		27,258				27,218				27,292				27,218				28,218
Federal Home Loan Bank (FHLB) advances		245,474				246,056				263,081				266,102				256,628
Subordinated notes, net of unamortized issuance costs		34,846				34,818				34,789				34,759				34,731
Dividend payable		2,997				2,996				2,998				2,975				2,975
Accrued expenses and other liabilities		33,326				31,659				40,832				27,825				25,930
Total liabilities		3,044,185				3,029,512				3,053,805				2,999,969				2,969,864
Commitments and Contingencies
Stockholders' Equity
Common stock - No par value 20,000,000 shares authorized; issued
14,564,425 shares 3/31/25 and 12/31/24; outstanding 13,718,336 shares 3/31/25 and 13,699,536 shares 12/31/24		135,407				135,565				135,193				135,829				135,482
Treasury stock - 846,089 shares 3/31/25 and 864,889 shares 12/31/24		(10,768	)			(10,985	)			(10,904	)			(11,006	)			(10,851	)
Retained earnings		240,079				235,854				230,465				226,430				223,648
Accumulated other comprehensive loss		(20,117	)			(25,223	)			(19,374	)			(28,589	)			(30,589	)
Total stockholders' equity		344,601				335,211				335,380				322,664				317,690
Total Liabilities and Stockholders' Equity	$	3,388,786			$	3,364,723			$	3,389,185			$	3,322,633			$	3,287,554

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
SELECT FINANCIAL DATA
		For the Three Months Ended
Selected financial data		March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024
Return on average assets			0.85	%			0.99	%			0.78	%			0.69	%			0.66	%
Return on average equity			8.31	%			10.00	%			7.93	%			7.13	%			6.76	%
Yield on earning assets			5.19	%			5.20	%			5.27	%			5.22	%			5.00	%
Cost of interest bearing liabilities			2.76	%			3.01	%			3.21	%			3.18	%			3.06	%
Net interest spread			2.43	%			2.19	%			2.06	%			2.04	%			1.94	%
Net interest margin			3.03	%			2.84	%			2.71	%			2.71	%			2.60	%
Efficiency ratio			66.79	%			59.82	%			67.98	%			69.03	%			74.08	%
Dividend payout ratio			43.10	%			35.75	%			45.99	%			52.35	%			55.52	%
Tangible book value per share		$	17.71			$	17.74			$	17.72			$	16.79			$	16.51
Tier 1 leverage ratio			8.44	%			8.12	%			8.04	%			8.02	%			8.40	%
Average shares outstanding			13,706,003				13,699,869				13,687,119				13,681,501				13,671,166
Loans		March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024
(Dollar amounts in thousands)
Commercial real estate		$	1,325,698			$	1,310,811			$	1,301,160			$	1,303,598			$	1,304,400
Agricultural real estate			215,898				216,401				220,328				222,558				227,455
Consumer real estate			523,383				520,114				524,055				525,902				525,178
Commercial and industrial			278,254				275,152				260,732				268,426				256,051
Agricultural			153,607				152,080				137,252				142,909				127,670
Consumer			60,115				63,009				67,394				70,918				74,819
Other			24,985				24,978				25,916				26,449				26,776
Less: Net deferred loan fees, costs and other (1)			(36	)			(676	)			1,499				(1,022	)			(982	)
Total loans, net		$	2,581,904			$	2,561,869			$	2,538,336			$	2,559,738			$	2,541,367
Asset quality data		March 31, 2025				December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024
(Dollar amounts in thousands)
Nonaccrual loans		$	4,494			$	3,124			$	2,898			$	2,487			$	19,391
90 day past due and accruing		$	-			$	-			$	-			$	-			$	-
Nonperforming loans		$	4,494			$	3,124			$	2,898			$	2,487			$	19,391
Other real estate owned		$	-			$	-			$	-			$	-			$	-
Nonperforming assets		$	4,494			$	3,124			$	2,898			$	2,487			$	19,391
Allowance for credit losses - loans		$	26,352			$	25,826			$	25,484			$	25,270			$	24,680
Allowance for credit losses - off balance sheet credit exposures			1,281				1,541				1,661				1,928				1,946
Total allowance for credit losses		$	27,633			$	27,367			$	27,145			$	27,198			$	26,626
Total allowance for credit losses/total loans			1.07	%			1.07	%			1.07	%			1.06	%			1.05	%
Adjusted credit losses with accretable yield/total loans			1.08	%			1.08	%			1.10	%			1.10	%			1.11	%
Net charge-offs:
Quarter-to-date		$	285			$	4			$	68			$	15			$	55
Year-to-date		$	285			$	142			$	138			$	70			$	55
Net charge-offs to average loans
Quarter-to-date			0.01	%			0.00	%			0.00	%			0.00	%			0.00	%
Year-to-date			0.01	%			0.01	%			0.01	%			0.00	%			0.00	%
Nonperforming loans/total loans			0.17	%			0.12	%			0.11	%			0.10	%			0.76	%
Allowance for credit losses/nonperforming loans			586.38	%			826.70	%			879.37	%			1016.08	%			127.28	%
NPA coverage ratio			586.38	%			826.70	%			879.37	%			1016.08	%			127.28	%
(1) Includes carrying value adjustments of $1.7 million as of March 31, 2025, $1.1 million as of December 31, 2024, $3.0 million as of September 30, 2024, $612 thousand as of June 30, 2024, and $969 thousand as of March 31, 2024 related to interest rate swaps associated with fixed rate loans

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES
(in thousands of dollars, except percentages)
	For the Three Months Ended								For the Three Months Ended
	March 31, 2025								March 31, 2024
Interest Earning Assets:	Average Balance			Interest/Dividends			Annualized Yield/Rate		Average Balance			Interest/Dividends			Annualized Yield/Rate
Loans	$	2,578,531		$	37,072		5.75%		$	2,577,114		$	35,200		5.46%
Taxable investment securities		458,519			2,739		2.39%			384,928			1,686		1.75%
Tax-exempt investment securities		18,310			78		2.16%			21,109			86		2.06%
Fed funds sold & other		105,770			1,113		4.21%			110,388			1,682		6.09%
Total Interest Earning Assets		3,161,130		$	41,002		5.19%			3,093,539		$	38,654		5.00%
Nonearning Assets		166,630								159,240
Total Assets	$	3,327,760							$	3,252,779
Interest Bearing Liabilities:
Savings deposits	$	1,543,665		$	8,564		2.22%		$	1,443,530		$	9,407		2.61%
Other time deposits		627,498			5,424		3.46%			650,580			5,872		3.61%
Other borrowed money		245,734			2,550		4.15%			263,280			2,689		4.09%
Fed funds purchased & securities
sold under agreement to repurchase		27,480			271		3.94%			28,458			284		3.99%
Subordinated notes		34,828			284		3.26%			34,712			284		3.27%
Total Interest Bearing Liabilities	$	2,479,205		$	17,093		2.76%		$	2,420,560		$	18,536		3.06%
Noninterest Bearing Liabilities		509,190								514,986
Stockholders' Equity	$	339,365							$	317,233
Net Interest Income and Interest Rate Spread				$	23,909		2.43%					$	20,118		1.94%
Net Interest Margin							3.03%								2.60%
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

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES
(in thousands of dollars, except percentages)
	For the Three Months Ended March 31, 2025															For the Three Months Ended March 31, 2024
	As Reported					Excluding Acc/Amort					Difference					As Reported					Excluding Acc/Amort					Difference
	$		Yield			$		Yield			$		Yield			$		Yield			$		Yield			$			Yield
Interest Earning Assets:
Loans	$	37,072	5.75	%		$	36,468	5.66	%		$	604	0.09	%		$	35,200	5.46	%		$	34,525	5.36	%		$	675		0.10	%
Taxable investment securities		2,739	2.39	%			2,739	2.39	%			-	0.00	%			1,686	1.75	%			1,686	1.75	%			-		0.00	%
Tax-exempt investment securities		78	2.16	%			78	2.16	%			-	0.00	%			86	2.06	%			86	2.06	%			-		0.00	%
Fed funds sold & other		1,113	4.21	%			1,113	4.21	%			-	0.00	%			1,682	6.09	%			1,682	6.09	%			-		0.00	%
Total Interest Earning Assets		41,002	5.19	%			40,398	5.11	%			604	0.08	%			38,654	5.00	%			37,979	4.92	%			675		0.08	%
Interest Bearing Liabilities:
Savings deposits	$	8,564	2.22	%		$	8,564	2.22	%		$	-	0.00	%		$	9,407	2.61	%		$	9,407	2.61	%		$	-		0.00	%
Other time deposits		5,424	3.46	%			5,424	3.46	%			-	0.00	%			5,872	3.61	%			5,872	3.61	%			-		0.00	%
Other borrowed money		2,550	4.15	%			2,547	4.15	%			3	0.00	%			2,689	4.09	%			2,707	4.11	%			(18	)	-0.02	%
Federal funds purchased and
securities sold under agreement to
repurchase		271	3.94	%			271	3.94	%			-	0.00	%			284	3.99	%			284	3.99	%			-		0.00	%
Subordinated notes		284	3.26	%			284	3.26	%			-	0.00	%			284	3.27	%			284	3.27	%			-		0.00	%
Total Interest Bearing Liabilities		17,093	2.76	%			17,090	2.76	%			3	-0.00	%			18,536	3.06	%			18,554	3.07	%			(18	)	-0.01	%
Interest/Dividend income/yield		41,002	5.19	%			40,398	5.11	%			604	0.08	%			38,654	5.00	%			37,979	4.92	%			675		0.08	%
Interest Expense / yield		17,093	2.76	%			17,090	2.76	%			3	-0.00	%			18,536	3.06	%			18,554	3.07	%			(18	)	-0.01	%
Net Interest Spread		23,909	2.43	%			23,308	2.35	%			601	0.08	%			20,118	1.94	%			19,425	1.85	%			693		0.09	%
Net Interest Margin			3.03	%				2.95	%				0.08	%				2.60	%				2.52	%					0.08	%

Company Contact:	Investor and Media Contact:
Lars B. Eller President and Chief Executive Officer Farmers & Merchants Bancorp, Inc. (419) 446-2501 leller@fm.bank	Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com

FAQ

How much did Farmers & Merchants (FMAO) earnings grow in Q1 2025?

FMAO reported a 29.7% increase in net income to $7.0 million ($0.51 per share) in Q1 2025, compared to $5.4 million ($0.39 per share) in Q1 2024.

What is FMAO's dividend payout ratio for Q1 2025?

FMAO's dividend payout ratio was 43.10% for Q1 2025, significantly improved from 55.52% in the same period last year, with a quarterly cash dividend of $0.22125 per share.

What is the loan quality of FMAO stock in Q1 2025?

FMAO maintained strong loan quality with nonperforming loans at just 0.17% of total loans ($4.5 million) and an allowance for credit losses to nonperforming loans ratio of 586.38% as of March 31, 2025.

How much did FMAO's deposits grow in Q1 2025?

FMAO's total deposits increased by $78.9 million (3.0%) to $2.70 billion as of March 31, 2025, with growth primarily in lower-cost core deposits.

What is FMAO's commercial real estate exposure in 2025?

FMAO's CRE portfolio represents 51.3% of total loans, with the largest exposures in Industrial (10.9%), Multi-family (8.4%), and Retail (8.3%) sectors. Office exposure is limited to 5.4% of total loans.