2026 third quarter and year-to-date
Filed Oct 22, 2026Farmers & Merchants Bancorp, Inc. reported 2026 third-quarter net income of $11.5 million, or $0.84 per basic and diluted share, with net interest margin of 3.57%.
Third-quarter net income increased 30.3% to $11.5 million, net interest margin increased by 17 basis points to 3.57%, efficiency improved to 58.09%, and deposits increased 7.7%, while asset quality remained low-loss despite nonperforming loans above the prior-year level.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net income, three months ended September 30GAAP | $11.54M | – | 30.3% |
| Basic earnings per share, three months ended September 30GAAP | $ 0.84 | – | – |
| Diluted earnings per share, three months ended September 30GAAP | $ 0.84 | – | – |
| Net income, nine months ended September 30GAAP | $32.91M | – | – |
| Basic earnings per share, nine months ended September 30GAAP | $ 2.39 | – | 39.8% |
| Diluted earnings per share, nine months ended September 30GAAP | $ 2.39 | – | – |
| Total interest income, three months ended September 30GAAP | $46.99M | – | – |
| Total interest expense, three months ended September 30GAAP | $17.05M | – | – |
| Net interest income before provision for credit losses, three months ended September 30GAAP | $29.94M | – | – |
| Provision for credit losses - loans, three months ended September 30GAAP | ($ 104) | – | – |
| Provision for credit losses - off balance sheet credit exposures, three months ended September 30GAAP | $ 479 | – | – |
| Net interest income after provision for credit losses, three months ended September 30GAAP | $29.57M | – | – |
| Total noninterest income, three months ended September 30GAAP | $4.87M | – | – |
| Total noninterest expense, three months ended September 30GAAP | $20.22M | – | – |
| Income before income taxes, three months ended September 30GAAP | $14.21M | – | – |
| Income taxes, three months ended September 30GAAP | $2.68M | – | – |
| Comprehensive income, three months ended September 30GAAP | $6.87M | – | – |
| Return on average assets, three months ended September 30GAAP | 1.29 % | – | – |
| Return on average equity, three months ended September 30GAAP | 11.76 % | – | – |
| Yield on earning assets, three months ended September 30other | 5.61 % | – | – |
| Cost of interest-bearing liabilities, three months ended September 30other | 2.59 % | – | – |
| Net interest spread, three months ended September 30other | 3.02 % | – | – |
| Net interest margin, three months ended September 30other | 3.57 % | – | increased by 17 basis points |
| Efficiency ratio, three months ended September 30other | 58.09 % | – | – |
| Total depositsGAAP | $2.96B | – | 7.7%, or $210.6 million |
| Total loans, netGAAP | $2.74B | – | 3.0%, or by $79.0 million |
| Nonperforming loansGAAP | $6.22M | – | – |
| Nonperforming loans/total loansGAAP | 0.23 % | – | – |
| Allowance for credit losses - loansGAAP | $27.80M | – | – |
| Total allowance for credit losses/total loansGAAP | 1.08 % | – | – |
| Net charge-offs to average loans, quarter-to-dateGAAP | 0.00 % | – | – |
| Total assetsGAAP | $3.60B | – | – |
| Total stockholders' equityGAAP | $386.9M | – | 6.9% |
| Stockholders' equity per shareGAAP | $28.12 per share | – | – |
| Tangible common equitynon-GAAP | $297.5M | – | – |
| Tangible book value per sharenon-GAAP | $ 21.62 | – | – |
| Tier 1 leverage ratioGAAP | 9.14 % | – | – |
Capital returns
- Third quarter regular dividend per share increased 5.5% to $0.96 annualized.
- The Company declared an additional $0.01 per share special dividend, bringing total third-quarter payment to $0.250 per share.
- For the nine months ended September 30, 2026, the Company declared cash dividends of $0.71 per share, representing a 6.0% increase over the same period last year.
- For the nine months ended September 30, 2026, the dividend payout ratio was 29.34% compared to 38.64% for the same period last year.
- The Company continued to actively repurchase shares of F&M common stock.
What drove it
- Loans, including fees interest income was $ 42,061 for the three months ended September 30, 2026, compared to $ 41,013 for the same period last year.
- The year-over-year increase in total loans, net was driven primarily by higher agricultural, commercial and industrial, and consumer real estate loans, partially offset by lower commercial real estate, consumer, and agricultural real estate loans.
- Cost of interest-bearing liabilities was 2.59%, compared to 2.83% in the same period last year.
- Commercial real estate loans represented 48.2% of the Company's total loan portfolio at September 30, 2026.
- Total noninterest income was $ 4,867 for the third quarter, compared to $ 4,357 for the same period last year.
Concerns
- Nonperforming loans were $ 6,219, or 0.23% of total loans, at September 30, 2026, compared to $ 5,155, or 0.19% of total loans, at September 30, 2025.
- Subordinated notes interest expense was $ 480 for the three months ended September 30, 2026, compared to $ 284 for the same period last year.
- Other comprehensive loss was ($ 4,673) for the three months ended September 30, 2026, compared to other comprehensive income of $ 5,222 for the same period last year.
- The financial information is preliminary and subject to change pending completion of customary quarterly closing processes and review.
What to watch
- Loan repricing opportunities extending through 2028, as described by management.
- The Company's ability to maintain the improvement in net interest margin through deposit pricing and funding costs.
- Nonperforming loans, which were $ 6,219 at September 30, 2026.
- Commercial real estate exposure, which represented 48.2% of the total loan portfolio at September 30, 2026.
- Deposit growth and loan growth, including the stated healthy lending pipeline.
Balance sheet and cash flow
- Total cash and cash equivalents were $ 205,811 at September 30, 2026, compared to $ 117,030 at September 30, 2025 and $ 156,390 at June 30, 2026.
- Securities - available-for-sale were $ 455,977 at September 30, 2026, compared to $ 422,773 at September 30, 2025.
- Federal Home Loan Bank advances were $ 167,903 at September 30, 2026, compared to $ 187,913 at September 30, 2025.
- Subordinated notes, net of unamortized issuance costs, were $ 35,000 at September 30, 2026, compared to $ 34,904 at September 30, 2025.
- No operating cash flow or free cash flow was reported.
Analysis
Farmers & Merchants Bancorp reported a strong third quarter. Net income was $11.5 million, compared to $8.9 million for the same period last year, while basic and diluted earnings per share were $0.84 versus $0.64. For the nine months ended September 30, 2026, net income was $32.9 million compared to $23.5 million, and basic and diluted earnings per share were $2.39 compared to $1.71.
Net interest income before provision for credit losses increased to $ 29,940 from $ 26,901 in the third quarter. Net interest margin was 3.57%, compared to 3.40%, while the cost of interest-bearing liabilities declined to 2.59% from 2.83%. The efficiency ratio improved to 58.09% from 63.11%, although total noninterest expense increased to $ 20,218 from $ 19,739.
Balance-sheet growth was led by deposits and loans. Total deposits were $ 2,962,492, up 7.7%, or $210.6 million, from September 30, 2025. Total loans, net were $ 2,737,319, an increase of 3.0%, or $79.0 million. Management attributed the loan increase primarily to agricultural, commercial and industrial, and consumer real estate lending, partly offset by lower commercial real estate, consumer, and agricultural real estate loans.
Credit quality remained low-loss, with quarter-to-date net charge-offs to average loans of 0.00% and allowance for credit losses to total loans of 1.08%. However, nonperforming loans were $ 6,219, or 0.23% of total loans, above $ 5,155, or 0.19%, a year earlier. Commercial real estate loans represented 48.2% of the total loan portfolio, making portfolio performance in that category material to monitor.
Capital levels and distributions strengthened. Total stockholders' equity was $ 386,927 versus $ 361,780 a year earlier, and the Tier 1 leverage ratio was 9.14% versus 8.74%. The Company declared an additional $0.01 per share special dividend, bringing the total third-quarter payment to $0.250 per share, and reported nine-month declared cash dividends of $0.71 per share. No quantitative forward guidance was issued; management emphasized loan repricing opportunities through 2028, deposit-pricing discipline, and the aim to sustain net interest margin improvement.
Management, verbatim
2026 is shaping up to be a historic year of profitability and growth with year-to-date earnings per share increasing 39.8% to $2.39. Throughout the 2026 nine-month period, our team has worked hard to expand our net interest margin, control operating expenses, grow our balance sheet, and maintain excellent asset quality. We are encouraged by the progress we have made across these key priorities and believe we are well positioned to sustain our positive momentum through the remainder of 2026 and into 2027.
Lars B. Eller, President and Chief Executive Officer
We believe F&M is well positioned to navigate a higher interest rate environment and capitalize on opportunities to further expand our net interest margin. With loan repricing opportunities extending through 2028, we believe we have a favorable backdrop to support interest income growth in the coming quarters and years. Combined with our disciplined approach to deposit pricing and funding costs, we remain optimistic about our ability to maintain the significant improvement in net interest margin achieved over the past year.
Lars B. Eller, President and Chief Executive Officer
Our relationship-based banking model and local decision-making continue to differentiate F&M across our Ohio, Indiana, and Michigan markets. We maintain a healthy lending pipeline, reflecting continued opportunities to support businesses and consumers throughout our communities. Our local market knowledge and disciplined underwriting practices allow us to remain selective in pursuing new business while maintaining strong asset quality. We believe this balanced approach to profitable growth, combined with our continued focus on operational efficiency and shareholder returns, positions F&M to build upon our strong financial performance.
Lars B. Eller, President and Chief Executive Officer
Not in the filing
stated, not guessed- Forward quantitative guidance was not provided.
- Previous-release outlook was not provided, so comparison with prior guidance is unavailable.
- Segment revenue and segment profitability were not reported.
- Gross margin was not reported and is not a stated banking performance measure.
- Operating cash flow and free cash flow were not reported.
- Share repurchase dollar amount, share count, and authorization details were not reported.
- A GAAP/non-GAAP adjusted earnings measure was not reported.
- Tax rate was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.