Farmers & Merchants Bancorp reported first‑quarter 2026 results that show a 37.8% year‑over‑year rise in net income to $9.6 million, driven by a 39‑basis‑point expansion in net interest margin to 3.42% and robust non‑interest income. The earnings per share climbed to $0.70 from $0.51 a year earlier, a beat of $0.02 over the $0.68 consensus estimate and essentially in line with the $0.6936 estimate reported by some analysts.
Total deposits grew 4.1% to $2.81 billion, while total loans increased 3.9% to $2.68 billion, reflecting continued demand for the bank’s agricultural and commercial lending franchise. The allowance for credit losses rose modestly to 1.08% of total loans, up from 1.07% a year earlier, and non‑performing loans increased to $11.1 million (0.42% of total loans) from $4.5 million (0.17%) a year prior, a normalization from very low prior levels.
The cost of interest‑bearing liabilities fell to 2.54% from 2.76% a year earlier, a result of a shift in deposit mix and lower market rates that helped preserve margin expansion in a declining rate environment. Management highlighted disciplined cost control and a focus on core deposit growth as key drivers of the results.
The bank maintained its 31‑year dividend streak, raising the quarterly dividend to $0.23 per share, a 4.0% increase from the prior year. CEO Lars B. Eller said, “We are off to an outstanding start in 2026, delivering 37.8% year‑over‑year earnings growth driven by a 39‑basis point expansion in net interest margin, strong levels of noninterest income, and solid balance sheet management.” He added, “Deposit growth in the quarter demonstrates the early success of our new three‑year, growth‑oriented strategic plan, including our renewed focus on strengthening core deposit generation and expanding our treasury management and retail offerings.”
Revenue for the quarter was $32.44 million. Depending on the consensus estimate used, the figure represents either a beat of $3.83 million versus a $28.61 million estimate or a miss of $100,000 versus a $32.54 million estimate. The market reaction was muted, with after‑hours trading showing little movement, indicating that investors viewed the results as largely in line with expectations.
The earnings release underscores the bank’s ability to generate margin expansion in a challenging rate environment while preserving credit quality. The modest rise in non‑performing loans and the slight increase in the allowance for credit losses suggest a cautious approach to credit risk, but the overall balance sheet remains strong. The dividend increase and the continued growth in deposits and loans signal confidence in the bank’s strategic plan and its core agricultural and commercial lending franchise.
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