Farmers & Merchants Bancshares reported first‑quarter 2026 results that show a 57% year‑over‑year increase in net income to $1.8 million, or $0.56 per share, as the bank’s return on average equity climbed to 11.03% from 8.22% and return on average assets rose to 0.84% from 0.57%.
Net interest income grew 23% to $6.8 million, supported by a 34‑basis‑point lift in the yield on earning assets to 5.37% and a $44.5 million increase in average earning assets to $835 million. Average loans expanded by $44.2 million to $637.9 million. The bank reported no provision for credit losses and maintained zero non‑accrual loans, underscoring strong loan quality amid broader industry charge‑off trends.
Non‑interest income fell to $431 k from $514 k, largely because a $94 k non‑recurring gain was eliminated. Non‑interest expense rose $244 k, driven by higher employee benefits, occupancy costs, and other real‑estate expenses. Income taxes increased to $320 k, reflecting higher pre‑tax earnings and an effective tax rate of 25.8% versus 21.3% in 2025.
Deposits declined $9.2 million to $711.3 million, mainly due to the repayment of $8.5 million in brokered CDs, which reduced the bank’s low‑cost funding base. Liquidity remains robust, with $360 million available from the Federal Home Loan Bank system and other lines. Management highlighted the quarter as a momentum‑building period, emphasizing ongoing technology modernization and talent acquisition to support future growth.
The results illustrate margin expansion driven by higher yields and loan growth, while loan quality remains solid. The deposit outflow could pose a headwind, but the strong liquidity buffer mitigates immediate risk. The focus on technology and talent signals a strategic push toward long‑term efficiency and market expansion.
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