Farmers & Merchants Bancorp(FMAO) - 2025 Q4 - Annual Results

Financial Performance - Net income for Q4 2025 reached a record $9.8 million, a 16.8% increase year-over-year, translating to $0.71 per share[5] - Full-year net income increased 28.4% to $33.3 million, or $2.43 per share, compared to $25.9 million in 2024[7] - Net income for the three months ended December 31, 2025, was $9,793,000, an increase of 10.5% compared to $8,854,000 for the previous quarter[25] - Basic earnings per share for the twelve months ended December 31, 2025, was $2.43, compared to $1.90 for the same period last year, representing a growth of 28%[25] - The company declared dividends of $0.23000 per share for the quarter ended December 31, 2025, an increase from $0.22750 in the previous quarter[25] Asset and Loan Growth - Total loans, net rose by 5.9% to $2.71 billion, up from $2.56 billion at the end of 2024[11] - Total loans, including fees, for the three months ended December 31, 2025, were $40,999,000, compared to $36,663,000 in the same period last year, indicating an increase of 12.8%[24] - Loans for the twelve months ended December 31, 2025, reached $2,632,363 thousand, generating interest income of $158,614 thousand at a yield of 6.03%[35] - Loans amounted to $4,611,000,000 with a yield of 6.03% for the twelve months ended December 31, 2025, up from $4,509,000,000 and a yield of 5.94% in 2024, indicating a growth of $102,000,000 and an increase in yield of 0.09%[37] Deposit and Liability Changes - Total deposits increased by 1.6% to $2.73 billion as of December 31, 2025[9] - Total deposits decreased to $2,730,735,000 as of December 31, 2025, from $2,751,911,000 in the prior quarter, a decline of 0.8%[27] - Total liabilities as of December 31, 2025, were $3,063,520,000, an increase from $3,028,972,000 in the previous quarter, reflecting a growth of 1.1%[27] Efficiency and Profitability Metrics - The efficiency ratio improved to 58.38%, down from 59.82% in the previous year[5] - Return on average assets improved to 1.14% for the twelve months ended December 31, 2025, compared to 0.99% for the same period in 2024[30] - Return on average equity rose to 10.55% for the twelve months ended December 31, 2025, up from 9.43% in 2024[30] - The net interest margin was reported at 3.46% for the twelve months ended December 31, 2025, compared to 3.28% in 2024, indicating better profitability on earning assets[30] Interest Income and Expense - Total interest income for the three months ended December 31, 2025, was $44,566,000, an increase from $41,851,000 for the same period in 2024, representing a year-over-year growth of 6.5%[24] - Total interest expense for the twelve months ended December 31, 2025, was $69,252,000, down from $77,660,000 in 2024, representing a decrease of 10.9%[24] - Interest expense for the twelve months ended December 31, 2025, was $252,000,000, maintaining a yield of 2.80%, consistent with the previous year[37] Credit Quality and Provisions - Nonperforming loans were $11.3 million, or 0.42% of total loans, compared to $3.1 million, or 0.12% of total loans in 2024[12] - Provision for credit losses on loans for the three months ended December 31, 2025, was $567,000, up from $346,000 in the same period last year, indicating a 64% increase in provisions[24] - The allowance for credit losses on loans stood at $27.69 million as of December 31, 2025, up from $25.83 million a year earlier, reflecting increased provisions for potential loan losses[31] Strategic Initiatives - A new three-year strategic plan is being developed to drive sustainable performance and create enduring value for shareholders[15]