Farmers & Merchants Bancorp (FMCB) Reports Record Fourth Quarter and Annual 2025 Financial Results

Core Insights - Farmers & Merchants Bancorp reported record annual net income of $93.6 million for 2025, a 5.8% increase from $88.5 million in 2024, with diluted earnings per share rising to $133.96, up 10.69% from the previous year [2][4][5] Financial Performance - Net interest income for 2025 was $219.2 million, an increase of 6.04% from $206.7 million in 2024, driven by a rise in interest income and a decrease in interest expense [6][26] - Non-interest income rose to $23.6 million, up from $20.7 million in 2024, attributed to net gains on leases and deferred compensation benefits [7] - Non-interest expenses increased to $110.5 million, primarily due to higher employee compensation and benefits, but the efficiency ratio improved to 45.52% from 46.24% in 2024 [8] Balance Sheet Highlights - Total assets grew by 5.96% to $5.7 billion as of December 31, 2025, compared to $5.4 billion in 2024 [9][26] - Total deposits increased by $278.7 million, or 5.93%, reaching $5.0 billion at year-end 2025 [9][26] - Gross loans and leases decreased slightly to $3.7 billion, down 0.62% from the previous year [9][10] Credit Quality - The allowance for credit losses on loans and leases increased to $76.4 million, or 2.08% of total loans, reflecting ongoing economic stress in certain sectors [11] - Non-performing loans and leases remained low at 0.02% of total loans, indicating strong credit quality [10][11] Capital Position - The total risk-based capital ratio improved to 15.29%, with a common equity tier 1 ratio of 13.81% as of December 31, 2025, both indicating a strong capital position [12][27] - Tangible book value per share increased to $907.24, up 13.33% from $800.52 in 2024 [12][13] Strategic Focus - The company emphasized maintaining strong liquidity with $1.8 billion in cash and investment securities and a conservative loan-to-deposit ratio of just under 74% [3][4] - The focus on client relationships and disciplined growth has contributed to consistent increases in net income and earnings per share over the past eight years [5]