Farmers & Merchants Bancorp (FMAO) investor relations material

Executive summary

• Achieved robust asset and net income growth, with net income for the first half of 2026 up 45.8% year-over-year to $21.4 million and record quarterly net income of $11.8 million, supported by geographic expansion, disciplined acquisitions, and operational efficiency.

• Opened a second full-service office in Michigan, expanding to 38 locations across Ohio, Indiana, and Michigan.

• Developed a new three-year strategic plan focused on deposit growth, market expansion, operational efficiency, and leadership development.

• Maintained 93 consecutive quarters of profitability, with strong operating leverage and disciplined expense management.

• Noninterest income increased 28.8% year-over-year, led by gains on loan sales and higher bank-owned life insurance income.

Financial highlights

• Total assets reached $3.50 billion as of June 30, 2026, up 4.7% year-over-year and a 12.5% CAGR over five years.

• Net interest income after provision for credit losses rose 14.3% year-over-year to $28.6 million in Q2 2026; net interest margin improved to 3.48%.

• Total loans increased 3.0% year-over-year to $2.70 billion, driven by growth in consumer real estate, commercial, and agricultural loans.

• Deposits grew 46.3% from 2021 to 2025 and 5.9% year-over-year to $2.87 billion, with Ohio and Indiana markets seeing 48.1% and 31.3% increases, respectively.

• Annual dividend per share increased to $0.92 in 2026, marking 31 consecutive years of dividend growth.

Outlook and guidance

• Strategic priorities for 2026 include enhancing profitability, accelerating new office productivity, leveraging loan repricing, and focusing on low-cost deposit growth.

• Management expects continued improvement in net interest margin as more loans reprice over the next 18 months and ongoing deposit growth.

• Plans to optimize loan processes, upgrade digital account opening, pursue new products, and invest in people, technology, and markets.

• Consulting fees may rise in the second half of 2026 due to upcoming projects.