F&M Bancorp Caps Record Year Amidst Strategic Expansion

ARCHBOLD, OH – February 12, 2026 – Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) announced record-breaking financial results for 2025, cementing a year of significant growth driven by core operational strength and strategic expansion across the Midwest. The Archbold-based financial holding company reported historic highs in quarterly earnings, total assets, and stockholders' equity, signaling strong momentum heading into 2026.

For the full year, net income surged 28.4% to $33.3 million, or $2.43 per share. The fourth quarter was particularly robust, with net income climbing 16.8% year-over-year to a record $9.8 million, or $0.71 per share. These figures were bolstered by a significant 62-basis-point increase in the net interest margin to 3.46% and an improved efficiency ratio of 58.38%, reflecting the bank's ability to manage costs while growing revenue.

"I am proud to report that F&M ended 2025 with record quarterly earnings per share, record stockholders’ equity, and record total assets, highlighting F&M’s operating strength and financial consistency," stated Lars B. Eller, President and Chief Executive Officer. "Our performance throughout the year and in the fourth quarter reflects sustained organic growth and the continued expansion of our local market presence across Ohio, Indiana, and Michigan."

Record Profits and Shareholder Returns

A key theme of the 2025 results is the substantial value returned to shareholders. The company's stockholders' equity reached a record $370.9 million, a 10.6% increase from the previous year. This was complemented by a 15.0% rise in tangible book value per share to $20.40.

F&M Bancorp also extended its long-standing tradition of rewarding investors, marking its 31st consecutive annual increase in its regular dividend payment. The company declared a fourth-quarter dividend of $0.23 per share, a 4.0% increase over the same period last year, reinforcing its reputation as a reliable dividend-paying stock. For the full year, the dividend payout ratio was a healthy 36.67%.

Eller noted that the bank's profitability has returned to levels not seen since the pandemic era, but with a crucial difference. “Profitability has returned to levels not seen since the period of extraordinary industry support during the COVID era, this time driven entirely by core operating performance, prudent balance sheet management, and sustainable growth across our markets,” he commented. This performance, he added, "provide[s] confidence in our ability to deliver attractive, consistent returns."

A Closer Look at Asset Quality

While the headline numbers paint a picture of robust health, a deeper dive into the balance sheet reveals a more nuanced story regarding asset quality. Nonperforming loans (NPLs) as a percentage of total loans rose to 0.42% at the end of 2025, a noticeable increase from 0.12% at the end of 2024. This uptick has caught the attention of market watchers, with some analysts advising investors to "track asset quality" closely. The bank's allowance for credit losses to total loans stood at 1.02%, slightly down from 1.07% a year prior.

However, the company's report also includes data suggesting improved credit trends in other areas. The average percentage of loans over 30 days past due for the full year actually decreased, falling to 0.26% in 2025 from 0.46% in 2024. This could indicate that while a few larger loans may have moved into nonperforming status, the overall flow of new delinquencies has slowed.

Financial analysts have maintained a cautious but stable outlook, with a consensus "Hold" rating on FMAO stock and an average 12-month price target near $27.00. The bank's full-year return on average assets (ROA) of 0.99%, while a significant improvement from 0.78% in 2024, sits slightly below the 1.27% average reported for community banks in the FDIC's Q3 2025 profile, providing a broader industry context for its performance.

Strategic Growth in the Midwest

The bank's strong earnings were underpinned by solid growth in its loan portfolio, which increased by 5.9% to $2.71 billion. This growth was primarily fueled by commercial real estate, agricultural loans, and consumer real estate lending across its tri-state footprint. Total assets also ticked up by 2.1% to $3.43 billion.

A cornerstone of F&M's strategy has been targeted market expansion. In August 2025, the company opened a new full-service office in Troy, Michigan, its second in the state. The move into Troy appears strategically sound, as the city is a major business and commercial hub in Oakland County. Recognized by U.S. News & World Report as one of the nation's "Best Places to Live," Troy is home to 6,000 businesses and boasts one of the lowest tax rates in the county, creating a fertile environment for a community-focused bank to attract both commercial and retail customers.

"Throughout 2025, we made targeted investments to strengthen F&M’s operating capabilities and support both current performance and future growth, while maintaining disciplined expense management," Eller said, highlighting the expansion into Troy as a key part of this strategy.

Charting the Course for 2026 and Beyond

Looking ahead, F&M Bancorp is not resting on its laurels. Eller revealed that the company began developing a new three-year strategic plan in the fall of 2025, intended to guide its next phase of growth and shareholder value creation.

"F&M enters 2026 from a position of strength, supported by a sound balance sheet, a scalable operating model, and a culture focused on long-term value creation," Eller concluded. "As we look ahead, we are approaching growth intentionally, allocating capital thoughtfully, investing in our business, and expanding within our markets in line with our strategic priorities."

The forthcoming plan is expected to be "anchored in our community-banking heritage and informed by the opportunities across Ohio, Indiana, and Michigan." While specific details have not yet been released, the focus on sustainable performance and leveraging its strong regional presence suggests that F&M is positioning itself to build upon its record-setting 2025 for years to come. The plan will serve as a critical roadmap for navigating the competitive landscape and continuing to deliver on its promise of consistent, long-term growth.