Farmers & Merchants Bancorp Tops 2025 Profit Record, Shareholders Approve Directors and Say-on-Pay

Shareholder votes: All 11 director nominees were elected and shareholders ratified the non-binding "say on pay" and the appointment of Plante Moran as auditor, with the company to file a Form 8-K confirming results.

Record 2025 performance: Net income reached a company record, rising 28.4% versus 2024, driven by higher net interest income and a 56 basis-point improvement in net interest margin, with net interest income after provisions up 19.3% year over year.

Dividends and strategic outlook: FMAO increased its annual dividend twice in 2025—part of a 31-year streak of annual dividend increases—and launched a three-year plan focused on deposit growth, selective M&A, revenue diversification, and digital/AI-driven efficiency to sustain margin improvement into 2026.

Farmers & Merchants Bancorp (NASDAQ:FMAO) held its virtual annual shareholder meeting on April 20, 2026, where shareholders voted on the election of directors, executive compensation, and the appointment of its independent auditor. Following the formal business, management presented financial and operational highlights from 2025 and discussed priorities and expectations for 2026.

Annual meeting votes and governance items

During the formal portion of the meeting, the company reported that 13,748,074 shares of common stock were eligible to vote as of the Feb. 27, 2026 record date, and the inspector of election confirmed a quorum was present.

Shareholders voted on three proposals. Marilyn Johnson, serving as inspector of election, delivered preliminary results showing:

Proposal 1: All 11 nominees were elected as directors.

Proposal 2: The non-binding advisory “say on pay” vote was ratified.

Proposal 3: The non-binding advisory vote to ratify Plante Moran, PLLC as the independent registered public accounting firm for fiscal 2026 was ratified.

The company said it would file a Form 8-K with the SEC within four business days to confirm the vote results.

Chief Financial Officer Barbara Britenriker told shareholders her presentation reflected “major financial improvement over the course of 2025” and “the momentum we are bringing into 2026.” She said 2025 net income was the highest in company history, ending “28.4% better than 2024,” and attributed the largest contributor to improved net income to higher net interest income.

Britenriker said total assets grew 2.1% year over year, while the company’s five-year compound annual growth rate (CAGR) for assets was 12.5%, growing from $1.9 billion to $3.4 billion. She added that net interest income after provision for credit losses increased 19.3% from 2024 to 2025 and rose from $53 million to $102 million over five years, which she described as profit enhancement outpacing asset growth.

On balance sheet composition, Britenriker said 2025 asset growth was driven by a 6% year-over-year increase in loans, with the largest portfolio increases “in all areas of real estate, commercial, agriculture, and consumer,” along with commercial and industrial and agricultural loans, partially offset by lower consumer loans.

She highlighted that net interest margin improved 56 basis points in 2025, totaling $17.8 million, noting that “both components of the calculation improved” as asset yield rose while the cost of interest-bearing liabilities fell. She also discussed operating efficiency, saying the operating efficiency ratio improved from 68.4% in 2023 to 61.99% in 2025, with a goal of keeping the ratio “in the low 60s” and a longer-term goal “of it beginning with a five.”

Dividend record and shareholder returns

Britenriker emphasized the company’s dividend history, saying Farmers & Merchants has increased its annual cash dividend for 31 consecutive years. She told shareholders the company increased the regular dividend twice in 2025, once in the third quarter and again with the fourth-quarter declaration.

Chief Executive Officer Lars Eller reiterated the dividend milestone and said 2025 performance enabled dividend increases in the third and fourth quarters. He added that the annual dividend per share increased 2%, “from $0.8825 to $0.90 per share last year.” In response to a shareholder question about dividend policy, Eller described the company’s shareholder base as roughly 25% institutional, with the remainder retail investors, which he said makes dividends and dividend growth especially important. He said payout guidelines were “around 40%-70%” for the bank and “35%-45%” at the Bancorp level, with the lower Bancorp percentage intended to leave capacity for potential acquisitions, while emphasizing the company does not jeopardize its capital position.

Britenriker also cited total shareholder return comparisons, stating that from Dec. 31, 2011 to Dec. 31, 2025, FMAO produced a return that was 17.5% higher than the KBW Regional Banking Index, based on Bloomberg calculations using a $100 initial investment.

Operations, expansion, and a new three-year strategic plan

Eller said 2025 momentum was supported by “sustained organic growth and continued expansion” across Ohio, Indiana, and Michigan, and that the company ended 2025 with record quarterly earnings per share, record stockholders’ equity, and record total assets. He said profitability returned to levels not seen since the COVID-era support period, but “this time driven entirely by core operating performance.”

Among operational updates, Eller said:

The company expanded its treasury management team with two experienced professionals, each generating “more than $40 million in deposits” in their first year.

The home loan group funded “more than 1,000 mortgages,” up 22% from 2024, and improved gain on sale to “more than $600,000.”

A swap program generated “more than $2 million” in 2025 revenue.

F&M Investments had its best year, surpassing $400 million in assets under management and producing $1.35 million in annual revenue.

The bank opened over 7,500 new checking accounts, including 720 in December.

A new Troy, Michigan branch generated approximately $19 million in loans and $3 million in deposits since opening in August.

Eller also outlined technology investments, including automation in deposit operations and a rebuilt account-opening platform that allows customers to open and fund an account in under five minutes, compared with 15–20 minutes historically.

On leadership and governance, Eller said Ahmed Alomari joined the board in June 2025 and cited his technology leadership background as aligned with digital transformation and cybersecurity priorities. Eller also described a board leadership transition in which Andrew Briggs stepped down as chairman and Kevin J. Souder assumed the role. He said director Jo Ellen Hornish resigned after 12 years of service.

Looking ahead, Eller said management and the board completed a new three-year strategic plan with four pillars: growing deposits to fund loan growth, achieving sustainable and profitable growth through expansion and selective M&A with revenue diversification, improving operational efficiency through digital advancement and automation (including AI and cybersecurity), and fostering workplace excellence through leadership development and employee engagement.

Management’s outlook themes for 2026

During the Q&A, Britenriker said management expects to maintain margin improvements using pricing models and cited “large repricing opportunities on our loans in 2026 and 2027.” She added that even if rates are cut, the company could “handle improvement or still see improvement for at least the next 150 basis points drop,” and said the year began with a higher margin than the prior year due to progress made throughout 2025. Britenriker also pointed to expected growth in non-interest income through F&M Investments, treasury management, and “new services and acquisitions that may come about in 2026.”

On asset quality, Britenriker said the company is not changing underwriting standards and does not feel pressure to ease standards to generate loans. While she declined to provide a specific expected normalization level for non-performing loans, she said the company’s credit team stress-tests cash flows under different scenarios to identify issues early and expressed confidence that loan structuring would help prevent large losses even if asset quality ratios rise.

Eller said the company expects continued yield expansion in the loan portfolio as loans originated in a lower-rate environment mature and reprice, and said the bank’s approach to deposit pricing provides flexibility if the Federal Reserve reduces rates, creating opportunities to optimize funding costs.

About Farmers & Merchants Bancorp (NASDAQ:FMAO)

Farmers & Merchants Bancorp (NASDAQ:FMAO) is the bank holding company for Farmers & Merchants Bank of Central California, a community-focused institution headquartered in Los Banos, California. The bank traces its roots to 1916 and has grown to serve individuals, businesses and agricultural enterprises throughout the western San Joaquin Valley. Operating with a commitment to local decision-making, the company emphasizes personalized service and close ties to the communities in which it operates.

Through its banking subsidiary, Farmers & Merchants offers a comprehensive suite of financial products and services, including checking and savings accounts, certificates of deposit, online and mobile banking platforms, and merchant services.