Farmers & Merchants reported record net income of $11.8 million for the second quarter of 2026, up 53.0% year-over-year, producing diluted earnings per share of $0.86 and a return on average assets of 1.34%. Total deposits rose to $2.87 billion and net interest margin expanded to 3.48% in the quarter. The company also noted improved funding costs, stable credit metrics and a 4.0% increase in its annualized dividend.

Financial Highlights

  • Net income (Q2 2026): $11.8 million, up 53.0% year-over-year; Net income (YTD June 30, 2026): $21.4 million versus $14.7 million prior year.
  • Diluted (and basic) earnings per share (Q2 2026): $0.86; YTD EPS: $1.55 versus $1.07 prior year.
  • Net interest margin (Q2 2026): 3.48%; Net interest income before provision: $28.918 million for the quarter.
  • Total deposits (June 30, 2026): $2.869 billion, a 5.9% increase year-over-year.
  • Efficiency ratio (Q2 2026): 56.08%; Tier 1 leverage ratio: 8.99%; Dividend declared (six months ended June 30, 2026): $0.46 per share, a 4.0% increase year-over-year.

Business Highlights

  • Maintained 93 consecutive quarters of profitability and reported the most profitable quarter in the company's 129-year history.
  • Loans, net increased 3.0% year-over-year to $2.704 billion, driven by higher consumer real estate, commercial & industrial, and agricultural loans.
  • Commercial real estate remained a large, diversified component of the loan book, representing 48.4% of total loans with an aggregate CRE balance of $1,308,600 (amounts in thousands).
  • Asset quality remained strong: nonperforming loans were $7.4 million (0.27% of total loans) and net charge-offs to average loans were 0.00% for the quarter.
  • Management emphasized continued investments in people, technology and markets while executing a new three-year strategic plan focused on relationship-based local banking.

Original SEC Filing:

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