Farmers & Merchants Bancorp, Inc. Reports 2026 Second-Quarter and Year-to-Date Financial Results

Post Office Box 216

307 North Defiance Street

Archbold, Ohio 43502

Farmers & Merchants Bancorp, Inc. Reports

2026 Second-Quarter and Year-to-Date Financial Results

ARCHBOLD, OHIO, July 27, 2026, Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2026 second quarter and year-to-date ended June 30, 2026, on a consolidated basis.

2026 Second-Quarter Financial and Operating Highlights

(at June 30, 2026, and on a year-over-year basis unless noted) • 93 consecutive quarters of profitability • Net income increased 53.0% to a quarterly record of $11.8 million, or $0.86 per basic and diluted share • Strong profitability drives ROAA to 1.34%, compared to 0.92% • Net charge-offs to average loans of 0.00% • Tier 1 leverage ratio was 8.99% • Cost of interest-bearing liabilities improved to 2.56%, from 2.83% • Net interest margin increased by 26 basis points to 3.48% • Efficiency ratio improved to 56.08%, compared to 64.93% • Second quarter dividend per share increased 4.0% to $0.92 annualized Lars B. Eller, President and Chief Executive Officer, stated, “I am proud to report the second quarter of 2026 was the most profitable quarter in our 129-year history. Our record performance builds upon the strong start we established in the first quarter and demonstrates the meaningful operating leverage across our business. With growing earnings momentum, a solid balance sheet and continued investments in our people, technology, and markets, we believe F&M is well positioned to deliver sustained profitable growth and long-term value for our shareholders.”

Income Statement

Net income for the quarter ended June 30, 2026, was $11.8 million, compared to $7.7 million for the same period last year. Net income per basic and diluted share for the 2026 second quarter was $0.86, compared to $0.56 for the same period last year. Net income for the 2026 first half ended June 30, 2026, was $21.4 million, compared to $14.7 million for the same period last year. Net income per basic and diluted share for the 2026 first half was $1.55, compared to $1.07 for the same period last year.

“Second quarter 2026, net income increased 53% year-over-year and 23% sequentially, reflecting continued net interest margin expansion, strong levels of noninterest income, disciplined expense management, and effective balance sheet execution. Record levels of net income drove a significant expansion in our return on average assets at June 30, 2026, to 1.34%, the highest quarterly level in 23 quarters. We achieved these levels of profitability, while maintaining excellent credit quality, underscoring the strength and consistency of our core banking franchise,” continued Mr. Eller.

Deposits

At June 30, 2026, total deposits were $2.87 billion, an increase of 5.9%, or $159.1 million from June 30, 2025. For the three months ended June 30, 2026, F&M’s cost of interest-bearing liabilities was 2.56%, compared to 2.83% in the same period last year.

Mr. Eller continued: “We continue to see favorable business and economic trends across our Ohio, Indiana, and Michigan markets, supporting higher year-over-year levels of both loans and deposits. We believe this growth reflects the value customers place on our relationship-based approach, local decision-making and ability to deliver responsive, tailored financial solutions. Our deposit growth was also accompanied by improved funding costs, with the cost of interest-bearing liabilities declining 27 basis points from the prior-year period. Together, these trends demonstrate the strength of our local franchise and our continued ability to attract, retain, and deepen high-quality customer relationships across the communities we serve.”

Loan Portfolio and Asset Quality

Total loans, net at June 30, 2026, increased 3.0%, or by $79.5 million to $2.70 billion, compared to $2.62 billion at June 30, 2025. The year-over-year increase was driven primarily by higher consumer real estate, commercial and industrial, and agricultural loans, partially offset by lower commercial real estate, agricultural real estate, and consumer loans.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans continue to normalize on a quarter-over-quarter basis and were $7.4 million, or 0.27% of total loans at June 30, 2026, compared to $11.1 million, or 0.42% of total loans at March 31, 2026, and $3.7 million, or 0.14% of total loans at June 30, 2025.

F&M maintains a well-balanced, diverse, and high performing CRE portfolio. CRE loans represented 48.4% of the Company’s total loan portfolio at June 30, 2026. F&M’s CRE portfolio included the following categories at June 30, 2026 (*):

* Numbers have been rounded; totals may not foot due to rounding; and dollar amounts in thousands.

At June 30, 2026, the Company’s total allowance for credit losses to total loans was 1.08%, compared to 1.08% at June 30, 2025.

Mr. Eller concluded, “Our record second-quarter and year-to-date profitability demonstrate the strength of the platform we have built and the progress we are making across F&M. As we execute our new three-year strategic plan, we remain focused on building upon this momentum, while preserving the relationship-based service, local decision-making and tailored financial solutions that distinguish F&M across our markets. We believe this combination positions us to achieve the next level of profitable growth and create increasing long-term value for our customers, communities, and shareholders.”

Stockholders’ Equity and Dividends

Total stockholders’ equity increased 9.7% to $384.7 million, or $27.92 per share at June 30, 2026, from $350.8 million, or $25.56 per share at June 30, 2025. The Company had a Tier 1 leverage ratio of 8.99% at June 30, 2026, compared to 8.50% at June 30, 2025.

Tangible stockholders’ equity increased to $295.0 million at June 30, 2026, compared to $259.6 million at June 30, 2025. On a per share basis, tangible stockholders’ equity at June 30, 2026, was $21.41 per share, compared to $18.91 per share at June 30, 2025. Tangible stockholders’ equity and tangible book value per share are non-GAAP financial measures; see “Use of Non-GAAP Financial Measures.”

F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 31 consecutive years. For the six months ended June 30, 2026, the Company declared cash dividends of $0.46 per share, representing a 4.0% increase over the same period last year. For the six months ended June 30, 2026, the dividend payout ratio was 29.27% compared to 40.90% for the same period last year.

About Farmers & Merchants Bancorp, Inc.

Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) is a financial holding company headquartered in Archbold, Ohio, and the parent company of The Farmers & Merchants State Bank.

About Farmers & Merchants State Bank:

F&M Bank is a local independent community bank that has been serving its communities since 1897. F&M Bank provides commercial banking, retail banking, and other financial services. Our locations are in Butler, Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood counties in Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben, and Wells counties. The Michigan footprint includes Oakland County, and we have Loan Production Offices in Muncie, Indiana; and Perrysburg and Bryan, Ohio.

Use of Non-GAAP Financial Measures

This release contains certain non-GAAP financial measures, including tangible stockholders’ equity and tangible book value per share. Management believes these measures facilitate period-to-period comparisons of the Company’s performance and provide useful supplemental information to investors; however, they should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP.

Basis of Presentation

The financial information in this release is preliminary, based on management’s current expectations, and is subject to change pending completion of customary quarterly closing processes and review. Unless otherwise indicated, all figures are presented on a consolidated basis and comparisons are to the same period of the prior year. Averages may be annualized. Totals may not foot due to rounding.

Safe Harbor Statement

Farmers & Merchants Bancorp, Inc. (“F&M”) wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995. Statements by F&M, including management’s expectations and comments, may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “seek,” “estimate,” “project,” “target,” “goal,” “will,” “would,” and similar expressions. Actual results could vary materially depending on risks and uncertainties inherent in general and local banking conditions, competitive factors specific to markets in which F&M and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions, capital market conditions, deposit flows and pricing, liquidity and access to wholesale funding, interest rate and asset-liability management, credit quality (including commercial real estate exposures), collateral values, inflation and macroeconomic conditions, changes in laws and regulations (including capital and liquidity requirements and the implementation of “Basel III Endgame”), FDIC assessments, stress testing and supervisory expectations, cybersecurity and third-party/vendor risks, competition and technological change, geopolitical events, severe weather and natural disasters, agricultural sector conditions, the accuracy of CECL estimates and other accounting judgments, capital and dividend restrictions, and other risks described in F&M’s filings with the SEC. F&M undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. For more details, please refer to F&M’s SEC filing, including its most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q. Such filings can be viewed at the SEC’s website, www.sec.gov or through F&M’s website www.fm.bank.

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