Farmers & Merchants Bancorp Reports 29.7% Increase in Net Income for Q1 2025

Farmers & Merchants Bancorp, Inc. reported a net income of $6.95 million for the first quarter of 2025, reflecting a 29.7% increase from $5.36 million in the same period last year. This growth was primarily driven by a rise in net interest income, which increased by $3.8 million, or 18.8%, compared to the first quarter of 2024. The company's net interest margin improved to 3.03%, up from 2.60% a year earlier, attributed to a reduction in funding costs and an increase in asset yields. Interest income from loans rose to $37.07 million, a 5.3% increase year-over-year, while total interest income reached $41 million, up from $38.65 million in the prior year.

In terms of operational performance, total loans increased by $19.4 million, or 0.08%, from December 31, 2024, to $2.58 billion as of March 31, 2025. The growth was driven by a 4.1% increase in commercial and industrial loans, alongside a 20.3% rise in non-real estate agricultural loans. However, consumer loans saw a significant decline of 19.6%. The company’s allowance for credit losses rose to $26.35 million, reflecting a provision for credit losses of $811,000 during the quarter, compared to a recovery of $289,000 in the same quarter last year.

Farmers & Merchants Bancorp has also made strategic moves to enhance its market position. The company continues to focus on expanding its core deposit base and has introduced new products, including a low-income home buyer mortgage program. The bank's insurance agency, established in November 2023, aims to provide additional services to its customers. The company operates 37 full-service banking offices across Ohio, Indiana, and Michigan, and has seen a steady increase in customer engagement, particularly in its agricultural and commercial sectors.

Looking ahead, the company remains optimistic about its financial outlook, anticipating continued improvement in net interest income and overall profitability. Management expects that loan repricing and growth in low-cost core deposits will further enhance the net interest margin throughout 2025. The bank is also closely monitoring economic conditions, including inflation and potential impacts from trade policies, which could affect its borrowers and overall credit quality. The company maintains a strong capital position, with a Tier 1 leverage ratio well above regulatory requirements, positioning it favorably for future growth and stability.