Farmers & Merchants Bancorp Reports $88.5 Million Net Income for Fiscal Year 2024

Farmers & Merchants Bancorp (FMCB) reported a net income of $88.5 million for the fiscal year ending December 31, 2024, a slight increase from $88.3 million in 2023. The company's total revenue, primarily driven by interest income, rose to $271.98 million, up from $253.75 million in the previous year. However, net interest income decreased by 4.04% to $206.68 million, attributed to a significant rise in interest expenses, which surged from $38.37 million in 2023 to $65.30 million in 2024. The increase in interest expenses was largely due to higher rates on deposits, reflecting the broader economic environment influenced by Federal Reserve policies.

In terms of operational changes, FMCB did not record any provision for credit losses in 2024, a notable shift from the $9.4 million provision in 2023. This change was primarily due to improved credit quality and modest loan growth of 0.65%, with total loans and leases held for investment reaching $3.68 billion. Non-interest income also saw a substantial increase of 38.80%, totaling $20.7 million, driven by gains on the sale of securities and increased service charges on deposit accounts.

FMCB's strategic developments included the termination of its Executive Retirement Plan and Senior Management Retention Plan, both effective November 29, 2024, which were replaced by a new restricted stock compensation plan. The company also authorized a new share repurchase program of up to $55 million, following the cancellation of a previous $25 million program. This reflects FMCB's ongoing commitment to returning value to shareholders while managing its capital structure effectively.

The bank's total assets increased to $5.37 billion, up from $5.31 billion in 2023, with total deposits rising to $4.70 billion. The increase in deposits was primarily driven by a growth in non-interest-bearing deposits, which rose by 2.41%. The bank's capital ratios remained strong, with a common equity tier 1 capital ratio of 13.04%, exceeding regulatory requirements for a well-capitalized institution. The company employed 373 full-time equivalent employees as of December 31, 2024, reflecting its commitment to maintaining a skilled workforce to support its operations.

Looking ahead, FMCB anticipates continued challenges from economic conditions, including potential impacts from inflation and interest rate fluctuations. The company remains focused on managing its interest rate risk and maintaining asset quality while exploring opportunities for growth in its lending and deposit activities. The management's outlook suggests a cautious approach, emphasizing the importance of adapting to changing market conditions and regulatory environments.