Farmers & Merchants Q2 net income rises nearly 36%

Overview

• Farmers & Merchants Bancorp Q2 net income rises 35.7% yr/yr to $7.7 mln

• Pretax profit for Q2 beats analyst expectations, per LSEG data

• Net interest margin expands for fourth consecutive qtr, up 51 basis points yr/yr

Outlook

• Company expects continued loan growth and stable asset quality in 2025

• Farmers & Merchants Bancorp anticipates further net interest margin expansion

• Farmers & Merchants Bancorp sees increasing profitability in the back half of 2025

Result Drivers

• NET INTEREST MARGIN - Expansion driven by higher asset yields and favorable rates on new loan originations, per CEO Lars B. Eller

• LOAN GROWTH - Total loans increased by $67.2 mln, primarily due to higher commercial real estate, commercial and industrial, and agricultural loans

• EFFICIENCY IMPROVEMENT - Efficiency ratio improved to 64.93% as revenue growth outpaced rise in noninterest expenses, contributing to core profitability

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for Farmers & Merchants Bancorp Inc is $26.50, about 2.8% above its July 25 closing price of $25.77

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 13 three months ago

Press Release: ID:nGNX8DxRgk