The sharp deterioration in the efficiency ratio (55.49% vs 46.48%) and the reliance on a one-time $5.0M tax benefit to deliver record earnings warrant close monitoring of expense trends in Q4. Loan growth is solid but deposit growth lagged, pushing the loan-to-deposit ratio to 75.70% from 74.16% a year ago.
Price Chart
Executive Summary
Farmers & Merchants Bancorp reported record Q3 2026 net income of $25.1M, up 5.75% YoY, driven by net interest income growth of 5.25% to $58.3M and a 4.24% NIM. The efficiency ratio deteriorated sharply to 55.49% from 46.48% a year ago due to higher compensation and professional fees, partially offset by a $5.0M tax benefit. Capital ratios strengthened further, with a CET1 ratio of 14.91% and a total risk-based capital ratio of 16.39%.
Key Financial Metrics
Key Facts
- Record Q3 2026 net income of $25.1M, up 5.75% YoY from $23.7M
- Diluted EPS of $36.75, up 8.34% YoY from $33.92
- Net interest income of $58.3M, up 5.25% YoY; NIM expanded to 4.24% from 4.16%
- Efficiency ratio deteriorated to 55.49% from 46.48% YoY, driven by higher salaries and professional fees
- Income tax expense fell to $2.2M from $8.9M YoY due to a $5.0M benefit from reversal of non-deductible items
- Total loans grew 3.77% YoY to $3.74B; deposits grew 1.74% to $5.0B
- Tangible book value per share rose 6.27% YoY to $932.14, but fell from $963.82 at Q2 2026 due to AOCI losses
- Company repurchased 4,714 shares at a cost of $6.7M during the quarter
Financial Impact
Record quarterly net income of $25.1M, up $1.4M YoY; net interest income up $2.9M YoY; non-interest expense up $6.9M YoY; tax benefit of $5.0M
Risk Factors
- Efficiency ratio deterioration to 55.49% from 46.48% YoY signals expense creep that could pressure future earnings
- Tangible book value declined sequentially from $963.82 to $932.14 due to AOCI losses from rising rates
- Non-interest expense up $6.9M YoY, primarily from salaries, benefits, and consulting fees
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001140361-26-040188 |
| Document: ef20083984_8k.htm | 0001140361-26-040188 |
| Document: 0001140361-26-040188-index-headers.html | 0001140361-26-040188 |
| Document: 0001140361-26-040188-index.html | 0001140361-26-040188 |
| Document: 0001140361-26-040188.txt | 0001140361-26-040188 |
| 8-K Data (Synthetic) | 0001140361-26-040188 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 21, 2026 5d ago | 8-K | $1,468.99 | awaiting T+60 | — | $1,452.47 (−1.12%) |
Oct 20, 2026 6d ago | 8-K | $1,445.00 | awaiting T+60 | — | $1,452.47 (+0.52%) |
Jul 23, 2026 13w ago | 8-K | $1,378.00 $1,437.10 | ▲ +4.29% | ▲ +0.09% | $1,452.47 (+5.40%) |
Jun 11, 2026 19w ago | 8-K | $1,321.00 $1,435.00 | ▲ +8.63% | ▲ +5.10% | $1,452.47 (+9.95%) |
May 12, 2026 23w ago | 8-K | $1,310.01 $1,380.00 | ▲ +5.34% | ▲ +0.90% | $1,452.47 (+10.87%) |
Apr 20, 2026 27w ago | 8-K | $1,225.00 $1,350.00 | ▲ +10.20% | ▲ +3.31% | $1,452.47 (+18.57%) |
US Market Status
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