Farmers & Merchants Bancorp (FMAO) AI Stock Analysis

• Market Cap: $355.57M
• Dividend Yield: 3.18%
• Average Volume (3M): 22.27K
• Price to Earnings (P/E): 10.7
• Beta (1Y): 0.97
• Revenue Growth: 6.52%
• EPS Growth: 36.77%
• Country: US
• Employees: 482
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.71
• Shares Outstanding: 13,749,944
• 10 Day Avg. Volume: 19,130
• 30 Day Avg. Volume: 22,273
• PEG Ratio: 0.13
• Price to Book (P/B): 0.92
• Price to Sales (P/S): 1.79
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.57
• Enterprise Value/Revenue: 2.97
• Enterprise Value/Gross Profit: 4.79
• Enterprise Value/Ebitda: 11.68
• 1Y Price Target: $29.00
• Price Target Upside: 12.14% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 2.61
• Revenue Forecast (FY): $129.88M

• Rating: 63 Neutral
• Price Target: $28.00 ▲(8.28% Upside)
• Action: Downgraded Date: 02/28/26
• Date: Action: Downgraded 02/28/26

The score is driven primarily by solid multi-year growth and a stable balance sheet, but it is held back by the significant TTM cash-flow weakening. Supportive valuation (low P/E and a ~3.5% dividend yield) and the new share repurchase program provide offsets, while near-term technical indicators remain soft.

Positive Factors

Consistent multi-year revenue and earnings growth

Sustained revenue and earnings expansion over multiple years indicates durable franchise growth and rising scale in core banking activities. That scale supports diversified net interest and fee income, improves absorption of fixed costs, and underpins investment capacity and resilience over the next several months.

Strengthened capital and expanding asset base

Meaningful equity build alongside asset growth provides regulatory and loss-absorption buffers, enabling measured balance-sheet expansion. Improved equity and scale increase lending capacity, support strategic initiatives, and reduce the likelihood of forced capital actions in the medium term.

Board-authorized share repurchase program

A formal repurchase authorization signals management confidence and disciplined capital allocation. Executed repurchases can sustainably boost EPS and return on equity over the program term, align capital deployment with shareholder value, and provide a flexible tool for long-term capital management.

Negative Factors

Sharp TTM cash-flow deterioration

A collapse in operating cash flow and negative free cash flow weakens earnings quality and reduces internal funding for lending, dividends, or buybacks. Persistent weak cash conversion raises reliance on external funding and creates timing risk for capital plans and liquidity over coming quarters.

Sizable outstanding debt and still-elevated leverage

Although leverage has improved, the remaining debt stock and a debt/equity near 0.8 constrain flexibility and increase interest expense sensitivity. Elevated leverage limits capacity to absorb credit stress and could restrict growth or capital return options if funding costs rise or credit costs spike.

Margins compressed versus peak years

Despite healthy current margins, a clear gap from prior peak profitability suggests structural pressure from funding costs, pricing competition, or mix shifts. Sustained margin compression would dampen return on equity and slow internal capital generation critical for medium-term growth and resilience.

Farmers & Merchants Bancorp Business Overview & Revenue Model

Company Description

Farmers & Merchants Bancorp, Inc. operates as the bank holding company for The Farmers & Merchants State Bank that provides commercial banking services to individuals and small businesses in northwest Ohio and northeast Indiana. The company offers checking, savings, and time deposit accounts; certificates of deposit; and custodial services for individual retirement and health savings accounts. It also provides commercial, agricultural, and residential mortgage, as well as consumer and credit card lending products; loans for farmland, farm equipment, and livestock; operating loans for seeds, fertilizers, and feeds; home improvement loans; and loans for autos, trucks, recreational vehicles, and motorcycles. In addition, the company offers commercial real estate loans, such as lines of credit and machinery purchase loans. Further, it provides automated teller machine or interactive teller machine services; and online and mobile banking, remote deposit capture or electronic deposit processing, and merchant credit card services. It also offers electronic transaction origination, such as wire and automated clearing house file transmittal services. Farmers & Merchants Bancorp, Inc. was founded in 1897 and is headquartered in Archbold, Ohio.

How the Company Makes Money

Farmers & Merchants Bancorp generates revenue primarily through net interest income, which is the difference between the interest earned on loans and the interest paid on deposits. Key revenue streams include interest income from commercial and consumer loans, residential mortgages, and investment securities. Additionally, the bank earns non-interest income through fees for services such as account maintenance, transaction fees, and wealth management services. The company's financial health is bolstered by its relationships with local businesses and community organizations, which contribute to its deposit base and loan demand. Overall, FMAO's earnings are influenced by interest rate trends, loan growth, and efficient management of operating expenses.

Farmers & Merchants Bancorp Financial Statement Overview

Summary

Income statement strength (steady multi-year revenue and earnings growth; still-healthy TTM margins) and a broadly stable balance sheet with moderate, improving leverage are meaningfully offset by a sharp TTM cash-flow deterioration (operating cash flow reported at $0 and negative free cash flow), which raises near-term financial quality risk.

Income Statement

Revenue has grown steadily over the last several years (from $85.3M in 2020 to $188.0M in TTM (Trailing-Twelve-Months)), supporting a clear earnings expansion (net income up to $33.3M in TTM). Profitability remains healthy in TTM with solid operating and net margins (about 25.4% and 17.7%, respectively), but margins are materially below the very strong levels seen in 2021–2022, indicating some pressure on profitability despite higher scale.

Balance Sheet

The company has built equity over time ($249.2M in 2020 to $370.9M in TTM (Trailing-Twelve-Months)) alongside asset growth ($1.91B to $3.43B), which supports balance-sheet expansion. Leverage is moderate for a regional bank, with debt-to-equity improving to ~0.81 in TTM (Trailing-Twelve-Months) from ~1.04 in 2023, though it is still higher than earlier years and total debt remains sizable (~$300.0M). Returns on shareholder capital improved to ~9.3% in TTM (Trailing-Twelve-Months) from ~7.7% in 2024, but remain below the peak level achieved in 2022.

Cash Flow

Cash generation weakened sharply in TTM (Trailing-Twelve-Months): operating cash flow is reported at $0 and free cash flow is negative (-$3.1M), versus strong positive free cash flow in prior years (e.g., $30.6M in 2024 and $38.1M in 2022). Free cash flow fell well below net income in TTM (Trailing-Twelve-Months), which raises questions about the durability and timing of cash conversion relative to reported earnings, even though historical cash flow was generally supportive.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	189.09M	176.56M	152.05M	113.66M	92.17M
Gross Profit	117.75M	98.63M	91.89M	94.70M	81.38M
EBITDA	42.52M	38.95M	34.13M	44.49M	34.49M
Net Income	33.31M	25.94M	22.79M	32.52M	23.50M
Balance Sheet
Total Assets	3.43B	3.36B	3.28B	3.02B	2.64B
Cash, Cash Equivalents and Short-Term Investments	519.32M	601.41M	502.13M	478.32M	576.33M
Total Debt	300.03M	308.09M	328.67M	226.28M	127.80M
Total Liabilities	3.06B	3.03B	2.97B	2.72B	2.34B
Stockholders Equity	370.86M	335.21M	316.54M	298.14M	297.17M
Cash Flow
Free Cash Flow	0.00	30.60M	11.22M	38.07M	32.78M
Operating Cash Flow	0.00	32.47M	22.15M	40.67M	34.74M
Investing Cash Flow	0.00	-44.36M	-194.09M	-389.90M	-265.69M
Financing Cash Flow	0.00	46.04M	229.73M	252.82M	236.07M

Farmers & Merchants Bancorp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 25.86
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FMAO, the sentiment is Negative. The current price of 25.86 is below the 20-day moving average (MA) of 27.64, below the 50-day MA of 26.46, and above the 200-day MA of 25.10, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 42.74 is Neutral, neither overbought nor oversold. The STOCH value of 22.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FMAO.

Farmers & Merchants Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
USCB	76 Outperform	$342.83M	14.23	14.96%	2.10%	15.45%	52.68%
BWFG	71 Outperform	$367.88M	10.49	10.04%	1.66%	2.52%	85.94%
WTBA	69 Neutral	$412.51M	12.71	13.14%	4.39%	4.47%	49.09%
PDLB	68 Neutral	$390.02M	13.65	5.48%	―	16.03%	145.10%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SFST	66 Neutral	$459.63M	14.92	7.65%	―	4.74%	86.27%
FMAO	63 Neutral	$355.57M	10.66	8.98%	3.18%	6.52%	36.77%

Farmers & Merchants Bancorp Corporate Events

Farmers & Merchants Bancorp Announces New Share Repurchase

On January 27, 2026, Farmers & Merchants Bancorp, Inc. announced that its board of directors had authorized a share repurchase program for up to 650,000 shares, representing approximately 4.7% of its outstanding common stock, with purchases permitted in the open market or through privately negotiated transactions from January 27, 2026, through December 31, 2026. The move signals the company’s capital management strategy and may be interpreted as a sign of confidence in its financial position and long-term value, with potential implications for shareholder returns and earnings per share over the duration of the program.

The most recent analyst rating on (FMAO) stock is a Hold with a $26.00 price target. To see the full list of analyst forecasts on Farmers & Merchants Bancorp stock, see the FMAO Stock Forecast page.