FMAO Stock Overview
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.
Farmers & Merchants Bancorp Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$26.68|
|52 Week High||US$42.14|
|52 Week Low||US$22.23|
|1 Month Change||-10.74%|
|3 Month Change||-24.61%|
|1 Year Change||17.48%|
|3 Year Change||1.48%|
|5 Year Change||-26.80%|
|Change since IPO||94.04%|
Recent News & Updates
Farmers & Merchants Bancorp: Growing Bank To Consider
Summary We think you should be buying into regional banks into the weakness from the Fed, such as Farmers & Merchants Bancorp. Rising rates are a benefit to banks, but the fear of economic collapse is leading to pain. Growing loans and deposits organically and through acquisitions. Yield approaching 3% which is a decent return while waiting for capital gains. To no one's surprise, this rising rate environment has wreaked havoc on the markets. It has gotten particularly bad the last two weeks. Banks were hit hard the last few months. We think investors should let the market sell off some more here in September and then do some buying. One such place we would like to see our members buying in would be the banks. Regional banks in particular look set up to do well over the next few years after the market adjusts to the actions taken to stymie inflation. We encourage our members and followers to put money into financials, and specifically regional banks on this weakness. A higher rate environment will help banks in 2023 and 2024, and one that we like on a pull back to under $25 is Farmers & Merchants Bancorp (FMAO). Right now, the stock is pulling back slightly with a weak market the last two weeks, but the company has been doing well, despite a tough macro environment in 2022. When Farmers & Merchants reported Q2 earnings, they were impressive despite a tough macro situation in H1 2022. In addition, the bank pays a dividend that it just raised, and the yield will be over 3% at our preferred entry under $25. We think this dividend can be raised further next year as we move forward in a higher rate environment. Wait for a pullback, then buy. Let us discuss the key banking metrics we follow. Q2 headline strength The bank's operational results were mostly better than expected in Q2. Farmers & Merchants Bancorp saw revenues and earnings grow thanks to continued loan growth and deposit strength. The top line expanded from last year. The Q2 revenues were $21.9 million, rising 36.9% in this metric year-over-year, largely due to the completion of both the Perpetual Federal Savings Bank, Inc. and Ossian Financial Services, Inc. acquisitions. Still, organically, there was loan and deposit growth. It should be noted there will be more growth as the company is also purchasing People-s Sydney Financial as well. Earnings were strong as well. While year-over-year revenues ripped higher due to new assets under management, margins were strong, which helped fuel earnings power. Due to strong top line and increases in margins, the bottom line was better than expected. Net income was solid at $8.3 million or $0.44 per share, beating consensus by $0.01. Earnings will now start to grow at a more organic normalized pace, especially as the company fully incorporates recent acquisitions and their operations. The bank has been a serial acquirer the last few years. We think 2023, especially H2 2023 will be even better based on the trends we are seeing for banks, especially in a rising rate environment, once we see peak recessionary pressures abate. Book value suggests waiting for a dip We think you get a better price before entering the stock. While the stock is not expensive relative to tangible book, we would like to see you buy shares at or below book value. Thus, investors should wait, in our opinion, though we are bullish long-term FMAO stock is somewhat expensive at $27 relative to the tangible book value per share at June 30, 2022. Tangible book value per share was $17.43 as of this time. This tangible book value jumped from Q1 2022 and from the start of 2022. There is a strong pipeline of loans as well. Still, this is not an expensive stock on most financial metrics, but let it fall. It is very rare to find regional banks trading near tangible book. On this metric, valuation is a bit more stretched, but on a selloff, we are buyers. Loans and deposit growth As we always stress, growth in loans and deposits are a key metric that we follow. Naturally, with acquisitions, we expected a rise here. But growth on these metrics is key whether the bank is small or large. And this company is not very large numbers wise. The fact is that banks tend to do better when rates rise because the idea is that they should make more money on the margin between what they lend out and what they pay for funds. We are seeing signs of that now. The net interest margin for the quarter increased to 3.14%. Rising margins are a big plus for earnings potential. We want to own these stocks as margins widen. We know there is pressure from inflation and possible rising unemployment, which seems to be a Fed goal, but we suspect these stocks find a bottom soon. On top of the better margins, loans are growing, and not just because of acquisitions. Total loans were a record of $2.035 billion and increased 9.6% from $1.857 billion at the start of the year. Total loans were up 39.5%, or $576.4 million vs. compared to $1.46 billion in Q2 2021. Excellent. Total deposits have grown, which we like, and they grew 20% to $2.675 billion. The bank has strong liquidity with which to lend out to future customers. Farmers & Merchants Bancorp asset health So growing assets is great, but you want to have a sense of the quality of assets. Farmers & Merchants maintained strong asset quality metrics in Q2 2022. The provisions for loan losses creeped up much like other banks in Q2 as the macro situation is so poor. There was a provision of $1.63 million, rising from a year ago when they were $0.641 million. Non-performing loans improved dramatically as well. They were 0.28% in Q2 2022, improving from 0.48% of all loans a year ago, and 0.44% from Q1 2022. We will be closely watching for trends on this key metric. Net charge-offs are basically 0% of all loans, there was a small $26,000 charge off in Q2, and that is a win.
Farmers & Merchants Bancorp (NASDAQ:FMAO) Has Announced That It Will Be Increasing Its Dividend To $0.21
Farmers & Merchants Bancorp, Inc. ( NASDAQ:FMAO ) will increase its dividend on the 20th of October to $0.21, which is...
Farmers & Merchants Bancorp raises dividend by 10.5% to $0.21
Farmers & Merchants Bancorp (NASDAQ:FMAO) declares $0.21/share quarterly dividend, 10.5% increase from prior dividend of $0.19. Forward yield 3.21% Payable Oct. 20; for shareholders of record Sept. 26; ex-div Sept. 23. See FMAO Dividend Scorecard, Yield Chart, & Dividend Growth.
|FMAO||US Banks||US Market|
Return vs Industry: FMAO exceeded the US Banks industry which returned -21.7% over the past year.
Return vs Market: FMAO exceeded the US Market which returned -23% over the past year.
|FMAO Average Weekly Movement||3.8%|
|Banks Industry Average Movement||3.4%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.8%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: FMAO is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: FMAO's weekly volatility (4%) has been stable over the past year.
About the Company
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.
Farmers & Merchants Bancorp Fundamentals Summary
|FMAO fundamental statistics|
Is FMAO overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|FMAO income statement (TTM)|
|Cost of Revenue||US$0|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||2.29|
|Net Profit Margin||31.93%|
How did FMAO perform over the long term?See historical performance and comparison
3.1%Current Dividend Yield
Is FMAO undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 3/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for FMAO?
Other financial metrics that can be useful for relative valuation.
|What is FMAO's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does FMAO's PE Ratio compare to its peers?
|FMAO PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
RCBC River City Bank
WTBA West Bancorporation
SMMF Summit Financial Group
JMSB John Marshall Bancorp
FMAO Farmers & Merchants Bancorp
Price-To-Earnings vs Peers: FMAO is expensive based on its Price-To-Earnings Ratio (11.6x) compared to the peer average (8.5x).
Price to Earnings Ratio vs Industry
How does FMAO's PE Ratio compare vs other companies in the US Banks Industry?
Price-To-Earnings vs Industry: FMAO is expensive based on its Price-To-Earnings Ratio (11.6x) compared to the US Banks industry average (9.7x)
Price to Earnings Ratio vs Fair Ratio
What is FMAO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||11.6x|
|Fair PE Ratio||12.3x|
Price-To-Earnings vs Fair Ratio: FMAO is good value based on its Price-To-Earnings Ratio (11.6x) compared to the estimated Fair Price-To-Earnings Ratio (12.3x).
Share Price vs Fair Value
What is the Fair Price of FMAO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: FMAO ($26.68) is trading below our estimate of fair value ($43.5)
Significantly Below Fair Value: FMAO is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
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How is Farmers & Merchants Bancorp forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?
Future Growth Score1/6
Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: FMAO's forecast earnings growth (9% per year) is above the savings rate (1.9%).
Earnings vs Market: FMAO's earnings (9% per year) are forecast to grow slower than the US market (14.7% per year).
High Growth Earnings: FMAO's earnings are forecast to grow, but not significantly.
Revenue vs Market: FMAO's revenue (3.7% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: FMAO's revenue (3.7% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: Insufficient data to determine if FMAO's Return on Equity is forecast to be high in 3 years time
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How has Farmers & Merchants Bancorp performed over the past 5 years?
Past Performance Score5/6
Past Performance Score 5/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: FMAO has high quality earnings.
Growing Profit Margin: FMAO's current net profit margins (31.9%) are higher than last year (28%).
Past Earnings Growth Analysis
Earnings Trend: FMAO's earnings have grown by 16% per year over the past 5 years.
Accelerating Growth: FMAO's earnings growth over the past year (42.1%) exceeds its 5-year average (16% per year).
Earnings vs Industry: FMAO earnings growth over the past year (42.1%) exceeded the Banks industry 8.6%.
Return on Equity
High ROE: FMAO's Return on Equity (10.7%) is considered low.
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How is Farmers & Merchants Bancorp's financial position? (This company is analysed differently as a bank or financial institution)
Financial Health Score6/6
Financial Health Score 6/6
Allowance for Bad Loans
Low Risk Liabilities
Low Risk Deposits
Level of Bad Loans
Financial Position Analysis
Debt to Equity History and Analysis
Financial Institutions Analysis
Asset Level: FMAO's Assets to Equity ratio (9.5x) is low.
Allowance for Bad Loans: FMAO has a sufficient allowance for bad loans (351%).
Low Risk Liabilities: 93% of FMAO's liabilities are made up of primarily low risk sources of funding.
Loan Level: FMAO has an appropriate level of Loans to Assets ratio (75%).
Low Risk Deposits: FMAO's Loans to Deposits ratio (91%) is appropriate.
Level of Bad Loans: FMAO has an appropriate level of bad loans (0.3%).
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What is Farmers & Merchants Bancorp current dividend yield, its reliability and sustainability?
Dividend Score 4/6
Future Dividend Coverage
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: FMAO's dividend (3.15%) is higher than the bottom 25% of dividend payers in the US market (1.66%).
High Dividend: FMAO's dividend (3.15%) is low compared to the top 25% of dividend payers in the US market (4.57%).
Stability and Growth of Payments
Stable Dividend: FMAO's dividends per share have been stable in the past 10 years.
Growing Dividend: FMAO's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (31.5%), FMAO's dividend payments are well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years or that it will be covered by earnings.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Lars Eller (55 yo)
Mr. Lars B. Eller is President and Chief Executive Officer at Farmers & Merchants Bancorp, Inc. since February 01, 2019. Mr. Eller is President and Chief Executive Officer at Farmers & Merchants State Bank...
CEO Compensation Analysis
Compensation vs Market: Lars's total compensation ($USD717.79K) is below average for companies of similar size in the US market ($USD2.89M).
Compensation vs Earnings: Lars's compensation has been consistent with company performance over the past year.
Experienced Management: FMAO's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.
Experienced Board: FMAO's board of directors are considered experienced (9.8 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: FMAO insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
|23 Sep 22||BuyUS$26,430||Eugene Burkholder||Individual||1,000||US$26.43|
|16 Sep 22||BuyUS$101,536||David Vernon||Individual||3,800||US$26.72|
|13 Sep 22||BuyUS$13,015||Steven Planson||Individual||475||US$27.40|
|06 Sep 22||BuyUS$27,100||Eugene Burkholder||Individual||1,000||US$27.10|
|06 Sep 22||BuyUS$4,067||Steven Planson||Individual||150||US$27.11|
|31 Aug 22||BuyUS$14,005||Steven Planson||Individual||478||US$29.30|
|29 Aug 22||BuyUS$29,330||Eugene Burkholder||Individual||1,000||US$29.33|
|24 Jun 22||BuyUS$102,318||Jo Hornish||Individual||2,997||US$34.14|
|18 Feb 22||BuyUS$100,070||Jo Hornish||Individual||2,967||US$33.95|
|Owner Type||Number of Shares||Ownership Percentage|
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 16.7%.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Farmers & Merchants Bancorp, Inc.'s employee growth, exchange listings and data sources
- Name: Farmers & Merchants Bancorp, Inc.
- Ticker: FMAO
- Exchange: NasdaqCM
- Founded: 1897
- Industry: Regional Banks
- Sector: Banks
- Implied Market Cap: US$345.631m
- Shares outstanding: 12.95m
- Website: https://www.fm.bank
Number of Employees
- Farmers & Merchants Bancorp, Inc.
- 307 North Defiance Street
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|FMAO||NasdaqCM (Nasdaq Capital Market)||Yes||Common Stock||US||USD||Nov 2004|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/25 00:00|
|End of Day Share Price||2022/09/23 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.