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Farmers & Merchants Bank

Waterloo, AL · Cert 1745

State charter, non-member · FDIC · 2 branches

Q2 2026

$98.3MAssets
$5.3MLoans
$86.5MDeposits
$11.3MEquity
Loan mix
27%RE $1.1M40%C&I $1.6M32%Consumer $1.3MQ2 2025Q2 2026
Deposit mix
77%Interest-bearing $66.5M23%Noninterest $20.0MQ2 2025Q2 2026

NIM

3.01%Q2 ’243.07%Q2 ’253.17%Q2 ’26+28%+25%

Non-interest income vs. expense

0.81%Q2 ’240.87%Q2 ’251.22%Q2 ’26-7%+85%

Market Position · Florence-Muscle Shoals, AL · 2026 SOD (annual) · 2.2% share · #11 of 16 inst. · $0.1B of $3.9B

Executive Summary

  • Earnings: ROA of 0.52%, up 4 bps year over year; NIM at 1.48%.
  • Asset quality: problem loans at 1.33% of loans (-52 bps YoY), with net recoveries of 0.60%.
  • Capital: tier 1 leverage ratio of 17.03%, down 54 bps from a year ago.
  • Funding: loans stand at 6.16% of deposits as of Q2 2026.

Financial Results

Return on Assets (quarter, annualized)

0.52%+4 bps YoY

Net Interest Margin (quarter, annualized)

1.48%+30 bps YoY

Efficiency Ratio (quarter, annualized)

82.40%+1,986 bps YoY

Tier 1 Leverage Ratio

17.03%-54 bps YoY

Discrete quarter, annualized.

MetricQ2 2025Q3 2025Q4 2025Q1 2026Q2 2026YoY ΔTrend
Earnings
Return on Assets0.48%0.47%-0.66%0.65%0.52%+4 bps
Return on Equity4.64%4.29%-5.77%5.74%4.58%-7 bps
Net Interest Margin1.18%1.27%1.30%1.44%1.48%+30 bps
Efficiency Ratio62.54%64.36%151.60%57.89%82.40%+1,986 bps
Non-Interest Burden0.66%0.78%2.09%0.77%1.22%+56 bps
Growth
Asset Growth (YoY)-1.69%4.30%4.81%5.39%2.41%+410 bps
Loan Growth (YoY)1.46%6.71%-4.23%-10.72%-0.39%-185 bps
Deposit Growth (YoY)-3.32%4.66%1.51%4.08%1.21%+453 bps
Asset Quality
Nonperforming Loans / Loans1.85%1.39%0.80%3.93%1.33%-52 bps
Net Charge-Offs / Loans0.82%-0.07%-0.52%0.73%-0.60%-142 bps
Allowance / Loans3.37%3.15%3.49%3.63%3.51%+14 bps
Allowance Coverage of NPLs1.8x2.3x4.4x0.9x2.6x+0.8x
Capital
Tier 1 Leverage Ratio17.57%17.13%16.72%17.18%17.03%-54 bps
Total Risk-Based Capital17.57%17.13%16.72%17.18%17.03%-54 bps
Equity / Assets10.43%11.38%11.48%11.22%11.49%+105 bps
Liquidity & Funding
Loans / Deposits6.26%6.59%6.12%5.65%6.16%-10 bps
Liquid Assets / Assets2.72%2.64%2.61%2.39%2.40%-32 bps
CRE / Total Capitaln/a5.81%6.64%5.13%n/an/a