FMAO.NASDAQFarmers & Merchants Bancorp INC

DEF: Farmers & Merchants Bancorp Sets 2026 Annual Meeting Agenda

Sentiment:

Proxy Statement 24 March 2026 5:00 PM

📋All filings for Farmers & Merchants Bancorp INC

Farmers & Merchants Bancorp, Inc. announces its 2026 Annual Meeting of Shareholders to be held virtually on April 20, 2026, focusing on director elections, executive compensation, and auditor ratification.

Delay expectedThree Section 16(a) reports for Lars B. Eller, David R. Gerken, and Shalini Singhal were inadvertently filed late in 2025.

Better than expectedNet Income for 2025 increased by 28.57% to $33,309,000 from $25,938,000 in 2024.Return on Average Assets (ROAA) for 2025 increased by 27% to 0.99% from 0.78% in 2024.The adjusted ROA at the Bank level for 2025 was 1.04%, exceeding the target of 0.95%, leading to a 113.50% payout for the cash incentive.The Earnings Per Share (EPS) for 2025 was $2.43, resulting in a 120.50% payout (20.50% of base salary) for the cash incentive component.

Summary

The Annual Meeting of Shareholders will be held virtually on April 20, 2026, at 1:30 P.M. Eastern Daylight Savings Time.
Shareholders will vote on the election of eleven director nominees, an advisory 'Say-on-Pay' proposal for executive compensation, and the ratification of Plante Moran, PLLC as the independent registered public accounting firm for fiscal year 2026.
The voting record date for the Annual Meeting is February 27, 2026.
As of January 1, 2026, there were 13,748,074 shares of common stock outstanding, including 164,667 shares subject to restricted stock grants.
A quorum for the meeting requires thirty-three and one-third percent (33 1/3%) of the Company's shares entitled to vote.
The Board of Directors and executive officers as a group beneficially held 521,653 shares, representing 3.794% of the outstanding common stock, as of January 1, 2026.
The executive compensation program for 2025 included a cash incentive based on an adjusted Return on Average Assets (ROA) of 1.04% at the Bank level, exceeding the 0.95% target, resulting in a 113.50% payout.
The 2025 Earnings Per Share (EPS) of $2.43 resulted in a 120.50% payout (equivalent to 20.50% of base salary) for the EPS component of the cash incentive for titled executive officers.
Net Income for 2025 was $33,309,000, a 28.57% increase from $25,938,000 in 2024.
Return on Average Assets (ROAA) for 2025 was 0.99%, a 27% increase from 0.78% in 2024.
The Total Shareholder Return (TSR) for 2025 was $126, representing an 11.72% decrease from $142 in 2024.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively due to strong financial performance metrics like increased net income and ROAA, and robust corporate governance, despite a decline in Total Shareholder Return and some minor compliance delays.

Positives

Adjusted Return on Average Assets (ROA) for 2025 was 1.04%, exceeding the target of 0.95%, leading to a 113.50% payout for the cash incentive program.
Earnings Per Share (EPS) for 2025 was $2.43, resulting in a 120.50% payout (20.50% of base salary) for the cash incentive component.
Net Income increased by 28.57% from $25,938,000 in 2024 to $33,309,000 in 2025.
Return on Average Assets (ROAA) increased by 27% from 0.78% in 2024 to 0.99% in 2025.
The company maintains strong corporate governance practices, including separate roles for President/CEO and Board Chairman, and independent directors on key committees.
All directors attended 100% of the total meetings of the Board and the committees on which they served in 2025.
Shareholders indicated a significant level of support for the company's executive compensation policies and practices in the 2025 Annual Meeting's advisory vote.

Negatives

Total Shareholder Return (TSR) decreased by 11.72% from $142 in 2024 to $126 in 2025.
CEO compensation actually paid decreased by 9.06% in 2025, and average non-PEO NEO compensation decreased by 20.19% in 2025.
Five former executives are likely to receive a lower death benefit than stated in their original Executive Survivor Income Agreements due to changes in life insurance policy values over time.
Three Section 16(a) reports for Lars B. Eller, David R. Gerken, and Shalini Singhal were inadvertently filed late in 2025.

Risks

Credit Risk: Inherent in lending activities, managed through formal loan proposals, credit analysis, and assigned Loan Risk Ratings.
Interest Rate Risk: Impact on net interest spreads, net interest income, and the economic value of the bank due to changes in interest rates (re-pricing risk, basis risk, yield curve risk, options risk).
Liquidity Risk: Impact on earnings or capital due to changes in funding sources, affecting the ability to establish/service relationships, and potentially leading to litigation, financial loss, or reputation damage.
Price Risk: Impact on earnings or capital from changes in the value of financial instrument portfolios, affecting the ability to establish/service relationships.
Foreign Exchange Risk: Impact on earnings or capital from movements in foreign exchange rates due to cross-border investing and operating activities, potentially leading to litigation, financial loss, and reputation damage.
Compliance Risk: Risk of not operating in compliance with laws, rules, regulations, and industry standards, monitored through a compliance risk management program and annual assessments (including fair lending and identity theft).
Transaction/Operational Risk: Risk from service or product delivery problems, human error, fraud, incomplete information, or operational disruption, inherent in all bank products and services.
Strategic Risk: Risk arising from adverse business decisions or improper implementation of business strategies, or incompatibility between strategic goals, business strategies, and resources.
Information Technology Risk: Risk related to information and information systems, including disruption of business operations, and damage to reputation if systems are not reliable or properly secured.
Information Security Risk: Risk of compromise to confidential customer information, assessed at least annually in conformance with Gramm-Leach-Bliley Act requirements.
Cybersecurity Risk: Risk of cyber events (intrusions, breaches, unauthorized access) impacting bank systems, assets, and data, requiring a robust cybersecurity program for identification, protection, detection, response, and recovery.
Vendor Management Risk: Risks associated with outsourced relationships, particularly information and operational risks from third-party vendors and service providers.
Reputation Risk: Risk to bank capital or earnings arising from negative public opinion, inherent in all bank activities and potentially affecting relationships.

Future Outlook

The Board of Directors and Compensation Committee will evaluate the results of the 2026 advisory vote on executive compensation to determine if any changes to policies and practices are necessary or appropriate to address shareholder concerns. The company intends to continue monitoring developing legal requirements and best practices in corporate governance. Management continually seeks training and development to enhance technical knowledge and skill levels to stay up-to-date on changes in financial service industry operations and industry best practices.

Management Comments

The Compensation Committee has determined that the compensation structure for the Company's executive officers is effective and appropriate and has determined that the Company's executive compensation programs are reasonable and not excessive.
The Company believes that this structure [severance benefits upon change in control] will help: (i) assure the executives full attention and dedication to the Company, free from distractions caused by personal uncertainties and risks related to a pending or threatened change in control, (ii) assure the executives objectivity for shareholders interests, (iii) assure the executives of fair treatment in case of involuntary termination following a change in control, and (iv) attract and retain key talent during uncertain times.
The compensation policies and practices of the Company are not believed to create risks that are reasonably likely to have a material adverse effect on operations or financial results.
The compensation policies and practices of the Company are not designed to provide enormous bonuses and do not encourage employees to take undue amounts of risk.
The incentives provided to employees are designed to encourage sound performance over time rather than the pursuit of immediate high-risk profits.
The Board and management of the Company intend to continue to monitor not only the developing legal requirements in this area, but also the best practices of comparable companies, to assure that the Company maintains sound corporate governance practices in the future.

Industry Context

StockSavvy.ai notes that Farmers & Merchants Bancorp's focus on robust corporate governance, including the separation of CEO and Board Chairman roles and annual director independence reviews, aligns with best practices increasingly emphasized across the banking sector. The detailed risk management framework, covering credit, interest rate, liquidity, compliance, and cybersecurity risks, reflects the heightened regulatory scrutiny and complex operational environment faced by regional banks. The company's executive compensation strategy, which links incentives to Return on Average Assets (ROA) and Earnings Per Share (EPS), is a common approach in community banking to balance short-term profitability with long-term stability, aiming to attract and retain talent in a competitive financial services market. The use of a virtual annual meeting is also a continuing trend for efficiency and broader shareholder participation.

Comparison to Industry Standards

Executive Compensation: The company uses a peer group of eighteen publicly held bank holding companies (e.g., ChoiceOne Financial Services, Inc., Civista Bancshares, Inc., Farmers National Banc Corp.) of comparable size ($1 billion to $8 billion in assets) and geographic locations (Ohio, Indiana, Michigan) for executive pay comparisons, which is a standard practice to ensure competitive compensation.
Director Compensation: Two peer groups are used: the eighteen area/regional bank holding companies and twenty-one high-performing nationwide peer bank holding companies (e.g., Bank First Corporation, Capital Bancorp Inc., Citizens Financial Services, Inc.) to benchmark director fees, ensuring director compensation is fair and equitable.
Risk Management: The company's comprehensive risk management program, covering nine categories (Credit, Interest Rate, Liquidity, Price, Foreign Exchange, Compliance, Transaction/Operational, Strategic, Information Technology, Information Security, Cybersecurity, Vendor Management, Reputation), aligns with industry best practices and regulatory expectations for financial institutions, particularly given the FFIEC's guidance on cybersecurity and NIST Framework.
Corporate Governance: The separation of the President/CEO and Board Chairman roles, with the Chairman being a non-employee director, is a governance structure often favored by institutional investors and considered a best practice for enhanced oversight, similar to larger, more complex financial institutions.
Auditor Selection: The company's engagement of Plante Moran, PLLC, a recognized independent registered public accounting firm, for audit and non-audit services is standard for publicly traded companies. The Audit Committee's review of auditor independence and discussion of financial statements with management and auditors follows PCAOB requirements.
CEO Pay Ratio: The disclosed CEO pay ratio of 16.38 to 1.00 for 2025 is within the typical range for regional banks, which often have lower ratios compared to larger national or global corporations due to differences in scale and executive compensation structures.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Chairman of the Board of Directors	Jack C. Johnson	Andrew J. Briggs	April 30, 2024	Election.
Chairman of the Board of Directors	Andrew J. Briggs	Kevin J. Sauder	July 18, 2025	Election; Mr. Briggs stepped down in accordance with his 2026 retirement plan.
Vice Chairman of the Board of Directors	NA	Dr. Marcia S. Latta	July 29, 2025	Election.
Executive Vice President and Chief Lending Officer	Senior Vice President and Senior Commercial Banking Manager	David R. Gerken	January 22, 2024	Promotion.
Executive Vice President and Chief Risk Officer	Senior Vice President and Chief Risk Officer	Eric D. Faust	May 20, 2025	Promotion.
Chief Strategy Officer	Chief Retail Banking Officer	Andrew S. Baker	January 19, 2025	New role/promotion based on additional responsibility.
Director	NA	Ahmed Alomari	June 24, 2025	Nomination to the Board.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Structure	Maintained separate positions for President/CEO and Board Chairman to strengthen governance and ensure independent oversight. The Board Chairman is a non-employee director.	Ongoing	Enhances corporate structure, strategic direction focus, and accountability for shareholder interests.
Director Independence Review	Annual review of director independence against NASDAQ Marketplace Rules standards. All directors, except Mr. Eller (CEO) and Mr. Briggs (former SVP, now independent as of Jan 1, 2026), are deemed independent.	Annually	Ensures board members can exercise independent judgment, particularly for key committees like Compensation, Corporate Governance, and Audit.
Committee Charters	Adopted charters for Audit, Compensation, Enterprise Risk Management, and Corporate Governance and Nominating Committees, available on the bank's website.	Ongoing	Provides clear guidelines for committee responsibilities and operations, enhancing transparency and accountability.
Code of Business Conduct and Ethics	Adopted a Code of Business Conduct and Ethics applicable to all officers, directors, and employees, administered by the Audit Committee.	Ongoing	Promotes ethical conduct, compliance with laws, and protection of company assets, with ongoing monitoring for best practices.
Shareholder Communication Policy	Corporate Governance and Nominating Committee designated to receive, review, and respond to communications from stakeholders to non-management directors.	Ongoing	Facilitates direct communication between shareholders and independent board members, improving responsiveness to stakeholder concerns.
Insider Trading Policies	Adopted policies and procedures governing stock transactions by insiders, designed to comply with insider trading laws and NASDAQ listing standards.	Ongoing	Promotes compliance and fair dealing in securities transactions, though some late filings occurred in 2025.
Annual Meeting Attendance Policy	Corporate Governance Guidelines expect all Board members to attend the Annual Meeting of Shareholders.	Ongoing	Ensures active director engagement and availability to shareholders.
Hedging Practices Policy	Company has not adopted policies regarding directors or employees hedging or offsetting decreases in market value of company stock.	Ongoing	Indicates that insiders' stock holdings are fully exposed to market fluctuations, aligning their interests with long-term shareholder value.
Compensation Recoupment (Clawback) Policy	Adopted a policy to recoup erroneously awarded incentive-based compensation from current or former executive officers in the event of an accounting restatement due to material noncompliance with financial reporting requirements.	Ongoing	Enhances accountability for financial reporting accuracy and aligns executive incentives with long-term, accurate performance.
Disclosure Committee	Established a Disclosure Committee comprised of select officers to implement and document disclosure controls and procedures.	Ongoing	Ensures timely, fair, and accurate presentation of the company's financial condition and results of operations to security holders and the investment community.

Related Party Transactions

Certain directors, nominees, and executive officers or their associates were customers of and had transactions with the Company or its subsidiary during 2025.
Loan transactions were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and did not involve more than the normal risk of collectability or present other unfavorable features.
All other related party transactions require pre-approval by the Audit Committee, with exemptions for routine banking transactions.

Stakeholder Impact

Shareholders: Will vote on key governance matters (director elections, executive compensation, auditor ratification). Financial performance (Net Income, ROAA) shows positive trends, but TSR declined. Executive compensation is tied to performance, and a clawback policy is in place.
Employees: Participate in a 401(k) profit sharing plan with matching contributions. Executive compensation aims to attract and retain talent. The CEO pay ratio is 16.38 to 1.00.
Customers: The company's risk management framework, particularly liquidity, price, and reputation risk, aims to ensure continuity of operations and protection of customer interests. Fair lending risk assessments are conducted.
Suppliers/Vendors: Subject to a vendor management program to identify, measure, monitor, and control risks associated with outsourced relationships, including due diligence and performance reviews.
Creditors: Credit risk management and liquidity risk policies are in place to ensure the bank's financial health and ability to meet obligations.

Next Steps

Annual Meeting of Shareholders to be held virtually on April 20, 2026, at 1:30 P.M. EST.
Shareholders will vote on the election of eleven director nominees, an advisory 'Say-on-Pay' proposal, and the ratification of Plante Moran, PLLC as the independent auditor for fiscal year 2026.
The Board of Directors and Committee will evaluate the results of the 2026 advisory vote on executive compensation to determine if changes are necessary.
The company will continue to monitor developing legal requirements and best practices in corporate governance.
Shareholder proposals for the 2027 Annual Meeting must be received by November 24, 2026, for inclusion in the proxy statement.
Shareholder proposals for the 2027 Annual Meeting received after February 7, 2027, will be considered untimely.
Notice of intent to solicit proxies for director nominees for the 2027 Annual Meeting must be postmarked or electronically submitted by February 19, 2027.

Key Dates

Date	Description
1992	Barbara J. Britenriker began as Executive Vice President and Chief Financial Officer.
1995	Frank R. Simon received his Juris Doctor degree from the University of Detroit School of Law.
1996	Kevin G. Frey joined E.H. Frey & Sons, Inc. and worked as a Certified Public Accountant until 2003.
1996	Lori A. Johnston began her tenure at ProMedica.
1999	David P. Vernon and his family moved to Champaign County.
2002	Ian D. Boyce co-founded Dickmeyer Boyce Financial Management.
2002	David P. Vernon acquired his first two funeral homes in Mechanicsburg and North Lewisburg, Ohio.
2003	Frank R. Simon completed a three-year program earning an additional graduate degree from the Graduate School of Banking at the University of Wisconsin-Madison.
2003	David P. Vernon added a funeral home in Urbana.
2004	Kevin J. Sauder first became a Director.
2007	Ahmed Alomari founded Cybernoor.
2008	Steven J. Planson first became a Director.
2009	Dr. Marcia S. Latta first became a Director.
2009	Marcia S. Latta was named Northwest Ohio Association of Fundraising Professionals Outstanding Fundraising Professional.
2011	Steven J. Planson received the Paul Harris Award by the Rotary Foundation.
2013	Lars B. Eller joined Royal Bank of America as Executive Vice President and Chief Retail Banking Officer.
2013	Marcia S. Latta was named a Woman of Distinction from the Western Ohio Girl Scouts.
2015	Ian D. Boyce received an honorary doctorate in Humane Letters from the University of Vermont.
2016	David R. Gerken began as Executive Vice President and Chief Lending Officer.
2017	Royal Bank of America was acquired.
May 10, 2017	Company began listing on the NASDAQ Stock Exchange.
September 2018	Lars B. Eller joined The Farmers & Merchants State Bank as President and CEO and was appointed to the Board of Directors.
2018	Lars B. Eller first became a Director.
January 1, 2019	Merger of Limberlost Bancshares, Inc. into Farmers & Merchants Bancorp, Inc. completed, Andrew J. Briggs appointed to Board.
January 7, 2019	Ms. Britenriker served as Executive Vice President and Chief Retail Banking Officer of the Bank until October 16, 2023.
February 1, 2019	Lars B. Eller assumed additional position of President and Chief Executive Officer of the Company.
2019	Andrew J. Briggs first became a Director.
2019	Andrew J. Briggs was Chairman of the Indiana Bankers Association.
September 2019	Andrew J. Briggs was honored with the Sagamore of the Wabash award by Indiana Governor, Eric J. Holcomb.
2020	Lori A. Johnston first became a Director.
2021	Cybernoor merged with Buchanan Technologies.
October 1, 2021	Acquisition of Perpetual Federal Savings Bank of Urbana completed, David P. Vernon appointed to Board.
2021	Frank R. Simon first became a Director.
2021	David P. Vernon first became a Director.
September 14, 2022	Eric D. Faust served as Senior Vice President and Chief Risk Officer until May 19, 2025.
August 2022	Andrew J. Briggs was a recipient of the Indiana Bankers Association Leadership in Banking Excellence Award.
December 2022	Mr. Briggs retired as First Senior Vice President of Business Development/Indiana of the Bank.
2022	Eric D. Faust began as Executive Vice President and Chief Risk Officer.
2023	David P. Vernon obtained funeral homes in St. Paris and Fletcher, Ohio.
2023	Kevin J. Sauder received the American Home Furnishings Alliance (AHFA) Distinguished Service Award.
October 16, 2023	Barbara J. Britenriker resumed the position of Executive Vice President and Chief Financial Officer of the Bank.
October 16, 2023	Andrew S. Baker was named Senior Vice President and Retail Banking Officer.
January 22, 2024	David R. Gerken was named Executive Vice President and Chief Lending Officer.
April 30, 2024	Andrew J. Briggs was elected Chairman of the Board of Directors of the Company and the Bank, serving through June 2025.
May 2024	Paramount Health Care became part of Medical Mutual.
2024	Ian D. Boyce first became a Director.
2024	Kevin G. Frey first became a Director.
September 1, 2024	Mr. Eller entered into a new employment agreement for a three-year term ending August 31, 2027.
January 8, 2025	Andrew S. Baker served as Chief Retail Banking Officer until this date.
January 19, 2025	Andrew S. Baker was named Chief Strategy Officer.
2025	Marcia S. Latta received the Bowling Green Outstanding Citizen of the Year and the National Prevent Cancer Foundation Outstanding Leadership Award.
May 20, 2025	Eric D. Faust was named Executive Vice President and Chief Risk Officer.
June 24, 2025	Ahmed Alomari was nominated to the Board of Directors.
June 26, 2025	Andrew J. Briggs stepped down as Chairman of the Board of Directors.
July 18, 2025	Kevin J. Sauder was elected Chairman of the Board of Directors.
July 29, 2025	Dr. Marcia S. Latta was elected Vice Chairman of the Board of Directors.
August 23, 2025	Stock awards granted on 8/23/2022 vested.
December 31, 2025	Fiscal year end for which audited financial statements were prepared.
January 1, 2026	Record date for beneficial ownership of shares.
February 27, 2026	Voting record date for the Annual Meeting.
March 1, 2026	Vesting date for some restricted stock awards.
March 24, 2026	Proxy Statement and 2025 Annual Report mailed to shareholders.
April 20, 2026	Annual Meeting of Shareholders to be held virtually.
December 31, 2026	Fiscal year end for which Plante Moran, PLLC is appointed independent auditor.
March 1, 2027	Vesting date for some restricted stock awards.
April 20, 2027	Webcast replay of the Annual Meeting will be available until this date.
August 31, 2027	End of Mr. Eller's current employment agreement term.
November 24, 2026	Deadline for shareholder proposals for 2027 Annual Meeting to be included in proxy statement.
February 7, 2027	Shareholder proposals received after this date will be considered untimely for the 2027 Annual Meeting.
February 19, 2027	Deadline for notice of intent to solicit proxies for director nominees for the 2027 Annual Meeting under Rule 14a-19.
March 1, 2028	Vesting date for some restricted stock awards.

Recommendation

hold

The filing indicates solid financial performance for 2025 with significant increases in Net Income and Return on Average Assets, suggesting operational efficiency and profitability. The robust corporate governance framework and performance-linked executive compensation are positive indicators. However, the decline in Total Shareholder Return for 2025 and the minor compliance delays (late Section 16(a) filings) present some mixed signals. While the company appears fundamentally sound, the lack of new strategic initiatives or significant growth catalysts in this particular filing, combined with the TSR decline, suggests a 'hold' recommendation for seasoned investors, awaiting further operational updates or market-moving news.

Keywords

Farmers & Merchants Bancorp, FMAO, Proxy Statement, Annual Meeting, Corporate Governance, Executive Compensation, Director Election, Auditor Ratification, Financial Performance, Banking Industry, Risk Management, SEC Filing, Shareholder Vote, NASDAQ

Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.