Farmers & Merchants Bancorp: Still Offering A Healthy Mix Of Quality And Value

2025-03-19 13:52:01 ET

Summary

• 2024 earnings were typically robust for agricultural bank Farmers & Merchants Bancorp.
• This bank has an excellent core deposit franchise, with that leading to very low funding costs and above-average profitability.
• While its net interest margin has been ticking up again, earning asset growth has been more challenging, putting some pressure on earnings.
• Based on the historical average P/TBV and P/E multiples, these shares continue to look cheap.

It's been around six months since I last took a look at shares of Farmers & Merchants Bancorp ( FMCB ). For anybody new to this name, let me start by saying that this small-cap Californian bank definitely isn't for everyone. Being tucked away on the pink sheets means that volume will be a real issue for many readers, and probably a dealbreaker....

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