Farmers and Merchants Bancshares, Inc. Reports Earnings of $2.4 Million or $0.74 per Share for the Six Months Ended June 30, 2025
HAMPSTEAD, Md., July 23, 2025 (GLOBE NEWSWIRE) -- Farmers and Merchants Bancshares, Inc. (the “Company”), the parent company of Farmers and Merchants Bank (the “Bank” and, together with the Company, “we”, “us” and “our”), announced that net income for the six months ended June 30, 2025 was $2.4 million, or $0.74 per common share (basic and diluted) compared to $2.3 million, or $0.74 per common share (basic and diluted), for the same period in 2024. The Company’s return on average equity during the six months ended June 30, 2025 was 8.18% compared to 8.81% for the same period in 2024. The Company’s return on average assets during both the six months ended June 30, 2025 and 2024 was 0.58%.
Net income for the three months ended June 30, 2025 was $1.2 million, or $0.38 per common share (basic and diluted) compared to $1.1 million, or $0.35 per common share (basic and diluted), for the second quarter of 2024. The Company’s return on average equity during the three months ended June 30, 2025 was 8.15% compared to 8.23% for the same period in 2024. The Company’s return on average assets during the three months ended June 30, 2025 was 0.58% compared to 0.55% for the same period in 2024.
Net interest income for the six months ended June 30, 2025 was $1.18 million higher when compared to the same period in 2024 due to a widening net interest margin of 2.92% for the six months ended June 30, 2025 compared to 2.70% for the same period in 2024. The yield on earning assets increased to 5.11% for the six months ended June 30, 2025, compared to 4.76% for the same period in 2024. The cost of interest bearing liabilities increased to 2.67% for the six months ended June 30, 2025, up from 2.57% for the same period in 2024. Average interest earning assets were $793.5 million for the six months ended June 30, 2025 compared to $772.3 million for the same period in 2024. Gross interest income increased by $2.0 million to $20.2 million for the six months ended June 30, 2025, up from $18.2 million for the same period in 2024. Average interest bearing liabilities increased by $31.8 million to $650.7 million for the six months ended June 30, 2025 from $618.9 million for the same period in 2024. Total interest expense increased $756 thousand to $8.7 million for the six months ended June 30, 2025 compared to $7.9 million for the same period in 2024.
The Company recorded a $268 thousand provision for credit losses for the six months ended June 30, 2025. There was no provision recorded for the six months ended June 30, 2024. The increase in the provision was related to the write down of one loan by $356 thousand, which was ultimately foreclosed upon.
Noninterest income increased by $91 thousand for the six months ended June 30, 2025 when compared to the same period in 2024. The increase was due to several factors, including a $53 thousand increase in mortgage banking revenue, a $26 thousand increase in bank owned life insurance income, a $126 thousand increase in gain on settlement of fair value hedge, and an $83 thousand increase in fees and commissions. These increases were offset by lower service charges on deposits of $70 thousand and $143 thousand of non-recurring gain on insurance settlement recognized in 2024. Noninterest expense was $992 thousand higher in the six months ended June 30, 2025 when compared to the same period in 2024, due primarily to a $294 thousand in salaries and benefits and a $329 thousand combined increase in occupancy and furniture and equipment costs. ATM and debit card expenses increased by $35 thousand due to security enhancements added with the core system conversion. Also, the Bank’s FDIC assessment expense increased by $124 thousand due to higher FDIC assessment rates. Professional services increased by $27 thousand due to the higher legal fees in 2025 related to stockholder matters.
Total assets decreased slightly to $842.2 million at June 30, 2025 from $844.6 million at December 31, 2024. Loans increased to $615.5 million at June 30, 2025 from $583.0 million at December 31, 2024. Investments in debt securities decreased to $142.8 million at June 30, 2025 from $146.2 million at December 31, 2024. Deposits decreased to $748.9 million at June 30, 2025 from $758.8 million at December 31, 2024. The Company’s tangible equity was $53.2 million at June 30, 2025 compared to $49.2 million at December 31, 2024.
The book value of the Company’s common stock increased to $18.97 per share at June 30, 2025 from $17.77 per share at December 31, 2024. Book value per share at June 30, 2025 is reflective of the $15.1 million unrealized loss, net of income taxes, on the Bank’s available for sale (“AFS”) securities portfolio as a result of the rise in interest rates since the time of purchase. Changes in the market value of the AFS securities portfolio, net of income taxes, are reflected in the Company’s equity, but are not included in the income statement. The AFS securities portfolio is comprised of 72% government agency mortgage backed securities which are fully guaranteed, 23% investment grade non agency mortgage backed securities, 1% investment grade corporate and municipal bonds, and 4% subordinated debt of other community banks. Management does not believe there is any indication of credit deterioration in any of the bonds and we intend to hold these securities to maturity, so no actual losses are anticipated. There is no impact on regulatory capital because the Bank elected many years ago to not include in the calculation of regulatory capital changes in the market value of the AFS securities portfolio regardless of whether they are positive or negative.
Gary A. Harris, President and CEO, commented “Our net interest margin has continued to grow over the past year. Our yields on earning assets are rising with our loan growth and loans are renewing at higher interest rate levels. This coupled with moderating cost of funds has improved our net interest income. Loan growth is strong with over $32.5 million in net loans being booked in the first half of 2025. Asset quality remains high with few delinquencies and our liquidity position remains strong. Moving into the second half of 2025, we believe we are well positioned to improve on the gains we have made thus far. ”
About the Company
The Company is a financial holding company and the parent company of the Bank. The Bank was chartered in Maryland in 1919 and has over 100 years of service to the community. The Bank serves the deposit and financing needs of both consumers and businesses in Carroll and Baltimore Counties along the Route 30, Route 795, Route 140, Route 26, and Route 45 corridors. The main office is located in Upperco, Maryland, with seven additional branches in Owings Mills, Hampstead, Greenmount, Reisterstown, Westminster, Eldersburg, and Towson. Certain broker-dealers make a market in the common stock of Farmers and Merchants Bancshares, Inc., and trades are reported through the OTC Markets Group’s OTCID Market under the symbol “FMFG”.
Forward-Looking Statements
The statements contained herein that are not historical facts are forward-looking statements (as defined by the Private Securities Litigation Reform Act of 1995) based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “will,” “expect,” “believe,” “intend,” and similar expressions. Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Farmers and Merchants Bancshares, Inc. with the Securities and Exchange Commission entitled “Risk Factors”.
| Farmers and Merchants Bancshares, Inc. and Subsidiaries | ||||||||
| Consolidated Balance Sheets | ||||||||
| Dollars in thousands except share data | ||||||||
| (Unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2025 |
2024 * | |||||||
| Assets | ||||||||
| Cash and due from banks | $ | 30,282 | $ | 63,962 | ||||
| Federal funds sold and other interest-bearing deposits | 1,001 | 697 | ||||||
| Cash and cash equivalents | 31,283 | 64,659 | ||||||
| Certificates of deposit in other banks | 100 | 100 | ||||||
| Securities available for sale, at fair value | 121,434 | 125,713 | ||||||
| Securities held to maturity, at amortized cost less allowance for credit losses of $81 and $60 | 21,328 | 20,499 | ||||||
| Equity security, at fair value | 535 | 518 | ||||||
| Restricted stock, at cost | 1,190 | 921 | ||||||
| Mortgage loans held for sale | 641 | 157 | ||||||
| Loans, less allowance for credit losses of $4,233 and $4,260 | 615,469 | 582,993 | ||||||
| Premises and equipment, net | 7,267 | 7,349 | ||||||
| Accrued interest receivable | 2,388 | 2,439 | ||||||
| Deferred income taxes, net | 7,120 | 7,606 | ||||||
| Other real estate owned, net | 2,758 | 1,176 | ||||||
| Bank owned life insurance | 15,535 | 15,324 | ||||||
| Goodwill and other intangibles, net | 7,022 | 7,026 | ||||||
| Other assets | 8,148 | 8,163 | ||||||
| Total Assets | $ | 842,218 | $ | 844,643 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Deposits | ||||||||
| Noninterest-bearing | $ | 121,398 | $ | 107,197 | ||||
| Interest-bearing | 627,500 | 651,609 | ||||||
| Total deposits | 748,898 | 758,806 | ||||||
| Securities sold under repurchase agreements | 4,772 | 5,564 | ||||||
| Federal Home Loan Bank of Atlanta advances | 10,000 | 5,000 | ||||||
| Long-term debt, net of issuance costs | 10,388 | 11,329 | ||||||
| Accrued interest payable | 919 | 1,003 | ||||||
| Other liabilities | 6,995 | 6,669 | ||||||
| Total liabilities | 781,972 | 788,371 | ||||||
| Stockholders' equity | ||||||||
| Common stock, par value $.01 per share, authorized 5,000,000 shares; issued and outstanding 3,175,347 shares in 2025 and 3,166,653 shares in 2024 | 32 | 32 | ||||||
| Additional paid-in capital | 31,299 | 31,136 | ||||||
| Retained earnings | 43,976 | 41,613 | ||||||
| Accumulated other comprehensive loss | (15,061 | ) | (16,509 | ) | ||||
| Total Stockholders' equity | 60,246 | 56,272 | ||||||
| Total liabilities and stockholders' equity | $ | 842,218 | $ | 844,643 | ||||
| * Derived from audited consolidated financial statements | ||||||||
| Farmers and Merchants Bancshares, Inc. and Subsidiaries | ||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||
| Dollars in thousands except per share data | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Interest income | ||||||||||||||||
| Loans, including fees | $ | 8,899 | $ | 7,238 | $ | 17,265 | $ | 14,120 | ||||||||
| Investment securities - taxable | 1,070 | 1,592 | 2,121 | 3,171 | ||||||||||||
| Investment securities - tax exempt | 153 | 138 | 309 | 274 | ||||||||||||
| Federal funds sold and other interest earning assets | 171 | 212 | 485 | 681 | ||||||||||||
| Total interest income | 10,293 | 9,180 | 20,180 | 18,246 | ||||||||||||
| Interest expense | ||||||||||||||||
| Deposits | 4,071 | 3,232 | 8,321 | 6,333 | ||||||||||||
| Securities sold under repurchase agreements | 12 | 13 | 29 | 36 | ||||||||||||
| Federal Home Loan Bank advances | 110 | 32 | 122 | 44 | ||||||||||||
| Federal Reserve Bank advances | - | 641 | - | 1,263 | ||||||||||||
| Long-term debt | 109 | 129 | 222 | 262 | ||||||||||||
| Total interest expense | 4,302 | 4,047 | 8,694 | 7,938 | ||||||||||||
| Net interest income | 5,991 | 5,133 | 11,486 | 10,308 | ||||||||||||
| Provision for credit losses | 238 | - | 268 | - | ||||||||||||
| Net interest income after provision for credit losses | 5,753 | 5,133 | 11,218 | 10,308 | ||||||||||||
| Noninterest income | ||||||||||||||||
| Service charges on deposit accounts | 178 | 217 | 342 | 412 | ||||||||||||
| Mortgage banking income | 47 | 18 | 76 | 23 | ||||||||||||
| Bank owned life insurance income | 106 | 94 | 211 | 185 | ||||||||||||
| Fair value adjustment of equity security | 1 | (2 | ) | 10 | (6 | ) | ||||||||||
| Gain (loss) on settlement of fair value hedge | - | (31 | ) | 94 | (32 | ) | ||||||||||
| Gain on insurance proceeds, net | - | - | - | 143 | ||||||||||||
| Other fees and commissions | 124 | 78 | 236 | 153 | ||||||||||||
| Total noninterest income | 456 | 374 | 969 | 878 | ||||||||||||
| Noninterest expense | ||||||||||||||||
| Salaries | 2,191 | 1,993 | 4,398 | 3,969 | ||||||||||||
| Employee benefits | 531 | 441 | 913 | 1,048 | ||||||||||||
| Occupancy | 280 | 278 | 608 | 524 | ||||||||||||
| Furniture and equipment | 480 | 328 | 815 | 570 | ||||||||||||
| Professional services | 218 | 158 | 391 | 364 | ||||||||||||
| Automated teller machine and debit card expenses | 168 | 166 | 336 | 301 | ||||||||||||
| Federal Deposit Insurance Corporation premiums | 117 | 94 | 316 | 192 | ||||||||||||
| Postage, delivery, and armored carrier | 64 | 64 | 142 | 145 | ||||||||||||
| Advertising | 74 | 74 | 130 | 123 | ||||||||||||
| Other real estate owned expense, net | 67 | 3 | 71 | 5 | ||||||||||||
| Other | 540 | 524 | 1,108 | 995 | ||||||||||||
| Total noninterest expense | 4,730 | 4,123 | 9,228 | 8,236 | ||||||||||||
| Income before income taxes | 1,479 | 1,384 | 2,959 | 2,950 | ||||||||||||
| Income taxes | 280 | 305 | 596 | 652 | ||||||||||||
| Net income | $ | 1,199 | $ | 1,079 | $ | 2,363 | $ | 2,298 | ||||||||
| Earnings per common share - basic | $ | 0.38 | $ | 0.35 | $ | 0.74 | $ | 0.74 | ||||||||
| Earnings per common share - diluted | $ | 0.38 | $ | 0.35 | $ | 0.74 | $ | 0.74 | ||||||||
| Farmers and Merchants Bancshares, Inc. | ||||||||||||
| Selected Consolidated Financial Data | ||||||||||||
| (Unaudited) | ||||||||||||
| Dollars in thousands except per share data | ||||||||||||
| As of or For the Three Months Ended June 30, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| OPERATING DATA | ||||||||||||
| Interest income | $ | 10,293 | $ | 9,180 | $ | 7,384 | ||||||
| Interest expense | 4,302 | 4,047 | 2,113 | |||||||||
| Net interest income | 5,991 | 5,133 | 5,271 | |||||||||
| Provision for (recovery of) credit losses | 238 | - | (225 | ) | ||||||||
| Net interest income after provision for (recovery of) credit losses | 5,753 | 5,133 | 5,496 | |||||||||
| Noninterest income | 456 | 374 | 403 | |||||||||
| Noninterest expense | 4,730 | 4,123 | 3,686 | |||||||||
| Income before income taxes | 1,479 | 1,384 | 2,213 | |||||||||
| Income taxes | 280 | 305 | 543 | |||||||||
| Net income | $ | 1,199 | $ | 1,079 | $ | 1,670 | ||||||
| PER SHARE DATA | ||||||||||||
| Net income (Basic and diluted) | $ | 0.38 | $ | 0.35 | $ | 0.54 | ||||||
| Dividends | $ | 0.00 | $ | 0.33 | $ | 0.33 | ||||||
| Book value | $ | 18.97 | $ | 17.77 | $ | 16.13 | ||||||
| KEY RATIOS | ||||||||||||
| Return on average assets | 0.58 | % | 0.55 | % | 0.92 | % | ||||||
| Return on average equity | 8.15 | % | 8.23 | % | 13.22 | % | ||||||
| Efficiency ratio | 73.37 | % | 74.86 | % | 68.17 | % | ||||||
| Net yield on interest-earning assets | 3.03 | % | 2.71 | % | 3.00 | % | ||||||
| Tier 1 capital leverage ratio | 9.51 | % | 9.58 | % | 9.99 | % | ||||||
| AT PERIOD END | ||||||||||||
| Total assets | $ | 842,218 | $ | 798,556 | $ | 730,262 | ||||||
| Gross loans | 619,702 | 550,118 | 535,646 | |||||||||
| Cash and cash equivalents | 31,283 | 24,510 | 12,288 | |||||||||
| Securities | 142,762 | 177,661 | 139,949 | |||||||||
| Deposits | 748,898 | 651,209 | 631,811 | |||||||||
| Long term debt, FRB and FHLB borrowings | 20,388 | 81,271 | 38,154 | |||||||||
| Stockholders' equity | 60,246 | 54,543 | 49,834 | |||||||||
| SELECTED AVERAGE BALANCES | ||||||||||||
| Total assets | $ | 825,060 | $ | 784,510 | $ | 726,212 | ||||||
| Gross loans | 616,097 | 541,267 | 531,173 | |||||||||
| Cash and cash equivalents | 14,959 | 18,395 | 9,151 | |||||||||
| Securities | 165,409 | 204,779 | 167,107 | |||||||||
| Deposits | 734,631 | 647,215 | 630,567 | |||||||||
| Long term debt, FRB and FHLB borrowings | 20,786 | 72,762 | 35,249 | |||||||||
| Stockholders' equity | 58,827 | 52,431 | 50,538 | |||||||||
| ASSET QUALITY | ||||||||||||
| Nonperforming assets | $ | 3,028 | $ | 1,646 | $ | 1,898 | ||||||
| Nonperforming assets/total assets | 0.36 | % | 0.21 | % | 0.26 | % | ||||||
| Allowance for credit losses/total loans | 0.68 | % | 0.74 | % | 0.87 | % | ||||||
| Farmers and Merchants Bancshares, Inc. | ||||||||||||
| Selected Consolidated Financial Data | ||||||||||||
| (Unaudited) | ||||||||||||
| Amounts in thousands except per share data | ||||||||||||
| As of or For the Six Months Ended June 30, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| OPERATING DATA | ||||||||||||
| Interest income | $ | 20,180 | $ | 18,246 | $ | 14,437 | ||||||
| Interest expense | 8,694 | 7,938 | 3,509 | |||||||||
| Net interest income | 11,486 | 10,308 | 10,928 | |||||||||
| Provision for (recovery of) credit losses | 268 | - | (495 | ) | ||||||||
| Net interest income after provision for credit losses | 11,218 | 10,308 | 11,423 | |||||||||
| Noninterest income | 969 | 878 | 785 | |||||||||
| Noninterest expense | 9,228 | 8,236 | 7,443 | |||||||||
| Income before income taxes | 2,959 | 2,950 | 4,765 | |||||||||
| Income taxes | 596 | 652 | 1,194 | |||||||||
| Net income | $ | 2,363 | $ | 2,298 | $ | 3,571 | ||||||
| PER SHARE DATA | ||||||||||||
| Net income (Basic and diluted) | $ | 0.74 | $ | 0.74 | $ | 1.16 | ||||||
| Dividends | $ | 0.00 | $ | 0.33 | $ | 0.33 | ||||||
| Book value | $ | 18.97 | $ | 17.77 | $ | 16.13 | ||||||
| KEY RATIOS | ||||||||||||
| Return on average assets | 0.58 | % | 0.58 | % | 0.99 | % | ||||||
| Return on average equity | 8.18 | % | 8.81 | % | 14.34 | % | ||||||
| Efficiency ratio | 74.09 | % | 73.63 | % | 63.23 | % | ||||||
| Net yield on interest-earning assets | 2.92 | % | 2.70 | % | 3.09 | % | ||||||
| Tier 1 capital leverage ratio | 9.51 | % | 9.58 | % | 9.99 | % | ||||||
| AT PERIOD END | ||||||||||||
| Total assets | $ | 842,218 | $ | 798,556 | $ | 730,262 | ||||||
| Gross loans | 619,702 | 550,118 | 535,646 | |||||||||
| Cash and cash equivalents | 31,283 | 24,510 | 12,288 | |||||||||
| Securities | 142,762 | 177,661 | 139,949 | |||||||||
| Deposits | 748,898 | 651,209 | 631,811 | |||||||||
| Long term debt, FRB and FHLB borrowings | 20,388 | 81,271 | 38,154 | |||||||||
| Stockholders' equity | 60,246 | 54,543 | 49,834 | |||||||||
| SELECTED AVERAGE BALANCES | ||||||||||||
| Total assets | $ | 820,910 | $ | 792,174 | $ | 724,668 | ||||||
| Gross loans | 604,875 | 537,917 | 528,368 | |||||||||
| Cash and cash equivalents | 21,830 | 27,809 | 8,936 | |||||||||
| Securities | 166,812 | 206,593 | 168,482 | |||||||||
| Deposits | 733,685 | 655,331 | 628,434 | |||||||||
| Long term debt, FRB and FHLB borrowings | 18,291 | 71,140 | 35,689 | |||||||||
| Stockholders' equity | 57,742 | 52,192 | 49,802 | |||||||||
| ASSET QUALITY | ||||||||||||
| Nonperforming assets | $ | 3,028 | $ | 1,646 | $ | 1,898 | ||||||
| Nonperforming assets/total assets | 0.36 | % | 0.21 | % | 0.26 | % | ||||||
| Allowance for credit losses/total loans | 0.68 | % | 0.74 | % | 0.87 | % | ||||||
| Contact: | Mr. Gary A. Harris |
| President and Chief Executive Officer | |
| (410) 374-1510, ext. 1104 |
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