FMFG 8-K
Farmers & Merchants Bancshares, Inc. (FMFG)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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(d)
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Exhibits.
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| Exhibit No. | Description |
| 99.1 | Press release dated January 29, 2026 (furnished herewith). |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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FARMERS AND MERCHANTS BANCSHARES, INC.
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Dated: January 29, 2026
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By:
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/s/ Gary A. Harris
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Gary A. Harris
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President & CEO
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Exhibit 99.1
| FOR IMMEDIATE RELEASE | FOR FURTHER INFORMATION CONTACT: | ||
| January 29, 2026 | |||
| Farmers and Merchants Bancshares, Inc. | Contact: | Mr. Gary A. Harris | |
| 4510 Lower Beckleysville Rd, Suite H | President and Chief Executive Officer | ||
| Hampstead, Maryland 21074 | (410) 374-1510, ext. 1104 | ||
FARMERS AND MERCHANTS BANCSHARES, INC. REPORTS EARNINGS OF $5.8 MILLION OR $1.81 PER SHARE FOR THE YEAR ENDED
DECEMBER 31, 2025
HAMPSTEAD, MARYLAND (January 29, 2026) – 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 year ended December 31, 2025 was $5.8 million, or $1.81 per common share (basic and diluted) compared to $4.3 million, or $1.37 per common share (basic and diluted), for the same period in 2024. The Company’s return on average equity during the year ended December 31, 2025 was 9.57% compared to 7.83% for the same period in 2024. The Company’s return on average assets during the years ended December 31, 2025 and 2024 was 0.68% and 0.53%, respectively.
Net income for the three months ended December 31, 2025 was $1.7 million, or $0.53 per common share (basic and diluted), compared to $0.9 million, or $0.27 per common share (basic and diluted), for the fourth quarter of 2024. The Company’s return on average equity during the three months ended December 31, 2025 was 10.48% compared to 5.96% for the same period in 2024. The Company’s return on average assets during the three months ended December 31, 2025 was 0.77% compared to 0.41% for the same period in 2024.
Net interest income for the year ended December 31, 2025 was $3.6 million higher when compared to the same period in 2024 due to a widening net yield on interest-earning assets of 3.01% for the year ended December 31, 2025 compared to 2.68% for the same period in 2024. The yield on earning assets increased to 5.22% for the year ended December 31, 2025, compared to 4.92% for the same period in 2024. The cost of interest bearing liabilities decreased to 2.70% for the year ended December 31, 2025, down from 2.76% for the same period in 2024. Average interest earning assets were $815.7 million for the year ended December 31, 2025 compared to $784.6 million for the same period in 2024. Gross interest income increased by $4.0 million to $42.4 million for the year ended December 31, 2025, up from $38.4 million for the same period in 2024. Average interest bearing liabilities increased by $31.6 million to $666.2 million for the year ended December 31, 2025 from $634.7 million for the same period in 2024. Total interest expense increased $438 thousand to $18.0 million for the year ended December 31, 2025 compared to $17.5 million for the same period in 2024.
The Company recorded a $698 thousand provision for credit losses for the year ended December 31, 2025 compared to $150 thousand for the same period in 2024. The increase in the provision was related to the write down of two loans, both of which were foreclosed upon, as well as growth in the loan portfolio.
Noninterest income increased by $224 thousand for the year ended December 31, 2025 when compared to the same period in 2024. The increase was due to several factors, including a $49 thousand increase in mortgage banking revenue, a $30 thousand increase in bank owned life insurance income, a $94 thousand increase in gain on settlement of fair vlue hedge, and an $89 thousand increase in gains on the sale of SBA loans. Noninterest expense was $1.4 million higher for the year ended December 31, 2025 when compared to the same period in 2024, due primarily to a $677 thousand increase in salaries and benefits and a $417 thousand combined increase in occupancy and furniture and equipment costs. The Bank’s FDIC assessment expense increased by $187 thousand due to higher FDIC assessment rates and deposit mix. Other real estate owned expenses increased by $101 thousand due to the foreclosure of three properties in 2025.
Total assets increased to $872.0 million at December 31, 2025 from $844.6 million at December 31, 2024. Loans, net of the allowance for credit losses, increased to $633.1 million at December 31, 2025 from $583.0 million at December 31, 2024. Investments in debt securities decreased to $139.8 million at December 31, 2025 from $146.2 million at December 31, 2024. Deposits decreased to $720.5 million at December 31, 2025 from $758.8 million at December 31, 2024, largely due to a decrease in brokered CDs of $88.3 million. Federal Home Loan Bank advances and other long-term debt increased by $58.4 million to $74.7 million as of December 31, 2025, up from $16.3 million at December 31, 2024. The increase was primarily due to the Company utilizing Federal Home Loan Bank advances to repay $57.7 million of maturing brokered CDs. Additionally, the Company issued $12.5 million in subordinated debt during September 2025. The proceeds were used to repay the Company’s maturing term loan of approximately $10 million as well to add an interest reserve and increase the Bank’s capital. The Company’s tangible equity was $57.6 million at December 31, 2025 compared to $49.2 million at December 31, 2024.
The book value of the Company’s common stock increased to $20.02 per share at December 31, 2025 from $17.77 per share at December 31, 2024. Book value per share at December 31, 2025 was reflective of the $12.7 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. Management does not believe there is any indication of credit deterioration in any of the bonds and we do not intend to sell any of these securities, so no actual losses are anticipated. The securities portfolio is comprised of 62% government agency mortgage-backed securities which are fully guaranteed, 20% investment grade non-agency mortgage-backed securities, 14% investment grade corporate and municipal bonds, and 4% subordinated debt of other community banks. Unrealized gains and losses do not impact 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 “In 2025, we achieved a 35% increase in net income which was accomplished by growing our loan portfolio and reducing our funding costs. Our loan portfolio, net of allowance for credit losses, grew to $633 million, which is an increase of $50 million, or 9%, over last year’s balance. The yield on loans improved to 5.84% as existing loans in our portfolio repriced over the past year. This, along with lower cost of funds, has resulted in our net interest rate yield rising to 3.01% for the year. Our asset quality remains strong with zero non-accrual loans as of December 31, 2025. We look forward to building on a successful year as we continue to capitalize on our strategic investments in technology and people.
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 eight 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”.
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Farmers and Merchants Bancshares, Inc. and Subsidiaries |
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Consolidated Balance Sheets |
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Dollars in thousands except share data |
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(Unaudited) |
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December 31, |
December 31, |
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2025 |
2024 |
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Assets |
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Cash and due from banks |
$ | 46,113 | $ | 63,962 | ||||
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Federal funds sold and other interest-bearing deposits |
566 | 697 | ||||||
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Cash and cash equivalents |
46,679 | 64,659 | ||||||
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Certificates of deposit in other banks |
100 | 100 | ||||||
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Securities available for sale, at fair value |
118,730 | 125,713 | ||||||
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Securities held to maturity, at amortized cost less allowance for credit losses of $79 and $60 |
21,055 | 20,499 | ||||||
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Equity security, at fair value |
550 | 518 | ||||||
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Restricted stock, at cost |
3,693 | 921 | ||||||
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Mortgage loans held for sale |
714 | 157 | ||||||
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Loans, less allowance for credit losses of $4,361 and $4,260 |
633,144 | 582,993 | ||||||
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Premises and equipment, net |
7,141 | 7,349 | ||||||
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Accrued interest receivable |
2,535 | 2,439 | ||||||
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Deferred income taxes, net |
6,277 | 7,606 | ||||||
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Other real estate owned, net |
1,673 | 1,176 | ||||||
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Bank owned life insurance |
15,353 | 15,324 | ||||||
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Goodwill and other intangibles, net |
7,018 | 7,026 | ||||||
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Other assets |
7,296 | 8,163 | ||||||
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Total Assets |
$ | 871,958 | $ | 844,643 | ||||
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Liabilities and Stockholders' Equity |
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Deposits |
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Noninterest-bearing |
$ | 117,098 | $ | 107,197 | ||||
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Interest-bearing |
603,361 | 651,609 | ||||||
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Total deposits |
720,459 | 758,806 | ||||||
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Securities sold under repurchase agreements |
4,317 | 5,564 | ||||||
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Federal Home Loan Bank of Atlanta advances |
62,700 | 5,000 | ||||||
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Long-term debt, net of unamortized issuance costs |
12,036 | 11,329 | ||||||
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Accrued interest payable |
1,278 | 1,003 | ||||||
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Other liabilities |
6,508 | 6,669 | ||||||
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Total liabilities |
807,298 | 788,371 | ||||||
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Stockholders' equity |
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Common stock, par value $.01 per share, authorized 5,000,000 shares; issued and outstanding 3,229,795 shares in 2025 and 3,166,653 shares in 2024 |
32 | 32 | ||||||
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Additional paid-in capital |
32,148 | 31,136 | ||||||
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Retained earnings |
45,210 | 41,613 | ||||||
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Accumulated other comprehensive loss |
(12,730 | ) | (16,509 | ) | ||||
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Total Stockholders' equity |
64,660 | 56,272 | ||||||
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Total liabilities and stockholders' equity |
$ | 871,958 | $ | 844,643 | ||||
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Farmers and Merchants Bancshares, Inc. and Subsidiaries |
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Consolidated Statements of Income |
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Dollars in thousands except per share data |
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(Unaudited) |
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Three Months Ended December 31, |
Year Ended December 31, |
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2025 |
2024 |
2025 |
2024 |
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Interest income |
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Loans, including fees |
$ | 9,490 | $ | 8,317 | $ | 36,062 | $ | 30,338 | ||||||||
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Investment securities - taxable |
978 | 1,469 | 4,169 | 6,263 | ||||||||||||
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Investment securities - tax exempt |
156 | 143 | 623 | 559 | ||||||||||||
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Federal funds sold and other interest earning assets |
592 | 342 | 1,501 | 1,203 | ||||||||||||
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Total interest income |
11,216 | 10,271 | 42,355 | 38,363 | ||||||||||||
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Interest expense |
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Deposits |
3,795 | 4,275 | 16,460 | 14,519 | ||||||||||||
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Securities sold under repurchase agreements |
17 | 16 | 59 | 65 | ||||||||||||
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Federal Home Loan Bank advances |
596 | 14 | 847 | 123 | ||||||||||||
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Federal Reserve Bank advances |
- | 402 | - | 2,313 | ||||||||||||
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Long-term debt |
257 | 120 | 599 | 507 | ||||||||||||
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Total interest expense |
4,665 | 4,827 | 17,965 | 17,527 | ||||||||||||
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Net interest income |
6,551 | 5,444 | 24,390 | 20,836 | ||||||||||||
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Provision for credit losses |
103 | 150 | 698 | 150 | ||||||||||||
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Net interest income after provision for credit losses |
6,448 | 5,294 | 23,692 | 20,686 | ||||||||||||
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Noninterest income |
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Service charges on deposit accounts |
166 | 189 | 693 | 810 | ||||||||||||
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Mortgage banking income |
6 | 41 | 157 | 108 | ||||||||||||
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Bank owned life insurance income |
108 | 106 | 424 | 394 | ||||||||||||
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Gain (loss) on sale of debt securities |
- | 19 | - | (13 | ) | |||||||||||
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Fair value adjustment of equity security |
1 | (18 | ) | 17 | (4 | ) | ||||||||||
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Gain on settlement of fair value hedge |
- | - | 94 | - | ||||||||||||
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Loss on sale of premises and equipment |
- | - | - | (5 | ) | |||||||||||
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Gain on sale of SBA loans |
89 | - | 89 | - | ||||||||||||
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(Loss)/Gain on insurance proceeds, net |
(20 | ) | - | 53 | 142 | |||||||||||
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Other fees and commissions |
106 | 86 | 449 | 320 | ||||||||||||
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Total noninterest income |
456 | 423 | 1,976 | 1,752 | ||||||||||||
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Noninterest expense |
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Salaries |
2,142 | 2,006 | 8,718 | 7,854 | ||||||||||||
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Employee benefits |
514 | 590 | 2,000 | 2,187 | ||||||||||||
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Occupancy |
279 | 271 | 1,169 | 1,070 | ||||||||||||
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Furniture and equipment |
426 | 396 | 1,611 | 1,293 | ||||||||||||
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Professional services |
173 | 335 | 738 | 865 | ||||||||||||
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Automated teller machine and debit card expenses |
253 | 174 | 660 | 648 | ||||||||||||
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Federal Deposit Insurance Corporation premiums |
112 | 109 | 578 | 391 | ||||||||||||
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Postage, delivery, and armored carrier |
66 | 77 | 270 | 294 | ||||||||||||
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Advertising |
56 | 48 | 249 | 228 | ||||||||||||
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Other real estate owned expense, net |
119 | 59 | 177 | 76 | ||||||||||||
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Other |
518 | 557 | 2,125 | 2,023 | ||||||||||||
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Total noninterest expense |
4,658 | 4,622 | 18,295 | 16,929 | ||||||||||||
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Income before income taxes |
2,246 | 1,095 | 7,373 | 5,509 | ||||||||||||
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Income taxes |
549 | 238 | 1,607 | 1,231 | ||||||||||||
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Net income |
$ | 1,697 | $ | 857 | $ | 5,766 | $ | 4,278 | ||||||||
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Earnings per common share - basic |
$ | 0.53 | $ | 0.27 | $ | 1.81 | $ | 1.37 | ||||||||
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Earnings per common share - diluted |
$ | 0.53 | $ | 0.27 | $ | 1.81 | $ | 1.37 | ||||||||
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Farmers and Merchants Bancshares, Inc. |
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Selected Consolidated Financial Data |
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(Unaudited) |
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Dollars in thousands except per share data |
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As of or for the Years Ended December 31, |
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2025 |
2024 |
2023 |
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OPERATING DATA |
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Interest income |
$ | 42,355 | $ | 38,363 | $ | 31,323 | ||||||
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Interest expense |
17,965 | 17,527 | 9,907 | |||||||||
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Net interest income |
24,390 | 20,836 | 21,416 | |||||||||
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Provision for (recovery of) credit losses |
698 | 150 | (570 | ) | ||||||||
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Net interest income after provision for credit losses |
23,692 | 20,686 | 21,986 | |||||||||
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Noninterest income |
1,976 | 1,752 | 1,591 | |||||||||
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Noninterest expense |
18,295 | 16,929 | 15,142 | |||||||||
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Income before income taxes |
7,373 | 5,509 | 8,435 | |||||||||
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Income taxes |
1,607 | 1,231 | 2,017 | |||||||||
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Net income |
$ | 5,766 | $ | 4,278 | $ | 6,418 | ||||||
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PER SHARE DATA |
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Net income (Basic and diluted) |
$ | 1.81 | $ | 1.37 | $ | 2.08 | ||||||
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Dividends |
$ | 0.68 | $ | 0.67 | $ | 0.66 | ||||||
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Book value |
$ | 20.02 | $ | 17.77 | $ | 16.74 | ||||||
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KEY RATIOS |
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Return on average assets |
0.68 | % | 0.53 | % | 0.86 | % | ||||||
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Return on average equity |
9.57 | % | 7.83 | % | 13.08 | % | ||||||
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Efficiency ratio |
69.39 | % | 74.95 | % | 65.81 | % | ||||||
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Dividend payout ratio |
37.57 | % | 48.91 | % | 31.73 | % | ||||||
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Net yield on interest-earning assets |
3.01 | % | 2.68 | % | 2.97 | % | ||||||
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Tier 1 capital leverage ratio |
9.38 | % | 9.12 | % | 9.42 | % | ||||||
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AT PERIOD END |
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Total assets |
$ | 871,958 | $ | 844,643 | $ | 799,941 | ||||||
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Gross loans |
637,505 | 587,979 | 528,166 | |||||||||
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Cash and cash equivalents |
46,679 | 64,659 | 44,690 | |||||||||
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Securities |
139,785 | 146,211 | 184,248 | |||||||||
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Deposits |
720,459 | 758,806 | 680,963 | |||||||||
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Long term debt, FRB and FHLB borrowings |
74,736 | 11,329 | 57,973 | |||||||||
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Stockholders' equity |
64,660 | 56,272 | 52,178 | |||||||||
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SELECTED AVERAGE BALANCES |
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Total assets |
$ | 846,190 | $ | 810,043 | $ | 745,479 | ||||||
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Gross loans |
617,249 | 557,862 | 528,910 | |||||||||
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Cash and cash equivalents |
34,139 | 27,564 | 18,497 | |||||||||
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Securities |
164,300 | 177,743 | 182,160 | |||||||||
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Deposits |
740,792 | 672,493 | 642,039 | |||||||||
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Long term debt, FRB and FHLB borrowings |
33,346 | 72,287 | 48,041 | |||||||||
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Stockholders' equity |
60,254 | 54,610 | 49,063 | |||||||||
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ASSET QUALITY |
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Nonperforming assets |
$ | 1,673 | $ | 1,580 | $ | 1,898 | ||||||
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Nonperforming assets/total assets |
0.19 | % | 0.19 | % | 0.24 | % | ||||||
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Allowance for credit losses/total loans |
0.68 | % | 0.72 | % | 0.81 | % | ||||||