8-K
Farmers & Merchants Bancshares, Inc. (FMFG)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 27, 2025
Farmers and Merchants Bancshares, Inc.
(Exact name of registrant as specified in its charter)
| Maryland | 000-55756 | 81-3605835 |
|---|---|---|
| (State or other jurisdiction of<br><br> <br>incorporation or organization) | (Commission file number) | (IRS Employer<br><br> <br>Identification No.) |
| 4510 Lower Beckleysville Road, Suite H, Hampstead, MD | 21074 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (410) 374-1510
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operation and Financial Condition.
On October 27, 2025, Farmers and Merchants Bancshares, Inc. (the “Company”) issued a press release describing its financial results for the three and nine month periods ended September 30, 2025. A copy of the press release is furnished herewith as Exhibit 99.1.
The information contained in this Item 2.02 and in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
|---|
The exhibits furnished with this report are listed in the following Exhibit Index:
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release dated October 27, 2025 (furnished herewith). |
| --- | --- |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| --- | --- |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FARMERS AND MERCHANTS BANCSHARES, INC. | ||
|---|---|---|
| Dated: October 27, 2025 | By: | /s/ Gary A. Harris |
| Gary A. Harris | ||
| President & CEO |
ex_875900.htm
Exhibit 99.1
| FOR IMMEDIATE RELEASE<br><br> <br>October 27, 2025 | FOR FURTHER INFORMATION CONTACT: |
|---|---|
| Farmers and Merchants Bancshares, Inc.<br><br> <br>4510 Lower Beckleysville Rd, Suite H<br><br> <br>Hampstead, Maryland 21074 | Contact: Mr. Gary A. Harris<br><br> <br>President and Chief Executive Officer<br><br> <br>(410) 374-1510, ext. 1104 |
FARMERS AND MERCHANTS BANCSHARES, INC. REPORTS EARNINGS OF $4.1 MILLION OR $1.28 PER SHARE FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2025
HAMPSTEAD, MARYLAND (October 27, 2025) – 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 nine months ended September 30, 2025 was $4.1 million, or $1.28 per common share (basic and diluted) compared to $3.4 million, or $1.09 per common share (basic and diluted), for the same period in 2024. The Company’s return on average equity during the nine months ended September 30, 2025 was 9.24% compared to 8.53% for the same period in 2024. The Company’s return on average assets during the nine months ended September 30, 2025 and 2024 was 0.65% and 0.57%, respectively.
Net income for the three months ended September 30, 2025 was $1.7 million, or $0.53 per common share (basic and diluted) compared to $1.1 million, or $0.36 per common share (basic and diluted), for the third quarter of 2024. The Company’s return on average equity during the three months ended September 30, 2025 was 11.23% compared to 8.05% for the same period in 2024. The Company’s return on average assets during the three months ended September 30, 2025 was 0.80% compared to 0.56% for the same period in 2024.
Net interest income for the nine months ended September 30, 2025 was $2.4 million higher when compared to the same period in 2024 due to a widening net yield on interest-earning assets of 2.98% for the nine months ended September 30, 2025 compared to 2.67% for the same period in 2024. The yield on earning assets increased to 5.19% for the nine months ended September 30, 2025, compared to 4.86% for the same period in 2024. The cost of interest bearing liabilities decreased to 2.70% for the nine months ended September 30, 2025, down from 2.71% for the same period in 2024. Average interest earning assets were $804.3 million for the nine months ended September 30, 2025 compared to $775.9 million for the same period in 2024. Gross interest income increased by $3.0 million to $31.1 million for the nine months ended September 30, 2025, up from $28.1 million for the same period in 2024. Average interest bearing liabilities increased by $33.3 million to $657.8 million for the nine months ended September 30, 2025 from $624.5 million for the same period in 2024. Total interest expense increased $600 thousand to $13.3 million for the nine months ended September 30, 2025 compared to $12.7 million for the same period in 2024.
The Company recorded a $595 thousand provision for credit losses for the nine months ended September 30, 2025. There was no provision recorded for the nine months ended September 30, 2024. The increase in the provision was related to the write down of two loans, both of which were foreclosed upon.
Noninterest income increased by $191 thousand for the nine months ended September 30, 2025 when compared to the same period in 2024. The increase was due to several factors, including a $85 thousand increase in mortgage banking revenue, a $28 thousand increase in bank owned life insurance income, a $126 thousand increase in gain on settlement of fair value hedge, and a $109 thousand increase in fees and commissions. Noninterest expense was $1.3 million higher for the nine months ended September 30, 2025 when compared to the same period in 2024, due primarily to a $617 thousand increase in salaries and benefits and a $379 thousand combined increase in occupancy and furniture and equipment costs. ATM and debit card expenses decreased by $67 thousand, primarily due to conversion related costs incurred in 2024. Also, the Bank’s FDIC assessment expense increased by $184 thousand due to higher FDIC assessment rates. Professional services increased by $35 thousand due to the higher legal fees in 2025 related to stockholder matters. These increases were offset by $94 thousand in lower service charges on deposits and a $70 thousand decrease of non-recurring gain on insurance settlement recognized in 2024.
Total assets increased to $869.6 million at September 30, 2025 from $844.6 million at December 31, 2024. Loans, net of the allowance for credit losses, increased to $622.5 million at September 30, 2025 from $583.0 million at December 31, 2024. Investments in debt securities decreased to $142.3 million at September 30, 2025 from $146.2 million at December 31, 2024. Deposits decreased to $734.1 million at September 30, 2025 from $758.8 million at December 31, 2024. Federal Home Loan Bank advances and other long-term debt increased by $45.9 million to $62.2 million as of September 30, 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 $40 million of maturing brokered CDs. Additionally, the Company issued $12.5 million in subordinated debt during September 2025. The proceeds of which were used to repay the Company’s maturing term loan of approximately $10 million as well to add an interest reserve and increasing the Bank’s capital. The Company’s tangible equity was $56.1 million at September 30, 2025 compared to $49.2 million at December 31, 2024.
The book value of the Company’s common stock increased to $19.72 per share at September 30, 2025 from $17.77 per share at December 31, 2024. Book value per share at September 30, 2025 is reflective of the $13.0 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 intend to hold these securities to maturity, 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 “The decrease in interest rates over the past year, along with the repricing of the existing loan portfolio, has allowed our net yield on interest-earning assets to expand. We have strategically taken advantage of the lower interest rates by exercising call options on certain funding sources and replacing them with lower cost funds. Loan production is robust with over $39.5 million in net loan growth through September 30, 2025. Our asset quality remains strong with zero non-accrual loans as of September 30, 2025. The Towson Commercial Banking office, which opened in June of 2024, has exceeded our expectations with total deposits over $44 million as of September 30, 2025 coupled with strong loan growth. We remain focused on reducing costs while expanding income-generating opportunities. Investments made over the past two years in talent and infrastructure are beginning to yield positive returns, positioning us well for continued growth.”
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”.
| Farmers and Merchants Bancshares, Inc. and Subsidiaries | |||||
|---|---|---|---|---|---|
| Consolidated Balance Sheets | |||||
| Dollars in thousands except share and per share data | |||||
| (Unaudited) | |||||
| December 31, | |||||
| --- | --- | --- | --- | --- | --- |
| 2024 * | |||||
| Assets | |||||
| Cash and due from banks | 51,666 | $ | 63,962 | ||
| Federal funds sold and other interest-bearing deposits | 521 | 697 | |||
| Cash and cash equivalents | 52,187 | 64,659 | |||
| Certificates of deposit in other banks | 100 | 100 | |||
| Securities available for sale, at fair value | 121,138 | 125,713 | |||
| Securities held to maturity, at amortized cost less allowance for credit losses of 79 and 60 | 21,128 | 20,499 | |||
| Equity security, at fair value | 546 | 518 | |||
| Restricted stock, at cost | 3,100 | 921 | |||
| Mortgage loans held for sale | - | 157 | |||
| Loans, less allowance for credit losses of 4,257 and 4,260 | 622,457 | 582,993 | |||
| Premises and equipment, net | 7,222 | 7,349 | |||
| Accrued interest receivable | 2,550 | 2,439 | |||
| Deferred income taxes, net | 6,410 | 7,606 | |||
| Other real estate owned, net | 2,775 | 1,176 | |||
| Bank owned life insurance | 15,640 | 15,324 | |||
| Goodwill and other intangibles, net | 7,020 | 7,026 | |||
| Other assets | 7,359 | 8,163 | |||
| Total Assets | 869,632 | $ | 844,643 | ||
| Liabilities and Stockholders' Equity | |||||
| Deposits | |||||
| Noninterest-bearing | 116,187 | $ | 107,197 | ||
| Interest-bearing | 617,909 | 651,609 | |||
| Total deposits | 734,096 | 758,806 | |||
| Securities sold under repurchase agreements | 2,458 | 5,564 | |||
| Federal Home Loan Bank of Atlanta advances | 50,200 | 5,000 | |||
| Long-term debt, net of issuance costs | 12,024 | 11,329 | |||
| Accrued interest payable | 935 | 1,003 | |||
| Other liabilities | 6,756 | 6,669 | |||
| Total liabilities | 806,469 | 788,371 | |||
| Stockholders' equity | |||||
| Common stock, par value .01 per share, authorized 5,000,000 shares; issued and outstanding 3,202,935 shares in 2025 and 3,166,653 shares in 2024 | 32 | 32 | |||
| Additional paid-in capital | 31,718 | 31,136 | |||
| Retained earnings | 44,602 | 41,613 | |||
| Accumulated other comprehensive loss | (13,189 | ) | (16,509 | ) | |
| Total Stockholders' equity | 63,163 | 56,272 | |||
| Total liabilities and stockholders' equity | 869,632 | $ | 844,643 |
All values are in US Dollars.
* Derived from audited consolidated financial statements
The accompanying notes are an integral part of these 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 September 30, | Nine Months Ended September 30, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2025 | 2024 | 2025 | 2024 | ||||||||
| Interest income | |||||||||||
| Loans, including fees | $ | 9,307 | $ | 7,902 | $ | 26,572 | $ | 22,021 | |||
| Investment securities - taxable | **** | 1,071 | 1,623 | **** | 3,191 | 4,794 | |||||
| Investment securities - tax exempt | **** | 157 | 141 | **** | 467 | 416 | |||||
| Federal funds sold and other interest earning assets | **** | 424 | 181 | **** | 909 | 861 | |||||
| Total interest income | **** | 10,959 | 9,847 | **** | 31,139 | 28,092 | |||||
| Interest expense | |||||||||||
| Deposits | **** | 4,344 | 3,911 | **** | 12,665 | 10,244 | |||||
| Securities sold under repurchase agreements | **** | 13 | 13 | **** | 42 | 49 | |||||
| Federal Home Loan Bank advances | **** | 129 | 65 | **** | 251 | 109 | |||||
| Federal Reserve Bank advances | **** | - | 648 | **** | - | 1,911 | |||||
| Long-term debt | **** | 120 | 125 | **** | 342 | 387 | |||||
| Total interest expense | **** | 4,606 | 4,762 | **** | 13,300 | 12,700 | |||||
| Net interest income | **** | 6,353 | 5,085 | **** | 17,839 | 15,392 | |||||
| Provision for credit losses | **** | 327 | - | **** | 595 | - | |||||
| Net interest income after provision for credit losses | **** | 6,026 | 5,085 | **** | 17,244 | 15,392 | |||||
| Noninterest income | |||||||||||
| Service charges on deposit accounts | **** | 185 | 209 | **** | 527 | 621 | |||||
| Mortgage banking income | **** | 75 | 43 | **** | 151 | 66 | |||||
| Bank owned life insurance income | **** | 105 | 103 | **** | 316 | 288 | |||||
| Fair value adjustment of equity security | **** | 7 | 20 | **** | 16 | 14 | |||||
| Gain (loss) on settlement of fair value hedge | **** | - | - | **** | 94 | (32 | ) | ||||
| Loss on sale of premises and equipment | **** | - | (5 | ) | **** | - | (5 | ) | |||
| Gain on insurance proceeds, net | **** | 73 | - | **** | 73 | 143 | |||||
| Other fees and commissions | **** | 106 | 81 | **** | 343 | 234 | |||||
| Total noninterest income | **** | 551 | 451 | **** | 1,520 | 1,329 | |||||
| Noninterest expense | |||||||||||
| Salaries | **** | 2,178 | 1,878 | **** | 6,576 | 5,848 | |||||
| Employee benefits | **** | 573 | 549 | **** | 1,486 | 1,597 | |||||
| Occupancy | **** | 281 | 275 | **** | 890 | 799 | |||||
| Furniture and equipment | **** | 370 | 327 | **** | 1,185 | 897 | |||||
| Professional services | **** | 174 | 167 | **** | 565 | 530 | |||||
| Automated teller machine and debit card expenses | **** | 71 | 173 | **** | 407 | 474 | |||||
| Federal Deposit Insurance Corporation premiums | **** | 150 | 91 | **** | 466 | 282 | |||||
| Postage, delivery, and armored carrier | **** | 62 | 72 | **** | 204 | 217 | |||||
| Advertising | **** | 63 | 57 | **** | 193 | 180 | |||||
| Other real estate owned expense, net | **** | (13 | ) | 11 | **** | 58 | 17 | ||||
| Other | **** | 500 | 471 | **** | 1,607 | 1,466 | |||||
| Total noninterest expense | **** | 4,409 | 4,071 | **** | 13,637 | 12,307 | |||||
| Income before income taxes | **** | 2,168 | 1,465 | **** | 5,127 | 4,414 | |||||
| Income taxes | **** | 462 | 342 | **** | 1,058 | 993 | |||||
| Net income | $ | 1,706 | $ | 1,123 | $ | 4,069 | $ | 3,421 | |||
| Earnings per common share - basic and diluted | $ | 0.53 | $ | 0.36 | $ | 1.28 | $ | 1.09 |
The accompanying notes are an integral part of these consolidated financial statements.
| 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 September 30, | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2025 | 2024 | 2023 | |||||||
| OPERATING DATA | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Interest income | $ | 10,959 | $ | 9,847 | $ | 8,002 | |||
| Interest expense | 4,606 | 4,762 | 2,815 | ||||||
| Net interest income | 6,353 | 5,085 | 5,187 | ||||||
| Provision for (recovery of) credit losses | 327 | - | (75 | ) | |||||
| Net interest income after provision | |||||||||
| for (recovery of) credit losses | 6,026 | 5,085 | 5,262 | ||||||
| Noninterest income | 551 | 451 | 383 | ||||||
| Noninterest expense | 4,409 | 4,071 | 3,746 | ||||||
| Income before income taxes | 2,168 | 1,465 | 1,899 | ||||||
| Income taxes | 462 | 342 | 467 | ||||||
| Net income | $ | 1,706 | $ | 1,123 | $ | 1,432 | |||
| PER SHARE DATA | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Net income (Basic and diluted) | $ | 0.53 | $ | 0.36 | $ | 0.46 | |||
| Dividends | $ | 0.34 | $ | 0.00 | $ | 0.31 | |||
| Book value | $ | 19.72 | $ | 18.81 | $ | 15.61 | |||
| KEY RATIOS | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Return on average assets | 0.80 | % | 0.56 | % | 0.77 | % | |||
| Return on average equity | 11.23 | % | 8.05 | % | 11.54 | % | |||
| Efficiency ratio * | 67.04 | % | 73.54 | % | 66.36 | % | |||
| Net yield on interest-earning assets | 3.15 | % | 2.62 | % | 2.88 | % | |||
| Tier 1 capital leverage ratio | 9.29 | % | 9.42 | % | 9.91 | % |
* annualized noninterest expense divided by net interest income after provision for credit losses and noninterest income
| 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 September 30, | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2025 | 2024 | 2023 | |||||||
| AT PERIOD END | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Total assets | $ | 869,799 | $ | 817,531 | $ | 730,262 | |||
| Gross loans | 626,714 | 575,753 | 535,646 | ||||||
| Cash and cash equivalents | 52,187 | 16,842 | 12,288 | ||||||
| Securities | 142,266 | 179,697 | 139,949 | ||||||
| Deposits | 734,096 | 673,745 | 631,811 | ||||||
| Long term debt, FRB and FHLB borrowings | 62,224 | 70,800 | 38,154 | ||||||
| Stockholders' equity | 63,163 | 59,162 | 49,834 | ||||||
| SELECTED AVERAGE BALANCES | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Total assets | $ | 855,971 | $ | 808,044 | $ | 743,450 | |||
| Gross loans | 621,092 | 560,895 | 530,824 | ||||||
| Cash and cash equivalents | 41,735 | 20,676 | 18,650 | ||||||
| Securities | 142,514 | 178,679 | 148,323 | ||||||
| Deposits | 741,497 | 662,477 | 638,037 | ||||||
| Long term debt, FRB and FHLB borrowings | 41,306 | 76,036 | 44,919 | ||||||
| Stockholders' equity | 61,705 | 56,853 | 49,048 | ||||||
| ASSET QUALITY | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** | ****** |
| Nonperforming assets | $ | 2,775 | $ | 1,630 | $ | 1,898 | |||
| Nonperforming assets/total assets | 0.32 | % | 0.20 | % | 0.26 | % | |||
| Allowance for credit losses/total loans | 0.68 | % | 0.56 | % | 0.87 | % |