Farmers and Merchants Bancshares, Inc. Reports Earnings of $3.7 Million or $1.14 Per Share For the Six Months Ended June 30, 2026

Company Release - 7/23/2026 9:00 AM ET HAMPSTEAD, Md., July 23, 2026 (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, 2026 was $3.7 million, or $1.14 per common share (basic and diluted) compared to $2.4 million, or $0.74 per common share (basic and diluted), for the same period in 2025. The Company’s annualized return on average assets during the six months ended June 30, 2026 was 0.87% compared to 0.58% for the same period in 2025. The Company’s annualized return on average equity during the six months ended June 30, 2026 was 11.23% compared to 8.18% for the same period in 2025. Net income for the three months ended June 30, 2026 was $1.9 million, or $0.58 per common share (basic and diluted) compared to $1.2 million, or $0.38 per common share (basic and diluted), for the second quarter of 2025. The Company’s annualized return on average assets during the three months ended June 30, 2026 was 0.88% compared to 0.58% for the same period in 2025. The Company’s annualized return on average equity during the three months ended June 30, 2026 was 11.28% compared to 8.15% for the same period in 2025. Net interest income for the six months ended June 30, 2026 was $2.1 million higher when compared to the same period in 2025 due to a widening net yield on interest-earning assets of 3.27% for the six months ended June 30, 2026 compared to 2.92% for the same period in 2025. The yield on earning assets increased to 5.35% for the six months ended June 30, 2026, compared to 5.11% for the same period in 2025. The cost of interest bearing liabilities decreased to 2.57% for the six months ended June 30, 2026, down from 2.67% for the same period in 2025. Average interest earning assets were $831.8 million for the six months ended June 30, 2026 compared to $793.5 million for the same period in 2025. Gross interest income increased by $2.0 million to $22.2 million for the six months ended June 30, 2026, up from $20.2 million for the same period in 2025. Average interest bearing liabilities increased by $19.1 million to $669.8 million for the six months ended June 30, 2026 from $650.7 million for the same period in 2025. Total interest expense decreased slightly to $8.6 million for the six months ended June 30, 2026 compared to $8.7 million for the same period in 2025. The Company did not record a provision for credit losses for the six months ended June 30, 2026. There was a $268 thousand provision recorded for the six months ended June 30, 2025 which was related to a write down of one loan that was ultimately foreclosed upon. Noninterest income decreased by $15 thousand for the six months ended June 30, 2026 when compared to the same period in 2025. The decrease was due to several factors, including the non-recurrence of a gain on the settlement of a fair value hedge of $94 thousand in 2025, an $11 thousand decrease in service charges on deposit accounts, a $9 thousand decrease in bank owned life insurance income, and a $15 thousand decrease in the fair value adjustment of an equity security. These were offset by a $54 thousand increase in mortgage banking revenue and a $60 thousand increase in other fees and commissions. Noninterest expense was $306 thousand higher for the six months ended June 30, 2026 when compared to the same period in 2025, due primarily to a $391 thousand increase in salaries and benefits resulting from new staffing additions. Also contributing to the increase was a $126 thousand combined increase in occupancy and furniture and equipment costs. These increases were offset in part by year over year decreases in ATM and debit card expenses of $20 thousand, FDIC assessments of $134 thousand due to lower FDIC assessment rates, professional services of $47 thousand, advertising costs of $24 thousand, and other real estate owned expenses of $21 thousand. Total assets increased to $874.2 million at June 30, 2026 from $872.0 million at December 31, 2025. Loans, net of the allowance for credit losses, increased to $636.5 million at June 30, 2026 from $633.1 million at December 31, 2025. Investments in debt securities decreased to $130.0 million at June 30, 2026 from $139.8 million at December 31, 2025. Deposits increased to $725.1 million at June 30, 2026 from $720.5 million at December 31, 2025. Total borrowings decreased by $4.7 million to $74.3 million as of June 30, 2026, down from $79.0 million at December 31, 2025. The decrease was primarily due to the Company repaying $5.0 million in Federal Home Loan Bank advances. The book value of the Company’s common stock increased to $20.72 per share at June 30, 2026 from $20.02 per share at December 31, 2025. Book value per share at June 30, 2026 is reflective of the $12.9 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 Company’s tangible equity was $60.6 million at June 30, 2026 compared to $57.6 million at December 31, 2025. Gary A. Harris, President and CEO, commented “Our second quarter results reflect the continued momentum we have built across the organization. Net income for the first six months of 2026 increased 57% compared to the same period in 2025, demonstrating the strength of our core banking operations and the effectiveness of our growth strategy. As we continue investing in talent, technology, and customer experience, we remain confident in our ability to generate sustainable earnings growth and position the Bank for long-term success.” About the Company The Company is the financial holding company for Farmers and Merchants Bank, a Maryland-chartered community bank headquartered in Hampstead, Maryland. Founded in 1919, the Bank has served the deposit, lending, and financial needs of consumers and businesses across Carroll and Baltimore Counties for more than a century. The Bank operates eight locations along Routes 30, 795, 140, 26, and 45 corridors, including offices in Hampstead, Upperco, Owings Mills, Reisterstown, Westminster, Eldersburg, Greenmount, and Towson. Certain broker-dealers make a market in the common stock of Farmers and Merchants Bancshares, Inc., and trades are reported through the OTCID Basic Market under the symbol “FMFG”. For more information, visit fmb1919.bank. 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.Contact:Mr. Gary A. Harris4510 Lower Beckleysville Rd, Suite H President and Chief Executive OfficerHampstead, Maryland 21074 (410) 374-1510, ext. 1104 Farmers and Merchants Bancshares, Inc. and Subsidiaries Consolidated Balance Sheets Dollars in thousands except per share data (Unaudited) June 30, 2026 December 31, 2025 * Assets Cash and due from banks$54,323 $46,113 Federal funds sold and other interest-bearing deposits 1,163 566 Cash and cash equivalents 55,486 46,679 Certificates of deposit in other banks 100 100 Securities available for sale, at fair value 109,091 118,730 Securities held to maturity, at amortized cost less allowance for credit losses of $63 and $79 20,863 21,055 Equity security, at fair value 553 550 Restricted stock, at cost 3,475 3,693 Mortgage loans held for sale 694 714 Loans, less allowance for credit losses of $4,518 and $4,361 636,549 633,144 Premises and equipment, net 6,987 7,141 Accrued interest receivable 2,402 2,535 Deferred income taxes, net 6,404 6,277 Other real estate owned, net 1,665 1,673 Bank owned life insurance 15,555 15,353 Goodwill and other intangibles, net 7,014 7,018 Other assets 7,374 7,296 Total Assets$874,212 $871,958 Liabilities and Stockholders' Equity Deposits Noninterest-bearing$126,385 $117,098 Interest-bearing 598,740 603,361 Total deposits 725,125 720,459 Securities sold under repurchase agreements 4,559 4,317 Federal Home Loan Bank of Atlanta advances 57,700 62,700 Long-term debt, net of issuance costs 12,060 12,036 Accrued interest payable 989 1,278 Other liabilities 6,185 6,508 Total liabilities 806,618 807,298 Stockholders' equity Common stock, par value $.01 per share, authorized 5,000,000 shares; issued and outstanding 3,262,958 shares in 2026 and 3,229,795 shares in 2025 33 32 Additional paid-in capital 32,735 32,148 Retained earnings 47,766 45,210 Accumulated other comprehensive loss (12,940) (12,730) Total Stockholders' equity 67,594 64,660 Total liabilities and stockholders' equity$874,212 $871,958 * Derived from audited consolidated financial statements Farmers and Merchants Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) Amounts in thousands except per share data Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Interest income Loans, including fees$9,647 $8,899 $19,409 $17,265 Investment securities - taxable 798 1,070 1,643 2,121 Investment securities - tax exempt 157 153 298 309 Federal funds sold and other interest earning assets 417 171 819 485 Total interest income 11,019 10,293 22,169 20,180 Interest expense Deposits 3,417 4,071 6,922 8,321 Securities sold under repurchase agreements 10 12 26 29 Federal Home Loan Bank advances 559 110 1,158 122 Long-term debt 258 109 516 222 Total interest expense 4,244 4,302 8,622 8,694 Net interest income 6,775 5,991 13,547 11,486 Provision for credit losses - 238 - 268 Net interest income after provision for credit losses 6,775 5,753 13,547 11,218 Noninterest income Service charges on deposit accounts 174 178 331 342 Mortgage banking income 72 47 130 76 Bank owned life insurance income 102 106 202 211 Fair value adjustment of equity security (2) 1 (5) 10 Gain on settlement of fair value hedge - - - 94 Other fees and commissions 177 124 296 236 Total noninterest income 523 456 954 969 Noninterest expense Salaries 2,348 2,191 4,425 4,398 Employee benefits 583 531 1,277 913 Occupancy 319 280 664 608 Furniture and equipment 420 480 885 815 Professional services 201 218 344 391 Automated teller machine and debit card expenses 147 168 316 336 Federal Deposit Insurance Corporation premiums 81 117 182 316 Postage, delivery, and armored carrier 65 64 131 142 Advertising 49 74 106 130 Other real estate owned expense, net 6 67 50 71 Other 573 540 1,154 1,108 Total noninterest expense 4,792 4,730 9,534 9,228 Income before income taxes 2,506 1,479 4,967 2,959 Income taxes 610 280 1,246 596 Net income$1,896 $1,199 $3,721 $2,363 Earnings per common share - basic$0.58 $0.38 $1.14 $0.74 Earnings per common share - diluted$0.58 $0.38 $1.14 $0.74 Farmers and Merchants Bancshares, Inc. Selected Consolidated Financial Data (Unaudited) Amounts in thousands except per share data As of or For the Three Months Ended June 30, 2026 2025 2024 AT PERIOD END Total assets$874,212 $842,218 $798,556 Gross loans 641,067 619,702 550,118 Cash and cash equivalents 55,486 31,283 24,510 AFS and HTM Securities 129,954 142,762 177,661 Deposits 725,125 748,898 651,209 Borrowings 74,319 20,388 81,271 Stockholders' equity 67,594 60,246 54,543 SELECTED AVERAGE BALANCES Total assets$860,113 $825,060 $748,510 Gross loans 635,540 616,097 541,267 Cash and cash equivalents 42,884 14,959 18,395 Debt Securities 150,136 165,409 204,779 Deposits 712,115 734,631 647,215 Borrowings 70,442 20,786 72,762 Stockholders' equity 67,413 58,827 52,431 ASSET QUALITY Nonperforming assets$1,665 $3,028 $1,646 Nonperforming assets/total assets 0.19% 0.36% 0.21% Allowance for credit losses/total loans 0.70% 0.68% 0.74% Farmers and Merchants Bancshares, Inc. Selected Consolidated Financial Data (Unaudited) Amounts in thousands except per share data As of or For the Three Months Ended June 30, 2026 2025 2024 OPERATING DATA Interest income$11,019 $10,293 $9,180 Interest expense 4,244 4,302 4,047 Net interest income 6,775 5,991 5,133 Provision for credit losses - 238 - Net interest income after provision for credit losses 6,775 5,753 5,133 Noninterest income 523 456 374 Noninterest expense 4,792 4,730 4,123 Income before income taxes 2,506 1,479 1,384 Income taxes 610 280 305 Net income$1,896 $1,199 $1,079 PER SHARE DATA Earnings per share - basic and diluted$0.58 $0.38 $0.35 Dividends$0.36 $0.00 $0.33 Book value$20.72 $18.97 $17.77 KEY RATIOS Return on average assets (annualized) 0.88% 0.58% 0.55% Return on average equity (annualized) 11.28% 8.15% 8.23% Efficiency ratio 65.66% 73.37% 74.86% Dividend payout ratio 61.02% 0.00% 94.28% Net yield on interest-earning assets 3.27% 3.03% 2.71% Tier 1 capital leverage ratio 9.98% 9.51% 9.58% 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, 2026 2025 2024 AT PERIOD END Total assets$874,212 $842,218 $798,556 Gross loans 641,067 619,702 550,118 Cash and cash equivalents 55,486 31,283 24,510 AFS and HTM Securities 129,954 142,762 177,661 Deposits 725,125 748,898 651,209 Borrowings 74,319 20,388 81,271 Stockholders' equity 67,594 60,246 54,543 SELECTED AVERAGE BALANCES Total assets$863,653 $820,910 $792,174 Gross loans 636,731 604,875 537,917 Cash and cash equivalents 42,689 21,830 27,809 Debt Securities 152,376 166,812 206,593 Deposits 712,823 733,685 655,331 Borrowings 72,591 18,291 71,140 Stockholders' equity 66,803 57,742 52,192 ASSET QUALITY Nonperforming assets$1,665 $3,028 $1,646 Nonperforming assets/total assets 0.19% 0.36% 0.21% Allowance for credit losses/total loans 0.70% 0.68% 0.74% 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, 2026 2025 2024 OPERATING DATA Interest income$22,169 $20,180 $18,246 Interest expense 8,622 8,694 7,938 Net interest income 13,547 11,486 10,308 Provision for credit losses - 268 - Net interest income after provision for credit losses 13,547 11,218 10,308 Noninterest income 954 969 878 Noninterest expense 9,534 9,228 8,236 Income before income taxes 4,967 2,959 2,950 Income taxes 1,246 596 652 Net income$3,721 $2,363 $2,298 PER SHARE DATA Earnings per share - basic and diluted$1.14 $0.74 $0.74 Dividends$0.36 $0.00 $0.33 Book value$20.72 $18.97 $17.77 KEY RATIOS Return on average assets 0.87% 0.58% 0.58% Return on average equity 11.23% 8.18% 8.81% Efficiency ratio 65.75% 74.09% 73.63% Dividend payout ratio 31.30% 0.00% 44.59% Net yield on interest-earning assets 3.27% 2.92% 2.70% Tier 1 capital leverage ratio 9.98% 9.51% 9.58%  Source: Farmers and Merchants Bancshares, Inc.