Farmers and Merchants Bancshares, Inc. Reports Earnings of $4.1 Million or $1.28 per Share for the Nine Months Ended September 30, 2025

Rhea-AI Summary

Farmers and Merchants Bancshares (OTC: FMFG) reported net income of $4.1M or $1.28 per share for the nine months ended September 30, 2025, up from $3.4M ($1.09) in 2024. Return on average equity rose to 9.24% and return on average assets to 0.65% for the nine-month period.

Key drivers included a $2.4M increase in net interest income, wider net yield on interest-earning assets (2.98% vs 2.67%), loan growth of $39.5M (loans net $622.5M), and a $13.0M unrealized AFS securities loss reflected in equity but not in regulatory capital. The company issued $12.5M subordinated debt and increased FHLB advances, while provision for credit losses was $595K (two written-down foreclosed loans).

Positive

• Net income +19% YoY (nine months: $4.1M vs $3.4M)
• Net interest income +$2.4M for nine months
• Loan growth $39.5M through Sept 30, 2025
• Tangible equity increased to $56.1M from $49.2M

Negative

• AFS unrealized loss $13.0M reduced book equity (net of tax)
• Provision for credit losses $595K for nine months (two loans written down)
• Noninterest expense +$1.3M year-to-date, driven by salaries and occupancy
• Funding shift FHLB advances and long-term debt rose by $45.9M to $62.2M

HAMPSTEAD, Md., Oct. 27, 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 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)
	September 30,				December 31,
		2025				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
* 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 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

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			$	756,638
Gross loans		626,714				576,512				530,649
Cash and cash equivalents		52,187				16,842				25,012
Securities		142,266				179,697				156,697
Deposits		734,096				673,745				644,263
Long term debt, FRB and FHLB borrowings		62,224				70,800				51,683
Stockholders' equity		63,163				59,162				48,262
SELECTED AVERAGE BALANCES
Total assets	$	857,387			$	807,493			$	745,762
Gross loans		621,092				560,895				530,824
Cash and cash equivalents		41,735				20,676				18,650
Securities		162,120				199,915				182,002
Deposits		761,693				663,594				637,647
Long term debt, FRB and FHLB borrowings		23,406				74,569				48,181
Stockholders' equity		60,751				55,819				49,627
ASSET QUALITY
Nonperforming assets	$	4,049			$	1,630			$	1,898
Nonperforming assets/total assets		0.47	%			0.20	%			0.25	%
Allowance for credit losses/total loans		0.68	%			0.73	%			0.85	%

Farmers and Merchants Bancshares, Inc.
Selected Consolidated Financial Data
(Unaudited)
Dollars in thousands except per share data
	As of or For the Nine Months Ended September 30,
		2025				2024				2023
OPERATING DATA
Interest income	$	31,139			$	28,092			$	22,438
Interest expense		13,300				12,700				6,323
Net interest income		17,839				15,392				16,115
Provision for (recovery of) credit losses		595				-				(570	)
Net interest income after provision
for (recovery of ) credit losses		17,244				15,392				16,685
Noninterest income		1,520				1,329				1,169
Noninterest expense		13,637				12,307				11,189
Income before income taxes		5,127				4,414				6,665
Income taxes		1,058				993				1,662
Net income	$	4,069			$	3,421			$	5,003
PER SHARE DATA
Net income (Basic and diluted)	$	1.28			$	1.09			$	1.63
Dividends	$	0.34			$	0.33			$	0.31
Book value	$	19.72			$	18.81			$	15.61
KEY RATIOS
Return on average assets		0.65	%			0.57	%			0.91	%
Return on average equity		9.24	%			8.53	%			13.45	%
Efficiency ratio *		72.68	%			73.60	%			62.67	%
Net yield on interest-earning assets		2.98	%			2.67	%			3.04	%
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
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	$	857,221			$	808,736			$	737,425
Gross loans		604,854				549,531				523,785
Cash and cash equivalents		58,423				30,766				16,138
Securities		144,239				181,973				151,760
Deposits		746,451				677,354				633,937
Long term debt, FRB and FHLB borrowings		39,277				61,006				43,390
Stockholders' equity		59,718				55,670				48,019
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	%

Farmers and Merchants Bancshares, Inc.
Selected Consolidated Financial Data
(Unaudited)
Amounts in thousands except per share data
	As of or For the Nine Months Ended September 30,
		2025				2024				2023
AT PERIOD END
Total assets	$	869,799			$	817,531			$	756,638
Gross loans		626,714				576,512				530,649
Cash and cash equivalents		52,187				16,842				25,012
Securities		142,266				179,697				156,697
Deposits		734,096				673,745				644,263
Long term debt, FRB and FHLB borrowings		62,224				70,800				51,683
Stockholders' equity		63,163				59,162				48,262
SELECTED AVERAGE BALANCES
Total assets	$	833,069			$	797,367			$	731,446
Gross loans		604,854				549,531				523,785
Cash and cash equivalents		58,423				30,766				16,138
Securities		165,248				204,353				172,952
Deposits		743,021				658,105				631,453
Long term debt, FRB and FHLB borrowings		19,996				72,280				40,082
Stockholders' equity		58,745				53,476				49,593
ASSET QUALITY
Nonperforming assets	$	4,049			$	1,630			$	1,898
Nonperforming assets/total assets		0.47	%			0.20	%			0.25	%
Allowance for credit losses/total loans		0.68	%			0.73	%			0.85	%

Contact: Mr. Gary A. Harris
President and Chief Executive Officer
(410) 374-1510, ext. 1104

FAQ

What did FMFG report for net income and EPS for the nine months ended September 30, 2025?

FMFG reported $4.1M net income and $1.28 per share (basic and diluted) for the nine months ended September 30, 2025.

How much did FMFG's net interest income change for the nine months ended September 30, 2025?

Net interest income increased by approximately $2.4M for the nine months ended September 30, 2025 versus the same period in 2024.

How much loan growth did FMFG report through September 30, 2025?

FMFG reported net loan growth of about $39.5M, with loans net of allowance at $622.5M as of September 30, 2025.

What caused FMFG to record a provision for credit losses in 2025?

The Company recorded a $595K provision for credit losses in the nine months ended September 30, 2025 related to the write down of two loans that were foreclosed upon.

How did FMFG's available-for-sale (AFS) securities affect book value per share at Sept. 30, 2025?

A $13.0M unrealized loss (net of tax) on the AFS portfolio reduced equity; book value per share was $19.72 at Sept. 30, 2025.

What funding changes did FMFG make in September 2025 and why?

FMFG increased Federal Home Loan Bank advances and issued $12.5M subordinated debt in September 2025, using proceeds to repay maturing term debt and replace maturing brokered CDs.