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
