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Farmers and Merchants Bancshares, Inc. Reports Earnings of $5.7 Million or $1.76 Per Share For the Nine Months Ended September 30, 2026

HAMPSTEAD, Md., Oct. 22, 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 nine months ended September 30, 2026 was $5.7 million, or $1.76 per common share (basic and diluted), compared to $4.1 million, or $1.28 per common share (basic and diluted), for the same period in 2025. The Company’s annualized return on average assets during the nine months ended September 30, 2026 was 0.88% compared to 0.65% for the same period in 2025. The Company’s annualized return on average equity during the nine months ended September 30, 2026 was 11.58% compared to 9.24% for the same period in 2025.

Net income for the three months ended September 30, 2026 was $2.0 million, or $0.62 per common share (basic and diluted), compared to $1.7 million, or $0.53 per common share (basic and diluted), for the third quarter of 2025. The Company’s annualized return on average assets during the three months ended September 30, 2026 was 0.92% compared to 0.80% for the same period in 2025. The Company’s annualized return on average equity during the three months ended September 30, 2026 was 12.48% compared to 11.23% for the same period in 2025.           

Net interest income for the nine months ended September 30, 2026 was $2.9 million higher when compared to the same period in 2025 due to a widening net yield on interest-earning assets of 3.32% for the nine months ended September 30, 2026 compared to 2.98% for the same period in 2025. The yield on earning assets increased to 5.40% for the nine months ended September 30, 2026, compared to 5.19% for the same period in 2025. The cost of interest bearing liabilities decreased to 2.58% for the nine months ended September 30, 2026, down from 2.70% for the same period in 2025. Average interest earning assets were $837.0 million for the nine months ended September 30, 2026 compared to $804.3 million for the same period in 2025. Gross interest income increased by $2.6 million to $33.7 million for the nine months ended September 30, 2026, up from $31.1 million for the same period in 2025. Average interest bearing liabilities increased by $14.9 million to $672.7 million for the nine months ended September 30, 2026 from $657.8 million for the same period in 2025. Total interest expense decreased slightly to $13.0 million for the nine months ended September 30, 2026 compared to $13.3 million for the same period in 2025.

The Company did not record a provision for credit losses for the nine months ended September 30, 2026. There was a $595 thousand provision recorded for the nine months ended September 30, 2025 which was related to a write down of one loan that was ultimately foreclosed upon.

Noninterest income decreased by $46 thousand for the nine months ended September 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, a $22 thousand decrease in service charges on deposit accounts, the non-reccurance of a gain on insurance proceeds of $73 thousand, and a $41 thousand decrease in the fair value adjustment of an equity security. These were offset by a $29 thousand increase in mortgage banking revenue, a $74 thousand increase in bank owned life insurance income, an increase in the gain on the sale of SBA loans of $13 thousand, and a $68 thousand increase in other fees and commissions. Noninterest expense was $917 thousand higher for the nine months ended September 30, 2026 when compared to the same period in 2025, due primarily to a $730 thousand increase in salaries and benefits resulting from new staffing additions and incentives. Also contributing to the increase was a $230 thousand combined increase in occupancy and furniture and equipment costs, an increase in ATM and debit card expenses of $86 thousand, and a $160 thousand increase in other expenses. These increases were offset in part by year over year decreases in FDIC assessments of $188 thousand, professional services of $54 thousand, advertising costs of $41 thousand, postage of $5 thousand, and other real estate owned expenses of $1 thousand.

Total assets decreased to $865.4 million at September 30, 2026 from $872.0 million at December 31, 2025. Loans, net of the allowance for credit losses, increased to $655.0 million at September 30, 2026 from $633.1 million at December 31, 2025. Investments in debt securities decreased to $124.0 million at September 30, 2026 from $139.8 million at December 31, 2025. Deposits decreased to $716.0 million at September 30, 2026 from $720.5 million at December 31, 2025.   Total borrowings decreased by $4.6 million to $74.4 million at September 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 $20.70 per share at September 30, 2026 from $20.02 per share at December 31, 2025. Book value per share at September 30, 2026 was reflective of the $15.0 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. The Company’s tangible equity was $60.6 million at September 30, 2026 compared to $57.6 million at December 31, 2025.

Gary A. Harris, President and CEO, commented “Our results through the first nine months of 2026 reflect the progress we're making across the Bank, with net income increasing 41.2% over the same period last year and loan growth of approximately $33 million year over year. For us, growth is about more than getting bigger. It's about becoming a better bank for the people and businesses who count on us. That means investing in our team, strengthening our capabilities, and making it easier for customers to do business with us, while preserving the personal relationships that have defined Farmers and Merchants for more than a century.”

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”.

FOR FURTHER INFORMATION CONTACT:    
     
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. and Subsidiaries
Consolidated Balance Sheets
Dollars in thousands except per share data
 
  September 30,   December 31,
    2026     2025 *
  (Unaudited)    
Assets    
       
Cash and due from banks $ 31,945     $ 46,113  
Federal funds sold and other interest-bearing deposits   803       566  
          Cash and cash equivalents   32,748       46,679  
Certificates of deposit in other banks   100       100  
Securities available for sale, at fair value   103,257       118,730  
Securities held to maturity, at amortized cost less allowance for credit      
  losses of $95 and $79   20,774       21,055  
Equity security, at fair value   538       550  
Restricted stock, at cost   3,475       3,693  
Mortgage loans held for sale   113       714  
Loans, less allowance for credit losses of $4,666 and $4,361   654,965       633,144  
Premises and equipment, net   7,465       7,141  
Accrued interest receivable   2,723       2,535  
Deferred income taxes, net   7,185       6,277  
Other real estate owned, net   1,665       1,673  
Bank owned life insurance   15,656       15,353  
Goodwill and other intangibles, net   7,012       7,018  
Other assets   7,725       7,296  
    Total assets $ 865,401     $ 871,958  
       
Liabilities and Stockholders' Equity      
       
Deposits      
  Noninterest-bearing $ 126,615     $ 117,098  
  Interest-bearing   589,383       603,361  
          Total deposits   715,998       720,459  
Securities sold under repurchase agreements   4,664       4,317  
Federal Home Loan Bank of Atlanta advances   57,700       62,700  
Long-term debt, net of issuance costs   12,072       12,036  
Accrued interest payable   843       1,278  
Other liabilities   6,545       6,508  
    Total liabilities   797,822       807,298  
Stockholders' equity      
  Common stock, par value $.01 per share,      
  authorized 5,000,000 shares; issued and outstanding      
  3,263,958 shares in 2026 and 3,229,795 shares in 2025   33       32  
  Additional paid-in capital   32,752       32,148  
  Retained earnings   49,791       45,210  
  Accumulated other comprehensive loss   (14,997 )     (12,730 )
     Total stockholders' equity   67,579       64,660  
Total liabilities and stockholders' equity $ 865,401     $ 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
September 30,
  Nine Months Ended
September 30,
    2026       2025       2026       2025
               
Interest income              
  Loans, including fees $ 10,078     $ 9,307     $ 29,487     $ 26,572
  Investment securities - taxable   829       1,071       2,472       3,191
  Investment securities - tax exempt   160       157       458       467
  Federal funds sold and other interest earning assets   500       424       1,319       909
          Total interest income   11,567       10,959       33,736       31,139
               
Interest expense              
  Deposits   3,567       4,344       10,489       12,665
  Securities sold under repurchase agreements   10       13       36       42
  Federal Home Loan Bank advances   560       129       1,718       251
  Long-term debt   258       120       774       342
          Total interest expense   4,395       4,606       13,017       13,300
          Net interest income   7,172       6,353       20,719       17,839
               
Provision for credit losses   -       327       -       595
               
          Net interest income after provision for credit losses   7,172       6,026       20,719       17,244
               
Noninterest income              
  Service charges on deposit accounts   174       185       505       527
  Mortgage banking income   50       75       180       151
  Bank owned life insurance income   188       105       390       316
  Fair value adjustment of equity security   (20 )     7       (25 )     16
  Gain on settlement of fair value hedge   -       -       -       94
  Gain on sale of SBA loans   13       -       13       -
  Gain on insurance proceeds, net   -       73       -       73
  Other fees and commissions   115       106       411       343
          Total noninterest income   520       551       1,474       1,520
               
Noninterest expense              
  Salaries   2,471       2,178       6,896       6,576
  Employee benefits   619       573       1,896       1,486
  Occupancy   303       281       967       890
  Furniture and equipment   453       370       1,338       1,185
  Professional services   167       174       511       565
  Automated teller machine and debit card expenses   177       71       493       407
  Federal Deposit Insurance Corporation premiums   96       150       278       466
  Postage, delivery, and armored carrier   68       62       199       204
  Advertising   46       63       152       193
  Other real estate owned expense, net   7       (13 )     57       58
  Other   613       500       1,767       1,607
          Total noninterest expense   5,020       4,409       14,554       13,637
               
Income before income taxes   2,672       2,168       7,639       5,127
Income taxes   647       462       1,893       1,058
Net income $ 2,025     $ 1,706     $ 5,746     $ 4,069
               
Earnings per common share - basic $ 0.62     $ 0.53     $ 1.76     $ 1.28
Earnings per common share - diluted $ 0.62     $ 0.53     $ 1.76     $ 1.28
               


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,
    2026       2025       2024  
           
OPERATING DATA          
           
Interest income $ 11,567     $ 10,959     $ 9,847  
Interest expense   4,395       4,606       4,762  
Net interest income   7,172       6,353       5,085  
Provision for (recovery of) credit losses   -       327       -  
Net interest income after provision          
   for (recovery of) credit losses   7,172       6,026       5,085  
Noninterest income   520       551       451  
Noninterest expense   5,020       4,409       4,071  
Income before income taxes   2,672       2,168       1,465  
Income taxes   647       462       342  
Net income $ 2,025     $ 1,706     $ 1,123  
           
PER SHARE DATA          
           
Net income (Basic and diluted) $ 0.62     $ 0.53     $ 0.36  
Dividends $ 0.36     $ 0.34     $ 0.00  
Book value $ 20.70     $ 19.72     $ 18.81  
           
KEY RATIOS          
           
Return on average assets   0.92 %     0.80 %     0.56 %
Return on average equity   12.48 %     11.23 %     8.05 %
Efficiency ratio   65.26 %     67.04 %     73.54 %
Net yield on interest-earning assets   3.42 %     3.15 %     2.62 %
Tier 1 capital leverage ratio   10.05 %     9.29 %     9.42 %
           
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,
    2026       2025       2024  
           
AT PERIOD END          
           
Total assets $ 865,401     $ 869,799     $ 817,531  
Gross loans   659,631       626,714       576,512  
Cash and cash equivalents   32,748       52,187       16,842  
Securities   124,031       142,266       179,697  
Deposits   715,998       734,096       673,745  
Long term debt, FRB and FHLB borrowings   69,772       62,224       70,800  
Stockholders' equity   67,579       63,163       59,162  
           
SELECTED AVERAGE BALANCES          
           
Total assets $ 878,410     $ 857,387     $ 807,493  
Gross loans   648,749       625,431       566,893  
Cash and cash equivalents   51,614       41,735       20,676  
Securities   147,033       162,120       199,915  
Deposits   729,353       761,693       663,594  
Long term debt, FRB and FHLB borrowings   69,732       23,406       74,569  
Stockholders' equity   64,883       60,751       55,819  
           
ASSET QUALITY          
           
Nonperforming assets $ 3,224     $ 4,049     $ 1,630  
           
Nonperforming assets/total assets   0.37 %     0.47 %     0.20 %
           
Allowance for credit losses/total loans   0.72 %     0.68 %     0.56 %
           


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,
    2026       2025       2024  
           
OPERATING DATA          
           
Interest income $ 33,736     $ 31,139     $ 28,092  
Interest expense   13,017       13,300       12,700  
Net interest income   20,719       17,839       15,392  
Provision for (recovery of) credit losses   -       595       -  
Net interest income after provision          
   for credit losses   20,719       17,244       15,392  
Noninterest income   1,474       1,520       1,329  
Noninterest expense   14,554       13,637       12,307  
Income before income taxes   7,639       5,127       4,414  
Income taxes   1,893       1,058       993  
Net income $ 5,746     $ 4,069     $ 3,421  
           
PER SHARE DATA          
           
Net income (Basic and diluted) $ 1.76     $ 1.28     $ 1.09  
Dividends $ 0.36     $ 0.34     $ 0.33  
Book value $ 20.70     $ 19.72     $ 18.81  
           
KEY RATIOS          
           
Return on average assets   0.88 %     0.65 %     0.57 %
Return on average equity   11.58 %     9.24 %     8.53 %
Efficiency ratio   65.58 %     72.68 %     73.60 %
Net yield on interest-earning assets   3.32 %     2.98 %     2.67 %
Tier 1 capital leverage ratio   10.05 %     9.29 %     9.42 %
           
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,
    2026       2025       2024  
           
AT PERIOD END          
           
Total assets $ 865,401     $ 869,799     $ 817,531  
Gross loans   659,631       626,714       576,512  
Cash and cash equivalents   32,748       52,187       16,842  
Securities   124,031       142,266       179,697  
Deposits   715,998       734,096       673,745  
Long term debt, FRB and FHLB borrowings   69,772       62,224       70,800  
Stockholders' equity   67,579       63,163       59,162  
           
SELECTED AVERAGE BALANCES          
           
Total assets $ 868,572     $ 833,069     $ 797,367  
Gross loans   640,737       611,727       547,646  
Cash and cash equivalents   45,664       58,423       30,766  
Securities   150,595       165,248       204,353  
Deposits   718,333       743,021       658,105  
Long term debt, FRB and FHLB borrowings   71,638       19,996       72,280  
Stockholders' equity   66,163       58,745       53,476  
           
ASSET QUALITY          
           
Nonperforming assets $ 3,224     $ 4,049     $ 1,630  
           
Nonperforming assets/total assets   0.37 %     0.47 %     0.20 %
           
Allowance for credit losses/total loans   0.72 %     0.68 %     0.56 %
           



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