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

Rhea-AI Summary

Farmers and Merchants Bancshares (OTC: FMFG) reported net income of $3.7 million, or $1.14 per share, for the six months ended June 30, 2026, up from $2.4 million, or $0.74 per share, a year earlier. Annualized return on average assets rose to 0.87% and return on average equity to 11.23%. For Q2 2026, net income was $1.9 million, or $0.58 per share.

Net interest income increased by $2.1 million as net yield on interest-earning assets widened to 3.27% and the cost of interest-bearing liabilities fell to 2.57%. No provision for credit losses was recorded. Assets were $874.2 million, loans $636.5 million, deposits $725.1 million, and borrowings $74.3 million. Book value per share increased to $20.72, while accumulated other comprehensive loss on available-for-sale securities totaled $12.9 million net of tax. Nonperforming assets declined to 0.19% of total assets.

Positive

• Six‑month net income $3.7M vs. $2.4M in 2025 (+57%)
• Net yield on interest‑earning assets 3.27% vs. 2.92% (six‑month YoY)
• No provision for credit losses in first half 2026 vs. $268K in 2025
• Nonperforming assets/total assets improved to 0.19% from 0.36%
• Book value per share rose to $20.72 from $20.02 at year‑end 2025
• Q2 2026 efficiency ratio improved to 65.66% from 73.37% in Q2 2025
• Dividend per share $0.36 in Q2 2026 vs. $0.00 in Q2 2025

Negative

• Deposits $725.1M at June 30, 2026 vs. $748.9M at June 30, 2025
• Borrowings $74.3M at June 30, 2026 vs. $20.4M at June 30, 2025
• Noninterest expense up $306K for six months vs. 2025, driven by salaries and occupancy
• Accumulated other comprehensive loss on AFS securities $12.9M net of tax at June 30, 2026
• AFS and HTM securities down to $129.95M from $142.76M at June 30, 2025

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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. 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
	(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	%

FAQ

How did Farmers and Merchants Bancshares (FMFG) perform in Q2 2026?

Farmers and Merchants Bancshares reported Q2 2026 net income of $1.9 million, or $0.58 per share. According to the company, annualized return on average assets was 0.88% and return on average equity was 11.28%, with an efficiency ratio of 65.66%.

What drove FMFG earnings growth for the six months ended June 30, 2026?

FMFG’s six‑month 2026 net income rose to $3.7 million, up from $2.4 million in 2025. According to the company, growth was mainly from a $2.1 million increase in net interest income, wider 3.27% net yield, lower funding costs, and no credit loss provision.

How did loans, deposits, and assets change at FMFG by June 30, 2026?

By June 30, 2026, FMFG total assets were $874.2 million, with loans of $636.5 million and deposits of $725.1 million. According to the company, assets, loans, and deposits all increased modestly versus December 31, 2025, while total borrowings declined from $79.0 million.

What is Farmers and Merchants Bancshares’ asset quality as of Q2 2026?

As of Q2 2026, FMFG reported nonperforming assets of $1.7 million, or 0.19% of total assets. According to the company, this compares with 0.36% a year earlier, while the allowance for credit losses equaled 0.70% of total loans.

What dividend did FMFG pay and what was the payout ratio in Q2 2026?

In Q2 2026, FMFG paid a dividend of $0.36 per share, with a 61.02% dividend payout ratio. According to the company, this compares with no dividend in Q2 2025 and a 94.28% payout ratio in Q2 2024.

How did interest margins and funding costs trend for FMFG in the first half of 2026?

In the first half of 2026, FMFG’s net yield on interest‑earning assets was 3.27%, up from 2.92%. According to the company, the yield on earning assets rose to 5.35%, while the cost of interest‑bearing liabilities decreased to 2.57% from 2.67%.

What is FMFG’s book value and capital position as of June 30, 2026?

As of June 30, 2026, FMFG’s book value per share was $20.72 and stockholders’ equity totaled $67.6 million. According to the company, tangible equity reached $60.6 million, and the Tier 1 capital leverage ratio was 9.98% for the quarter.