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

Higher lending income and lower funding costs accompanied earnings growth, while deposits declined and operating expenses increased.

Rhea-AI Summary

Farmers and Merchants Bancshares (FMFG) reported $5.7 million in net income for the nine months ended September 30, 2026. Basic and diluted earnings per share rose to $1.76 from $1.28 a year earlier. Third-quarter net income was $2.0 million, or $0.62 per share, versus $1.7 million, or $0.53.

Nine-month net interest income increased to $20.719 million from $17.839 million, while net yield on interest-earning assets widened to 3.32% from 2.98%. No credit-loss provision was recorded, versus $595 thousand a year earlier. Noninterest expenses rose $917 thousand. Net loans reached $655.0 million at September 30, versus $633.1 million at year-end, while deposits fell to $716.0 million from $720.5 million. Borrowings declined to $74.4 million from $79.0 million. Book value rose to $20.70 per share from $20.02, despite a $15.0 million after-tax unrealized loss on available-for-sale securities.

18 points · 0 major

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1 major · 9 points

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Positive

• Moderate pointNine-month net income rose to $5.7 million and $1.76 per share, versus $4.1 million and $1.28.
• Moderate pointNine-month net interest income increased to $20.719 million from $17.839 million a year earlier.
• Moderate pointNine-month credit-loss provision was zero, versus $595 thousand; third-quarter provision was zero versus $327 thousand.
• Moderate pointNet loans increased to $655.0 million at September 30, 2026, from $633.1 million at year-end.
• Minor pointThird-quarter net income rose to $2.0 million and $0.62 per share, versus $1.7 million and $0.53.

13 minor points

• Minor pointThird-quarter net interest income increased to $7.172 million from $6.353 million a year earlier.
• Minor pointNine-month net yield on interest-earning assets widened to 3.32% from 2.98%; third-quarter yield reached 3.42% versus 3.15%.
• Minor pointNine-month earning-asset yield increased to 5.40% from 5.19% a year earlier.
• Minor pointNine-month interest-bearing liability costs declined to 2.58% from 2.70% a year earlier.
• Minor pointAverage interest-earning assets increased to $837.0 million for nine months, versus $804.3 million a year earlier.
• Minor pointAnnualized nine-month asset returns rose to 0.88% from 0.65%; third-quarter returns reached 0.92% versus 0.80%.
• Minor pointAnnualized nine-month equity returns rose to 11.58% from 9.24%; third-quarter returns reached 12.48% versus 11.23%.
• Minor pointThird-quarter efficiency ratio, measuring expenses against revenue, improved to 65.26% from 67.04% a year earlier.
• Minor pointBorrowings declined to $74.4 million from $79.0 million at year-end, primarily through Federal Home Loan Bank repayments.
• Minor pointBook value increased to $20.70 per share at September 30, 2026, from $20.02 at year-end.
• Minor pointTangible equity increased to $60.6 million at September 30, 2026, from $57.6 million at year-end.
• Minor pointTier 1 capital leverage ratio rose to 10.05% from 9.29% at September 30, 2025.
• Minor pointThird-quarter dividends increased to $0.36 per share from $0.34 a year earlier.

Negative

• Major pointAvailable-for-sale securities carried a $15.0 million after-tax unrealized loss at September 30, 2026, reflected in equity.
• Moderate pointCash and cash equivalents declined to $32.748 million at September 30, 2026, from $46.679 million at year-end.
• Minor pointNine-month salaries and benefits increased $730 thousand, reflecting staffing additions and incentives.
• Minor pointNine-month occupancy and furniture and equipment costs increased a combined $230 thousand year over year.
• Minor pointNine-month ATM and debit card expenses increased $86 thousand year over year.

4 minor points

• Minor pointNine-month other expenses increased $160 thousand year over year.
• Minor pointNine-month noninterest income decreased $46 thousand; third-quarter income fell to $520 thousand from $551 thousand.
• Minor pointDeposits declined to $716.0 million at September 30, 2026, from $720.5 million at year-end.
• Minor pointTotal assets declined to $865.4 million at September 30, 2026, from $872.0 million at year-end.

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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	%

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Farmers and Merchants Bancshares' earnings for the first nine months of 2026?

Farmers and Merchants Bancshares earned $5.7 million, or $1.76 per common share on both a basic and diluted basis, for the nine months ended September 30, 2026. That compares with $4.1 million, or $1.28 per share, for the same period in 2025.

Why did Farmers and Merchants Bancshares' noninterest income fall in the first nine months of 2026?

Noninterest income fell $46 thousand as several declines outweighed increases elsewhere. The prior-year $94 thousand hedge-settlement gain and $73 thousand insurance gain did not recur. Deposit service charges fell $22 thousand, and the equity-security fair-value adjustment declined $41 thousand. Higher mortgage banking revenue, life insurance income, SBA loan-sale gains and other fees partly offset those decreases.

Which expenses declined at Farmers and Merchants Bancshares in the first nine months of 2026?

Several expense categories declined year over year, partly offsetting higher staffing and other costs. FDIC assessments fell $188 thousand, professional services fell $54 thousand, advertising fell $41 thousand, postage fell $5 thousand, and other real estate owned expenses fell $1 thousand.