Farmers and Merchants Bancshares, Inc. Reports Earnings of $5.8 Million or $1.81 per Share for the Year Ended December 31, 2025

Rhea-AI Summary

Farmers and Merchants Bancshares (OTC:FMFG) reported 2025 net income of $5.8 million ($1.81 per share), a ~35% increase from 2024, driven by higher net interest income and loan growth. Loans rose to $633.1M and book value increased to $20.02 per share. Provision for credit losses and higher noninterest expense partially offset results.

Deposits fell amid an $88.3M drop in brokered CDs; FHLB advances and subordinated debt increased liquidity and capital.

Positive

• Net income +35% YoY to $5.8M (2025)
• Loans grew to $633.1M, +9% YoY (+$50M)
• Net interest income rose to $24.39M, +17% YoY
• Book value per share increased to $20.02

Negative

• Provision for credit losses increased to $698K from $150K
• Deposits declined to $720.5M, driven by an $88.3M drop in brokered CDs
• Unrealized AFS securities loss of $12.7M reduced equity
• Federal Home Loan Bank advances and long-term debt rose by $58.4M

HAMPSTEAD, Md., Jan. 29, 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 year ended December 31, 2025 was $5.8 million, or $1.81 per common share (basic and diluted) compared to $4.3 million, or $1.37 per common share (basic and diluted), for the same period in 2024. The Company’s return on average equity during the year ended December 31, 2025 was 9.57% compared to 7.83% for the same period in 2024. The Company’s return on average assets during the years ended December 31, 2025 and 2024 was 0.68% and 0.53%, respectively.

Net income for the three months ended December 31, 2025 was $1.7 million, or $0.53 per common share (basic and diluted), compared to $0.9 million, or $0.27 per common share (basic and diluted), for the fourth quarter of 2024. The Company’s return on average equity during the three months ended December 31, 2025 was 10.48% compared to 5.96% for the same period in 2024. The Company’s return on average assets during the three months ended December 31, 2025 was 0.77% compared to 0.41% for the same period in 2024.

Net interest income for the year ended December 31, 2025 was $3.6 million higher when compared to the same period in 2024 due to a widening net yield on interest-earning assets of 3.01% for the year ended December 31, 2025 compared to 2.68% for the same period in 2024. The yield on earning assets increased to 5.22% for the year ended December 31, 2025, compared to 4.92% for the same period in 2024. The cost of interest bearing liabilities decreased to 2.70% for the year ended December 31, 2025, down from 2.76% for the same period in 2024. Average interest earning assets were $815.7 million for the year ended December 31, 2025 compared to $784.6 million for the same period in 2024. Gross interest income increased by $4.0 million to $42.4 million for the year ended December 31, 2025, up from $38.4 million for the same period in 2024. Average interest bearing liabilities increased by $31.6 million to $666.2 million for the year ended December 31, 2025 from $634.7 million for the same period in 2024. Total interest expense increased $438 thousand to $18.0 million for the year ended December 31, 2025 compared to $17.5 million for the same period in 2024.

The Company recorded a $698 thousand provision for credit losses for the year ended December 31, 2025 compared to $150 thousand for the same period in 2024. The increase in the provision was related to the write down of two loans, both of which were foreclosed upon, as well as growth in the loan portfolio.

Noninterest income increased by $224 thousand for the year ended December 31, 2025 when compared to the same period in 2024. The increase was due to several factors, including a $49 thousand increase in mortgage banking revenue, a $30 thousand increase in bank owned life insurance income, a $94 thousand increase in gain on settlement of fair vlue hedge, and an $89 thousand increase in gains on the sale of SBA loans. Noninterest expense was $1.4 million higher for the year ended December 31, 2025 when compared to the same period in 2024, due primarily to a $677 thousand increase in salaries and benefits and a $417 thousand combined increase in occupancy and furniture and equipment costs. The Bank’s FDIC assessment expense increased by $187 thousand due to higher FDIC assessment rates and deposit mix. Other real estate owned expenses increased by $101 thousand due to the foreclosure of three properties in 2025.

Total assets increased to $872.0 million at December 31, 2025 from $844.6 million at December 31, 2024. Loans, net of the allowance for credit losses, increased to $633.1 million at December 31, 2025 from $583.0 million at December 31, 2024. Investments in debt securities decreased to $139.8 million at December 31, 2025 from $146.2 million at December 31, 2024. Deposits decreased to $720.5 million at December 31, 2025 from $758.8 million at December 31, 2024, largely due to a decrease in brokered CDs of $88.3 million. Federal Home Loan Bank advances and other long-term debt increased by $58.4 million to $74.7 million as of December 31, 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 $57.7 million of maturing brokered CDs. Additionally, the Company issued $12.5 million in subordinated debt during September 2025. The proceeds were used to repay the Company’s maturing term loan of approximately $10 million as well to add an interest reserve and increase the Bank’s capital. The Company’s tangible equity was $57.6 million at December 31, 2025 compared to $49.2 million at December 31, 2024.

The book value of the Company’s common stock increased to $20.02 per share at December 31, 2025 from $17.77 per share at December 31, 2024. Book value per share at December 31, 2025 was reflective of the $12.7 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 do not intend to sell any of these securities, 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, “In 2025, we achieved a 35% increase in net income which was accomplished by growing our loan portfolio and reducing our funding costs. Our loan portfolio, net of allowance for credit losses, grew to $633 million, which is an increase of $50 million, or 9%, over last year’s balance. The yield on loans improved to 5.84% as existing loans in our portfolio repriced over the past year. This, along with lower cost of funds, has resulted in our net interest rate yield rising to 3.01% for the year. Our asset quality remains strong with zero non-accrual loans as of December 31, 2025. We look forward to building on a successful year as we continue to capitalize on our strategic investments in technology and people.”

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 data (Unaudited)
		December 31,				December 31,
		2025				2024
Assets
Cash and due from banks		$	46,113			$	63,962
Federal funds sold and other interest-bearing deposits			566				697
Cash and cash equivalents			46,679				64,659
Certificates of deposit in other banks			100				100
Securities available for sale, at fair value			118,730				125,713
Securities held to maturity, at amortized cost less allowance for credit losses of $79 and $60			21,055				20,499
Equity security, at fair value			550				518
Restricted stock, at cost			3,693				921
Mortgage loans held for sale			714				157
Loans, less allowance for credit losses of $4,361 and $4,260			633,144				582,993
Premises and equipment, net			7,141				7,349
Accrued interest receivable			2,535				2,439
Deferred income taxes, net			6,277				7,606
Other real estate owned, net			1,673				1,176
Bank owned life insurance			15,353				15,324
Goodwill and other intangibles, net			7,018				7,026
Other assets			7,296				8,163
Total Assets		$	871,958			$	844,643
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing		$	117,098			$	107,197
Interest-bearing			603,361				651,609
Total deposits			720,459				758,806
Securities sold under repurchase agreements			4,317				5,564
Federal Home Loan Bank of Atlanta advances			62,700				5,000
Long-term debt, net of unamortized issuance costs			12,036				11,329
Accrued interest payable			1,278				1,003
Other liabilities			6,508				6,669
Total liabilities			807,298				788,371
Stockholders' equity
Common stock, par value $.01 per share, authorized 5,000,000 shares; issued and outstanding 3,229,795 shares in 2025 and 3,166,653 shares in 2024			32				32
Additional paid-in capital			32,148				31,136
Retained earnings			45,210				41,613
Accumulated other comprehensive loss			(12,730	)			(16,509	)
Total Stockholders' equity			64,660				56,272
Total liabilities and stockholders' equity		$	871,958			$	844,643

Farmers and Merchants Bancshares, Inc. and Subsidiaries Consolidated Statements of Income Dollars in thousands except per share data (Unaudited)
		Three Months Ended December 31,								Year Ended December 31,
		2025					2024			2025				2024
Interest income
Loans, including fees		$	9,490			$	8,317			$	36,062			$	30,338
Investment securities - taxable			978				1,469				4,169				6,263
Investment securities - tax exempt			156				143				623				559
Federal funds sold and other interest earning assets			592				342				1,501				1,203
Total interest income			11,216				10,271				42,355				38,363
Interest expense
Deposits			3,795				4,275				16,460				14,519
Securities sold under repurchase agreements			17				16				59				65
Federal Home Loan Bank advances			596				14				847				123
Federal Reserve Bank advances			-				402				-				2,313
Long-term debt			257				120				599				507
Total interest expense			4,665				4,827				17,965				17,527
Net interest income			6,551				5,444				24,390				20,836
Provision for credit losses			103				150				698				150
Net interest income after provision for credit losses			6,448				5,294				23,692				20,686
Noninterest income
Service charges on deposit accounts			166				189				693				810
Mortgage banking income			6				41				157				108
Bank owned life insurance income			108				106				424				394
Gain (loss) on sale of debt securities			-				19				-				(13	)
Fair value adjustment of equity security			1				(18	)			17				(4	)
Gain on settlement of fair value hedge			-				-				94				-
Loss on sale of premises and equipment			-				-				-				(5	)
Gain on sale of SBA loans			89				-				89				-
(Loss)/Gain on insurance proceeds, net			(20	)			-				53				142
Other fees and commissions			106				86				449				320
Total noninterest income			456				423				1,976				1,752
Noninterest expense
Salaries			2,142				2,006				8,718				7,854
Employee benefits			514				590				2,000				2,187
Occupancy			279				271				1,169				1,070
Furniture and equipment			426				396				1,611				1,293
Professional services			173				335				738				865
Automated teller machine and debit card expenses			253				174				660				648
Federal Deposit Insurance Corporation premiums			112				109				578				391
Postage, delivery, and armored carrier			66				77				270				294
Advertising			56				48				249				228
Other real estate owned expense, net			119				59				177				76
Other			518				557				2,125				2,023
Total noninterest expense			4,658				4,622				18,295				16,929
Income before income taxes			2,246				1,095				7,373				5,509
Income taxes			549				238				1,607				1,231
Net income		$	1,697			$	857			$	5,766			$	4,278
Earnings per common share - basic		$	0.53			$	0.27			$	1.81			$	1.37
Earnings per common share - diluted		$	0.53			$	0.27			$	1.81			$	1.37

Farmers and Merchants Bancshares, Inc. Selected Consolidated Financial Data (Unaudited) Dollars in thousands except per share data
		As of or for the Years Ended December 31,
		2025				2024				2023
OPERATING DATA
Interest income		$	42,355			$	38,363			$	31,323
Interest expense			17,965				17,527				9,907
Net interest income			24,390				20,836				21,416
Provision for (recovery of) credit losses			698				150				(570	)
Net interest income after provision for credit losses			23,692				20,686				21,986
Noninterest income			1,976				1,752				1,591
Noninterest expense			18,295				16,929				15,142
Income before income taxes			7,373				5,509				8,435
Income taxes			1,607				1,231				2,017
Net income		$	5,766			$	4,278			$	6,418
PER SHARE DATA
Net income (Basic and diluted)		$	1.81			$	1.37			$	2.08
Dividends		$	0.68			$	0.67			$	0.66
Book value		$	20.02			$	17.77			$	16.74
KEY RATIOS
Return on average assets			0.68	%			0.53	%			0.86	%
Return on average equity			9.57	%			7.83	%			13.08	%
Efficiency ratio			69.39	%			74.95	%			65.81	%
Dividend payout ratio			37.57	%			48.91	%			31.73	%
Net yield on interest-earning assets			3.01	%			2.68	%			2.97	%
Tier 1 capital leverage ratio			9.38	%			9.12	%			9.42	%
AT PERIOD END
Total assets		$	871,958			$	844,643			$	799,941
Gross loans			637,505				587,979				528,166
Cash and cash equivalents			46,679				64,659				44,690
Securities			139,785				146,211				184,248
Deposits			720,459				758,806				680,963
Long term debt, FRB and FHLB borrowings			74,736				11,329				57,973
Stockholders' equity			64,660				56,272				52,178
SELECTED AVERAGE BALANCES
Total assets		$	846,190			$	810,043			$	745,479
Gross loans			617,249				557,862				528,910
Cash and cash equivalents			34,139				27,564				18,497
Securities			164,300				177,743				182,160
Deposits			740,792				672,493				642,039
Long term debt, FRB and FHLB borrowings			33,346				72,287				48,041
Stockholders' equity			60,254				54,610				49,063
ASSET QUALITY
Nonperforming assets		$	1,673			$	1,580			$	1,898
Nonperforming assets/total assets			0.19	%			0.19	%			0.24	%
Allowance for credit losses/total loans			0.68	%			0.72	%			0.81	%

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

FAQ

What did Farmers and Merchants Bancshares (FMFG) report for full-year 2025 net income?

Net income for 2025 was $5.8 million, or $1.81 per share. According to the company, this represented about a 35% increase versus 2024, driven by higher net interest income and loan portfolio growth.

How much did Farmers and Merchants' loan portfolio (FMFG) grow in 2025?

Loans, net of allowances, increased to $633.1 million, roughly a $50 million, or 9%, rise. According to the company, loan repricing and volume growth contributed to higher loan yields in 2025.

Why did FMFG's provision for credit losses increase in 2025?

Provision for credit losses rose to $698 thousand from $150 thousand in 2024. According to the company, the increase reflected write-downs on two foreclosed loans and overall loan portfolio growth.

What caused the deposit decline at Farmers and Merchants (FMFG) in 2025?

Deposits decreased to $720.5 million, largely due to an $88.3 million reduction in brokered certificates of deposit. According to the company, this drove use of FHLB advances to replace maturing brokered CDs.

How did FMFG fund the drop in brokered CDs and strengthen capital in 2025?

The company increased Federal Home Loan Bank advances and issued $12.5 million subordinated debt. According to the company, proceeds repaid maturing term debt, added an interest reserve, and bolstered regulatory capital.