Exhibit 99.1




January 23, 2019


Farmers and Merchants Bancshares, Inc. 

4510 Lower Beckleysville Rd, Suite H 

Hampstead, Maryland 21074          




Contact:         Mr. James R. Bosley, Jr.


410-374-1510, ext. 104




HAMPSTEAD, MARYLAND (January 23, 2019) – Farmers and Merchants Bancshares, Inc. (the “Company”), the parent of Farmers and Merchants Bank (the “Bank”), announced that net income for the year ended December 31, 2018 was $4,712,676, or $2.82 per common share, compared to $3,789,241, or $2.28 per common share, in 2017. This is the highest net income in the history of the Company and the Bank surpassing the previous high achieved in 2015. Return on average equity was 10.77% in 2018 compared to 9.26% in 2017. Return on average assets was 1.14% in 2018 compared to 0.96% in 2017. Cash dividends paid to stockholders in 2018 increased 9% to $0.83 per common share from $0.76 per common share in 2017.


The increase in net income of $923,435 was due primarily to a decrease in income taxes of $896,105. The impact of the reduction of the federal corporate income tax rate from 34% to 21% as a result of the Tax Cuts and Jobs Act enacted in December 2017 accounted for $478,606 of the decrease. The other primary driver of the decrease was that income taxes for 2017 included a one-time charge of $410,391 as a result of the revaluation of the Company’s net deferred tax asset required by the aforementioned Act.


Net income before taxes in 2018 increased $27,330 from the amount recorded in 2017 due to an increase in net interest income of $373,529 and an increase in noninterest income of $28,179, offset by an increase in noninterest expense of $309,378, and an increase in the provision for loan losses of $65,000.


The increase in net interest income was due to an increase in average interest earning assets of $21 million, offset by a decline in the net yield of 16 basis points. The net yield continues to decline as deposit rates have risen at a faster pace than yields on loans and investments due to the flattening yield curve and intense competition for new loans and deposits. The primary reasons for the increase in noninterest expense were higher compensation and benefit costs as a result of normal salary increases. The provision for loan losses increased due to a larger loan portfolio and a delinquent commercial real estate loan that management identified as impaired during 2018.


Total assets at December 31, 2018 were $417 million, an increase of 4% from the $403 million recorded at December 31, 2017. The loan portfolio increased 3% to $341 million at December 31, 2018 from $333 million at December 31, 2017. Deposits increased 11% to $355 million at December 31, 2018 from $320 million at the end of 2017. The book value of the common stock of the Company was $26.97 per share at December 31, 2018, compared to $25.06 per share at the end of 2017.



The following information was filed by Farmers Merchants Bancshares, Inc. on Wednesday, January 23, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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