Exhibit 99.1

 


 

FOR IMMEDIATE RELEASE    FOR FURTHER INFORMATION CONTACT:
July 18, 2019      
       
Farmers and Merchants Bancshares, Inc.   Contact: Mr. James R. Bosley, Jr.
4510 Lower Beckleysville Rd, Suite H     President
Hampstead, Maryland 21074     (410) 374-1510, ext.104

                        

FARMERS AND MERCHANTS BANCSHARES, INC. REPORTS EARNINGS OF $1.38 PER SHARE FOR THE SIX MONTHS ENDED JUNE 30, 2019

 

HAMPSTEAD, MARYLAND (July 18, 2019) – Farmers and Merchants Bancshares, Inc. (the “Company”), the parent of Farmers and Merchants Bank (the “Bank”), announced that net income for the six months ended June 30, 2019 was $2,322,108, or $1.38 per common share, compared to $2,267,183, or $1.36 per common share, for the same period in 2018. The Company’s return on average equity during the six months ended June 30, 2019 was 9.92% compared to 10.58% during the same period in 2018. The Company’s return on average assets was 1.09% in 2019 compared to 1.11% in 2018.

 

Net interest income for the six months ended June 30, 2019 was $65,833 lower than the same period last year due to a decline in the taxable equivalent net yield on interest earning assets to 3.70% in the 2019 period from 3.83% in the 2018 period, offset by an increase in interest earning assets of $14.9 million to $407.9 million for the six months ended June 30, 2019 as compared to $393.0 million for the same period last year. The net yield continues to decline as deposit rates have risen more quickly than yields on loans and investments.

 

Noninterest income increased by $84,018 primarily as a result of $79,027 higher gain on the sale of SBA loans and $202,004 higher bank owned life insurance income due to proceeds received from a policy, offset by a $210,150 write-down of other real estate owned required by regulation. Noninterest expense was $106,312 higher in the six months ended June 30, 2019 when compared to the same period last year primarily due to usual salary increases and higher employee benefit costs. Income taxes declined by $31,052 during the first half of 2019 when compared to the first half of 2018 due to a higher amount of tax exempt revenue.

 

Net income for the three months ended June 30, 2019 was $1,225,821, or $0.73 per common share, compared to $1,145,247, or $0.69 per common share, for the same period in 2018.

 

Total assets increased to $436 million at June 30, 2019 compared to $417 million at December 31, 2018. Loans decreased to $340 million at June 30, 2019 compared to $341 million at December 31, 2018. Investment in debt securities increased to $56 million at June 30, 2019 compared to $45 million at December 31, 2018. Deposits increased to $372 million at June 30, 2019 compared to $355 million at December 31, 2018. The book value of the common stock of Farmers and Merchants Bancshares, Inc. was $28.23 per share at June 30, 2019, compared to $26.97 per share at December 31, 2018.

 

James R. Bosley, Jr., President and CEO, commented “We are pleased to have the highest first half net income in the Company’s history despite the challenges of rising funding costs and downward pressure on our net interest margin.”

 

 

 

 

About the Company

 

Farmers and Merchants Bancshares, Inc. is a financial holding company and the parent of Farmers and Merchants Bank. The Bank was chartered in Maryland in 1919, and is currently celebrating 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 and Route 795 corridors from Owings Mills, Maryland to the Pennsylvania State line. The main office is located in Upperco, Maryland, with seven additional branches in Owings Mills, Hampstead, Greenmount, Reisterstown, and Westminster. 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 Pink 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

 

   

June 30,

   

December 31,

 
   

2019

   

2018

 
   

(Unaudited)

         

Assets

 
                 

Cash and due from banks

  $ 19,434,418     $ 11,480,608  

Federal funds sold and other interest-bearing deposits

    3,221,403       3,137,629  

Cash and cash equivalents

    22,655,821       14,618,237  

Certificate of deposit in other bank

    100,000       100,000  

Securities available for sale

    36,098,444       26,591,991  

Securities held to maturity

    19,411,483       18,127,067  

Equity security at fair value

    524,710       503,827  

Federal Home Loan Bank stock, at cost

    503,700       575,800  

Mortgage loans held for sale

    972,750       573,638  

Loans, less allowance for loan losses of $2,551,125 and 2,509,334

    340,171,316       340,900,635  

Premises and equipment

    4,969,930       5,075,310  

Accrued interest receivable

    1,006,419       990,529  

Deferred income taxes

    981,334       1,179,454  

Other real estate owned

    -       210,150  

Bank owned life insurance

    7,063,146       7,053,354  

Other assets

    1,989,743       657,885  
    $ 436,448,796     $ 417,157,877  
                 

Liabilities and Stockholders' Equity

 
                 

Deposits

               

Noninterest-bearing

  $ 61,009,944     $ 62,717,520  

Interest-bearing

    311,165,456       291,995,483  

Total deposits

    372,175,400       354,713,003  

Securities sold under repurchase agreements

    8,789,585       11,012,000  

Federal Home Loan Bank of Atlanta advances

    3,000,000       3,000,000  

Accrued interest payable

    580,101       311,489  

Other liabilities

    4,168,677       2,726,678  
      388,713,763       371,763,170  

Stockholders' equity

               

Common stock, par value $.01 per share, authorized 5,000,000 shares; issued and outstanding 1,691,091 shares in 2019 and 1,682,997 shares in 2018

    16,911       16,830  

Additional paid-in capital

    27,561,593       27,324,794  

Retained earnings

    20,111,524       18,621,382  

Accumulated other comprehensive income

    45,005       (568,299 )
      47,735,033       45,394,707  
    $ 436,448,796     $ 417,157,877  

 

 

 

 

Farmers and Merchants Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

 

   

Three Months Ended June 30

   

Six Month Ended June 30

 
   

2019

   

2018

   

2019

   

2018

 
                                 

Interest income

                               

Loans, including fees

  $ 4,172,235     $ 4,048,984     $ 8,332,321     $ 7,982,139  

Investment securities - taxable

    222,272       149,998       397,108       304,858  

Investment securities - tax exempt

    143,125       142,799       281,213       285,562  

Federal funds sold and other interest earning assets

    121,824       43,725       196,350       70,693  

Total interest income

    4,659,456       4,385,506       9,206,992       8,643,252  
                                 

Interest expense

                               

Deposits

    885,246       499,916       1,660,777       938,326  

Securities sold under repurchase agreements

    28,423       35,012       53,722       69,401  

Federal Home Loan Bank advances and other borrowings

    11,195       45,985       31,748       108,947  

Total interest expense

    924,864       580,913       1,746,247       1,116,674  

Net interest income

    3,734,592       3,804,593       7,460,745       7,526,578  
                                 

Provision for loan losses

    -       75,000       13,000       125,000  
                                 

Net interest income after provision for loan losses

    3,734,592       3,729,593       7,447,745       7,401,578  
                                 

Noninterest income

                               

Service charges on deposit accounts

    166,115       173,888       318,175       335,728  

Mortgage banking income

    72,879       60,468       105,598       114,661  

Bank owned life insurance income

    242,012       40,489       282,398       80,394  

Unrealized gain (loss) on equity security

    6,911       (12,439 )     14,756       (11,479 )

Write down of other real estate owned

    (210,150 )     -       (210,150 )     -  

Gain on sale of SBA loans

    9,520       -       139,535       60,508  

Other fees and commissions

    35,946       28,090       65,317       51,799  

Total noninterest income

    323,233       290,496       715,629       631,611  
                                 

Noninterest expense

                               

Salaries

    1,309,007       1,264,702       2,635,790       2,548,212  

Employee benefits

    314,145       322,568       696,109       690,022  

Occupancy

    190,543       189,156       404,963       366,689  

Furniture and equipment

    155,933       165,392       311,080       327,008  

Other

    639,568       687,062       1,316,540       1,326,239  

Total noninterest expense

    2,609,196       2,628,880       5,364,482       5,258,170  
                                 

Income before income taxes

    1,448,629       1,391,209       2,798,892       2,775,019  

Income taxes

    222,808       245,962       476,784       507,836  

Net income

  $ 1,225,821     $ 1,145,247     $ 2,322,108     $ 2,267,183  
                                 

Earnings per share - basic and diluted

  $ 0.73     $ 0.69     $ 1.38     $ 1.36  

 


The following information was filed by Farmers Merchants Bancshares, Inc. on Thursday, July 18, 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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