Exhibit 99.1

 

logo.jpg

 

FOR IMMEDIATE RELEASE   FOR FURTHER INFORMATION CONTACT:
February 8, 2021    
     
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 $0.90 PER SHARE FOR THE YEAR ENDED DECEMBER 31, 2020

 

HAMPSTEAD, MARYLAND (February 8, 2021) – 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, 2020 was $2,682,003, or $0.90 per common share, compared to $4,560,804, or $1.54 per common share, for the year ended December 31, 2019. Net income for the three months ended December 31, 2020 was $417,394, or $0.14 per common share, compared to $1,060,786, or $0.36 per common share, for the three months ended December 31, 2019. On October 1, 2020, the Company consummated its previously-announced acquisition of Carroll Bancorp, Inc. and Carroll Community Bank (collectively “Carroll”).

 

Carroll Community Bank

 

Balance Sheet at Acquisition on October 1, 2020

 
                 
   

Book value

   

Fair value

 
                 

Cash

  $ 5,441,610     $ 5,441,610  

Investment securities

    14,540,495       14,599,320  

Loans held for sale

    1,702,950       1,743,195  

Loans

    145,153,100       145,080,950  

Premises and equipment

    2,619,413       2,684,240  

Other real estate owned

    1,411,605       1,411,605  

Other assets

    5,290,399       5,388,546  

Goodwill and other intangibles

    -       7,061,490  
                 

Total assets

  $ 176,159,572     $ 183,410,956  
                 

Deposits

  $ 145,177,501     $ 145,793,878  

FHLB advances

    13,000,000       13,000,000  

Other liabilities

    93,828       88,710  
                 

Total liabilities

    158,271,329       158,882,588  
                 

Stockholders' equity

    17,888,243       24,528,368  
                 

Total liabilities and stockholders equity

  $ 176,159,572     $ 183,410,956  

 

 

 

The Company incurred significant one-time costs of $1,624,496 and $3,236,817 during the three- and 12-months ended December 31, 2020, respectively, related to this acquisition. The table below provides a comparison of the Company’s results for the three- and 12-month periods ended December 31, 2020 and 2019, both with and without the acquisition costs.

 

   

Three Months Ended

   

Twelve Months Ended

 
   

December 31, 2020

   

December 31, 2019

   

December 31, 2020

   

December 31, 2019

 
           

Excluding

                   

Excluding

         
   

As Reported

   

Acquisition Costs

   

As Reported

   

As Reported

   

Acquisition Costs

   

As Reported

 
                                                 

Income before income taxes

  $ 444,255     $ 2,068,751     $ 1,315,612     $ 3,169,214     $ 6,406,031     $ 5,600,138  

Income taxes

    26,861       443,571       254,826       487,211       1,292,806       1,039,334  

Net income

  $ 417,394     $ 1,625,180     $ 1,060,786     $ 2,682,003     $ 5,113,225     $ 4,560,804  

Earnings per share

  $ 0.14     $ 0.54     $ 0.36     $ 0.90     $ 1.71     $ 1.54  

Return on average assets

    0.25 %     0.97 %     0.95 %     0.51 %     0.97 %     1.06 %

Return on average equity

    3.25 %     12.64 %     8.57 %     5.22 %     9.96 %     9.52 %

 

Net interest income for the year ended December 31, 2020 was $2,282,118 higher than for the year ended December 31, 2019 due to a $73.6 million increase in average interest earning assets to $488.3 million for the year ended December 31, 2020 as compared to $414.7 million for the year ended December 31, 2019, offset by a decline in the taxable equivalent net yield on interest earning assets to 3.58% in the 2020 period from 3.67% in the 2019 period. The net yield declined because the yield on loans and investments decreased 32 basis points to 4.58% for the year ended December 31, 2020 from 4.90% for the year ended December 31, 2019 as a result of the Federal Reserve rate cuts and the Company’s origination of $31 million of Paycheck Protection Program (“PPP”) loans that are yielding less than 2.50%. The Company’s cost of deposits and borrowings of 0.89% for the year ended December 31, 2020 was 26 basis points lower than the cost of 1.15% for the year ended December 31, 2019. The Company expects the cost of funds to continue to decline into 2021 because the Company has significantly reduced rates on many of its deposit products. The provision for loan losses totaled $625,000 for the year ended December 31, 2020 as a result of the economic downturn caused by the COVID-19 pandemic, compared to $40,000 for the year ended December 31, 2019.

 

Noninterest income increased by $578,552 in the year ended December 31, 2020 when compared to the year ended December 31, 2019, primarily as a result of a $627,227 increase in mortgage banking income and a $210,150 decrease in the write down of other real estate owned, offset by a $176,586 decrease in bank owned life insurance income and a $88,245 decrease in service charges. Noninterest expense was $4,706,594 higher in the year ended December 31, 2020 when compared to the year ended December 31, 2019 due primarily to the aforementioned acquisition costs of $3,236,817 and salary and benefit increases of $970,890 as a result of employees added in the fourth quarter of 2020 in connection with the Carroll acquisition along with usual increases to existing employees. Income taxes declined by $552,123 during the year ended December 31, 2020 when compared to the year ended December 31, 2019 due to lower income before taxes and a higher percentage of tax-exempt revenue, offset by certain acquisition costs that are not deductible.

 

The acquisition of Carroll was the primary driver of the significant increases in most assets and liabilities from the prior year end. In addition, the origination of $31 million of PPP loans also increased loans and deposits. Total assets increased to $677 million at December 31, 2020 from $442 million at December 31, 2019. Loans increased to $522 million at December 31, 2020 from $359 million at December 31, 2019. Investment in debt securities increased to $78 million at December 31, 2020 from $56 million at December 31, 2019. Deposits increased to $573 million at December 31, 2020 from $377 million at December 31, 2019. In connection with the Carroll acquisition, the Company borrowed $17 million that it used to fund a portion of the $25 million cash merger consideration. The book value of the common stock of Farmers and Merchants Bancshares, Inc. was $17.18 per share at December 31, 2020, compared to $16.63 per share at December 31, 2019.

 

 

 

The COVID-19 pandemic continues almost a full year after it started. The Bank is providing relief to its borrowers, as needed, including temporary deferral of payments. During the second quarter of 2020, the Bank granted 90-day payment deferrals on 107 loans totalling $109.2 million, which was approximately 30% of the portfolio. Of these deferred loans, 13 loans totaling $21.8 million, or 6% of the portfolio, were granted an additional 90-day deferral. Seven loans totaling $14.7 million, or 3% of the portfolio, including some added with the acquisition of Carroll, have been granted additional payment deferrals. All but one of these loans are making full interest payments. In addition, as mentioned previously, the Bank has made a significant amount of PPP loans to customers.

 

James R. Bosley, Jr., President and CEO, commented “We are excited that the acquisition of Carroll Community Bank and the related system conversion were completed in the fourth quarter. 2020 earnings excluding acquisition costs for both the fourth quarter and the full year significantly exceeded the prior year’s results for the same periods demonstrating the positive impact of the acquisition. In addition, we are pleased to have helped many of our borrowers with payment deferrals and/or PPP loans.”

 

 

About the Company

 

Farmers and Merchants Bancshares, Inc. is a financial holding company and the parent of Farmers and Merchants Bank. Farmers and Merchants 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, and Route 26 corridors. The main office is located in Upperco, Maryland, with nine additional branches in Owings Mills, Hampstead, Greenmount, Reisterstown, Westminster, and Eldersburg. 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

 

   

December 31,

   

December 31,

 
   

2020

   

2019

 
   

(Unaudited)

         

Assets

 
                 

Cash and due from banks

  $ 39,898,557     $ 6,664,307  

Federal funds sold and other interest-bearing deposits

    1,077,113       2,457,045  

Cash and cash equivalents

    40,975,670       9,121,352  

Certificates of deposit in other banks

    850,000       100,000  

Securities available for sale

    54,477,286       36,531,774  

Securities held to maturity

    23,078,519       19,510,018  

Equity security at fair value

    552,566       532,321  

Restricted stock, at cost

    900,500       376,200  

Mortgage loans held for sale

    1,673,350       242,000  

Loans, less allowance for loan losses of $3,296,538 and 2,593,715

    521,690,514       359,382,843  

Premises and equipment

    7,736,556       5,036,851  

Accrued interest receivable

    2,057,491       1,019,540  

Deferred income taxes

    1,219,668       1,036,078  

Other real estate owned

    1,411,605       -  

Bank owned life insurance

    11,297,342       7,145,477  

Goodwill and other intangibles

    7,059,408       -  

Other assets

    2,336,607       2,180,644  
    $ 677,317,082     $ 442,215,098  
                 

Liabilities and Stockholders' Equity

 
                 

Deposits

               

Noninterest-bearing

  $ 103,155,113     $ 60,659,015  

Interest-bearing

    470,246,434       315,954,299  

Total deposits

    573,401,547       376,613,314  

Securities sold under repurchase agreements

    24,753,972       10,958,118  

Federal Home Loan Bank of Atlanta advances

    5,000,000       -  

Long-tem debt

    16,973,280       -  

Accrued interest payable

    409,622       346,214  

Other liabilities

    5,049,178       4,843,936  
      625,587,599       392,761,582  

Stockholders' equity

               

Common stock, par value $.01 per share, authorized 5,000,000 shares; issued and outstanding 3,011,255 in 2020 and 2,974,019 in 2019

    30,113       29,740  

Additional paid-in capital

    28,294,139       27,812,991  

Retained earnings

    22,698,954       21,568,161  

Accumulated other comprehensive income

    706,277       42,624  
      51,729,483       49,453,516  
    $ 677,317,082     $ 442,215,098  

 

 

 

Farmers and Merchants Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

 

   

Three Months Ended December 31,

   

Twelve Months Ended December 31,

 
   

2020

   

2019

   

2020

   

2019

 
   

(Unaudited)

   

(Unaudited)

   

(Unaudited)

         

Interest income

                               

Loans, including fees

  $ 6,085,249     $ 4,312,265     $ 19,291,162     $ 16,894,657  

Investment securities - taxable

    209,356       238,075       770,394       869,457  

Investment securities - tax exempt

    162,794       149,030       625,099       580,384  

Federal funds sold and other interest earning assets

    18,163       76,964       76,525       357,840  

Total interest income

    6,475,562       4,776,334       20,763,180       18,702,338  
                                 

Interest expense

                               

Deposits

    699,498       942,731       3,128,994       3,519,960  

Securities sold under repurchase agreements

    11,608       31,729       107,318       114,641  

Federal Home Loan Bank advances and other borrowings

    196,639       2,835       222,365       45,352  

Total interest expense

    907,745       977,295       3,458,677       3,679,953  

Net interest income

    5,567,817       3,799,039       17,304,503       15,022,385  
                                 

Provision for loan losses

    150,000       40,000       625,000       40,000  
                                 

Net interest income after provision for loan losses

    5,417,817       3,759,039       16,679,503       14,982,385  
                                 

Noninterest income

                               

Service charges on deposit accounts

    160,929       168,923       575,430       663,675  

Mortgage banking income

    340,273       147,843       1,024,937       397,710  

Bank owned life insurance income

    60,670       42,888       188,143       364,729  

Unrealized gain (loss) on equity security

    (2,533 )     (2,489 )     10,513       16,232  

Write down of other real estate owned

    -       -       -       (210,150 )

Gain on sale of SBA loans

    61,885       -       125,520       139,535  

Other fees and commissions

    53,299       27,805       147,576       121,836  

Total noninterest income

    674,523       384,970       2,072,119       1,493,567  
                                 

Noninterest expense

                               

Salaries

    2,022,907       1,478,611       6,137,050       5,472,609  

Employee benefits

    475,237       343,974       1,658,651       1,352,202  

Occupancy

    206,092       177,351       758,357       771,917  

Furniture and equipment

    339,623       154,272       840,890       614,543  

Acquisition

    1,624,496       -       3,236,817       -  

Other

    979,730       674,189       2,950,643       2,664,543  

Total noninterest expense

    5,648,085       2,828,397       15,582,408       10,875,814  
                                 

Income before income taxes

    444,255       1,315,612       3,169,214       5,600,138  

Income taxes

    26,861       254,826       487,211       1,039,334  

Net income

  $ 417,394     $ 1,060,786     $ 2,682,003     $ 4,560,804  
                                 

Earnings per share - basic and diluted

  $ 0.14     $ 0.36     $ 0.90     $ 1.54  

 

 

View differences made from one to another to evaluate Farmers Merchants Bancshares, Inc.'s financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Farmers Merchants Bancshares, Inc..

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account