Exhibit 99.1
FOR IMMEDIATE RELEASE | FOR FURTHER INFORMATION CONTACT: | |
July 27, 2017 | ||
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 $1.28 PER SHARE FOR THE SIX MONTHS ENDED JUNE 30, 2017
HAMPSTEAD, MARYLAND (July 27, 2017) –Farmers and Merchants Bancshares, Inc., the parent of Farmers and Merchants Bank (collectively the “Bank”), announced that net income for the six months ended June 30, 2017 was $2,118,446, or $1.28 per common share, compared to $1,852,656, or $1.12 per common share, for the same period in 2016. Net interest income for the six months ended June 30, 2017 was $434,437 higher than the same period last year due to a $40,161,425 increase in average interest earning assets, offset by a decline in the net yield on interest earning assets to 3.94% in 2017 from 4.15% in 2016. The net yield continues to decline as deposit rates have begun to rise and loan pricing continues to fall as a result of intense competition and the flattening yield curve.
Noninterest expense was $395,878 higher in the six months ended June 30, 2017 when compared to the same period last year. The primary reasons for the increase were higher compensation and benefit costs as a result of several new positions and normal salary increases, an increase in legal and professional costs incurred from the SEC registration process and the implementation of the new dividend reinvestment plan, and expenses of the captive insurance subsidiary. Income taxes declined by $211,600 during the first half of 2017 when compared to the first half of 2016 due to higher tax exempt revenue.
The Bank’s return on average equity during the six months ended June 30, 2017 was 10.75% compared to 9.89% during the same period in 2016. The Bank’s return on average assets was 1.09% in 2017 compared to 1.06% in 2016.
Net income for the three months ended June 30, 2017 was $1,134,889, or $0.69 per common share, compared to $913,477, or $0.55 per common share, for the same period in 2016.
Total assets of $400 million as of June 30, 2017 increased from $380 million at December 31, 2016. Loans increased to $324 million at June 30, 2017 compared to $295 million at December 31, 2016, an increase of 9.7%. Deposits increased to $318 million at June 30, 2017 compared to $303 million at December 31, 2016. The book value of the common stock of Farmers and Merchants Bancshares, Inc. was $24.90 per share at June 30, 2017, compared to $23.55 per share at December 31, 2016.
James R. Bosley, Jr., President and CEO, commented “We are proud to reach $400 million in total assets for the first time in the Bank’s history. The 2nd quarter has continued where the 1st quarter left off with strong growth in the loan portfolio and increased earnings despite continuing pressure on our interest margin and higher overhead costs.”
Farmers and Merchants Bank was chartered in Maryland in 1919, and is currently celebrating 97 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 six additional branches in Owings Mills, Hampstead, Greenmount, Reisterstown, and Westminster. Shares of the Farmers and Merchants Bancshares, Inc. common stock are traded through NASDAQ’s Over-The-Counter Bulletin Board under the symbol “FMFG.OB”.
Farmers and Merchants Bancshares, Inc. and Subsidiaries
Consolidated Balance Sheets
June 30, | December 31, | |||||||
2017 | 2016 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Cash and due from banks | $ | 8,069,467 | $ | 12,334,358 | ||||
Federal funds sold and other interest-bearing deposits | 1,064,038 | 978,557 | ||||||
Cash and cash equivalents | 9,133,505 | 13,312,915 | ||||||
Certificate of deposit in other bank | 100,000 | 100,000 | ||||||
Securities available for sale | 31,773,618 | 34,385,939 | ||||||
Securities held to maturity | 18,747,947 | 17,987,628 | ||||||
Federal Home Loan Bank stock, at cost | 1,106,100 | 778,300 | ||||||
Mortgage loans held for sale | 473,500 | 884,500 | ||||||
Loans, less allowance for loan losses of$2,490,014and $2,363,086 | 324,044,052 | 295,286,572 | ||||||
Premises and equipment | 5,301,948 | 5,449,678 | ||||||
Accrued interest receivable | 942,647 | 956,963 | ||||||
Deferred income taxes | 956,886 | 1,029,019 | ||||||
Other real estate owned | 414,000 | 414,000 | ||||||
Bank owned life insurance | 6,807,247 | 6,721,003 | ||||||
Other assets | 576,405 | 2,524,842 | ||||||
$ | 400,377,855 | $ | 379,831,359 | |||||
Liabilities and Stockholders' Equity | ||||||||
Deposits | ||||||||
Noninterest-bearing | $ | 60,837,900 | $ | 62,791,835 | ||||
Interest-bearing | 257,005,012 | 239,923,301 | ||||||
Total deposits | 317,842,912 | 302,715,136 | ||||||
Securities sold under repurchase agreements | 21,003,860 | 27,226,159 | ||||||
Federal Home Loan Bank of Atlanta advances | 18,000,000 | 9,000,000 | ||||||
Accrued interest payable | 186,963 | 141,903 | ||||||
Other liabilities | 2,102,661 | 1,735,884 | ||||||
359,136,396 | 340,819,082 | |||||||
Stockholders' equity | ||||||||
Common stock, par value $.01 per share, | ||||||||
authorized 5,000,000 shares; issued and outstanding | ||||||||
1,656,390 shares in 2017 and 2016 | 16,564 | 16,564 | ||||||
Additional paid-in capital | 26,562,919 | 26,562,919 | ||||||
Retained earnings | 14,831,545 | 12,713,099 | ||||||
Accumulated other comprehensive income | (169,569 | ) | (280,305 | ) | ||||
41,241,459 | 39,012,277 | |||||||
$ | 400,377,855 | $ | 379,831,359 |
Farmers and Merchants Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended June 30 | Six Month Ended June 30 | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Interest income | ||||||||||||||||
Loans, including fees | $ | 3,765,062 | $ | 3,383,179 | $ | 7,381,230 | $ | 6,848,668 | ||||||||
Investment securities - taxable | 173,807 | 207,362 | 369,552 | 389,142 | ||||||||||||
Investment securities - tax exempt | 154,853 | 123,185 | 302,107 | 229,922 | ||||||||||||
Federal funds sold and other interest earning assets | 28,038 | 17,434 | 45,483 | 35,008 | ||||||||||||
Total interest income | 4,121,760 | 3,731,160 | 8,098,372 | 7,502,740 | ||||||||||||
Interest expense | ||||||||||||||||
Deposits | 332,879 | 265,878 | 643,684 | 525,549 | ||||||||||||
Securities sold under repurchase agreements | 37,772 | 32,428 | 84,287 | 60,899 | ||||||||||||
Federal Home Loan Bank advances and other borrowings | 41,967 | 24,234 | 70,360 | 50,688 | ||||||||||||
Total interest expense | 412,618 | 322,540 | 798,331 | 637,136 | ||||||||||||
Net interest income | 3,709,142 | 3,408,620 | 7,300,041 | 6,865,604 | ||||||||||||
Provision for loan losses | 75,000 | - | 125,000 | - | ||||||||||||
Net interest income after provision for loan losses | 3,634,142 | 3,408,620 | 7,175,041 | 6,865,604 | ||||||||||||
Noninterest income | ||||||||||||||||
Service charges on deposit accounts | 176,110 | 180,878 | 353,000 | 371,062 | ||||||||||||
Mortgage banking income | 50,952 | 86,205 | 108,733 | 162,137 | ||||||||||||
Bank owned life insurance income | 43,328 | 45,847 | 86,244 | 88,544 | ||||||||||||
Gain on sale of loans | 217,563 | - | 217,563 | - | ||||||||||||
Other fees and commissions | 33,785 | 28,136 | 59,242 | 62,408 | ||||||||||||
Total noninterest income | 521,738 | 341,066 | 824,782 | 684,151 | ||||||||||||
Noninterest expense | ||||||||||||||||
Salaries | 1,232,977 | 1,116,375 | 2,391,872 | 2,212,281 | ||||||||||||
Employee benefits | 323,626 | 303,095 | 679,167 | 634,674 | ||||||||||||
Occupancy | 167,618 | 159,347 | 351,421 | 330,607 | ||||||||||||
Furniture and equipment | 169,887 | 165,253 | 334,656 | 305,603 | ||||||||||||
Federal Deposit Insurance Premiums | 54,035 | 53,314 | 84,232 | 107,307 | ||||||||||||
Other | 626,844 | 542,228 | 1,236,907 | 1,091,905 | ||||||||||||
Total noninterest expense | 2,574,987 | 2,339,612 | 5,078,255 | 4,682,377 | ||||||||||||
Income before income taxes | 1,580,893 | 1,410,074 | 2,921,568 | 2,867,378 | ||||||||||||
Income taxes | 446,004 | 496,597 | 803,122 | 1,014,722 | ||||||||||||
Net income | $ | 1,134,889 | $ | 913,477 | $ | 2,118,446 | $ | 1,852,656 | ||||||||
Earnings per share - basic and diluted | $ | 0.69 | $ | 0.55 | $ | 1.28 | $ | 1.12 |