Exhibit 99.1
FOR IMMEDIATE RELEASE | FOR FURTHER INFORMATION CONTACT: |
April 23, 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 2019 FIRST QUARTER EARNINGS OF $0.65 PER SHARE
HAMPSTEAD, MARYLAND (April 23, 2019) – Farmers and Merchants Bancshares, Inc. (the “Company”), the parent of Farmers and Merchants Bank (the “Bank”), announced that net income for the three months ended March 31, 2019 was $1,096,287, or $0.65 per share, compared to $1,122,118, or $0.67 per share, for the same period in 2018, a decrease of $25,831 or 2%.
Net interest income for the three months ended March 31, 2019 was $4,168 higher than the same period last year due to a $13 million increase in average interest-earning assets, offset by a decline in the taxable equivalent net yield on interest earning assets to 3.73%, from 3.87% for the first quarter of 2018. The provision for loan losses decreased by $37,000 to $13,000 for the three months ended March 31, 2019 when compared to $50,000 recorded for the same period last year. Noninterest income increased by $52,116, primarily as a result of the gain on the sale of SBA loans. Noninterest expense increased by $125,996 in the first quarter of 2019 when compared to the same period last year due to usual salary increases and related employee benefit costs, higher occupancy costs, and higher other costs which are primarily professional fees. Income taxes were $6,881 lower for the quarter ended March 31, 2019 when compared to the same quarter in 2018.
The Company’s return on average equity during the first quarter of 2019 was 9.49%, compared to 10.58% during the first quarter of 2018. The Company’s return on average assets was 1.05% in 2019, compared to 1.11% during the same period last year.
Total assets at March 31, 2019 were $428 million, an increase of $11 million from the $417 million recorded at December 31, 2018. The loan portfolio decreased by $6 million to $335 million at March 31, 2019 from $341 million at December 31, 2018. Deposits increased by $10 million to $365 million at March 31, 2019 from $355 million at the end of 2018. The book value of the common stock of the Company was $27.75 per share at March 31, 2019, compared to $26.97 per share at the end of 2018.
James R. Bosley, Jr., President and CEO, commented “We are pleased to start 2019 with strong earnings despite continuing pressure on our interest margin. During 2019, please join us as will celebrate the Bank’s 100th year. We’d like to thank our founders, directors, employees and especially our customers and the communities we serve for helping us reach this milestone.”
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 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 NASDAQ’s Over-The-Counter Bulletin Board under the symbol “FMFG.OB.
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
| | | March 31, | | | December 31, | |
| | | 2019 | | | 2018 | |
| | | (Unaudited) | | | | | |
Assets | |
| | | | | | | | | |
Cash and due from banks | | $ | 20,088,893 | | | $ | 11,480,608 | |
Federal funds sold and other interest-bearing deposits | | | 6,724,288 | | | | 3,137,629 | |
Cash and cash equivalents | | | 26,813,181 | | | | 14,618,237 | |
Certificate of deposit in other bank | | | 100,000 | | | | 100,000 | |
Securities available for sale | | | 30,601,771 | | | | 26,591,991 | |
Securities held to maturity | | | 18,065,993 | | | | 18,127,067 | |
Equity security at fair value | | | 514,717 | | | | 503,827 | |
Federal Home Loan Bank stock, at cost | | | 503,700 | | | | 575,800 | |
Mortgage loans held for sale | | | 417,465 | | | | 573,638 | |
Loans, less allowance for loan losses of $2,529,209 and $2,501,955 | | | 335,142,379 | | | | 340,900,635 | |
Premises and equipment | | | 5,032,002 | | | | 5,075,310 | |
Accrued interest receivable | | | 1,014,800 | | | | 990,529 | |
Deferred income taxes | | | 1,100,714 | | | | 1,179,454 | |
Other real estate owned | | | 210,150 | | | | 210,150 | |
Bank owned life insurance | | | 7,093,740 | | | | 7,053,354 | |
Other assets | | | 1,873,120 | | | | 657,885 | |
| | | $ | 428,483,732 | | | $ | 417,157,877 | |
| | | | | | | | | |
Liabilities and Stockholders' Equity | |
| | | | | | | | | |
Deposits | | | | | | | | |
Noninterest-bearing | | $ | 60,431,904 | | | $ | 62,717,520 | |
Interest-bearing | | | 304,755,581 | | | | 291,995,483 | |
Total deposits | | | 365,187,485 | | | | 354,713,003 | |
Securities sold under repurchase agreements | | | 9,132,795 | | | | 11,012,000 | |
Federal Home Loan Bank of Atlanta advances | | | 3,000,000 | | | | 3,000,000 | |
Accrued interest payable | | | 350,206 | | | | 311,489 | |
Other liabilities | | | 4,114,849 | | | | 2,726,678 | |
| | | | 381,785,335 | | | | 371,763,170 | |
Stockholders' equity | | | | | | | | |
Common stock, par value $.01 per share, authorized 5,000,000 shares; issued and outstanding 1,682,997 shares in 2018 and 2017 | | | 16,830 | | | | 16,830 | |
Additional paid-in capital | | | 27,324,794 | | | | 27,324,794 | |
Retained earnings | | | 19,626,222 | | | | 18,621,382 | |
Accumulated other comprehensive loss | | | (269,449 | ) | | | (568,299 | ) |
| | | | 46,698,397 | | | | 45,394,707 | |
| | | $ | 428,483,732 | | | $ | 417,157,877 | |
Farmers and Merchants Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended March 31, | | 2019 | | | 2018 | |
| | | | | | | | | |
Interest income | | | | | | | | |
Loans, including fees | | $ | 4,160,086 | | | $ | 3,933,155 | |
Investment securities - taxable | | | 152,317 | | | | 154,860 | |
Investment securities - tax exempt | | | 160,607 | | | | 142,763 | |
Federal funds sold and other interest earning assets | | | 74,526 | | | | 26,968 | |
Total interest income | | | 4,547,536 | | | | 4,257,746 | |
| | | | | | | | | |
Interest expense | | | | | | | | |
Deposits | | | 775,531 | | | | 438,410 | |
Securities sold under repurchase agreements | | | 25,299 | | | | 34,389 | |
Federal Home Loan Bank advances and other borrowings | | | 20,553 | | | | 62,962 | |
Total interest expense | | | 821,383 | | | | 535,761 | |
Net interest income | | | 3,726,153 | | | | 3,721,985 | |
| | | | | | | | | |
Provision for loan losses | | | 13,000 | | | | 50,000 | |
| | | | | | | | | |
Net interest income after provision for loan losses | | | 3,713,153 | | | | 3,671,985 | |
| | | | | | | | | |
Noninterest income | | | | | | | | |
Service charges on deposit accounts | | | 152,060 | | | | 161,840 | |
Mortgage banking income | | | 32,719 | | | | 54,193 | |
Bank owned life insurance income | | | 40,386 | | | | 39,905 | |
Unrealized gain(loss) on equity security | | | 7,845 | | | | (11,429 | ) |
Gain on sale of SBA loans | | | 130,015 | | | | 60,508 | |
Other fees and commissions | | | 29,371 | | | | 35,263 | |
Total noninterest income | | | 392,396 | | | | 340,280 | |
| | | | | | | | | |
Noninterest expense | | | | | | | | |
Salaries | | | 1,326,783 | | | | 1,283,510 | |
Employee benefits | | | 381,964 | | | | 367,454 | |
Occupancy | | | 214,420 | | | | 177,533 | |
Furniture and equipment | | | 155,147 | | | | 161,616 | |
Other | | | 676,972 | | | | 639,177 | |
Total noninterest expense | | | 2,755,286 | | | | 2,629,290 | |
| | | | | | | | | |
Income before income taxes | | | 1,350,263 | | | | 1,382,975 | |
Income taxes | | | 253,976 | | | | 260,857 | |
Net income | | $ | 1,096,287 | | | $ | 1,122,118 | |
| | | | | | | | | |
Earnings per share - basic and diluted | | $ | 0.65 | | | $ | 0.67 | |
