Farmers and Merchants Bancshares, Inc. Reports Earnings of $4.1 Million or $1.28 per Share for the Nine Months Ended September 30, 2025

HAMPSTEAD, Md., Oct. 27, 2025 (GLOBE NEWSWIRE) -- Farmers and Merchants Bancshares, Inc. (the “Company”), the parent company of Farmers and Merchants Bank (the “Bank” and, together with the Company, “we”, “us” and “our”), announced that net income for the nine months ended September 30, 2025 was $4.1 million, or $1.28 per common share (basic and diluted) compared to $3.4 million, or $1.09 per common share (basic and diluted), for the same period in 2024. The Company’s return on average equity during the nine months ended September 30, 2025 was 9.24% compared to 8.53% for the same period in 2024. The Company’s return on average assets during the nine months ended September 30, 2025 and 2024 was 0.65% and 0.57%, respectively.

Net income for the three months ended September 30, 2025 was $1.7 million, or $0.53 per common share (basic and diluted) compared to $1.1 million, or $0.36 per common share (basic and diluted), for the third quarter of 2024. The Company’s return on average equity during the three months ended September 30, 2025 was 11.23% compared to 8.05% for the same period in 2024. The Company’s return on average assets during the three months ended September 30, 2025 was 0.80% compared to 0.56% for the same period in 2024.

Net interest income for the nine months ended September 30, 2025 was $2.4 million higher when compared to the same period in 2024 due to a widening net yield on interest-earning assets of 2.98% for the nine months ended September 30, 2025 compared to 2.67% for the same period in 2024. The yield on earning assets increased to 5.19% for the nine months ended September 30, 2025, compared to 4.86% for the same period in 2024. The cost of interest bearing liabilities decreased to 2.70% for the nine months ended September 30, 2025, down from 2.71% for the same period in 2024. Average interest earning assets were $804.3 million for the nine months ended September 30, 2025 compared to $775.9 million for the same period in 2024. Gross interest income increased by $3.0 million to $31.1 million for the nine months ended September 30, 2025, up from $28.1 million for the same period in 2024. Average interest bearing liabilities increased by $33.3 million to $657.8 million for the nine months ended September 30, 2025 from $624.5 million for the same period in 2024. Total interest expense increased $600 thousand to $13.3 million for the nine months ended September 30, 2025 compared to $12.7 million for the same period in 2024.

The Company recorded a $595 thousand provision for credit losses for the nine months ended September 30, 2025. There was no provision recorded for the nine months ended September 30, 2024. The increase in the provision was related to the write down of two loans, both of which were foreclosed upon.

Noninterest income increased by $191 thousand for the nine months ended September 30, 2025 when compared to the same period in 2024. The increase was due to several factors, including a $85 thousand increase in mortgage banking revenue, a $28 thousand increase in bank owned life insurance income, a $126 thousand increase in gain on settlement of fair value hedge, and a $109 thousand increase in fees and commissions. Noninterest expense was $1.3 million higher for the nine months ended September 30, 2025 when compared to the same period in 2024, due primarily to a $617 thousand increase in salaries and benefits and a $379 thousand combined increase in occupancy and furniture and equipment costs. ATM and debit card expenses decreased by $67 thousand, primarily due to conversion related costs incurred in 2024. Also, the Bank’s FDIC assessment expense increased by $184 thousand due to higher FDIC assessment rates. Professional services increased by $35 thousand due to the higher legal fees in 2025 related to stockholder matters. These increases were offset by $94 thousand in lower service charges on deposits and a $70 thousand decrease of non-recurring gain on insurance settlement recognized in 2024.

Total assets increased to $869.6 million at September 30, 2025 from $844.6 million at December 31, 2024. Loans, net of the allowance for credit losses, increased to $622.5 million at September 30, 2025 from $583.0 million at December 31, 2024. Investments in debt securities decreased to $142.3 million at September 30, 2025 from $146.2 million at December 31, 2024. Deposits decreased to $734.1 million at September 30, 2025 from $758.8 million at December 31, 2024. Federal Home Loan Bank advances and other long-term debt increased by $45.9 million to $62.2 million as of September 30, 2025, up from $16.3 million at December 31, 2024. The increase was primarily due to the Company utilizing Federal Home Loan Bank advances to repay $40 million of maturing brokered CDs. Additionally, the Company issued $12.5 million in subordinated debt during September 2025. The proceeds of which were used to repay the Company’s maturing term loan of approximately $10 million as well to add an interest reserve and increasing the Bank’s capital. The Company’s tangible equity was $56.1 million at September 30, 2025 compared to $49.2 million at December 31, 2024.

The book value of the Company’s common stock increased to $19.72 per share at September 30, 2025 from $17.77 per share at December 31, 2024. Book value per share at September 30, 2025 is reflective of the $13.0 million unrealized loss, net of income taxes, on the Bank’s available for sale (“AFS”) securities portfolio as a result of the rise in interest rates since the time of purchase. Changes in the market value of the AFS securities portfolio, net of income taxes, are reflected in the Company’s equity, but are not included in the income statement. Management does not believe there is any indication of credit deterioration in any of the bonds and we intend to hold these securities to maturity, so no actual losses are anticipated. The securities portfolio is comprised of 62% government agency mortgage backed securities which are fully guaranteed, 20% investment grade non agency mortgage backed securities, 14% investment grade corporate and municipal bonds, and 4% subordinated debt of other community banks. Unrealized gains and losses do not impact regulatory capital because the Bank elected many years ago to not include in the calculation of regulatory capital changes in the market value of the AFS securities portfolio regardless of whether they are positive or negative.

Gary A. Harris, President and CEO, commented “The decrease in interest rates over the past year, along with the repricing of the existing loan portfolio, has allowed our net yield on interest-earning assets to expand. We have strategically taken advantage of the lower interest rates by exercising call options on certain funding sources and replacing them with lower cost funds. Loan production is robust with over $39.5 million in net loan growth through September 30, 2025. Our asset quality remains strong with zero non-accrual loans as of September 30, 2025. The Towson Commercial Banking office, which opened in June of 2024, has exceeded our expectations with total deposits over $44 million as of September 30, 2025 coupled with strong loan growth. We remain focused on reducing costs while expanding income-generating opportunities. Investments made over the past two years in talent and infrastructure are beginning to yield positive returns, positioning us well for continued growth.”

About the Company

The Company is a financial holding company and the parent company of the Bank. The 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, Route 26, and Route 45 corridors. The main office is located in Upperco, Maryland, with eight additional branches in Owings Mills, Hampstead, Greenmount, Reisterstown, Westminster, Eldersburg, and Towson. 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 OTCID 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 SubsidiariesConsolidated Balance SheetsDollars in thousands except share and per share data(Unaudited) September 30, December 31, 2025 2024 * Assets Cash and due from banks$51,666 $63,962 Federal funds sold and other interest-bearing deposits 521 697 Cash and cash equivalents 52,187 64,659 Certificates of deposit in other banks 100 100 Securities available for sale, at fair value 121,138 125,713 Securities held to maturity, at amortized cost less allowance for credit losses of $79 and $60 21,128 20,499 Equity security, at fair value 546 518 Restricted stock, at cost 3,100 921 Mortgage loans held for sale - 157 Loans, less allowance for credit losses of $4,257 and $4,260 622,457 582,993 Premises and equipment, net 7,222 7,349 Accrued interest receivable 2,550 2,439 Deferred income taxes, net 6,410 7,606 Other real estate owned, net 2,775 1,176 Bank owned life insurance 15,640 15,324 Goodwill and other intangibles, net 7,020 7,026 Other assets 7,359 8,163 Total Assets$869,632 $844,643 Liabilities and Stockholders' Equity Deposits Noninterest-bearing$116,187 $107,197 Interest-bearing 617,909 651,609 Total deposits 734,096 758,806 Securities sold under repurchase agreements 2,458 5,564 Federal Home Loan Bank of Atlanta advances 50,200 5,000 Long-term debt, net of issuance costs 12,024 11,329 Accrued interest payable 935 1,003 Other liabilities 6,756 6,669 Total liabilities 806,469 788,371 Stockholders' equity Common stock, par value $.01 per share, authorized 5,000,000 shares; issued and outstanding 3,202,935 shares in 2025 and 3,166,653 shares in 2024 32 32 Additional paid-in capital 31,718 31,136 Retained earnings 44,602 41,613 Accumulated other comprehensive loss (13,189) (16,509)Total Stockholders' equity 63,163 56,272 Total liabilities and stockholders' equity$869,632 $844,643 * Derived from audited consolidated financial statements

Farmers and Merchants Bancshares, Inc. and SubsidiariesConsolidated Statements of IncomeDollars in thousands except per share data(Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Interest income Loans, including fees$9,307 $7,902 $26,572 $22,021 Investment securities - taxable 1,071 1,623 3,191 4,794 Investment securities - tax exempt 157 141 467 416 Federal funds sold and other interest earning assets 424 181 909 861 Total interest income 10,959 9,847 31,139 28,092 Interest expense Deposits 4,344 3,911 12,665 10,244 Securities sold under repurchase agreements 13 13 42 49 Federal Home Loan Bank advances 129 65 251 109 Federal Reserve Bank advances - 648 - 1,911 Long-term debt 120 125 342 387 Total interest expense 4,606 4,762 13,300 12,700 Net interest income 6,353 5,085 17,839 15,392 Provision for credit losses 327 - 595 - Net interest income after provision for credit losses 6,026 5,085 17,244 15,392 Noninterest income Service charges on deposit accounts 185 209 527 621 Mortgage banking income 75 43 151 66 Bank owned life insurance income 105 103 316 288 Fair value adjustment of equity security 7 20 16 14 Gain (loss) on settlement of fair value hedge - - 94 (32)Loss on sale of premises and equipment - (5) - (5)Gain on insurance proceeds, net 73 - 73 143 Other fees and commissions 106 81 343 234 Total noninterest income 551 451 1,520 1,329 Noninterest expense Salaries 2,178 1,878 6,576 5,848 Employee benefits 573 549 1,486 1,597 Occupancy 281 275 890 799 Furniture and equipment 370 327 1,185 897 Professional services 174 167 565 530 Automated teller machine and debit card expenses 71 173 407 474 Federal Deposit Insurance Corporation premiums 150 91 466 282 Postage, delivery, and armored carrier 62 72 204 217 Advertising 63 57 193 180 Other real estate owned expense, net (13) 11 58 17 Other 500 471 1,607 1,466 Total noninterest expense 4,409 4,071 13,637 12,307 Income before income taxes 2,168 1,465 5,127 4,414 Income taxes 462 342 1,058 993 Net income$1,706 $1,123 $4,069 $3,421 Earnings per common share - basic and diluted$0.53 $0.36 $1.28 $1.09

Farmers and Merchants Bancshares, Inc.Selected Consolidated Financial Data(Unaudited)Dollars in thousands except per share data As of or For the Three Months Ended September 30, 2025 2024 2023 OPERATING DATA Interest income$10,959 $9,847 $8,002 Interest expense 4,606 4,762 2,815 Net interest income 6,353 5,085 5,187 Provision for (recovery of) credit losses 327 - (75)Net interest income after provision for (recovery of) credit losses 6,026 5,085 5,262 Noninterest income 551 451 383 Noninterest expense 4,409 4,071 3,746 Income before income taxes 2,168 1,465 1,899 Income taxes 462 342 467 Net income$1,706 $1,123 $1,432 PER SHARE DATA Net income (Basic and diluted)$0.53 $0.36 $0.46 Dividends$0.34 $0.00 $0.31 Book value$19.72 $18.81 $15.61 KEY RATIOS Return on average assets 0.80% 0.56% 0.77%Return on average equity 11.23% 8.05% 11.54%Efficiency ratio * 67.04% 73.54% 66.36%Net yield on interest-earning assets 3.15% 2.62% 2.88%Tier 1 capital leverage ratio 9.29% 9.42% 9.91% * annualized noninterest expense divided by net interest income after provision for credit losses and noninterest income

Farmers and Merchants Bancshares, Inc.Selected Consolidated Financial Data(Unaudited)Dollars in thousands except per share data As of or For the Three Months Ended September 30, 2025 2024 2023 AT PERIOD END Total assets$869,799 $817,531 $756,638 Gross loans 626,714 576,512 530,649 Cash and cash equivalents 52,187 16,842 25,012 Securities 142,266 179,697 156,697 Deposits 734,096 673,745 644,263 Long term debt, FRB and FHLB borrowings 62,224 70,800 51,683 Stockholders' equity 63,163 59,162 48,262 SELECTED AVERAGE BALANCES Total assets$857,387 $807,493 $745,762 Gross loans 621,092 560,895 530,824 Cash and cash equivalents 41,735 20,676 18,650 Securities 162,120 199,915 182,002 Deposits 761,693 663,594 637,647 Long term debt, FRB and FHLB borrowings 23,406 74,569 48,181 Stockholders' equity 60,751 55,819 49,627 ASSET QUALITY Nonperforming assets$4,049 $1,630 $1,898 Nonperforming assets/total assets 0.47% 0.20% 0.25% Allowance for credit losses/total loans 0.68% 0.73% 0.85%

Farmers and Merchants Bancshares, Inc.Selected Consolidated Financial Data(Unaudited)Dollars in thousands except per share data As of or For the Nine Months Ended September 30, 2025 2024 2023 OPERATING DATA Interest income$31,139 $28,092 $22,438 Interest expense 13,300 12,700 6,323 Net interest income 17,839 15,392 16,115 Provision for (recovery of) credit losses 595 - (570)Net interest income after provision for (recovery of ) credit losses 17,244 15,392 16,685 Noninterest income 1,520 1,329 1,169 Noninterest expense 13,637 12,307 11,189 Income before income taxes 5,127 4,414 6,665 Income taxes 1,058 993 1,662 Net income$4,069 $3,421 $5,003 PER SHARE DATA Net income (Basic and diluted)$1.28 $1.09 $1.63 Dividends$0.34 $0.33 $0.31 Book value$19.72 $18.81 $15.61 KEY RATIOS Return on average assets 0.65% 0.57% 0.91%Return on average equity 9.24% 8.53% 13.45%Efficiency ratio * 72.68% 73.60% 62.67%Net yield on interest-earning assets 2.98% 2.67% 3.04%Tier 1 capital leverage ratio 9.29% 9.42% 9.91% * annualized noninterest expense divided by net interest income after provision for credit losses and noninterest income AT PERIOD END Total assets$869,799 $817,531 $730,262 Gross loans 626,714 575,753 535,646 Cash and cash equivalents 52,187 16,842 12,288 Securities 142,266 179,697 139,949 Deposits 734,096 673,745 631,811 Long term debt, FRB and FHLB borrowings 62,224 70,800 38,154 Stockholders' equity 63,163 59,162 49,834 SELECTED AVERAGE BALANCES Total assets$857,221 $808,736 $737,425 Gross loans 604,854 549,531 523,785 Cash and cash equivalents 58,423 30,766 16,138 Securities 144,239 181,973 151,760 Deposits 746,451 677,354 633,937 Long term debt, FRB and FHLB borrowings 39,277 61,006 43,390 Stockholders' equity 59,718 55,670 48,019 ASSET QUALITY Nonperforming assets$2,775 $1,630 $1,898 Nonperforming assets/total assets 0.32% 0.20% 0.26% Allowance for credit losses/total loans 0.68% 0.56% 0.87%

Farmers and Merchants Bancshares, Inc.Selected Consolidated Financial Data(Unaudited)Amounts in thousands except per share data As of or For the Nine Months Ended September 30, 2025 2024 2023 AT PERIOD END Total assets$869,799 $817,531 $756,638 Gross loans 626,714 576,512 530,649 Cash and cash equivalents 52,187 16,842 25,012 Securities 142,266 179,697 156,697 Deposits 734,096 673,745 644,263 Long term debt, FRB and FHLB borrowings 62,224 70,800 51,683 Stockholders' equity 63,163 59,162 48,262 SELECTED AVERAGE BALANCES Total assets$833,069 $797,367 $731,446 Gross loans 604,854 549,531 523,785 Cash and cash equivalents 58,423 30,766 16,138 Securities 165,248 204,353 172,952 Deposits 743,021 658,105 631,453 Long term debt, FRB and FHLB borrowings 19,996 72,280 40,082 Stockholders' equity 58,745 53,476 49,593 ASSET QUALITY Nonperforming assets$4,049 $1,630 $1,898 Nonperforming assets/total assets 0.47% 0.20% 0.25% Allowance for credit losses/total loans 0.68% 0.73% 0.85%

Contact: Mr. Gary A. Harris
President and Chief Executive Officer
(410) 374-1510, ext. 1104