UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 23, 2018
Farmers and Merchants Bancshares, Inc.
(Exact name of registrant as specified in its charter)
Maryland | 000-55756 | 81-3605835 |
(State or other jurisdiction of | (Commission file number) | (IRS Employer |
incorporation or organization) | Identification No.) |
4510 Lower Beckleysville Road, Suite H, Hampstead, MD | 21074 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (410) 374-1510
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operation and Financial Condition.
On April 23, 2018, Farmers and Merchants Bancshares, Inc. (the “Company”) issued a press release describing its financial results for the three-month period ended March 31, 2018. A copy of the press release is furnished herewith as Exhibit 99.1.
The information contained in this Item 2.02 and in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01. Regulation FD Disclosure.
On April 24, 2018, the Company will hold its Annual Meeting of Stockholders at which members of management will present information, including certain public financial data and performance trends, for the year ended December 31, 2017 and the first quarter of 2018. A copy of management’s presentation has been posted to the Company’s Internet website at www.fmb1919.com, where it may be accessed free of charge by visiting the “Investor Relations” page and clicking the “Presentations” link in the “News & Market Data” tab. The information on the Company’s website is not, and shall not be deemed to be, a part of this report or incorporated into other filings that the Company makes with the Securities and Exchange Commission.
The information contained in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits. |
The exhibits furnished with this report are listed in the following Exhibit Index:
Exhibit No. | Description | |
99.1 | Press release dated April 23, 2018 (furnished herewith). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
FARMERS AND MERCHANTS BANCSHARES, INC. | ||
Dated: April 23, 2018 | By: | /s/ James R. Bosley, Jr. |
James R. Bosley, Jr. | ||
President & CEO |
Exhibit 99.1
FOR IMMEDIATE RELEASE | FOR FURTHER INFORMATION CONTACT: | |
April 23, 2018 | ||
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 RECORD FIRST
QUARTER EARNINGS OF $0.67 PER SHARE
UPPERCO, MARYLAND (April 23, 2018) – 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, 2018 was $1,122,118 or $0.67 per share compared to $983,557 or $0.59 per share for the same period in 2017, an increase in earnings of $138,561 or 14%. This is the highest first quarter net income in the history of the Company.
Net interest income for the three months ended March 31, 2018 was $131,086 higher than the same period last year due to a $24 million increase in average interest-earning assets offset by a decline in the taxable equivalent net yield on interest earning assets to 3.87% from 4.03%. Non interest income increased by $37,236 primarily as a result of the gain on the sale of an SBA loan. Noninterest expense increased by $126,022 in the first quarter of 2018 compared to the same period last year due to usual salary increases and higher employee benefit costs. Income taxes were $96,261 lower in the quarter ended March 31, 2018 compared to the same quarter in 2017 due to the lower federal tax rate as a result of the Tax Cuts and Jobs Act enacted in December 2017.
The Company’s return on average equity during the first quarter of 2018 was 10.58% compared to 9.96% during the first quarter of 2017. The Company’s return on average assets was 1.11% in 2018 compared to 1.02% during the same period last year.
Total assets at March 31, 2018 were $411 million, an increase of $8 million from the $403 million recorded at December 31, 2017. The loan portfolio increased $4 million to $337 million at March 31, 2018 from $333 million at December 31, 2017. Deposits increased $14 million to $334 million at March 31, 2018 from $320 million at the end of 2017. The book value of the common stock of the Company was $25.60 per share at March 31, 2018, compared to $25.06 per share at the end of 2017.
James R. Bosley, Jr., President and CEO, commented “We are pleased that 2018 has started with increased earnings despite continuing pressure on our interest margin. Our core earnings are higher as a result of the continued growth of our high quality loan portfolio and effective management of our overhead expenses. In addition, we are already benefiting from the lower federal income tax rate.”
About the Company
The Company is a registered bank holding company and the parent of the Bank. The Bank was chartered in Maryland in 1919, and is currently celebrating over 98 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. Certain broker-dealers make a market in the Company’s common stock, 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 the Company with the Securities and Exchange Commission entitled “Risk Factors”.
Farmers and Merchants Bancshares, Inc. and Subsidiaries
Consolidated Balance Sheets
March 31, | December 31, | |||||||
2018 | 2017 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Cash and due from banks | $ | 11,812,127 | $ | 6,235,186 | ||||
Federal funds sold and other interest-bearing deposits | 795,257 | 1,002,199 | ||||||
Cash and cash equivalents | 12,607,384 | 7,237,385 | ||||||
Certificates of deposit in other banks | 342,000 | 100,000 | ||||||
Securities available for sale | 26,717,736 | 28,433,391 | ||||||
Securities held to maturity | 18,209,647 | 18,204,182 | ||||||
Federal Home Loan Bank stock, at cost | 979,600 | 1,063,600 | ||||||
Mortgage loans held for sale | 300,000 | 327,700 | ||||||
Loans, less allowance for loan losses of $2,501,955 and $2,458,911 | 337,119,741 | 332,533,706 | ||||||
Premises and equipment | 5,141,568 | 5,206,271 | ||||||
Accrued interest receivable | 1,027,198 | 1,020,256 | ||||||
Deferred income taxes | 1,083,876 | 998,032 | ||||||
Other real estate owned | 265,500 | 265,500 | ||||||
Bank owned life insurance | 6,931,495 | 6,891,590 | ||||||
Other assets | 611,813 | 622,856 | ||||||
$ | 411,337,558 | $ | 402,904,469 | |||||
Liabilities and Stockholders' Equity | ||||||||
Deposits | ||||||||
Noninterest-bearing | $ | 59,185,184 | $ | 64,403,133 | ||||
Interest-bearing | 274,613,264 | 255,393,291 | ||||||
Total deposits | 333,798,448 | 319,796,424 | ||||||
Securities sold under repurchase agreements | 19,604,308 | 21,768,507 | ||||||
Federal Home Loan Bank of Atlanta advances | 12,500,000 | 17,000,000 | ||||||
Accrued interest payable | 228,686 | 180,620 | ||||||
Other liabilities | 2,509,634 | 2,359,986 | ||||||
368,641,076 | 361,105,537 | |||||||
Stockholders' equity | ||||||||
Common stock, par value $.01 per share, | ||||||||
authorized 5,000,000 shares; issued and outstanding | ||||||||
1,667,863 shares in 2018 and 1,667,813 in 2016 | 16,679 | 16,678 | ||||||
Additional paid-in capital | 26,871,345 | 26,869,796 | ||||||
Retained earnings | 16,418,327 | 15,306,625 | ||||||
Accumulated other comprehensive income | (609,869 | ) | (394,167 | ) | ||||
42,696,482 | 41,798,932 | |||||||
$ | 411,337,558 | $ | 402,904,469 |
Farmers and Merchants Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended March 31, | 2018 | 2017 | ||||||
Interest income | ||||||||
Loans, including fees | $ | 3,933,155 | $ | 3,616,168 | ||||
Investment securities - taxable | 154,860 | 195,745 | ||||||
Investment securities - tax exempt | 142,763 | 147,254 | ||||||
Federal funds sold and other interest earning assets | 26,968 | 17,445 | ||||||
Total interest income | 4,257,746 | 3,976,612 | ||||||
Interest expense | ||||||||
Deposits | 438,410 | 310,805 | ||||||
Securities sold under repurchase agreements | 34,389 | 46,515 | ||||||
Federal Home Loan Bank advances and other borrowings | 62,962 | 28,393 | ||||||
Total interest expense | 535,761 | 385,713 | ||||||
Net interest income | 3,721,985 | 3,590,899 | ||||||
Provision for loan losses | 50,000 | 50,000 | ||||||
Net interest income after provision for loan losses | 3,671,985 | 3,540,899 | ||||||
Noninterest income | ||||||||
Service charges on deposit accounts | 161,840 | 176,890 | ||||||
Mortgage banking income | 54,193 | 57,781 | ||||||
Bank owned life insurance income | 39,905 | 42,916 | ||||||
Gain on sale of loans | 60,508 | - | ||||||
Other fees and commissions | 23,834 | 25,457 | ||||||
Total noninterest income | 340,280 | 303,044 | ||||||
Noninterest expense | ||||||||
Salaries | 1,283,510 | 1,158,895 | ||||||
Employee benefits | 367,454 | 355,541 | ||||||
Occupancy | 177,533 | 183,803 | ||||||
Furniture and equipment | 161,616 | 164,769 | ||||||
Other | 639,177 | 640,260 | ||||||
Total noninterest expense | 2,629,290 | 2,503,268 | ||||||
Income before income taxes | 1,382,975 | 1,340,675 | ||||||
Income taxes | 260,857 | 357,118 | ||||||
Net income | $ | 1,122,118 | $ | 983,557 | ||||
Earnings per share - basic and diluted | $ | 0.67 | $ | 0.59 |
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