Farmers & Merchants Bancshares Reports 19% Net Income Increase to $4.1 Million for Nine Months Ended September 30, 2025

Farmers & Merchants Bancshares, Inc. reported a net income of $4.1 million for the nine months ended September 30, 2025, a 19% increase from $3.4 million in the same period of 2024. Total interest income rose to $31.1 million, up from $28.1 million, driven primarily by a $64.1 million increase in average loan balances. The net interest income for the nine-month period was $17.8 million, compared to $15.4 million in the prior year, reflecting a net yield on interest-earning assets that increased to 2.98% from 2.67%. However, total interest expense also increased to $13.3 million from $12.7 million, primarily due to a higher average balance of interest-bearing liabilities.

In terms of operational changes, the company experienced a significant increase in its loan portfolio, which grew by $39.5 million, or 6.8%, to $622.5 million as of September 30, 2025. This growth was attributed to the addition of new lending staff and stabilizing interest rates. The allowance for credit losses on loans remained steady at $4.3 million, representing 0.68% of the loan portfolio, slightly down from 0.72% at the end of 2024. The company also reported a notable increase in its stockholders' equity, which rose by 12.3% to $63.2 million, driven by net income and a reduction in accumulated other comprehensive loss.

The company’s total assets increased by $25 million, or 3%, to $869.6 million, primarily due to the growth in loans and an increase in stock issued by the Federal Home Loan Bank of Atlanta. Conversely, total liabilities rose by $18.1 million, or 2.3%, largely due to a $45.2 million increase in Federal Home Loan Bank advances, offset by a decrease in deposits of $24.7 million. Total deposits decreased to $734.1 million, reflecting a strategic shift away from higher-cost brokered CDs in favor of lower-cost funding sources.

Looking ahead, Farmers & Merchants Bancshares, Inc. remains focused on maintaining its asset quality and managing credit risk through stringent underwriting standards and continuous monitoring of its loan portfolio. The company anticipates that its recent operational adjustments, including staffing enhancements and strategic funding decisions, will support continued growth in its lending activities. Management believes that the current allowance for credit losses is adequate to cover expected losses in the loan portfolio, and they are committed to navigating the evolving economic landscape effectively.