FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT:
January 23, 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 SEVENTH CONSECUTIVE YEAR OF RECORD EARNINGS FOR 2016
UPPERCO, MARYLAND (January 23, 2017) - Farmers and Merchants Bancshares, Inc., the parent of Farmers and Merchants Bank (collectively the "Bank") announced that net income for the year ended December 31, 2016 was
$4,302,864 or $2.60 per share compared to $4,268,222 or $2.61 per share in 2015 - the seventh consecutive year that the Bank has set a record for net income. The increase of $34,642 over 2015 was due to an increase in net interest income of
$489,622 and a decrease in income taxes of $897,120, offset by a decrease in noninterest income of $521,063 and an increase in noninterest expense of $831,037.
The increase in net interest income was due to an increase in average interest earning assets of $27 million, offset by a decline in the net yield of 20 basis points. The decrease in income taxes was a result of the effective tax rate decreasing to 27.5% in 2016 from 37.2% in 2015 due to a higher amount of tax exempt revenue. The decrease in noninterest income was due primarily to a decrease in the gain on the sale of other real estate owned of $607,359, a decrease in the gain on sale of loans of $107,830, offset by an increase in mortgage banking income of $78,098 and an increase in bank owned life insurance income of $107,358. The noninterest expense increase is due primarily to higher compensation and benefit costs, higher telecommunication costs, mobile banking costs, professional fees, and the costs associated with the new EMV chip card technology. Compensation and benefit costs increased as a result of several new positions, incentives on higher loan production, and normal salary increases.
Return on average equity was 11.29% in 2016 compared to 12.26% in 2015. Return on average assets was 1.19% in 2016 compared to 1.29% in 2015. Cash dividends paid to shareholders in 2016 increased 9% to $0.70 per common share from
$0.64 per common share in 2015.
Net income for the three months ended December 31, 2016 was $1,409,836 or $.85 per share, compared to 1,081,074 or
$.66 per share per share for the same period in 2015. The increase of $328,762 was due to a $207,619 increase in net interest income and a $506,516 decrease in income taxes, offset by a $117,631 decrease in noninterest income, and an increase of $252,742 in noninterest expenses.
Total assets of $380 million as of December 31, 2016 increased 10% from $345 million as of December 31, 2015. The loan portfolio increased 10% to $295 million at December 31, 2016 from $268 million at December 31, 2015. Deposits also increased 10% to $303 million at December 31, 2016 from $276 million at the end of 2015. The book value of the common stock of the Bank was $23.79 per share at December 31, 2016, compared to $21.99 per share at the end of 2015.
James R. Bosley, Jr., President and CEO, commented "We are very proud to report our seventh consecutive year of record earnings. We are also very pleased that the strong growth in loans and deposits we achieved in 2016 will further solidify our balance sheet and will help to maintain a high level of earnings into the future."
Farmers and Merchants Bank was chartered in Maryland in 1919, and is currently celebrating over 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 Bank's common stock are traded through NASDAQ's Over-The-Counter Bulletin Board under the symbol "FMFG.OB".
Consolidated Balance Sheets
Cash and due from banks | $ 13,504,081 $ 18,693,272 |
Federal funds sold and other interest bearing deposits | 978,557 1,710,327 |
Cash and cash equivalents | 14,482,638 20,403,599 |
Certificate of deposit in other bank 100,000 | 100,000 | |
Securities available for sale 34,385,939 | 23,608,646 | |
Securities held to maturity 17,987,628 | 16,640,005 | |
Federal Home Loan Bank stock, at cost 778,300 | 758,100 | |
Loans held for sale 884,500 | - | |
Loans, less allowance for loan losses of $2,363,086 and $2,583,445 295,286,572 | 268,207,580 | |
Premises and equipment 5,449,678 | 5,647,933 | |
Accrued interest receivable 956,963 | 850,923 | |
Deferred income taxes 1,420,891 | 1,315,254 | |
Other real estate owned 414,000 | 472,500 | |
Bank owned life insurance 6,721,003 | 6,541,381 | |
Other assets 1,356,982 | 508,155 | |
$ 380,225,094 | $ 345,054,076 | |
Liabilities and Stockholders' Equity | ||
Deposits | ||
Noninterest-bearing | $ 62,791,835 | $ 57,970,899 |
Interest-bearing | 239,923,301 | 217,900,147 |
Total deposits | 302,715,136 | 275,871,046 |
Securities sold under repurchase agreements | 27,226,159 | 20,490,619 |
Federal Home Loan Bank of Atlanta advances | 9,000,000 | 11,000,000 |
Accrued interest payable | 141,903 | 137,968 |
Other liabilities | 1,735,884 | 1,330,248 |
340,819,082 | 308,829,881 | |
Stockholders' equity | ||
Common stock, par value $.01 per share, authorized 5,000,000 | ||
shares; issued and outstanding 1,656,390 shares in 2016 | ||
and 1,647,541 shares in 2015 | 16,564 | 16,475,415 |
Surplus | 26,562,919 | 9,889,660 |
Undivided profits | 13,106,834 | 9,961,244 |
Accumulated other comprehensive income | (280,305) | (102,124) |
39,406,012 | 36,224,195 |
345,054,076
Consolidated Statements of Income
Three Months Ended December 31, Year Ended December 31,2016 | 2015 | 2016 | 2015 |
(Unaudited) | (Unaudited) | (Unaudited) |
Interest income | ||||
Loans, including fees | $ 3,651,644 | $ 3,484,024 | $ 14,024,899 | $ 13,809,312 |
Investment securities - taxable | 184,423 | 137,989 | 762,383 | 479,217 |
Investment securities - tax exempt | 141,743 | 90,199 | 501,530 | 367,030 |
Federal funds sold and other interest earning assets | 14,381 | 16,770 | 62,685 | 49,842 |
Total interest income | 3,992,191 | 3,728,982 | 15,351,497 | 14,705,401 |
Deposits | 293,265 | 261,616 | 1,098,987 | 1,005,317 |
Securities sold under repurchase agreements | 47,930 | 25,616 | 144,620 | 99,886 |
Federal Home Loan Bank advances and other borrowings | 27,690 | 26,063 | 102,513 | 84,443 |
Total interest expense | 368,885 | 313,295 | 1,346,120 | 1,189,646 |
Net interest income | 3,623,306 | 3,415,687 | 14,005,377 | 13,515,755 |
Provision for loan losses - (15,000) - -
Net interest income after provision for loan losses 3,623,306 3,430,687 14,005,377 13,515,755
Noninterest incomeService charges on deposit accounts | 195,014 | 195,186 | 758,075 | 748,310 |
Mortgage banking income | 124,039 | 86,656 | 471,982 | 393,884 |
Bank owned life insurance income | 44,896 | 153,563 | 179,622 | 72,264 |
Net gain on sale of securities | - | (13,687) | - | (5,508) |
Gain (loss) on sale and writedown of other real estate owned | (57,065) | 653 | (57,065) | 550,474 |
Gain on sale of commercial loans | - | - | - | 107,830 |
Other fees and commissions | 25,714 | 27,858 | 112,583 | 119,006 |
Total noninterest income | 332,598 | 450,229 | 1,465,197 | 1,986,260 |
Noninterest expense | ||||
Salaries | 1,299,031 | 1,127,447 | 4,661,703 | 4,240,524 |
Employee benefits | 291,838 | 298,355 | 1,217,508 | 1,131,389 |
Occupancy | 162,503 | 149,164 | 649,055 | 640,083 |
Furniture and equipment | 175,055 | 163,433 | 649,865 | 609,458 |
Federal Deposit Insurance premiums | 22,300 | 49,603 | 189,471 | 207,414 |
Other | 548,916 | 458,899 | 2,167,023 | 1,874,720 |
Total noninterest expense | 2,499,643 | 2,246,901 | 9,534,625 | 8,703,588 |
Income before income taxes | 1,456,261 | 1,634,015 | 5,935,949 | 6,798,427 |
Income taxes | 46,425 | 552,941 | 1,633,085 | 2,530,205 |
Net income | $ 1,409,836 | $ 1,081,074 | $ 4,302,864 | $ 4,268,222 |
Earnings per share - basic and diluted | $ 0.85 | $ 0.66 | $ 2.60 | $ 2.61 |
Farmers & Merchants Bank published this content on 23 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 23 January 2017 18:25:01 UTC.
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