Farmers & Merchants Bancshares, Inc. reported a strong year-over-year increase in net income and improved profitability metrics, driven by loan portfolio growth and reduced funding costs. The company also saw an increase in its provision for credit losses, reflecting loan portfolio expansion and specific write-downs.
Net income for the year ended December 31, 2025 was $5.8 million, a 35% increase compared to $4.3 million for the same period in 2024.
positiveDiluted EPS for the year ended December 31, 2025 was $1.81, up from $1.37 in 2024.
positiveReturn on average equity improved to 9.57% in 2025 from 7.83% in 2024.
positiveNet interest income increased by $3.6 million to $24.4 million in 2025, driven by a widening net yield on interest-earning assets.
positiveLoan portfolio, net of allowance for credit losses, grew by 9% to $633.1 million.
positiveAsset quality remains strong with zero non-accrual loans as of December 31, 2025.
positiveThe provision for credit losses increased significantly to $698 thousand in 2025 from $150 thousand in 2024, related to write-downs of two foreclosed loans and loan portfolio growth.
attentionNoninterest expense increased by $1.4 million to $18.3 million in 2025, primarily due to higher salaries, benefits, occupancy, and furniture/equipment costs.
attentionDeposits decreased to $720.5 million at December 31, 2025 from $758.8 million at December 31, 2024, largely due to a decrease in brokered CDs of $88.3 million.
attentionThe book value per share of $20.02 at December 31, 2025 reflects a $12.7 million unrealized loss on available-for-sale securities due to rising interest rates.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
In 2025, we achieved a 35% increase in net income which was accomplished by growing our loan portfolio and reducing our funding costs.
Our loan portfolio, net of allowance for credit losses, grew to $633 million, which is an increase of $50 million, or 9%, over last year’s balance.
The yield on loans improved to 5.84% as existing loans in our portfolio repriced over the past year.
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