Farmers and Merchants Bancshares (FMFG) AI Stock Analysis

Farmers and Merchants Bancshares

(Other OTC:FMFG)

Select Model

Rating:68Neutral

Price Target:$20.50▲(9.30% Upside)

Action:downgraded

Date:09/24/26

The score is driven primarily by solid-but-mixed financial performance: good revenue growth and improving TTM returns are offset by weaker recent cash generation and elevated leverage. Valuation provides meaningful support (low P/E and healthy dividend), while technicals are broadly neutral and the corporate event is a modest governance positive.

Positive Factors

Revenue GrowthSustained revenue expansion indicates that FMFG has continued growing its banking franchise and customer-related income over several years. The increase into TTM provides a durable base for earnings growth, although future benefits will depend on preserving profitability as the business scales.

Negative Factors

Margin CompressionThe substantial multi-year decline in net margin shows that revenue growth has not translated into the level of profitability achieved earlier in the cycle. Persistent margin pressure can reduce earnings resilience, limit capital generation, and make results more sensitive to operating and funding costs.

Farmers and Merchants Bancshares (FMFG) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $61.96M
Dividend Yield: 3.81%
Average Volume (3M): 1,802
Price to Earnings (P/E): 8.1
Beta (1Y): 0.13
Revenue Growth: 7.79%
EPS Growth: 48.15%
Country: US
Employees: 93
Sector: Financial
Sector Strength: 68
Industry: Banks - Regional

Farmers and Merchants Bancshares Business Overview & Revenue Model

Company Description

Farmers and Merchants Bancshares, Inc. operates as the bank holding company for Farmers and Merchants Bank that provides commercial and retail banking services to individuals and businesses in Maryland. It offers checking, savings, money market, indi...

How the Company Makes Money

FMFG primarily makes money through its banking subsidiary by earning net interest income and generating fee-based (noninterest) income. Net interest income is generally the largest driver of earnings for community banks and is produced by (1) interes...

Farmers and Merchants Bancshares Financial Statement Overview

Summary

Profitable with solid revenue growth into TTM, but the overall quality is tempered by multi-year margin compression, a higher leverage profile (debt-to-equity ~1.1x–1.2x), and a notable recent deterioration in operating and free cash flow (TTM FCF down ~48% with weaker OCF-to-net income coverage).

Income Statement

74Positive

Balance Sheet

61Positive

Cash Flow

53Neutral

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	46.41M	44.15M	39.47M	32.41M	28.09M	27.49M
Gross Profit	28.09M	25.49M	21.80M	23.07M	25.47M	24.36M
EBITDA	10.10M	8.11M	6.15M	8.94M	11.06M	11.07M
Net Income	7.12M	5.77M	4.28M	6.42M	8.09M	8.15M
Balance Sheet
Total Assets	874.21M	871.96M	844.64M	799.94M	718.21M	716.68M
Cash, Cash Equivalents and Short-Term Investments	163.41M	164.84M	183.60M	200.98M	132.83M	174.85M
Total Debt	74.32M	79.05M	24.58M	58.98M	40.27M	28.70M
Total Liabilities	806.62M	807.30M	788.37M	747.76M	670.44M	660.06M
Stockholders Equity	67.59M	64.66M	56.27M	52.18M	47.77M	56.62M
Cash Flow
Free Cash Flow	3.58M	6.24M	953.00K	5.04M	6.75M	11.40M
Operating Cash Flow	3.69M	6.61M	2.29M	5.90M	7.16M	11.70M
Investing Cash Flow	-6.89M	-42.06M	-22.71M	-42.36M	-35.36M	-58.98M
Financing Cash Flow	23.31M	17.47M	40.39M	73.88M	9.00M	32.77M

Farmers and Merchants Bancshares Technical Analysis

Technical Analysis SentimentPositive

Last Price18.75

Price Trends

50DMA18.72Positive

100DMA18.65Positive

200DMA18.20Positive

Market Momentum

MACD0.02Negative

RSI50.97Neutral

STOCH67.33Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FMFG, the sentiment is Positive. The current price of 18.75 is above the 20-day moving average (MA) of 18.69, above the 50-day MA of 18.72, and above the 200-day MA of 18.20, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 50.97 is Neutral, neither overbought nor oversold. The STOCH value of 67.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FMFG.

Farmers and Merchants Bancshares Risk Analysis

Farmers and Merchants Bancshares disclosed 36 risk factors in its most recent earnings report. Farmers and Merchants Bancshares reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added

1 New Risk

1.Text to select risk factors from:Q1, 2026

Farmers and Merchants Bancshares Peers Comparison

Overall Rating

UnderperformOutperform

Sector (68)

Financial Indicators

FMFG against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OPHC	83Outperform	$115.50M	5.29	16.39%	―	24.01%	20.16%
ASRV	70Outperform	$83.42M	9.14	7.48%	2.44%	2.43%	75.47%
FMFG	68Neutral	$61.20M	8.12	11.20%	3.81%	7.79%	48.15%
Sector *	68Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
TCBS	65Neutral	$49.87M	14.34	6.14%	1.44%	5.94%	51.02%

* Financial Sector Average

Performance Comparison

FMFG and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
FMFG	Farmers and Merchants Bancshares	18.75	2.68	16.69%
ASRV	AmeriServ Financial, Inc.	4.91	1.88	62.15%
OPHC	Optimumbank	9.15	5.05	123.17%
TCBS	Texas Community Bancshares, Inc.	17.36	1.70	10.83%

Farmers and Merchants Bancshares Corporate Events

Executive/Board ChangesRegulatory Filings and Compliance

Farmers and Merchants Bancshares Elects Mark Krebs Director

Positive

Sep 23, 2026

On September 21, 2026, Farmers and Merchants Bancshares, Inc. and its subsidiary Farmers and Merchants Bank elected former longtime executive Mark C. Krebs as a Class I director to serve until the 2027 annual meeting, also appointing him to the Asset...

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Sep 24, 2026

Farmers and Merchants Bancshares AI Stock Analysis