Company: FMFG
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001437749-25-017235
Chunk: 4

Company: Farmers & Merchants Bancshares, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 4
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 to make timely principal and interest payments under the contractual terms of the securities, and (iv) internal forecasts. Unrated bonds were underwritten similar to commercial loans and the financial condition of the issuer is monitored periodically. Expected credit losses on commercial loans are applied to unrated bonds. The duration of each bond is used as the remaining life in the calculation of expected credit losses.

The following table summarizes Moody's and/or Standard & Poor's bond ratings (the Company’s primary credit quality indicators) for our portfolio of held-to-maturity securities issued by states and political subdivisions as of March 31, 2025 and December 31, 2024 at amortized cost:

  (dollars in thousands)      March 31, 2025                  December 31, 2024              
 ─────────────────────────────────────────────────────────────────────────────────────────────
  AAA                         $                    2,808      $                       2,803  
  AA                                              12,637                             12,603  
  A                                                1,810                              1,811  
  Not rated                                        3,942                              3,342  
  Total                       $                   21,197      $                      20,559  

Generally, the historical loss rates associated with securities having similar grades as those in our portfolio have not been significant. Furthermore, as of March 31 2025, there were no past due principal or interest payments associated with these securities and none were on nonaccrual status.

The following table details activity in the allowance for credit losses on held-to-maturity securities for the three-month periods ended March 31, 2025 and 2024:

                                        Three Months                Three Months             
                                        Ended                       Ended                    
  (dollars in thousands)                March 31, 2025              March 31, 2024           
 ─────────────────────────────────────────────────────────────────────────────────────────────
  Beginning balance                     $                   60      $                    36  
  Credit loss (recovery) provision                           3                          ( 4  
  Ending balance                        $                   63      $                    32  

Accrued interest receivable on available for sale securities totaled $293thousand and $303thousand as of March 31, 2025 and December 31, 2024, respectively, and accrued interest receivable on held to maturity securities totaled $118.5thousand and $122.0thousand as of March 31, 2025 and December 31