Company: FMFG
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001437749-25-017235
Chunk: 9

Company: Farmers & Merchants Bancshares, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 9
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 Common equity tier 1 (to risk-weighted assets)      76,601      11.67                            45,940       7.00      42,658       6.50  
  Tier 1 leverage (to average assets)                 76,601       9.12                            33,580       4.00      41,974       5.00  

  (1)      Includes capital conservation buffer.  

  Derivative Financial Instruments  
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The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and other terms of the individual interest rate swap agreements.

Fair Value Hedges: Interest rate swaps with notional amounts totaling $64.6million and $75.3million as of March 31, 2025 and December 31, 2024, respectively, were designated as fair value hedges under the portfolio layer method of certain government agency mortgage backed securities. There were no interest rate swaps prior to 2023. The hedges were determined to be effective during all periods presented. The Company expects the hedges to remain effective during the remaining terms of the swaps.

  Derivative Financial Instruments (continued)  
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The following table presents the amounts recorded on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges at March 31, 2025 and December 31, 2024:

  (dollars in thousands)                                                                                               
  Line item in                                           Carrying                                   Carrying           
  the balance sheet                  Carrying            amount of fair      Carrying               amount of fair     
  in which the                       amount of the       value hedging       amount of the          value hedging      
  hedged item is                     hedged assets       adjustment          hedged assets          adjustment         
  included                           March 31, 2025      March 31, 2025      December 31, 2024      December 31, 2024  
  Securities available for sale      $                   $                   $                      $                  

The Company presents derivative positions gross on the consolidated balance sheets. The following table reflects the derivatives recorded on the balance sheet at March 31, 2025 and December 31, 2024:

                                                                    March 31