Company: FMFG
Filing Date: 2025-05-23
Form Type: S-1
Source: 0001437749-25-018314
Chunk: 5

Company: Farmers & Merchants Bancshares, Inc.
Filing Date: 2025-05-23
Form: S-1
Chunk 5
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, which we refer to as the “Reorganization”, involving Farmers and Merchants Bank, a Maryland commercial bank, which we refer to as the “Bank”. In the Reorganization, the Bank became a wholly-owned subsidiary of the Company and all of the Bank’s stockholders became stockholders of the Company. Effective on October 1, 2020, the Company consummated its acquisition of Carroll Bancorp, Inc. and its wholly-owned subsidiary, Carroll Community Bank through a series of mergers. The Company’s primary business activities are serving as the parent company of the Bank and holding a series investment, which we refer to as the “Insurance Subsidiary”, in First Community Bankers Insurance Co., LLC, a Tennessee “series” limited liability company and licensed protected cell captive insurance company.

The Bank is a Maryland commercial bank chartered on October 24, 1919 that is engaged in a general commercial and retail banking business. The Bank’s main office is located in Upperco, Maryland, and it has six additional full service branches located in the Maryland communities of Hampstead, Greenmount, Reisterstown, Owings Mills, Eldersburg, and Westminster. In addition, the Bank has a satellite branch located at the senior living community of Carroll Lutheran Village in Westminster, Maryland and a loan production office in Towson, Maryland. The Bank is an independent community bank providing a wide range of retail and commercial banking services to businesses and individuals in its market areas. The Bank’s deposits are insured by the Federal Deposit Insurance Corporation.

The Insurance Subsidiary is one protected cell of a protected cell captive insurance company. From its formation through November 7, 2022, the Insurance Subsidiary reinsured certain risks of the Bank as well as other groups of related entities that were not affiliated with the Bank for which it received premiums. The related insurance policies were issued each year. Under the reinsurance arrangement, the premium earned by the Insurance Subsidiary for a particular year could be retained as earnings (subject to any regulatory capital and surplus requirements imposed by applicable law) once the claim deadline for that year’s policy had passed. As the sole owner of the Insurance Subsidiary, the Company may terminate the Insurance Subsidiary’s participation in this reinsurance arrangement with respect to a future year at any time. The Company chose to not renew the policy when it expired on November 6, 2022. As of March 31, 2025, the Insurance Subsidiary’s