Exhibit 99.1

FARMERS AND MERCHANTS BANCSHARES, INC. REPORTS EARNINGS OF $0.90 PER SHARE FOR THE YEAR ENDED DECEMBER 31, 2020

HAMPSTEAD, MARYLAND (February 8, 2021) – Farmers and Merchants Bancshares, Inc. (the “Company”), the parent of Farmers and Merchants Bank (the “Bank”), announced that net income for the year ended December 31, 2020 was $2,682,003, or $0.90 per common share, compared to $4,560,804, or $1.54 per common share, for the year ended December 31, 2019. Net income for the three months ended December 31, 2020 was $417,394, or $0.14 per common share, compared to $1,060,786, or $0.36 per common share, for the three months ended December 31, 2019. On October 1, 2020, the Company consummated its previously-announced acquisition of Carroll Bancorp, Inc. and Carroll Community Bank (collectively “Carroll”).

The Company incurred significant one-time costs of $1,624,496 and $3,236,817 during the three- and 12-months ended December 31, 2020, respectively, related to this acquisition. The table below provides a comparison of the Company’s results for the three- and 12-month periods ended December 31, 2020 and 2019, both with and without the acquisition costs.

Net interest income for the year ended December 31, 2020 was $2,282,118 higher than for the year ended December 31, 2019 due to a $73.6 million increase in average interest earning assets to $488.3 million for the year ended December 31, 2020 as compared to $414.7 million for the year ended December 31, 2019, offset by a decline in the taxable equivalent net yield on interest earning assets to 3.58% in the 2020 period from 3.67% in the 2019 period. The net yield declined because the yield on loans and investments decreased 32 basis points to 4.58% for the year ended December 31, 2020 from 4.90% for the year ended December 31, 2019 as a result of the Federal Reserve rate cuts and the Company’s origination of $31 million of Paycheck Protection Program (“PPP”) loans that are yielding less than 2.50%. The Company’s cost of deposits and borrowings of 0.89% for the year ended December 31, 2020 was 26 basis points lower than the cost of 1.15% for the year ended December 31, 2019. The Company expects the cost of funds to continue to decline into 2021 because the Company has significantly reduced rates on many of its deposit products. The provision for loan losses totaled $625,000 for the year ended December 31, 2020 as a result of the economic downturn caused by the COVID-19 pandemic, compared to $40,000 for the year ended December 31, 2019.

Noninterest income increased by $578,552 in the year ended December 31, 2020 when compared to the year ended December 31, 2019, primarily as a result of a $627,227 increase in mortgage banking income and a $210,150 decrease in the write down of other real estate owned, offset by a $176,586 decrease in bank owned life insurance income and a $88,245 decrease in service charges. Noninterest expense was $4,706,594 higher in the year ended December 31, 2020 when compared to the year ended December 31, 2019 due primarily to the aforementioned acquisition costs of $3,236,817 and salary and benefit increases of $970,890 as a result of employees added in the fourth quarter of 2020 in connection with the Carroll acquisition along with usual increases to existing employees. Income taxes declined by $552,123 during the year ended December 31, 2020 when compared to the year ended December 31, 2019 due to lower income before taxes and a higher percentage of tax-exempt revenue, offset by certain acquisition costs that are not deductible.

The acquisition of Carroll was the primary driver of the significant increases in most assets and liabilities from the prior year end. In addition, the origination of $31 million of PPP loans also increased loans and deposits. Total assets increased to $677 million at December 31, 2020 from $442 million at December 31, 2019. Loans increased to $522 million at December 31, 2020 from $359 million at December 31, 2019. Investment in debt securities increased to $78 million at December 31, 2020 from $56 million at December 31, 2019. Deposits increased to $573 million at December 31, 2020 from $377 million at December 31, 2019. In connection with the Carroll acquisition, the Company borrowed $17 million that it used to fund a portion of the $25 million cash merger consideration. The book value of the common stock of Farmers and Merchants Bancshares, Inc. was $17.18 per share at December 31, 2020, compared to $16.63 per share at December 31, 2019.

The COVID-19 pandemic continues almost a full year after it started. The Bank is providing relief to its borrowers, as needed, including temporary deferral of payments. During the second quarter of 2020, the Bank granted 90-day payment deferrals on 107 loans totalling $109.2 million, which was approximately 30% of the portfolio. Of these deferred loans, 13 loans totaling $21.8 million, or 6% of the portfolio, were granted an additional 90-day deferral. Seven loans totaling $14.7 million, or 3% of the portfolio, including some added with the acquisition of Carroll, have been granted additional payment deferrals. All but one of these loans are making full interest payments. In addition, as mentioned previously, the Bank has made a significant amount of PPP loans to customers.

James R. Bosley, Jr., President and CEO, commented “We are excited that the acquisition of Carroll Community Bank and the related system conversion were completed in the fourth quarter. 2020 earnings excluding acquisition costs for both the fourth quarter and the full year significantly exceeded the prior year’s results for the same periods demonstrating the positive impact of the acquisition. In addition, we are pleased to have helped many of our borrowers with payment deferrals and/or PPP loans.”

About the Company

Farmers and Merchants Bancshares, Inc. is a financial holding company and the parent of Farmers and Merchants Bank. Farmers and Merchants Bank was chartered in Maryland in 1919 and has over 100 years of service to the community. The Bank serves the deposit and financing needs of both consumers and businesses in Carroll and Baltimore Counties along the Route 30, Route 795, Route 140, and Route 26 corridors. The main office is located in Upperco, Maryland, with nine additional branches in Owings Mills, Hampstead, Greenmount, Reisterstown, Westminster, and Eldersburg. Certain broker-dealers make a market in the common stock of Farmers and Merchants Bancshares, Inc., and trades are reported through the OTC Markets Group’s Pink Market under the symbol “FMFG”.

Forward-Looking Statements

The statements contained herein that are not historical facts are forward-looking statements (as defined by the Private Securities Litigation Reform Act of 1995) based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “will,” “expect,” “believe,” “intend,” and similar expressions. Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Farmers and Merchants Bancshares, Inc. with the Securities and Exchange Commission entitled “Risk Factors”.

Farmers and Merchants Bancshares, Inc. and Subsidiaries

Consolidated Balance Sheets

Farmers and Merchants Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income