Analyzing Finward Bancorp (OTCMKTS:FNWD) and Farmers and Merchants Bancshares (OTCMKTS:FMFG)

Profitability

This table compares Finward Bancorp and Farmers and Merchants Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Finward Bancorp	14.46%	10.52%	0.67%
Farmers and Merchants Bancshares	N/A	N/A	N/A

Dividends

Finward Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. Farmers and Merchants Bancshares pays an annual dividend of $0.47 per share and has a dividend yield of 2.7%. Finward Bancorp pays out 17.0% of its earnings in the form of a dividend. Farmers and Merchants Bancshares pays out 41.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation & Earnings

This table compares Finward Bancorp and Farmers and Merchants Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Finward Bancorp	$70.21 million	1.72	$15.08 million	$2.83	9.89
Farmers and Merchants Bancshares	N/A	N/A	N/A	$1.13	15.05

Finward Bancorp has higher revenue and earnings than Farmers and Merchants Bancshares. Finward Bancorp is trading at a lower price-to-earnings ratio than Farmers and Merchants Bancshares, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

26.6% of Finward Bancorp shares are held by institutional investors. Comparatively, 0.2% of Farmers and Merchants Bancshares shares are held by institutional investors. 13.7% of Finward Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Finward Bancorp beats Farmers and Merchants Bancshares on 8 of the 10 factors compared between the two stocks.

About Finward Bancorp

Finward Bancorp operates as the holding company for Peoples Bank that provides various banking products and services. The company's deposit products include non-interest- and interest-bearing demand accounts, savings accounts, money market deposit accounts, certificate accounts, and retirement savings plans. Its loan products portfolio comprises residential mortgage loans that enable borrowers to purchase existing homes, refinance existing homes, or construct new homes; construction loans primarily to individuals and contractors; commercial real estate loans; consumer loans to individuals for personal, household, or family purposes; home equity line of credit; home improvement loans and equity loans; commercial business loans; government loans; and loans to municipalities. The company also offers estate and retirement planning, custodial services, guardianships, IRA accounts, and investment agency accounts, as well as serves as the personal representative of estates, and acts as trustee for revocable and irrevocable trusts. In addition, it provides insurance and annuity investments to wealth management customers; holds real estate properties; and operates as a real estate investment trust. The company was formerly known as NorthWest Indiana Bancorp and changed its name to Finward Bancorp in May 2021. Finward Bancorp was founded in 1916 and is headquartered in Munster, Indiana.

About Farmers and Merchants Bancshares

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 Baltimore and Carroll counties in Maryland and surrounding areas of northern Maryland. It offers checking, savings, money market, individual retirement, and sweep accounts, as well as certificates of deposit, remote check deposits, and repurchase agreements. The company also provides credit for residential mortgages, including federal housing administration and veterans affairs loans; construction loans; home equity lines; personal installment loans; and other consumer financing, as well as finances commerce and industry by providing credit and deposit services for small to medium size businesses and the agricultural community. In addition, it offers commercial lending, which includes commercial mortgages, land acquisition and development loans, lines of credit, accounts receivable financing, and term loans for fixed asset purchases, as well as loans guaranteed by the Small Business Administration and the United States Department of Agriculture. Further, the company provides automated teller machine, internet, mobile banking, and automated telephone services, as well as debit and credit cards. It serves customers through its office located in Upperco, Maryland; branches located in Hampstead, Greenmount, Reisterstown, Owings Mills, Eldersburg, and Westminster, Maryland; and a satellite branch located in Westminster, Maryland. Farmers and Merchants Bancshares, Inc. was founded in 1919 and is headquartered in Hampstead, Maryland.