SecProbe.io

Mail Stop 4720
April 4, 2017

James R. Bosley, Jr.
President and Chief Executive Officer
Farmers and Merchants Bancshares, Inc.
4510 Lower Beckleysville Road, Suite H
Hampstead, MD 21074

Re: Farmers and Merchants Bancshares, Inc.
 Registration Statement on Form 10
Filed March 8, 2017
File No. 000 -55756

Dear Mr. Bosley :

We have reviewed your filing an d have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand yo ur
disclosure.

Please respond to these comments  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.

After reviewing your response and any amendment you may file in response to these
comments , we may have  additional comments.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Financial Condition

Loans, page 24

1. We note your disclosure on page 27 that a nonaccrual loan is returned to current status when
the prospects of future contractual payments are not in doubt.   Please tell us and revise future
filings to disclose in greate r detail how you determine that the prospects of future contractual
payments are not in doubt in order to return a nonaccrual loan to accrual status.

Interest Rate Risk, page 38

2. We note your Economic Value of Equity analysis presented for both 2015 a nd 2016.  In that
simulation it appears that you are exposed to both an increase as well as a further decrease in

James R. Bosley , Jr.
Farmers and Merchants Bancshares, Inc.
April 4, 2017
Page 2

 interest rates.  Please tell us the particular aspects of your assets and liabilities, including any
particular maturity gap, which might caus e you to be at risk in both a rising and falling
environment.  Consider changes to the Management’s Discussion , as well as the second risk
factor on page 13 based on your response.

Recent Sales of Unregistered Securities, page 55

3. Please tell us whether t he company has continued to issue shares under its dividend
reinvestment plan since the holding company reorganization.  If the company plans to
continue to offer the reinvestment plan, please tell us whether you plan to register the offer
and sale of shar es under the plan , or provide us with your analysis as to the exemption from
registration you plan to rely on for those sales.

Notes to Consolidated Financial Statements

Note 15.   Fair Value, page 88

4. We note your disclosure on page 89 that you have othe r real estate owned and impaired loans
that are based on Level 3 fair value measurements on a non -recurring basis for the periods
presented.   Please include information about the valuation technique(s) and significant
unobservable inputs used in the fair v alue measurement in accordance with ASC 820 -10-50-
2(bbb).   In addition, please indicate the frequency of appraisals and whether they are
conducted by internal or third parties.

We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.

You may contact Cara Lubit, Staff Accountant,  at (202) 5 51-5909 or H. Stephen Kim,
Assistant Chief Accountant,  at (202) 551 -3291  if you have questions regarding comments on the
financial statements and re lated matters.  Please contact Kate Donovan, Staff Attorney, at
(202) 551 -8636 , or me , at (202) 551 -3419 , with any other questions.

Sincerely,

 /s/ Christian Windsor

Christian Windsor
Special Counsel
Office of Financial Services
cc: Andrew Bulgin
 Gordon Feinblatt LLC