Farmers & Merchants Bank of Long Beach Reports 2016 First-Quarter Results

Farmers & Merchants Bank of Long Beach (OTCQB: FMBL) today reported financial results for the first quarter ended March 31, 2016.

“Now in our 109th year of serving Southern California, F&M’s solid first quarter performance reflects our unwavering focus on core fundamentals that have driven the Bank’s financial strength since its inception,” said Henry Walker, president of Farmers & Merchants Bank. “Despite the protracted low interest rate environment, we continue to apply our conservative lending philosophy to ensure the Bank’s financial health.”

Income Statement

For the three months ended March 31, 2016, interest and dividend income rose to $54.9 million from $48.7 million a year ago. Interest expense for the 2016 first quarter was $2.4 million, compared with $1.7 million in the same period last year.

Farmers & Merchants’ net interest income for the 2016 first quarter increased to $52.5 million from $46.9 million for the first quarter in 2015.

Farmers & Merchant’s net interest margin grew to 3.60% for the first quarter ended March 31, 2016, from 3.57% at the end of the same period last year.

The Bank did not have a loan loss provision in the first quarter of 2016, nor in the first quarter of 2015. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.70% at March 31, 2016, compared with 1.69% at March 31, 2015.

Non-interest income was $6.2 million for the 2016 first quarter, compared with $7.0 million in the 2015 first quarter. Non-interest expense for the 2016 first quarter was $31.8 million, versus $29.3 million for the same period last year.

The Bank’s net income for the 2016 first quarter advanced to $18.1 million, or $138.28 per diluted share, from $16.7 million, or $127.76 per diluted share, in the 2015 first quarter.

Balance Sheet

At March 31, 2016, net loans totaled $3.27 billion, compared with $3.22 billion at December 31, 2015. The Bank’s total deposits rose to $4.76 billion at the end of the 2016 first quarter from $4.69 billion at December 31, 2015. Non-interest bearing deposits represented 38.3% of total deposits at March 31, 2016, versus 38.9% of total deposits at December 31, 2015. Total assets grew to $6.22 billion at the close of the 2016 first quarter from $6.15 billion at December 31, 2015.

At March 31, 2016, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 21.14%, a tier 1 risk-based capital ratio of 19.89%, a common equity tier 1 capital ratio of 19.89%, and a tier 1 leverage ratio of 14.11%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.

“The Bank continued to generate healthy profitability in the first quarter, as well as maintain robust capital ratios,” said Daniel Walker, chief executive officer and chairman of the board. “These positive results are an excellent way to begin the year, and also exemplify the underlying strength of a talented team that keeps F&M on a healthy trajectory.”

About Farmers & Merchants Bank

Founded in Long Beach in 1907 by C.J. Walker, Farmers & Merchants Bank has 24 branches across Orange County, Long Beach and the South Bay. The Bank specializes in commercial and small business banking, business loan programs, home loans, and a robust offering of consumer retail banking products, including checking, savings and youth accounts. Farmers & Merchants Bank is a California state chartered bank with deposits insured by the Federal Deposit Insurance Corporation (Member FDIC) and an Equal Housing Lender. For more information about F&M, please visit the website, www.fmb.com.

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