Farmers & Merchants Bank of Long Beach Reports 2017 First-Quarter Results
--First-Quarter Net Income Rises More Than 11% in Year-Over-Year Comparison --
Farmers & Merchants Bank of Long Beach (OTCQB: FMBL) today reported financial results for the first quarter ended March 31,
2017.
“First-quarter financial results reflect strong growth in our loan portfolio, in addition to continued investments in technology
and human capital, as we further enhance the deployment of F&M’s products and services in our 110th year of serving Southern
California,” said Henry Walker, president of Farmers & Merchants Bank. “Prudent maintenance of the Bank’s financial health,
including targeted investments in renewable energy resulting in a significant reduction of income tax expense, remains a
cornerstone of the Bank’s ongoing business strategy.”
Income Statement
For the three months ended March 31, 2017, interest and dividend income rose to $57.4 million from $54.9 million a year ago.
Interest expense for the 2017 first quarter was $3.1 million, compared with $2.4 million in the same period last year.
Farmers & Merchants’ net interest income for the 2017 first quarter increased to $54.3 million from $52.5 million for the
first quarter of 2016.
Farmers & Merchants’ net interest margin was 3.42% for the first quarter ended March 31, 2017, compared with 3.60% at the
end of the same period last year.
The Bank did not have a loan loss provision in the first quarter of 2017, nor in the first quarter of 2016. The Bank’s allowance
for loan losses as a percentage of loans outstanding was 1.58% at March 31, 2017, compared with 1.70% at March 31, 2016.
Non-interest income was $9.1 million for the 2017 first quarter, compared with $6.3 million for the 2016 first quarter.
Non-interest expense for the 2017 first quarter was $36.7 million, versus $31.9 million for the same period last year.
The Bank’s net income for the 2017 first quarter advanced to $20.2 million, or $154.11 per diluted share, from $18.1 million, or
$138.28 per diluted share, in the 2016 first quarter.
Balance Sheet
At March 31, 2017, net loans totaled $3.54 billion, compared with $3.40 billion at December 31, 2016. The Bank’s total deposits
rose to $5.22 billion at the end of the 2017 first quarter from $5.12 billion at December 31, 2016. Non-interest bearing deposits
represented 39.3% of total deposits at March 31, 2017, versus 37.7% of total deposits at December 31, 2016. Total assets grew to
$6.83 billion at the close of the 2017 first quarter from $6.73 billion at December 31, 2016.
At March 31, 2017, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total
risk-based capital ratio of 20.81%, a tier 1 risk-based capital ratio of 19.56%, a common equity tier 1 capital ratio of 19.56%,
and a tier 1 leverage ratio of 13.72%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50%
and 5.00%, respectively.
“F&M’s strong first-quarter results are a testament to fundamentals that have contributed to the Bank’s financial health
since its inception in 1907, including conservative lending practices and a robust balance sheet,” said Daniel Walker, chief
executive officer and chairman of the board. “As F&M’s asset size continues to grow, we remain steadfast in our commitment to
the core values our clients know and trust.”
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.
| FARMERS & MERCHANTS BANK OF LONG BEACH |
| Income Statements (Unaudited) |
| (In thousands except per share data) |
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
2017 |
|
2016 |
|
|
|
|
|
|
| Interest and dividend income: |
|
|
|
|
|
|
|
|
|
|
|
| Loans |
$ |
40,822 |
|
$ |
39,725 |
|
| Investment securities |
|
15,976 |
|
|
14,635 |
|
| Investments in FHLB and FRB stock |
|
446 |
|
|
399 |
|
| Interest-bearing deposits in financial institutions |
|
139 |
|
|
153 |
|
|
|
|
|
|
|
| Total interest and dividend income |
|
57,383 |
|
|
54,912 |
|
|
|
|
|
|
|
| Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
| Deposits |
|
2,337 |
|
|
1,930 |
|
| Securities sold under repurchase agreements |
|
763 |
|
|
440 |
|
| Other borrowings |
|
20 |
|
|
- |
|
|
|
|
|
|
|
| Total interest expense |
|
3,120 |
|
|
2,370 |
|
|
|
|
|
|
|
| Net interest income |
|
54,263 |
|
|
52,542 |
|
|
|
|
|
|
|
| Provision for loan losses |
|
- |
|
|
- |
|
|
|
|
|
|
|
| Net interest income after provision for loan losses |
|
54,263 |
|
|
52,542 |
|
|
|
|
|
|
|
| Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
| Service charges on deposit accounts |
|
959 |
|
|
1,008 |
|
| Other real estate owned income |
|
17 |
|
|
12 |
|
| Merchant bankcard income |
|
2,612 |
|
|
2,423 |
|
| Other income |
|
5,533 |
|
|
2,825 |
|
|
|
|
|
|
|
| Total non-interest income |
|
9,121 |
|
|
6,268 |
|
|
|
|
|
|
|
| Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
| Salaries and employee benefits |
|
21,002 |
|
|
19,026 |
|
| FDIC and other insurance expense |
|
632 |
|
|
858 |
|
| Occupancy expense |
|
2,161 |
|
|
2,155 |
|
| Software and equipment expense |
|
1,976 |
|
|
1,776 |
|
| Other real estate owned expense |
|
30 |
|
|
(43 |
) |
| Merchant bankcard expense |
|
2,151 |
|
|
1,837 |
|
| Professional and legal services |
|
75 |
|
|
1,027 |
|
| Marketing expense |
|
1,352 |
|
|
1,174 |
|
| Other expense |
|
7,272 |
|
|
4,053 |
|
|
|
|
|
|
|
| Total non-interest expense |
|
36,651 |
|
|
31,863 |
|
|
|
|
|
|
|
| Income before income tax expense |
|
26,733 |
|
|
26,947 |
|
|
|
|
|
|
|
| Income tax expense |
|
6,556 |
|
|
8,842 |
|
|
|
|
|
|
|
| Net income |
$ |
20,177 |
|
$ |
18,105 |
|
|
|
|
|
|
|
| Basic and diluted earnings per common share |
$ |
154.11 |
|
$ |
138.28 |
|
|
|
|
|
|
|
|
| FARMERS & MERCHANTS BANK OF LONG BEACH |
| Balance Sheets (Unaudited) |
| (In thousands except share and per share data) |
|
|
|
|
|
|
|
|
Mar. 31, 2017 |
|
|
Dec. 31, 2016 |
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
|
|
|
|
| Cash and due from banks: |
|
|
|
|
|
| Noninterest-bearing balances |
$ |
56,684 |
|
|
$ |
63,797 |
|
| Interest-bearing balances |
|
96,795 |
|
|
|
84,918 |
|
|
|
|
|
|
|
| Total cash and due from banks |
|
153,479 |
|
|
|
148,715 |
|
| Securities available-for-sale, at fair value |
|
204,306 |
|
|
|
182,320 |
|
| Securities held-to-maturity, at amortized cost |
|
2,718,760 |
|
|
|
2,762,877 |
|
| Loans held for sale |
|
4,044 |
|
|
|
6,080 |
|
| Gross loans |
|
3,604,892 |
|
|
|
3,466,382 |
|
| Allowance for loan losses |
|
(56,954 |
) |
|
|
(56,867 |
) |
| Unamortized deferred loan fees, net |
|
(5,183 |
) |
|
|
(5,314 |
) |
|
|
|
|
|
|
| Loans, net |
|
3,542,755 |
|
|
|
3,404,201 |
|
|
|
|
|
|
|
| Other real estate owned, net |
|
- |
|
|
|
791 |
|
| Investments in FHLB and FRB stock, at cost |
|
20,690 |
|
|
|
20,690 |
|
| Bank premises and equipment, net |
|
89,710 |
|
|
|
87,775 |
|
| Deferred tax assets, net |
|
29,151 |
|
|
|
30,281 |
|
| Other assets |
|
71,173 |
|
|
|
85,328 |
|
|
|
|
|
|
|
| Total assets |
$ |
6,834,068 |
|
|
$ |
6,729,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
| Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
| Noninterest-bearing demand deposits |
$ |
2,049,161 |
|
|
$ |
1,931,931 |
|
| Interest-bearing demand deposits |
|
803,824 |
|
|
|
868,380 |
|
| Savings and money market savings |
|
1,512,568 |
|
|
|
1,460,669 |
|
| Time deposits |
|
854,812 |
|
|
|
861,977 |
|
|
|
|
|
|
|
| Total deposits |
|
5,220,365 |
|
|
|
5,122,957 |
|
| Securities sold under repurchase agreements |
|
611,577 |
|
|
|
540,035 |
|
| Other borrowings |
|
50,000 |
|
|
|
100,000 |
|
| Other liabilities |
|
24,340 |
|
|
|
55,753 |
|
|
|
|
|
|
|
| Total liabilities |
|
5,906,282 |
|
|
|
5,818,745 |
|
|
|
|
|
|
|
| Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
| Common Stock, par value $20; authorized 250,000 |
|
|
|
|
|
| shares; issued and outstanding 130,928 shares |
|
2,619 |
|
|
|
2,619 |
|
| Additional paid-in capital |
|
112,044 |
|
|
|
112,044 |
|
| Retained earnings |
|
812,353 |
|
|
|
795,187 |
|
| Accumulated other comprehensive income |
|
770 |
|
|
|
463 |
|
|
|
|
|
|
|
| Total stockholders' equity |
|
927,786 |
|
|
|
910,313 |
|
|
|
|
|
|
|
| Total liabilities and stockholders' equity |
$ |
6,834,068 |
|
|
$ |
6,729,058 |
|
Farmers & Merchants Bank of Long Beach
John Hinrichs
Executive Vice President
562-437-0011, ext. 4835
or
PondelWilkinson Inc.
Evan Pondel
Investor Relations
310-279-5980
investor@pondel.com
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