Farmers & Merchants Bank of Long Beach Reports 2017 Second-Quarter Results
Farmers & Merchants Bank of Long Beach (OTCQB: FMBL) today reported financial results for the second quarter and six-months
ended June 30, 2017.
“We continued to achieve solid loan growth in the second quarter, while at the same time maintain conservative lending
standards,” said Henry Walker, president of Farmers & Merchants Bank of Long Beach. “We’re focused on investing in long-term
relationships with our clients, delivering a high-level of service that the communities we serve expect from our Bank.”
Income Statement
For the three months ended June 30, 2017, total interest and dividend income rose to $58.8 million from $55.8 million in the
second quarter of 2016. Interest and dividend income for the first half of 2017 increased to $116.2 million from $110.7 million
reported for the first half of 2016.
Interest expense for the 2017 second quarter was $3.4 million, compared with $2.5 million in the second quarter of 2016.
Interest expense for the first half of 2017 was $6.6 million, versus $4.9 million reported for the corresponding period last
year.
Net interest income for the 2017 second quarter advanced to $55.4 million from $53.3 million for the second quarter of 2016. Net
interest income for the first half of 2017 increased to $109.6 million from $105.9 million for the six months ended June 30,
2016.
Farmers & Merchants’ net interest margin was 3.44% for the 2017 second quarter, versus 3.59% in the 2016 second quarter. Net
interest margin was 3.43% for the first half of 2017, compared with 3.60% for the same period in 2016.
The Bank did not have a provision for loan losses in the first half of 2017, nor in the same period a year ago. The Bank’s
allowance for loan losses as a percentage of loans outstanding was 1.53% at June 30, 2017, compared with 1.64% at December 31,
2016.
Non-interest income was $6.8 million for the 2017 second quarter, compared with $6.0 million in the same period a year ago. In
the first half of 2017, non-interest income was $15.9 million, compared with $12.3 million for the six months ended June 30,
2016.
Non-interest expense for the 2017 second quarter was $41.3 million, compared with $32.8 million for the same period last year.
Non-interest expense for the first half of 2017 was $78.0 million, compared with $64.6 million for the first half of 2016.
Net income for the 2017 second quarter was $16.4 million, or $125.56 per diluted share, compared with $17.9 million, or $136.56
per diluted share, for the 2016 second quarter. Net income for the first half of 2017 rose to $36.6 million, or $279.67 per diluted
share, from $36.0 million, or $274.85 per diluted share, for the six months ended June 30, 2016.
Balance Sheet
At June 30, 2017, net loans increased to $3.65 billion from $3.40 billion at December 31, 2016. The Bank’s deposits rose to
$5.33 billion at the end of the 2017 second quarter from $5.12 billion at December 31, 2016. Non-interest-bearing deposits
represented 39.8% of total deposits at June 30, 2017, versus 37.7% of total deposits at December 31, 2016. Total assets increased
to $6.91 billion at the close of the 2017 second quarter from $6.73 billion at December 31, 2016.
At June 30, 2017, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total
risk-based capital ratio of 20.44%, a tier 1 risk-based capital ratio of 19.19%, a common equity tier 1 capital ratio of 19.19%,
and a tier 1 leverage ratio of 13.75%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50%
and 5.00%, respectively.
“As F&M continues to grow, we are committed to ensuring the Bank’s financial health, which is reflected in our balance
sheet,” said Daniel Walker, chief executive officer and chairman of the board. “Despite a highly competitive environment, the Bank
is in a position of strength as we enter the second half of our 110th year serving Southern California.”
About Farmers & Merchants Bank of Long Beach
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 June 30, |
|
Six Months Ended June 30, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
| Interest and dividend income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans |
|
$ |
42,446 |
|
$ |
41,134 |
|
|
$ |
83,268 |
|
$ |
80,859 |
|
| Investment securities |
|
|
15,831 |
|
|
14,089 |
|
|
|
31,807 |
|
|
28,724 |
|
| Investments in FHLB and FRB stock |
|
|
349 |
|
|
434 |
|
|
|
795 |
|
|
833 |
|
| Interest-bearing deposits in financial institutions |
|
|
185 |
|
|
174 |
|
|
|
324 |
|
|
327 |
|
|
|
|
|
|
|
|
|
|
| Total interest and dividend income |
|
|
58,811 |
|
|
55,831 |
|
|
|
116,194 |
|
|
110,743 |
|
|
|
|
|
|
|
|
|
|
| Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deposits |
|
|
2,400 |
|
|
2,055 |
|
|
|
4,737 |
|
|
3,985 |
|
| Securities sold under repurchase agreements |
|
|
997 |
|
|
467 |
|
|
|
1,760 |
|
|
907 |
|
| Other borrowings |
|
|
42 |
|
|
- |
|
|
|
62 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
| Total interest expense |
|
|
3,439 |
|
|
2,522 |
|
|
|
6,559 |
|
|
4,892 |
|
|
|
|
|
|
|
|
|
|
| Net interest income |
|
|
55,372 |
|
|
53,309 |
|
|
|
109,635 |
|
|
105,851 |
|
|
|
|
|
|
|
|
|
|
| Provision for loan losses |
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
| Net interest income after provision for loan losses |
|
|
55,372 |
|
|
53,309 |
|
|
|
109,635 |
|
|
105,851 |
|
|
|
|
|
|
|
|
|
|
| Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Service charges on deposit accounts |
|
|
1,004 |
|
|
965 |
|
|
|
1,963 |
|
|
1,972 |
|
| Other real estate owned income |
|
|
- |
|
|
4 |
|
|
|
17 |
|
|
16 |
|
| Merchant bankcard income |
|
|
2,752 |
|
|
2,516 |
|
|
|
5,364 |
|
|
4,939 |
|
| Other income |
|
|
3,027 |
|
|
2,543 |
|
|
|
8,560 |
|
|
5,369 |
|
|
|
|
|
|
|
|
|
|
| Total non-interest income |
|
|
6,783 |
|
|
6,028 |
|
|
|
15,904 |
|
|
12,296 |
|
|
|
|
|
|
|
|
|
|
| Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries and employee benefits |
|
|
21,440 |
|
|
19,265 |
|
|
|
42,442 |
|
|
38,291 |
|
| FDIC and other insurance expense |
|
|
639 |
|
|
867 |
|
|
|
1,271 |
|
|
1,725 |
|
| Occupancy expense |
|
|
2,326 |
|
|
2,265 |
|
|
|
4,487 |
|
|
4,420 |
|
| Software and equipment expense |
|
|
2,273 |
|
|
1,822 |
|
|
|
4,249 |
|
|
3,598 |
|
| Other real estate owned expense |
|
|
94 |
|
|
(84 |
) |
|
|
124 |
|
|
(127 |
) |
| Merchant bankcard expense |
|
|
2,144 |
|
|
1,977 |
|
|
|
4,295 |
|
|
3,814 |
|
| Professional and legal services |
|
|
1,785 |
|
|
1,195 |
|
|
|
1,860 |
|
|
2,222 |
|
| Marketing expense |
|
|
1,218 |
|
|
1,605 |
|
|
|
2,570 |
|
|
2,779 |
|
| Other expense |
|
|
9,392 |
|
|
3,838 |
|
|
|
16,664 |
|
|
7,891 |
|
|
|
|
|
|
|
|
|
|
| Total non-interest expense |
|
|
41,311 |
|
|
32,750 |
|
|
|
77,962 |
|
|
64,613 |
|
|
|
|
|
|
|
|
|
|
| Income before income tax expense |
|
|
20,844 |
|
|
26,587 |
|
|
|
47,577 |
|
|
53,534 |
|
|
|
|
|
|
|
|
|
|
| Income tax expense |
|
|
4,405 |
|
|
8,707 |
|
|
|
10,961 |
|
|
17,549 |
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
16,439 |
|
$ |
17,880 |
|
|
$ |
36,616 |
|
$ |
35,985 |
|
|
|
|
|
|
|
|
|
|
| Basic and diluted earnings per common share |
|
$ |
125.56 |
|
$ |
136.56 |
|
|
$ |
279.67 |
|
$ |
274.85 |
|
| |
| FARMERS & MERCHANTS BANK OF LONG BEACH |
| Balance Sheets (Unaudited) |
| (In thousands except share and per share data) |
|
|
|
|
|
|
|
June 30, 2017 |
|
Dec. 31, 2016 |
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
|
|
| Cash and due from banks: |
|
|
|
|
| Noninterest-bearing balances |
|
$ |
54,641 |
|
|
$ |
63,797 |
|
| Interest-bearing balances |
|
|
184,162 |
|
|
|
84,918 |
|
|
|
|
|
|
| Total cash and due from banks |
|
|
238,803 |
|
|
|
148,715 |
|
| Securities available-for-sale, at fair value |
|
|
189,408 |
|
|
|
182,320 |
|
| Securities held-to-maturity, at amortized cost |
|
|
2,617,796 |
|
|
|
2,762,877 |
|
| Loans held for sale |
|
|
4,416 |
|
|
|
6,080 |
|
| Gross loans |
|
|
3,709,728 |
|
|
|
3,466,382 |
|
| Allowance for loan losses |
|
|
(56,736 |
) |
|
|
(56,867 |
) |
| Unamortized deferred loan fees, net |
|
|
(4,876 |
) |
|
|
(5,314 |
) |
|
|
|
|
|
| Loans, net |
|
|
3,648,116 |
|
|
|
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 |
|
|
90,395 |
|
|
|
87,775 |
|
| Deferred tax assets, net |
|
|
30,143 |
|
|
|
30,281 |
|
| Other assets |
|
|
68,451 |
|
|
|
85,328 |
|
|
|
|
|
|
| Total assets |
|
$ |
6,908,218 |
|
|
$ |
6,729,058 |
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
| Liabilities: |
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
| Noninterest-bearing demand deposits |
|
$ |
2,120,067 |
|
|
$ |
1,931,931 |
|
| Interest-bearing demand deposits |
|
|
838,892 |
|
|
|
868,380 |
|
| Savings and money market savings |
|
|
1,526,254 |
|
|
|
1,460,669 |
|
| Time deposits |
|
|
842,952 |
|
|
|
861,977 |
|
|
|
|
|
|
| Total deposits |
|
|
5,328,165 |
|
|
|
5,122,957 |
|
| Securities sold under repurchase agreements |
|
|
610,736 |
|
|
|
540,035 |
|
| Other borrowings |
|
|
- |
|
|
|
100,000 |
|
| Other liabilities |
|
|
28,003 |
|
|
|
55,753 |
|
|
|
|
|
|
| Total liabilities |
|
|
5,966,904 |
|
|
|
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 |
|
|
825,781 |
|
|
|
795,187 |
|
| Accumulated other comprehensive income |
|
|
870 |
|
|
|
463 |
|
|
|
|
|
|
| Total stockholders' equity |
|
|
941,314 |
|
|
|
910,313 |
|
|
|
|
|
|
| Total liabilities and stockholders' equity |
|
$ |
6,908,218 |
|
|
$ |
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
View source version on businesswire.com: http://www.businesswire.com/news/home/20170719005838/en/