Farmers & Merchants Bank of Long Beach (“F&M” or the “Bank”) (OTCQB: FMBL) today reported financial results for the quarter ended March 31, 2022.
“F&M performed well for the first quarter of 2022, notwithstanding the rigors of a challenging economic climate, characterized by low interest rates, geopolitical uncertainty and the lingering effects of the pandemic,” said Henry Walker, president of Farmers & Merchants Bank of Long Beach. “We are pleased that core deposits continued to grow, as did our total assets, both of which attained record highs.”
Income Statement
For the three months ended March 31, 2022, interest and dividend income rose to $75.3 million from $73.9 million a year ago. Interest expense for the 2022 first quarter decreased to $2.7 million from $3.4 million in the same period last year.
Farmers & Merchants’ net interest income for the 2022 first quarter increased to $72.6 million from $70.5 million for the first quarter of 2021. Net interest margin was 2.60% for the 2022 first quarter, compared with 2.87% for the same period last year.
The Bank recorded a $1.0 million recapture of loan loss provision in the 2022 first quarter, compared with a $2.0 million loan loss provision in the first quarter of 2021. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.31% at March 31, 2022, compared with 1.32% at March 31, 2021.
Non-interest income was $5.1 million for the 2022 first quarter, equal to that for the 2021 first quarter. Non-interest expense for the 2022 first quarter was $43.7 million, versus $41.9 million for the same period last year.
The Bank’s net income for the 2022 first quarter advanced to $27.8 million, or $217.02 per diluted share, from $25.3 million, or $197.51 per diluted share, in the 2021 first quarter.
Balance Sheet
At March 31, 2022, net loans totaled $5.40 billion, compared with $5.37 billion at December 31, 2021. The Bank’s total deposits rose to $9.36 billion at the end of the 2022 first quarter, up from $9.24 billion at December 31, 2021. Non-interest-bearing deposits represented 38.4% of total deposits at March 31, 2022, which is the same as at December 31, 2021. Total assets grew to a record $11.67 billion at the close of the 2022 first quarter from $11.44 billion at December 31, 2021.
At March 31, 2022, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 18.67%, a tier 1 risk-based capital ratio of 17.63%, a common equity tier 1 capital ratio of 17.63%, and a tier 1 leverage ratio of 10.91%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.
“The positive first quarter results continued to demonstrate the Bank’s financial strength, as well as the dedication of our hard-working team that is so attentive to meeting clients’ needs,” said Daniel Walker, chief executive officer and chairman of the board. “It is gratifying that our client relationships continue to grow, in part reflecting the flight to safety experienced during the peak pandemic period, when we were able to assist businesses and consumers in their time of need. Today, we extend our thoughts and prayers to the Ukrainian citizens who are enduring a humanitarian horror that is evoking new global economic stress. Over the past 115+ years, the Bank has weathered the effects of many wars and economic cycles and will continue to serve all of our stakeholders well.”
During the first quarter of 2022, the Bank repurchased 309 shares of its common stock at an average price of $8,210.21 per share, pursuant to a stock repurchase program announced in January 2022, under which the board of directors authorized the repurchase of up to $20 million of the Bank’s common stock. To the extent the Bank repurchases additional shares under this program, which expires December 31, 2023, the timing and number of shares repurchased will depend on a variety of factors, including, but not limited to, stock price, trading volume, regulatory requirements, general business conditions and others. The Bank may choose to modify, suspend, or discontinue such proposed repurchases at any time without prior notice, and the share repurchase program does not obligate the Bank to acquire any specific number of shares in any period.
About Farmers & Merchants Bank
Founded in Long Beach in 1907 by C.J. Walker, Farmers & Merchants Bank provides white-glove service to clients at 25 branches from San Clemente to Santa Barbara, as well as through its Online and Mobile Banking platforms. The Bank offers 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 Mar. 31, | |||||||
2022 |
2021 |
||||||
| Interest and dividend income: | |||||||
| Loans | $ | 55,719 |
|
$ | 60,273 |
||
| Investment securities | 18,669 |
|
13,075 |
|
|||
| Investments in FHLB and FRB stock | 272 |
|
262 |
|
|||
| Interest-bearing deposits in financial institutions | 596 |
|
257 |
|
|||
| Total interest and dividend income | 75,256 |
|
73,867 |
|
|||
| Interest expense: | |||||||
| Deposits | 1,987 |
|
2,494 |
|
|||
| Securities sold under repurchase agreements | 678 |
|
893 |
|
|||
| Total interest expense | 2,665 |
|
3,387 |
|
|||
| Net interest income | 72,591 |
|
70,480 |
|
|||
| Provision for loan losses | (1,000 |
) |
2,000 |
|
|||
| Net interest income after provision for loan losses | 73,591 |
|
68,480 |
|
|||
| Non-interest income: | |||||||
| Service charges on deposit accounts | 1,535 |
|
1,325 |
|
|||
| Card income | 970 |
|
573 |
|
|||
| Other income | 2,568 |
|
3,198 |
|
|||
| Total non-interest income | 5,073 |
|
5,096 |
|
|||
| Non-interest expense: | |||||||
| Salaries and employee benefits | 29,110 |
|
27,878 |
|
|||
| FDIC and other insurance expense | 1,000 |
|
853 |
|
|||
| Occupancy expense | 3,548 |
|
3,254 |
|
|||
| Software and equipment expense | 3,642 |
|
3,535 |
|
|||
| Professional and legal services | 1,465 |
|
1,340 |
|
|||
| Marketing expense | 1,021 |
|
679 |
|
|||
| Other expense | 3,889 |
|
4,335 |
|
|||
| Total non-interest expense | 43,675 |
|
41,874 |
|
|||
| Income before income tax expense | 34,989 |
|
31,702 |
|
|||
| Income tax expense | 7,154 |
|
6,427 |
|
|||
| Net income | $ | 27,835 |
|
$ | 25,275 |
|
|
| Basic earnings per common share | $ | 221.65 |
|
$ | 199.64 |
|
|
| Diluted earnings per common share | $ | 217.02 |
|
$ | 197.51 |
|
|
| Basic weighted-average shares outstanding | 125,581 |
|
126,607 |
|
|||
| Diluted weighted-average shares outstanding | 128,256 |
|
127,970 |
|
|||
| FARMERS & MERCHANTS BANK OF LONG BEACH | ||||||
| Balance Sheets (Unaudited) | ||||||
| (In thousands, except share and per share data) | ||||||
| Mar. 31, 2022 | Dec. 31, 2021 | |||||
| Assets | ||||||
| Cash and due from banks: | ||||||
| Noninterest-bearing balances | $ | 75,121 |
|
$ | 49,025 |
|
| Interest-bearing balances | 1,103,691 |
|
1,252,646 |
|
||
| Total cash and due from banks | 1,178,812 |
|
1,301,671 |
|
||
| Securities available-for-sale, at fair value | 131,088 |
|
139,947 |
|
||
| Securities held-to-maturity, at amortized cost | 4,721,132 |
|
4,366,821 |
|
||
| Loans held for sale | 8,592 |
|
9,430 |
|
||
| Gross loans | 5,476,293 |
|
5,453,279 |
|
||
| Allowance for loan losses | (71,895 |
) |
(72,880 |
) |
||
| Unamortized deferred loan fees, net | (7,573 |
) |
(8,650 |
) |
||
| Loans, net | 5,396,825 |
|
5,371,749 |
|
||
| Other real estate owned, net | 966 |
|
966 |
|
||
| Investments in FHLB and FRB stock, at cost | 20,025 |
|
20,031 |
|
||
| Bank premises and equipment, net | 114,453 |
|
115,827 |
|
||
| Deferred tax assets, net | 27,747 |
|
27,939 |
|
||
| Other assets | 73,753 |
|
83,879 |
|
||
| Total assets | $ | 11,673,393 |
|
$ | 11,438,260 |
|
| Liabilities and Stockholders' Equity | ||||||
| Liabilities: | ||||||
| Deposits: | ||||||
| Noninterest-bearing demand deposits | $ | 3,597,306 |
|
$ | 3,552,248 |
|
| Interest-bearing demand deposits | 2,268,861 |
|
2,187,998 |
|
||
| Savings and money market savings | 2,784,355 |
|
2,755,862 |
|
||
| Time deposits | 708,645 |
|
745,382 |
|
||
| Total deposits | 9,359,167 |
|
9,241,490 |
|
||
| Securities sold under repurchase agreements | 1,023,291 |
|
916,672 |
|
||
| Other liabilities | 31,666 |
|
38,536 |
|
||
| Total liabilities | 10,414,124 |
|
10,196,698 |
|
||
| Stockholders' Equity: | ||||||
| Common Stock, par value $20; authorized 250,000 shares; | ||||||
| 125,319 and 125,628 shares issued and outstanding | ||||||
| at March 31, 2022 and December 31, 2021, respectively | 2,506 |
|
2,513 |
|
||
| Additional paid-in capital | 88,845 |
|
89,972 |
|
||
| Retained earnings | 1,171,982 |
|
1,147,661 |
|
||
| Accumulated other comprehensive income | (4,064 |
) |
1,416 |
|
||
| Total stockholders' equity | 1,259,269 |
|
1,241,562 |
|
||
| Total liabilities and stockholders' equity | $ | 11,673,393 |
|
$ | 11,438,260 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220414005281/en/
Contacts
John Hinrichs
Executive Vice President
562-437-0011, ext. 4835
Roger Pondel
PondelWilkinson Inc.
Investor Relations
310-279-5980
investor@pondel.com
