LONG BEACH, Calif.--(BUSINESS WIRE)--Farmers & Merchants Bank of Long Beach (OTCBB: FMBL) today reported financial results for the second quarter and six-months ended June 30, 2014.
“Farmers & Merchants achieved strong loan growth during the first half of the year, as the Bank’s expanded lending team continues to deliver results,” said Henry Walker, president of Farmers & Merchants Bank of Long Beach. “At the same time, the Bank made steady gains in deposit growth, which is a testament to Farmers & Merchants’ focus on providing superior service with sound and stable fundamentals.”
Income Statement
For the three months ended June 30, 2014, interest income rose to $45.0 million from $39.2 million in the second quarter of 2013. Interest income for the first half of 2014 increased to $88.3 million from $78.8 million reported for the first half of 2013.
Interest expense for the 2014 second quarter was $1.7 million, compared with $1.5 million in the second quarter of 2013. Interest expense for the first half of 2014 was $3.3 million, versus $3.0 million reported for the corresponding period last year.
Net interest income for the 2014 second quarter advanced to $43.3 million from $37.6 million for the second quarter of 2013. Net interest income for the first half of 2014 increased to $85.0 million from $75.7 million for the six months ended June 30, 2013.
Farmers & Merchants’ net interest margin was 3.48% for the 2014 second quarter, up from 3.20% in the 2013 second quarter. Net interest margin was 3.44% for the first half of 2014, versus 3.24% for the same period in 2013.
The Bank did not have a provision for loan losses in the first half of 2014, nor in the same period a year ago, reflecting the continued strength of Farmers & Merchant’s loan portfolio. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.86% at June 30, 2014, compared with 2.09% at December 31, 2013.
Non-interest income was $9.8 million for the 2014 second quarter, compared with $10.4 million in the same period a year ago. In the first half of 2014, non-interest income was $16.4 million, compared with $21.2 million for the six months ended June 30, 2013.
Non-interest expense for the 2014 second quarter was $29.7 million, compared with $26.4 million for the same period last year. Non-interest expense for the first half of 2014 was $57.9 million, compared with $50.1 million for the first half of 2013.
Net income for the 2014 second quarter increased to $16.1 million, or $123.05 per diluted share, from $14.9 million, or $113.76 per diluted share, for the 2013 second quarter. Net income for the first half of 2014 was $30.2 million, or $230.44 per diluted share, compared with $32.1 million, or $245.44 per diluted share, for the six months ended June 30, 2013.
Balance Sheet
At June 30, 2014, net loans increased to $2.71 billion from $2.40 billion at December 31, 2013. The Bank’s deposits rose to $4.00 billion at the end of the 2014 second quarter from $3.83 billion at December 31, 2013. Non-interest bearing deposits represented 39.3% of total deposits at June 30, 2014, versus 38.5% of total deposits at December 31, 2013. Total assets increased to $5.41 billion at the close of the 2014 second quarter from $5.21 billion at December 31, 2013.
At June 30, 2014, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 24.38%, a Tier 1 risk-based capital ratio of 23.13%, and a Tier 1 leverage ratio of 14.54%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 6.00% and 5.00%, respectively.
“As a key pillar to the strength and stability of Farmers &Merchants Bank, we continued to maintain a healthy balance sheet in the first half of the year,” said Daniel Walker, chief executive officer and chairman of the board. “As Farmers & Merchants Bank further enhances its presence in Southern California, we remain committed to implementing our growth strategy with the very prudence, integrity and tact that has led to the Bank’s profitability on an annual basis for more than a century.”
About Farmers & Merchants Bank of Long Beach
Founded in Long Beach in 1907 by C.J. Walker, Farmers & Merchants Bank has 23 branches in Los Angeles and Orange Counties. The Bank specializes in commercial and small business banking along with business loan programs. Farmers & Merchants Bank of Long Beach 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 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, | |||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||
| Interest income: | ||||||||||||
| Loans | $ | 31,122 | $ | 25,252 | $ | 59,992 | $ | 50,811 | ||||
| Securities available-for-sale | 1,328 | 2,069 | 2,858 | 4,309 | ||||||||
| Securities held-to-maturity | 12,446 | 11,688 | 25,299 | 23,317 | ||||||||
| Deposits with banks | 88 | 146 | 141 | 353 | ||||||||
| Total interest income | 44,984 | 39,155 | 88,290 | 78,790 | ||||||||
| Interest expense: | ||||||||||||
| Deposits | 1,424 | 1,224 | 2,772 | 2,485 | ||||||||
| Federal funds purchased | - | - | 4 | - | ||||||||
| Securities sold under repurchase agreements | 280 | 284 | 554 | 557 | ||||||||
| Total interest expense | 1,704 | 1,508 | 3,330 | 3,042 | ||||||||
| Net interest income | 43,280 | 37,647 | 84,960 | 75,748 | ||||||||
| Provision for loan losses | - | - | - | - | ||||||||
| Net interest income after provision for loan losses | 43,280 | 37,647 | 84,960 | 75,748 | ||||||||
| Non-interest income: | ||||||||||||
| Service charges on deposit accounts | 1,154 | 1,115 | 2,287 | 2,268 | ||||||||
| Gains on sale of securities | - | - | 425 | 1,048 | ||||||||
| Other real estate owned income | 338 | 153 | 503 | 463 | ||||||||
| Merchant bankcard income | 2,429 | 2,388 | 4,703 | 4,562 | ||||||||
| Other income | 5,853 | 6,771 | 8,445 | 12,838 | ||||||||
| Total non-interest income | 9,774 | 10,427 | 16,363 | 21,179 | ||||||||
| Non-interest expense: | ||||||||||||
| Salaries and employee benefits | 16,247 | 13,383 | 31,926 | 26,724 | ||||||||
| FDIC and other insurance expense | 769 | 1,707 | 1,521 | 3,399 | ||||||||
| Occupancy expense | 1,982 | 1,673 | 3,753 | 3,271 | ||||||||
| Equipment expense | 1,589 | 1,538 | 3,070 | 2,972 | ||||||||
| Other real estate owned expense | 1,162 | 811 | 1,783 | (6) | ||||||||
| Amortization of public welfare investments | 2,117 | 2,020 | 4,234 | 4,041 | ||||||||
| Merchant bankcard expense | 1,938 | 1,939 | 3,725 | 3,660 | ||||||||
| Legal and professional services | 782 | 1,001 | 1,726 | 1,749 | ||||||||
| Marketing expense | 1,279 | 786 | 2,768 | 1,375 | ||||||||
| Other expense | 1,807 | 1,507 | 3,360 | 2,954 | ||||||||
| 2,922 | 2,922 | |||||||||||
| Total non-interest expense | 29,672 | 26,365 | 57,866 | 50,139 | ||||||||
| Income before income tax expense | 23,382 | 21,709 | 43,457 | 46,788 | ||||||||
| Income tax expense | 7,271 | 6,815 | 13,286 | 14,653 | ||||||||
| Net income | $ | 16,111 | $ | 14,894 | $ | 30,171 | $ | 32,135 | ||||
| Basic and diluted earnings per common share | $ | 123.05 | $ | 113.76 | $ | 230.44 | $ | 245.44 | ||||
| FARMERS & MERCHANTS BANK OF LONG BEACH | |||||
| Balance Sheets (Unaudited) | |||||
| (In thousands except share and per share data) | |||||
| June 30, 2014 | Dec. 31, 2013 | ||||
| Assets | |||||
| Cash and due from banks: | |||||
| Noninterest-bearing balances | $ | 67,663 | $ | 65,261 | |
| Interest-bearing balances | 130,141 | 20,755 | |||
| Securities available-for-sale | 303,262 | 427,942 | |||
| Securities held-to-maturity | 1,985,486 | 2,145,289 | |||
| Loans held for sale | 1,254 | 465 | |||
| Gross loans | 2,759,914 | 2,454,302 | |||
| Less allowance for loan losses | (51,275) | (51,251) | |||
| Less unamortized deferred loan fees, net | (1,852) | (1,704) | |||
| Net loans | 2,706,787 | 2,401,347 | |||
| Other real estate owned, net | 12,075 | 14,502 | |||
| Public welfare investments | 50,519 | 27,722 | |||
| Bank premises and equipment, net | 87,004 | 66,212 | |||
| Net deferred tax assets | 23,089 | 23,512 | |||
| Federal Home Loan Bank stock | 25,000 | - | |||
| Other assets | 22,584 | 21,579 | |||
| Total assets | $ |
5,414,864 |
$ |
5,214,586 |
|
| Liabilities and Stockholders' Equity | |||||
| Liabilities: | |||||
| Deposits: | |||||
| Demand, non-interest bearing | $ | 1,572,185 | $ | 1,475,888 | |
| Demand, interest bearing | 408,256 | 413,291 | |||
| Savings and money market savings | 1,168,541 | 1,080,774 | |||
| Time deposits | 848,716 | 861,489 | |||
| Total deposits | 3,997,698 | 3,831,442 | |||
| Securities sold under repurchase agreements | 594,043 | 595,991 | |||
| Other liabilities | 38,806 | 27,986 | |||
| Total liabilities |
4,630,547 |
4,455,419 |
|||
| 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 | 12,044 | |||
| Retained earnings | 666,818 | 742,408 | |||
| Accumulated other comprehensive income | 2,836 | 2,096 | |||
| Total stockholders' equity | 784,317 | 759,167 | |||
| Total liabilities and stockholders' equity | $ |
5,414,864 |
$ |
5,214,586 |
|
