LONG BEACH, Calif.--(BUSINESS WIRE)--Farmers & Merchants Bank of Long Beach (OTCQB: FMBL) today reported financial results for the third quarter ended September 30, 2016.
“As the banking industry continues to navigate a historically low interest rate environment, and confidence in large financial institutions wanes, Farmers & Merchants’ strong deposit growth this year is a testament to the sacred trust we share with our clients in the very community where the Bank was founded in 1907,” said Henry Walker, president of Farmers & Merchants Bank. “The Bank further distinguishes itself by demonstrating consistent financial strength, multi-generational relationships with clients, and a commitment to enhancing the communities we serve through philanthropic contributions.”
For the 2016 third quarter, interest and dividend income rose to $55.7 million from $51.0 million in the 2015 third quarter. Interest and dividend income for the nine-month period ended September 30, 2016 advanced to $166.4 million from $153.0 million reported for the same period in 2015.
Interest expense for the 2016 third quarter was $2.7 million, compared with $2.0 million in last year’s third quarter. Interest expense for the nine-month period ended September 30, 2016 was $7.6 million, versus $5.5 million reported for the same period last year.
Net interest income for the 2016 third quarter rose to $53.1 million from $49.1 million for the third quarter of 2015, and increased to $158.9 million for the first nine months of 2016, versus $147.5 million for the same period in 2015.
Farmers & Merchants’ net interest margin was 3.44% for the 2016 third quarter, compared with 3.53% for the 2015 third quarter. Net interest margin was 3.54% for the first nine months of 2016, compared with 3.66% for the same period in 2015.
The Bank did not have a provision for loan losses in the first nine months of 2016, nor in the same period a year ago, amid continued strength in its loan portfolio. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.66% at September 30, 2016. Farmers & Merchants’ allowance for loan losses as a percentage of loans outstanding was 1.73% at December 31, 2015.
Non-interest income was $6.5 million for the 2016 third quarter, compared with $6.1 million in the third quarter a year ago. Non-interest income was $18.8 million for the nine-month period ended September 30, 2016, compared with $19.6 million for the same period in 2015.
Non-interest expense for the 2016 third quarter was $33.1 million, versus $31.9 million for the same period last year. Non-interest expense for the first nine months of 2016 was $97.7 million, compared with $94.9 million last year.
Net income for the 2016 third quarter was $17.8 million, or $135.90 per diluted share, compared with $16.2 million, or $123.47 per diluted share, in the year-ago period. The Bank’s net income for the first nine months of 2016 was $53.8 million, or $410.75 per diluted share, compared with $49.5 million, or $377.99 per diluted share, for the same period in 2015.
At September 30, 2016, net loans totaled $3.37 billion, compared with $3.22 billion at December 31, 2015. The Bank’s deposits totaled $5.10 billion at the end of the 2016 third quarter, compared with $4.69 billion at December 31, 2015. Non-interest bearing deposits represented 38.5% of total deposits at September 30, 2016, versus 38.9% of total deposits at December 31, 2015. Total assets increased to $6.63 billion at the close of the 2016 third quarter, compared with $6.15 billion at the close of the prior year.
At September 30, 2016, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 21.11%, a tier 1 risk-based capital ratio of 19.86%, a common equity tier 1 capital ratio of 19.86%, and a tier 1 leverage ratio of 13.81%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.
“Farmers & Merchants’ solid balance sheet is indicative of characteristics that have embodied the Bank since its inception: liquidity and a conservative lending philosophy,” said Daniel Walker, chief executive officer and chairman of the board. “It is these fundamentals that set the foundation for Farmers & Merchants’ stellar financial health, as well as the Bank’s safety and soundness for every depositor.”
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 Sept 30,||Nine Months Ended Sept 30,|
|Interest and dividend income:|
|Investments in FHLB and FRB stock||445||537||1,277||2,416|
|Interest-bearing deposits in financial institutions||370||163||697||317|
|Total interest and dividend income||55,722||51,042||166,449||152,959|
|Securities sold under repurchase agreements||492||305||1,400||849|
|Total interest expense||2,670||1,986||7,562||5,491|
|Net interest income||53,052||49,056||158,887||147,468|
|Provision for loan losses||-||-||-||-|
|Net interest income after provision for loan losses||53,052||49,056||158,887||147,468|
|Service charges on deposit accounts||1,004||1,029||2,977||3,037|
|Other real estate owned income||1||42||17||1,414|
|Merchant bankcard income||2,726||2,608||7,665||7,391|
|Total non-interest income||6,495||6,104||18,807||19,616|
|Salaries and employee benefits||18,348||18,095||56,639||54,614|
|FDIC and other insurance expense||618||826||2,343||2,398|
|Software and equipment expense||1,811||1,790||5,409||5,255|
|Other real estate owned expense||69||2||(58||)||112|
|Amortization of public welfare investments||2,117||2,117||6,351||6,351|
|Merchant bankcard expense||2,087||2,080||5,801||6,014|
|Professional and legal services||1,418||1,079||3,640||2,969|
|Total non-interest expense||33,113||31,895||97,726||94,897|
|Income before income tax expense||26,434||23,265||79,968||72,187|
|Income tax expense||8,641||7,100||26,190||22,698|
|Basic and diluted earnings per common share||$||135.90||$||123.47||$||410.75||$||377.99|
|FARMERS & MERCHANTS BANK OF LONG BEACH|
|Balance Sheets (Unaudited)|
|(In thousands except share and per share data)|
|Sept. 30, 2016||Dec. 31, 2015|
|Cash and due from banks:|
|Total cash and due from banks||313,372||168,020|
|Securities available-for-sale, at fair value||187,810||206,649|
|Securities held-to-maturity, at amortized cost||2,559,270||2,363,383|
|Loans held for sale||8,788||3,168|
|Allowance for loan losses||(56,844||)||(56,670||)|
|Unamortized deferred loan fees, net||(4,774||)||(4,139||)|
|Other real estate owned, net||791||1,351|
|Investments in FHLB and FRB stock, at cost||20,690||20,690|
|Public welfare investments||26,149||34,499|
|Bank premises and equipment, net||87,581||86,781|
|Deferred tax assets, net||28,377||27,892|
|Liabilities and Stockholders' Equity|
|Noninterest-bearing demand deposits||$||1,964,744||$||1,824,516|
|Interest-bearing demand deposits||821,243||645,125|
|Savings and money market savings||1,459,556||1,376,920|
|Securities sold under repurchase agreements||594,253||572,915|
Common Stock, par value $20; authorized 250,000 shares; issued and outstanding 130,928 shares
|Additional paid-in capital||112,044||112,044|
|Accumulated other comprehensive income||1,474||1,409|
|Total stockholders' equity||900,140||855,331|
|Total liabilities and stockholders' equity||$||6,627,923||$||6,153,600|