LONG BEACH, Calif.--(BUSINESS WIRE)--Farmers & Merchants Bank of Long Beach (OTCQB: FMBL) today reported financial results for the first quarter ended March 31, 2019.
“F&M achieved profitable results for the first quarter, as it continued to invest in technology to further enhance the Bank’s infrastructure and customer experience,” said Henry Walker, president of Farmers & Merchants Bank. “Our ongoing priority is to develop and continue building strong relationships with our customers and the communities we serve, as we distinguish ourselves as a Bank committed to the success of all our stakeholders.”
Income Statement
For the three months ended March 31, 2019, interest and dividend income rose to $68.3 million from $61.7 million a year ago. Interest expense for the 2019 first quarter was $7.4 million, compared with $4.4 million in the same period last year.
Farmers & Merchants’ net interest income for the 2019 first quarter increased to $60.9 million from $57.3 million for the first quarter of 2018.
Farmers & Merchants’ net interest margin was 3.49% for the first quarter ended March 31, 2019, compared with 3.37% at the end of the same period last year.
The Bank’s provision for loan losses in the first quarter of 2019 was $250,000, while it did not have a loan loss provision in the same period a year ago. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.45% at March 31, 2019, compared with 1.51% at March 31, 2018.
Noninterest income was $4.5 million for the 2019 first quarter, compared with $4.1 million for the 2018 first quarter. Noninterest expense for the 2019 first quarter was $37.8 million, versus $32.5 million for the same period last year.
The Bank’s net income for the 2019 first quarter advanced to $22.3 million, or $170.91 per diluted share, from $21.0 million, or $160.65 per diluted share, in the 2018 first quarter.
Balance Sheet
At March 31, 2019, net loans totaled $4.26 billion, compared with $4.19 billion at December 31, 2018. The Bank’s total deposits rose to $5.67 billion at the end of the 2019 first quarter, up from $5.58 billion at December 31, 2018. Noninterest-bearing deposits represented 37.0% of total deposits at March 31, 2019, versus 37.6% of total deposits at December 31, 2018. Total assets grew to $7.37 billion at the close of the 2019 first quarter from $7.31 billion at December 31, 2018.
At March 31, 2019, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 19.99%, a tier 1 risk-based capital ratio of 18.75%, a common equity tier 1 capital ratio of 18.75%, and a tier 1 leverage ratio of 14.23%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.
“F&M had a very productive first quarter, with the completion of our office expansion in Newport Beach, the grand opening of our Redondo Beach branch, and the appointment of JoAnn Bourne and Christine Scheuneman to the board of directors,” said Daniel Walker, chief executive officer and chairman of the board. “F&M also repurchased shares in the first quarter, which is a testament to the conviction we have in the strength of the Bank in its 112th year of serving Southern California.”
During the first quarter, Farmers & Merchants Bank repurchased 750 shares of its common stock for approximately $6.05 million at a weighted average price of $8,061.83 per share. As previously disclosed, in October 2018, F&M’s board of directors authorized the Bank to repurchase up to $20 million of its common stock prior to December 31, 2019. The Bank may continue to purchase shares of its common stock from time to time through various means, including open market transactions, privately negotiated transactions, or otherwise in accordance with applicable laws.
To the extent the Bank repurchases shares, the number of shares repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, stock price, trading volume, regulatory requirements, general business conditions and other factors. The Bank may choose to modify, suspend or discontinue such proposed repurchases at any time and anticipates that any such repurchases will be funded from existing cash and cash equivalents or future cash flow.
About Farmers & Merchants Bank
Founded in Long Beach in 1907 by C.J. Walker, Farmers & Merchants Bank has 25 branches across Orange County, Long Beach, the South Bay and Santa Barbara. 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 Mar. 31, | ||||||||||||||||
| 2019 | 2018 | |||||||||||||||
| Interest and dividend income: | ||||||||||||||||
| Loans | $ | 50,740 | $ | 44,598 | ||||||||||||
| Investment securities | 16,926 | 16,376 | ||||||||||||||
| Investments in FHLB and FRB stock | 356 | 356 | ||||||||||||||
| Interest-bearing deposits in financial institutions | 318 | 353 | ||||||||||||||
| Total interest and dividend income | 68,340 | 61,683 | ||||||||||||||
| Interest expense: | ||||||||||||||||
| Deposits | 4,935 | 2,857 | ||||||||||||||
| Securities sold under repurchase agreements | 2,444 | 1,503 | ||||||||||||||
| Other borrowings | 40 | - | ||||||||||||||
| Total interest expense | 7,419 | 4,360 | ||||||||||||||
| Net interest income | 60,921 | 57,323 | ||||||||||||||
| Provision for loan losses | 250 | - | ||||||||||||||
| Net interest income after provision for loan losses | 60,671 | 57,323 | ||||||||||||||
|
Noninterest income: |
||||||||||||||||
| Service charges on deposit accounts | 1,645 | 1,026 | ||||||||||||||
| Card income | 928 | 901 | ||||||||||||||
| Other real estate owned income | 18 | - | ||||||||||||||
| Other income | 1,956 | 2,150 | ||||||||||||||
|
Total noninterest income |
4,547 | 4,077 | ||||||||||||||
|
Noninterest expense: |
||||||||||||||||
| Salaries and employee benefits | 23,294 | 22,096 | ||||||||||||||
| FDIC and other insurance expense | 622 | 653 | ||||||||||||||
| Occupancy expense | 2,648 | 2,287 | ||||||||||||||
| Software and equipment expense | 3,040 | 2,571 | ||||||||||||||
| Other real estate owned expense | 50 | 22 | ||||||||||||||
| Professional and legal services | 1,671 | 1,196 | ||||||||||||||
| Marketing expense | 1,715 | 1,146 | ||||||||||||||
| Other expense | 4,775 | 2,528 | ||||||||||||||
|
Total noninterest expense |
37,815 | 32,499 | ||||||||||||||
| Income before income tax expense | 27,403 | 28,901 | ||||||||||||||
| Income tax expense | 5,069 | 7,867 | ||||||||||||||
| Net income | $ | 22,334 | $ | 21,034 | ||||||||||||
| Basic and diluted earnings per common share | $ | 170.91 | $ | 160.65 | ||||||||||||
| Basic and diluted weighted-average shares outstanding | 130,681 | 130,928 | ||||||||||||||
| FARMERS & MERCHANTS BANK OF LONG BEACH | |||||||||||||||||||
| Balance Sheets (Unaudited) | |||||||||||||||||||
| (In thousands except share and per share data) | |||||||||||||||||||
| Mar. 31, 2019 | Dec. 31, 2018 | ||||||||||||||||||
| Assets | |||||||||||||||||||
| Cash and due from banks: | |||||||||||||||||||
| Noninterest-bearing balances | $ | 79,847 | $ | 69,486 | |||||||||||||||
| Interest-bearing balances | 103,150 | 17,661 | |||||||||||||||||
| Total cash and due from banks | 182,997 | 87,147 | |||||||||||||||||
| Securities available-for-sale, at fair value | 169,808 | 134,008 | |||||||||||||||||
| Securities held-to-maturity, at amortized cost | 2,513,606 | 2,649,460 | |||||||||||||||||
| Loans held for sale | 22,112 | 20,718 | |||||||||||||||||
| Gross loans | 4,326,174 | 4,260,093 | |||||||||||||||||
| Allowance for loan losses | (62,714 | ) | (62,450 | ) | |||||||||||||||
| Unamortized deferred loan fees, net | (5,675 | ) | (5,973 | ) | |||||||||||||||
| Loans, net | 4,257,785 | 4,191,670 | |||||||||||||||||
| Other real estate owned, net | 1,699 | 1,724 | |||||||||||||||||
| Investments in FHLB and FRB stock, at cost | 20,690 | 20,690 | |||||||||||||||||
| Bank premises and equipment, net | 99,379 | 100,478 | |||||||||||||||||
| Deferred tax assets, net | 20,101 | 19,680 | |||||||||||||||||
| Other assets | 86,600 | 82,661 | |||||||||||||||||
| Total assets | $ | 7,374,777 | $ | 7,308,236 | |||||||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 2,096,366 | $ | 2,098,097 | |||||||||||||||
| Interest-bearing demand deposits | 1,211,691 | 1,178,886 | |||||||||||||||||
| Savings and money market savings | 1,614,295 | 1,566,446 | |||||||||||||||||
| Time deposits | 744,709 | 741,037 | |||||||||||||||||
| Total deposits | 5,667,061 | 5,584,466 | |||||||||||||||||
| Securities sold under repurchase agreements | 605,670 | 609,791 | |||||||||||||||||
| FHLB advances | - | 30,000 | |||||||||||||||||
| Other liabilities | 60,372 | 56,106 | |||||||||||||||||
| Total liabilities | 6,333,103 | 6,280,363 | |||||||||||||||||
| Stockholders' Equity: | |||||||||||||||||||
|
Common Stock, par value $20; authorized 250,000 shares; 130,178 and 130,928 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively |
2,604 |
2,619 |
|||||||||||||||||
| Additional paid-in capital | 106,012 | 112,044 | |||||||||||||||||
| Retained earnings | 932,977 | 914,164 | |||||||||||||||||
| Accumulated other comprehensive income | 81 | (954 | ) | ||||||||||||||||
| Total stockholders' equity | 1,041,674 | 1,027,873 | |||||||||||||||||
| Total liabilities and stockholders' equity | $ | 7,374,777 | $ | 7,308,236 | |||||||||||||||
