Farmers & Merchants Bank of Long Beach Reports 2019 Fourth-Quarter and Full-Year Results

LONG BEACH, Calif.--()--Farmers & Merchants Bank of Long Beach (OTCQB: FMBL) today reported financial results for the fourth quarter and full year ended December 31, 2019.

“Results again demonstrated the foundational strength of our organization,” said Henry Walker, president of Farmers & Merchants Bank. “For 2019, total deposits, net loans and total assets all increased over the prior year. Our clients, both new and those who have been with us for decades, fully appreciate the exceptional service they receive from our highly trained, professional staff, along with user-friendly and robust technology, and Farmers and Merchants’ financial strength, to meet all of their banking needs.”

Income Statement

For the 2019 fourth quarter, total interest and dividend income was $70.1 million, compared with $68.9 million in the fourth quarter of 2018. Total interest and dividend income for the year ended December 31, 2019 was $280.5 million, compared with $261.0 million reported for 2018.

Interest expense for the 2019 fourth quarter was $8.4 million, compared with $6.5 million in the same period a year ago. Interest expense for 2019 was $33.0 million, versus $21.9 million in 2018.

Farmers & Merchants’ net interest income for the 2019 fourth quarter was $61.7 million, compared with $62.4 million for the fourth quarter in 2018. Net interest income for 2019 was $247.5 million, versus $239.1 million in 2018.

Net interest margin for the 2019 fourth quarter was 3.34%, compared with 3.56% for the same period in 2018. Farmers & Merchants’ net interest margin was 3.43% for the year ended December 31, 2019, versus 3.45% in the previous year.

The Bank did not record a provision for loan losses in the 2019 fourth quarter, compared with a $500,000 loan loss provision in the 2018 fourth quarter. For the full 2019 year, the loan loss provision was $250,000, versus $2.5 million in 2018. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.42% at December 31, 2019, compared with 1.47% at December 31, 2018.

Non-interest income was $4.9 million for the 2019 fourth quarter, compared with $4.6 million for the 2018 fourth quarter. Non-interest income for 2019 totaled $19.3 million, versus $18.2 million in 2018.

Non-interest expense for the 2019 fourth quarter was $44.6 million, compared with $38.2 million for the same period last year. Non-interest expense for the year ended December 31, 2019 was $163.7 million, compared with $146.1 million last year.

The Bank’s net income for the 2019 fourth quarter was $18.7 million, or $141.03 per diluted share, compared with $22.1 million, or $169.17 per diluted share, for the 2018 fourth quarter. The Bank’s net income for 2019 was $85.6 million, or $651.60 per diluted share, compared with $85.6 million, or $654.07 per diluted share, for 2018.

Balance Sheet

At December 31, 2019, net loans increased to $4.34 billion, from $4.19 billion at December 31, 2018. The Bank’s deposits grew to $5.83 billion at the end of 2019, from $5.58 billion at December 31, 2018. Non-interest-bearing deposits represented 36.6% of total deposits at December 31, 2019, versus 37.6% of total deposits at the end of 2018. Total assets advanced to $7.61 billion at the close of 2019 from $7.31 billion at December 31, 2018.

At December 31, 2019, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 20.64%, a tier 1 risk-based capital ratio of 19.42%, a common equity tier 1 capital ratio of 19.42%, and a tier 1 leverage ratio of 13.99%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.

“Despite the challenges of a persistently low interest rate environment, Farmers & Merchants Bank continues to maintain its solid financial strength and leadership stature in the communities we serve,” said Daniel Walker, chief executive officer and chairman of the board. “The growth in our loan and deposit portfolios for 2019 further exemplifies the attractiveness of our service offerings and the professionalism and dedication of our talented and growing staff throughout the Bank. As we proceed into 2020, on behalf of our board of directors and management team, I extend appreciation and thanks to all of our valued stakeholders.”

During 2019, Farmers & Merchants Bank repurchased 2,400 shares of its common stock at an average price of $8,194.03 per share pursuant to its previously announced repurchase program. The repurchase program expired at the end of 2019.

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 across Orange County, Long Beach, the South Bay and Santa Barbara, as well as through robust Online and Mobile Banking platforms. The Bank offers commercial and small business banking, business loan programs, home loans, and consumer 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 Bank’s website, www.fmb.com.

FARMERS & MERCHANTS BANK OF LONG BEACH

Income Statements (Unaudited)

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended Dec. 31,

 

Twelve Months Ended Dec. 31,

 

 

2019

 

2018

 

2019

 

2018

   
Interest and dividend income:  
   
Loans  

$

51,449

$

50,713

$

207,294

$

190,234

Investment securities  

17,277

17,326

68,829

67,034

Investments in FHLB and FRB stock  

348

636

1,404

1,694

Interest-bearing deposits in financial institutions  

993

258

2,926

2,035

   
Total interest and dividend income  

70,067

68,933

280,453

260,997

   
Interest expense:  
   
Deposits  

6,038

4,231

22,533

14,202

Securities sold under repurchase agreements  

2,351

2,280

10,378

7,698

Other borrowings  

2

34

54

41

   
Total interest expense  

8,391

6,545

32,965

21,941

   
Net interest income  

61,676

62,388

247,488

239,056

   
Provision for loan losses  

-

500

250

2,500

   
Net interest income after provision for loan losses  

61,676

61,888

247,238

236,556

   
Non-interest income:  
   
Service charges on deposit accounts  

1,507

1,534

6,584

5,650

Card income  

1,047

1,028

3,618

3,877

Other real estate owned income  

-

-

227

-

Other income  

2,330

2,003

8,838

8,639

   
Total non-interest income  

4,884

4,565

19,267

18,166

   
Non-interest expense:  
   
Salaries and employee benefits  

27,063

22,274

99,683

88,463

FDIC and other insurance expense  

130

639

1,041

2,593

Occupancy expense  

3,347

2,912

11,930

10,195

Software and equipment expense  

3,297

3,070

12,725

10,879

Other real estate owned expense  

1

90

85

139

Professional and legal services  

1,843

1,633

7,154

5,803

Marketing expense  

2,007

1,767

8,556

5,950

Other expense  

6,870

5,834

22,555

22,076

   
Total non-interest expense  

44,558

38,219

163,729

146,098

   
Income before income tax expense  

22,002

28,234

102,776

108,624

   
Income tax expense  

3,344

6,085

17,204

22,988

   
Net income  

$

18,658

$

22,149

$

85,572

$

85,636

   
Basic earnings per common share  

$

145.17

$

169.17

$

661.80

$

654.07

Diluted earnings per common share  

$

141.03

$

169.17

$

651.60

$

654.07

Basic weighted-average shares outstanding  

128,528

130,928

129,303

130,928

Diluted weighted-average shares outstanding  

132,303

130,928

131,327

130,928

   

FARMERS & MERCHANTS BANK OF LONG BEACH

Balance Sheets (Unaudited)

(In thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

Dec. 31, 2019

 

 

Dec. 31, 2018

     
Assets    
     
Cash and due from banks:    
Noninterest-bearing balances  

$

64,556

 

$

69,486

Interest-bearing balances  

54,309

 

17,661

     
Total cash and due from banks  

118,865

 

87,147

Securities available-for-sale, at fair value  

150,623

 

134,008

Securities held-to-maturity, at amortized cost  

2,728,583

 

2,649,460

Loans held for sale  

23,301

 

20,718

Gross loans  

4,403,876

 

4,260,093

Allowance for loan losses  

(62,489)

 

(62,450)

Unamortized deferred loan fees, net  

(5,127)

 

(5,973)

     
Loans, net  

4,336,260

 

4,191,670

     
Other real estate owned, net  

-

 

1,724

Investments in FHLB and FRB stock, at cost  

20,160

 

20,690

Bank premises and equipment, net  

108,133

 

100,478

Deferred tax assets, net  

24,679

 

19,680

Other assets  

94,965

 

82,661

     
Total assets  

$

7,605,569

 

$

7,308,236

     
     
Liabilities and Stockholders' Equity    
     
Liabilities:    
     
Deposits:    
Noninterest-bearing demand deposits  

$

2,135,056

 

$

2,098,097

Interest-bearing demand deposits  

1,302,726

 

1,178,886

Savings and money market savings  

1,669,525

 

1,566,446

Time deposits  

720,958

 

741,037

     
Total deposits  

5,828,265

 

5,584,466

Securities sold under repurchase agreements  

632,428

 

609,791

FHLB advances  

-

 

30,000

Other liabilities  

61,996

 

56,106

     
Total liabilities  

6,522,689

 

6,280,363

     
Stockholders' Equity:    
     
Common Stock, par value $20; authorized 250,000    
shares; 128,528 and 130,928 shares issued    
and outstanding at December 31, 2019 and    
December 31, 2018, respectively  

2,571

 

2,619

Additional paid-in capital  

95,446

 

112,044

Retained earnings  

983,867

 

914,164

Accumulated other comprehensive income  

996

 

(954)

     
Total stockholders' equity  

1,082,880

 

1,027,873

     
Total liabilities and stockholders' equity  

$

7,605,569

 

$

7,308,236

 

Contacts

John Hinrichs
Executive Vice President
562-437-0011, ext. 5035

Roger Pondel
PondelWilkinson Inc.
Investor Relations
310-279-5980
investor@pondel.com

Contacts

John Hinrichs
Executive Vice President
562-437-0011, ext. 5035

Roger Pondel
PondelWilkinson Inc.
Investor Relations
310-279-5980
investor@pondel.com