Farmers & Merchants Bank of Long Beach Reports 2026 Second Quarter and Year-to-Date Financial Results

Note to our Stockholders:

We value our relationship with our stockholders and want to keep you updated about what’s happening at the Bank. To do this, we need to be able to contact you directly. If your F&M shares are held through your brokerage, your account may be designated as an “Objecting Beneficial Owner,” (or “OBO”). Please ask your broker to designate you as a “Non-Objecting Beneficial Owner,” (or “NOBO”). This way, you’ll receive our updates directly from F&M in a timely manner. If you have questions, call us at 562-499-4829 or email [e-mail].

LONG BEACH, Calif.--(BUSINESS WIRE)--Farmers & Merchants Bank of Long Beach (“F&M” or the “Bank”) (OTCQX: FMBL) today reported financial results for the second quarter ended June 30, 2026.

“The positive operating trends and favorable comparisons in F&M’s financial performance are continuing,” said W. Henry Walker, Chief Executive Officer. “Our second-quarter results reflected the strength of a proven banking model that has served our clients and shareholders well through many different economic cycles over more than a century. Thus far into 2026, the Federal Reserve’s steady interest rate environment is allowing us to expand net interest margin and maintain a strong balance sheet with a stable deposit base.

“The Bank’s performance is the product of consistent execution over many years, which again was exemplified at quarter’s end, with F&M’s capital ratios far exceeding the regulatory capital requirements to meet the definition of a ‘well-capitalized’ financial institution.”

Daniel Walker F&M’s Executive Chairman of the Board, said, “While rates held steady and there were no headline-making developments in the banking sector during the quarter, that is often when the fundamentals matter most. We believe that shareholder value is driven through discipline and prudence, rather than pursuing short-term opportunities. The 2026 second quarter was another example of the validity of that approach.

“As we proceed into the second half of the year, we continue to focus on credit quality and thoughtful loan growth, with a talented staff that is dedicated to providing the personal service our clients expect.”

Operating Results

For the second quarter of 2026, total interest and dividend income increased to $115.3 million, from $105.1 million in the second quarter of 2025. Total interest and dividend income for the six months ended June 30, 2026 increased to $227.4 million from $209.8 million reported for the six months ended June 30, 2025.

Total interest expense for the second quarter of 2026 was $35.2 million, compared with $38.2 million in the second quarter of 2025. Interest expense for the six months ended June 30, 2026 was $69.6 million, compared with $78.7 million a year ago.

Net interest income before provision for credit losses for the second quarter of 2026 increased to $80.1 million, from $66.9 million for the second quarter of 2025. Net interest income before provision for credit losses for the six months ended June 30, 2026 was $157.8 million, compared with $131.0 million for the six months ended June 30, 2025.

F&M’s net interest margin improved to 2.81% for the second quarter of 2026, from 2.42% for the second quarter of 2025. Net interest margin was 2.76% for the six months ended June 30, 2026, compared with 2.35% for the same period in 2025.

For the second quarter of 2026, the Bank recorded a $3.3 million recapture of provision for credit losses, compared with a $3.3 million provision for credit losses recorded in the second quarter of 2025. For the six months ended June 30, 2026, the Bank recorded a $2.7 million recapture of provision for credit losses, compared with a $1.3 million provision for credit losses for the six months ended June 30, 2025.

Total non-interest income was $18.9 million for the second quarter of 2026, compared with $4.5 million for the same period last year. For the six months ended June 30, 2026, total non-interest income was $23.1 million, compared with $8.8 million for the six months ended June 30, 2025.

Total non-interest expense for the second quarter of 2026 was $55.3 million, compared with $49.4 million for the second quarter of 2025. Non-interest expense for the six months ended June 30, 2026 was $107.7 million, compared with $97.4 million for the six months ended June 30, 2025.

Second quarter 2026 net income increased to $35.5 million, or $256.32 per diluted share, from $13.9 million, or $112.71 per diluted share, for the second quarter of 2025. Net income for the six months ended June 30, 2026 was $57.4 million, or $413.60 per diluted share, compared with $30.7 million, or $249.01 per diluted share, for the six months ended June 30, 2025.

Balance Sheet

Gross loans were $6.65 billion as of June 30, 2026, compared with $6.08 billion as of December 31, 2025. The Bank’s allowance for loan losses totaled $84.0 million at June 30, 2026 and December 31, 2025, representing 1.27% of loans held-for-investment at June 30, 2026, and 1.39% of loans held-for investment at December 31, 2025.

F&M’s total deposits at June 30, 2026 amounted to $8.76 billion, compared with $8.95 billion at December 31, 2025. Noninterest-bearing deposits represented 33.53% of total deposits at June 30, 2026, and 34.58% at December 31, 2025.

Securities sold under repurchase agreements increased to $1.02 billion at June 30, 2026, from $883.2 million at December 31, 2025. Borrowings were $300 million at June 30, 2026 and December 31, 2025.

Total assets at June 30, 2026, were $11.77 billion, compared with $11.80 billion at December 31, 2025. Total stockholders’ equity was $1.64 billion at June 30, 2026 and $1.61 billion at December 31, 2025.

Capital

Capital ratios are the foundation of safety in all banks, and F&M continues to exceed most national and regional banks in this area, as well as exceeding regulatory capital requirements to meet the definition of a “well-capitalized” financial institution. As of June 30, 2026, the Bank’s total risk-based capital ratio was 21.86%; tier 1 risk-based capital ratio was 20.65%; common equity tier 1 capital ratio was 18.25%; and tier 1 leverage ratio was 13.95%. The minimum capital adequacy ratios for a “well-capitalized” bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.

Stock Repurchase Program

During the six months ended June 30, 2026, the Bank repurchased 876 shares of its common stock for $7.4 million on the open market at an average repurchase price of $8,397.23 per share, under the $10 million stock repurchase plan that expired on May 9, 2026. The Board of Directors has approved an additional stock repurchase plan of up to $10 million through December 31, 2026.

Under the stock repurchase program, the Bank may purchase shares of its common stock through various means, including open market transactions and privately negotiated transactions, in each case, subject to applicable requirements and laws. To the extent the Bank repurchases shares, the number of shares repurchased and the timing of any 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. An approved stock repurchase program does not obligate the Bank to repurchase any specific number of shares in any particular period.

About Farmers & Merchants Bank of Long Beach

Farmers & Merchants Bank of Long Beach (F&M) provides a distinctive white-glove banking experience through 27 Southern California branches, from San Clemente to Santa Barbara, and through its secure online and mobile banking platforms. Founded in 1907 by C.J. Walker, and today proudly led by the fourth generation of the Walker family, the Bank has devoted more than a century to building trusted relationships, rooted in personal service, integrity, safety and community commitment. Combining the strength and sophistication of a regional institution with the warmth and responsiveness of a community bank, F&M provides a wide range of commercial and consumer banking services designed to help businesses, individuals and families thrive at every stage of growth. With assets exceeding $11 billion, F&M is a California state-chartered bank, with deposits insured by the Federal Deposit Insurance Corporation (FDIC), and is an Equal Housing Lender. Please visit www.fmb.com for more information.

FARMERS & MERCHANTS BANK OF LONG BEACH
Income Statements (Unaudited)
(In thousands, except share and per share data)
	Three Months Ended June 30,					Six Months Ended June 30,
	2026			2025		2026			2025
Interest and dividend income:
Loans	$	80,524		$	76,008	$	155,936		$	150,950
Investment securities		29,058			17,362		55,152			36,611
Interest-bearing deposits in financial institutions		5,229			11,278		14,913			21,293
Investments in FHLB and FRB stock		469			448		1,397			905
Total interest and dividend income		115,280			105,096		227,398			209,759
Interest expense:
Deposits		25,247			26,995		50,070			54,344
Securities sold under repurchase agreements		6,999			8,221		13,679			16,603
Borrowings		2,949			2,963		5,867			7,800
Total interest expense		35,195			38,179		69,616			78,747
Net interest income before provision for credit losses		80,085			66,917		157,782			131,012
(Recapture) provision for credit losses
Loans		(2,300	)		2,100		(1,300	)		2,100
Reserve for unfunded loan commitments		(1,000	)		1,200		(1,400	)		(800	)
Total (recapture) provision for credit losses		(3,300	)		3,300		(2,700	)		1,300
Net interest income after (recapture) provision for credit losses		83,385			63,617		160,482			129,712
Non-interest income:
Service charges on deposit accounts		1,995			1,996		4,071			4,037
Card income		247			292		456			496
Other income		16,666			2,194		18,580			4,272
Total non-interest income		18,908			4,482		23,107			8,805
Non-interest expense:
Salaries and employee benefits		35,313			31,424		69,689			62,295
FDIC and other insurance expense		1,816			1,941		3,432			4,019
Occupancy expense		4,242			3,986		8,321			7,948
Software and equipment expense		4,873			4,447		9,729			8,891
Other real estate owned expense		-			5		-			13
Professional and legal services		2,364			2,414		4,466			4,504
Marketing expense		1,579			1,682		3,015			2,901
Other expense		5,131			3,547		9,096			6,873
Total non-interest expense		55,318			49,446		107,748			97,444
Income before income tax expense		46,975			18,653		75,841			41,073
Income tax expense		11,438			4,773		18,422			10,381
Net income	$	35,537		$	13,880	$	57,419		$	30,692
Basic earnings per common share	$	259.04		$	113.74	$	417.89		$	251.29
Diluted earnings per common share	$	256.32		$	112.71	$	413.60		$	249.01
Basic weighted-average shares outstanding		120,924			122,030		121,140			122,138
Diluted weighted-average shares outstanding		122,208			123,145		122,398			123,257

FARMERS & MERCHANTS BANK OF LONG BEACH
Balance Sheets (Unaudited)
(In thousands, except share and per share data)
	Jun. 30, 2026			Dec. 31, 2025
Assets
Cash and due from banks:
Noninterest-bearing balances	$	89,956		$	65,062
Interest-bearing balances		414,369			1,344,503
Total cash and due from banks		504,325			1,409,565
Securities available-for-sale, at fair value		1,328,194			839,350
Securities held-to-maturity, at amortized cost net of allowance for credit losses		3,073,883			3,266,193
Loans held for sale		599			1,447
Gross loans		6,646,799			6,076,581
Unamortized deferred loan fees, net		(12,035	)		(10,479	)
Allowance for loan losses		(83,976	)		(84,020	)
Loans, net		6,550,788			5,982,082
Investments in FHLB and FRB stock, at cost		27,703			22,262
Bank premises and equipment, net		122,923			121,894
Deferred tax assets, net		37,814			39,839
Other assets		123,863			114,428
Total assets	$	11,770,092		$	11,797,060
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposits	$	2,937,781		$	3,095,295
Interest-bearing demand deposits		1,688,420			1,751,037
Savings and money market savings		3,229,650			3,084,461
Time deposits		906,796			1,020,001
Total deposits		8,762,647			8,950,794
Securities sold under repurchase agreements		1,015,477			883,234
Borrowings		300,000			300,000
Other liabilities		55,875			56,745
Total liabilities		10,133,999			10,190,773
Stockholders' Equity:
Preferred Stock; issued 16,261 shares		190,884			190,884
Common Stock, par value $20; authorized 250,000 shares; 120,914 and 121,802 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively		2,418			2,436
Additional paid-in capital		155,793			162,243
Retained earnings		1,301,092			1,251,367
Accumulated other comprehensive loss		(14,094	)		(643	)
Total stockholders' equity		1,636,093			1,606,287
Total liabilities and stockholders' equity	$	11,770,092		$	11,797,060