Farmers & Merchants Bank of Long Beach Reports 2021 Fourth-Quarter and Full-Year Results

Rhea-AI Summary

Farmers & Merchants Bank of Long Beach (FMBL) reported a strong financial performance for 2021, ending with record total deposits of $9.24 billion and net loans of $5.37 billion. The bank's total interest income rose to $307.3 million, up from $286.3 million in 2020. Net income for 2021 increased to $115.2 million or $898.31 per diluted share, compared to $79.8 million in 2020. The Board has authorized a new $20 million stock repurchase program, reflecting confidence in the bank's long-term prospects.

Positive

• Record total deposits of $9.24 billion, up from $7.62 billion in 2020.
• Net income increased to $115.2 million, up from $79.8 million in 2020.
• Total interest income rose to $307.3 million for 2021, an increase from $286.3 million in 2020.
• Authorized a new $20 million stock repurchase program, indicating confidence in long-term outlook.

Negative

• Net interest margin decreased to 2.83% for 2021, down from 2.99% in 2020.
• Non-interest expense for 2021 was $172.6 million, slightly lower than $175.2 million in 2020.

-Board Authorizes New $20 Million Stock Repurchase Program-

LONG BEACH, Calif.--(BUSINESS WIRE)-- Farmers & Merchants Bank of Long Beach (“F&M” or the “Bank”) (OTCQB: FMBL) today reported financial results for the fourth quarter and full year ended December 31, 2021.

“Affirming the loyalty and trust of our growing client base, F&M ended what was another challenging year for our nation and our community in a position of financial strength,” said Henry Walker, president. “The Bank effectively managed through the lingering pandemic and low interest rate environment to successfully assist our clients and finish 2021 with record high total deposits, net loans and total assets.”

Income Statement

For the 2021 fourth quarter, total interest and dividend income rose to $76.0 million, from $71.6 million in the fourth quarter of 2020. Total interest and dividend income for the year ended December 31, 2021, increased to $307.3 million, from $286.3 million reported for 2020.

Interest expense for the 2021 fourth quarter declined to $2.8 million, from $4.4 million in the same period a year ago. Interest expense for 2021 was $12.2 million, versus $24.9 million in 2020.

The Bank’s net interest income before loan loss provision for the 2021 fourth quarter advanced to $73.3 million, from $67.2 million for the 2020 fourth quarter. Net interest income before loan loss provision for 2021 rose to $295.1 million, from $261.4 million in 2020.

Net interest margin for the 2021 fourth quarter was 2.67%, compared with 2.83% for the same period in 2020. F&M’s net interest margin was 2.83% for the year ended December 31, 2021, versus 2.99% in the previous year.

The Bank recorded a $1.0 million recapture of loan loss provision in the fourth quarter of 2021, compared with a $2.0 loan loss provision in the fourth quarter of 2020. For the full 2021 year, there was no loan loss provision, compared to $10.5 million of loan loss provision in 2020. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.34% at December 31, 2021, equal to that at December 31, 2020.

Non-interest income increased to $6.5 million for the 2021 fourth quarter, from $6.0 million for the comparable period last year. Non-interest income for 2021 rose to $22.0 million, from $20.5 million in 2020.

Non-interest expense for the 2021 fourth quarter was $45.2 million, equal to that for the same period last year. Non-interest expense for the year ended December 31, 2021, was $172.6 million, versus $175.2 million last year.

The Bank’s net income for the 2021 fourth quarter increased to $29.0 million, or $226.02 per diluted share, from $21.4 million, or $167.49 per diluted share, for the 2020 fourth quarter. The Bank’s net income for the full year 2021 rose to $115.2 million, or $898.31 per diluted share, from $79.8 million, or $622.74 per diluted share, for 2020.

Balance Sheet

At December 31, 2021, net loans increased to $5.37 billion, from $5.33 billion at December 31, 2020. The Bank’s deposits grew to $9.24 billion at the end of 2021, from $7.62 billion a year ago. Non-interest-bearing deposits represented 38.4% of total deposits at December 31, 2021, versus 37.9% of total deposits at the end of 2020. Total assets advanced to $11.44 billion at the close of 2021 from $9.87 billion at December 31, 2020.

Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories at December 31, 2021, with a total risk-based capital ratio of 18.63%, a tier 1 risk-based capital ratio of 17.54%, a common equity tier 1 capital ratio of 17.54%, and a tier 1 leverage ratio of 10.88%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.

“The Bank performed well in 2021, as we navigated the ongoing dual pressures of the pandemic and general economic environment,” said Daniel Walker, chief executive officer and chairman of the board. “The F&M team showcased our ability to make prudent business decisions and achieve positive outcomes. Moving forward in 2022, empathy and understanding will remain hallmarks that are embedded in all of our client interactions, whether in-person or on a screen.”

Stock Repurchase Program

Reflecting the Board of Directors confidence in the long-term outlook for the Bank, Farmers & Merchants Bank also announced today that the Board has authorized a new $20 million stock repurchase program, authorizing the Bank to repurchase of up to $20 million of the Bank’s common stock from time to time through December 31, 2023.

Under the new stock repurchase program, the Bank may 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 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. The new stock repurchase program does not obligate the Bank to repurchase any specific number of shares in any particular period.

During 2021, the Bank repurchased a total of 989 shares of its common stock at an average price of $8,152.22 per share, pursuant to a prior stock repurchase program that expired December 31, 2021. No shares were repurchased as part of that program during the fourth quarter of 2021.

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 its 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 December 31,							Twelve Months Ended December 31,
	2021				2020			2021			2020
Interest and dividend income:
Loans	$	58,534			$	58,780		$	244,062		$	226,663
Investment securities		16,569				12,345			60,444			57,181
Investments in FHLB and FRB stock		347				261			1,206			1,040
Interest-bearing deposits in financial institutions		566				235			1,578			1,381
Total interest and dividend income		76,016				71,621			307,290			286,265
Interest expense:
Deposits		2,068				3,119			8,952			17,028
Securities sold under repurchase agreements		697				1,291			3,280			7,856
Total interest expense		2,765				4,410			12,232			24,884
Net interest income		73,251				67,211			295,058			261,381
Provision for loan losses		(1,000	)			2,000			-			10,500
Net interest income after provision for loan losses		74,251				65,211			295,058			250,881
Non-interest income:
Service charges on deposit accounts		1,489				1,271			5,602			5,193
Card income		1,644				1,057			4,007			3,370
Other income		3,330				3,711			12,421			11,940
Total non-interest income		6,463				6,039			22,030			20,503
Non-interest expense:
Salaries and employee benefits		28,614				28,834			111,046			111,485
FDIC and other insurance expense		969				756			3,614			2,611
Occupancy expense		3,639				3,520			14,004			14,236
Software and equipment expense		3,823				4,741			14,254			14,046
Professional and legal services		1,720				1,589			6,070			6,009
Marketing expense		1,438				966			4,957			5,126
Other expense		4,958				4,780			18,618			21,681
Total non-interest expense		45,161				45,186			172,563			175,194
Income before income tax expense		35,553				26,064			144,525			96,190
Income tax expense		6,575				4,700			29,320			16,389
Net income	$	28,978			$	21,364		$	115,205		$	79,801
Basic earnings per common share	$	230.66			$	168.12		$	913.60		$	623.42
Diluted earnings per common share	$	226.02			$	167.49		$	898.31		$	622.74
Basic weighted-average shares outstanding		125,628				127,081			126,100			128,006
Diluted weighted-average shares outstanding		128,206				127,552			128,246			128,146

FARMERS & MERCHANTS BANK OF LONG BEACH
Balance Sheets (Unaudited)
(In thousands, except share and per share data)
		Dec. 31, 2021				Dec. 31, 2020
Assets
Cash and due from banks:
Noninterest-bearing balances	$	49,025			$	72,109
Interest-bearing balances		1,252,646				939,566
Total cash and due from banks		1,301,671				1,011,675
Securities available-for-sale, at fair value		139,947				137,373
Securities held-to-maturity, at amortized cost		4,366,821				3,131,213
Loans held for sale		9,430				22,893
Gross loans		5,453,279				5,414,814
Allowance for loan losses		(72,880	)			(72,267	)
Unamortized deferred loan fees, net		(8,650	)			(15,747	)
Loans, net		5,371,749				5,326,800
Other real estate owned, net		966				966
Investments in FHLB and FRB stock, at cost		20,031				20,257
Bank premises and equipment, net		115,827				103,615
Deferred tax assets, net		27,939				26,489
Other assets		83,879				90,497
Total assets	$	11,438,260			$	9,871,778
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposits	$	3,552,248			$	2,889,012
Interest-bearing demand deposits		2,187,998				1,788,133
Savings and money market savings		2,755,862				2,129,755
Time deposits		745,382				810,726
Total deposits		9,241,490				7,617,626
Securities sold under repurchase agreements		916,672				1,062,348
Other liabilities		38,536				47,962
Total liabilities		10,196,698				8,727,936
Stockholders' Equity:
Common Stock, par value $20; authorized 250,000
125,628 and 126,617 shares issued and outstanding
at December 31, 2021 and 2020, respectively		2,513				2,532
Additional paid-in capital		89,972				90,516
Retained earnings		1,147,661				1,047,949
Accumulated other comprehensive income		1,416				2,845
Total stockholders' equity		1,241,562				1,143,842
Total liabilities and stockholders' equity	$	11,438,260			$	9,871,778

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220124005161/en/

John Hinrichs

Executive Vice President

562-437-0011, ext. 5035

Roger Pondel

PondelWilkinson Inc.

Investor Relations

310-279-5965

investor@pondel.com

Source: Farmers & Merchants Bank of Long Beach

FAQ

What are the financial highlights for Farmers & Merchants Bank (FMBL) in 2021?

In 2021, Farmers & Merchants Bank reported a net income of $115.2 million and record total deposits of $9.24 billion.

What is the new stock repurchase program for FMBL?

Farmers & Merchants Bank authorized a $20 million stock repurchase program to be executed through December 31, 2023.

How much did FMBL's total interest income rise in 2021?

Total interest income for FMBL rose to $307.3 million in 2021, up from $286.3 million in 2020.

What was the net interest margin for FMBL in 2021?

The net interest margin for Farmers & Merchants Bank was 2.83% for 2021, down from 2.99% in 2020.

Did FMBL incur a loan loss provision in 2021?

Farmers & Merchants Bank did not incur any loan loss provision in 2021, compared to $10.5 million in 2020.