Farmers & Merchants Bank of Long Beach Reports 2022 First-Quarter Results

Rhea-AI Summary

Farmers & Merchants Bank of Long Beach (FMBL) reported strong first-quarter 2022 results, reinforcing its financial stability amid challenging economic conditions. Net income rose to $27.8 million, or $217.02 per diluted share, up from $25.3 million in Q1 2021. Total assets reached a record of $11.67 billion, with total deposits increasing to $9.36 billion. The bank’s net interest income was $72.6 million, a growth from $70.5 million. A loan loss provision recapture of $1.0 million was noted, alongside a solid capital position with a total risk-based capital ratio of 18.67%.

Positive

• Net income increased to $27.8 million, or $217.02 per diluted share, from $25.3 million a year ago.
• Total assets grew to a record $11.67 billion, an increase from $11.44 billion.
• Total deposits rose to $9.36 billion, up from $9.24 billion.
• Net interest income increased to $72.6 million, compared to $70.5 million in Q1 2021.
• Loan loss provision recapture of $1.0 million compared to $2.0 million provision last year.
• The bank remained well-capitalized with a total risk-based capital ratio of 18.67%.

Negative

• Net interest margin decreased to 2.60% from 2.87% year-over-year.
• Non-interest expense increased to $43.7 million from $41.9 million in the previous year.

LONG BEACH, Calif.--(BUSINESS WIRE)-- Farmers & Merchants Bank of Long Beach (“F&M” or the “Bank”) (OTCQB: FMBL) today reported financial results for the quarter ended March 31, 2022.

“F&M performed well for the first quarter of 2022, notwithstanding the rigors of a challenging economic climate, characterized by low interest rates, geopolitical uncertainty and the lingering effects of the pandemic,” said Henry Walker, president of Farmers & Merchants Bank of Long Beach. “We are pleased that core deposits continued to grow, as did our total assets, both of which attained record highs.”

Income Statement

For the three months ended March 31, 2022, interest and dividend income rose to $75.3 million from $73.9 million a year ago. Interest expense for the 2022 first quarter decreased to $2.7 million from $3.4 million in the same period last year.

Farmers & Merchants’ net interest income for the 2022 first quarter increased to $72.6 million from $70.5 million for the first quarter of 2021. Net interest margin was 2.60% for the 2022 first quarter, compared with 2.87% for the same period last year.

The Bank recorded a $1.0 million recapture of loan loss provision in the 2022 first quarter, compared with a $2.0 million loan loss provision in the first quarter of 2021. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.31% at March 31, 2022, compared with 1.32% at March 31, 2021.

Non-interest income was $5.1 million for the 2022 first quarter, equal to that for the 2021 first quarter. Non-interest expense for the 2022 first quarter was $43.7 million, versus $41.9 million for the same period last year.

The Bank’s net income for the 2022 first quarter advanced to $27.8 million, or $217.02 per diluted share, from $25.3 million, or $197.51 per diluted share, in the 2021 first quarter.

Balance Sheet

At March 31, 2022, net loans totaled $5.40 billion, compared with $5.37 billion at December 31, 2021. The Bank’s total deposits rose to $9.36 billion at the end of the 2022 first quarter, up from $9.24 billion at December 31, 2021. Non-interest-bearing deposits represented 38.4% of total deposits at March 31, 2022, which is the same as at December 31, 2021. Total assets grew to a record $11.67 billion at the close of the 2022 first quarter from $11.44 billion at December 31, 2021.

At March 31, 2022, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 18.67%, a tier 1 risk-based capital ratio of 17.63%, a common equity tier 1 capital ratio of 17.63%, and a tier 1 leverage ratio of 10.91%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.

“The positive first quarter results continued to demonstrate the Bank’s financial strength, as well as the dedication of our hard-working team that is so attentive to meeting clients’ needs,” said Daniel Walker, chief executive officer and chairman of the board. “It is gratifying that our client relationships continue to grow, in part reflecting the flight to safety experienced during the peak pandemic period, when we were able to assist businesses and consumers in their time of need. Today, we extend our thoughts and prayers to the Ukrainian citizens who are enduring a humanitarian horror that is evoking new global economic stress. Over the past 115+ years, the Bank has weathered the effects of many wars and economic cycles and will continue to serve all of our stakeholders well.”

During the first quarter of 2022, the Bank repurchased 309 shares of its common stock at an average price of $8,210.21 per share, pursuant to a stock repurchase program announced in January 2022, under which the board of directors authorized the repurchase of up to $20 million of the Bank’s common stock. To the extent the Bank repurchases additional shares under this program, which expires December 31, 2023, the timing and number of shares repurchased will depend on a variety of factors, including, but not limited to, stock price, trading volume, regulatory requirements, general business conditions and others. The Bank may choose to modify, suspend, or discontinue such proposed repurchases at any time without prior notice, and the share repurchase program does not obligate the Bank to acquire any specific number of shares in any period.

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 from San Clemente to 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 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,
	2022				2021
Interest and dividend income:
Loans	$	55,719			$	60,273
Investment securities		18,669				13,075
Investments in FHLB and FRB stock		272				262
Interest-bearing deposits in financial institutions		596				257
Total interest and dividend income		75,256				73,867
Interest expense:
Deposits		1,987				2,494
Securities sold under repurchase agreements		678				893
Total interest expense		2,665				3,387
Net interest income		72,591				70,480
Provision for loan losses		(1,000	)			2,000
Net interest income after provision for loan losses		73,591				68,480
Non-interest income:
Service charges on deposit accounts		1,535				1,325
Card income		970				573
Other income		2,568				3,198
Total non-interest income		5,073				5,096
Non-interest expense:
Salaries and employee benefits		29,110				27,878
FDIC and other insurance expense		1,000				853
Occupancy expense		3,548				3,254
Software and equipment expense		3,642				3,535
Professional and legal services		1,465				1,340
Marketing expense		1,021				679
Other expense		3,889				4,335
Total non-interest expense		43,675				41,874
Income before income tax expense		34,989				31,702
Income tax expense		7,154				6,427
Net income	$	27,835			$	25,275
Basic earnings per common share	$	221.65			$	199.64
Diluted earnings per common share	$	217.02			$	197.51
Basic weighted-average shares outstanding		125,581				126,607
Diluted weighted-average shares outstanding		128,256				127,970

FARMERS & MERCHANTS BANK OF LONG BEACH
Balance Sheets (Unaudited)
(In thousands, except share and per share data)
		Mar. 31, 2022			Dec. 31, 2021
Assets
Cash and due from banks:
Noninterest-bearing balances	$	75,121		$	49,025
Interest-bearing balances		1,103,691			1,252,646
Total cash and due from banks		1,178,812			1,301,671
Securities available-for-sale, at fair value		131,088			139,947
Securities held-to-maturity, at amortized cost		4,721,132			4,366,821
Loans held for sale		8,592			9,430
Gross loans		5,476,293			5,453,279
Allowance for loan losses		(71,895	)		(72,880	)
Unamortized deferred loan fees, net		(7,573	)		(8,650	)
Loans, net		5,396,825			5,371,749
Other real estate owned, net		966			966
Investments in FHLB and FRB stock, at cost		20,025			20,031
Bank premises and equipment, net		114,453			115,827
Deferred tax assets, net		27,747			27,939
Other assets		73,753			83,879
Total assets	$	11,673,393		$	11,438,260
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposits	$	3,597,306		$	3,552,248
Interest-bearing demand deposits		2,268,861			2,187,998
Savings and money market savings		2,784,355			2,755,862
Time deposits		708,645			745,382
Total deposits		9,359,167			9,241,490
Securities sold under repurchase agreements		1,023,291			916,672
Other liabilities		31,666			38,536
Total liabilities		10,414,124			10,196,698
Stockholders' Equity:
Common Stock, par value $20; authorized 250,000 shares;
125,319 and 125,628 shares issued and outstanding
at March 31, 2022 and December 31, 2021, respectively		2,506			2,513
Additional paid-in capital		88,845			89,972
Retained earnings		1,171,982			1,147,661
Accumulated other comprehensive income		(4,064	)		1,416
Total stockholders' equity		1,259,269			1,241,562
Total liabilities and stockholders' equity	$	11,673,393		$	11,438,260

 

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John Hinrichs

Executive Vice President

562-437-0011, ext. 4835

Roger Pondel

PondelWilkinson Inc.

Investor Relations

310-279-5980

investor@pondel.com

Source: Farmers & Merchants Bank of Long Beach

FAQ

What were the financial results for Farmers & Merchants Bank of Long Beach for Q1 2022?

Farmers & Merchants Bank reported a net income of $27.8 million for Q1 2022, an increase from $25.3 million in Q1 2021.

How did Farmers & Merchants Bank’s total assets change in Q1 2022?

Total assets rose to a record $11.67 billion at the end of Q1 2022, compared to $11.44 billion at the end of Q4 2021.

What was the net interest income for Farmers & Merchants Bank in Q1 2022?

Net interest income increased to $72.6 million in Q1 2022, up from $70.5 million in the same quarter last year.

What is Farmers & Merchants Bank’s total risk-based capital ratio as of March 31, 2022?

The total risk-based capital ratio for Farmers & Merchants Bank was 18.67% as of March 31, 2022.

Did Farmers & Merchants Bank repurchase shares during Q1 2022?

Yes, the Bank repurchased 309 shares of its common stock at an average price of $8,210.21 per share.