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

Rhea-AI Summary

Farmers & Merchants Bank of Long Beach (OTCQX: FMBL) reported strong financial results for Q2 and the first half of 2022, with total assets rising to $11.73 billion and net loans increasing to $5.78 billion. Total interest income grew to $81.2 million, while net income for Q2 reached $29.1 million, or $228.51 per diluted share. However, net interest margin decreased to 2.76% from 2.96% year-over-year. Non-interest income also declined, totaling $4.7 million. The bank repurchased shares under its stock buyback program, enhancing shareholder value amidst economic uncertainties.

Positive

• Total assets increased to $11.73 billion, up from $11.44 billion.
• Net loans rose to $5.78 billion, compared to $5.37 billion.
• Net interest income grew to $78.1 million from $74.7 million.
• Net income for Q2 was $29.1 million, slightly down from $30.4 million, but overall strong performance.
• Share buyback program continues, with 1,661 shares repurchased year to date.

Negative

• Net interest margin declined to 2.76% from 2.96% year-over-year.
• Total non-interest income decreased to $4.7 million from $5.4 million.

LONG BEACH, Calif.--(BUSINESS WIRE)-- Farmers & Merchants Bank of Long Beach (OTCQX: FMBL) today reported financial results for the second quarter and six-months ended June 30, 2022.

“Results for the 2022 second quarter demonstrated F&M’s financial strength during a period of inflationary pressures, rising interest rates and geopolitical uncertainty,” said Henry Walker, president of Farmers & Merchants Bank of Long Beach. “Total assets, total deposits and net loans increased over the comparable prior year period, with all capital ratios far exceeding minimum requirements.”

Income Statement

For the three months ended June 30, 2022, total interest and dividend income rose to $81.2 million from $77.8 million in the second quarter of 2021. Total interest and dividend income for the first half of 2022 increased to $156.4 million from $151.6 million reported for the first half of 2021.

Total interest expense for the 2022 second quarter was $3.0 million, compared with $3.1 million in the second quarter of 2021. Interest expense for the first half of 2022 was $5.7 million, versus $6.5 million reported for the corresponding period last year.

Net interest income for the 2022 second quarter advanced to $78.1 million from $74.7 million for the second quarter of 2021. Net interest income for the first half of 2022 increased to $150.7 million from $145.2 million for the six months ended June 30, 2021.

Net interest margin was 2.76% for the 2022 second quarter, versus 2.96% in the 2021 second quarter. Net interest margin was 2.69% for the first half of 2022, compared with 2.91% for the same period in 2021.

The Bank had no provision for loan losses in both the second quarter of 2022 and 2021. For the first half of 2022, the Bank recorded a $1.0 million recapture of loan loss provision, compared with a $2.0 million loan loss provision for the corresponding period of 2021. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.23% at June 30, 2022, compared with 1.36% at December 31, 2021.

Total non-interest income was $4.7 million for the 2022 second quarter, compared with $5.4 million for the same period a year ago. In the first half of 2022, total non-interest income was $9.8 million, compared with $10.5 million for the six months ended June 30, 2021.

Total non-interest expense for the 2022 second quarter was $46.9 million, compared with $41.4 million for the same period last year. Non-interest expense for the first half of 2022 was $90.6 million, compared with $83.3 million for the first half of 2021.

Net income for the 2022 second quarter was $29.1 million, or $228.51 per diluted share, compared with $30.4 million, or $236.95 per diluted share, for the 2021 second quarter. Net income for the first half of 2022 was $56.9 million, or $445.33 per diluted share, compared with $55.7 million, or $434.39 per diluted share, for the six months ended June 30, 2021.

Balance Sheet

At June 30, 2022, net loans increased to $5.78 billion from $5.37 billion at December 31, 2021. The Bank’s deposits rose to $9.46 billion at the end of the 2022 second quarter from $9.24 billion at December 31, 2021.

Non-interest-bearing deposits represented 37.9% of total deposits at June 30, 2022, versus 38.4% of total deposits at December 31, 2021. Total assets increased to $11.73 billion at the close of the 2022 second quarter from $11.44 billion at December 31, 2021.

At June 30, 2022, Farmers & Merchants Bank’s total risk-based capital ratio was 17.07%; its tier 1 risk-based capital ratio was 16.13%, with a common equity tier 1 capital ratio of 16.13%, and a tier 1 leverage ratio of 10.94%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.

During the 2022 second quarter, the Bank repurchased 1,352 shares of its common stock at an average price of $8,184.60 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. Year to date, the Bank repurchased a total of 1,661 shares of its common stock at an average price of $8,189.37 per share. 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.

“F&M’s core performance measures continue to be strong, as we proceed into the second half of 2022,” said Daniel Walker, chief executive officer and chairman of the board. “We are particularly proud of our net loan growth during the first six months of this year, based, in part, on deep relationships with existing clients and our ability to serve new clients. While our nation and the communities we serve face economic headwinds, the Bank’s balance sheet remains strong. F&M stands ready and able to continue to serve the needs of our business and consumer clients as we have through many challenging business cycles during the past 114 years. As always, I thank our team for their hard work, dedication and for all they do for the Bank and for our growing base of valued clients.”

About Farmers & Merchants Bank of Long Beach

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 June 30,						Six Months Ended June 30,
	2022			2021			2022				2021
Interest and dividend income:
Loans	$	57,048		$	62,291		$	112,767			$	122,564
Investment securities		22,219			14,924			40,888				27,999
Investments in FHLB and FRB stock		286			298			558				560
Interest-bearing deposits in financial institutions		1,613			256			2,209				513
Total interest and dividend income		81,166			77,769			156,422				151,636
Interest expense:
Deposits		2,042			2,253			4,029				4,747
Securities sold under repurchase agreements		997			842			1,675				1,735
Total interest expense		3,039			3,095			5,704				6,482
Net interest income		78,127			74,674			150,718				145,154
Provision for loan losses		-			-			(1,000	)			2,000
Net interest income after provision for loan losses		78,127			74,674			151,718				143,154
Non-interest income:
Service charges on deposit accounts		1,565			1,361			3,100				2,686
Card income		1,074			835			2,044				1,408
Other income		2,097			3,167			4,665				6,365
Total non-interest income		4,736			5,363			9,809				10,459
Non-interest expense:
Salaries and employee benefits		29,437			26,852			58,547				54,730
FDIC and other insurance expense		1,014			861			2,014				1,714
Occupancy expense		3,853			3,444			7,401				6,698
Software and equipment expense		3,771			3,449			7,413				6,984
Professional and legal services		1,962			1,412			3,427				2,752
Marketing expense		2,196			1,111			3,217				1,790
Other expense		4,688			4,317			8,577				8,652
Total non-interest expense		46,921			41,446			90,596				83,320
Income before income tax expense		35,942			38,591			70,931				70,293
Income tax expense		6,853			8,160			14,007				14,587
Net income	$	29,089		$	30,431		$	56,924			$	55,706
Basic earnings per common share	$	233.52		$	240.92		$	455.13			$	440.51
Diluted earnings per common share	$	228.51		$	236.95		$	445.33			$	434.39
Basic weighted-average shares outstanding		124,566			126,309			125,071				126,457
Diluted weighted-average shares outstanding		127,297			128,424			127,823				128,239

FARMERS & MERCHANTS BANK OF LONG BEACH
Balance Sheets (Unaudited)
(In thousands, except share and per share data)
		June 30, 2022				Dec. 31, 2021
Assets
Cash and due from banks:
Noninterest-bearing balances		$	78,412			$	49,025
Interest-bearing balances			417,706				1,252,646
Total cash and due from banks			496,118				1,301,671
Securities available-for-sale, at fair value			122,565				139,947
Securities held-to-maturity, at amortized cost			5,027,557				4,366,821
Loans held for sale			-				9,430
Gross loans			5,862,844				5,453,279
Allowance for loan losses			(71,801	)			(72,880	)
Unamortized deferred loan fees, net			(8,873	)			(8,650	)
Loans, net			5,782,170				5,371,749
Other real estate owned, net			966				966
Investments in FHLB and FRB stock, at cost			19,991				20,031
Bank premises and equipment, net			114,616				115,827
Deferred tax assets, net			28,495				27,939
Other assets			139,483				83,879
Total assets		$	11,731,961			$	11,438,260
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposits		$	3,588,427			$	3,552,248
Interest-bearing demand deposits			2,410,227				2,187,998
Savings and money market savings			2,776,544				2,755,862
Time deposits			686,669				745,382
Total deposits			9,461,867				9,241,490
Securities sold under repurchase agreements			905,927				916,672
Other liabilities			88,523				38,536
Total liabilities			10,456,317				10,196,698
Stockholders' Equity:
Common Stock, par value $20; authorized 250,000
124,276 and 125,628 shares issued and outstanding
at June 30, 2022 and December 31, 2021, respectively			2,485				2,513
Additional paid-in capital			82,196				89,972
Retained earnings			1,197,586				1,147,661
Accumulated other comprehensive (loss) income			(6,623	)			1,416
Total stockholders' equity			1,275,644				1,241,562
Total liabilities and stockholders' equity		$	11,731,961			$	11,438,260

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220714005265/en/

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 Farmers & Merchants Bank's earnings for Q2 2022?

Farmers & Merchants Bank reported a net income of $29.1 million for Q2 2022.

How much did total assets increase for FMBL in the first half of 2022?

Total assets increased to $11.73 billion as of June 30, 2022.

What is the current net interest margin for Farmers & Merchants Bank?

The net interest margin is currently 2.76% for Q2 2022.

How many shares has FMBL repurchased in 2022?

Farmers & Merchants Bank has repurchased 1,661 shares year to date.

What was the total interest income for FMBL in the first half of 2022?

Total interest income for the first half of 2022 was $156.4 million.