Farmers & Merchants Bank of Long Beach Reports 2021 Second-Quarter Results

Rhea-AI Summary

Farmers & Merchants Bank of Long Beach (OTCQB: FMBL) announced strong financial results for Q2 2021, with total assets reaching $10.68 billion, a rise from $9.87 billion a year prior. Total deposits increased to $8.37 billion, driven by a flight to safety amid low interest rates. The bank reported net income of $30.4 million for Q2, up from $20.6 million in 2020, and net interest income also rose to $74.7 million. No provision for loan losses was required in Q2 2021, contrasting with $4.7 million in Q2 2020, signaling financial stability.

Positive

• Net income rose to $30.4 million in Q2 2021, compared to $20.6 million in Q2 2020.
• Total assets increased to $10.68 billion, up from $9.87 billion year-over-year.
• Total deposits grew to $8.37 billion, indicating a strong inflow of funds.
• Net interest income for Q2 2021 was $74.7 million, an increase from $68.0 million in Q2 2020.
• No provision for loan losses in Q2 2021, compared to $4.7 million in Q2 2020.

Negative

• Net interest margin decreased to 2.96% in Q2 2021 from 3.13% in Q2 2020.
• Total non-interest expense was $41.4 million for Q2 2021, slightly down from $42.6 million in Q2 2020.

Farmers & Merchants Bank of Long Beach (OTCQB: FMBL) today reported financial results for the second quarter and six-months ended June 30, 2021.

“F&M again achieved growth in key measurements of performance for the second quarter of 2021,” said Henry Walker, president. “Total assets, total deposits, net loans and net income all increased over the prior year period. The Bank’s performance demonstrated resiliency during the protracted low interest rate environment, as well as the outstanding work our entire team is doing to serve and attract increasing numbers of business and individual clients.”

Income Statement

For the three months ended June 30, 2021, total interest and dividend income rose to $77.8 million from $74.7 million in the second quarter of 2020. Total interest and dividend income for the first half of 2021 increased to $151.6 million from $143.9 million reported for the first half of 2020.

Total interest expense for the 2021 second quarter was $3.1 million, compared with $6.7 million in the second quarter of 2020. Interest expense for the first half of 2021 was $6.5 million, versus $14.7 million reported for the corresponding period last year.

Net interest income for the 2021 second quarter advanced to $74.7 million from $68.0 million for the second quarter of 2020, with the increase primarily reflecting the recognition of net loan fees and interest income from Paycheck Protection Program (PPP) loans. Net interest income for the first half of 2021 increased to $145.2 million from $129.2 million for the six months ended June 30, 2020.

Net interest margin was 2.96% for the 2021 second quarter, versus 3.13% in the 2020 second quarter. Net interest margin was 2.91% for the first half of 2021, compared with 3.20% for the same period in 2020.

The Bank had no provision for loan losses in the second quarter of 2021, compared with $4.7 million for loan losses in the second quarter of 2020. For the first half of 2021, the provision for loan losses was $2.0 million, compared with $5.5 million in the corresponding period last year. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.36% at June 30, 2021, compared with 1.34% at December 31, 2020.

Total non-interest income was $5.4 million for the 2021 second quarter, compared with $4.3 million for the same period a year ago. In the first half of 2021, total non-interest income was $10.5 million, compared with $8.9 million for the six months ended June 30, 2020.

Total non-interest expense for the 2021 second quarter was $41.4 million, compared with $42.6 million for the same period last year. Non-interest expense for the first half of 2021 was $83.3 million, compared with $86.2 million for the first half of 2020.

Net income for the 2021 second quarter was $30.4 million, or $236.95 per diluted share, compared with $20.6 million, or $160.52 per diluted share, for the 2020 second quarter. Net income for the first half of 2021 was $55.7 million, or $434.39 per diluted share, compared with $38.6 million, or $300.12 per diluted share, for the six months ended June 30, 2020.

Balance Sheet

At June 30, 2021, net loans increased to $5.36 billion from $5.33 billion at December 31, 2020. The Bank’s deposits rose to $8.37 billion at the end of the 2021 second quarter from $7.62 billion at December 31, 2020, continuing, in part, to reflect a general flight to safety, as well as funding of PPP loans.

Non-interest-bearing deposits represented 39.0% of total deposits at June 30, 2021, versus 37.9% of total deposits at December 31, 2020. Total assets increased to $10.68 billion at the close of the 2021 second quarter from $9.87 billion at December 31, 2020.

At June 30, 2021, Farmers & Merchants Bank’s total risk-based capital ratio was 18.96%; its tier 1 risk-based capital ratio was 17.78%, with a common equity tier 1 capital ratio of 17.78%, and a tier 1 leverage ratio of 11.93%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.

“F&M’s growth over the past 113-plus years has been built on a culture of relationships during good as well as challenging times, serving businesses and individuals and enriching lives,” said Daniel Walker, chief executive officer and chairman of the board. “Through it all, we are unwavering in our mandate to maintain conservative fiscal policies, with strong capital ratios that exceed requirements. We had an excellent first half of 2021, thanks to our hard-working, talented F&M team and our loyal clients throughout the communities we serve.”

As announced in April 2020, the board of directors authorized the repurchase up to $20 million of the Bank’s common stock as part of a stock repurchase program that expires on December 31, 2021. As part of this program, the Bank repurchased 370 shares of its common stock during the second quarter of the current fiscal year at an average price of $8,179.75 per share. Year to date, the Bank repurchased a total of 509 shares of its common stock at an average price of $8,052.81 per share. To the extent the Bank repurchases additional shares pursuant to this program, 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 anticipates that any such repurchases will be funded from existing cash and cash equivalents or future cash flow. The share repurchase program does not obligate the Bank to acquire any specific number of shares in any period.

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 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 June 30,						Six Months Ended June 30,
		2021			2020			2021			2020
Interest and dividend income:
Loans		$	62,291		$	59,020		$	122,564		$	110,345
Investment securities			14,924			15,345			27,999			32,090
Investments in FHLB and FRB stock			298			171			560			519
Interest-bearing deposits in financial institutions			256			211			513			939
Total interest and dividend income			77,769			74,747			151,636			143,893
Interest expense:
Deposits			2,253			4,452			4,747			10,142
Securities sold under repurchase agreements			842			2,253			1,735			4,553
Total interest expense			3,095			6,705			6,482			14,695
Net interest income			74,674			68,042			145,154			129,198
Provision for loan losses			-			4,700			2,000			5,500
Net interest income after provision for loan losses			74,674			63,342			143,154			123,698
Non-interest income:
Service charges on deposit accounts			1,361			1,192			2,686			2,719
Card income			835			578			1,408			1,448
Other income			3,167			2,531			6,365			4,771
Total non-interest income			5,363			4,301			10,459			8,938
Non-interest expense:
Salaries and employee benefits			26,852			27,715			54,730			55,416
FDIC and other insurance expense			861			738			1,714			1,183
Occupancy expense			3,444			3,561			6,698			6,894
Software and equipment expense			3,449			3,579			6,984			6,898
Other real estate owned expense			7			-			20			-
Professional and legal services			1,412			1,663			2,752			2,824
Marketing expense			1,111			1,155			1,790			2,923
Other expense			4,310			4,143			8,632			10,056
Total non-interest expense			41,446			42,554			83,320			86,194
Income before income tax expense			38,591			25,089			70,293			46,442
Income tax expense			8,160			4,459			14,587			7,868
Net income		$	30,431		$	20,630		$	55,706		$	38,574
Basic earnings per common share		$	240.92		$	160.53		$	440.51		$	300.15
Diluted earnings per common share		$	236.95		$	160.52		$	434.39		$	300.12
Basic weighted-average shares outstanding			126,309			128,508			126,457			128,518
Diluted weighted-average shares outstanding			128,424			128,521			128,239			128,531

FARMERS & MERCHANTS BANK OF LONG BEACH
Balance Sheets (Unaudited)
(In thousands, except share and per share data)
			June 30, 2021			Dec. 31, 2020
Assets
Cash and due from banks:
Noninterest-bearing balances		$	73,903		$	72,109
Interest-bearing balances			937,358			939,566
Total cash and due from banks			1,011,261			1,011,675
Securities available-for-sale, at fair value			147,402			137,373
Securities held-to-maturity, at amortized cost			3,899,259			3,131,213
Loans held for sale			15,896			22,893
Gross loans			5,455,970			5,414,814
Allowance for loan losses			(74,172)			(72,267)
Unamortized deferred loan fees, net			(18,157)			(15,747)
Loans, net			5,363,641			5,326,800
Other real estate owned, net			966			966
Investments in FHLB and FRB stock, at cost			20,042			20,257
Bank premises and equipment, net			103,313			103,615
Deferred tax assets, net			28,691			26,489
Other assets			93,676			90,497
Total assets		$	10,684,147		$	9,871,778
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposits		$	3,263,345		$	2,889,012
Interest-bearing demand deposits			2,001,944			1,788,133
Savings and money market savings			2,307,252			2,129,755
Time deposits			799,430			810,726
Total deposits			8,371,971			7,617,626
Securities sold under repurchase agreements			1,080,453			1,062,348
Other liabilities			40,183			47,962
Total liabilities			9,492,607			8,727,936
Stockholders' Equity:
Common Stock, par value $20; authorized 250,000
126,108 and 126,617 shares issued and outstanding
at June 30, 2021 and December 31, 2020. respectively			2,522			2,532
Additional paid-in capital			90,176			90,516
Retained earnings			1,096,830			1,047,949
Accumulated other comprehensive income			2,012			2,845
Total stockholders' equity			1,191,540			1,143,842
Total liabilities and stockholders' equity		$	10,684,147		$	9,871,778

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210714005249/en/

FAQ

What were the financial results for FMBL in Q2 2021?

Farmers & Merchants Bank reported a net income of $30.4 million for Q2 2021, an increase from $20.6 million in Q2 2020.

How did total assets change for FMBL from 2020 to 2021?

Total assets for FMBL rose to $10.68 billion in Q2 2021, up from $9.87 billion in Q2 2020.

What is the current net interest margin for FMBL?

FMBL's net interest margin for Q2 2021 decreased to 2.96%, down from 3.13% in Q2 2020.

How did total deposits perform for FMBL in 2021?

Total deposits for FMBL increased to $8.37 billion in Q2 2021, reflecting strong inflows.

What was the status of loan losses for FMBL in Q2 2021?

FMBL had no provision for loan losses in Q2 2021, compared to $4.7 million in Q2 2020.