Farmers & Merchants Bancorp (FMCB) Reports Strong First Quarter 2024 Earnings
- Net income of $22.7 million with a return on average assets of 1.71% and return on average equity of 16.33% in Q1 2024
- Strong liquidity position with $738.4 million in cash and $239.9 million in available-for-sale investment securities
- Total risk-based capital ratio of 14.23% and common equity tier 1 ratio of 12.75%
- Credit quality remains solid with no non-accrual loans or leases at quarter-end
- CEO pleased with strong financial performance and recognition as the 4th best performing bank in the nation for 2023 by S&P Global Market Intelligence
- None.
First Quarter 2024 Highlights
- Net income of
$22.7 million , or$30.56 per share; - Achieved return on average assets of
1.71% and return on average equity of16.33% ; - Strong liquidity position with
$738.4 million in cash,$239.9 million in available-for-sale investment securities and a borrowing capacity of$1.9 billion as of March 31, 2024; - Strengthening capital position with a total risk-based capital ratio of
14.23% , common equity tier 1 ratio of12.75% , tier 1 leverage ratio of10.85% and a tangible common equity ratio of9.68% ; - Credit quality remains solid with net recoveries of
$53,000 ; no non-accrual loans or leases at quarter-end; and a total allowance for credit losses of2.12% .
LODI, Calif., April 17, 2024 (GLOBE NEWSWIRE) -- Farmers & Merchants Bancorp (OTCQX: FMCB) (the “Company” or “FMCB”), the parent company of Farmers & Merchants Bank of Central California (the “Bank” or “F&M Bank”), reported net income of
Net income over the trailing twelve months was
CEO Commentary
Kent Steinwert, Farmers & Merchants Bancorp’s Chairman, President and Chief Executive Officer, stated, “We continue to be very pleased with the Company’s strong ongoing financial performance including the results in the first quarter of 2024 highlighted by net income of
Earnings
Net interest income for the quarter ended March 31, 2024 was
Balance Sheet
Total assets at quarter-end were
Credit Quality
The Company’s credit quality remained solid with no non-accrual loans and leases as of March 31, 2024 and a negligible delinquency ratio of only
Capital
The Company’s and Bank’s regulatory capital ratios continued to strengthen during the first quarter of 2024. At March 31, 2024, the Company’s preliminary total risk-based capital ratio was
About Farmers & Merchants Bancorp
Farmers & Merchants Bancorp, trades on the OTCQX under the symbol FMCB, is the parent company of Farmers & Merchants Bank of Central California, also known as F&M Bank. Founded in 1916, F&M Bank is a locally owned and operated community bank, which proudly serves California through 32 convenient locations. F&M Bank is financially strong, with over
In July 2023 Farmers & Merchants Bancorp was named by Bank Director’s Magazine as the #1 best performing bank in the nation across all asset categories in their annual “Ranking Banking” study of the top performing banks for 2022. The selection of Farmers & Merchants Bancorp as the best performing bank in 2022 was based on using five metrics to assess performance from data compiled by Piper Sandler & Co. using S&P Global Market Intelligence data.
Farmers & Merchants Bancorp has paid dividends for 88 consecutive years and has increased dividends for 58 consecutive years. As a result, Farmers & Merchants Bancorp is a member of a select group of only 56 publicly traded companies referred to as “Dividend Kings”, and is ranked 17th in that group based on consecutive years of dividend increases. A “Dividend King” is a stock with 50 or more consecutive years of dividend increases.
F&M Bank is the 14th largest bank lender to agriculture in the United States. F&M Bank operates in the mid-Central Valley of California including, Sacramento, San Joaquin, Solano, Stanislaus, and Merced counties and the east region of the San Francisco Bay Area, including Napa, Alameda and Contra Costa counties.
F&M Bank offers a full complement of loan, deposit, equipment leasing and treasury management products to businesses, as well as a full suite of consumer banking products. The FDIC awarded F&M Bank the highest possible rating of "Outstanding" in their 2022 Community Reinvestment Act (“CRA”) evaluation.
F&M Bank was named the “Best Community Bank in California” by Newsweek magazine, in October 2021. Newsweek’s ranking recognizes those financial institutions that best serve their customers’ needs in each state. This recognition speaks to the superior customer service the F&M Bank team members provide to its clients.
F&M Bank was inducted into the National Agriculture Science Center’s “Ag Hall of Fame” at the end of 2021 for providing resources, financial advice, guidance, and support to the agribusiness communities as well as to students in the next generation of agribusiness workforce. F&M Bank is dedicated to helping California remain the premier agricultural region in the world and will continue to work with the next generation of farmers, ranchers, and processors. F&M Bank remains committed to servicing the needs of agribusiness in California as has been the case since its founding 108 years ago.
Forward-Looking Statements
This press release may contain certain forward-looking statements that are based on management's current expectations regarding the Company’s financial performance. Forward- looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “intend,” “estimate” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could” or “may”. Forward-looking statements in this press release include, without limitation, statements regarding loan and deposit production (including any growth representations), balance sheet management, levels of net interest margin, the ability to control costs and expenses, the competitive environment, financial and regulatory policies of the United States government, water management issues in California and general economic conditions, inflation, recessions, natural disasters, pandemics, geopolitical risks, economic uncertainty in the United States, changes in interest rates, deposit flows, real estate values, costs or effects of acquisitions, competition, changes in accounting principles, policies or guidelines, legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors (including external fraud and cybersecurity threats) affecting the Company's operations, pricing, products and services. These and other important factors are detailed in the Company’s Form 10-K, Form 10- Qs, and various other securities law filings made periodically by the Company, copies of which are available from the Company’s website. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law.
For more information about Farmers & Merchants Bancorp and F&M Bank, visit fmbonline.com.
Investor Relations Contact
Farmers & Merchants Bancorp
Bart R. Olson
Executive Vice President and Chief Financial Officer
Phone: 209-367-2485
bolson@fmbonline.com
FINANCIAL HIGHLIGHTS
| Three Months Ended | ||||||||||||
| (dollars in thousands, except per share amounts) | March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||
| Earnings and Profitability: | ||||||||||||
| Interest income | $ | 66,641 | $ | 67,392 | $ | 59,632 | ||||||
| Interest expense | 14,928 | 13,592 | 3,910 | |||||||||
| Net interest income | 51,713 | 53,800 | 55,722 | |||||||||
| Provision for credit losses | - | 2,350 | 1,500 | |||||||||
| Noninterest income | 5,075 | 2,401 | 3,460 | |||||||||
| Noninterest expense | 25,521 | 24,866 | 28,183 | |||||||||
| Income before taxes | 31,267 | 28,985 | 29,499 | |||||||||
| Income tax expense | 8,544 | 7,560 | 5,952 | |||||||||
| Net income | $ | 22,723 | $ | 21,425 | $ | 23,547 | ||||||
Diluted earnings per share | $ | 30.56 | $ | 28.55 | $ | 30.80 | ||||||
| Return on average assets | 1.71 | % | 1.63 | % | 1.80 | % | ||||||
| Return on average equity | 16.33 | % | 16.54 | % | 18.93 | % | ||||||
| Loan yield | 6.09 | % | 6.10 | % | 5.69 | % | ||||||
| Cost of average total deposits - core deposits | 1.27 | % | 1.14 | % | 0.32 | % | ||||||
| Net interest margin - tax equivalent | 4.14 | % | 4.24 | % | 4.55 | % | ||||||
| Effective tax rate | 27.33 | % | 26.08 | % | 20.18 | % | ||||||
| Efficiency ratio | 44.94 | % | 44.24 | % | 47.62 | % | ||||||
| Book value per share | $ | 760.96 | $ | 735.00 | $ | 667.04 | ||||||
| Balance Sheet: | ||||||||||||
| Total assets | $ | 5,714,573 | $ | 5,308,928 | $ | 5,133,771 | ||||||
| Cash and cash equivalents | 738,397 | 410,642 | 529,593 | |||||||||
| of which held at Fed | 672,601 | 338,375 | 461,315 | |||||||||
| Total securities | 1,046,827 | 1,000,200 | 968,824 | |||||||||
| of which available for sale | 239,856 | 182,512 | 118,437 | |||||||||
| of which held to maturity | 806,971 | 817,688 | 850,387 | |||||||||
| Gross Loans | 3,706,437 | 3,665,397 | 3,437,591 | |||||||||
| Allowance for credit losses - Loans | 75,018 | 74,965 | 68,573 | |||||||||
| Total deposits | 4,959,589 | 4,668,095 | 4,539,162 | |||||||||
| Borrowings | 100,000 | - | - | |||||||||
| Subordinated debentures | 10,310 | 10,310 | 10,310 | |||||||||
| Total shareholders' equity | $ | 565,217 | $ | 549,755 | $ | 508,902 | ||||||
| Loan-to-deposit ratio | 74.73 | % | 78.52 | % | 75.73 | % | ||||||
| Percentage of checking deposits to total deposits | 49.39 | % | 51.76 | % | 55.89 | % | ||||||
| Capital ratios (Bancorp) (1) | ||||||||||||
| Common equity tier 1 capital to risk-weighted assets | 12.75 | % | 12.30 | % | 12.19 | % | ||||||
| Tier 1 capital to risk-weighted assets | 12.97 | % | 12.53 | % | 12.43 | % | ||||||
| Risk-based capital to risk-weighted assets | 14.23 | % | 13.78 | % | 13.68 | % | ||||||
| Tier 1 leverage capital ratio | 10.85 | % | 10.38 | % | 9.94 | % | ||||||
| Tangible Common Equity Ratio(2) | 9.68 | % | 10.13 | % | 9.67 | % | ||||||
| (1) Capital information is preliminary March 31, 2024 | ||||||||||||
| (2) Non-GAAP measurement | ||||||||||||
| Non-GAAP measurement reconciliation: | ||||||||||||
| (Dollars in thousands) | March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||
| Shareholders' equity | $ | 565,217 | $ | 549,755 | $ | 508,902 | ||||||
| Less: Intangible assets | 13,282 | 13,419 | 13,849 | |||||||||
| Tangible common equity | $ | 551,935 | $ | 536,336 | $ | 495,053 | ||||||
| Total Assets | $ | 5,714,573 | $ | 5,308,928 | $ | 5,133,771 | ||||||
| Less: Intangible assets | 13,282 | 13,419 | 13,849 | |||||||||
| Tangible assets | $ | 5,701,291 | $ | 5,295,509 | $ | 5,119,922 | ||||||
| Tangible common equity ratio(1) | 9.68 | % | 10.13 | % | 9.67 | % | ||||||
| (1) Tangible common equity divided by tangible assets | ||||||||||||
FAQ
What was Farmers & Merchants Bancorp's net income in the first quarter of 2024?
What were the return on average assets and return on average equity for Farmers & Merchants Bancorp in Q1 2024?
Did Farmers & Merchants Bancorp have any non-accrual loans or leases at the end of the first quarter of 2024?
What recognition did Farmers & Merchants Bancorp receive in 2023?
What was the total risk-based capital ratio for Farmers & Merchants Bancorp at the end of Q1 2024?
