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FARMERS & MERCHANTS BANK OF LONG BEACH

(FMBL)
  Report
Delayed OTC Markets  -  12:30:55 2023-02-06 pm EST
7165.01 USD   -0.07%
01/23Farmers & Merchants Bank of Long Beach Reports 2022 Fourth-Quarter and Full-Year Results
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01/23Farmers & Merchants Bank of Long Beach Reports Earnings Results for the Full Year Ended December 31, 2022
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01/23Farmers & Merchants Bank of Long Beach Reports Earnings Results for the Fourth Quarter Ended December 31, 2022
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Farmers & Merchants Bank of Long Beach Reports 2022 Third Quarter Results

10/17/2022 | 08:11am EST

Farmers & Merchants Bank of Long Beach (“F&M” or the “Bank”) (OTCQX: FMBL) today reported financial results for the third quarter ended September 30, 2022.

“Farmers & Merchants Bank of Long Beach demonstrated its ongoing commitment to client relationships during the 2022 third quarter, as the banking sector faced a challenging external environment, characterized by the nation’s rapid rise in interest rates,” said Henry Walker, president. “We are responsively meeting the demands of our business and consumer clients, both on the lending side, as well as with new product offerings for savers. At the close of the third quarter, total assets, net loans and total deposits all increased from December 31, 2021, and capital ratios again far exceeded minimum requirements.”

Income Statement

For the 2022 third quarter, interest and dividend income increased to $88.0 million from $79.6 million in the 2021 third quarter. Interest and dividend income for the nine-month period ended September 30, 2022 rose to $244.4 million from $231.3 million for the same period in 2021.

Interest expense for the 2022 third quarter amounted to $6.9 million, versus $3.0 million a year ago, reflecting the higher interest rate environment, along with Bank borrowings, which are anticipated to continue in the months ahead to accommodate increased client lending needs. Interest expense for the nine-month period ended September 30, 2022 was $12.6 million, versus $9.5 million reported for the same period last year.

Net interest income before provision for loan losses for the 2022 third quarter advanced to $81.0 million from $76.7 million for the third quarter of 2021 and increased to $231.7 million for the first nine months of 2022 from $221.8 million for the same period in 2021.

Farmers & Merchants’ net interest margin for the 2022 third quarter was 2.83%, versus 2.90% for the 2021 third quarter. Net interest margin was 2.75% for the first nine months of 2022, versus 2.89% for the same period in 2021.

For the 2022 third quarter, the Bank recorded a $4.5 million provision for loan losses, compared with a $1.0 million recapture of loan loss provision in last year’s third quarter. The Bank’s provision for loan losses was $3.5 million for the first nine months of 2022, versus $1.0 million for the first nine months of 2021. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.18% at September 30, 2022, compared with 1.34% at December 31, 2021.

Non-interest income was $4.6 million for the 2022 third quarter, compared with $5.1 million in the third quarter a year ago. For the nine-month period ended September 30, 2022, non-interest income was $14.4 million, compared with $15.6 million for the same period in 2021.

Non-interest expense for the 2022 third quarter was $47.6 million, versus $44.1 million for the same period last year. Non-interest expense for the first nine months of 2022 was $138.2 million, compared with $127.4 million last year.

Net income for the 2022 third quarter was $26.6 million, or $209.64 per diluted share, compared with $30.5 million, or $238.07 per diluted share, in the year-ago period. The Bank’s net income for the first nine months of 2022 was $83.6 million, or $654.87 per diluted share, compared with $86.2 million, or $672.37 per diluted share, for the same period in 2021.

Balance Sheet

At September 30, 2022, net loans increased to $6.4 billion, from $5.4 billion at December 31, 2021. The Bank’s deposits rose to $9.4 billion at the end of the 2022 third quarter, from $9.2 billion at December 31, 2021. Noninterest-bearing deposits represented 38.5% of total deposits at September 30, 2022, versus 38.4% of total deposits at December 31, 2021. Total assets increased to $11.9 billion at September 30, 2022, from $11.4 billion at December 31, 2021.

At September 30, 2022, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 16.61%, a tier 1 risk-based capital ratio of 15.66%, a common equity tier 1 capital ratio of 15.66%, and a tier 1 leverage ratio of 11.11%. 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 third quarter, demonstrating its confidence in F&M’s long-term outlook, the Bank repurchased 444 shares of its common stock on the open market at an average price of $8,085.00 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. For the first nine months of 2022, the Bank purchased a total of 1,796 shares of its common stock at an average price of $8,159.98 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.

“The Bank’s long history of generating profits for our stockholders, while prudently managing risk, combined with our unwavering commitment to serving our clients during periods of economic stress, continue to serve F&M and all of its stakeholders well,” said Daniel Walker, chief executive officer and chairman of the board. “Our talented team and F&M’s sound fundamentals remain central to our performance, as we navigate the volatile rate environment and uncertainties that lay ahead.”

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.

Forward-Looking Statements

In addition to the historical information contained herein, this press release may contain forward-looking statements about Farmers & Merchants Bank of Long Beach, including, but not limited to, statements about the Bank’s ability to navigate through the challenges of a volatile rate environment and economic uncertainties, anticipated Bank borrowings to accommodate increased client lending needs, as well as expectations regarding the amount of, timing, and methods for potential repurchases of its common stock. Readers of this press release should understand that such forward-looking statements are neither promises nor guarantees and are subject to various risks and uncertainties, many of which are beyond the Bank’s control. Such risks and uncertainties could cause actual results and actions to differ materially from those contemplated in such forward-looking statements and the Bank’s reported results should not be considered an indication of the Bank’s future performance. Factors that could cause or contribute to such differences include, but are not limited to, the adverse effects and negative impacts related to, or caused by the COVID-19 pandemic, credit, market, operational, liquidity and interest rate risks associated with the Bank’s business and operations, changes in interest rates, changes in general business and economic conditions, changes in banking laws and regulations, loan losses, increases in expenses, changes in rates charged on loans and earned on investments, accounting estimates and judgments, changes in rates on deposits, competition effects, the amount of non-interest income earned, as well as other factors. Given these factors, readers should not place undue reliance on any forward-looking statements, which reflect management’s opinions only as of the date hereof. Except as otherwise required by law, the Bank assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

FARMERS & MERCHANTS BANK OF LONG BEACH
Income Statements (Unaudited)
(In thousands, except per share data)
 
Three Months Ended September 30, Nine Months Ended September 30,

2022

2021

2022

2021

 

 

 

 

Interest and dividend income:

 

 

 

 

 

 

 

 

Loans

$

63,182

$

62,964

$

175,949

$

185,528

Investment securities

 

23,477

 

 

15,876

 

 

64,365

 

 

43,875

 

Investments in FHLB and FRB stock

 

279

 

 

299

 

 

837

 

 

859

 

Interest-bearing deposits in financial institutions

 

1,013

 

 

499

 

 

3,222

 

 

1,012

 

Total interest and dividend income

 

87,951

 

 

79,638

 

 

244,373

 

 

231,274

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

Deposits

 

3,255

 

 

2,137

 

 

7,284

 

 

6,884

 

Securities sold under repurchase agreements

 

2,348

 

 

848

 

 

4,023

 

 

2,583

 

Borrowings

 

1,317

 

 

-

 

 

1,317

 

 

-

 

Total interest expense

 

6,920

 

 

2,985

 

 

12,624

 

 

9,467

 

 

 

 

 

Net interest income

 

81,031

 

 

76,653

 

 

231,749

 

 

221,807

 

 

 

 

 

Provision for loan losses

 

4,500

 

 

(1,000

)

 

3,500

 

 

1,000

 

 

 

 

 

Net interest income after provision for loan losses

 

76,531

 

 

77,653

 

 

228,249

 

 

220,807

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

1,632

 

 

1,427

 

 

4,732

 

 

4,113

 

Card income

 

257

 

 

955

 

 

2,301

 

 

2,363

 

Other income

 

2,677

 

 

2,726

 

 

7,342

 

 

9,091

 

Total non-interest income

 

4,566

 

 

5,108

 

 

14,375

 

 

15,567

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

29,590

 

 

27,702

 

 

88,137

 

 

82,432

 

FDIC and other insurance expense

 

1,055

 

 

931

 

 

3,069

 

 

2,645

 

Occupancy expense

 

4,030

 

 

3,667

 

 

11,431

 

 

10,365

 

Software and equipment expense

 

3,909

 

 

3,447

 

 

11,322

 

 

10,431

 

Professional and legal services

 

2,121

 

 

1,598

 

 

5,548

 

 

4,350

 

Marketing expense

 

1,997

 

 

1,729

 

 

5,214

 

 

3,519

 

Other expense

 

4,889

 

 

5,008

 

 

13,466

 

 

13,660

 

Total non-interest expense

 

47,591

 

 

44,082

 

 

138,187

 

 

127,402

 

 

 

 

 

Income before income tax expense

 

33,506

 

 

38,679

 

 

104,437

 

 

108,972

 

 

 

 

 

Income tax expense

 

6,872

 

 

8,158

 

 

20,879

 

 

22,745

 

 

 

 

 

Net income

$

26,634

 

$

30,521

 

$

83,558

 

$

86,227

 

 

 

 

 

Basic earnings per common share

$

214.68

 

$

242.49

 

$

669.90

 

$

682.94

 

Diluted earnings per common share

$

209.64

 

$

238.07

 

$

654.87

 

$

672.37

 

Basic weighted-average shares outstanding

 

124,067

 

 

125,871

 

 

124,732

 

 

126,260

 

Diluted weighted-average shares outstanding

 

127,047

 

 

128,204

 

 

127,595

 

 

128,244

 

FARMERS & MERCHANTS BANK OF LONG BEACH
Balance Sheets (Unaudited)
(In thousands, except share and per share data)
 

Sept. 30, 2022

Dec. 31, 2021

 
Assets
 
Cash and due from banks:

 

 

Noninterest-bearing balances

$

80,653

 

$

49,025

 

Interest-bearing balances

 

170,558

 

 

1,252,646

 

Total cash and due from banks

 

251,211

 

 

1,301,671

 

Securities available-for-sale, at fair value

 

122,916

 

 

139,947

 

Securities held-to-maturity, at amortized cost

 

4,880,124

 

 

4,366,821

 

Loans held for sale

 

-

 

 

9,430

 

Gross loans

 

6,481,640

 

 

5,453,279

 

Allowance for loan losses

 

(76,485

)

 

(72,880

)

Unamortized deferred loan fees, net

 

(12,837

)

 

(8,650

)

Loans, net

 

6,392,318

 

 

5,371,749

 

Other real estate owned, net

 

-

 

 

966

 

Investments in FHLB and FRB stock, at cost

 

19,790

 

 

20,031

 

Bank premises and equipment, net

 

116,024

 

 

115,827

 

Deferred tax assets, net

 

30,285

 

 

27,939

 

Other assets

 

124,860

 

 

83,879

 

 
Total assets

$

11,937,528

 

$

11,438,260

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

Liabilities:

 

 

 

 

Deposits:

 

 

Noninterest-bearing demand deposits

$

3,603,835

 

$

3,552,248

 

Interest-bearing demand deposits

 

2,331,221

 

 

2,187,998

 

Savings and money market savings

 

2,711,594

 

 

2,755,862

 

Time deposits

 

703,611

 

 

745,382

 

Total deposits

 

9,350,261

 

 

9,241,490

 

Securities sold under repurchase agreements

 

704,220

 

 

916,672

 

Borrowings

 

500,000

 

 

-

 

Other liabilities

 

89,837

 

 

38,536

 

Total liabilities

 

10,644,318

 

 

10,196,698

 

 

 

Stockholders' Equity:

 

 

 

 

Common Stock, par value $20; authorized 250,000 123,832 and 125,628 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

 

2,477

 

 

2,513

 

Additional paid-in capital

 

180,450

 

 

89,972

 

Retained earnings

 

1,120,752

 

 

1,147,661

 

Accumulated other comprehensive (loss) income

 

(10,469

)

 

1,416

 

Total stockholders' equity

 

1,293,210

 

 

1,241,562

 

 
Total liabilities and stockholders' equity

$

11,937,528

 

$

11,438,260

 

 


ę Business Wire 2022
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Financials (USD)
Sales 2021 317 M - -
Net income 2021 115 M - -
Net cash 2021 379 M - -
P/E ratio 2021 8,94x
Yield 2021 1,34%
Capitalization 883 M 883 M -
EV / Sales 2020 3,31x
EV / Sales 2021 1,99x
Nbr of Employees 747
Free-Float 99,0%
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Managers and Directors
Daniel K. Walker Chairman
W. Henry Walker President
John W. H. Hinrichs Chief Financial Officer & Executive Vice President
H. Melissa Lanfre Chief Operating Officer & Executive Vice President
Kevin Tiber Investment Officer