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

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

 

 

Contacts

John Hinrichs

Executive Vice President

562-437-0011, ext. 4835

Roger Pondel

PondelWilkinson Inc.

Investor Relations

310-279-5980

investor@pondel.com

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