LONG BEACH, Calif.--(BUSINESS WIRE)-- Farmers & Merchants Bank of Long Beach (“F&M” or the “Bank”) (OTCQB: FMBL) today reported financial results for the fourth quarter and full year ended December 31, 2020.
“Farmers & Merchants Bank finished 2020 in a position of strength, with total deposits, net loans and total assets all achieving record highs,” said Henry Walker, president. “In a year and business environment characterized by the unprecedented challenges of the pandemic, we remained focused on maintaining our strong capital position, our continuous pursuit of enhancing operating efficiencies and our legacy of providing clients with a superior banking experience.”
Income Statement
For the 2020 fourth quarter, total interest and dividend income rose to $71.6 million, from $70.1 million in the fourth quarter of 2019. Total interest and dividend income for the year ended December 31, 2020 increased to $286.3 million, from $280.5 million reported for 2019.
Interest expense for the 2020 fourth quarter was $4.4 million, compared with $8.4 million in the same period a year ago. Interest expense for 2020 was $24.9 million, versus $33.0 million in 2019.
Farmers & Merchants’ net interest income before loan loss provision for the 2020 fourth quarter advanced to $67.2 million, from $61.7 million for the 2019 fourth quarter. Net interest income before loan loss provision for 2020 rose to $261.4 million, from $247.5 million in 2019.
Net interest margin for the 2020 fourth quarter was 2.83%, compared with 3.34% for the same period in 2019. Farmers & Merchants’ net interest margin was 2.99% for the year ended December 31, 2020, versus 3.43% in the previous year.
The Bank recorded a $2.0 million provision for loan losses in the 2020 fourth quarter, compared with no loan loss provision in the 2019 fourth quarter. For the full 2020 year, the loan loss provision was $10.5 million, versus $250,000 in 2019. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.34% at December 31, 2020, compared with 1.42% at December 31, 2019.
Non-interest income increased to $6.0 million for the 2020 fourth quarter, from $4.9 million for the comparable period last year. Non-interest income for 2020 rose to $20.5 million, from $19.3 million in 2019.
Non-interest expense for the 2020 fourth quarter amounted to $45.2 million, compared with $44.6 million for the same period last year. Non-interest expense for the year ended December 31, 2020 was $175.2 million, versus $163.7 million last year.
The Bank’s net income for the 2020 fourth quarter increased to $21.4 million, or $167.49 per diluted share, from $18.7 million, or $144.99 per diluted share, for the 2019 fourth quarter. The Bank’s net income for 2020 was $79.8 million, or $622.74 per diluted share, compared with $85.6 million, or $661.23 per diluted share, for 2019.
Balance Sheet
At December 31, 2020, net loans increased to $5.33 billion, from $4.34 billion at December 31, 2019. The Bank’s deposits grew to $7.62 billion at the end of 2020, from $5.83 billion a year ago. Non-interest-bearing deposits represented 37.9% of total deposits at December 31, 2020, versus 36.6% of total deposits at the end of 2019. Total assets advanced to $9.87 billion at the close of 2020 from $7.61 billion at December 31, 2019.
At December 31, 2020, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 19.57%, a tier 1 risk-based capital ratio of 18.33%, a common equity tier 1 capital ratio of 18.33%, and a tier 1 leverage ratio of 12.41%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.
“While the economic environment remains uncertain, our robust balance sheet demonstrates Farmers & Merchants’ commitment to long-term relationships, as well as our ability to attract new clients in their flight to financial safety,” said Daniel Walker, chief executive officer and chairman of the board. “Throughout 2020, we worked closely with our clients in each of the communities we serve, in some cases, helping their businesses survive. For F&M, 2020 was a financially rewarding year, setting the stage for a solid start in 2021. I am extremely proud of the outstanding job our entire team has shown, with tremendous resiliency during the ongoing pandemic to keep our clients safe and provide the service and attention they have come to expect.”
During 2020, the Bank repurchased 1,911 shares of its common stock at an average price of $6,173.58 per share, pursuant to a stock repurchase program announced in April 2020, 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, 2021, 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 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.
(Tables Follow)
| FARMERS & MERCHANTS BANK OF LONG BEACH |
| Income Statements (Unaudited) |
| (In thousands, except per share data) |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended Dec. 31,
|
|
Twelve Months Ended Dec. 31,
|
| |
2020
|
|
2019
|
|
2020
|
|
2019
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Interest and dividend income: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Loans |
$ |
58,780
|
|
$ |
51,449
|
|
$ |
226,663
|
|
$ |
207,294
|
| Investment securities |
|
12,345
|
|
|
17,277
|
|
|
57,181
|
|
|
68,829
|
| Investments in FHLB and FRB stock |
|
261
|
|
|
348
|
|
|
1,040
|
|
|
1,404
|
| Interest-bearing deposits in financial institutions |
|
235
|
|
|
993
|
|
|
1,381
|
|
|
2,926
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Total interest and dividend income |
|
71,621
|
|
|
70,067
|
|
|
286,265
|
|
|
280,453
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Deposits |
|
3,119
|
|
|
6,038
|
|
|
17,028
|
|
|
22,533
|
| Securities sold under repurchase agreements |
|
1,291
|
|
|
2,351
|
|
|
7,856
|
|
|
10,378
|
| Other borrowings |
|
-
|
|
|
2
|
|
|
-
|
|
|
54
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Total interest expense |
|
4,410
|
|
|
8,391
|
|
|
24,884
|
|
|
32,965
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Net interest income |
|
67,211
|
|
|
61,676
|
|
|
261,381
|
|
|
247,488
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Provision for loan losses |
|
2,000
|
|
|
-
|
|
|
10,500
|
|
|
250
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Net interest income after provision for loan losses |
|
65,211
|
|
|
61,676
|
|
|
250,881
|
|
|
247,238
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Service charges on deposit accounts |
|
1,271
|
|
|
1,507
|
|
|
5,193
|
|
|
6,584
|
| Card income |
|
1,057
|
|
|
1,047
|
|
|
3,370
|
|
|
3,618
|
| Other real estate owned income |
|
-
|
|
|
-
|
|
|
-
|
|
|
227
|
| Other income |
|
3,711
|
|
|
2,330
|
|
|
11,940
|
|
|
8,838
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Total non-interest income |
|
6,039
|
|
|
4,884
|
|
|
20,503
|
|
|
19,267
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Salaries and employee benefits |
|
28,834
|
|
|
27,063
|
|
|
111,485
|
|
|
99,683
|
| FDIC and other insurance expense |
|
756
|
|
|
130
|
|
|
2,611
|
|
|
1,041
|
| Occupancy expense |
|
3,520
|
|
|
3,347
|
|
|
14,236
|
|
|
11,930
|
| Software and equipment expense |
|
3,535
|
|
|
3,727
|
|
|
14,046
|
|
|
14,234
|
| Other real estate owned expense |
|
17
|
|
|
1
|
|
|
34
|
|
|
85
|
| Professional and legal services |
|
1,589
|
|
|
1,843
|
|
|
6,009
|
|
|
7,154
|
| Marketing expense |
|
966
|
|
|
2,007
|
|
|
5,126
|
|
|
8,556
|
| Other expense |
|
5,969
|
|
|
6,440
|
|
|
21,647
|
|
|
21,046
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Total non-interest expense |
|
45,186
|
|
|
44,558
|
|
|
175,194
|
|
|
163,729
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Income before income tax expense |
|
26,064
|
|
|
22,002
|
|
|
96,190
|
|
|
102,776
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Income tax expense |
|
4,700
|
|
|
3,344
|
|
|
16,389
|
|
|
17,204
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Net income |
$ |
21,364
|
|
$ |
18,658
|
|
$ |
79,801
|
|
$ |
85,572
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings per common share |
$ |
168.12
|
|
$ |
145.17
|
|
$ |
623.42
|
|
$ |
661.80
|
| Diluted earnings per common share |
$ |
167.49
|
|
$ |
144.99
|
|
$ |
622.74
|
|
$ |
661.23
|
| Basic weighted-average shares outstanding |
|
127,081
|
|
|
128,528
|
|
|
128,006
|
|
|
129,303
|
| Diluted weighted-average shares outstanding |
|
127,552
|
|
|
128,688
|
|
|
128,146
|
|
|
129,414
|
| FARMERS & MERCHANTS BANK OF LONG BEACH |
| Balance Sheets (Unaudited) |
| (In thousands, except share and per share data) |
| |
|
|
|
|
|
| |
|
Dec. 31, 2020
|
|
|
Dec. 31, 2019
|
| |
|
|
|
|
|
| Assets |
|
|
|
|
|
| |
|
|
|
|
|
| Cash and due from banks: |
|
|
|
|
|
| Noninterest-bearing balances |
$ |
72,109
|
|
$ |
64,556
|
| Interest-bearing balances |
|
939,566
|
|
|
54,309
|
| |
|
|
|
|
|
| Total cash and due from banks |
|
1,011,675
|
|
|
118,865
|
| Securities available-for-sale, at fair value |
|
137,373
|
|
|
150,623
|
| Securities held-to-maturity, at amortized cost |
|
3,131,213
|
|
|
2,728,583
|
| Loans held for sale |
|
22,893
|
|
|
23,301
|
| Gross loans |
|
5,414,814
|
|
|
4,403,876
|
| Allowance for loan losses |
|
(72,267)
|
|
|
(62,489)
|
| Unamortized deferred loan fees, net |
|
(15,747)
|
|
|
(5,127)
|
| |
|
|
|
|
|
| Loans, net |
|
5,326,800
|
|
|
4,336,260
|
| |
|
|
|
|
|
| Other real estate owned, net |
|
966
|
|
|
-
|
| Investments in FHLB and FRB stock, at cost |
|
20,257
|
|
|
20,160
|
| Bank premises and equipment, net |
|
103,615
|
|
|
108,133
|
| Deferred tax assets, net |
|
26,489
|
|
|
22,213
|
| Other assets |
|
90,497
|
|
|
97,431
|
| |
|
|
|
|
|
| Total assets |
$ |
9,871,778
|
|
$ |
7,605,569
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
|
|
| |
|
|
|
|
|
| Liabilities: |
|
|
|
|
|
| |
|
|
|
|
|
| Deposits: |
|
|
|
|
|
| Noninterest-bearing demand deposits |
$ |
2,889,012
|
|
$ |
2,135,056
|
| Interest-bearing demand deposits |
|
1,788,133
|
|
|
1,302,726
|
| Savings and money market savings |
|
2,129,755
|
|
|
1,669,525
|
| Time deposits |
|
810,726
|
|
|
720,958
|
| |
|
|
|
|
|
| Total deposits |
|
7,617,626
|
|
|
5,828,265
|
| Securities sold under repurchase agreements |
|
1,062,348
|
|
|
632,428
|
| Other liabilities |
|
47,962
|
|
|
61,996
|
| |
|
|
|
|
|
| Total liabilities |
|
8,727,936
|
|
|
6,522,689
|
| |
|
|
|
|
|
| Stockholders' Equity: |
|
|
|
|
|
| |
|
|
|
|
|
| Common Stock, par value $20; authorized 250,000 |
|
|
|
|
|
126,617 and 128,528 shares issued and outstanding at
December 31, 2020 and December 31, 2019, respectively |
|
2,532
|
|
|
2,571
|
| Additional paid-in capital |
|
90,516
|
|
|
95,446
|
| Retained earnings |
|
1,047,949
|
|
|
983,867
|
| Accumulated other comprehensive income |
|
2,845
|
|
|
996
|
| |
|
|
|
|
|
| Total stockholders' equity |
|
1,143,842
|
|
|
1,082,880
|
| |
|
|
|
|
|
| Total liabilities and stockholders' equity |
$ |
9,871,778
|
|
$ |
7,605,569
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210121005890/en/
John Hinrichs
Executive Vice President
562-437-0011, ext. 5035
Roger Pondel
PondelWilkinson Inc.
Investor Relations
310-279-5965
investor@pondel.com
Source: Farmers & Merchants Bank of Long Beach