Farmers & Merchants Bank of Long Beach (CA) (FMBL)

[Enterprising Investor]

Farmers & Merchants Bank of Long Beach Reports 2014 Third-Quarter Results (10/16/14)

--Net Loans Increased 18.5 Percent in Year-to-Date Performance--

LONG BEACH, Calif.--(BUSINESS WIRE)--Farmers & Merchants Bank of Long Beach (OTCBB: FMBL) today reported financial results for the third quarter ended September 30, 2014.

“Farmers & Merchant’s third-quarter results reflect strength in the Bank’s lending activities, as we continue to enhance our footprint throughout Los Angeles and Orange Counties,” said Henry Walker, president of Farmers & Merchants Bank of Long Beach. “Steady growth and profitability have been hallmarks of F&M since its inception, and the Bank’s third-quarter results are a testament to these core characteristics.”

Income Statement

For the 2014 third quarter, interest income rose to $46.8 million from $40.9 million in the 2013 third quarter, reflecting strength in the Bank’s loan portfolio. Interest income for the nine-month period ended September 30, 2014 advanced to $135.1 million from $119.7 million reported for the same period in 2013.

Interest expense for the 2014 third quarter was $1.8 million, compared with $1.6 million in last year’s third quarter. Interest expense for the nine-month period ended September 30, 2014 was $5.1 million, versus $4.6 million reported for the same period last year.

Net interest income for the 2014 third quarter rose to $45.0 million from $39.3 million for the third quarter of 2013, and increased to $130.0 million for the first nine months of 2014, versus $115.1 million for the same period in 2013.

Farmers & Merchants’ net interest margin was 3.48% for the 2014 third quarter, compared with 3.28% for the 2013 third quarter. Net interest margin was 3.45% for the first nine months of 2014, compared with 3.25% for the same period in 2013.

The Bank did not have a provision for loan losses in the first nine months of 2014, nor in the same period a year ago, amid continued strength in its loan portfolio. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.78% at September 30, 2014, compared with 2.09% at December 31, 2013.

Non-interest income was $8.4 million for the 2014 third quarter, compared with $9.4 million in the third quarter a year ago. Non-interest income was $24.8 million for the nine-month period ended September 30, 2014, compared with $30.6 million for the same period in 2013.

Non-interest expense for the 2014 third quarter was $29.4 million, versus $26.9 million for the same period last year. Non-interest expense for the first nine months of 2014 was $87.2 million, compared with $77.0 million last year.

Net income for the 2014 third quarter increased to $16.4 million, or $125.29 per diluted share, from $15.1 million, or $114.95 per diluted share, in the year-ago period. The Bank’s net income for the first nine months of 2014 was $46.6 million, or $355.73 per diluted share, compared with $47.2 million, or $360.39 per diluted share, for the same period in 2013.

Balance Sheet

At September 30, 2014, net loans totaled $2.85 billion, compared with $2.40 billion at December 31, 2013. The Bank’s deposits totaled $4.11 billion at the end of the 2014 third quarter, compared with $3.83 billion at December 31, 2013. Non-interest bearing deposits represented 40.0% of total deposits at September 30, 2014, versus 38.5% of total deposits at December 31, 2013. Total assets increased to $5.53 billion at the close of the 2014 third quarter, compared with $5.21 billion at the close of the prior year.

At September 30, 2014, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 23.76%, a Tier 1 risk-based capital ratio of 22.51%, and a Tier 1 leverage ratio of 14.35%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 6.00% and 5.00%, respectively.

“Maintaining a healthy balance sheet has been imperative for keeping F&M Bank in sound condition, and our year-to-date results reflect the Bank’s solid standing,” said Daniel Walker, chief executive officer and chairman of the board. “As we enter the final stretch of 2014, the Bank’s strong financial health will serve as an excellent foundation for attracting new clients and helping them achieve their goals.”

About Farmers & Merchants Bank

Founded in Long Beach in 1907 by C.J. Walker, Farmers & Merchants Bank has 23 branches in Los Angeles and Orange Counties. The Bank specializes in commercial and small business banking along with business loan programs. Farmers & Merchants Bank of Long Beach 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 www.fmb.com.

http://www.businesswire.com/news/home/20141016006382/en/Farmers-Merchants-Bank-Long-Beach-Reports-2014#.VD_E6ol0yUk