Farmers & Merchants Bank of Long Beach Reports 2013 Second Quarter Results

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Farmers & Merchants Bank of Long Beach Reports 2013 Second Quarter Results

LONG BEACH, Calif.--(BUSINESS WIRE)-- Farmers & Merchants Bank of Long Beach (OTCBB: FMBL) today reported financial results for the second quarter ended June 30, 2013.

"Despite prevailing headwinds from the low interest rate environment, our second quarter results were in line with expectations, as F&M maintained its strong financial position for the first half of 2013," said Henry Walker, president of Farmers & Merchants Bank of Long Beach. "As favorable economic signs appear to be surfacing, the Bank is well poised to serve its personal and business banking customers, while we also benefit from the talents and prowess of new members of our team."


Income Statement

For the three months ended June 30, 2013, interest income was $39.2 million, compared with $42.9 million in the second quarter of 2012; the decline reflects the continuing low interest rate and competitive loan pricing environment. Interest income for the first half of 2013 was $78.8 million, compared with $89.2 million reported for the first half of 2012.

Interest expense for the 2013 second quarter declined to $1.5 million from $1.8 million in the second quarter of 2012. Interest expense for the first half of 2013 declined to $3.0 million from $3.6 million reported for the first half of 2012. Interest expense continues to reflect the impact of historically low rates and strong levels of non-interest bearing demand accounts.

Net interest income for the 2013 second quarter was $37.6 million, compared with $41.1 million for the second quarter of 2012. Net interest income for the first half of 2013 was $75.7 million, compared with $85.5 million for the six months ended June 30, 2012.

Farmers & Merchants' net interest margin was 3.20% for the 2013 second quarter, compared with 3.73% in the 2012 second quarter. Net interest margin was 3.24% for the first half of 2013, compared with 3.87% for the same period in 2012.

The Bank did not have a provision for loan losses in the first half of 2013, nor in the same period a year ago, reflecting the continued improvement in the quality of the Bank's loan portfolio. The Bank's allowance for loan losses as a percentage of loans outstanding was 2.40% at June 30, 2013, compared with 2.57% at December 31, 2012.

Non-interest income was $10.0 million for the 2013 second quarter, which included one-time income of $3.5 million, compared with non-interest income of $4.5 million in the second quarter of 2012. In the first half of 2013, non-interest income was $20.1 million, compared with $10.9 million for the six months ended June 30, 2012.

Non-interest expense for the 2013 second quarter was $25.9 million, compared with $21.0 million for the same period last year. Non-interest expense for the first half of 2013 was $49.1 million, compared with $44.1 million for the first half of 2012.

Net income for the 2013 second quarter totaled $14.9 million, or $113.76 per diluted share, compared with net income of $16.7 million, or $127.88 per diluted share, for the 2012 second quarter. Net income for the first half of 2013 was $32.1 million, or $245.44 per diluted share, compared with $35.3 million, or $269.35 per diluted share, for the six months ended June 30, 2012.

Balance Sheet

At June 30, 2013, net loans increased to $2.06 billion from $1.93 billion at December 31, 2012. The Bank's deposits rose to $3.77 billion at the end of the 2013 second quarter from $3.69 billion at December 31, 2012. Non-interest bearing deposits represented 40.5% of total deposits at June 30, 2013, versus 40.0% of total deposits at December 31, 2012. Total assets increased to $5.15 billion at the close of the 2013 second quarter from $4.99 billion at December 31, 2012.

At March 31, 2013, Farmers & Merchants Bank remained "well-capitalized" under all regulatory categories, with a total risk-based capital ratio of 29.09%, a Tier 1 risk-based capital ratio of 27.84%, and a Tier 1 leverage ratio of 14.48%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 6.00% and 5.00%, respectively.

"We continued to report steady loan and deposit growth and maintained strong capital ratios during the first half of the year," said Daniel Walker, chief executive officer and chairman of the board. "As Farmers & Merchants Bank continues to grow, the financial health of our balance sheet is indicative of the Bank's competitive advantage in the communities we serve."

About Farmers & Merchants Bank of Long Beach

Farmers & Merchants Bank of Long Beach provides personal and business banking services through 21 offices in Los Angeles and Orange Counties. Founded in 1907 by C.J. Walker, the Bank specializes in commercial and small business banking along with business loan programs.

 
FARMERS & MERCHANTS BANK OF LONG BEACH
Income Statements (Unaudited)
(In Thousands Except Per Share Data)
     
Three Months Ended June 30,Six Months Ended June 30,
2013201220132012
 
Interest income:
 
Loans$25,252$27,945$50,811$59,355
Securities available-for-sale2,0692,7764,3095,791
Securities held-to-maturity11,68811,91123,31723,544
Deposits with banks146252 353 471
 
Total interest income39,15542,884 78,790 89,161
 
Interest expense:
 
Deposits1,2241,5132,4853,079
Securities sold under repurchase agreements284280 557 549
 
Total interest expense1,5081,793 3,042 3,628
 
Net interest income37,64741,09175,74885,533
 
Provision for loan losses-- - -
 
Net interest income after provision for loan losses37,64741,091 75,748 85,533
 
Non-interest income:
 
Service charges on deposit accounts1,1151,1532,2682,352
Gain on sale of securities--1,04842
Merchant bankcard income2,3881,5984,5623,226
Other income6,4831,794 12,271 5,303
 
Total non-interest income9,9864,545 20,149 10,923
 
Non-interest expense:
 
Salaries and employee benefits13,38311,80326,72423,564
FDIC and other insurance expense1,7071,6093,3993,179
Occupancy expense1,3841,3582,7042,736
Equipment expense1,5381,3792,9722,716
Other real estate owned expense, net658(757)(469)538
Amortization of public welfare investments2,0201,8304,0414,031
Merchant bankcard expense1,9391,0633,6602,170
Legal and professional services1,0015801,7491,045
Marketing expense8014831,4071,113
Other expense1,4931,627 2,922 3,022
2,922
Total non-interest expense25,92420,975 49,109 44,114
 
Income before income tax expense21,70924,66146,78852,342
 
Income tax expense6,8157,918 14,653 17,077
 
Net income$14,894$16,743 $32,135 $35,265
 
Basic and diluted earnings per common share$113.76$127.88 $245.44 $269.35
 
 
FARMERS & MERCHANTS BANK OF LONG BEACH
Balance Sheets (Unaudited)
(In Thousands Except Share and Per Share Data)
    
June 30, 2013Dec. 31, 2012
 
Assets
 
Cash and due from banks:
Noninterest-bearing balances$76,231$60,914
Interest-bearing balances193,267253,087
Securities available-for-sale566,239630,055
Securities held-to-maturity2,083,9981,942,085
Gross loans2,112,8541,984,440
Less allowance for loan losses(50,762)(50,994)
Less unamortized deferred loan fees, net(360)(364)
Net loans2,061,732 1,933,082 

Other real estate owned, net

17,95317,696
Public welfare investments31,76335,804
Bank premises and equipment, net64,53060,504
Net deferred tax assets26,78426,060
Other assets23,646 29,674 
 
Total assets$5,146,143 $4,988,961 
 
 
Liabilities and Stockholders' Equity
 
Liabilities:
 
Deposits:
Demand, non-interest bearing$1,527,624$1,474,215
Demand, interest bearing359,149346,991
Savings and money market savings1,048,5651,011,029
Time deposits836,735 853,631 
 
Total deposits3,772,0733,685,866
 
Securities sold under repurchase agreements605,373551,293
Other liabilities29,643 34,543 
 
Total liabilities4,407,089 4,271,702 
 
Stockholders' Equity:
 
Common Stock, par value $20; authorized 250,000
shares; issued and outstanding
130,928 shares2,6192,619
Additional paid-in capital12,04412,044
Retained earnings721,543695,169
Other comprehensive income2,848 7,427 
 
Total stockholders' equity739,054 717,259 
 
Total liabilities and stockholders' equity$5,146,143 $4,988,961 



Farmers & Merchants Bank of Long Beach
John Hinrichs
Executive Vice President
562-437-0011, ext. 5035
or
PondelWilkinson Inc.
Evan Pondel
Corporate and Investor Relations
310-279-5980
investor@pondel.com

KEYWORDS:   United States  North America  California

INDUSTRY KEYWORDS:

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