CORRECTING and REPLACING Farmers & Merchants Bank of Long Beach Reports 2023 Fourth-Quarter and Full-Year Results
Farmers & Merchants Bank of Long Beach (FMBL) reported strong financial results for the fourth quarter and full year ended December 31, 2023. The Board of Directors authorized a new $10 million stock repurchase program, reflecting confidence in the bank's long-term outlook. Despite industry pressures, the bank maintained a strong balance sheet and capital ratios, with net charge-offs of 0.01% and an allocation for credit losses for loans ratio of 1.45%. However, the net interest margin and net income saw declines compared to the previous year.
Positive
Strong financial results for the fourth quarter and full year
Authorization of a new $10 million stock repurchase program
Strong balance sheet and capital ratios
Net charge-offs of 0.01% and an allocation for credit losses for loans ratio of 1.45%
Negative
Decline in net interest margin and net income compared to the previous year
01/25/2024 - 08:05 AM
Board of Directors Authorizes New $10 Million
LONG BEACH, Calif. --(BUSINESS WIRE)--
In the Income Statements table of release dated Jan. 25, 2024, the header over the first two columns should read: Three Months Ended December 31, (instead of Twelve Months Ended December 31,).
The updated release reads:
FARMERS & MERCHANTS BANK OF LONG BEACH REPORTS 2023 FOURTH-QUARTER AND FULL-YEAR RESULTS
Board of Directors Authorizes New $10 Million
Farmers & Merchants Bank of Long Beach (“F&M” or the “Bank”) (OTCQX: FMBL) today reported financial results for the fourth quarter and the full year ended December 31, 2023. F&M also announced that its Board of Directors has authorized a new $10 million
“Now in our 117th year since F&M was founded, we ended 2023 with profitable operations for the full year and fourth quarter, along with a strong balance sheet and capital ratios that far exceed regulatory requirements,” said Henry Walker, Chief Executive Officer. “Despite the challenges that continue to impact the banking industry nationwide, we remain steadfastly focused on our foremost priority goal of safeguarding our clients’ deposits and operating the Bank to create long-term value for all stakeholders.
“We enter 2024 with some of the same external pressures that our industry faced last year, including the high cost of funds and increased regulatory expense, which in turn, impact net interest margin and earnings performance. Nevertheless, we will stay true to our core of maintaining stringent underwriting standards and a stellar loan portfolio that is withstanding the test of a volatile real estate market. Finishing the year with net charge-offs of 0.01% and an allocation for credit losses for loans ratio of 1.45% speak to the quality and safety for which F&M is known.”
Daniel Walker, F&M’s Executive Chairman, said, “We were pleased and proud that our Board of Directors declared a total of $127
Operating Results
For the fourth quarter of 2023, total interest and dividend income rose to $108.0 million $95.9 million $415.5 million $340.3 million
Total interest expense for the fourth quarter of 2023 was $45.7 million $18.6 million $152.5 million $31.2 million
Net interest income before provision for credit losses for the fourth quarter of 2023 was $62.3 million $77.3 million $263.1 million $309.0 million
F&M’s net interest margin was 2.08% for the fourth quarter of 2023, versus 2.40% in the fourth quarter of 2022. Net interest margin was 2.21% for the year ended of 2023, compared with 2.73% for the same period in 2022.
For the fourth quarter of 2023 and 2022, the Bank did not record a net provision for credit losses. The Bank recorded a recapture of provision for credit losses of $3.6 million $3.5 million
Non-interest income was $4.2 million $4.2 million $16.4 million $18.5 million
Total noninterest expense for the fourth quarter of 2023 was $49.8 million $50.6 million $201.2 million $188.8 million
Fourth quarter 2023 net income was $12.8 million $101.61 $25.4 million $200.86 $70.0 million $553.79 $109.0 million $855.56
Balance Sheet
At December 31, 2023, gross loans amounted to $6.76 billion $6.77 billion $97.9 million 1.45% of loans held-for-investment at December 31, 2023, compared with $76.5 million 1.13% of loans held-for-investment, at December 31, 2022.
The Bank’s total deposits were $8.67 billion $9.14 billion
Noninterest-bearing deposits represented 33.2% of total deposits at December 31, 2023, versus 36.7% of total deposits at December 31, 2022.
Total assets were $12.04 billion $12.05 billion
Capital
Total stockholders’ equity was $1.35 billion 17.51% ; its tier 1 risk-based capital ratio was 16.26% , with a common equity tier 1 capital ratio of 16.26% , and a tier 1 leverage ratio of 11.01% , as of December 31, 2023. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00% , 8.00% , 6.50% and 5.00% , respectively.
Stock Repurchase Program
Reflecting the Board of Directors’ confidence in the Bank’s long-term outlook, F&M also announced today that the Board has authorized a new stock repurchase program, authorizing the Bank to repurchase of up to $10 million
Under the new stock repurchase program, the Bank may purchase shares of its common stock from time to time through various means, including open market transactions and privately negotiated transactions, in each case, subject to applicable requirements and laws. To the extent the Bank repurchases shares, the number of shares repurchased and the timing of any repurchases will depend on a number of factors, including, but not limited to, stock price, trading volume, regulatory requirements, general business conditions and other factors. The Bank may choose to modify, suspend or discontinue such proposed repurchases at any time and anticipates that any such repurchases will be funded from existing cash and cash equivalents or future cash flow. The new stock repurchase program does not obligate the Bank to repurchase any specific number of shares in any particular period.
During 2023, the Bank repurchased 93 shares of its common stock on the open market at an average repurchase price of $5,125.78
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 27 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 December 31,
Twelve Months Ended December 31,
2023
2022
2023
2022
Interest and dividend income:
Loans
$
76,432
$
70,869
$
299,723
$
246,818
Investment securities
20,895
23,236
87,511
87,601
Investments in FHLB and FRB stock
443
389
1,672
1,226
Interest-bearing deposits in financial institutions
10,199
1,406
26,615
4,628
Total interest and dividend income
107,969
95,900
415,521
340,273
Interest expense:
Deposits
24,978
8,448
81,556
15,732
Securities sold under repurchase agreements
9,287
4,739
31,499
8,762
Borrowings
11,414
5,423
39,398
6,740
Total interest expense
45,679
18,610
152,453
31,234
Net interest income before provision for credit losses
62,290
77,290
263,068
309,039
Provision for credit losses
Loans
1,100
-
(700
)
3,500
Investment securities
-
-
100
-
Reserve for unfunded loan commitments
(1,100
)
-
(3,000
)
-
Total provision for credit losses
-
-
(3,600
)
3,500
Net interest income after provision for credit losses
62,290
77,290
266,668
305,539
Non-interest income:
Service charges on deposit accounts
1,818
1,719
6,971
6,451
Card income
315
242
1,272
2,543
Other income
2,018
2,194
8,204
9,536
Total non-interest income
4,151
4,155
16,447
18,530
Non-interest expense:
Salaries and employee benefits
26,881
31,841
120,419
119,978
FDIC and other insurance expense
3,249
1,237
9,172
4,306
Occupancy expense
4,071
3,923
15,712
15,354
Software and equipment expense
4,471
3,738
16,025
15,060
Professional and legal services
2,524
2,064
8,121
7,612
Marketing expense
1,485
1,672
7,730
6,886
Other expense
7,080
6,136
24,004
19,602
Total non-interest expense
49,761
50,611
201,183
188,798
Income before income tax expense
16,680
30,834
81,932
135,271
Income tax expense
3,832
5,390
11,925
26,269
Net income
$
12,848
$
25,444
$
70,007
$
109,002
Basic earnings per common share
$
104.34
$
206.12
$
568.23
$
876.17
Diluted earnings per common share
$
101.61
$
200.86
$
553.79
$
855.56
Basic weighted-average shares outstanding
123,135
123,442
123,202
124,407
Diluted weighted-average shares outstanding
126,446
126,672
126,413
127,404
FARMERS & MERCHANTS BANK OF LONG BEACH
Balance Sheets (Unaudited)
(In thousands, except share and per share data)
Dec. 31, 2023
Dec. 31, 2022
Assets
Cash and due from banks:
Noninterest-bearing balances
$
74,595
$
75,489
Interest-bearing balances
548,874
67,369
Total cash and due from banks
623,469
142,858
Securities available-for-sale, at fair value
115,883
123,919
Securities held-to-maturity, at amortized cost
4,301,060
4,789,522
Gross loans
6,756,207
6,765,391
Allowance for loan losses
(97,900
)
(76,503
)
Unamortized deferred loan fees, net
(11,469
)
(14,429
)
Loans, net
6,646,838
6,674,459
Investments in FHLB and FRB stock, at cost
22,798
27,088
Bank premises and equipment, net
125,929
118,228
Deferred tax assets, net
45,723
31,538
Other assets
154,154
147,132
Total assets
$
12,035,854
$
12,054,744
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposits
$
2,880,315
$
3,355,298
Interest-bearing demand deposits
2,069,275
2,212,509
Savings and money market savings
2,661,312
2,668,334
Time deposits
1,059,166
906,355
Total deposits
8,670,068
9,142,496
Securities sold under repurchase agreements
909,376
785,912
Borrowings
1,000,000
700,000
Other liabilities
104,965
113,254
Total liabilities
10,684,409
10,741,662
Stockholders' Equity:
Common Stock, par value $20
2,463
2,465
Additional paid-in capital
184,483
177,433
Retained earnings
1,169,759
1,140,897
Accumulated other comprehensive loss
(5,260
)
(7,713
)
Total stockholders' equity
1,351,445
1,313,082
Total liabilities and stockholders' equity
$
12,035,854
$
12,054,744
View source version on businesswire.com: https://www.businesswire.com/news/home/20240125553164/en/
Kevin Tiber
Roger Pondel
investor@pondel.com
Source: Farmers & Merchants Bank of Long Beach
What is the ticker symbol for Farmers & Merchants Bank of Long Beach?
The ticker symbol is FMBL.
What were the total interest and dividend income for the year ended December 31, 2023?
The total interest and dividend income for the year ended December 31, 2023, was $415.5 million.
What was the net income for the fourth quarter of 2023?
The net income for the fourth quarter of 2023 was $12.8 million, or $101.61 per diluted share.
What is the total stockholders' equity at December 31, 2023?
The total stockholders' equity was $1.35 billion at December 31, 2023.
What is the new stock repurchase program authorized by the Board of Directors?
The Board has authorized a new stock repurchase program, allowing the Bank to repurchase up to $10 million of the Bank’s common stock from time to time through December 31, 2024.
