Farmers & Merchants Bank of Long Beach Reports 2023 Third-Quarter Results
Farmers & Merchants Bank of Long Beach reports financial results for Q3 2023, with strong balance sheet and stable deposit base. Cost of funds may impact performance in the near-term. Total interest and dividend income rose to $107.9 million. Net interest income before provision for credit losses decreased to $64.9 million. Net interest margin was 2.14% for Q3 2023. Non-interest income was $4.1 million. Net income was $17.4 million. Gross loans amounted to $6.81 billion. Deposits were $9.06 billion. Total assets increased to $12.5 billion. Capital ratios exceed regulatory requirements. Bank repurchased 93 shares of common stock.
Positive
Farmers & Merchants Bank of Long Beach reports strong balance sheet and stable deposit base. Total interest and dividend income rose to $107.9 million. Gross loans amounted to $6.81 billion. Deposits were $9.06 billion. Total assets increased to $12.5 billion. Capital ratios exceed regulatory requirements.
Negative
Cost of funds may impact performance in the near-term. Net interest income before provision for credit losses decreased to $64.9 million. Net interest margin was 2.14% for Q3 2023. Non-interest income was $4.1 million. Net income was $17.4 million.
10/18/2023 - 08:05 AM
LONG BEACH, Calif. --(BUSINESS WIRE)--
Farmers & Merchants Bank of Long Beach (“F&M” or the “Bank”) (OTCQX: FMBL) today reported financial results for the third quarter and nine months ended September 30, 2023.
“We ended the third quarter with a strong balance sheet, a solid and stable deposit base that grew organically from the preceding second quarter, and capital ratios that remain best-in-class,” said Henry Walker, President of Farmers & Merchants Bank of Long Beach. “Our branches continue to perform well, acquiring new customers who are attracted to F&M due to our responsive, personal-touch service that is difficult to receive elsewhere.
“As anticipated, and as with most regional banks, F&M experienced and continues to foresee further pressure on its cost of funds, which, in turn, will likely impact performance in the near-term. Despite the difficult macro environment, our cost of deposits and cost of funds compare favorably to most regional bank peers. F&M is in the fortunate position of having strong credit quality and a solid cash position.”
Operating Results
For the three months ended September 30, 2023, total interest and dividend income rose to $107.9 million $88.0 million $307.6 million $244.4 million
Total interest expense for the 2023 third quarter was $43.0 million $6.9 million $106.8 million $12.6 million
Net interest income before provision for credit losses for the 2023 third quarter was $64.9 million $81.0 million $200.8 million $231.7 million
F&M’s net interest margin was 2.14% for the 2023 third quarter, versus 2.83% in the 2022 third quarter. Net interest margin was 2.25% for the first nine months of 2023, compared with 2.75% for the same period in 2022.
For the 2023 third quarter, the Bank recorded a $3.6 million $4.5 million $3.6 million $3.5 million
Non-interest income was $4.1 million $4.6 million $12.3 million $14.4 million
Total non-interest expense for the 2023 third quarter was $52.3 million $47.6 million $151.4 million $138.2 million
Net income for the 2023 third quarter was $17.4 million $137.57 $26.6 million $209.64 $57.2 million $452.11 $83.6 million $654.87
Balance Sheet
At September 30, 2023, gross loans amounted to $6.81 billion $6.77 billion $96.8 million 1.42% of loans held-for-investment at September 30, 2023, compared with $76.5 million 1.45% of loans, held-for-investment at December 31, 2022.
The Bank’s deposits were $9.06 billion $9.14 billion
Non-interest-bearing deposits represented 33.8% of total deposits at September 30, 2023, versus 36.7% of total deposits at December 31, 2022.
Total assets increased to $12.5 billion $12.1 billion
Capital
At September 30, 2023, all of Farmers & Merchants Bank’s capital ratios exceeded regulatory capital requirements to meet the definition of a “well-capitalized” financial institution. The Bank’s total risk-based capital ratio was 17.30% ; its tier 1 risk-based capital ratio was 16.05% , with a common equity tier 1 capital ratio of 16.05% , and a tier 1 leverage ratio of 10.80% , as of September 30, 2023. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00% , 8.00% , 6.50% and 5.00% , respectively.
“The F&M brand continues to promote safety, soundness and unparalleled client service,” added Daniel Walker, Chairman and Chief Executive Officer of Farmers & Merchants Bank. “Our team will not waver from its conservative and prudent approach to managing the Bank and working to enhance long-term value for all stakeholders, as we work through today’s challenging times and external business environment.”
Stock Repurchase Program
During the third quarter of 2023, the Bank repurchased 93 shares of its common stock on the open market at an average price of $5,125.78 $20 million The Bank did not repurchase any shares during the first or second quarter of 2023.
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 26 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 September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
Interest and dividend income:
Loans
$
76,184
$
63,182
$
223,291
$
175,949
Investment securities
21,458
23,477
66,616
64,365
Investments in FHLB and FRB stock
415
279
1,229
837
Interest-bearing deposits in financial institutions
9,859
1,013
16,416
3,222
Total interest and dividend income
107,916
87,951
307,552
244,373
Interest expense:
Deposits
23,009
3,255
56,578
7,284
Securities sold under repurchase agreements
8,918
2,348
22,212
4,023
Borrowings
11,103
1,317
27,984
1,317
Total interest expense
43,030
6,920
106,774
12,624
Net interest income before provision for credit losses
64,886
81,031
200,778
231,749
Provision for credit losses
Loans
(1,800
)
4,500
(1,800
)
3,500
Investment securities
-
-
100
-
Reserve for unfunded loan commitments
(1,800
)
-
(1,900
)
-
Total provision for credit losses
(3,600
)
4,500
(3,600
)
3,500
Net interest income after provision for credit losses
68,486
76,531
204,378
228,249
Non-interest income:
Service charges on deposit accounts
1,799
1,632
5,153
4,732
Card income
357
257
957
2,301
Other income
1,919
2,677
6,186
7,342
Total non-interest income
4,075
4,566
12,296
14,375
Non-interest expense:
Salaries and employee benefits
30,831
29,590
93,538
88,137
FDIC and other insurance expense
2,319
1,055
5,923
3,069
Occupancy expense
4,103
4,030
11,641
11,431
Software and equipment expense
3,891
3,909
11,554
11,322
Professional and legal services
2,113
2,121
5,597
5,548
Marketing expense
2,694
1,997
6,245
5,214
Other expense
6,357
4,889
16,924
13,466
Total non-interest expense
52,308
47,591
151,422
138,187
Income before income tax expense
20,253
33,506
65,252
104,437
Income tax expense
2,866
6,872
8,093
20,879
Net income
$
17,387
$
26,634
$
57,159
$
83,558
Basic earnings per common share
$
141.11
$
214.68
$
463.86
$
669.90
Diluted earnings per common share
$
137.57
$
209.64
$
452.11
$
654.87
Basic weighted-average shares outstanding
123,216
124,067
123,224
124,732
Diluted weighted-average shares outstanding
126,389
127,047
126,428
127,595
FARMERS & MERCHANTS BANK OF LONG BEACH
Balance Sheets (Unaudited)
(In thousands, except share and per share data)
Sept. 30, 2023 Dec. 31, 2022
Assets
Cash and due from banks:
Noninterest-bearing balances
$
80,830
$
75,489
Interest-bearing balances
817,988
67,369
Total cash and due from banks
898,818
142,858
Securities available-for-sale, at fair value
111,232
123,919
Securities held-to-maturity, at amortized cost
4,428,668
4,789,522
Loans held for sale
521
-
Gross loans
6,809,407
6,765,391
Allowance for loan losses
(96,812
)
(76,503
)
Unamortized deferred loan fees, net
(12,401
)
(14,429
)
Loans, net
6,700,194
6,674,459
Investments in FHLB and FRB stock, at cost
22,757
27,088
Bank premises and equipment, net
125,421
118,228
Deferred tax assets, net
45,436
31,538
Other assets
131,182
147,132
Total assets
$
12,464,229
$
12,054,744
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposits
$
3,058,711
$
3,355,298
Interest-bearing demand deposits
2,195,985
2,212,509
Savings and money market savings
2,759,651
2,668,334
Time deposits
1,041,243
906,355
Total deposits
9,055,590
9,142,496
Securities sold under repurchase agreements
943,908
785,912
Borrowings
1,000,000
700,000
Other liabilities
127,335
113,254
Total liabilities
11,126,833
10,741,662
Stockholders' Equity:
Common Stock, par value $20
2,463
2,465
Additional paid-in capital
182,464
177,433
Retained earnings
1,162,207
1,140,897
Accumulated other comprehensive loss
(9,738
)
(7,713
)
Total stockholders' equity
1,337,396
1,313,082
Total liabilities and stockholders' equity
$
12,464,229
$
12,054,744
View source version on businesswire.com: https://www.businesswire.com/news/home/20231018483011/en/
John Hinrichs
Roger Pondel
investor@pondel.com
Source: Farmers & Merchants Bank of Long Beach
What were the financial results for Farmers & Merchants Bank of Long Beach in Q3 2023?
Farmers & Merchants Bank of Long Beach reported strong financial results for Q3 2023, with a strong balance sheet and stable deposit base. Total interest and dividend income rose to $107.9 million. Net interest income before provision for credit losses decreased to $64.9 million. Non-interest income was $4.1 million. Net income was $17.4 million.
What is the status of the bank's loans and deposits?
Gross loans amounted to $6.81 billion, and deposits were $9.06 billion at the end of Q3 2023.
How did the bank's capital ratios perform?
The bank's capital ratios exceeded regulatory requirements. The total risk-based capital ratio was 17.30%, the tier 1 risk-based capital ratio was 16.05%, the common equity tier 1 capital ratio was 16.05%, and the tier 1 leverage ratio was 10.80%.
Did the bank repurchase any shares of its common stock?
Yes, during Q3 2023, the bank repurchased 93 shares of its common stock on the open market at an average price of $5,125.78 per share, effectively closing out the remaining balance of the stock repurchase program.
