Farmers & Merchants Bank of Long Beach (OTCBB: FMBL) today reported financial results for the fourth quarter and full year ended December 31, 2014.
“F&M’s strong financial performance in 2014 is a result of an expanded lending team that continues to establish relationships with the community we serve,” said Henry Walker, president of Farmers & Merchants Bank. “As the economy shows further signs of improvement, the Bank is in a position of strength for sustainable growth.”
Income Statement
For the 2014 fourth quarter, total interest income was $49.8 million, compared with $43.5 million in the fourth quarter of 2013. Total interest income for the year ended December 31, 2014 was $184.9 million, compared with $163.2 million reported for 2013.
Interest expense for the 2014 fourth quarter was $1.8 million, compared with $1.6 million in the same period a year ago. Interest expense for the full 2014 year was $6.9 million versus $6.2 million in 2013.
Farmers & Merchants’ net interest income for the 2014 fourth quarter was $48.0 million, compared with net interest income of $41.9 million for the fourth quarter in 2013. Net interest income for 2014 was $178.0 million, versus $157.0 million in 2013.
Farmers & Merchant’s net interest margin was 3.50% for the year ended December 31, 2014, compared with 3.30% in the previous year.
The Bank did not have a provision for loan losses in 2014, nor in 2013, amid continued strength in its loan portfolio. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.69% at December 31, 2014, compared with 2.09% at December 31, 2013.
Non-interest income was $7.3 million for the 2014 fourth quarter, compared with $7.2 million in the 2013 fourth quarter. Non-interest income for the full 2014 year totaled $32.0 million, versus $37.8 million for 2013.
Non-interest expense for the 2014 fourth quarter was $32.2 million, compared with $27.2 million for the same period last year. Non-interest expense for the year ended December 31, 2014 was $119.4 million, compared with $104.3 million last year.
The Bank’s net income for the 2014 fourth quarter was $15.8 million, or $120.94 per diluted share, compared with $15.0 million, or $114.41 per diluted share, in the 2013 fourth quarter. The Bank’s net income for 2014 was $62.4 million, or $476.67 per diluted share, compared with $62.2 million, or $474.80 per diluted share, for 2013.
Balance Sheet
At December 31, 2014, net loans totaled $2.96 billion, compared with $2.40 billion at December 31, 2013. The Bank’s deposits grew to $4.20 billion at the end of 2014, from $3.83 billion at December 31, 2013. Non-interest bearing deposits represented 37.3% of total deposits at December 31, 2014, versus 38.5% of total deposits at December 31, 2013. Total assets increased to $5.58 billion at the close of 2014 from $5.21 billion at December 31, 2013.
At December 31, 2014, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 23.59%, a Tier 1 risk-based capital ratio of 22.34%, 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.
“F&M maintained its robust financial health in 2014, as well as enhanced its infrastructure to continue the Bank’s leadership position throughout the regions we serve,” said Daniel Walker, chief executive officer and chairman of the board. “As we enter 2015, F&M’s healthy balance sheet and sound fundamentals provide an excellent platform for introducing the Bank’s unparalleled service to new clients.”
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.
| 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, | |||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||
| Interest and dividend income: | ||||||||||||
| Loans | $ | 35,281 | $ | 28,351 | $ | 128,254 | $ | 105,163 | ||||
| Securities available-for-sale | 982 | 1,778 | 5,148 | 8,067 | ||||||||
| Securities held-to-maturity | 12,490 | 13,323 | 49,864 | 49,441 | ||||||||
| Investments in FHLB and FRB stock | 956 | 7 | 1,290 | 26 | ||||||||
| Deposits with banks | 63 | 31 | 313 | 488 | ||||||||
| Total interest and dividend income | 49,772 | 43,490 | 184,869 | 163,185 | ||||||||
| Interest expense: | ||||||||||||
| Deposits | 1,491 | 1,296 | 5,744 | 5,049 | ||||||||
| Securities sold under repurchase agreements | 267 | 274 | 1,140 | 1,113 | ||||||||
| Other borrowings | 29 | 3 | 34 | 3 | ||||||||
| Total interest expense | 1,787 | 1,573 | 6,918 | 6,165 | ||||||||
| Net interest income before provision for loan losses | 47,985 | 41,917 | 177,951 | 157,020 | ||||||||
| Provision for loan losses | - | - | - | - | ||||||||
| Net interest income after provision for loan losses | 47,985 | 41,917 | 177,951 | 157,020 | ||||||||
| Non-interest income: | ||||||||||||
| Service charges on deposit accounts | 1,098 | 1,151 | 4,570 | 4,554 | ||||||||
| Gains on sale of securities | 689 | 261 | 1,114 | 1,308 | ||||||||
| Other real estate owned income | 827 | 482 | 1,583 | 3,757 | ||||||||
| Merchant bankcard income | 2,281 | 2,348 | 9,365 | 9,358 | ||||||||
| Other income | 2,361 | 2,944 | 15,385 | 18,810 | ||||||||
| Total non-interest income | 7,256 | 7,186 | 32,017 | 37,788 | ||||||||
| Non-interest expense: | ||||||||||||
| Salaries and employee benefits | 17,093 | 15,726 | 64,492 | 55,986 | ||||||||
| FDIC and other insurance expense | 782 | 123 | 3,087 | 4,825 | ||||||||
| Occupancy expense | 2,077 | 1,952 | 8,043 | 6,987 | ||||||||
| Software and equipment expense | 2,143 | 1,434 | 7,057 | 6,026 | ||||||||
| Other real estate owned expense | 703 | 285 | 3,207 | 528 | ||||||||
| Amortization of public welfare investments | 2,117 | 2,021 | 8,468 | 8,082 | ||||||||
| Merchant bankcard expense | 1,814 | 1,929 | 7,386 | 7,493 | ||||||||
| Legal and professional services | 1,151 | 885 | 3,709 | 3,604 | ||||||||
| Marketing expense | 1,925 | 772 | 6,333 | 3,706 | ||||||||
| Other expense | 2,399 | 2,119 | 7,644 | 7,025 | ||||||||
| 2,922 | 2,922 | |||||||||||
| Total non-interest expense | 32,204 | 27,246 | 119,426 | 104,262 | ||||||||
| Income before income tax expense | 23,037 | 21,857 | 90,542 | 90,546 | ||||||||
| Income tax expense | 7,202 | 6,878 | 28,133 | 28,382 | ||||||||
| Net income | $ | 15,835 | $ | 14,979 | $ | 62,409 | $ | 62,164 | ||||
| Basic and diluted earnings per common share | $ | 120.94 | $ | 114.41 | $ | 476.67 | $ | 474.80 | ||||
| FARMERS & MERCHANTS BANK OF LONG BEACH | ||||||
| Balance Sheets (Unaudited) | ||||||
| (In thousands except share and per share data) | ||||||
| Dec. 31, 2014 | Dec. 31, 2013 | |||||
| Assets | ||||||
| Cash and due from banks: | ||||||
| Noninterest-bearing balances | $ | 55,322 | $ | 65,261 | ||
| Interest-bearing balances | 137,826 | 20,755 | ||||
| Securities available-for-sale | 215,223 | 427,942 | ||||
| Securities held-to-maturity | 2,008,064 | 2,145,289 | ||||
| Loans held for sale | 1,751 | 465 | ||||
| Gross loans | 3,009,945 | 2,454,302 | ||||
| Less allowance for loan losses | (50,804 | ) | (51,251 | ) | ||
| Less unamortized deferred loan fees, net | (2,991 | ) | (1,704 | ) | ||
| Net loans | 2,956,150 | 2,401,347 | ||||
| Other real estate owned, net | 3,406 | 14,502 | ||||
| Investments in FHLB and FRB stock | 28,440 | 440 | ||||
| Public welfare investments | 45,457 | 27,722 | ||||
| Bank premises and equipment, net | 85,002 | 66,212 | ||||
| Net deferred tax assets | 23,296 | 23,512 | ||||
| Other assets | 20,788 | 21,139 | ||||
| Total assets | $ | 5,580,725 | $ | 5,214,586 | ||
| Liabilities and Stockholders' Equity | ||||||
| Liabilities: | ||||||
| Deposits: | ||||||
| Demand, non-interest bearing | $ | 1,567,046 | $ | 1,475,888 | ||
| Demand, interest bearing | 552,432 | 413,291 | ||||
| Savings and money market savings | 1,228,584 | 1,080,774 | ||||
| Time deposits | 852,211 | 861,489 | ||||
| Total deposits | 4,200,273 | 3,831,442 | ||||
| Securities sold under repurchase agreements | 546,758 | 595,991 | ||||
| Other liabilities | 27,133 | 27,986 | ||||
| Total liabilities | 4,774,164 | 4,455,419 | ||||
| Stockholders' Equity: | ||||||
| Common Stock, par value $20; authorized 250,000 | ||||||
| shares; issued and outstanding 130,928 shares | 2,619 | 2,619 | ||||
| Additional paid-in capital | 112,044 | 12,044 | ||||
| Retained earnings | 689,892 | 742,408 | ||||
| Accumulated other comprehensive income | 2,006 | 2,096 | ||||
| Total stockholders' equity | 806,561 | 759,167 | ||||
| Total liabilities and stockholders' equity | $ | 5,580,725 | $ | 5,214,586 | ||
