LONG BEACH, Calif.--()--Farmers & Merchants Bank of Long Beach (OTCBB: FMBL) today announced financial results for the fourth quarter and full year ended December 31, 2012.
“Additionally, we believe the strategic investments we made in 2012, in both personnel and technology enhancements, will help continue to distinguish Farmers & Merchants Bank as one of the strongest banks in the region.”
“We achieved solid financial results for 2012, including another year of record earnings, despite an increasingly challenging regulatory and interest rate environment,” said Henry Walker, president of Farmers & Merchants Bank of Long Beach. “We also made several key hires during the year, including a new chief credit officer, chief auditor, chief information officer and supporting staff, which will further enhance our position of strength as we enter 2013.”
For the 2012 fourth quarter, total interest income was $40.4 million, compared with $43.3 million in the fourth quarter of 2011. Total interest income for the year ended December 31, 2012 was $171.1 million, compared with $178.6 million reported for 2011.
Interest expense for the 2012 fourth quarter fell to $1.6 million from $2.0 million in the same quarter of 2011. Interest expense for the full 2012 year declined to $7.0 million from $9.5 million in 2011. The Bank’s overall cost of funds continued to reflect the low interest rate environment and the impact of non-interest bearing deposits.
The Bank’s net interest income for the 2012 fourth quarter was $38.8 million, compared with net interest income of $41.3 million for the same quarter of 2011. Net interest income for 2012 was $164.1 million, versus $169.2 million in 2011. Farmers & Merchant’s net interest margin was 3.65% for the year ended December 31, 2012, compared with 4.08% in the previous year.
The Bank did not have a provision for loan losses in the fourth quarter of 2012 or for the year ended December 31, 2012, reflecting stabilization of the asset quality of the Bank’s loan portfolio. Provision for loan losses in the fourth quarter of 2011 totaled $5.5 million and was $14.2 for the full 2011 year. The Bank’s allowance for loan losses as a percentage of loans outstanding was 2.85% at December 31, 2012, compared with 2.80% at December 31, 2011.
Non-interest income was $3.9 million for the 2012 fourth quarter, compared with $4.0 million in the 2011 fourth quarter. Non-interest income for the full 2012 year totaled $15.9 million, versus $13.9 million for 2011.
Non-interest expense for the 2012 fourth quarter was $24.1 million, compared with $19.9 million for the same period last year. Non-interest expense for the year ended December 31, 2012 was $87.8 million, compared with $78.4 million last year.
The Bank’s net income for the 2012 fourth quarter was $13.2 million, or $101.12 per diluted share, compared with $13.8 million, or $105.30 per diluted share, in the 2011 fourth quarter. The Bank’s net income for 2012 rose to $63.4 million, or $484.14 per diluted share, from $59.1 million, or $451.53 per diluted share, for 2011.
At December 31, 2012, net loans totaled $1.93 billion, compared with $2.03 billion at December 31, 2011. The Bank’s deposits grew to $3.69 billion at the end of 2012, from $3.39 billion at December 31, 2011. Non-interest bearing deposits represented 40.0% of total deposits at December 31, 2012, versus 37.2% of total deposits at December 31, 2011. Total assets increased to $4.99 billion at the close of 2012 from $4.66 billion at December 31, 2011.
At December 31, 2012, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 29.61%, a Tier 1 risk-based capital ratio of 28.35%, and a Tier 1 leverage ratio of 14.24%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 6.00% and 5.00%, respectively.
“We continued to build on the asset quality of our loan portfolio and experienced solid deposit growth in 2012 – two characteristics that reflect Farmers & Merchants’ commitment to the long-term success of the Bank,” said Daniel Walker, chief executive officer and chairman of the board. “Additionally, we believe the strategic investments we made in 2012, in both personnel and technology enhancements, will help continue to distinguish Farmers & Merchants Bank as one of the strongest banks in the region.”
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)|
|Three Months Ended Dec. 31,||Twelve Months Ended Dec. 31,|
|Deposits with banks||287||224||1,051||497|
|Total interest income||40,431||43,312||171,114||178,606|
|Securities sold under agreement to repurchase||293||294||1,147||1,535|
|Total interest expense||1,621||2,003||6,987||9,455|
|Net interest income||38,810||41,309||164,127||169,151|
|Provision for loan losses||-||5,450||-||14,200|
|Net interest income after provision for loan losses||38,810||35,859||164,127||154,951|
|Service charges on deposit accounts||1,136||1,481||4,598||5,114|
|Gains on sale of securities||303||71||345||174|
|Merchant bankcard fees||376||354||1,710||1,257|
|Total non-interest income||3,909||4,014||15,877||13,905|
|Salaries and employee benefits||13,012||9,850||48,271||41,814|
|FDIC and other insurance expense||1,667||1,643||6,479||4,671|
|Other real estate owned expense,net||740||1,081||1,679||3,441|
|Amortization of investments in LIC||1,866||2,541||7,762||3,894|
|Legal and professional fees||953||1,321||2,882||3,896|
|Marketing and promotional expense||1,067||1,096||3,674||3,934|
|Total non-interest expense||24,060||19,864||87,761||78,428|
|Income before income tax expense||18,659||20,009||92,243||90,428|
|Income tax expense||5,420||6,223||28,856||31,310|
|Basic and diluted earnings per common share||$||101.12||$||105.30||$||484.14||$||451.53|
|FARMERS & MERCHANTS BANK OF LONG BEACH|
|Balance Sheets (Unaudited)|
|Dec. 31, 2012||Dec. 31, 2011|
|Cash and due from banks:|
|Securities available for sale||630,055||548,289|
|Less allowance for loan losses||(56,700||)||(58,463||)|
|Less unamortized deferred loan fees, net||(364||)||(418||)|
|Other real estate owned, net||17,696||23,036|
|Investments in low-income communities (LIC)||35,804||43,566|
|Bank premises and equipment, net||60,504||55,155|
|Accrued interest receivable||18,542||16,464|
|Net deferred tax assets||28,302||28,583|
|Liabilities and stockholders' equity|
|Demand, non-interest bearing||$||1,474,215||$||1,263,162|
|Demand, interest bearing||346,991||300,984|
|Savings and money market savings||1,011,029||909,794|
|Securities sold under agreements to repurchase||551,293||555,992|
|Common Stock, par value $20; authorized|
|250,000 shares; issued and outstanding|
|Accumulated other comprehensive income||7,427||8,845|
|Total stockholders' equity||717,259||670,216|
|Total liabilities and stockholders' equity||$||4,988,961||$||4,659,345|