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Farmers & Merchants Bank of Long Beach Reports 2009 Third-Quarter Results
Business Wire
Oct 16, 2009
Farmers & Merchants Bank of Long Beach (OTCBB:FMBL) today reported financial results for the third quarter ended September 30, 2009.
“Results for the third quarter were positive, despite the continuing challenges in the general economy,” said Henry Walker, chief executive officer of Farmers & Merchants Bank of Long Beach. “We have experienced a level of stabilization in our loan portfolio, as we continue to maintain a conservative approach with regard to lending practices.
“These times call for closely monitoring all aspects of our business while we further our fundamental objective to continuously improve the customer experience, whether in person or online,” Walker added.
Income Statement
For the 2009 third quarter, interest income increased 5.7% to $48.0 million from $45.4 million in the comparable prior-year period, principally reflecting growth in the Bank’s loan portfolio and investment securities. Interest income for the nine-month period ended September 30, 2009 rose to $142.7 million, from $135.4 million reported for the same period in 2008.
Interest expense for the 2009 third quarter declined to $4.3 million, from $8.9 million for the third quarter of 2008, primarily related to the declining interest rate environment. Interest expense for the nine-month period ended September 30, 2009 declined to $14.6 million, from $28.0 million for the year-to-date period in 2008.
Net interest income for the 2009 third quarter rose 19.7% to $43.6 million from $36.4 million for the third quarter of 2008. Net interest income increased to $128.1 million for the first nine months of 2009, from $107.5 million for the same period in 2008.
The Bank’s provision for loan losses was $7.7 million for the third quarter of 2009, compared with $10.0 million in the second quarter of 2009, and $19.5 million in the third quarter of 2008. Provision for loan losses totaled $25.7 million for the first nine months of 2009, versus $29.3 million for the same period in 2008. The Bank’s allowance for loan losses as a percentage of loans outstanding was 2.92% at September 30, 2009, compared with 2.75% at June 30, 2009.
Non-interest income was $3.3 million for the 2009 third quarter, versus $3.5 million for the third quarter a year ago. Non-interest income was $9.5 million for the first nine months of 2009, compared with $11.0 million for the same period in 2008.
Non-interest expense for the 2009 third quarter was $19.8 million, versus $14.8 million for the same period a year ago. Non-interest expense for the nine-month period ended September 30, 2009 was $60.3 million, compared with $46.7 million for the same period a year ago. The increase in non-interest expense was principally attributable to other real estate owned expenses and significantly higher FDIC insurance premiums following the failure of a number of U.S. banks.
The Bank’s net income for the 2009 third quarter rose to $11.4 million, or $87.35 per diluted share, from $4.0 million, or $30.24 per diluted share, in the same period a year ago. The Bank’s net income for the first nine months of 2009 increased to $30.6 million, or $233.51 per diluted share, from $26.8 million, or $195.06 per diluted share for the same period in 2008.
Balance Sheet
At September 30, 2009, net loans increased to $1.97 billion from $1.95 billion at December 31, 2008. The Bank’s deposits totaled $2.82 billion at the end of the 2009 third quarter, up from $2.68 billion at December 31, 2008. Non-interest bearing deposits represented 30.7% of total deposits at September 30, 2009, versus 30.3% of total deposits at December 31, 2008. Total assets increased to $3.94 billion at the close of the 2009 third quarter, compared with $3.64 billion at December 31, 2008.
At September 30, 2009, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 26.46%, a Tier 1 risk-based capital ratio of 25.19%, and a Tier 1 leverage ratio of 14.30%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 6.00% and 5.00%, respectively.
“Our balance sheet reflects the sound strategies that have been in place at Farmers & Merchants Bank for more than a century,” said Daniel Walker, president and chairman of the board. “The Bank’s strong capital ratios represent management’s dedication to serving in the best interests of our customers and shareholders at a time when liquidity is a highly valued attribute in our industry.”
About Farmers & Merchants Bank of Long Beach
Farmers & Merchants Bank of Long Beach provides personal and business banking services through 22 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.
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FARMERS & MERCHANTS BANK OF LONG BEACH |
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Balance Sheets (unaudited) |
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Sept. 30, 2009 |
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Dec. 31, 2008 |
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| Assets | ||||||||
| Cash and due from banks: | ||||||||
| Noninterest-bearing balances | $ | 55,039,793 | $ | 59,028,599 | ||||
| Interest-bearing balances | 90,115,934 | 150,668,294 | ||||||
| Investment securities | 1,701,437,709 | 1,386,358,588 | ||||||
| Gross loans | 2,033,454,284 | 2,000,951,253 | ||||||
| Allowance for loan losses | (59,380,003 | ) | (53,794,344 | ) | ||||
| Net loans | 1,974,074,281 | 1,947,156,909 | ||||||
| Bank premises and equipment | 53,365,215 | 55,531,620 | ||||||
| Other real estate owned | 21,333,246 | - | ||||||
| Accrued interest receivable | 17,099,346 | 14,853,715 | ||||||
| Other assets | 30,376,945 | 23,674,204 | ||||||
| Total assets | $ | 3,942,842,469 | $ | 3,637,271,929 | ||||
| Liabilities and stockholders' equity | ||||||||
| Liabilities: | ||||||||
| Deposits: | ||||||||
| Demand, non-interest bearing | $ | 866,629,609 | $ | 809,671,161 | ||||
| Demand, interest bearing | 232,443,425 | 225,485,095 | ||||||
| Savings and money market savings | 621,962,707 | 507,521,371 | ||||||
| Time deposits | 1,097,655,374 | 1,133,141,414 | ||||||
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Total deposits |
2,818,691,115 | 2,675,819,041 | ||||||
| Federal funds purchased | 5,000,000 | - | ||||||
| Securities sold under agreements to repurchase | 516,901,275 | 393,201,735 | ||||||
| Accrued interest payable and other liabilities | 17,423,675 | 7,329,241 | ||||||
| Total liabilities | 3,358,016,065 | 3,076,350,017 | ||||||
| Stockholders' Equity: | ||||||||
| Common Stock, par value $20; authorized 250,000 shares; issued and outstanding 130,928 shares | 2,618,560 | 2,618,560 | ||||||
| Surplus | 12,043,783 | 12,043,783 | ||||||
| Retained earnings | 558,999,056 | 536,674,669 | ||||||
| Other comprehensive income | 11,165,005 | 9,584,900 | ||||||
| Total stockholders' equity | 584,826,404 | 560,921,912 | ||||||
| Total liabilities and stockholders' equity | $ | 3,942,842,469 | $ | 3,637,271,929 | ||||
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FARMERS & MERCHANTS BANK OF LONG BEACH |
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Income Statements (unaudited) |
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| Three Months ended Sept. 30, | Nine Months ended Sept. 30, | |||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||
| Interest income: | ||||||||||||
| Loans | $ | 30,452,442 | $ | 28,944,210 | $ | 91,565,448 | $ | 84,889,034 | ||||
| Securities held to maturity | 12,776,531 | 10,828,806 | 36,767,590 | 33,307,788 | ||||||||
| Securities available for sale | 4,544,140 | 5,038,316 | 13,985,412 | 15,441,753 | ||||||||
| Federal funds sold | - | 572,637 | - | 1,803,207 | ||||||||
| Deposits with banks | 178,870 | - | 369,813 | - | ||||||||
| Total interest income | 47,951,983 | 45,383,969 | 142,688,263 | 135,441,782 | ||||||||
| Interest expense: | ||||||||||||
| Deposits | 3,595,670 | 7,169,001 | 12,586,435 | 21,045,916 | ||||||||
| Securities sold under agreement to repurchase | 726,658 | 1,766,395 | 2,008,286 | 6,903,900 | ||||||||
| Federal funds purchased | - | 1,936 | - | 11,596 | ||||||||
| Total interest expense | 4,322,328 | 8,937,332 | 14,594,721 | 27,961,412 | ||||||||
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Net interest income |
43,629,655 | 36,446,637 | 128,093,542 | 107,480,370 | ||||||||
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Provision for loan losses |
7,700,000 | 19,512,368 | 25,700,000 | 29,250,101 | ||||||||
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Net interest income after provision for loan losses |
35,929,655 | 16,934,269 | 102,393,542 | 78,230,269 | ||||||||
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Non-interest income: |
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| Service charges on deposit accounts | 1,443,983 | 1,536,537 | 4,403,680 | 4,403,609 | ||||||||
| Merchant bankcard fees | 331,265 | 421,477 | 893,290 | 1,129,247 | ||||||||
| Escrow fees | 228,592 | 288,082 | 521,217 | 944,405 | ||||||||
| Other | 1,320,718 | 1,230,536 | 3,651,444 | 4,531,711 | ||||||||
| Total non-interest income | 3,324,558 | 3,476,632 | 9,469,631 | 11,008,972 | ||||||||
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Non-interest expense: |
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| Salaries and employee benefits | 10,009,980 | 9,040,295 | 30,133,043 | 29,793,658 | ||||||||
| FDIC and other insurance expense | 1,377,380 | 565,357 | 5,365,458 | 884,657 | ||||||||
| Occupancy expense | 1,663,530 | 1,525,944 | 4,556,385 | 4,162,140 | ||||||||
| Equipment expense | 1,240,237 | 1,095,396 | 3,739,455 | 3,106,125 | ||||||||
| Other real estate owned expense, net | 3,209,810 | - | 8,625,041 | - | ||||||||
| Legal and professional fees | 579,433 | 563,856 | 1,658,906 | 1,888,107 | ||||||||
| Marketing and promotional expense | 389,119 | 526,950 | 1,401,614 | 1,896,540 | ||||||||
| Printing and supplies | 225,997 | 201,690 | 727,317 | 748,292 | ||||||||
| Postage and delivery | 309,435 | 353,590 | 984,179 | 988,168 | ||||||||
| Other | 807,239 | 913,214 | 3,080,519 | 3,258,663 | ||||||||
| Total non-interest expense | 19,812,160 | 14,786,292 | 60,271,917 | 46,726,350 | ||||||||
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Income before income tax expense |
19,442,053 | 5,624,610 | 51,591,256 | 42,512,891 | ||||||||
| Income tax expense: | 8,006,120 | 1,666,384 | 21,018,404 | 15,721,105 | ||||||||
| Net income | $ | 11,435,933 | $ | 3,958,225 | $ | 30,572,852 | $ | 26,791,786 | ||||
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Basic earnings per common share |
$ | 87.35 | $ | 30.24 | $ | 233.51 | $ | 195.06 | ||||
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Diluted earnings per common share |
$ | 87.35 | $ | 30.24 | $ | 233.51 | $ | 195.06 | ||||
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