Farmers & Merchants Bank of Long Beach (OTCBB: FMBL) today reported financial results for the second quarter ended June 30, 2012.
“Farmers & Merchants reported solid financial results for the second quarter, maintaining strong operational performance and continuing to grow the Bank’s deposit base,” said Henry Walker, president of Farmers & Merchants Bank of Long Beach. “The Bank’s strength reflects our conservative lending practices and disciplined approach to managing investments.”
For the 2012 second quarter, interest income decreased to $42.9 million from $45.5 million in the prior-year comparable period. Interest income for the first half of 2012 was $89.2 million, compared with $90.7 million reported for the first half of 2011.
Interest expense for the 2012 second quarter declined to $1.8 million from $2.5 million in the second quarter of 2011, primarily related to the prolonged low interest rate environment. Interest expense for the first half of 2012 declined to $3.6 million from $5.1 million reported for the first half of 2011.
Net interest income for the 2012 second quarter declined to $41.1 million from $42.9 million for the second quarter of 2011, and was virtually unchanged at $85.5 million for the first half of 2012, compared with the six months ended June 30, 2011.
The Bank did not have a provision for loan losses in the second quarter or first half of 2012, primarily because of generally more stable economic conditions. The provision for loan losses was $6.1 million for the second quarter of 2011 and $6.8 million for the first half of 2011. The Bank’s allowance for loan losses as a percentage of loans outstanding was 2.80% at June 30, 2012, in line with 2.80% at December 31, 2011.
Non-interest income was $3.4 million for the 2012 second quarter, the same as that for the second quarter a year ago. Non-interest income was $8.6 million for the first half of 2012, compared with $6.6 million for the first half of 2011.
Non-interest expense for the 2012 second quarter was $19.9 million, compared with $18.5 million for the same period last year. Non-interest expense for the first half of 2012 was $41.8 million, compared with $39.8 million for the first half of 2011.
Farmers & Merchants’ net interest margin was 3.73% for the 2012 second quarter, compared with 4.24% last year.
The Bank’s net income for the 2012 second quarter rose 19.0% to $16.7 million, or $127.87 per diluted share, from $14.0 million, or $107.21 per diluted share, for the 2011 second quarter. Net income for the first half of 2012 advanced to $35.3 million, or $269.35 per diluted share, from $29.4 million, or $224.39 per diluted share for the first six months of 2011.
At June 30, 2012, net loans decreased to $1.99 billion from $2.03 billion at December 31, 2011. The Bank’s deposits grew to $3.48 billion at the end of the 2012 second quarter, from $3.39 billion at December 31, 2011. Non-interest bearing deposits represented 37.7% of total deposits at June 30, 2012, versus 37.2% of total deposits at December 31, 2011. Total assets increased to $4.78 billion at the close of the 2012 second quarter from $4.66 billion at December 31, 2011.
At June 30, 2012, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 28.90%, a Tier 1 risk-based capital ratio of 27.64%, and a Tier 1 leverage ratio of 14.47%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 6.00% and 5.00%, respectively.
“Deposits grew at a steady clip during the first half of 2012, as we continued to maintain a strong balance sheet,” said Daniel Walker, chief executive officer and chairman of the board. “With capital ratios well above regulatory minimums, the Bank enters the second half of the year in a position of strength and stability.”
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 June 30,||Six Months Ended June 30,|
|Securities held to maturity||11,911||13,014||23,544||25,434|
|Securities available for sale||2,776||3,961||5,791||7,341|
|Deposits with banks||252||50||471||111|
|Total interest income||42,884||45,461||89,161||90,721|
|Securities sold under agreement to repurchase||280||433||549||868|
|Total interest expense||1,793||2,539||3,628||5,107|
|Net interest income||41,091||42,922||85,533||85,614|
|Provision for loan losses||-||6,050||-||6,750|
|Net int. income after provision for loan losses||41,091||36,872||85,533||78,864|
|Service charges on deposit accounts||1,153||1,182||2,352||2,352|
|Merchant bankcard fees||481||290||902||555|
|Total non-interest income||3,427||3,350||8,598||6,639|
|Salaries and employee benefits||11,803||10,349||23,564||21,038|
|FDIC and other insurance expense||1,609||703||3,179||1,820|
|Other real estate owned expense,net||(758||)||550||538||2,043|
|Amortization of investments in low-income communities||1,830||451||4,031||902|
|Legal and professional fees||581||862||1,045||1,613|
|Marketing and promotional expense||547||1,100||1,233||1,905|
|Total non-interest expense||19,858||18,509||41,789||39,766|
|Income before income tax expense||24,660||21,713||52,342||45,737|
|Income tax expense||7,918||7,676||17,077||16,359|
|Basic and diluted earnings per common share||$||127.87||$||107.21||$||269.35||$||224.39|
|FARMERS & MERCHANTS BANK OF LONG BEACH|
|Balance Sheets (Unaudited)|
|June 30, 2012||Dec. 31, 2011|
|Cash and due from banks:|
|Less allowance for loan losses||(57,155||)||(58,463||)|
|Less unamortized deferred loan fees, net||(450||)||(418||)|
|Other real estate owned||21,248||23,036|
|Investments in low-income communities||39,535||43,566|
|Bank premises and equipment||59,751||55,155|
|Accrued interest receivable||16,940||16,464|
|Deferred tax asset||29,117||28,583|
|Liabilities and stockholders' equity|
|Demand, non-interest bearing||$||1,314,325||$||1,263,162|
|Demand, interest bearing||307,950||300,984|
|Savings and money market savings||964,329||909,794|
|Securities sold under agreements to repurchase||559,007||555,992|
Common Stock, par value $20; authorized
|250,000 shares; issued and outstanding|
|Other comprehensive income||8,218||8,845|
|Total stockholders' equity||699,355||670,216|
|Total liabilities and stockholders' equity||$||4,779,863||$||4,659,345|
Executive Vice President
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