Farmers & Merchants Bank of Long Beach Reports 2021 Fourth-Quarter and Full-Year Results

-Board Authorizes New $20 Million Stock Repurchase Program-

LONG BEACH, Calif.--(BUSINESS WIRE)-- Farmers & Merchants Bank of Long Beach ("F&M" or the "Bank") (OTCQB: FMBL) today reported financial results for the fourth quarter and full year ended December 31, 2021.

"Affirming the loyalty and trust of our growing client base, F&M ended what was another challenging year for our nation and our community in a position of financial strength," said Henry Walker, president. "The Bank effectively managed through the lingering pandemic and low interest rate environment to successfully assist our clients and finish 2021 with record high total deposits, net loans and total assets."

Income Statement

For the 2021 fourth quarter, total interest and dividend income rose to $76.0 million, from $71.6 million in the fourth quarter of 2020. Total interest and dividend income for the year ended December 31, 2021, increased to $307.3 million, from $286.3 million reported for 2020.

Interest expense for the 2021 fourth quarter declined to $2.8 million, from $4.4 million in the same period a year ago. Interest expense for 2021 was $12.2 million, versus $24.9 million in 2020.

The Bank's net interest income before loan loss provision for the 2021 fourth quarter advanced to $73.3 million, from $67.2 million for the 2020 fourth quarter. Net interest income before loan loss provision for 2021 rose to $295.1 million, from $261.4 million in 2020.

Net interest margin for the 2021 fourth quarter was 2.67%, compared with 2.83% for the same period in 2020. F&M's net interest margin was 2.83% for the year ended December 31, 2021, versus 2.99% in the previous year.

The Bank recorded a $1.0 million recapture of loan loss provision in the fourth quarter of 2021, compared with a $2.0 loan loss provision in the fourth quarter of 2020. For the full 2021 year, there was no loan loss provision, compared to $10.5 million of loan loss provision in 2020. The Bank's allowance for loan losses as a percentage of loans outstanding was 1.34% at December 31, 2021, equal to that at December 31, 2020.

Non-interest income increased to $6.5 million for the 2021 fourth quarter, from $6.0 million for the comparable period last year. Non-interest income for 2021 rose to $22.0 million, from $20.5 million in 2020.

Non-interest expense for the 2021 fourth quarter was $45.2 million, equal to that for the same period last year. Non-interest expense for the year ended December 31, 2021, was $172.6 million, versus $175.2 million last year.

The Bank's net income for the 2021 fourth quarter increased to $29.0 million, or $226.02 per diluted share, from $21.4 million, or $167.49 per diluted share, for the 2020 fourth quarter. The Bank's net income for the full year 2021 rose to $115.2 million, or $898.31 per diluted share, from $79.8 million, or $622.74 per diluted share, for 2020.

Balance Sheet

At December 31, 2021, net loans increased to $5.37 billion, from $5.33 billion at December 31, 2020. The Bank's deposits grew to $9.24 billion at the end of 2021, from $7.62 billion a year ago. Non-interest-bearing deposits represented 38.4% of total deposits at December 31, 2021, versus 37.9% of total deposits at the end of 2020. Total assets advanced to $11.44 billion at the close of 2021 from $9.87 billion at December 31, 2020.

Farmers & Merchants Bank remained "well-capitalized" under all regulatory categories at December 31, 2021, with a total risk-based capital ratio of 18.63%, a tier 1 risk-based capital ratio of 17.54%, a common equity tier 1 capital ratio of 17.54%, and a tier 1 leverage ratio of 10.88%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.

"The Bank performed well in 2021, as we navigated the ongoing dual pressures of the pandemic and general economic environment," said Daniel Walker, chief executive officer and chairman of the board. "The F&M team showcased our ability to make prudent business decisions and achieve positive outcomes. Moving forward in 2022, empathy and understanding will remain hallmarks that are embedded in all of our client interactions, whether in-person or on a screen."

Stock Repurchase Program

Reflecting the Board of Directors confidence in the long-term outlook for the Bank, Farmers & Merchants Bank also announced today that the Board has authorized a new $20 million stock repurchase program, authorizing the Bank to repurchase of up to $20 million of the Bank's common stock from time to time through December 31, 2023.

Under the new stock repurchase program, the Bank may purchase shares of its common stock from time to time through various means, including open market transactions, privately negotiated transactions, or otherwise in accordance with applicable requirements and laws. To the extent the Bank repurchases shares, the number of shares repurchased and the timing of any repurchases will depend on a number of factors, including, but not limited to, stock price, trading volume, regulatory requirements, general business conditions and other factors. The Bank may choose to modify, suspend or discontinue such proposed repurchases at any time and anticipates that any such repurchases will be funded from existing cash and cash equivalents or future cash flow. The new stock repurchase program does not obligate the Bank to repurchase any specific number of shares in any particular period.

During 2021, the Bank repurchased a total of 989 shares of its common stock at an average price of $8,152.22 per share, pursuant to a prior stock repurchase program that expired December 31, 2021. No shares were repurchased as part of that program during the fourth quarter of 2021.

About Farmers & Merchants Bank

Founded in Long Beach in 1907 by C.J. Walker, Farmers & Merchants Bank provides white-glove service to clients at 25 branches across Orange County, Long Beach, the South Bay and 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 consumer 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 Bank's website, www.fmb.com.

FARMERS & MERCHANTS BANK OF LONG BEACH
Income Statements (Unaudited)
(In thousands, except per share data)
	Three Months Ended December 31,		Twelve Months Ended December 31,
	2021		2020		2021		2020
Interest and dividend income:
Loans	$	58,534		$	58,780	$	244,062	$	226,663
Investment securities	16,569		12,345	60,444	57,181
Investments in FHLB and FRB stock	347		261	1,206	1,040
Interest-bearing deposits in financial institutions	566		235	1,578	1,381
Total interest and dividend income	76,016		71,621	307,290	286,265
Interest expense:
Deposits	2,068		3,119	8,952	17,028
Securities sold under repurchase agreements	697		1,291	3,280	7,856
Total interest expense	2,765		4,410	12,232	24,884
Net interest income	73,251		67,211	295,058	261,381
Provision for loan losses	(1,000	)	2,000	-	10,500
Net interest income after provision for loan losses	74,251		65,211	295,058	250,881
Non-interest income:
Service charges on deposit accounts	1,489		1,271	5,602	5,193
Card income	1,644		1,057	4,007	3,370
Other income	3,330		3,711	12,421	11,940
Total non-interest income	6,463		6,039	22,030	20,503
Non-interest expense:
Salaries and employee benefits	28,614		28,834	111,046	111,485
FDIC and other insurance expense	969		756	3,614	2,611
Occupancy expense	3,639		3,520	14,004	14,236
Software and equipment expense	3,823		4,741	14,254	14,046
Professional and legal services	1,720		1,589	6,070	6,009
Marketing expense	1,438		966	4,957	5,126
Other expense	4,958		4,780	18,618	21,681
Total non-interest expense	45,161		45,186	172,563	175,194
Income before income tax expense	35,553		26,064	144,525	96,190
Income tax expense	6,575		4,700	29,320	16,389
Net income	$	28,978		$	21,364	$	115,205	$	79,801
Basic earnings per common share	$	230.66		$	168.12	$	913.60	$	623.42
Diluted earnings per common share	$	226.02		$	167.49	$	898.31	$	622.74
Basic weighted-average shares outstanding	125,628		127,081	126,100	128,006
Diluted weighted-average shares outstanding	128,206		127,552	128,246	128,146

FARMERS & MERCHANTS BANK OF LONG BEACH
Balance Sheets (Unaudited)
(In thousands, except share and per share data)
Dec. 31, 2021	Dec. 31, 2020
Assets
Cash and due from banks:
Noninterest-bearing balances	$	49,025		$	72,109
Interest-bearing balances	1,252,646		939,566
Total cash and due from banks	1,301,671		1,011,675
Securities available-for-sale, at fair value	139,947		137,373
Securities held-to-maturity, at amortized cost	4,366,821		3,131,213
Loans held for sale	9,430		22,893
Gross loans	5,453,279		5,414,814
Allowance for loan losses	(72,880	)	(72,267	)
Unamortized deferred loan fees, net	(8,650	)	(15,747	)
Loans, net	5,371,749		5,326,800
Other real estate owned, net	966		966
Investments in FHLB and FRB stock, at cost	20,031		20,257
Bank premises and equipment, net	115,827		103,615
Deferred tax assets, net	27,939		26,489
Other assets	83,879		90,497
Total assets	$	11,438,260		$	9,871,778
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing demand deposits	$	3,552,248		$	2,889,012
Interest-bearing demand deposits	2,187,998		1,788,133
Savings and money market savings	2,755,862		2,129,755
Time deposits	745,382		810,726
Total deposits	9,241,490		7,617,626
Securities sold under repurchase agreements	916,672		1,062,348
Other liabilities	38,536		47,962
Total liabilities	10,196,698		8,727,936
Stockholders' Equity:
Common Stock, par value $20; authorized 250,000
125,628 and 126,617 shares issued and outstanding
at December 31, 2021 and 2020, respectively	2,513		2,532
Additional paid-in capital	89,972		90,516
Retained earnings	1,147,661		1,047,949
Accumulated other comprehensive income	1,416		2,845
Total stockholders' equity	1,241,562		1,143,842
Total liabilities and stockholders' equity	$	11,438,260		$	9,871,778

View source version on businesswire.com: https://www.businesswire.com/news/home/20220124005161/en/

John Hinrichs
Executive Vice President
562-437-0011, ext. 5035

Roger Pondel
PondelWilkinson Inc.
Investor Relations
310-279-5965
[email protected]

Source: Farmers & Merchants Bank of Long Beach

Public link

Please use the above public link if you want to share this noodl on another website.