Farmers & Merchants Bank “Robust and Healthy”
2009-05-26 · By Editor
Farmers & Merchants Bank of Long Beach (OTCBB: FMBL) recently reported financial results for the first quarter which ended March 31, 2009.
“We continued to experience solid deposit growth in the first quarter, a function of our customers’ trust and confidence in Farmers & Merchants Bank of Long Beach at a time when the soundness and strength of a financial institution is absolutely imperative,” said Henry Walker, chief executive officer. “At the same time, our net loans grew more modestly as our priority is to maintain strong levels of liquidity.”
For the 2009 first quarter, interest income increased 2.8% to $46.6 million from $45.4 million in the prior-year comparable period, primarily reflecting growth in the Bank’s loan portfolio. Interest expense for the 2009 first quarter declined to $5.6 million from $10.4 million in the first quarter of 2008, mostly related to the declining interest rate environment.
Net interest income for the 2009 first quarter rose 17.5% to $41.0 million from $34.9 million for the first quarter of 2008.
Farmers & Merchants Bank’s provision for loan losses equaled $8.0 million in the first quarter of 2009, compared with $23.7 million in the preceding fourth quarter, and $2.0 million in the first quarter of 2008. The Bank’s allowance for loan losses as a percentage of loans outstanding was 2.52% at March 31, 2009, compared with 2.69% at December 31, 2008.
Non-interest income was $2.8 million for the 2009 first quarter versus $3.2 million in the first quarter a year ago. Non-interest expense for the 2009 first quarter was $19.6 million, versus $15.4 million for the same period last year. The increase in non-interest expense was principally attributable to increased FDIC and other insurance expenses, as well as costs associated with the foreclosure of certain real estate properties.
Farmers & Merchants Bank’s net income for the 2009 first quarter totaled $10.0 million, or $76.64 per diluted share, compared with net income of $12.8 million, or $85.45 per diluted share, in the year-ago period.
At March 31, 2009, net loans increased to $1.96 billion from $1.95 billion at December 31, 2008. Farmers & Merchants Bank’s deposits totaled $2.87 billion at the end of the 2009 first quarter, compared with $2.68 billion at December 31, 2008. Non-interest bearing deposits represented 31% of total deposits at March 31, 2009, versus 30% of total deposits at December 31, 2008. Total assets increased to $3.87 billion at the close of the 2009 first quarter, compared with $3.64 billion at December 31, 2008.
At March 31, 2009, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 26.60%, a Tier 1 risk-based capital ratio of 25.34%, and a Tier 1 leverage ratio of 14.86%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 6.00% and 5.00%, respectively.
“Our balance sheet remains robust and healthy, and we are committed and focused on maintaining its strength,” said Daniel Walker, president and chairman of the board. “While the economic environment is challenging, these are the times when Farmers & Merchants Bank of Long Beach has an opportunity to provide its customers with time-tested banking services dating back more than a century.”
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.