FMBL Farmers and Merchants Bank (QX)

Farmers & Merchants Bank of Long Beach (OTCBB:FMBL) today reported financial results for the first quarter ended March 31, 2011.

“We maintained solid performance in the first quarter, despite global market uncertainty,” said Henry Walker, chief executive officer of Farmers & Merchants Bank of Long Beach. “Core deposits continued to grow during the quarter, as customers sought stability amid a challenging economic environment.”

Income Statement

For the three months ended March 31, 2011, interest income was $45.3 million, unchanged from the comparable prior-year period. Interest expense for the 2011 first quarter declined to $2.6 million from $3.3 million in the first quarter of 2010, primarily related to the continued low interest rate environment.

Net interest income for the 2011 first quarter rose 1.7% to $42.7 million from $42.0 million for the first quarter of 2010.

The Bank’s provision for loan losses equaled $700,000 in the first quarter of 2011, compared with $6.5 million in the preceding fourth quarter, and $6.8 million in the first quarter of 2010. The Bank’s allowance for loan losses as a percentage of loans outstanding was 2.75% at March 31, 2011, compared with 2.69% at December 31, 2010.

Non-interest income was $3.3 million for the 2011 first quarter versus $3.4 million for the first quarter a year ago. Non-interest expense for the 2011 first quarter was $21.3 million, compared with $17.2 million for the same period last year.

The Bank's net interest margin remained strong for the 2011 first quarter at 4.29%.

Net income for the 2011 first quarter totaled $15.3 million, or $117.18 per diluted share, compared with net income of $13.3 million, or $101.59 per diluted share, for the 2010 first quarter.

Balance Sheet

At March 31, 2011, net loans increased to $2.02 billion from $2.01 billion at December 31, 2010. The Bank’s deposits totaled $3.07 billion at the end of the 2011 first quarter, compared with $3.00 billion at December 31, 2010. Non-interest bearing deposits represented 34.5% of total deposits at March 31, 2011, versus 33.4% of total deposits at December 31, 2010. Total assets increased to $4.40 billion at the close of the 2011 first quarter from $4.26 billion at December 31, 2010.

At March 31, 2010, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 26.98%, a Tier 1 risk-based capital ratio of 25.72%, and a Tier 1 leverage ratio of 14.52%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 6.0% and 4.0%, respectively.

“Beginning the year with a strong balance sheet is imperative, particularly at a time when customers are seeking a banking partner with established fundamentals,” said Daniel Walker, president and chairman of the board. “During the first quarter, the Bank’s conservative lending practices and maintenance of liquidity were important factors that speak to more than century of experience serving Southern California.”

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.

       

FARMERS & MERCHANTS BANK OF LONG BEACH

Balance Sheets (unaudited)

(in thousands)

  Mar. 31, 2011 Dec. 31, 2010 Assets Cash and due from banks: Noninterest-bearing balances $ 55,373 $ 49,628 Interest-bearing balances 165,052 48,509 Investment securities 1,982,791 1,977,343 Gross loans 2,078,885 2,070,493 Less allowance for loan losses (57,094 ) (55,627 ) Less unamortized deferred loan fees, net (569 ) (426 ) Net loans 2,021,222   2,014,440   Bank premises and equipment 51,673 51,650 Other real estate owned 43,334 37,300 Accrued interest receivable 17,963 17,134 Deferred tax asset 28,582 27,032 Other assets 32,616   39,370   Total assets $ 4,398,606   $ 4,262,406     Liabilities and stockholders' equity   Liabilities: Deposits: Demand, non-interest bearing $ 1,058,592 $ 1,004,272 Demand, interest bearing 276,993 261,961 Savings and money market savings 788,338 754,446 Time deposits 947,030   983,314   Total deposits 3,070,953 3,003,993 Securities sold under agreements to repurchase 676,870 628,192 Accrued interest payable and other liabilities 15,239   7,141   Total liabilities 3,763,062   3,639,326     Stockholders' Equity: Common Stock, par value $20; authorized 250,000 shares; issued and outstanding 130,928 shares 2,619 2,619 Surplus 12,044 12,044 Retained earnings 614,453 601,861 Other comprehensive income 6,428   6,556   Total stockholders' equity 635,544   623,080   Total liabilities and stockholders' equity $ 4,398,606   $ 4,262,406        

FARMERS & MERCHANTS BANK OF LONG BEACH

Income Statements (unaudited)

(in thousands)

  Three Months Ended March 31, 2011     2010 Interest income:     Loans $ 29,399 $ 29,008 Securities held to maturity 12,420 11,871 Securities available for sale 3,381 4,203 Deposits with banks 60 218 Total interest income 45,260 45,300   Interest expense: Deposits 2,133 2,772 Securities sold under agreement to repurchase 435 536 Total interest expense 2,568 3,308 Net interest income 42,692 41,992   Provision for loan losses 700 6,750 Net int. income after provision for loan losses 41,992 35,242   Non-interest income: Service charges on deposit accounts 1,171 1,308 Gains on sale of securities 7 442 Merchant bankcard fees 264 254 Escrow fees 205 149 Other 1,642 1,198 Total non-interest income 3,289 3,351   Non-interest expense: Salaries and employee benefits 10,690 10,235 FDIC and other insurance expense 1,118 1,049 Occupancy expense 1,258 1,327 Equipment expense 1,315 1,211 Other real estate owned expense, net 1,492 560 Legal and professional fees 751 497 Marketing and promotional expense 805 705 Printing and supplies 226 221 Postage and delivery 268 289 Other 3,334 1,057 Total non-interest expense 21,257 17,151 Income before income tax expense 24,024 21,442   Income tax expense 8,682 8,141 Net income $ 15,342 $ 13,301 Basic and diluted earnings per common share $ 117.18 $ 101.59