LONG BEACH, Calif.--(BUSINESS WIRE)--Jul 12, 2018--Farmers & Merchants Bank of Long Beach (OTCQB: FMBL) today reported financial results for the second quarter and six-months ended June 30, 2018.

“Our strong second-quarter results reflect a combination of solid topline growth and prudent management of expenses,” said Henry Walker, president of Farmers & Merchants Bank of Long Beach. “We believe the financial performance achieved thus far in 2018 is a testament to the health of the Bank, as we enter the second half of the year.”

Income Statement

For the three months ended June 30, 2018, total interest and dividend income rose to $63.7 million from $58.8 million in the second quarter of 2017. Interest and dividend income for the first half of 2018 increased to $125.4 million from $116.2 million reported for the first half of 2017.

Interest expense for the 2018 second quarter was $5.3 million, compared with $3.4 million in the second quarter of 2017. Interest expense for the first half of 2018 was $9.6 million, versus $6.6 million reported for the corresponding period last year.

Net interest income for the 2018 second quarter advanced to $58.5 million from $55.3 million for the second quarter of 2017. Net interest income for the first half of 2018 increased to $115.8 million from $109.6 million for the six months ended June 30, 2017.

Farmers & Merchants’ net interest margin was 3.39% for the 2018 second quarter, versus 3.44% in the 2017 second quarter. Net interest margin was 3.38% for the first half of 2018, compared with 3.43% for the same period in 2017.

The Bank did not have a provision for loan losses in the first half of 2018, nor in the same period a year ago. The Bank’s allowance for loan losses as a percentage of loans outstanding was 1.50% at June 30, 2018, compared with 1.53% at December 31, 2017.

Non-interest income was $7.7 million for the 2018 second quarter, compared with $6.8 million in the same period a year ago. In the first half of 2018, non-interest income was $14.4 million, compared with $15.9 million for the six months ended June 30, 2017.

Non-interest expense for the 2018 second quarter was $36.2 million, compared with $41.3 million for the same period last year. Non-interest expense for the first half of 2018 was $71.4 million, compared with $78.0 million for the first half of 2017.

Net income for the 2018 second quarter was $21.8 million, or $166.43 per diluted share, compared with $16.4 million, or $125.56 per diluted share, for the 2017 second quarter. Net income for the first half of 2018 rose to $42.8 million, or $327.08 per diluted share, from $36.6 million, or $279.67 per diluted share, for the six months ended June 30, 2017.

Balance Sheet

At June 30, 2018, net loans increased to $3.94 billion from $3.83 billion at December 31, 2017. The Bank’s deposits rose to $5.59 billion at the end of the 2018 second quarter from $5.40 billion at December 31, 2017. Non-interest-bearing deposits represented 38.4% of total deposits at June 30, 2018, versus 37.6% of total deposits at December 31, 2017. Total assets increased to $7.27 billion at the close of the 2018 second quarter from $6.99 billion at December 31, 2017.

At June 30, 2017, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 20.09%, a tier 1 risk-based capital ratio of 18.86%, a common equity tier 1 capital ratio of 18.86%, and a tier 1 leverage ratio of 13.87%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.

“The financial strength of F&M’s second-quarter results parallels our plans to enhance the Bank’s presence with new branch openings in Santa Barbara and Redondo Beach, in addition to expanding our office in Newport Beach, making it the Bank’s first regional office in Orange County,” said Daniel Walker, chief executive officer and chairman of the board. “These initiatives provide even better access for F&M’s existing and future clients who value an independent and regionally focused bank that is uniquely positioned to understand the needs of its community.”

About Farmers & Merchants Bank of Long Beach

Founded in Long Beach in 1907 by C.J. Walker, Farmers & Merchants Bank has 24 branches across Orange County, Long Beach and the South Bay. The Bank specializes in commercial and small business banking, business loan programs, home loans, and a robust offering of consumer retail 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 website, www.fmb.com.

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