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Farmers & Merchants Bank of Long Beach Reports 2010 Third-Quarter Results

^{Published on 2010-10-18 05:10:13 - Market Wire}
 

LONG BEACH, Calif.--([ BUSINESS WIRE ])--Farmers & Merchants Bank of Long Beach (OTCBB: FMBL) today reported financial results for the third quarter ended September 30, 2010.

"We continued to experience steady deposit growth in the third quarter, as customers seek safety and access to liquidity during this prolonged period of economic uncertainty"

aWe continued to experience steady deposit growth in the third quarter, as customers seek safety and access to liquidity during this prolonged period of economic uncertainty,a said Henry Walker, chief executive officer of Farmers & Merchants Bank of Long Beach. aThe historically low interest rate environment is contributing to a highly competitive industry. Nevertheless, Farmers & Merchants Banka™s deep roots in Southern California and financial stability remain important distinguishing factors for the communities we serve.a

Income Statement

For the 2010 third quarter, interest income decreased to $44.4 million from $48.0 million earned in the third quarter of 2009, primarily due to the low interest rate environment. Interest income for the nine-month period ended September 30, 2010 was $135.0 million, compared with $142.7 million reported for the same period in 2009.

Interest expense for the 2010 third quarter declined to $2.9 million from $4.3 million in last yeara™s third quarter, again, mostly related to the low interest rate environment. Interest expense for the nine-month period ended September 30, 2010 declined to $9.4 million from $14.6 million reported for the same period in 2009.

Net interest income for the 2010 third quarter decreased 4.9% to $41.5 million from $43.6 million for the third quarter of 2010, and declined 1.9% to $125.6 million for the first nine months of 2010 from $128.1 million for the same period in 2009.

The Banka™s provision for loan losses equaled $4.0 million for the third quarter of 2010, compared with $8.7 million for the preceding second quarter, and $7.7 million for the third quarter of 2009. Provision for loan losses totaled $19.5 million for the first nine months of 2010 versus $25.7 million for the same period in 2009. The Banka™s allowance for loan losses as a percentage of loans outstanding was 2.8% at September 30, 2010, compared with 3.0% at June 30, 2010.

Non-interest income rose to $4.3 million for the 2010 third quarter from $3.3 million in the third quarter a year ago. Non-interest income was $11.2 million for the nine-month period ended September 30, 2010, compared with $9.5 million for the same period in 2009.

Non-interest expense for the 2010 third quarter was $22.2 million, versus $19.8 million for the same period last year. Non-interest expense for the first nine months of 2010 was $57.7 million, compared with $60.3 million last year.

The Bank's net interest margin was 4.12% for the quarter ended September 30, 2010 and 4.30% for the first nine months of 2010.

Net income for the 2010 third quarter increased to $12.7 million, or $96.66 per diluted share, from $11.4 million, or $87.35 per diluted share, in the year-ago period. The Banka™s net income for the first nine months of 2010 rose to $37.7 million, or $287.90 per diluted share, from $30.6 million, or $233.51 per diluted share, for the same period in 2009.

Balance Sheet

At September 30, 2010, net loans totaled $1.97 billion, approximately the same when compared with the end of 2009. The Banka™s deposits totaled $2.97 billion at the end of the 2010 third quarter, compared with $2.84 billion at December 31, 2009. Non-interest bearing deposits represented 33.4% of total deposits at September 30, 2010, versus 31.6% of total deposits at December 31, 2009. Total assets increased to $4.26 billion at the close of the 2010 third quarter, compared with $3.98 billion at the close of the prior year.

At September 30, 2010, Farmers & Merchants Bank remained awell-capitalizeda under all regulatory categories, with a total risk-based capital ratio of 27.19%, a Tier 1 risk-based capital ratio of 25.93%, and a Tier 1 leverage ratio of 14.34%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 6.00% and 5.00%, respectively.

aThe strength of our balance sheet reflects the importance we place on maintaining strong liquidity and exercising the necessary discipline to navigate challenging economic conditions,a said Daniel Walker, president and chairman of the board. aFarmers & Merchants Banka™s robust health aligns with our core principles to uphold superior standards upon which customers know they can depend.a

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.