FARMERS & MERCHANTS BANK (LONG BEAC(NDA) 
By
John Hinrichs
Executive Vice President
562-437-0011, ext. 5035
Evan Pondel PondelWilkinson Inc. Investor Relations
310-279-5980 investor@pondel.com
-- Net Loans Grew 24% in Year-Over-Year Comparison --
LONG BEACH, Calif. - January 16, 2014 - Farmers & Merchants Bank of Long Beach (OTCBB: FMBL)
today reported financial results for the fourth quarter and full year ended December 31, 2013.
"Our strong loan growth in 2013 reflects the hard work and results-driven focus of F&M's newly expanded lending team," said Henry Walker, president of Farmers & Merchants Bank of Long Beach. "The Bank's position of strength was further enhanced during the year with additional strategic hires, as well as the opening of two new branches - Corona del Mar and Downey.
"F&M is entering 2014 with the financial health, vigor and core values that have been hallmarks of the Bank
since its inception in 1907," Walker added.
For the 2013 fourth quarter, total interest income was $43.5 million, compared with $40.4 million in the fourth quarter of 2012. Total interest income for the year ended December 31, 2013 was $163.2 million, compared with $171.1 million reported for 2012.
Interest expense for the 2013 fourth quarter was $1.6 million, essentially in line with interest expense for the same quarter in 2012. Interest expense for the full 2013 year declined to $6.2 million from $7.0 million in 2012, reflecting the protracted low interest rate environment.
Farmers & Merchants' net interest income for the 2013 fourth quarter was $41.9 million, compared with net interest income of $38.8 million for the same quarter of 2012. Net interest income for 2013 was $157.0 million, versus $164.1 million in 2012.
Farmers & Merchant's net interest margin was 3.30% for the year ended December 31, 2013, compared with
3.65% in the previous year.
The Bank did not have a provision for loan losses in 2013, nor in 2012, amid continued strength in the quality of its loan portfolio. The Bank's allowance for loan losses as a percentage of loans outstanding was 2.09% at December 31, 2013, compared with 2.57% at December 31, 2012.
Non-interest income was $7.2 million for the 2013 fourth quarter, compared with $6.2 million in the 2012 fourth quarter. Non-interest income for the full 2013 year totaled $37.8 million, versus $26.6 million for 2012.
Non-interest expense for the 2013 fourth quarter was $27. 2 million, compared with $26.4 million for the same period last year. Non-interest expense for the year ended December 31, 2013 was $104.3 million, compared with $98.5 million last year.
The Bank's net income for the 2013 fourth quarter was $15.0 million, or $114.41 per diluted share, compared with $13.2 million, or $101.13 per diluted share, in the 2012 fourth quarter. The Bank's net income for 2013 was $62.2 million, or $474.80 per diluted share, compared with $63.4 million, or $484.13 per diluted share, for
2012.
At December 31, 2013, net loans totaled $2.40 billion, compared with $1.93 billion at December 31, 2012. The Bank's deposits grew to $3.83 billion at the end of 2013, from $3.69 billion at December 31, 2012. Non-interest bearing deposits represented 38.5% of total deposits at December 31, 2013, versus 40.0% of total deposits at December 31, 2012. Total assets increased to $5.21 billion at the close of 2013 from $5.00 billion at December
31, 2012.
At December 31, 2013, Farmers & Merchants Bank remained "well-capitalized" under all regulatory categories, with a total risk-based capital ratio of 27.45%, a Tier 1 risk-based capital ratio of 26.20%, and a Tier 1 leverage ratio of 14.48%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 6.00% and
5.00%, respectively.
"Our solid loan growth was approached with the conservative lending standards that are fundamental to F&M's strength," said Daniel Walker, chief executive officer and chairman of the board. "Additionally, our new branch openings are indicative of the opportunities we see in Southern California, as we continue to serve a region
where a strong and stable banking partner is a key ingredient of an economy on the mend."
Founded in Long Beach in 1907 by C.J. Walker, Farmers & Merchants Bank has 23 branches in Los Angeles and Orange Counties. The Bank specializes in commercial and small business banking along with business loan programs. Farmers & Merchants Bank of Long Beach 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 www.fmb.com.
# # # (Tables Follow)
FARMERS & MERCHANTS BANK OF LONG BEACH In come Statements (Unaudited)
(In thousands except per share data)
lnterest income: Three Months Ended Dee. 31, Twelve Months Ended Dee. 31,2013 2012 2013 2012
Loans $ 28,35 l $ 26,060 $ 105,163 $ 112,157
Securities available-for-sale 1,778 2,364 8,067 10,794
Securities held-to-maturity 13,323 Il ,720 49,441 47,112
Deposits with banks 31 286 488 1,051
Total interest income 43,483 40,430 163, l 59 171,114
Deposits | 1,296 | 1,328 | 5,049 | 5,840 | |||
Securities sold tnlder repurchase agreements | 277 | 292 | l,116 | l, 147 | |||
Total interest expense | 1,573 | 1,620 | 6,165 | 6,987 | |||
Net interest income | 41,910 | 38,810 | 156,994 | 164,127 |
Net interest income after provision for loan losses 41,910 38,810 156,994 164,127
Non-interest income:Service charges on deposit accounts 1,151 1,136 4,554 4,598
Gains on sale of securities 261 303 1,308 345
Other real estate ovmed income 482 293 3,757 2,797
Merchant bankcard income 2,348 2,178 9,358 8,822
Other income 2,942 2,291 18,837 10,071
Total non-interest income 7,184 6,201 37,814 26,633
Non-interest expense:Salaries and employee benefìts 15,726 13,012 55,986 48,271
FDIC and other insurance expense 123 1,667 4,825 6,479
Occupancy expense 1,944 1,732 6,987 6,500
Equipment expense 1,434 1,552 6,026 5,634
Other real estate ovmed expense 285 1,033 528 4,476
Amortization ofpublic welfare investments 2,020 1,866 8,082 7,762
Merchant bankcard expense 1,929 1,749 7,493 6,821
Legai and professional services 885 953 3,604 2,882
Marketing expense 790 998 3,770 3,424
Other expense 2,101 1,790 6,961 6,268
Total non-interest expense 27,237 26,352 104,262 98,517
Income before income tax expense 21,857 18,659 90,546 92,243
Income tax expense 6,878 5,420 28,382 28,856Net income $ 14,979 $ 13,239 $ 62,164 $ 63,387
Basic and diluted eamings per connnon share $ 114.41 $ 101.13 $ 474.80 $ 484.13
FARMERS & MERCHANTS BANK OF LONG BEACH Balance Sheets (Unaudited) (In thousands except share and per share data) AssetsCash and due from banks:
Noninterest-bearing balances | $ 65,261 | $ 60,914 |
Interest-bearing balances | 20,755 | 253,087 |
Securities available-for-sale | 427,942 | 630,055 |
Securities held-to-maturity | 2,145,289 | 1,942,085 |
Loan held for sale | 465 | 2,364 |
Gross loans | 2,454,302 | 1,982,076 |
Less allowance for loan losses | (51,251) | (50,994) |
Less unamortized deferred loan fees, net | (1,704) | (364) |
Net loans | 2,401,347 | 1,930,718 |
Other real estate ownecl,net | 14,502 | 17,696 |
Public welfure investments | 27,722 | 35,804 |
Bank premises and equipment, net | 66,212 | 60,504 |
Net deferred tax assets | 23,512 | 26,060 |
Other assets | 21,579 | 29,674 |
Total assets | $ 5,214,586 | $ 4,988,962 |
Deposits:
Demancl, non-interest bearing | $ 1,475,888 | $ 1,474,215 |
Demancl, interest bearing | 413,291 | 346,991 |
Savings and money market savings | 1,080,774 | 1,011,029 |
Time deposits | 861,489 | 853,631 |
Total deposits | 3,831,442 | 3,685,866 |
Securities sold under repurchase agreements | 595,991 | 551,293 |
Other liabilities | 27,986 | 34,543 |
Total liabilitie s | 4,455,419 | 4,271,702 |
Common Stock, par value $20; authorized 250,000 shares; issued and outstanding 130,928 shares | 2,619 | 2,619 | |
Aclditional paid-in capitai | 12,044 | 12,044 | |
Retained earnings | 742,408 | 695,169 | |
Accumulateci other comprehensive incarne | 2,096 | 7,427 | |
Total stockholders' equity | 759,167 | 717,259 | |
Totalliabilitie s and stockholders' e quity | $ 5,214,586 | $ 4,988,961 |
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