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FARMERS & MERCHANTS BANK OF LONG BEACH REPORTS 2021 THIRD QUARTER RESULTS Company Release - 10/18/2021 LONG BEACH , Calif .-- ( BUSINESS WIRE ) -- Farmers & Merchants Bank of Long Beach ( " F & M " or the " Bank " ) ( OTCQB : FMBL ) today reported financial results for the third quarter ended September 30 , 2021 . " The Bank reported a sharp increase in net income , and further enhanced its financial strength for the third quarter of 2021 , with total assets attaining a record high , and capital ratios far exceeding regulatory requirements , " said Henry Walker , president . " As the transition from a COVID - 19 impacted economy continues , we are beginning to experience an increased pace of in - person meetings with new and existing clients who are looking to expand their operations and develop new projects , as evidenced , in part , by core loan growth of $ 150 million during the quarter . " Income Statement For the 2021 third quarter , interest and dividend income increased to $ 79.6 million from $ 70.8 million in the 2020 third quarter . Interest and dividend income for the nine - month period ended September 30 , 2021 rose to $ 231.3 million from $ 214.6 million for the same period in 2020 . Interest expense for the 2021 third quarter declined to $ 3.0 million from $ 5.8 million a year ago . Interest expense for the nine - month period ended September 30 , 2021 was $ 9.5 million , versus $ 20.5 million reported for the same period last year . Net interest income before provision for loan losses for the 2021 third quarter advanced to $ 76.7 million from $ 65.0 million for the third quarter of 2020 and increased to $ 221.8 million for the first nine months of 2021 from $ 194.2 million for the same period in 2020 . Farmers & Merchants ' net interest margin for the 2021 third quarter was 2.90 % , versus 2.80 % for the 2020 third quarter . Net interest margin was 2.89 % for the first nine months of 2021 , versus 3.05 % for the same period in 2020 . For the 2021 third quarter , the Bank recorded a $ 1.0 million recapture of loan loss provision , compared with a provision for loan losses of $ 3.0 million in last year's third quarter . The Bank's provision for loan losses was $ 1.0 million for the first nine months of 2021 , versus $ 8.5 million for the first nine months of 2020. The Bank's allowance for loan losses as a percentage of loans outstanding was 1.38 % at September 30 , 2021 , compared with 1.34 % at December 31 , 2020 . Non - interest income was $ 5.1 million for the 2021 third quarter , compared with $ 5.5 million in the third quarter a year ago . For the nine - month period ended September 30 , 2021 , non - interest income was $ 15.6 million , compared with $ 14.5 million for the same period in 2020 . Non - interest expense for the 2021 third quarter was $ 44.1 million , versus $ 43.8 million for the same period last year . Non - interest expense for the first nine months of 2021 was $ 127.4 million , compared with $ 130.0 million last year . Net income for the 2021 third quarter rose to $ 30.5 million , or $ 238.07 per diluted share , from $ 19.9 million , or $ 155.18 per diluted share , in the year - ago period . The Bank's net income for the first nine months of 2021 increased to $ 86.2 million , or $ 672.37 per diluted share , from $ 58.4 million , or $ 455.18 per diluted share , for the same period in 2020 . Balance Sheet At September 30 , 2021 , net loans totaled $ 5.3 billion , equal to that at December 31 , 2020. The Bank's deposits rose to $ 8.9 billion at the end of the 2021 third quarter , from $ 7.6 billion at December 31 , 2020. Noninterest - bearing deposits represented 39.3 % of total deposits at September 30 , 2021 , versus 37.9 % of total deposits at December 31 , 2020. Total assets increased to $ 11.3 billion at September 30 , 2021 , compared with $ 9.9 billion at December 31 , 2020 . At September 30 , 2021 , Farmers & Merchants Bank remained " well - capitalized " under all regulatory categories , with a total risk- based capital ratio of 18.86 % , a tier 1 risk - based capital ratio of 17.71 % , a common equity tier 1 capital ratio of 17.71 % , and a tier 1 leverage ratio of 11.25 % . The minimum ratios for capital adequacy for a well - capitalized bank are 10.00 % , 8.00 % , 6.50 % and 5.00 % , respectively . " As restrictions related to the pandemic are lifting in California and the vaccine rollout continues , we are working together throughout our communities toward a COVID - 19 solution and are optimistic about business conditions over the long - term in the markets we serve , " said Daniel Walker , chief executive officer and chairman of the board . " During the third quarter , we assisted clients with their applications for more than $ 250 million of PPP loan forgiveness and ended the quarter with approximately $ 140 million of remaining PPP loans . F & M's long history of financial and operational strength is allowing us to successfully navigate the current transitional and low interest rate business environment , as we have met numerous challenges serving our clients since the Bank's inception in 1907. " During the third quarter , the Bank repurchased 480 shares of its common stock on the open market at an average price of $ 8,257.63 share . For the first nine months of 2021 , the Bank purchased a total of 989 shares of its common stock at an average price of $ 8,152.22 . The purchases were made as part of a stock repurchase program announced in April 2020 , under which the board of directors authorized the repurchase of up to $ 20 million of the Bank's common stock . To the extent the Bank repurchases additional shares pursuant to this program , which expires December 31 , 2021 , the timing and number of shares repurchased will depend on a variety of factors , including , but not limited to , stock price , trading volume , regulatory requirements , general business conditions and others . The Bank may choose to modify , suspend or discontinue such proposed repurchases at any time without prior notice , and anticipates that any such repurchases will be funded from existing cash and cash equivalents or future cash flow . The share repurchase program does not obligate the Bank to acquire any specific number of shares in any period . About Farmers & Merchants Bank of Long Beach Founded in Long Beach in 1907 by C.J. Walker , Farmers & Merchants Bank provides white - glove service to clients at 25 branches across Orange County , Long Beach , the South Bay and Santa Barbara , as well as through its Online and Mobile Banking platforms . The Bank offers commercial and small business banking , business loan programs , home loans , and consumer 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 Bank's website , www.fmb.com . Forward - Looking Statements In addition to the historical information contained herein , this press release may contain forward - looking statements about Farmers & Merchants Bank of Long Beach , including statements about the Bank's ability to endure and navigate through the challenges caused by the COVID - 19 pandemic and expectations regarding the amount of , timing , and methods for potential repurchases of its common stock . Readers of this press release should understand that such forward - looking statements are neither promises nor guarantees and are subject to various risks and uncertainties , many of which are beyond the Bank's control . Such risks and uncertainties could cause actual results and actions to differ materially from those contemplated in such forward - looking statements and the Bank's reported results should not be considered an indication of the Bank's future performance . Factors that could cause or contribute to such differences include , but are not limited to , the adverse effects and negative impacts related to , or caused by the COVID - 19 pandemic , credit , market , operational , liquidity and interest rate risks associated with the Bank's business and operations , changes in interest rates , changes in general business and economic conditions , changes in banking laws and regulations , loan losses , increases in expenses , changes in rates charged on loans and earned on investments , accounting estimates and judgments , changes in rates on deposits , competition effects , the amount of non - interest income earned , as well as other factors . Given these factors , readers should not place undue reliance on any forward - looking statements , which reflect management's opinions only as of the date hereof . Except as otherwise required by law , the Bank assumes no obligation to update any forward - looking statements or information , which speak as of their respective dates . FARMERS & MERCHANTS BANK OF LONG BEACH Income Statements ( Unaudited ) ( In thousands , except per share data ) Three Months Ended September 30 , Nine Months Ended September 30 , 2021 2020 2021 2020 Interest and dividend income : $ 62,964 $ 57,538 185,528 167,883 Loans $ $ 15,876 12,746 43,875 44,836 Investment securities 299 260 859 779 Investments in FHLB and FRB stock 499 207 1,012 1,146 Interest - bearing deposits in financial institutions 79,638 70,751 231,274 214,644 Total interest and dividend income Interest expense : 2,137 3,767 6,884 13,909 Deposits 848 2,012 2,583 6,565 Securities sold under repurchase agreements 2,985 5,779 9,467 20,474 Total interest expense 76,653 64,972 221,807 194,170 Net interest income ( 1,000 ) 3,000 1,000 8,500 Provision for loan losses 77,653 61,972 220,807 185,670 Net interest income after provision for loan losses Non - interest income : 1,427 1,203 4,113 3,922 Service charges on deposit accounts 955 865 2,363 2,313 Card income 2,726 3,458 9,091 8,229 Other income 5,108 5,526 15,567 14,464 Total non - interest income Non - interest expense : 27,702 27,235 82,432 82,651 Salaries and employee benefits 931 672 2,645 1,855 FDIC and other insurance expense 3,667 3,822 10,365 10,716 Occupancy expense 3,447 3,560 10,431 10,511 Software and equipment expense 7 17 27 17 Other real estate owned expense 1,598 1,596 4,350 4,420 Professional and legal services 1,729 1,237 3,519 4,160 Marketing expense 5,001 5,675 13,633 15,678 Other expense 44,082 43,814 127,402 130,008 Total non - interest expense 38,679 23,684 108,972 70,126 Income before income tax expense 8,158 3,821 22,745 11,689 Income tax expense $ 30,521 $ 19,863 86,227 58,437 Net income $ 242.49 $ 155.28 682.94 455.41 Basic earnings per common share 238.07 $ 155.18 672.37 455.18 Diluted earnings per common share 125,871 127,918 126,260 128,316 Basic weighted - average shares outstanding 128,204 127,995 128,244 128,384 Diluted weighted - average shares outstanding Assets FARMERS & MERCHANTS BANK OF LONG BEACH Balance Sheets ( Unaudited ) ( In thousands , except share and per share data ) September 30 , 2021 December 31 , 2020 Cash and due from banks : 67,379 Noninterest - bearing balances Interest - bearing balances $ $ 1,424,159 72,109 939,566 Total cash and due from banks 1,491,538 147,409 1,011,675 137,373 Securities available - for - sale , at fair value 4,117,419 3,131,213 Securities held - to - maturity , at amortized cost 15,534 22,893 Loans held for sale 5,351,629 5,414,814 Gross loans ( 73,882 ) Allowance for loan losses ( 10,581 ) ( 72,267 ) ( 15,747 ) Unamortized deferred loan fees , net 5,267,166 5,326,800 Loans , net 966 966 Other real estate owned , net 20,031 20,257 Investments in FHLB and FRB stock , at cost 115,725 103,615 Bank premises and equipment , net 29,450 26,489 Deferred tax assets , net 81,042 90,497 Other assets Total assets Liabilities and Stockholders ' Equity Liabilities : 11,286,280 9,871,778 Deposits : 3,516,980 2,889,012 Noninterest - bearing demand deposits $ $ 2,059,824 1,788,133 Interest - bearing demand deposits 2,595,061 2,129,755 Savings and money market savings 775,376 810,726 Time deposits 8,947,241 7,617,626 Total deposits 1,081,673 1,062,348 Securities sold under repurchase agreements 41,356 47,962 Other liabilities Total liabilities Stockholders ' Equity : Common Stock , par value $ 20 ; authorized 250,000 10,070,270 8,727,936 125,628 and 126,617 shares issued and outstanding at September 30 , 2021 and December 31 , 2020 , respectively Additional paid - in capital Retained earnings 2,513 2,532 88,097 90,516 1,123,959 1,047,949 1,441 2,845 Accumulated other comprehensive income 1,216,010 1,143,842 Total stockholders ' equity 11,286,280 9,871,778 Total liabilities and stockholders ' equity View source version on businesswire.com : https://www.businesswire.com/news/home/20211018005106/en/ John Hinrichs Executive Vice President 562-437-0011 , ext . 4835 Roger Pondel PondelWilkinson Inc. Investor Relations 310-279-5980 investor@pondel.com Source : Farmers & Merchants Bank