Farmers & Merchants Bank of Long Beach (“F&M” or the “Bank”) (OTCQX: FMBL) today reported financial results for the second quarter ended June 30, 2025.

"As we enter the second half of 2025, all of our stakeholders—customers, shareholders, F&M team members, and community partners—should find great comfort in the Bank’s continued strength and stability,” said W. Henry Walker, Chief Executive Officer. "Our solid deposit base, conservative loan portfolio, and balance sheet integrity remain cornerstones of our long-term strategy. All of our capital ratios not only meet, but far exceed regulatory requirements, underscoring the disciplined, resilient foundation we have built over time."

Daniel Walker, F&M’s Executive Chairman, added, "Loan demand across the communities we serve remains stable, a testament to the trust we have earned and the value we continue to provide. By offering competitive rates and maintaining a prudent approach to lending, our team is actively supporting local growth, while preserving F&M’s financial health. Combined with our experienced, talented management team, we are well-positioned to reach our next growth plateau and to continue delivering results that benefit all those we serve."

Operating Results

For the second quarter of 2025, total interest and dividend income amounted to $105.1 million, compared with $108.7 million in the second quarter of 2024. Total interest and dividend income for the six months ended June 30, 2025 decreased to $209.8 million from $217.3 million reported for the six months ended June 30, 2024.

Total interest expense for the second quarter of 2025 was $38.2 million, compared with $51.6 million a year ago. Interest expense for the six months ended June 30, 2025 was $78.7 million, compared to $102.8 million reported for the same period in 2024.

Net interest income before provision for credit losses for the second quarter of 2025 rose to $66.9 million, from $57.1 million for the second quarter of 2024. Net interest income before provision for credit losses for the six months ended June 30, 2025 was $131.0 million, compared with $114.5 million for the six months ended June 30, 2024.

F&M’s net interest margin improved to 2.42% for the second quarter of 2025, from 1.92% for the second quarter of 2024. Net interest margin was 2.35% for the six months ended June 30, 2025, compared with 1.92% for the same period in 2024.

For the second quarter of 2025, the Bank recorded a $3.3 million provision for credit losses, compared with a $1.0 million recapture of provision for credit losses in the second quarter of 2024. For the six months ended June 30, 2025, the Bank recorded a $1.3 million provision for credit losses, compared with a $3.5 million recapture of provision for credit losses for the six months ended June 30, 2024.

Total non-interest income was $4.5 million for the second quarter of 2025, compared with non-interest income of $10.6 million for the same period last year. For the six months ended June 30, 2025, total non-interest income was $8.8 million, compared with $18.8 million for the six months ended June 30, 2024.

Total non-interest expense for the second quarter of 2025 was $49.4 million, compared with $49.8 million for the second quarter of 2024. Non-interest expense for the six months ended June 30, 2025 was $97.4 million, compared with $99.8 million for the six months ended June 30, 2024.

Second quarter 2025 net income increased to $13.9 million, or $112.71 per diluted share, from $13.5 million, or $107.86 per diluted share for the second quarter of 2024. Net income for the six months ended June 30, 2025 was $30.7 million, or $249.01 per diluted share, compared with $26.5 million, or $210.54 per diluted share, for the six months ended June 30, 2024.

Balance Sheet

Gross loans were $6.47 billion as of June 30, 2025 and December 31, 2024. The Bank’s allowance for loan losses totaled $97.5 million, or 1.51% of loans held-for-investment at June 30, 2025, compared with $96.6 million, or 1.50% of loans held-for investment at December 31, 2024.

The Bank’s total deposits at June 30, 2025 amounted to $8.69 billion, compared with $8.77 billion at December 31, 2024. Noninterest-bearing deposits represented 34.2% of total deposits at June 30, 2025, and 33.2% at December 31, 2024.

Securities sold under repurchase agreements decreased to $956.3 million at June 30, 2025, from $991.9 million at December 31, 2024. Borrowings were $300.0 million at June 30, 2025, a decrease of $200.0 million from $500.0 million at December 31, 2024.

Total assets at June 30, 2025 were $11.40 billion, compared with $11.69 billion at December 31, 2024. Total stockholders’ equity was $1.39 billion at June 30, 2025, up from $1.37 billion at December 31, 2024.

Capital

All of F&M’s regulatory capital ratios are well in excess of regulatory requirements for a “well-capitalized” financial institution. The Bank’s total risk-based capital ratio was 19.16%; its tier 1 risk-based capital ratio was 17.91%, with a common equity tier 1 capital ratio of 17.91%, and a tier 1 leverage ratio of 12.18%, as of June 30, 2025. The minimum ratios for capital adequacy for a “well-capitalized” bank are 10.00%, 8.00%, 6.50% and 5.00%, respectively.

Stock Repurchase Program

During the six months ended June 30, 2025, the Bank repurchased 704 shares of its common stock for $4.0 million on the open market at an average repurchase price of $5,661.92 per share. Under the stock purchase program, the Bank may purchase shares of its common stock through various means, including open market transactions and privately negotiated transactions, in each case, subject to applicable requirements and laws.

To the extent the Bank repurchases shares, the number of shares repurchased and the timing of any repurchases will depend on a number of factors, including, but not limited to, stock price, trading volume, regulatory requirements, general business conditions and other factors. The Bank may choose to modify, suspend or discontinue such proposed purchases at any time and anticipates that any such repurchases will be funded from existing cash and cash equivalents or future cash flow. The stock repurchase program does not obligate the Bank to repurchase any specific number of shares in any particular 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 27 branches from San Clemente to 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 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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