Farmers & Merchants' Q2 is 53rd profitable quarter
Staff Writer |
Farmers & Merchants Bancorp reported financial results for the 2016 second quarter and year-to-date ended June 30, 2016. The company reported 53 consecutive quarters of profitability.
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Net income for the 2016 second quarter ended June 30, 2016 was $2,974,000, or $0.65 per basic and diluted share compared to $2,597,000, or $0.56 per basic and diluted share for the same period last year.
The 14.5% improvement in net income for the 2016 second quarter was primarily due to a 10.6% increase in net interest income after provision for loan losses, and a 6.9% increase in noninterest income, partially offset by a 4.3% increase in noninterest expense.
Net income for the 2016 first half was $5,455,000, or $1.18 per basic and diluted share compared to $4,948,000, or $1.07 per basic and diluted share for the period ended June 30, 2015.
The 10.2% improvement in net income for the 2016 six-month period was primarily due to an 8.9% increase in net interest income after provision for loan losses, and a 5.7% increase in noninterest income, partially offset by a 5.4% increase in noninterest expense.
Total loans at June 30, 2016 increased 17.9% to a record $731,691,000, compared to $620,591,000 at June 30, 2015, and up 6.7% from $685,878,000 at December 31, 2015.
Year-over-year loan growth was strong across the company’s lending areas and included a 28.0% increase in commercial real estate loans, a 21.2% increase in consumer loans, a 16.6% increase in agricultural real estate loans, a 12.2% increase in agricultural, a 9.5% increase in commercial and industrial loans, and a 2.6% increase in consumer real estate loans, offset by a 20.1% reduction in industrial development bonds.
The company’s provision for loan losses for the 2016 second quarter was $339,000, compared to $183,000 for the 2015 second quarter. Year-to-date, the provision for loan losses was $616,000, compared to $297,000 for the same period last year. The second quarter and year-to-date increase in provision expense was a result of the significant growth the company has experienced in its loan portfolio.
F&M’s loan quality remains strong as the allowance for loan losses to nonperforming loans was 424.9% at June 30, 2016, compared to 193.5% at June 30, 2015.
Net charge-offs for the second quarter ended June 30, 2016 were $131,000, or 0.02% of average loans, compared to $233,000 or 0.04% of average loans, at June 30, 2015. Year-to-date, net charge-offs were $180,000, or 0.01% of average loans outstanding, compared to $275,000, or 0.04% of average loans outstanding for the same period last year.
Tangible stockholders’ equity increased to $119,913,000 at June 30, 2016, compared to $114,960,000 at December 31, 2015, and $111,594,000 at June 30, 2015.
On a per share basis, tangible stockholders’ equity at June 30, 2016 was $26.04, compared with $24.92 at December 31, 2015, and $24.23 at June 30, 2015. The increase in tangible stockholders’ equity is the result of growth in retained earnings due to increased profitability.
At June 30, 2016, the company had a Tier 1 leverage ratio of 11.74%, compared to 11.90% at June 30, 2015.
For the 2016 second quarter, the company declared cash dividends of $0.23 per share, which represented a dividend payout ratio of 35.3% compared to 38.8% for the same period last year. ■