FMBL - Farmers and Merchants Bank of Long Beach

[Foreign Tuffett]

Weighted-average diluted shares outstanding:

2018           Q1 2019   Q2 2019   Q3 2019
130,928   130,681   129,936   132,370

They started repurchasing shares in Q1, but the diluted sharecount is higher than it was at YE 2018.

Did they start using stock-based comp again, or am I missing something here?

[mjm]

they claim per website that actual # shares 9/19 is 128,528.  http://www.snl.com/IRW/FinancialHighlights/1014752?keyReport=-58

[Foreign Tuffett]

they claim per website that actual # shares 9/19 is 128,528.  http://www.snl.com/IRW/FinancialHighlights/1014752?keyReport=-58

That is basic shares outstanding, I am referring specifically to diluted.

[thepupil]

I would just like to take this opportunity to note that covid can't stop the safest bank in California from paying that Christmas dividend!

In these uncertain times, it's good to know that some things truly are sacred.

I will try not to spend my $84 (divvy for 2 shares) in one place.

everyone else out there still using this company's results as an effective sleep aid?




Press Release: Farmers & Merchants Bank of Long Beach Declares Fourth Quarter Cash Dividend of $27 Per Share, Declares Special Christmas Dividend of $15 Per Share

Farmers & Merchants Bank of Long Beach Declares Fourth Quarter Cash Dividend of $27 Per Share, Declares Special Christmas Dividend of $15 Per Share

--Declaration Represents 510(th) Dividend Payment to Shareholders Since 1916-- LONG BEACH, Calif.--(BUSINESS WIRE)--November 16, 2020--
Farmers & Merchants Bank of Long Beach today announced that its board of directors has declared regular quarterly cash dividend of $27 per share and a special Christmas dividend of $15 per share on the Bank's common stock.
Both the quarterly and special dividends are payable on December 15, 2020 to shareholders of record as of November 30, 2020. The declaration represents F&M's 510th dividend payment, including special dividends. F&M has paid a dividend each year to shareholders since 1916, and the value of F&M's quarterly dividend has never decreased.

[Ulrich]

Company is at 74% Book. Check
Very safe , strong capital buffer. Check
Good geographic area. They re operating in one of the richest neigbourhoods worldwide. Check

And they are buying back stock at these valuations. check

I think this stock has an easy upside of 40 percent + x.

This stock is an long term no brainer and very, very safe.

[kab60]

Value looks pretty fair to me... Sub 10 pct. ROE even before covid equals sub 1xTBV fair value? I don't disagree that this could easily rerate, like a ton of other financials, and it looks relatively safe (for a bank) yadayada, but what do you expect to gain longer term?

[thepupil]

I expect to make a 7-8%/ year  return from owning this with very low risk of permanent impairment of capital. I think stocks like this have a role in a portfolio. The ROE is only sub 10% because it’s so excessively capitalized; it will very likely remain so. It’s a stay rich stock rather than a get rich stock.

[Ulrich]

I bought NWLI and ANAT too. (the mindset is the same)

Farmers is a bank, the other two are mostly life insurance companies. All three are overcapitalized. Like thepupil said, the low profitability comes from the crazy high capital ratios.

Farmers and Merchant seems do know of the discount. They buy back stock. Because of the low trading volume these buybacks are limited. But it makes the downside very limited too

I bought ANAT at 70 Dollars not long ago and NWLI at 190. I think these stocks have a very good risk/reward in times of such heavy discounts to tangible book. Even a rerating to something like 60Percent tangible book value is a double. Plus these companies add tangible book value and are profitable year after year.

[thepupil]

http://www.snl.com/IRW/file/1014752/Index?KeyFile=406672743

Results out. They're really growing. I need to do a little more work to decide if that's a good thing.

EDIT: from what I can gather, I think it's the PPP loans on their balance sheet, their huge loan growth is in C&I and it appears there are bills to let community banks not count those in assets, but I can't find whether or not that passed. this gives me more comfort that they're not going too crazy with the lending.

EDIT 2: I'm 99% sure its PPP. the biggest jump was in Q2 in C&I. their call reports differ from the annual, but call reports said C&I went from $50mm-->$500mm+. And their 2019 annual letter said they processed $700mm of PPP loans, all this jives and leads me to conclude that the loan growth isn't as scary as it seems.