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FARMERS & MERCHANTS BANK OF LONG BEACH REPORTS 2013 FOURTH-QUARTER AND FULL-YEAR RESULTS

-- 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.

Income Statement

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.

Balance Sheet

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."

About Farmers & Merchants Bank

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



lnterest expense:

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



Provision for loan losses



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 28,856



Net 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) Assets


Cash and due from banks:


Dee. 31, 2013 Dec.31,2012

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



Liabilities and Stockholders' Equity Liabilities:


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



Stockholders' Equity:

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

distributed by