Farmers & Merchants Bank of Long Beach (OTCBB: FMBL) today reported financial results for the first quarter ended March 31, 2012.

“Farmers & Merchants’ first-quarter results reflect a strong start for 2012, as we achieved solid profitability and continued to grow the Bank’s deposit base,” said Henry Walker, chief executive officer of Farmers & Merchants Bank of Long Beach. “During the quarter, we also continued to enhance the Bank’s technology and auditing teams with the naming of industry veteran Ken Nagel as chief information officer and tenured accounting executive Frank Coleman as chief auditor.”

Income Statement

For the three months ended March 31, 2012, interest income rose to $46.3 million from $45.3 million in the first quarter of 2011. Interest expense for the 2012 first quarter declined to $1.8 million from $2.6 million in the first quarter of 2011, primarily related to the prolonged low interest rate environment.

Net interest income for the 2012 first quarter rose 4.10% to $44.4 million from $42.7 million for the first quarter of 2011. Farmers & Merchants’ net interest margin was 4.07% for the 2012 first quarter, compared with 4.29% in the 2011 first quarter.

Primarily due to a decrease in gross loans for the period ended March 31, 2012, the Bank did not establish a provision for loan losses in the first quarter of 2012, compared with a provision for loan losses of $700,000 reported in the first quarter of 2011. The Bank’s allowance for loan losses as a percentage of loans outstanding was 2.86% at March 31, 2012, compared with 2.75% at March 31, 2011.

Non-interest income was $5.2 million for the 2012 first quarter, versus $3.3 million for the first quarter a year ago, principally related to the gain realized from the resolution and conclusion of a lending relationship.

Non-interest expense for the 2012 first quarter was $21.9 million, compared with $21.3 million for the same period last year.

Net income for the 2012 first quarter totaled $18.5 million, or $141.48 per diluted share, compared with net income of $15.3 million, or $117.18 per diluted share, for the 2011 first quarter.

Balance Sheet

At March 31, 2012, net loans decreased to $1.97 billion from $2.03 billion at December 31, 2011. The Bank’s deposits totaled $3.53 billion at the end of the 2012 first quarter, compared with $3.39 billion at December 31, 2011. Non-interest bearing deposits represented 37.9% of total deposits at March 31, 2012, versus 37.2% of total deposits at December 31, 2011. Total assets increased to $4.77 billion at the close of the 2012 first quarter from $4.70 billion at December 31, 2011.

At March 31, 2012, Farmers & Merchants Bank remained “well-capitalized” under all regulatory categories, with a total risk-based capital ratio of 29.00%, a Tier 1 risk-based capital ratio of 27.73%, and a Tier 1 leverage ratio of 14.45%. The minimum ratios for capital adequacy for a well-capitalized bank are 10.00%, 6.00% and 5.00%, respectively.

“Farmers & Merchants’ first-quarter results reflect the Bank’s ability to adapt and succeed in times of economic uncertainty,” said Daniel Walker, president and chairman of the board. “Despite a heightened regulatory environment, the Bank’s sound fundamentals and steadfast commitment to personalized service remained central to our performance.”

About Farmers & Merchants Bank of Long Beach

Farmers & Merchants Bank of Long Beach provides personal and business banking services through 21 offices in Los Angeles and Orange Counties. Founded in 1907 by C.J. Walker, the Bank specializes in commercial and small business banking along with business loan programs.