Updated at 1:50 p.m. Feb. 2:
Farmers & Merchants Bank is planning to expand its footprint to the Central Coast with a lease on a longstanding bank building in downtown Santa Barbara.
The Long Beach-based banking company said Jan. 24 that it will be renovating the former Rabobank location at the corner of Carrillo and Anacapa streets to develop a full-service branch that will open later this summer.
With $7 billion in assets, 111-year-old Farmers & Merchants is one of the oldest banks in California under continuous ownership. Although it is publicly traded on the Over-the-Counter market (symbol: FMBL), the founding Walker family, now in its fifth generation, still guides its fortunes.
The closing price at press time on Jan. 31 was $8,020 per share.
During 2017, the bank, which has 24 branches on the California coast, grew from $6.73 billion to $6.99 billion in assets at year-end.
“Our entry into Santa Barbara will help us continue that growth,” said Chairman and CEO Daniel Walker, who said the performance of a Farmers & Merchants Trust office in Santa Barbara encouraged the company to find a full-service branch location.
“The trust company office has performed very well. We’ve been encouraged by several customers to open a branch,” he said in a phone interview with the Business Times, adding that the bank has made about $25 million in commercial loans in the Santa Barbara area since the trust office opened.
“Especially now, given the recent tragedies the area has suffered, we are especially proud to be able to invest in the local economy,” said Farmers & Merchants President Henry Walker.
The new branch will occupy the former Santa Barbara region headquarters for Mid-State Bank & Trust and, prior to that, the headquarters for City Commerce Bank.
The Farmers & Merchants Trust office in Santa Barbara has been in operation since May under the management of Frank Tabar.
The office, located at 1034 Santa Barbara St. at the corner of Figueroa and Santa Barbara streets in the old Folk Mote Music building, will remain a separate operation after the branch is opened, the bank said.
Mark Mattingly and Matt Logsdon of Pacifica Commercial Realty represented the bank on the Carrillo Street transaction, which will involve reconfiguring the 5,000 square foot branch.
Walker said the bank has been making loans in the Santa Barbara area since the late 1950s and that it has a tradition of growth though community engagement.
The family has been involved with the Santa Barbara Polo & Racquet Club for a number of years and helped finance the Polo Club condo complex.
Since the end of the recession, Farmers & Merchants has seen assets more than double from below $3 billion to $7 billion.
“Our growth has been organic and not mergers and acquisitions,” Walker said, adding that he believes the Central Coast “needs the types of services that a $7 billion bank can provide.”
On Jan. 25, Farmers & Merchants Bank announced that 2017 fourth quarter interest and dividend income rose to $62 million from $56.4 million in the year earlier period.
Net income for the quarter was $11.5 million or $87.53 per share including a $6.8 million adjustment related to the 2017 tax act. Year earlier quarterly net income was $17.7 million or $135.42 per share.
The bank did not record any loan loss provision for the quarter.
Net income for the year was $494.65 per share compared with $546.16 per share for 2016.
Although the downtown Santa Barbara branch has a relatively rare drive-through window, the bank said it won’t use the drive up facility but will instead provide additional parking for customers.
The branch lease won’t include a second-floor office suite that had served as offices for both Mid-State and Rabobank.
• Contact Henry Dubroff at [email protected]