For Spokane Valley-based Farmers & Merchants Bank of Rockford, home is where the heart is, and in its case, home means Spokane County. The 97-year-old bank, which was started in Rockford, doesnt have plans to grow beyond Spokane County, but certainly has expanded within the county during the last several years.


Farmers & Merchants currently is developing its eighth free-standing branch, and has applied for approval to open its eighth supermarket branch, both on Spokanes North Side. In addition, the bank recently bought property near its headquarters in Spokane Valley for future development. Farmers & Merchants employment, assets, and net income are up, and, at least judging by its chief operating officers demeanor, its spirits are up, too.


The strength of our organization is our focus on community banking, says a smiling John Tombari, the banks COO.


The bank has a surprisingly strong base here. Even though its far from being the largest locally owned bank here, it has the second largest deposit base of any bank thats owned here, trailing only Washington Trust Bank. We believe that is based on our focus here in Spokane County, Tombari says.


Farmers & Merchants has added nine full-time equivalent positions to its overall staff of 130 employees during the last year and plans to hire about that many more within the next six months, Tombari says.


In the 12 months ended June 30, the banks assets increased 13 percent, to $291 million, Tombari says. Deposits grew 12 percent, to $250 million, and loans went up 9 percent, to $247 million. In 2002, the bank racked up record net income of $3.7 million, a 10.6 percent increase over its 2001 net profit of $3.3 million.


The free-standing branch that the bank currently is developing will be located in the Wandermere area, at 516 E. Hastings in the Fred Meyer Inc. stores parking lot, and is expected to open in December, Tombari says. Farmers & Merchants plans to occupy 5,000 square feet of space in the two-story structure and lease out the remaining 4,000 square feet, although tenants havent been secured for that space yet.


The supermarket branch it hopes to open would be inside Safeway Inc.s store in the Shadle Center, Tombari says. If all goes as expected, that branch will open this fall, he says.


We have a lot of clients in those areas, and there is a need for us to bring our services there, he says.


Tombari declines to elaborate on the banks plans for the 1.3-acre property it acquired for an undisclosed amount just north of its Spokane Valley branch and headquarters. He says Farmers & Merchants will continue to expand its footprint in Spokane County, looking for branch sites that meet the needs of our clients and that will serve our bank.


In addition to general-banking services, the new Wandermere branch also will offer residential real estate lending services to meet the tremendous needs because of new construction on the North Side and refinancing growth, Tombari says.


Low mortgage rates have boosted Farmers & Merchants residential real estate loan activity recently, but the primary focus of the lending we do is to businesses, he says. Employees in the banks commercial-loan department have an average of about 15 years of experience at Farmers & Merchants, and all steps of the loan-approval process are done in house, Tombari says.


We have the ability to make quick decisions because all of our decision makers are here, he says.


Farmers & Merchants also has a private-banking division, which caters to high-net-worth customers by bypassing normal banking channels and personally managing those accounts.


The division, formed two years ago, often handles requests in the clients offices rather than at Farmers & Merchants branches.


Their time is valuable, he says of such customers. We try to provide a comprehensive relationship for all their banking needs.


Farmers & Merchants launched a totally-free checking service in March of 2001 for personal-banking customers, and has begun offering that service to small businesses and nonprofit organizations, he says.


Were pioneering that move in the market here, Tombari claims.


In 2000, Farmers & Merchants appointed a management team to oversee operations replacing its conventional hierarchical system in which the banks officers reported to the chief operating officer. While Tombari still leads the bank and the team, he works hand in hand with Lorilei Bruggink, chief retail, information-systems, and marketing officer, and Mike Beasley, the chief credit officer. The three operate as equals in meetings, bringing different strengths and experiences to the table, Tombari says.


We think were broadening the depth of talent by doing this as well as reaping the rewards of bringing the various points of view to bear, he says. The growth numbers, and the fact that assets, deposits, and loans all are up speak to (the new management styles) success.