Farmers & Merchants Bank, of Spokane, posted healthy gains in loans, assets, deposits, and net income in 2000.


We had a good year, says John Tombari, the banks chief operating officer.


The banks net income soared 28.7 percent to $2.8 million, up from $2.2 million in 1999. Net income in 1999 was virtually unchanged from the year earlier.


Farmers & Merchants loan portfolio grew nearly 17.8 percent to about $191 million at year-end, up from about $162 million at the end of 1999. The banks assets climbed 13.5 percent to almost $226 million at year-end.


Also, deposits surged nearly 14 percent to $200 million at the end of 2000, after creeping up a sluggish 1.7 percent in the previous year. In the industry, deposit growth has been a problem, but its really good for us, Tombari says.


The bank reported substantial improvements last year in two profitability ratiosreturn on equity and return on assets, Tombari says. F&Ms return on equity was about 14.6 percent, up from 12.2 percent in 1999, while its return on average assets climbed to 1.37 percent from 1.16 percent in the previous year.


Tombari credits the banks favorable results to improvements it has made in recent years, especially in customer service and internal efficiencies. Weve focused on lots of areas in the bank in the past several years, he says. This doesnt just happen overnight.


Last year F&M opened two new branchesone in an Albertsons Inc. store at 57th and Regal, and one in a Safeway Inc. store in Liberty Lake. In January, the bank opened a branch in a Safeway store at Market and Garland, giving it 14 in all.


Those branches are doing well for us, Tombari says. We still want more expansion, but it is expensive, so we must balance what we have done with what we want to do.


F&M now is eyeing northwest Spokane for additional branches, Tombari says. The bank has dropped plans for a branch at a site it had been evaluating on the Five Mile Prairie, however, and also has dropped plans for a branch on Sullivan Road, in the Spokane Valley, he says. Both those potential sites had run into development-related problems.


Plans to expand into Idaho through the purchase of a bank there or by starting a new Idaho institution also have been set aside, he says. Well keep all our options on the table, but thats not readily available.


A year ago, the bank appointed a five-person management team to oversee operations, and the team approach is working well, Tombari says. The results speak for themselves.


The team includes Diane Groh, who oversees branch banking; Lorilei Bruggink, who heads up computer, accounting, loan, and marketing services; Steve Utt, who oversees commercial lending; and Mike Beasley, who oversees correspondent banking.