Farmers & Merchants Bank of Long Beach Announces Court Approval of Litigation Settlement.

LONG BEACH, Calif. -- Farmers & Merchants Bank of Long Beach (OTCBB:FMBL) today announced that the Superior Court of the State of California for the County of Orange (the "Court") conducted a hearing on December 17, 2007 on whether to grant final approval of the proposed settlement of the class action and derivative lawsuit brought by shareholder Marcus D. Walker against certain present and former officers and/or directors of the Bank and the Bank as nominal defendant (the "Settlement"). At the conclusion of the hearing, the Court indicated that it would approve the Settlement and enter a formal order and judgment dismissing with prejudice the litigation brought by Marcus D. Walker in the next few days.

The Court's final approval and its entry of a judgment dismissing with prejudice the litigation are conditions to the effectiveness of the proposed Settlement and the transactions contemplated thereby. As previously announced, on December 6, 2007 the Bank's shareholders approved a proposal authorizing the Bank to repurchase shares of the Bank's common stock, which approval was also a condition to the effectiveness of the proposed Settlement. Effectiveness of the proposed Settlement and the transactions contemplated thereby remain subject to other conditions, including, but not limited to, the Court's judgment not being reversed or materially modified on appeal.

Additional Information

Statements contained herein about the terms and conditions of the proposed Settlement are not complete. A Notice of Pendency and Settlement of Class and Derivative Action (the "Notice Regarding Settlement") containing additional information about the terms and conditions of the proposed Settlement and the rights of class members was previously mailed to the Bank's shareholders. For more information regarding the terms and conditions of the proposed Settlement and the transactions contemplated thereby, interested persons are referred to the Notice Regarding Settlement and to the Stipulation of Settlement ("Stipulation") and exhibits thereto, copies of which are on file with the Superior Court of California for the County of Orange, located at 751 West Santa Ana Boulevard, Santa Ana, California 92701.

About Farmers & Merchants Bank of Long Beach

Founded in Long Beach in 1907 by C.J. Walker, Farmers & Merchants Bank of Long Beach has 22 branches in L.A. and Orange counties. The Bank specializes in commercial and small business banking along with business loan programs up to $35 million. The Bank is one of the strongest banks in the country measured by a variety of industry measurements. Farmers and Merchants Bank of Long Beach is a California state chartered bank with deposits insured by the Federal Deposit Insurance Corporation ("FDIC").

Information contained in this press release about the proposed Settlement and the matters contemplated thereby, other than historical information, should be considered forward-looking statements. These forward-looking statements and the effectiveness of the proposed Settlement are subject to risks and uncertainties, some of which cannot be predicted or quantified. These risks and uncertainties include, without limitation, the fact that the effectiveness of the proposed Settlement and the proposed transactions contemplated thereby remain subject to various conditions and the fact that even though the Court has indicated that it will grant its final approval of the proposed Settlement, the Court must enter an order and judgment dismissing with prejudice the litigation, and when entered such judgment could still be appealed. Any appeal of the judgment could take a significant amount of time to resolve which would have the effect of delaying the effectiveness of the proposed Settlement and the transactions contemplated thereby or could possibly result in changes to the proposed Settlement and such proposed transactions. In addition, the Stipulation and the transactions contemplated thereby may not become effective if there is an Occurrence of a Material Adverse Event, as set forth in the Stipulation. Should one or more of these risks or uncertainties materialize, or should any of the Bank's underlying assumptions with regard to any forward looking statements prove incorrect, actual results may vary materially from those anticipated, estimated or expected. In addition, other risks, uncertainties and factors may emerge from time to time, and it is not possible for the Bank to predict all such risks, uncertainties and factors. Any forward-looking statement speaks only as of the date on which such statement is made, and the Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on any forward-looking statements.