NOVATO, Calif.--(BUSINESS WIRE)--
Bank of Marin Bancorp ("Bancorp") (Nasdaq:BMRC) announced second quarter
2009 earnings of $3.1 million, compared to $3.4 million in the second
quarter of 2008 and $3.2 million in the first quarter of 2009. Diluted
earnings per share were $0.60 in the second quarter of 2009, compared to
$0.65 in the second quarter of 2008, and $0.37 in the first quarter of
2009.
Earnings for the six-month period ended June 30, 2009 totaled $6.4
million, compared to $6.7 million for the same period a year ago.
Diluted earnings per share for the six-month period ended June 30, 2009
totaled $0.97, compared to $1.27 for the same period a year ago. The
earnings per common share for the first half of 2009 were reduced by
$0.25 as a result of the non-recurring accelerated accretion of the
redemption premium resulting from Bancorp's early repurchase of the
preferred stock that had been issued to the U.S. Department of the
Treasury (the "Treasury") under the voluntary Capital Purchase Program
("CPP") discussed below, and dividends on the preferred stock. Further,
earnings reflected a special assessment imposed by the Federal Deposit
Insurance Corporation ("FDIC") of $496 thousand in the second quarter of
2009, which reduced diluted earnings per share by $0.06 for the second
quarter and six-month period ended June 30, 2009.
"In a challenging economic time, we continue to produce strong financial
results, which are a direct result of our commitment to the fundamentals
of responsible, sound banking," said Russell A. Colombo, President and
Chief Executive Officer. "We have always operated as a
relationship-based community bank in the markets we know, which has led
to solid growth in loans and deposits with a manageable level of credit
risk."
Loans totaled $909.6 million at June 30, 2009, which represents an
increase of $110.1 million, or 13.8%, over June 30, 2008. The mix of
loans reflects an increase in the percentage of home equity lines of
credit, as well as a slight decrease in commercial real estate loans. In
the second quarter of 2009 and 2008, Bancorp's loan loss provision
totaled $0.7 million and $0.5 million, respectively. The provision for
loan losses totaled $1.9 million and $1.1 million in the first half of
2009 and 2008, respectively. The increase in the provision for loan
losses reflects the identification of specific reserves on certain
non-accrual loans, primarily resulting from the softening of the real
estate market. The allowance for loan losses as a percentage of loans
totaled 1.11% at June 30, 2009 compared to 1.07% a year ago. The
increase in the allowance for loan losses as a percentage of loans
primarily reflects an increased factor for economic uncertainty.
Non-performing loans totaled $5.9 million, or 0.6% of Bancorp's loan
portfolio at June 30, 2009 compared to $7.4 million or 0.8% at March 31,
2009 and compared to $236 thousand a year ago. "While we have
experienced a higher-than-historical level of non-accrual loans, they
remain at a very manageable level. Our credit quality outperforms
California and national banking industry trends due to our strong
underwriting standards, early detection of issues and active monitoring
of loans," said Christina J. Cook, Chief Financial Officer. Loans past
due 30 to 89 days totaled $7.2 million at June 30, 2009 compared to
$11.7 million at March 31, 2009 and $1.3 million a year ago.
Approximately 94% of the balance at June 30, 2009 represents
collateralized loans which Management believes are adequately secured
with minimal loss exposure.
Deposits totaled $922.6 million at June 30, 2009, which represents an
increase of $121.4 million, or 15.2% over June 30, 2008. "Our deposit
growth reflects the confidence and trust our customers place in us, and
our efforts to build strong, long-standing partnerships with our
customers," said Colombo. "Core deposit growth has provided valuable
liquidity to support our asset growth."
Bancorp's total risk-based capital totaled 11.7% at June 30, 2009 after
repayment of the TARP capital. "Our capital levels continue to exceed
regulatory standards for well-capitalized institutions," said Cook. "Our
focus on being well-capitalized has helped us through a challenging
economic climate and will position us well for the future."
In March 2009, Bancorp repurchased all 28,000 shares of preferred stock
issued to the Treasury on December 5, 2008 as part of the CPP. A total
of $28.2 million was paid to the Treasury, including accrued dividends
of $179 thousand. The CPP was established by the Treasury pursuant to
the Troubled Asset Relief Program ("TARP"). Warrants that were issued to
the Treasury as part of TARP to purchase 154,242 shares of common stock
at a per share exercise price of $27.23 remain outstanding. On June 26,
2009, the Treasury issued guidance on the process banks can use to
repurchase warrants under the CPP. Bancorp currently does not intend to
repurchase the warrants from the Treasury under these guidelines.
Net interest income of $13.0 million in the quarter ended June 30, 2009
increased $1.1 million, or 9.4%, from the same period last year, and the
year-to-date amount for 2009 increased $2.6 million, or 11.4% from the
same period last year. The increases reflect growth in interest-earning
assets and a reduced cost of funds, partially offset by decreased loan
yields in a lower-rate environment. The tax-equivalent net interest
margin was 5.13% in the second quarter of 2009 compared to 5.52% in the
second quarter of 2008 and 5.15% in the first half of 2009 compared to
5.46% in the first half of 2008. Decreases in the tax-equivalent net
interest margin were primarily due to the downward re-pricing of our
loan portfolio in a declining rate environment and to a lesser extent,
interest foregone on non-accrual loans (representing an eight-basis
point and a seven-basis point impact on the net interest margin in the
quarter and six months ended June 30, 2009, respectively).
Non-interest income totaled $1.3 million in the second quarter of 2009,
essentially unchanged from the same period last year. Excluding the $457
thousand pre-tax non-recurring gain on the sale of Visa Inc. shares in
the first quarter of 2008 discussed below, non-interest income of $2.5
million for the first six months of 2009 is essentially unchanged from
the same period last year.
Non-interest expense totaled $8.6 million in the second quarter of 2009
and $16.2 million in the first half of 2009. Excluding the first quarter
2008 reversal of the $242 thousandVisa Inc. litigation liability
discussed below, non-interest expense in the first half of 2009
increased $1.8 million, or 12.3%, from the same period a year ago. The
increase reflected $914 thousand more in FDIC premiums related to a
significantly higher FDIC premium assessment rate (including a one-time
special assessment of 5 basis points on total assets minus Tier 1
capital as of June 30, 2009) and increased deposits levels. The increase
also reflects higher personnel costs associated with branch expansion,
operational losses, increased legal fees in connection with our
participation and termination in the CPP program, as well as costs
associated with non-accrual loans, partially offset by lower data
processing and information technology costs.
Net income for the first six months of 2008 included a pre-tax
non-recurring gain of $457 thousand recorded in the first quarter
related to the mandatory redemption of a portion of Bank of Marin's
shares in Visa Inc., and the reversal of a pre-tax charge of $242
thousand that was originally recorded in the fourth quarter of 2007, for
the potential obligation to Visa Inc. in connection with certain
litigation indemnifications provided to Visa Inc. by Visa member banks.
These two non-recurring items positively impacted diluted earnings per
share for the first six months of 2008 by $0.08.
About Bank of Marin Bancorp
Bank of Marin Bancorp's assets currently exceed $1 billion. Bank of
Marin, as the sole subsidiary of Bancorp, operates twelve branch offices
in California and a commercial loan production office in San Francisco.
The Bank's Administrative offices are located in Novato, California and
its Wealth Management Services are located in Corte Madera, Novato and
Petaluma, California. Bank of Marin is included in the Russell 2000
Small-Cap Index and has received a superior five-star rating from Bauer
Financial for 40 consecutive quarters, including being named to the
Bauer Financial recommended list for 69 quarters (www.bauerfinancial.com).
Bank of Marin has been recognized as one of the "Best Places to Work in
the Bay Area" and one of the "Top Corporate Philanthropists" by the San
Francisco Business Times. For more information, visit Bank of Marin at www.bankofmarin.com.
Forward Looking Statements
This release may contain certain forward-looking statements that are
based on management's current expectations regarding economic,
legislative, and regulatory issues that may impact Bancorp's earnings in
future periods. Forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts. They
often include the words "believe," "expect," "intend," "estimate" or
words of similar meaning, or future or conditional verbs such as "will,"
"would," "should," "could" or "may." Factors that could cause future
results to vary materially from current management expectations include,
but are not limited to, general economic conditions, the current
financial turmoil in the United States and abroad, changes in interest
rates, deposit flows, real estate values, and competition; changes in
accounting principles, policies or guidelines; changes in legislation or
regulation; and other economic, competitive, governmental, regulatory
and technological factors affecting Bancorp's operations, pricing,
products and services. These and other important factors are detailed in
various securities law filings made periodically by Bancorp, copies of
which are available from Bancorp without charge. Bancorp undertakes no
obligation to release publicly the result of any revisions to these
forward-looking statements that may be made to reflect events or
circumstances after the date of this press release or to reflect the
occurrence of unanticipated events.
BANK OF MARIN BANCORP
FINANCIAL HIGHLIGHTS
Year To Year Comparison
June 30, 2009
SECOND QUARTER QTR 2009 QTR 2008 CHANGE % CHANGE
NET INCOME $3,133,000 $3,386,000 ($253,000) (7.5%)
DILUTED EARNINGS PER $0.60 $0.65 ($0.05) (7.7%)
COMMON SHARE
RETURN ON AVERAGE ASSETS 1.16% 1.48% (0.32%) (21.6%)
(ROA)
RETURN ON AVERAGE EQUITY 12.25% 14.73% (2.48%) (16.8%)
(ROE)
EFFICIENCY RATIO 60.11% 54.14% 5.97% 11.0%
TAX-EQUIVALENT NET 5.13% 5.52% (0.39%) (7.1%)
INTEREST MARGIN
YEAR TO DATE YTD 2009 YTD 2008 CHANGE % CHANGE
NET INCOME $6,362,000 $6,662,000 ($300,000) (4.5%)
DILUTED EARNINGS PER $0.97 $1.27 ($0.30) (23.6%)
SHARE
RETURN ON ASSETS (ROA) 1.20% 1.48% (0.28%) (18.9%)
RETURN ON EQUITY (ROE) 11.16% 14.68% (3.52%) (24.0%)
EFFICIENCY RATIO 56.99% 54.01% 2.98% 5.5%
TAX-EQUIVALENT NET 5.15% 5.46% (0.31%) (5.7%)
INTEREST MARGIN
AT PERIOD END June 30, 2009 June 30, 2008 CHANGE % CHANGE
TOTAL ASSETS $1,094,359,000 $952,539,000 $141,820,000 14.9%
TOTAL DEPOSITS $922,605,000 $801,220,000 $121,385,000 15.2%
TOTAL LOANS $909,614,000 $799,510,000 $110,104,000 13.8%
TOTAL NON-PERFORMING $5,909,000 $236,000 $5,673,000 2403.8%
LOANS
TOTAL ACCRUING LOANS $7,228,000 $1,319,000 $5,909,000 448.0%
30-89 DAYS PAST DUE
LOAN LOSS RESERVE TO 1.11% 1.07% 0.04% 3.7%
LOANS
LOAN LOSS RESERVE TO 1.7x 36.3x (34.6)x (95.3%)
NON-PERFORMING LOANS
STOCKHOLDERS' EQUITY $103,587,000 $92,547,000 $11,040,000 11.9%
BOOK VALUE PER SHARE $19.90 $18.00 $1.90 10.6%
TOTAL CAPITAL TO ASSETS 9.47% 9.72% (0.25%) (2.6%)
TOTAL RISK BASED CAPITAL 11.6% 11.6% 0.00% 0.0%
RATIO-BANK*
TOTAL RISK BASED CAPITAL 11.7% 11.8% (0.1%) (0.8%)
RATIO-BANCORP*
*Current period estimated
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF CONDITION
at June 30, 2009, March 31, 2009 and June 30, 2008
(in thousands, except share June 30, 2009 March 31, 2009 June 30, 2008
data; unaudited)
Assets
Cash and due from banks $ 46,376 $ 19,587 $ 30,355
Fed funds sold 300 --- 800
Cash and cash equivalents 46,676 19,587 31,155
Investment securities
Held to maturity, at 30,655 26,978 19,476
amortized cost
Available for sale (at fair
market value; amortized cost
$75,012, $75,127 and $73,577 76,365 76,369 72,999
at June 30, 2009, March 31,
2009 and June 30, 2008,
respectively)
Total investment securities 107,020 103,347 92,475
Loans, net of allowance for
loan losses of $10,135,
10,289, and $8,555 at June 899,479 911,270 790,955
30, 2009, March 31, 2009 and
June 30, 2008, respectively
Bank premises and equipment, 7,883 8,032 8,635
net
Interest receivable and 33,301 32,592 29,319
other assets
Total assets $ 1,094,359 $ 1,074,828 $ 952,539
Liabilities and
Stockholders' Equity
Liabilities
Deposits
Non-interest bearing $ 237,571 $ 218,455 $ 219,684
Interest bearing
Transaction accounts 88,353 89,873 76,839
Savings and money market 437,713 405,370 422,834
CDARS(R) reciprocal time 60,234 50,589 1,352
Other time 98,734 95,162 80,511
Total deposits 922,605 859,449 801,220
Federal funds purchased and
Federal Home Loan Bank 55,000 99,100 46,800
borrowings
Subordinated debenture 5,000 5,000 5,000
Interest payable and other 8,167 10,992 6,972
liabilities
Total liabilities 990,772 974,541 859,992
Stockholders' Equity
Common stock, no par value
Authorized - 15,000,000
shares
Issued and outstanding -
5,205,538 shares, 5,154,430
shares, and 5,140,351 shares 53,047 52,221 50,679
at June 30, 2009, March 31,
2009 and June 30, 2008,
respectively
Retained earnings 49,755 47,346 42,203
Accumulated other
comprehensive income (loss), 785 720 (335 )
net
Total stockholders' equity 103,587 100,287 92,547
Total liabilities and $ 1,094,359 $ 1,074,828 $ 952,539
stockholders' equity
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF OPERATIONS
for the three months ended June 30, 2009, March 31, 2009 and June 30, 2008
(in thousands, except per June 30, 2009 March 31, 2009 June 30, 2008
share amounts; unaudited)
Interest income
Interest and fees on loans $ 13,623 $ 13,462 $ 13,400
Interest on investment
securities
Securities of U.S. 809 868 882
Government agencies
Obligations of state and
political subdivisions (tax 287 246 183
exempt)
Corporate debt securities 115 1 78
and other
Interest on Federal funds 3 --- 1
sold
Total interest income 14,837 14,577 14,544
Interest expense
Interest on interest bearing 31 24 96
transaction accounts
Interest on savings and 817 790 1,583
money market deposits
Interest on CDARS(R) 183 181 4
reciprocal time deposits
Interest on other time 397 413 650
deposits
Interest on borrowed funds 376 361 302
Total interest expense 1,804 1,769 2,635
Net interest income 13,033 12,808 11,909
Provision for loan losses 700 1,185 510
Net interest income after 12,333 11,623 11,399
provision for loan losses
Non-interest income
Service charges on deposit 432 435 430
accounts
Wealth Management Services 351 316 310
Other income 490 486 539
Total non-interest income 1,273 1,237 1,279
Non-interest expense
Salaries and related 4,418 4,346 4,035
benefits
Occupancy and equipment 842 777 793
Depreciation and 336 350 327
amortization
FDIC insurance 832 317 112
Data processing 392 381 430
Professional services 395 423 419
Other expense 1,385 963 1,024
Total non-interest expense 8,600 7,557 7,140
Income before provision for 5,006 5,303 5,538
income taxes
Provision for income taxes 1,873 2,074 2,152
Net income $ 3,133 $ 3,229 $ 3,386
Preferred stock dividends $ --- $ (1,299 ) $ ---
and accretion
Net income available to $ 3,133 $ 1,930 $ 3,386
common stockholders
Net income per common share:
Basic $ 0.61 $ 0.38 $ 0.66
Diluted $ 0.60 $ 0.37 $ 0.65
Weighted average shares used
to compute net income per
common share:
Basic 5,164 5,146 5,139
Diluted 5,214 5,184 5,226
Dividends declared per $ 0.14 $ 0.14 $ 0.14
common share
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF OPERATIONS
for the six months ended June 30, 2009 and June 30, 2008
(in thousands, except per share amounts - June 30, 2009 June 30, 2008
unaudited)
Interest income
Interest and fees on loans $ 27,085 $ 26,712
Interest on investment securities
Securities of U.S. Government agencies 1,677 1,749
Obligations of state and political 533 344
subdivisions (tax exempt)
Corporate debt securities and other 116 167
Interest on Federal funds sold 3 113
Total interest income 29,414 29,085
Interest expense
Interest on interest bearing transaction 55 184
accounts
Interest on savings and money market deposits 1,607 3,774
Interest on CDARS(R) reciprocal time deposits 364 5
Interest on other time deposits 810 1,400
Interest on borrowed funds 737 523
Total interest expense 3,573 5,886
Net interest income 25,841 23,199
Provision for loan losses 1,885 1,125
Net interest income after provision for loan 23,956 22,074
losses
Non-interest income
Service charges on deposit accounts 867 836
Wealth Management Services 667 646
Net gain on redemption of shares in Visa, Inc. --- 457
Other income 976 1,042
Total non-interest income 2,510 2,981
Non-interest expense
Salaries and related benefits 8,764 8,193
Occupancy and equipment 1,619 1,561
Depreciation and amortization 686 645
FDIC insurance 1,149 235
Data processing 773 875
Professional services 818 825
Other expense 2,348 1,807
Total non-interest expense 16,157 14,141
Income before provision for income taxes 10,309 10,914
Provision for income taxes 3,947 4,252
Net income $ 6,362 $ 6,662
Preferred stock dividends and accretion $ (1,299 ) $ ---
Net income available to common stockholders $ 5,063 $ 6,662
Net income per common share:
Basic $ 0.98 $ 1.30
Diluted $ 0.97 $ 1.27
Weighted average shares used to compute net
income per common share:
Basic 5,155 5,137
Diluted 5,199 5,232
Dividends declared per common share $ 0.28 $ 0.28
Source: Bank of Marin Bancorp
Contact: for Bank of Marin Bancorp
Sandy Pfaff, 415-633-3224
spfaff@peppercom.com