Maintains Healthy Credit Quality and Enhances Capital Strength
NOVATO, Calif.--(BUSINESS WIRE)--
Bank of Marin Bancorp ("Bancorp") (NASDAQ:BMRC) announced 2009
third-quarter earnings of $3.6 million, up $906 thousand, or 33.6%, from
the same period a year ago, and up $468 thousand, or 14.9% from the
second quarter of 2009. Diluted earnings per share were $0.68 in the
third quarter of 2009, up sixteen cents, or 30.8% from the third quarter
of 2008, and up eight cents, or 13.3% from the second quarter of 2009.
"We are pleased to achieve the highest quarterly earnings in our history
this quarter," said Russell A. Colombo, President and Chief Executive
Officer. "Our business success is based on our consistent execution on
the fundamentals of responsible, solid banking which has been
particularly important in this challenging economic environment."
Bancorp also provided the following highlights on its operating and
financial performance for the third quarter of 2009:
-- Strong loan growth of $80.8 million, or 9.6%, over a year ago; total loans
of $919.8 million at September 30, 2009.
-- Solid deposit growth of $100.1 million, or 11.8%, over a year ago; total
deposits of $949.3 million at September 30, 2009.
-- Bank of Marin opened its thirteenth full service branch in Greenbrae,
California.
-- Credit quality remains strong: non-performing loans totaled $6.0 million, or
0.7% of Bancorp's loan portfolio at September 30, 2009.
-- A robust net interest margin of 5.18% in the third quarter.
-- The third quarter efficiency ratio improved to 53.02%, down from 55.11% in
the same quarter last year and 60.11% in the preceding quarter.
-- Bancorp's total risk-based capital ratio grew to 12.1% at September 30,
2009, up fifty basis points from a year ago.
"Our capital growth allows us to withstand fluctuations in an uncertain
economy and is a reflection of our overall strength," said Christina J.
Cook, Chief Financial Officer. "We are pleased to continue to exceed
regulatory standards for well-capitalized institutions."
Loans and Credit Quality
Total loans reached $919.8 million at the end of third quarter,
representing growth of $80.8 million or a 9.6% increase from the same
time last year. The mix of loans reflects an increase in home equity
lines of credit as a percentage of total loans, as well as a slight
decrease in commercial real estate loans as a percentage of total loans.
Non-performing loans totaled $6.0 million, or 0.7% of Bancorp's loan
portfolio at September 30, 2009 compared to $5.9 million or 0.6% at June
30, 2009 and $823 thousand a year ago. Accruing loans past due 30 to 89
days declined to $4.4 million at September 30, 2009, down from $7.2
million and $10.2 million at June 30, 2009 and September 30, 2008,
respectively. The allowance for loan losses of $11.1 million is
equivalent to 184% of non-performing loans. The allowance for loan
losses as a percentage of loans totaled 1.21% at September 30, 2009
compared to 1.11% a year ago. The increase in the allowance for loan
losses as a percentage of loans reflects an increased allowance factor
for residential subdivision land loans.
Deposits
Total deposits grew $100.1 million or 11.8% over a year ago. New deposit
account openings during the first nine months of 2009 increased 17% over
the same period in 2008. Early in September 2009, Bank of Marin opened
the new Greenbrae branch, which has generated over $5 million in
deposits in its first month of operation. Non-interest bearing deposits
totaled 26.0% of total deposits at September 30, 2009 and have provided
sturdy and low-cost funding for Bancorp's operations.
"Our healthy deposit growth is a reflection of the confidence and trust
our customers continue to place in us," said Colombo. "By solidifying
our footprint in Marin with a new branch in Greenbrae, we are well
positioned to increase market share."
Earnings
Earnings for the nine-month period ended September 30, 2009 totaled
$10.0 million, an increase of $606 thousand, or 6.5%, over the same
period a year ago. Diluted earnings per share for the nine-month period
ended September 30, 2009 totaled $1.66, compared to $1.79 for the same
period a year ago. The earnings per common share for the nine-month
period ended September 30, 2009 were reduced by $0.25 resulting from
Bancorp's early repurchase of the preferred stock that had been issued
under the TCPP1 and dividends on the preferred stock.
Further, earnings reflected a special assessment imposed by the FDIC2
on all banks of $496 thousand in the second quarter of 2009, which
reduced diluted earnings per share by $0.06 for the nine-month period
ended September 30, 2009.
Net interest income of $13.3 million in the quarter ended September 30,
2009 increased $1.0 million, or 8.3%, from the same period last year,
and the year-to-date amount for 2009 increased $3.7 million, or 10.3%
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 primarily due to a lower-rate environment. The
tax-equivalent net interest margin was 5.18% in the third quarter of
2009 compared to 5.35% in the third quarter of 2008 and 5.16% in the
first nine months of 2009 compared to 5.43% in the first nine months 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 a nine-basis point and a eight-basis point impact on
the net interest margin in the quarter and nine months ended September
30, 2009, respectively).
Non-interest income totaled $1.3 million in the third quarter of 2009,
an increase of $137 thousand or 11.5% 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 $3.8 million for the first nine months of 2009
remained relatively unchanged from the same period last year.
Non-interest expense totaled $7.8 million in the third quarter of 2009
and $23.9 million in the first nine months of 2009. Excluding the first
quarter 2008 reversal of the $242 thousandVisa Inc. litigation
liability discussed below, non-interest expense in the first nine months
of 2009 increased $2.1 million, or 9.7%, from the same period a year
ago. The increase reflected $1.1 million more in FDIC premiums related
to a significantly higher FDIC premium assessment rate (including a
special assessment of five basis points on total assets minus Tier 1
capital as of June 30, 2009) and increased deposits levels. The increase
also reflects higher personnel and occupancy costs associated with
branch expansion, operational losses, increased legal fees in connection
with our participation and termination in the TCPP program, as well as
costs associated with non-accrual loans, partially offset by lower data
processing and other professional costs.
Net income for the first nine 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 nine 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 thirteen 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 Greenbrae,
Novato and Petaluma, California. Bank of Marin is included in the
Russell 2000 Small-Cap Index, is recognized as one of thirty top
performing small-cap banks by Sandler O'Neill + Partners, and has
received the highest five star rating from Bauer Financial for 41
consecutive 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.
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.
1 ) The U.S. Department of the Treasury Capital Purchase
Program. In March 2009, Bancorp repurchased all 28,000 shares of
preferred stock issued under the The U.S. Department of the Treasury
(the "Treasury") Capital Purchase Program on December 5, 2008. A total
of $28.2 million was paid to the Treasury, including accrued dividends
of $179 thousand. 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 TCPP. Bancorp currently does not intend to repurchase the
warrants from the Treasury under these guidelines.
2 ) Federal Deposit Insurance Corporation
BANK OF MARIN BANCORP
FINANCIAL HIGHLIGHTS
Year To Year Comparison
September 30, 2009
(dollars in thousands, except share data; unaudited)
THIRD QUARTER QTD 2009 QTD 2008 CHANGE % CHANGE
NET INCOME $3,601 $2,695 $906 33.6%
DILUTED EARNINGS PER $0.68 $0.52 $0.16 30.8%
COMMON SHARE
RETURN ON AVERAGE 1.29% 1.10% 0.19% 17.3%
ASSETS (ROA)
RETURN ON AVERAGE 13.46% 11.37% 2.09% 18.4%
EQUITY (ROE)
EFFICIENCY RATIO 53.02% 55.11% (2.09%) (3.8%)
TAX-EQUIVALENT NET 5.18% 5.35% (0.17%) (3.2%)
INTEREST MARGIN
NET CHARGE-OFFS TO 0.01% 0.12% (0.11%) (93.1%)
AVERAGE LOANS
YEAR TO DATE YTD 2009 YTD 2008 CHANGE % CHANGE
NET INCOME $9,963 $9,357 $606 6.5%
DILUTED EARNINGS PER $1.66 $1.79 ($0.13) (7.3%)
SHARE
RETURN ON ASSETS 1.23% 1.35% (0.12%) (8.9%)
(ROA)
RETURN ON EQUITY 11.89% 13.55% (1.66%) (12.3%)
(ROE)
EFFICIENCY RATIO 55.63% 54.39% 1.24% 2.3%
TAX-EQUIVALENT NET 5.16% 5.43% (0.27%) (5.0%)
INTEREST MARGIN
NET CHARGE-OFFS TO 0.20% 0.14% 0.06% 41.9%
AVERAGE LOANS
AT PERIOD END September 30, 2009 September 30, 2008 CHANGE % CHANGE
TOTAL ASSETS $1,126,529 $984,739 $141,790 14.4%
TOTAL DEPOSITS $949,291 $849,228 $100,063 11.8%
TOTAL LOANS $919,844 $839,007 $80,837 9.6%
TOTAL NON-PERFORMING $6,049 $823 $5,226 635.0%
LOANS
TOTAL ACCRUING LOANS $4,418 $10,214 ($5,796) (56.7%)
30-89 DAYS PAST DUE
LOAN LOSS RESERVE TO 1.21% 1.11% 0.10% 9.0%
LOANS
LOAN LOSS RESERVE TO 1.8x 11.3x (9.5)x (84.1%)
NON-PERFORMING LOANS
NON-PERFORMING LOANS 0.66% 0.10% 0.56% 570.9%
TO TOTAL LOANS
STOCKHOLDERS' EQUITY $107,416 $94,673 $12,743 13.5%
BOOK VALUE PER SHARE $20.55 $18.43 $2.12 11.5%
TOTAL CAPITAL TO 9.54% 9.61% (0.07%) (0.7%)
ASSETS
TOTAL RISK BASED 12.0% 11.4% 0.60% 5.3%
CAPITAL RATIO-BANK*
TOTAL RISK BASED
CAPITAL 12.1% 11.6% 0.50% 4.3%
RATIO-BANCORP*
*Current period
estimated
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF CONDITION
at September 30, 2009, June 30, 2009 and September 30, 2008
(in thousands, except September 30, 2009 June 30, 2009 September 30, 2008
share data; unaudited)
Assets
Cash and due from banks $ 63,589 $ 46,376 $ 20,464
Fed funds sold --- 300 ---
Cash and cash equivalents 63,589 46,676 20,464
Investment securities
Held to maturity, at 30,163 30,655 20,542
amortized cost
Available for sale (at
fair market value;
amortized cost $79,850,
$75,012 and $73,405 at 81,841 76,365 73,348
September 30, 2009, June
30, 2009 and September
30, 2008, respectively)
Total investment 112,004 107,020 93,890
securities
Loans, net of allowance
for loan losses of
$11,118, $10,135 and
$9,271 at September 30, 908,726 899,479 829,736
2009, June 30, 2009 and
September 30, 2008,
respectively
Bank premises and 8,257 7,883 8,558
equipment, net
Interest receivable and 33,953 33,301 32,091
other assets
Total assets $ 1,126,529 $ 1,094,359 $ 984,739
Liabilities and
Stockholders' Equity
Liabilities
Deposits
Non-interest bearing $ 246,968 $ 237,571 $ 215,307
Interest bearing
Transaction accounts 89,355 88,353 80,723
Savings and money market 454,759 437,713 449,303
CDARS(R) reciprocal time 55,535 60,234 16,776
Other time 102,674 98,734 87,119
Total deposits 949,291 922,605 849,228
Federal funds purchased
and Federal Home Loan 55,000 55,000 28,600
Bank borrowings
Subordinated debenture 5,000 5,000 5,000
Interest payable and 9,822 8,167 7,238
other liabilities
Total liabilities 1,019,113 990,772 890,066
Stockholders' Equity
Common stock, no par
value
Authorized - 15,000,000
shares
Issued and outstanding -
5,226,993 shares,
5,205,538 shares, and
5,136,267 shares at 53,635 53,047 50,527
September 30, 2009, June
30, 2009 and September
30, 2008, respectively
Retained earnings 52,626 49,755 44,179
Accumulated other
comprehensive income 1,155 785 (33 )
(loss), net
Total stockholders' 107,416 103,587 94,673
equity
Total liabilities and $ 1,126,529 $ 1,094,359 $ 984,739
stockholders' equity
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF OPERATIONS
for the three months ended September 30, 2009, June 30, 2009 and September 30,
2008
(in thousands, except per September 30, 2009 June 30, 2009 September 30, 2008
share amounts; unaudited)
Interest income
Interest and fees on $ 13,860 $ 13,623 $ 13,833
loans
Interest on investment
securities
Securities of U.S. 794 809 892
Government agencies
Obligations of state and
political subdivisions 285 287 187
(tax exempt)
Corporate debt securities 176 115 91
and other
Interest on Federal funds 1 3 25
sold
Total interest income 15,116 14,837 15,028
Interest expense
Interest on interest
bearing transaction 31 31 93
accounts
Interest on savings and 821 817 1,833
money market deposits
Interest on CDARS(R) 186 183 50
reciprocal time deposits
Interest on other time 378 397 562
deposits
Interest on borrowed 364 376 179
funds
Total interest expense 1,780 1,804 2,717
Net interest income 13,336 13,033 12,311
Provision for loan losses 1,100 700 1,685
Net interest income after 12,236 12,333 10,626
provision for loan losses
Non-interest income
Service charges on 456 432 417
deposit accounts
Wealth Management 350 351 330
Services
Other income 525 490 447
Total non-interest income 1,331 1,273 1,194
Non-interest expense
Salaries and related 4,286 4,418 4,179
benefits
Occupancy and equipment 950 842 802
Depreciation and 335 336 351
amortization
FDIC insurance 307 832 131
Data processing 400 392 480
Professional services 366 395 336
Other expense 1,132 1,385 1,163
Total non-interest 7,776 8,600 7,442
expense
Income before provision 5,791 5,006 4,378
for income taxes
Provision for income 2,190 1,873 1,683
taxes
Net income $ 3,601 $ 3,133 $ 2,695
Net income available to $ 3,601 $ 3,133 $ 2,695
common stockholders
Net income per common
share:
Basic $ 0.69 $ 0.61 $ 0.53
Diluted $ 0.68 $ 0.60 $ 0.52
Weighted average shares
used to compute net
income per common share:
Basic 5,205 5,164 5,130
Diluted 5,274 5,214 5,209
Dividends declared per $ 0.14 $ 0.14 $ 0.14
common share
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF OPERATIONS
for the nine months ended September 30, 2009 and September 30, 2008
(in thousands, except per share amounts September 30, 2009 September 30, 2008
- unaudited)
Interest income
Interest and fees on loans $ 40,945 $ 40,545
Interest on investment securities
Securities of U.S. Government agencies 2,471 2,641
Obligations of state and political 818 531
subdivisions (tax exempt)
Corporate debt securities and other 292 258
Interest on Federal funds sold 4 138
Total interest income 44,530 44,113
Interest expense
Interest on interest bearing transaction 86 277
accounts
Interest on savings and money market 2,428 5,607
deposits
Interest on CDARS(R) reciprocal time 550 55
deposits
Interest on other time deposits 1,188 1,962
Interest on borrowed funds 1,101 702
Total interest expense 5,353 8,603
Net interest income 39,177 35,510
Provision for loan losses 2,985 2,810
Net interest income after provision for 36,192 32,700
loan losses
Non-interest income
Service charges on deposit accounts 1,323 1,253
Wealth Management Services 1,017 976
Net gain on redemption of shares in --- 457
Visa, Inc.
Other income 1,501 1,489
Total non-interest income 3,841 4,175
Non-interest expense
Salaries and related benefits 13,050 12,372
Occupancy and equipment 2,569 2,363
Depreciation and amortization 1,021 996
FDIC insurance 1,456 366
Data processing 1,173 1,355
Professional services 1,184 1,161
Other expense 3,480 2,970
Total non-interest expense 23,933 21,583
Income before provision for income taxes 16,100 15,292
Provision for income taxes 6,137 5,935
Net income $ 9,963 $ 9,357
Preferred stock dividends and accretion $ (1,299 ) $ ---
Net income available to common $ 8,664 $ 9,357
stockholders
Net income per common share:
Basic $ 1.68 $ 1.82
Diluted $ 1.66 $ 1.79
Weighted average shares used to compute
net income per common share:
Basic 5,172 5,135
Diluted 5,224 5,224
Dividends declared per common share $ 0.42 $ 0.42
Source: Bank of Marin Bancorp
Contact: For Bank of Marin Bancorp
Sandy Pfaff, 415-633-3224
spfaff@peppercom.com