Continued Focus on Strong Community Banking Fundamentals Contributes
to Steady Growth
NOVATO, Calif.--(BUSINESS WIRE)--
Bank of Marin Bancorp ("Bancorp")(NASDAQ: BMRC) announced 2009 earnings
of $12.8 million, an increase of $615 thousand, or 5.1%, from 2008.
Fourth-quarter 2009 earnings were $2.8 million, an increase of $9
thousand or 0.3%, from the same period a year ago. Diluted earnings per
share were $2.19 for the year 2009 and $0.52 for the fourth quarter
2009, compared to $2.31 for the year 2008 and $0.52 for the fourth
quarter of 2008. 2009 diluted earnings per share were reduced by $0.25
related to Bancorp's participation and withdrawal from the TCPP1
and $0.06 related to an FDIC2 special assessment,
respectively, as discussed later.
"We are pleased to close 2009 with solid year-over-year earnings growth.
Our commitment to strong customer relationships and responsible lending
has contributed to our consistent results," said Russell A. Colombo,
President and Chief Executive Officer.
Bancorp also provided the following highlights on its operating and
financial performance for the fourth quarter and year ended December 31,
2009:
-- Bank of Marin (the "Bank") became the largest community bank in Marin
County, CA3 with substantial deposit growth of $91.8 million, or 10.8%,
over a year ago; deposits totaled $944.1 million at December 31, 2009.
-- Bancorp reported a robust net interest margin of 5.18% in the fourth
quarter.
-- Total risk-based capital ratio for Bancorp grew to 12.3%, up from 12.1%
at September 30, 2009, and continues to be well above industry standards
for a well-capitalized institution.
-- In the fourth quarter, Bancorp paid an increased quarterly cash dividend
of $0.15 per share, up from $0.14 in the previous quarter.
-- In 2009, Bank of Marin gave back to the community in the form of
charitable contributions more than 1% of its pre-tax earnings. For seven
consecutive years, the Bank has received an award recognizing us as part
of a small group of corporations that contributes at this high level.
Loans and Credit Quality
Total loans reached $917.7 million at the end of 2009, representing
growth of $27.2 million or a 3.1% increase from the end of last year.
The mix of loans reflects an increase in home equity lines of credit and
a decrease in construction loans as a percentage of total loans.
"We are committed to actively lend with a focus in our local community,"
said Christina J. Cook, Chief Financial Officer. "Our emphasis on
prudent lending standards and active management of relationships have
kept the credit losses in our loan portfolio at a manageable level."
Non-performing loans totaled $11.6 million, or 1.26% of Bancorp's loan
portfolio at December 31, 2009 compared to $6.0 million, or 0.66% of
Bancorp's loan portfolio at September 30, 2009 and $6.7 million or 0.75%
a year ago. Accruing loans past due 30 to 89 days declined to $835
thousand at December 31, 2009 from $4.4 million at both September 30,
2009 and December 31, 2008.
The provision for loan losses totaled $5.5 million in 2009 compared to
$5.0 million in 2008. The allowance for loan losses of $10.6 million
totaled 1.16% of loans at December 31, 2009, compared to 1.12% a year
ago and 1.21% at September 30, 2009. The higher level of nonperforming
loans in the quarter did not require a higher level of allowance for
loan loss due to the fact that these loans are well secured and have
been written down to their net realizable value based on current
appraisals.
Deposits
Total deposits grew $91.8 million or 10.8% over a year ago. New deposit
account openings during 2009 increased 19% over 2008. Non-interest
bearing deposits totaled 24.4% of total deposits at December 31, 2009,
an increase from 23.6% a year ago. In September 2009, Bank of Marin
opened the new Greenbrae branch, which has generated $13.7 million in
deposits by December 31, 2009.
"Our healthy deposit growth during 2009 is a reflection of the
confidence and trust our community continues to place in us," said
Colombo. "As a result, we continue to grow market share and enjoy the
largest community bank presence in our primary market of Marin County."
Earnings
Diluted earnings per common share for 2009 were reduced by $0.25
resulting from Bancorp's early repurchase of the preferred stock that
had been issued under the TCPP and dividends on the preferred stock.
Further, earnings reflected a special assessment imposed by the FDIC of
$496 thousand in the second quarter of 2009, which reduced 2009 diluted
earnings per share by $0.06. 2008 net income 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 2008 diluted earnings
per share by $0.08.
Net interest income of $13.4 million in the quarter ended December 31,
2009 increased $541 thousand, or 4.2%, from the same quarter last year,
and 2009 net interest income increased $4.2 million, or 8.7% from 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 fourth quarter of 2009 compared to
5.36% in the fourth quarter of 2008. The tax-equivalent net interest
margin was 5.17% in 2009 compared to 5.41% in 2008. Decreases in the
tax-equivalent net interest margin were primarily due to the downward
re-pricing of the Bank's loan portfolio in a declining rate environment
and to a lesser extent, interest foregone on non-accrual loans
(representing a three basis-point and a seven basis-point reduction to
the net interest margin in the quarter and year ended December 31, 2009,
respectively, compared to one basis point and two basis points the
quarter and year ended December 31, 2008, respectively).
Non-interest income totaled $1.3 million in the fourth quarter of 2009,
an increase of $160 thousand or 13.5% from the same period last year.
Non-interest income totaled $5.2 million in 2009, a decrease of $174
thousand or 3.2% from 2008. 2008 non-interest income included the $457
thousand pre-tax non-recurring gain on the sale of Visa Inc. shares in
the first quarter of 2008, as discussed above.
Non-interest expense totaled $7.8 million in the fourth quarter of 2009,
an increase of $669 thousand or 9.4% from the same period last year,
mainly due to higher personnel costs and occupancy costs associated with
branch expansion, higher FDIC insurance expense due to a higher FDIC
insurance rate and an increased deposit level, as well as higher
professional service fees related to consulting projects. Non-interest
expense in 2009 increased $3.0 million, or 10.5%, from last year. The
increase reflects $1.3 million more in FDIC insurance expense related to
a significantly higher FDIC insurance assessment rate, including a $496
thousand 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 as discussed
above, operational losses, and increased legal fees in connection with
Bancorp's participation and termination in the TCPP program as well as
legal fees associated with loans.
About Bank of Marin Bancorp
Bank of Marin Bancorp's assets currently exceed $1 billion. Bank of
Marin, as the sole subsidiary of Bancorp, is the number one community
bank in Marin County with thirteen branch offices in the Bay Area 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 more than ten years. (www.bauerfinancial.com).
Celebrating its 20th anniversary in 2010, 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.
1The U.S. Department of the Treasury Capital Purchase
Program. In March 2009, Bancorp repurchased all 28,000 shares of
preferred stock issued under 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 the
TCPP 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.
2Federal Deposit Insurance Corporation
3 Based on FDIC deposit market share data as of June 30, 2009.
BANK OF MARIN BANCORP
FINANCIAL HIGHLIGHTS
Year To Year Comparison
December 31, 2009
(dollars in thousands, except
share data; unaudited)
FOURTH QUARTER QTD 2009 QTD 2008 CHANGE % CHANGE
NET INCOME $ 2,802 $ 2,793 $ 9 0.3 %
DILUTED
EARNINGS PER $ 0.52 $ 0.52 $ 0.00 0.0 %
COMMON SHARE
RETURN ON
AVERAGE ASSETS 0.97 % 1.10 % (0.13 %) (11.8 %)
(ROA)
RETURN ON
AVERAGE EQUITY 10.15 % 10.59 % (0.44 %) (4.2 %)
(ROE)
EFFICIENCY 52.70 % 50.56 % 2.14 % 4.2 %
RATIO
TAX-EQUIVALENT
NET INTEREST 5.18 % 5.36 % (0.18 %) (3.4 %)
MARGIN4
NET $ 3,025 $ 1,521 $ 1,504 98.9 %
CHARGE-OFFS
NET
CHARGE-OFFS TO 0.33 % 0.18 % 0.15 % 83.3 %
AVERAGE LOANS
YEAR TO DATE YTD 2009 YTD 2008 CHANGE % CHANGE
NET INCOME $ 12,765 $ 12,150 $ 615 5.1 %
DILUTED
EARNINGS PER $ 2.19 $ 2.31 ($0.12 ) (5.2 %)
COMMON SHARE
RETURN ON
AVERAGE ASSETS 1.16 % 1.28 % (0.12 %) (9.4 %)
(ROA)
RETURN ON
AVERAGE EQUITY 11.46 % 12.73 % (1.27 %) (10.0 %)
(ROE)
EFFICIENCY 54.89 % 53.39 % 1.50 % 2.8 %
RATIO
TAX-EQUIVALENT
NET INTEREST 5.17 % 5.41 % (0.24 %) (4.4 %)
MARGIN4
NET $ 4,842 $ 2,635 $ 2,207 83.8 %
CHARGE-OFFS
NET
CHARGE-OFFS TO 0.53 % 0.33 % 0.20 % 60.6 %
AVERAGE LOANS
AT PERIOD END December 31, December 31, 2008 CHANGE % CHANGE
2009
TOTAL ASSETS $ 1,121,672 $ 1,049,557 $ 72,115 6.9 %
TOTAL DEPOSITS $ 944,061 $ 852,290 $ 91,771 10.8 %
TOTAL LOANS $ 917,748 $ 890,544 $ 27,204 3.1 %
NON-PERFORMING
LOANS:
CONSTRUCTION $ 6,520 $ 5,804 $ 716 12.3 %
COMMERCIAL $ 3,722 $ 0 $ 3,722 NM
REAL ESTATE
COMMERCIAL $ 910 $ 145 $ 765 527.6 %
INSTALLMENT
AND OTHER $ 313 $ 455 ($142 ) (31.2 %)
CONSUMER
HOME EQUITY $ 100 $ 288 ($188 ) (65.3 %)
LINE OF CREDIT
TOTAL
NON-PERFORMING $ 11,565 $ 6,692 $ 4,873 72.8 %
LOANS
TOTAL ACCRUING
LOANS 30-89 $ 835 $ 4,410 ($3,575 ) (81.1 %)
DAYS PAST DUE
LOAN LOSS
RESERVE TO 1.16 % 1.12 % 0.04 % 3.6 %
LOANS
LOAN LOSS
RESERVE TO 0.9 x 1.5 x (0.6)x (40.0 %)
NON-PERFORMING
LOANS
NON-PERFORMING
LOANS TO TOTAL 1.26 % 0.75 % 0.51 % 68.0 %
LOANS
STOCKHOLDERS' $ 109,051 $ 125,546 ($16,495 ) (13.1 %)
EQUITY
BOOK VALUE PER $ 20.85 $ 19.14 $ 1.71 8.9 %
SHARE
TOTAL CAPITAL 9.72 % 11.96 % (2.24 %) (18.7 %)
TO ASSETS
TOTAL RISK
BASED CAPITAL 11.6 % 13.9 % (2.30 %) (16.5 %)
RATIO-BANK5
TOTAL RISK
BASED CAPITAL 12.3 % 14.1 % (1.80 %) (12.8 %)
RATIO-BANCORP5
4 Net interest income is annulized by dividing actual number of days in the
period times 360 days.
5 2009 amount estimated. 2008 amount reflects $28 million of preferred stock
issued on December 5, 2008 under the The U.S. Department of the Treasury
Capital Purchase Program, which was repurchased in March of 2009.
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF CONDITION
at December 31, 2009, September 30, 2009 and December 31, 2008
(in thousands, except
share data; 2009 December 31, 2009 September 30, 2009 December 31, 2008
unaudited)
Assets
Cash and due from $ 23,660 $ 63,589 $ 24,926
banks
Short-term investments 15,000 --- ---
Cash and cash 38,660 63,589 24,926
equivalents
Investment securities
Held to maturity, at 30,396 30,163 23,558
amortized cost
Available for sale (at
fair market value;
amortized cost
$96,752, $79,850 and
$79,284 at December 97,818 81,841 79,952
31, 2009, September
30, 2009, and December
31, 2008,
respectively)
Total investment 128,214 112,004 103,510
securities
Loans, net of
allowance for loan
losses of $10,618,
$11,118 and $9,950 at 907,130 908,726 880,594
December 31, 2009,
September 30, 2009 and
December 31, 2008,
respectively
Bank premises and 8,043 8,257 8,292
equipment, net
Interest receivable 39,625 33,953 32,235
and other assets
Total assets $ 1,121,672 $ 1,126,529 $ 1,049,557
Liabilities and
Stockholders' Equity
Liabilities
Deposits
Non-interest bearing $ 230,551 $ 246,968 $ 201,363
Interest bearing
Transaction accounts 89,660 89,355 82,223
Savings and money 464,352 454,759 440,496
market
CDARS(R) reciprocal 51,819 55,535 42,892
time
Other time 107,679 102,674 85,316
Total deposits 944,061 949,291 852,290
Federal funds
purchased and Federal 55,000 55,000 56,800
Home Loan Bank
borrowings
Subordinated debenture 5,000 5,000 5,000
Interest payable and 8,560 9,822 9,921
other liabilities
Total liabilities 1,012,621 1,019,113 924,011
Stockholders' Equity
Preferred stock, no
par value, $1,000 per
share liquidation
preference
Authorized - 5,000,000
shares;
Issued and outstanding
- 28,000 shares at --- --- 27,055
December 31, 2008
Common stock, no par
value
Authorized -
15,000,000 shares
Issued and outstanding
- 5,229,529 shares,
5,226,993 shares, and
5,146,798 shares at 53,789 53,635 51,965
December 31, 2009,
September 30, 2009 and
December 31, 2008,
respectively
Retained earnings 54,644 52,626 46,138
Accumulated other
comprehensive income, 618 1,155 388
net
Total stockholders' 109,051 107,416 125,546
equity
Total liabilities and $ 1,121,672 $ 1,126,529 $ 1,049,557
stockholders' equity
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF OPERATIONS
for the three months ended December 31, 2009, September 30, 2009 and December
31, 2008
(in thousands,
except per share December 31, 2009 September 30, 2009 December 31, 2008
data; unaudited)
Interest income
Interest and fees on $ 13,871 $ 13,860 $ 13,930
loans
Interest on
investment
securities
Securities of U.S. 833 794 914
Government agencies
Obligations of state
and political 285 285 204
subdivisions
Corporate debt 214 176 15
securities and other
Interest on Federal
funds sold and 1 1 ---
short-term
investments
Total interest 15,204 15,116 15,063
income
Interest expense
Interest on interest
bearing transaction 29 31 67
accounts
Interest on savings
and money market 901 821 1,303
deposits
Interest on CDARS(R)
reciprocal time 171 186 145
deposits
Interest on other 353 378 504
time deposits
Interest on borrowed 360 364 195
funds
Total interest 1,814 1,780 2,214
expense
Net interest income 13,390 13,336 12,849
Provision for loan 2,525 1,100 2,200
losses
Net interest income
after provision for 10,865 12,236 10,649
loan losses
Non-interest income
Service charges on 459 456 401
deposit accounts
Wealth Management 366 350 316
Services
Other income 516 525 464
Total non-interest 1,341 1,331 1,181
income
Non-interest expense
Salaries and related 3,951 4,286 3,725
benefits
Occupancy and 947 950 839
equipment
Depreciation and 349 335 344
amortization
FDIC insurance 344 307 141
Data processing 477 400 470
Professional 543 366 439
services
Other expense 1,152 1,132 1,136
Total non-interest 7,763 7,776 7,094
expense
Income before
provision for income 4,443 5,791 4,736
taxes
Provision for income 1,641 2,190 1,943
taxes
Net income $ 2,802 $ 3,601 $ 2,793
Preferred stock
dividends and --- --- ($113 )
accretion
Net income available
to common $ 2,802 $ 3,601 $ 2,680
shareholders
Net income per
common share:
Basic $ 0.53 $ 0.69 $ 0.52
Diluted $ 0.52 $ 0.68 $ 0.52
Weighted average
shares used to
compute
net income per
common share:
Basic 5,268 5,205 5,137
Diluted 5,352 5,274 5,200
Dividends declared $ 0.15 $ 0.14 $ 0.14
per common share
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF OPERATIONS
for the fiscal years ended December 31, 2009, 2008 and 2007
(in thousands, except
per share data; 2009 December 31, 2009 December 31, 2008 December 31, 2007
unaudited)
Interest income
Interest and fees on $ 54,816 $ 54,475 $ 52,668
loans
Interest on auto --- --- 2,062
loans held for sale
Interest on
investment securities
U.S. Treasury --- --- 8
securities
Securities of U.S. 3,304 3,555 3,759
Government agencies
Obligations of state
and political 1,103 735 479
subdivisions
Corporate debt 506 273 656
securities and other
Interest on Federal
funds sold and 5 138 2,209
short-term
investments
Total interest income 59,734 59,176 61,841
Interest expense
Interest on interest
bearing transaction 115 344 301
accounts
Interest on savings
and money market 3,329 6,910 14,161
deposits
Interest on CDARS(R)
reciprocal time 721 200 ---
deposits
Interest on other 1,541 2,466 3,465
time deposits
Interest on borrowed 1,461 897 1,172
funds
Total interest 7,167 10,817 19,099
expense
Net interest income 52,567 48,359 42,742
Provision for loan 5,510 5,010 685
losses
Net interest income
after provision for 47,057 43,349 42,057
loan losses
Non-interest income
Service charges on 1,782 1,654 1,251
deposit accounts
Wealth Management 1,383 1,292 1,229
Services
Net gain on indirect
auto and Visa(R) --- --- 1,097
portfolios
Net gain on
redemption of shares --- 457 ---
in Visa, Inc.
Other income 2,017 1,953 2,141
Total non-interest 5,182 5,356 5,718
income
Non-interest expense
Salaries and related 17,001 16,097 15,900
benefits
Occupancy and 3,516 3,202 2,871
equipment
Depreciation and 1,370 1,340 1,246
amortization
FDIC insurance 1,800 507 263
Data processing 1,650 1,825 1,657
Professional services 1,727 1,600 1,681
Other expense 4,632 4,106 4,055
Total non-interest 31,696 28,677 27,673
expense
Income before
provision for income 20,543 20,028 20,102
taxes
Provision for income 7,778 7,878 7,778
taxes
Net income $ 12,765 $ 12,150 $ 12,324
Preferred stock
dividends and $ (1,299 ) $ (113 ) $ ---
accretion
Net income available
to common $ 11,466 $ 12,037 $ 12,324
shareholders
Net income per common
share:
Basic $ 2.21 $ 2.34 $ 2.38
Diluted $ 2.19 $ 2.31 $ 2.31
Weighted average
shares used to
compute
net income per common
share:
Basic 5,182 5,135 5,187
Diluted 5,242 5,217 5,330
Dividends declared $ 0.57 $ 0.56 $ 0.51
per common share
Source: Bank of Marin Bancorp
Contact: Peppercom
Sandy Pfaff, 415-633-3224
spfaff@peppercom.com