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Investor Relations
Press Release

Bank of Marin Bancorp Reports Annual Earnings of $18.4 Million

Company Release - 1/25/2016 8:00 AM ET

Record Loan Originations in 2015, Dividend Increase

NOVATO, Calif.--(BUSINESS WIRE)-- Bank of Marin Bancorp, "Bancorp" (NASDAQ:BMRC), parent company of Bank of Marin “Bank”, announced earnings of $4.9 million in the fourth quarter of 2015, an increase from $4.8 million in the third quarter of 2015 and $4.7 million in the fourth quarter of 2014. Diluted earnings per share totaled $0.81 in the fourth quarter of 2015, compared to $0.79 in the prior quarter and $0.78 in the same quarter a year ago. Annual earnings for 2015 totaled $18.4 million, compared to $19.8 million a year ago. Diluted earnings per share totaled $3.04 for the year ended December 31, 2015, compared to $3.29 per share for the same period in 2014.

“Our performance in 2015 was excellent,” said Russell A. Colombo, President and Chief Executive Officer. “Substantial loan and core deposit growth points to a promising 2016, and credit quality improved even further. Our credit culture remains a hallmark of our organization and is critical to the continued, long-term success of the Bank.”

Bancorp also provided the following highlights on its operating and financial performance for the fourth quarter and year ended December 31, 2015:

  • Gross loans totaled $1,451.2 million at December 31, 2015, an increase of $88 million from both September 30, 2015 and December 31, 2014. 2015 was highlighted by record new loan volume of approximately $114 million for the fourth quarter and approximately $252 million for the year, compared to approximately $192 million in 2014. These numbers reflect the success of our long-term strategy and work by the lending team all year long to expand existing markets and build new ones. Payoffs for the year ended at $169 million or 12% of gross loans, a reasonable level despite the sales of some large businesses and properties early in the year.
  • Total deposits grew 11.4% year-over-year to $1,728.2 million from $1,551.6 million. The Bank added several significant new commercial deposit relationships in 2015 while maintaining its low cost of funding. Non-interest bearing deposits make up 44.6% of total deposits and the cost of deposits dropped to 0.09%.
  • Credit quality remains strong with non-accrual loans trending downward, representing 0.15% of total loans at December 31, 2015, down from 0.19% at September 30, 2015 and 0.69% a year ago. The Texas ratio was 1.18% at December 31, 2015, down from 1.41% at the end of the prior quarter and 4.79% a year ago. Classified loans totaled $22.3 million, down from $24.0 million at the end of the prior quarter and $36.2 million a year ago. These improvements, in combination with loan growth for the quarter resulted in a provision for loan losses of $500 thousand and a slight decline in the loan loss reserve as a percentage of total loans to 1.03%.
  • The total risk-based capital ratio for Bancorp was 13.4% at December 31, 2015 compared to 14.0% at September 30, 2015. The common equity tier one ratio, a regulatory ratio under Basel III (Basel Committee on Bank Supervision guidelines for determining regulatory capital), was 12.2% at December 31, 2015, compared to 12.7% at September 30, 2015. All capital ratios are well above regulatory requirements for a well-capitalized institution under the new requirements that took effect January 1, 2015. Tangible common equity to tangible assets totaled 10.1% at December 31, 2015, compared to 10.8% at September 30, 2015 and 10.7% at December 31, 2014.
  • To reflect the strength of the Bank and its future prospects, the Board of Directors declared a quarterly cash dividend of $0.25 per share on January 22, 2016. The dividend increased $0.01 from the prior quarter and $0.03, or 14% from one year ago. The cash dividend is payable to shareholders of record at the close of business on February 5, 2016 and will be payable on February 12, 2016.

Loans and Credit Quality

Loans totaled $1,451.2 million at December 31, 2015, compared to $1,363.2 million at September 30, 2015 and $1,363.4 million at December 31, 2014. Loan volume was distributed across our entire geographic footprint in 2015. Investor commercial real estate and commercial and industrial (and related owner-occupied commercial real estate) accounted for the majority of new loan volume in the fourth quarter and year ended December 31, 2015.

Non-accrual loans totaled $2.2 million, or 0.15%, of Bancorp's loan portfolio at December 31, 2015, a decrease from $2.6 million, or 0.19%, at September 30, 2015 and $9.4 million, or 0.69%, a year ago. The decrease in non-accrual loans from a year ago primarily relates to a previously non-performing loan that was returned to accrual status, the payoff of a commercial real estate loan, and a land development loan that was sold. Accruing loans past due 30 to 89 days totaled $2.1 million at December 31, 2015, compared to $3.4 million at September 30, 2015 and $1.0 million a year ago.

A provision for loan losses of $500 thousand was recorded in the fourth quarter of 2015, primarily due to the significant loan growth in the quarter, compared to no provision for loan losses in both the prior quarter and the same quarter a year ago. The provision for loan losses totaled $500 thousand and $750 thousand in 2015 and 2014, respectively. Net recoveries for the fourth quarter totaled $42 thousand compared to $102 thousand in the prior quarter and $50 thousand in the same quarter a year ago. Net charge-offs totaled $600 thousand for the year ended December 31, 2015, primarily related to the sale of a long-time land development loan, compared to net recoveries of $124 thousand for the year ended December 31, 2014. The ratio of loan loss reserve to loans was 1.03% at December 31, 2015, compared to 1.06% at September 30, 2015 and 1.11% at December 31, 2014. The decrease compared to the prior year is primarily related to the improvement in credit quality.

Investments

The investment portfolio totaled $487.4 million at December 31, 2015, and grew $67.1 million over September 30, 2015 and $170.1 million from December 31, 2014, as excess cash and new deposits were deployed into agency securities and municipal bonds which are available to fund future loan growth.

Deposits

Deposits totaled $1,728.2 million at December 31, 2015, and grew $92.7 million over September 30, 2015 and $176.6 million over December 31, 2014. Non-interest bearing deposits totaled $770.1 million at December 31, 2015, an increase of $17.8 million from September 30, 2015, and an increase of $99.2 million from December 31, 2014. Non-interest bearing deposits represented 44.6% of total deposits as of December 31, 2015, compared to 46.0% at the prior quarter end and 43.2% at December 31, 2014.

Earnings

“The exceptional quality of the Bank's loan and deposit portfolios is borne out in strong core operating earnings throughout the year. Despite persistent margin pressure, our fourth quarter return on assets was 0.98% and return on equity was 9.12%,” said Tani Girton, Chief Financial Officer. “Our expense discipline allowed the efficiency ratio to trend down to 57.6%, while strong capital and liquidity position us for further growth.”

Net interest income totaled $17.2 million in the fourth quarter of 2015 compared to $16.9 million in the prior quarter and $17.1 million in the same quarter a year ago. The increase from the prior quarter primarily relates to higher average balances on investment securities and loans, partially offset by lower yields on investment securities and loans, and lower accretion income on acquired loans. The tax-equivalent net interest margin was 3.70%, 3.79% and 3.99% for those respective periods. The decrease in the fourth quarter of 2015 compared to the prior quarter and the same quarter a year ago relates to higher securities balances as a percentage of earning assets and the continued impact of the low interest rate environment on our loan and investment portfolio turnover. Additionally, accretion income related to acquired loans purchased at a discount continues to decline.

Net interest income totaled $67.2 million and $70.4 million in 2015 and 2014, respectively, with the decrease reflecting lower income on acquired loans and lower rates on loans and securities. The tax-equivalent net interest margin decreased to 3.83% in 2015 compared to 4.13% in 2014 for the same reasons.

Loans acquired through the acquisition of other banks are classified as Purchased Credit Impaired ("PCI") or non-PCI loans and are recorded at fair value at acquisition date. For acquired loans not considered credit impaired, the level of accretion varies due to maturities and early payoffs. Accretion on PCI loans fluctuates based on changes in cash flows expected to be collected. Gains on payoffs of PCI loans are recorded as interest income when the payoff amounts exceed the recorded investment. PCI loans totaled $3.7 million at both December 31, 2015 and September 30, 2015, and totaled $5.2 million at December 31, 2014.

Accretion and gains on payoffs of purchased loans recorded to interest income were as follows:

      Three months ended
December 31, 2015     September 30, 2015     December 31, 2014
(dollars in thousands; unaudited)      

Dollar
Amount

   

Basis point
impact to net
interest margin

   

Dollar
Amount

   

Basis point
impact to net
interest margin

   

Dollar
Amount

   

Basis point
impact to net
interest margin

Accretion on PCI loans $ 128     3 bps $ 128     3 bps $ 120     3 bps
Accretion on non-PCI loans $ 243 5 bps $ 309 7 bps $ 475 11 bps
Gains on pay-offs of PCI loans       $           $ 1       0 bps     $       0 bps
 
      Years ended
December 31, 2015     December 31, 2014
(dollars in thousands; unaudited)      

Dollar
Amount

   

Basis point
impact to net
interest margin

   

Dollar
Amount

   

Basis point
impact to net
interest margin

Accretion on PCI loans $ 495     3 bps $ 614     4 bps
Accretion on non-PCI loans $ 1,389 8 bps $ 3,292 19 bps
Gains on pay-offs of PCI loans       $ 44       0 bps     $ 622       4 bps
 

Non-interest income in the fourth quarter of 2015 totaled $2.1 million, compared to $2.3 million in the prior quarter and $2.2 million in the same quarter a year ago. Non-interest income decreased compared to the prior quarter as the third quarter included a $72 thousand gain on the sale of four investment securities. The decrease also includes lower merchant interchange fees due to decreased transaction volume in the fourth quarter. The 2015 non-interest income totaled $9.2 million, compared to $9.0 million in 2014. The increase in 2015 primarily relates to higher dividend income from the Federal Home Loan Bank of San Francisco, partially offset by lower merchant interchange fees due to decreased transaction volume.

Non-interest expense totaled $11.1 million in the fourth quarter of 2015, compared to $11.6 million in both the prior quarter and the same quarter a year ago. The decrease in non-interest expense from the prior quarter and the same quarter a year ago primarily relates to the reversal of provision for losses on off-balance sheet commitments in the fourth quarter of 2015. The reversal mainly resulted from a refinement in methodology used in the calculation of the loss reserve on off-balance sheet commitments. Non-interest expense decreased from $47.3 million in 2014 to $46.9 million in 2015, primarily due to the reversal of provision for losses on off-balance sheet commitments and a decrease in data processing expense as the first quarter of 2014 included $442 thousand in one-time acquisition-related expenses. Decreases were partially offset by higher salaries and benefits and higher occupancy expense relating to non-recurring accounting adjustments in 2015.

Earnings Call and Webcast Information

Bank of Marin Bancorp will webcast its fourth quarter earnings call on Monday, January 25, 2016 at 8:30 a.m. PT/ 11:30 a.m. ET. Investors will have the opportunity to listen to the conference call online through Bank of Marin’s website at http://www.bankofmarin.com on the “Investor Relations” page. To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available at the same website location shortly after the call.

About Bank of Marin Bancorp

Bank of Marin is a leading business and community bank in the San Francisco Bay Area, with assets of $2.0 billion. Founded in 1989 and headquartered in Novato, Bank of Marin is the wholly-owned subsidiary of Bank of Marin Bancorp (NASDAQ: BMRC). With 20 offices in San Francisco, Marin, Napa, Sonoma and Alameda counties, Bank of Marin provides business and personal banking, commercial lending, and wealth management and trust services. Specializing in providing legendary service to its customers and investing in its local communities, Bank of Marin has consistently been ranked one of the “Top Corporate Philanthropists" by the San Francisco Business Times and one of the “Best Places to Work” by the North Bay Business Journal. Bank of Marin Bancorp is included in the Russell 2000 Small-Cap Index and NASDAQ ABA Community Bank Index and has been recognized as a Top 200 Community Bank by US Banker Magazine for the past five years. For more information, go to 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, economic uncertainty in the United States and abroad, changes in interest rates, deposit flows, real estate values, costs or effects of future acquisitions, competition, changes in accounting principles, policies or guidelines, legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors (including external fraud and cyber-security threats) 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
December 31, 2015
(dollars in thousands, except per share data; unaudited)              

QUARTER-TO-DATE

Dec. 31, 2015

Sept. 30, 2015

Dec. 31, 2014

NET INCOME $ 4,925 $ 4,773 $ 4,692
DILUTED EARNINGS PER COMMON SHARE $ 0.81 $ 0.79 $ 0.78
RETURN ON AVERAGE ASSETS (ROA) 0.98 % 1.00 % 1.01 %
RETURN ON AVERAGE EQUITY (ROE) 9.12 % 9.00 % 9.36 %
EFFICIENCY RATIO 57.57 % 60.67 % 60.18 %
TAX-EQUIVALENT NET INTEREST MARGIN1 3.70 % 3.79 % 3.99 %
NET CHARGE-OFFS/(RECOVERIES) $ (42 ) $ (102 ) $ (50 )
NET CHARGE-OFFS/(RECOVERIES) TO AVERAGE LOANS % (0.01 ) % %
 

YEAR-TO-DATE

NET INCOME $ 18,441 $ 19,771
DILUTED EARNINGS PER COMMON SHARE $ 3.04 $ 3.29
RETURN ON AVERAGE ASSETS (ROA) 0.98 % 1.08 %
RETURN ON AVERAGE EQUITY (ROE) 8.84 % 10.31 %
EFFICIENCY RATIO 61.47 % 59.46 %
TAX-EQUIVALENT NET INTEREST MARGIN1 3.83 % 4.13 %
NET CHARGE-OFFS/(RECOVERIES) $ 600 $ (124 )
NET CHARGE-OFFS/(RECOVERIES) TO AVERAGE LOANS 0.04 % (0.01 ) %
 

AT PERIOD END

TOTAL ASSETS $ 2,031,134 $ 1,882,794 $ 1,787,130
 
LOANS:
COMMERCIAL AND INDUSTRIAL $ 219,452 $ 189,967 $ 210,223
REAL ESTATE
COMMERCIAL OWNER-OCCUPIED $ 242,309 $ 239,335 $ 230,605
COMMERCIAL INVESTOR-OWNED $ 715,879 $ 671,677 $ 673,499
CONSTRUCTION $ 65,495 $ 54,921 $ 48,413
HOME EQUITY $ 112,300 $ 113,731 $ 110,788
OTHER RESIDENTIAL $ 73,154 $ 71,682 $ 73,035
INSTALLMENT AND OTHER CONSUMER LOANS $ 22,639   $ 21,887   $ 16,788  
TOTAL LOANS $ 1,451,228 $ 1,363,200 $ 1,363,351
 
NON-ACCRUAL LOANS2:
COMMERCIAL AND INDUSTRIAL $ 21 $ 354 $
REAL ESTATE
COMMERCIAL OWNER-OCCUPIED $ $ $ 1,403
COMMERCIAL INVESTOR-OWNED $ 1,903 $ 2,020 $ 2,429
CONSTRUCTION $ 1 $ 2 $ 5,134
HOME EQUITY $ 171 $ 172 $ 280
OTHER RESIDENTIAL $ $ $
INSTALLMENT AND OTHER CONSUMER LOANS $ 83   $ 90   $ 104  
TOTAL NON-ACCRUAL LOANS $ 2,179 $ 2,638 $ 9,350
 
CLASSIFIED LOANS (GRADED SUBSTANDARD & DOUBTFUL) $ 22,331 $ 24,023 $ 36,237
TOTAL ACCRUING LOANS 30-89 DAYS PAST DUE $ 2,104 $ 3,361 $ 1,009
LOAN LOSS RESERVE TO LOANS 1.03 % 1.06 % 1.11 %
LOAN LOSS RESERVE TO NON-ACCRUAL LOANS 6.88 x 5.48 x 1.61 x
NON-ACCRUAL LOANS TO TOTAL LOANS 0.15 % 0.19 % 0.69 %
TEXAS RATIO3 1.18 % 1.41 % 4.79 %
 
TOTAL DEPOSITS $ 1,728,226 $ 1,635,482 $ 1,551,619
LOAN-TO-DEPOSIT RATIO 84.0 % 83.4 % 87.9 %
STOCKHOLDERS' EQUITY $ 214,473 $ 211,954 $ 200,026
BOOK VALUE PER SHARE $ 35.34 $ 34.97 $ 33.68
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS4 10.1 % 10.8 % 10.7 %
TOTAL RISK-BASED CAPITAL RATIO-BANK5 13.1 % 13.6 % 13.7 %
TOTAL RISK-BASED CAPITAL RATIO-BANCORP5 13.4 % 14.0 % 13.9 %
FULL TIME EQUIVALENT EMPLOYEES 259 257 260

1 Net interest income is annualized by dividing actual number of days in the period times 360 days.

2 Excludes accruing troubled-debt restructured loans of $19.0 million, $18.8 million and $15.9 million at December 31, 2015, September 30, 2015 and December 31, 2014, respectively. Excludes purchased credit-impaired (PCI) loans with carrying values of $3.7 million, $3.7 million and $3.8 million that were accreting interest at December 31, 2015, September 30, 2015 and December 31, 2014, respectively. These amounts are excluded as PCI loan accretable yield interest recognition is independent from the underlying contractual loan delinquency status. Total PCI loans were $3.7 million, $3.7 million and $5.2 million at December 31, 2015, September 30,2015 and December 31, 2014 respectively.

3 (Non-performing assets + 90 day delinquent loans)/(tangible common equity + allowance for loan losses).

4 Tangible common equity to tangible assets is considered to be a meaningful non-GAAP financial measure of capital adequacy and is useful for investors to assess Bancorp's ability to absorb potential losses. Tangible common equity includes common stock, retained earnings and unrealized gain on available for sale securities, net of tax, less goodwill and intangible assets of $9.5 million, $9.7 million and $10.2 million at December 31, 2015, September 30, 2015 and December 31, 2014, respectively. Tangible assets excludes goodwill and intangible assets.

5 Current period estimated.

 
 
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF CONDITION

at December 31, 2015, September 30, 2015 and December 31, 2014

             
December 31, September 30,

December 31,

(in thousands, except share data; unaudited)       2015     2015     2014
Assets
Cash and due from banks $ 26,343 $ 35,315 $ 41,367
Investment securities
Held-to-maturity, at amortized cost 69,637 86,471 116,437

Available-for-sale (at fair value; amortized cost $417,410, $331,024 and $199,045 at December 31, 2015, September 30, 2015 and December 31, 2014, respectively)

      417,787       333,856       200,848
Total investment securities 487,424 420,327 317,285

Loans, net of allowance for loan losses of $14,999, $14,457 and $15,099 at December 31, 2015, September 30, 2015 and December 31, 2014, respectively

1,436,229 1,348,743 1,348,252
Bank premises and equipment, net 9,305 9,537 9,859
Goodwill 6,436 6,436 6,436
Core deposit intangible 3,113 3,268 3,732
Interest receivable and other assets       62,284       59,168       60,199
Total assets       $ 2,031,134       $ 1,882,794       $ 1,787,130
 
Liabilities and Stockholders' Equity
Liabilities
Deposits
Non-interest bearing $ 770,087 $ 752,336 $ 670,890
Interest bearing
Transaction accounts 114,277 95,522 93,758
Savings accounts 141,316 136,021 133,714
Money market accounts 541,089 495,642 503,543
Time accounts       161,457       155,961       149,714
Total deposits 1,728,226 1,635,482 1,551,619
Federal Home Loan Bank ("FHLB") borrowings 67,000 15,000 15,000
Subordinated debentures 5,395 5,343 5,185
Interest payable and other liabilities       16,040       15,015       15,300
Total liabilities       1,816,661       1,670,840       1,587,104
 
Stockholders' Equity
Preferred stock, no par value,
Authorized - 5,000,000 shares, none issued

Common stock, no par value, Authorized - 15,000,000 shares; Issued and outstanding - 6,068,543, 6,060,744 and 5,939,482 at December 31, 2015, September 30, 2015 and December 31, 2014, respectively

84,727 84,272 82,436
Retained earnings 129,553 126,082 116,502
Accumulated other comprehensive income, net       193       1,600       1,088
Total stockholders' equity       214,473       211,954       200,026
Total liabilities and stockholders' equity       $ 2,031,134       $ 1,882,794       $ 1,787,130
 
 
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 
      Three months ended     Years ended

 

December 31,     September 30,     December 31, December 31,     December 31,

(in thousands, except per share amounts; unaudited)

      2015     2015     2014 2015     2014
Interest income
Interest and fees on loans $ 15,590 $ 15,498 $ 15,946 $ 61,754 $ 64,823
Interest on investment securities
Securities of U.S. government agencies 1,461 1,223 951 4,709 4,502
Obligations of state and political subdivisions 577 527 536 2,155 2,273
Corporate debt securities and other 139 162 253 685 1,031
Interest on Federal funds sold and due from banks       28       35       36   135       161
Total interest income 17,795 17,445 17,722 69,438 72,790
Interest expense
Interest on interest-bearing transaction accounts 27 28 25 115 99
Interest on savings accounts 14 12 12 51 46
Interest on money market accounts 120 125 135 495 550
Interest on time accounts 204 212 222 853 917
Interest on FHLB and overnight borrowings 81 80 80 317 315
Interest on subordinated debentures       106       105       106     420       422
Total interest expense       552       562       580   2,251       2,349
Net interest income 17,243 16,883 17,142 67,187 70,441
Provision for loan losses       500               500       750
Net interest income after provision for loan losses       16,743       16,883       17,142   66,687       69,691
Non-interest income
Service charges on deposit accounts 461 489 531 1,979 2,167
Wealth Management and Trust Services 582 568 565 2,391 2,309
Debit card interchange fees 358 372 343 1,445 1,378
Merchant interchange fees 115 171 174 545 803
Earnings on bank-owned life Insurance 204 204 209 814 841
Dividends on FHLB stock 186 209 154 1,003 563
(Loss) gain on investment securities, net (1 ) 72 (13 ) 79 80
Other income       193       213       193   937       900
Total non-interest income       2,098       2,298       2,156   9,193       9,041
Non-interest expense
Salaries and related benefits 6,002 6,300 5,735 25,764 25,005
Occupancy and equipment 1,317 1,346 1,426 5,498 5,470
Depreciation and amortization 456 441 383 1,968 1,585
Federal Deposit Insurance Corporation insurance 258 250 252 997 1,032
Data processing 905 835 809 3,318 3,665
Professional services 549 493 653 2,121 2,230
Directors' expense 206 182 163 826 628
Information technology 182 186 157 736 675
(Reversal of) provision for losses on off-balance sheet commitments (277 ) 324 336 (263 ) 334
Other expense       1,537       1,281       1,699   5,984       6,639
Total non-interest expense       11,135       11,638       11,613   46,949       47,263
Income before provision for income taxes 7,706 7,543 7,685 28,931 31,469
Provision for income taxes       2,781       2,770       2,993   10,490       11,698
Net income       $ 4,925       $ 4,773       $ 4,692   $ 18,441       $ 19,771
Net income per common share:
Basic $ 0.82 $ 0.80 $ 0.79 $ 3.09 $ 3.35
Diluted $ 0.81 $ 0.79 $ 0.78 $ 3.04 $ 3.29
Weighted average shares used to compute net income per common share:
Basic 6,033 5,963 5,913 5,966 5,893
Diluted 6,083 6,067 6,037 6,065 6,006
Dividends declared per common share       $ 0.24       $ 0.22       $ 0.22   $ 0.90       $ 0.80
Comprehensive income
Net income $ 4,925 $ 4,773 $ 4,692 $ 18,441 $ 19,771
Other comprehensive income
Change in net unrealized (loss) gain on available-for-sale securities (2,456 ) 1,523 884 (1,420 ) 2,939
Reclassification adjustment for loss (gain) on available-for-sale securities included in net income       1             13   (6 )   24
Net change in unrealized (loss) gain on available-for-sale securities, before tax (2,455 ) 1,523 897 (1,426 ) 2,963
Deferred tax(benefit) expense       (1,048 )     654       375   (531 )     1,203
Other comprehensive (loss) income, net of tax       (1,407 )     869       522   (895 )     1,760
Comprehensive income       $ 3,518       $ 5,642       $ 5,214   $ 17,546       $ 21,531
 
 

BANK OF MARIN BANCORP

AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME

         
Three months ended Three months ended Three months ended
December 31, 2015   September 30, 2015   December 31, 2014
  Interest     Interest     Interest  
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
(Dollars in thousands; unaudited)       Balance   Expense   Rate   Balance   Expense   Rate   Balance   Expense   Rate
Assets
Interest-bearing due from banks 1 $ 41,604 $ 28 0.26 % $ 51,378 $ 35 0.27 % $ 54,845 $ 36 0.26 %
Investment securities 2, 3 460,811 2,391 2.08 % 389,260 2,094 2.15 % 322,027 1,887 2.34 %
Loans 1, 3, 4       1,377,932     15,890     4.51 %   1,352,023     15,800     4.57 %   1,348,013     16,251     4.72 %
Total interest-earning assets 1 1,880,347 18,309 3.81 % 1,792,661 17,929 3.91 % 1,724,885 18,174 4.12 %
Cash and non-interest-bearing due from banks 45,063 43,054 47,930
Bank premises and equipment, net 9,465 9,680 9,503
Interest receivable and other assets, net       58,342             57,589             56,718          
Total assets       $ 1,993,217             $ 1,902,984             $ 1,839,036          
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts $ 101,299 $ 27 0.11 % $ 93,933 $ 28 0.12 % $ 90,659 $ 25 0.11 %
Savings accounts 139,281 13 0.04 % 135,202 13 0.04 % 131,728 12 0.04 %
Money market accounts 538,330 120 0.09 % 506,952 125 0.10 % 502,637 135 0.11 %
Time accounts including CDARS 155,899 205 0.52 % 157,252 212 0.53 % 150,298 222 0.59 %
Overnight borrowings 1 2,535 2 0.31 % 188 % 15 %
FHLB fixed-rate advances 15,000 79 2.07 % 15,000 79 2.07 % 15,000 80 2.07 %
Subordinate debentures 1       5,367     106     7.73 %   5,316     105     7.73 %   5,152     106     8.05 %
Total interest-bearing liabilities 957,711 552 0.23 % 913,843 562 0.24 % 895,489 580 0.26 %
Demand accounts 805,118 765,284 729,183
Interest payable and other liabilities 16,014 13,467 15,551
Stockholders' equity       214,374             210,390             198,813          
Total liabilities & stockholders' equity       $ 1,993,217             $ 1,902,984             $ 1,839,036          
Tax-equivalent net interest income/margin 1           $ 17,757     3.70 %       $ 17,367     3.79 %       $ 17,594     3.99 %
Reported net interest income/margin 1           $ 17,243     3.59 %       $ 16,883     3.69 %       $ 17,142     3.89 %
Tax-equivalent net interest rate spread               3.58 %           3.67 %           3.86 %
 
Year ended Year ended
December 31, 2015 December 31, 2014
Interest Interest
Average Income/ Yield/ Average Income/ Yield/
(Dollars in thousands; unaudited)       Balance   Expense   Rate   Balance   Expense   Rate
Assets
Interest-bearing due from banks 1 $ 52,004 $ 135 0.26 % $ 63,150 $ 161 0.25 %
Investment securities 2, 3 370,730 8,255 2.23 % 341,787 8,385 2.45 %
Loans 1, 3, 4       1,354,564     62,953     4.58 %   1,317,794     65,856     4.93 %
Total interest-earning assets 1 1,777,298 71,343 3.96 % 1,722,731 74,402 4.26 %
Cash and non-interest-bearing due from banks 44,543 44,452
Bank premises and equipment, net 9,705 9,290
Interest receivable and other assets, net       58,201             56,592          
Total assets       $ 1,889,747             $ 1,833,065          
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts $ 95,662 $ 115 0.12 % $ 101,133 $ 99 0.10 %
Savings accounts 134,997 50 0.04 % 125,169 46 0.04 %
Money market accounts 505,280 495 0.10 % 507,055 550 0.11 %
Time accounts including CDARS 156,316 853 0.55 % 155,229 917 0.59 %
Overnight borrowings 1 784 3 0.38 % 4 %
FHLB fixed-rate advances 15,000 315 2.07 % 15,000 315 2.07 %
Subordinated debentures       5,288     420     7.94 %   5,070     422     8.36 %
Total interest-bearing liabilities 913,327 2,251 0.25 % 908,660 2,349 0.26 %
Demand accounts 753,038 717,738
Interest payable and other liabilities 14,856 14,934
Stockholders' equity       208,526             191,733          
Total liabilities & stockholders' equity       $ 1,889,747             $ 1,833,065          
Tax-equivalent net interest income/margin 1           $ 69,092     3.83 %       $ 72,053     4.13 %
Reported net interest income/margin 1           $ 67,187     3.73 %       $ 70,441     4.03 %
Tax-equivalent net interest rate spread               3.71 %           4.00 %

1 Interest income/expense is divided by actual number of days in the period times 360 days to correspond to stated interest rate terms, where applicable.

2 Yields on available-for-sale securities are calculated based on amortized cost balances rather than fair value, as changes in fair value are reflected as a component of stockholders' equity. Investment security interest is earned on 30/360 day basis monthly.

3 Yields and interest income on tax-exempt securities and loans are presented on a taxable-equivalent basis using the Federal statutory rate of 35 percent.

4 Average balances on loans outstanding include non-performing loans. The amortized portion of net loan origination fees is included in interest income on loans, representing an adjustment to the yield.

Pfaff PR for Bank of Marin
Sandy Pfaff, 415-819-7447
[email protected]

Source: Bank of Marin Bancorp