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Investor Relations
Press Release

Bank of Marin Bancorp Reports Record Earnings of $7.0 Million

Company Release - 10/24/2016 8:00 AM ET

NOVATO, Calif.--(BUSINESS WIRE)-- Bank of Marin Bancorp, "Bancorp" (NASDAQ:BMRC), parent company of Bank of Marin, announced quarterly earnings of $7.0 million in the third quarter of 2016, compared to $4.8 million in both the second quarter of 2016 and the third quarter of 2015. Diluted earnings per share of $1.14 in the third quarter increased $0.35 from $0.79 in both the prior quarter and the same quarter a year ago, due to the recovery of a problem credit and accelerated accretion of an acquired loan discount upon early payoff. Year-to-date earnings of $17.4 million grew 29.1% from $13.5 million for the same period a year ago. Diluted earnings per share were $2.86 in the first nine months of 2016, an increase from $2.23 for the same period in 2015.

“Bank of Marin has exceeded the record earnings achieved in the first quarter this year,” said Russell A. Colombo, President and Chief Executive Officer. “I'm pleased with our performance overall, particularly with our organic growth in both deposits and loans. We enter the fourth quarter with strong focus and positive momentum thanks to our commitment to relationship banking and our discipline, both of which drive the way the Bank operates. Our relationship focus has allowed us to build a strong customer base and work with our clients to resolve issues. This is clearly evident in the recovery we achieved in the third quarter.”

Bancorp also provided the following highlights from its operating and financial performance for the third quarter of 2016:

  • The resolution of a problem commercial real estate credit added $1.4 million interest recovery to net interest income and resulted in a $1.6 million reversal of the provision for loan losses. Non-accrual loans represent 0.04% of total loans as of September 30, 2016.
  • Deposit growth of $95.9 million in the third quarter reflects the strength of our customer relationships. Non-interest bearing deposits grew by $56.2 million and represent 47.8% of total deposits. The 0.08% cost of total deposits is consistent with the prior quarter.
  • Loans increased by $19.3 million and totaled $1,467.7 million at September 30, 2016, compared to $1,448.4 million at June 30, 2016. New loan volume of $56.3 million in the third quarter of 2016 was $11.8 million higher than last quarter.
  • All capital ratios are well above regulatory requirements for a well-capitalized institution. The total risk-based capital ratio for Bancorp was 14.3% at September 30, 2016 compared to 14.1% at June 30, 2016. Tangible common equity to tangible assets decreased to 10.9% at September 30, 2016 from 11.2% at June 30, 2016, primarily due to the increase in total assets.
  • The Board of Directors declared a cash dividend of $0.27 per share on October 21, 2016. This represents the 46th consecutive quarterly dividend paid by Bank of Marin Bancorp. The dividend is payable on November 14, 2016, to shareholders of record at the close of business on November 4, 2016.

Loans and Credit Quality

Loan originations of $56.3 million in the third quarter of 2016 were spread throughout our markets. Investor commercial real estate, commercial and industrial loans and owner-occupied commercial real estate accounted for the majority of the new loan volume for the quarter. New loan originations in the third quarter were offset by payoffs of $38.6 million, and combined with lines of credit utilization and amortization on existing loans, resulted in the net increase of $19.3 million. Payoffs in the quarter ended September 30, 2016 were primarily the result of property sales or scheduled project completion.

Year-to-date loan originations of $129.9 million are consistent with 2015 while payoffs of $116.1 million are lower than the first nine months of 2015.

Non-accrual loans totaled $540 thousand, or 0.04% of Bank of Marin's loan portfolio at September 30, 2016, compared to $2.7 million, or 0.19%, at June 30, 2016 and $2.6 million, or 0.19% a year ago. The decrease in non-accrual loans from the prior quarter and a year ago primarily relates to the payoff of the problem commercial real estate credit mentioned above. Classified loans increased $2.2 million to $22.6 million at September 30, 2016, from $20.4 million at June 30, 2016. Accruing loans past due 30 to 89 days totaled $160 thousand at September 30, 2016, compared to $135 thousand at June 30, 2016 and $3.4 million a year ago.

A $1.6 million reversal of the provision for loan losses was recorded in the third quarter of 2016 and resulted from charged-off principal recovery of $2.2 million on the problem credit previously mentioned. Net recoveries were $59 thousand in the prior quarter and $102 thousand in the same quarter a year ago. The ratio of loan loss reserve to loans totaled 1.07% at September 30, 2016 compared to 1.04% at June 30, 2016 and 1.06% at September 30, 2015.

Investments

The investment portfolio totaled $425.4 million at September 30, 2016, an increase of $43.6 million from June 30, 2016, mainly due to the deployment of cash generated by deposit growth into agency and municipal securities.

Deposits

Deposits totaled $1,801.5 million at September 30, 2016, compared to $1,705.6 million at June 30, 2016 and $1,635.5 million at September 30, 2015. The increase of $95.9 million in the third quarter is due to the normal business activity of our customers. Non-interest bearing deposits totaled $860.6 million, or 47.8% of total deposits, compared to 47.2% at June 30, 2016 and 46.0% at September 30, 2015.

Earnings

“Our credit quality continues to be exceptional. It’s the hallmark of this bank and one of the important ways by which we measure our success. Over the Bank's history, we have only taken $306 thousand in net loan losses on commercial real estate loans originated by Bank of Marin,” said Tani Girton, Chief Financial Officer. “Our 1.35% return on assets and 55.41% efficiency ratio for the quarter demonstrate the exceptional performance associated with disciplined underwriting, lending, relationship management and expense control.”

Net interest income totaled $55.2 million in the first nine months of 2016 compared to $49.9 million for the same period of 2015. The increase of $5.2 million was primarily due to an increase in average earning assets of $146.8 million. Additional positive variances in 2016 include interest recovery of $1.4 million mentioned above and an increase in gains on payoffs of purchased credit impaired (“PCI”) loans of $696 thousand (as seen in the table below), which were partially offset by lower average rates on loans and investments and prepayment fees of $312 thousand on a Federal Home Loan Bank ("FHLB") advance in the second quarter of 2016.

Net interest income totaled $19.4 million in the third quarter of 2016, compared to $17.2 million in the prior quarter and $16.9 million in the same quarter a year ago. The increase from both earlier quarters was due to $1.4 million interest recovery previously discussed and an increase in purchased loan accretion shown in the table below. In addition, average earning assets were higher while interest expense was lower as a result of the Federal Home Loan Bank fixed rate advance prepayment. These positive variances were minimally offset by a decline in the average rates on loans.

The tax-equivalent net interest margin was 4.05% in the third quarter of 2016, compared to 3.77% in the prior quarter and 3.79% in the same quarter a year ago. The increase in the third quarter of 2016 compared to both the second quarter of 2016 and the third quarter of 2015 is primarily due to the same changes impacting net interest income mentioned above.

Loans acquired through the acquisition of other banks are classified as 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 $2.9 million, $2.9 million, and $3.7 million at September 30, 2016, June 30, 2016 and September 30, 2015, respectively.

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

       
    Three months ended
September 30, 2016     June 30, 2016     September 30, 2015

(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 1   $ 89     2 bps   $ 87     2 bps   $ 128     3 bps
Accretion on non-PCI loans 2 $ 605 12 bps $ 317 7 bps $ 366 8 bps
Gains on payoffs of PCI loans       $       0 bps       $       0 bps       $ 1       0 bps
 
                     
    Nine months ended
September 30, 2016     September 30, 2015
(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 1 $ 274   2 bps $ 367   3 bps
Accretion on non-PCI loans 2 $ 1,252 9 bps $ 1,202 9 bps
Gains on payoffs of PCI loans     $ 740     5 bps     $ 44     0 bps
1   Accretable yield on PCI loans totaled $1.6 million, $1.7 million and $2.7 million at September 30, 2016, June 30, 2016 and September 30, 2015, respectively.
2 Unaccreted purchase discounts on non-PCI loans totaled $1.9 million, $2.5 million and $3.4 million at September 30, 2016, June 30, 2016 and September 30, 2015, respectively.
 

Non-interest income in the third quarter of 2016 totaled $2.1 million, compared to $2.4 million in the prior quarter and $2.3 million in the same quarter a year ago. The decrease compared to the prior quarter primarily relates to a $284 thousand gain on the sale of four securities in the second quarter of 2016. The decrease from the same quarter last year is partially due to a $72 thousand gain on the sale of four securities in the third quarter of 2015, lower merchant card interchange fees of $57 thousand related to a decline in sales volume and $62 thousand lower wealth management and trust services fees in the third quarter of 2016.

Non-interest expense has been very stable totaling $11.9 million in the third quarter of 2016, $12.0 million in the prior quarter and $11.6 million in the same quarter a year ago. The increase from the third quarter of 2015 was partially due to an increase in salaries and benefits related to annual merit increases and higher full time equivalents in 2016.

Earnings Call and Webcast Information

Bank of Marin Bancorp will webcast its third quarter earnings call on Monday, October 24, 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 under “Investor Relations.” 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 $2.1 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 retail 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 was named 2016 Community Bank of the Year by Western Independent Bankers and 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
September 30, 2016
(dollars in thousands, except per share data; unaudited)
           
September 30, June 30, September 30,

QUARTER-TO-DATE

2016 2016 2015
NET INCOME $ 6,964 $ 4,837 $ 4,773
DILUTED EARNINGS PER COMMON SHARE $ 1.14 $ 0.79 $ 0.79
RETURN ON AVERAGE ASSETS (ROA) 1.35 % 0.99 % 1.00 %
RETURN ON AVERAGE EQUITY (ROE) 12.08 % 8.68 % 9.00 %
EFFICIENCY RATIO 55.41 % 61.35 % 60.67 %
TAX-EQUIVALENT NET INTEREST MARGIN1 4.05 % 3.77 % 3.79 %
NET CHARGE-OFFS (RECOVERIES) $ (2,176 ) $ (59 ) $ (102 )
NET CHARGE-OFFS (RECOVERIES) TO AVERAGE LOANS (0.15 ) % % (0.01 ) %
 

YEAR-TO-DATE

NET INCOME $ 17,447 $ 10,483 $ 13,516
DILUTED EARNINGS PER COMMON SHARE $ 2.86 $ 1.72 $ 2.23
RETURN ON AVERAGE ASSETS (ROA) 1.17 % 1.07 % 0.97 %
RETURN ON AVERAGE EQUITY (ROE) 10.40 % 9.52 % 8.75 %
EFFICIENCY RATIO 58.07 % 59.49 % 62.79 %
TAX-EQUIVALENT NET INTEREST MARGIN1 3.95 % 3.90 % 3.88 %
NET CHARGE-OFFS (RECOVERIES) $ (2,264 ) $ (89 ) $ 643
NET CHARGE-OFFS (RECOVERIES) TO AVERAGE LOANS (0.15 ) % (0.01 ) % 0.05 %
 

AT PERIOD END

TOTAL ASSETS $ 2,054,821 $ 1,950,452 $ 1,882,794
 
LOANS:
COMMERCIAL AND INDUSTRIAL $ 221,207 $ 215,257 $ 189,967
REAL ESTATE
COMMERCIAL OWNER-OCCUPIED $ 237,538 $ 242,103 $ 239,335
COMMERCIAL INVESTOR-OWNED $ 715,051 $ 703,458 $ 671,677
CONSTRUCTION $ 80,491 $ 77,024 $ 54,921
HOME EQUITY $ 111,211 $ 112,240 $ 113,731
OTHER RESIDENTIAL $ 77,769 $ 73,761 $ 71,682
INSTALLMENT AND OTHER CONSUMER LOANS $ 24,396   $ 24,556   $ 21,887  

TOTAL LOANS

$ 1,467,663 $ 1,448,399 $ 1,363,200
 
NON-PERFORMING LOANS2:
COMMERCIAL AND INDUSTRIAL $ 44 $ 21 $ 354
REAL ESTATE
COMMERCIAL OWNER-OCCUPIED $ 176 $ 176 $
COMMERCIAL INVESTOR-OWNED $ $ 1,676 $ 2,020
CONSTRUCTION $ $ $ 2
HOME EQUITY $ 260 $ 789 $ 172
OTHER RESIDENTIAL $ $ $
INSTALLMENT AND OTHER CONSUMER LOANS $ 60   $ 63   $ 90  
TOTAL NON-ACCRUAL LOANS $ 540 $ 2,725 $ 2,638
 
CLASSIFIED LOANS (GRADED SUBSTANDARD & DOUBTFUL) $ 22,592 $ 20,399 $ 24,023
TOTAL ACCRUING LOANS 30-89 DAYS PAST DUE $ 160 $ 135 $ 3,361
LOAN LOSS RESERVE TO LOANS 1.07 % 1.04 % 1.06 %
LOAN LOSS RESERVE TO NON-ACCRUAL LOANS 29.11 x 5.54 x 5.48 x
NON-ACCRUAL LOANS TO TOTAL LOANS 0.04 % 0.19 % 0.19 %
 
TOTAL DEPOSITS $ 1,801,469 $ 1,705,615 $ 1,635,482
LOAN-TO-DEPOSIT RATIO 81.5 % 84.9 % 83.4 %
STOCKHOLDERS' EQUITY $ 231,780 $ 226,452 $ 211,954
BOOK VALUE PER SHARE $ 37.85 $ 37.00 $ 34.97
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS3 10.9 % 11.2 % 10.8 %
TOTAL RISK BASED CAPITAL RATIO-BANK 13.9 % 13.8 % 13.6 %
TOTAL RISK BASED CAPITAL RATIO-BANCORP 14.3 % 14.1 % 14.0 %
FULL-TIME EQUIVALENT EMPLOYEES 263 255 257
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 $19.1 million, $19.9 million and $18.8 million at September 30, 2016, June 30, 2016 and September 30, 2015, respectively. Excludes purchased credit-impaired (PCI) loans with carrying values of $2.9 million, $2.9 million and $3.7 million that were accreting interest at September 30, 2016, June 30, 2016 and September 30, 2015, 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 $2.9 million, $2.9 million and $3.7 million at September 30, 2016, June 30, 2016 and September 30, 2015, respectively.
3 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 $9.1 million, $9.3 million and $9.7 million at September 30, 2016, June 30, 2016 and September 30, 2015, respectively. Tangible assets exclude goodwill and intangible assets.
 
 

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF CONDITION

At September 30, 2016, June 30, 2016 and September 30, 2015

           
September 30, June 30, September 30,
(in thousands, except share data; unaudited)     2016     2016     2015
Assets
Cash and due from banks $ 96,930 $ 55,438 $ 35,315
Investment securities
Held-to-maturity, at amortized cost 46,423 58,491 86,471

Available-for-sale (at fair value; amortized cost $374,802, $318,335 and $331,024 at September 30, 2016, June 30, 2016 and September 30, 2015, respectively)

    378,996     323,361     333,856
Total investment securities 425,419 381,852 420,327

Loans, net of allowance for loan losses of $15,713, $15,087 and $14,457 at September 30, 2016, June 30, 2016 and September 30, 2015, respectively

1,451,950 1,433,312 1,348,743
Bank premises and equipment, net 8,611 8,650 9,537
Goodwill 6,436 6,436 6,436
Core deposit intangible 2,713 2,846 3,268
Interest receivable and other assets     62,762     61,918     59,168
Total assets     $ 2,054,821     $ 1,950,452     $ 1,882,794
 
Liabilities and Stockholders' Equity
Liabilities
Deposits
Non-interest bearing $ 860,638 $ 804,447 $ 752,336
Interest bearing
Transaction accounts 91,979 88,365 95,522
Savings accounts 156,225 149,745 136,021
Money market accounts 533,682 502,476 495,642
Time accounts     158,945     160,582     155,961
Total deposits 1,801,469 1,705,615 1,635,482
Federal Home Loan Bank ("FHLB") and other borrowings 15,000
Subordinated debentures 5,540 5,493 5,343
Interest payable and other liabilities     16,032     12,892     15,015
Total liabilities     1,823,041     1,724,000     1,670,840
 
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 - 6,123,181, 6,120,684 and 6,060,744 at September 30, 2016, June 30, 2016 and September 30, 2015, respectively

86,926 86,569 84,272
Retained earnings 142,427 136,992 126,082
Accumulated other comprehensive income, net     2,427     2,891     1,600
Total stockholders' equity     231,780     226,452     211,954
Total liabilities and stockholders' equity     $ 2,054,821     $ 1,950,452     $ 1,882,794
 
           
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
       
Three months ended Nine months ended

 

September 30,   June 30,   September 30, September 30,   September 30,

(in thousands, except per share amounts; unaudited)

    2016   2016   2015 2016   2015
Interest income
Interest and fees on loans $ 17,840 $ 16,097 $ 15,498 $ 51,078 $ 46,164
Interest on investment securities
Securities of U.S. government agencies 1,283 1,191 1,223 3,826 3,248
Obligations of state and political subdivisions 569 588 527 1,743 1,578
Corporate debt securities and other 38 77 162 220 546
Interest on Federal funds sold and short-term investments     104     40     35   155     107  
Total interest income 19,834 17,993 17,445 57,022 51,643
Interest expense
Interest on interest-bearing transaction accounts 27 28 28 82 88
Interest on savings accounts 15 14 12 43 37
Interest on money market accounts 112 107 125 330 375
Interest on time accounts 190 193 212 579 649
Interest on FHLB and other borrowings 378 80 478 236
Interest on subordinated debentures     109     107     105   325     314  
Total interest expense     453     827     562   1,837     1,699  
Net interest income 19,381 17,166 16,883 55,185 49,944
(Reversal of) provision for loan losses     (1,550 )         (1,550 )    
Net interest income after provision for loan losses     20,931     17,166     16,883   56,735     49,944  
Non-interest income
Service charges on deposit accounts 447 441 489 1,344 1,518
Wealth Management and Trust Services 506 527 568 1,599 1,809
Debit card interchange fees 393 381 372 1,112 1,087
Merchant interchange fees 114 128 171 355 430
Earnings on bank-owned life insurance 216 209 204 626 610
Dividends on FHLB stock 223 185 209 577 817
Gains on investment securities, net 284 72 394 80
Other income     215     266     213   691     744  
Total non-interest income     2,114     2,421     2,298   6,698     7,095  
Non-interest expense
Salaries and related benefits 6,683 6,724 6,300 20,155 19,762
Occupancy and equipment 1,275 1,175 1,346 3,731 4,181
Depreciation and amortization 449 441 441 1,343 1,512
Federal Deposit Insurance Corporation insurance 253 246 250 760 739
Data processing 894 916 835 2,666 2,413
Professional services 476 554 493 1,528 1,572
Directors' expense 143 116 182 448 620
Information technology 307 165 186 665 554
Provision for losses on off-balance sheet commitments 150 324 150 14
Other expense     1,430     1,530     1,281   4,491     4,447  
Total non-interest expense     11,910     12,017     11,638   35,937     35,814  
Income before provision for income taxes 11,135 7,570 7,543 27,496 21,225
Provision for income taxes     4,171     2,733     2,770   10,049     7,709  
Net income     $ 6,964     $ 4,837     $ 4,773   $ 17,447     $ 13,516  
Net income per common share:
Basic $ 1.14 $ 0.80 $ 0.80 $ 2.87 $ 2.27
Diluted $ 1.14 $ 0.79 $ 0.79 $ 2.86 $ 2.23
Weighted average shares:
Basic 6,083 6,078 5,963 6,070 5,943
Diluted 6,117 6,109 6,067 6,106 6,059
Dividends declared per common share     $ 0.25     $ 0.25     $ 0.22   $ 0.75     $ 0.66  
Comprehensive income:
Net income $ 6,964 $ 4,837 $ 4,773 $ 17,447 $ 13,516
Other comprehensive income
Change in net unrealized (loss) gain on available-for-sale securities (831 ) 2,119 1,523 4,211 1,037
Reclassification adjustment for gains on available-for-sale securities included in net income         (284 )     (394 )   (8 )
Net change in unrealized (loss) gain on available-for-sale securities, before tax     (831 )   1,835     1,523   3,817     1,029  
Deferred tax (benefit) expense     (367 )   776     654   1,583     517  
Other comprehensive (loss) income, net of tax     (464 )   1,059     869   2,234     512  
Comprehensive income     $ 6,500     $ 5,896     $ 5,642   $ 19,681     $ 14,028  
 
 

BANK OF MARIN BANCORP

AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME

                   
Three months ended Three months ended Three months ended
September 30, 2016   June 30, 2016   September 30, 2015
Interest Interest Interest
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
(dollars in thousands)     Balance   Expense   Rate   Balance   Expense   Rate   Balance   Expense   Rate
Assets
Interest-bearing due from banks 1 $ 79,672 $ 105 0.51 % $ 28,766 $ 39 0.54 % $ 51,378 $ 35 0.27 %
Investment securities 2, 3 394,980 2,120 2.15 % 389,023 2,080 2.14 % 389,260 2,094 2.15 %
Loans 1, 3, 4     1,454,617     18,182     4.89 %   1,440,847     16,416     4.51 %   1,352,023     15,800     4.57 %
Total interest-earning assets 1 1,929,269 20,407 4.14 % 1,858,636 18,535 3.95 % 1,792,661 17,929 3.91 %
Cash and non-interest-bearing due from banks 48,901 40,540 43,054
Bank premises and equipment, net 8,808 8,827 9,680
Interest receivable and other assets, net     61,649             60,205             57,589          
Total assets     $ 2,048,627             $ 1,968,208             $ 1,902,984          
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts $ 91,035 $ 27 0.12 % $ 93,355 $ 28 0.12 % $ 93,933 $ 28 0.12 %
Savings accounts 152,370 15 0.04 % 149,234 14 0.04 % 135,202 13 0.04 %
Money market accounts 531,130 112 0.08 % 510,727 107 0.08 % 506,952 125 0.10 %
Time accounts including CDARS 160,595 190 0.47 % 160,031 192 0.48 % 157,252 212 0.53 %
Overnight borrowings 1 % 1,082 1 0.40 % 188 %
FHLB fixed-rate advances 1 % 12,363 377 12.07 % 15,000 79 2.07 %
Subordinated debentures 1     5,516     109     7.68 %   5,471     108     7.78 %   5,316     105     7.73 %
Total interest-bearing liabilities 940,646 453 0.19 % 932,263 827 0.36 % 913,843 562 0.24 %
Demand accounts 864,460 797,935 765,284
Interest payable and other liabilities 14,124 13,853 13,467
Stockholders' equity     229,397             224,157             210,390          
Total liabilities & stockholders' equity     $ 2,048,627             $ 1,968,208             $ 1,902,984          
Tax-equivalent net interest income/margin 1         $ 19,954     4.05 %       $ 17,708     3.77 %       $ 17,367     3.79 %
Reported net interest income/margin 1         $ 19,382     3.93 %       $ 17,166     3.65 %       $ 16,883     3.69 %
Tax-equivalent net interest rate spread             3.95 %           3.59 %           3.67 %
 
Nine months ended Nine months ended
September 30, 2016   September 30, 2015
Interest Interest
Average Income/ Yield/ Average Income/ Yield/
(dollars in thousands)     Balance   Expense   Rate   Balance   Expense   Rate
Assets
Interest-bearing due from banks 1 $ 39,293 $ 155 0.52 % $ 55,509 $ 107 0.25 %
Investment securities 2, 3 403,986 6,458 2.13 % 340,373 5,864 2.30 %
Loans 1, 3, 4     1,446,053     52,072     4.73 %   1,346,689     47,063     4.61 %
Total interest-earning assets 1 1,889,332 58,685 4.08 % 1,742,571 53,034 4.01 %
Cash and non-interest-bearing due from banks 39,788 44,368
Bank premises and equipment, net 8,926 9,786
Interest receivable and other assets, net     60,022             58,153          
Total assets     $ 1,998,068             $ 1,854,878          
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts $ 95,112 $ 82 0.11 % $ 93,762 $ 88 0.13 %
Savings accounts 148,050 43 0.04 % 133,553 38 0.04 %
Money market accounts 523,641 330 0.08 % 494,142 375 0.10 %
Time accounts including CDARS 160,523 579 0.48 % 156,458 648 0.55 %
Overnight borrowings 1 7,190 22 0.42 % 194 %
FHLB fixed-rate advances 1 9,087 456 6.59 % 15,000 236 2.07 %
Subordinated debentures 1     5,469     325     7.80 %   5,261     314     7.98 %
Total interest-bearing liabilities 949,072 1,837 0.26 % 898,370 1,699 0.25 %
Demand accounts 810,190 735,487
Interest payable and other liabilities 14,651 14,466
Stockholders' equity     224,155             206,555          
Total liabilities & stockholders' equity     $ 1,998,068             $ 1,854,878          
Tax-equivalent net interest income/margin 1         $ 56,848     3.95 %       $ 51,335     3.88 %
Reported net interest income/margin 1         $ 55,185     3.84 %       $ 49,944     3.78 %
Tax-equivalent net interest rate spread             3.82 %           3.76 %
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.

Bank of Marin Bancorp
Sandy Pfaff, 415-819-7447
sandy@pfaffpr.com

Source: Bank of Marin Bancorp