Tamalpais Bancorp Reports Results for Fiscal 2009

SAN RAFAEL, Calif.--(BUSINESS WIRE)--

Tamalpais Bancorp TAMB (the Company), the parent company for Tamalpais Bank (the Bank), today reported a net loss for the fourth quarter of 2009 of $28.2 million and a quarterly loss per share (EPS) of $7.37. The net loss for the full year of 2009 was $37.6 million and the annual diluted loss per share was $9.83, compared to net income of $4.8 million and EPS of $1.26 in the prior year.

To meet regulatory requirements, the Bank continues to divest itself of portions of its loan portfolio to reduce its risk exposure in classified assets and to facilitate the required roll-off of brokered deposits. The resulting loan loss provisions recorded for loans sold in the fourth quarter of 2009 and for loans to be sold in the first quarter of 2010 were the major contributors for the fourth quarter loss. Additionally, the general provisions increased the allowance for loan losses as a percent of total loans held for investment to 5.03% as of December 31, 2009, from 1.37% as of December 31, 2008. For the 12 months ended December 31, 2009 the Bank’s net loans decreased by $88.8 million to $495.6 million.

“In the fourth quarter, we increased our allowance for loan losses to resolve non-performing loans and to acknowledge the decline in commercial real estate values,” said Mark Garwood, president/CEO/chairman. “The results of this action and plans for loan sales in the first quarter 2010 show our continuing and determined work to improve our credit quality.

“We are focusing our efforts on raising capital and have been successful in increasing deposit balances, plus decreasing FHLB borrowings and brokered deposits,” he said.

During 2009, deposits into the Bank increased by $26.9 million to $487.2 million. During this same period, while investments decreased by $10.4 million to $56.8 million, the Bank’s FHLB borrowings also decreased by $64.0 million to $119.1 million. As of December 31, 2009 the total assets of the Company decreased to $629.7 million from a total of $703.7 million as of December 31, 2008.

About Tamalpais Bancorp

Tamalpais Bancorp, through its wholly owned subsidiary Tamalpais Bank, offers business and consumer banking through its seven Marin County full service branches. The Company had $630 million in assets as of December 31, 2009. As previously reported, Tamalpais Wealth Advisors has been absorbed by CSI Capital Management Inc.

This news release contains forward-looking statements with respect to the financial condition, results of operation and business of Tamalpais Bancorp and its subsidiary. These include, but are not limited to, statements that relate to or are dependent on estimates or assumptions relating to the prospects of loan growth, credit quality, changes in securities or financial markets, and certain operating efficiencies resulting from the operations of Tamalpais Bank. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) our ability to successfully raise capital or otherwise comply with the requirements of the FDIC order and agreement with the Federal Reserve Board; (2) competitive pressure among financial services companies increases significantly; (3) changes in the interest rate environment reduce interest margins; (4) general economic conditions, internationally, nationally or in the State of California are less favorable than expected; (5) legislation or regulatory requirements or changes adversely affect the businesses in which the consolidated organization is or will be engaged; (6) the ability to satisfy the requirements of the Sarbanes-Oxley Act and other regulations governing internal controls; and (7) other risks detailed in the Tamalpais Bancorp filings with the Securities and Exchange Commission. When relying on forward-looking statements to make decisions with respect to Tamalpais Bancorp, investors and others are cautioned to consider these and other risks and uncertainties. Tamalpais Bancorp disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

TAMALPAIS BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets
		December 31,				December 31,
		2009				2008				$ Change				% Change
		(unaudited)
Assets
Cash and cash equivalents:
Cash and due from banks		$	14,186,881			$	15,918,826			$	(1,731,945	)		-10.9	%
Federal funds sold			15,001,715				838				15,000,877			1790081	%
Total Cash and Cash Equivalents			29,188,596				15,919,664				13,268,932			83.3	%
Interest-bearing time deposits in other financial institutions			178,733				558,034				(379,301	)		-68.0	%
											-
Investment securities											-
Available-for-sale			50,951,388				56,415,727				(5,464,339	)		-9.7	%
Held-to-maturity, at cost			5,807,181				10,773,579				(4,966,398	)		-46.1	%
Federal Home Loan Bank restricted stock, at cost			8,652,000				8,652,000				-			0.0	%
Pacific Coast Banker's Bank restricted stock, at cost			50,000				50,000				-			0.0	%
Loans receivable			458,750,100				592,543,181				(133,793,081	)		-22.6	%
Less: Allowance for loan losses			(23,097,897	)			(8,093,499	)			(15,004,398	)		185.4	%
Loans Held-for-Sale			59,985,443				-				59,985,443			100	%
Total Loans, net			495,637,646				584,449,682				(88,812,036	)		-15.2	%
Bank premises and equipment, net			3,322,794				3,935,230				(612,436	)		-15.6	%
Accrued interest receivable			3,205,232				3,861,854				(656,622	)		-17.0	%
Other real estate owned			3,587,468				-				3,587,468			100	%
Cash surrender value of bank-owned life insurance			11,194,845				10,828,936				365,909			3.4	%
Other assets			17,953,434				7,945,510				10,007,924			126.0	%
Total Assets		$	629,729,317			$	703,390,216				(73,660,899	)		-10.5	%
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing deposits			43,362,167				33,259,929				10,102,238			30.4	%
Interest-bearing checking deposits			7,171,790				9,735,689				(2,563,899	)		-26.3	%
Money market and saving deposits			128,632,912				156,479,340				(27,846,428	)		-17.8	%
Certificates of deposit			308,050,249				260,826,102				47,224,147			18.1	%
Total Deposits			487,217,118				460,301,060				26,916,058			5.8	%
Federal Home Loan Bank Advances			119,085,000				183,085,000				(64,000,000	)		-35.0	%
Long term debt			6,185,614				6,000,000				185,614			3.1	%
Junior Subordinated Debentures			13,403,000				13,403,000				-			0.0	%
Accrued interest payable and other liabilities			4,077,163				3,227,823				849,340			26.3	%
Total Liabilities			629,967,895				666,016,883				(36,048,988	)		-5.4	%
Commitment and Contingencies			-				-				-			-
Stockholders' Equity
Common stock, no par value; 300,000,000 shares authorized; 3,823,634 shares issued and outstanding at December 31, 2009 and December 31, 2008, respectively			12,027,473				12,027,473				-			0.0	%
Paid-In-Capital			1,181,825				949,488				232,337			24.5	%
Retained earnings			(13,774,870	)			24,082,473				(37,857,343	)		-157.2	%
Accumulated other comprehensive income			326,994				313,899				13,095			4.2	%
Total Stockholders' Equity			(238,578	)			37,373,333				(37,611,911	)		-100.6	%
Total Liabilities and Stockholders' Equity		$	629,729,317			$	703,390,216				(73,660,899	)		-10.5	%

TAMALPAIS BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
For the Periods Ended December 31, 2009 and 2008
		For the Three Months Ended
		December 31,										Change
		2009					2008					$				%
		(Unaudited)
Interest Income
Interest and fees on loans		$	8,069,951				$	10,287,346				$	(2,217,395	)		-21.6	%
Interest on investment securities			608,232					728,165					(119,933	)		-16.5	%
Interest on Federal funds sold			19,252					16,238					3,014			18.6	%
Interest on other investments			159					(32,266	)				32,425			-100.5	%
Interest on deposits in other financial institutions			1,558					7,034					(5,476	)		-77.9	%
Total Interest Income			8,699,152					11,006,517					(2,307,365	)		-21.0	%
Interest Expense
Interest expense on deposits			2,346,667					2,685,048					(338,381	)		-12.6	%
Interest expense on borrowed funds			1,323,582					1,891,966					(568,384	)		-30.0	%
Interest expense on long term debt			84,090					93,889					(9,799	)		-10.4	%
Interest expense on Junior Subordinated Debentures			58,980					137,781					(78,801	)		-57.2	%
Total Interest Expense			3,813,319					4,808,684					(995,365	)		-20.7	%
Net Interest Income Before Provision for Loan Losses			4,885,833					6,197,833					(1,312,000	)		-21.2	%
Provision for Loan Losses			27,410,510					1,594,000					25,816,510			1619.6	%
Net Interest (Loss) Income After Provision for Loan Losses			(22,524,677	)				4,603,833					(27,128,510	)		-589.3	%
Noninterest Income
Gain on sale of securities, net			546,335					-					546,335			-
(Loss)Gain on sale/brokering of loans, net			(67,219	)				16,196					(83,415	)		-515.0	%
(Loss) on sale of other real estate owned, net			(552,089	)				-					(552,089	)		-
Loan servicing			47,643					50,233					(2,590	)		-5.2	%
Registered Investment Advisory Services fee income			147,371					135,420					11,951			8.8	%
Other income			265,277					320,730					(55,453	)		-17.3	%
Total Noninterest Income			387,317					522,579					(135,262	)		-25.9	%
Noninterest Expenses
Salaries and benefits			1,820,817					2,077,211					(256,394	)		-12.3	%
Occupancy			351,295					361,063					(9,768	)		-2.7	%
Advertising			160,960					74,029					86,931			117.4	%
Professional			1,066,816					287,578					779,238			271.0	%
Data processing			194,665					186,208					8,457			4.5	%
Equipment and depreciation			195,016					188,197					6,819			3.6	%
Other administrative			2,581,713					730,474					1,851,239			253.4	%
Total Noninterest Expense			6,371,282					3,904,760					2,466,522			63.2	%
(Loss) Income Before Income Taxes			(28,508,642	)				1,221,652					(29,730,294	)		-2433.6	%
(Benefit) Provision for Income Taxes			(313,640	)				371,924					(685,564	)		-184.3	%
Net (Loss) Income		$	(28,195,003	)			$	849,728				$	(29,044,731	)		-3418.1	%
(Loss) Earnings Per Share
Basic		$	(7.37	)			$	0.22				$	(7.59	)		-3450.6	%
Diluted		$	(7.37	)			$	0.22				$	(7.59	)		-3450.6	%

TAMALPAIS BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
For the Periods Ended December 31, 2009 and 2008
		For the Twelve Months Ended December 31,								Change
		2009				2008				$				%
		(Unaudited)
Interest Income
Interest and fees on loans		$	37,147,921			$	40,052,345			$	(2,904,424	)		-7.3	%
Interest on investment securities			2,744,977				2,680,668				64,309			2.4	%
Interest on Federal funds sold			46,016				110,668				(64,652	)		-58.4	%
Interest on other investments			24,913				298,165				(273,252	)		-91.6	%
Interest on deposits in other financial institutions			20,700				30,647				(9,947	)		-32.5	%
Total Interest Income			39,984,527				43,172,493				(3,187,966	)		-7.4	%
Interest Expense
Interest expense on deposits			9,129,615				11,987,917				(2,858,302	)		-23.8	%
Interest expense on borrowed funds			6,526,821				7,027,569				(500,748	)		-7.1	%
Interest expense on long term debt			287,826				212,803				75,023			35.3	%
Interest expense on Junior Subordinated Debentures			723,793				635,787				88,006			13.8	%
Total Interest Expense			16,668,055				19,864,076				(3,196,021	)		-16.1	%
Net Interest Income Before Provision for Loan Losses			23,316,472				23,308,417				8,055			0.0	%
Provision for Loan Losses			50,845,681				3,190,957				47,654,724			1493.4	%
Net Interest Income (Loss) After Provision for Loan Losses			(27,529,209	)			20,117,460				(47,646,669	)		-236.8	%
Noninterest Income
Gain on sale of loans, net			(67,219	)			182,489				(249,708	)		-136.8	%
Gain (Loss) on sale of securities, net			783,822				(5,780	)			789,602			-13660.9	%
Gain on sale of other real estate owned, net			(474,308	)			-				(474,308	)		-
Loan servicing			166,982				182,093				(15,111	)		-8.3	%
Registered Investment Advisory Services fee income			540,448				599,537				(59,089	)		-9.9	%
Other income			1,211,498				1,228,544				(17,046	)		-1.4	%
Total Noninterest Income			2,161,222				2,186,883				(25,661	)		-1.2	%
Noninterest Expenses
Salaries and benefits			7,790,611				8,489,707				(699,096	)		-8.2	%
Occupancy			1,420,994				1,481,267				(60,273	)		-4.1	%
Advertising			547,168				307,868				239,300			77.7	%
Professional			2,321,692				674,067				1,647,625			244.4	%
Data processing			665,672				610,092				55,580			9.1	%
Equipment and depreciation			757,526				838,561				(81,035	)		-9.7	%
Other administrative			6,666,306				2,688,146				3,978,160			148.0	%
Total Noninterest Expense			20,169,969				15,089,708				5,080,261			33.7	%
(Loss) Income Before Income Taxes			(45,537,956	)			7,214,635				(52,752,591	)		-731.2	%
(Benefit) Provision for Income Taxes			(7,909,929	)			2,385,901				(10,295,830	)		-431.5	%
Net (Loss) Income		$	(37,628,027	)		$	4,828,734			$	(42,456,761	)		-879.3	%
(Loss) Earnings Per Share
Basic		$	(9.84	)		$	1.26			$	(11.10	)		-880.7	%
Diluted		$	(9.83	)		$	1.26			$	(11.09	)		-880.2	%

TAMALPAIS BANCORP AND SUBSIDIARIES
Selected Ratios and Other Data
Unaudited
(Dollars in Thousands Except Per Share Amounts)
		At or For the Three Months Ended December 31,									At or For the Twelve Months Ended December 31,
		2009					2008				2009				2008
Profitability Ratios:
Return on average assets			-16.67	%				0.49	%			-5.39	%			0.76	%
Return on average equity			-425.75	%				9.18	%			-115.17	%			13.74	%
Net Interest Margin			2.97	%				3.71	%			3.45	%			3.79	%
Efficiency ratio			120.8	%				58.1	%			79.2	%			59.2	%
Other Information:
Average total assets		$	676,544				$	686,981			$	697,971			$	636,713
Average interest earning assets		$	652,354				$	664,824			$	674,900			$	614,458
Average equity		$	26,490				$	37,023			$	32,672			$	35,135
Period Ending Shares Outstanding			3,823,634					3,823,634				3,823,634				3,823,634
Average Basic Shares Outstanding			3,823,634					3,823,634				3,823,634				3,820,535
Average Diluted Shares Outstanding			3,823,634					3,825,842				3,827,699				3,830,149
Book value per share		$	(0.06	)			$	9.77			$	(0.06	)		$	9.77
Basic (loss) / earnings per share		$	(7.37	)			$	0.22			$	(9.84	)		$	1.26
Diluted (loss) / earnings per share		$	(7.37	)			$	0.22			$	(9.83	)		$	1.26
Tamalpais Bank Capital Ratios:
Tier 1 leverage ratio			2.73	%				8.07	%
Tier 1 risk based capital ratio			3.58	%				9.20	%
Total risk based capital ratio			4.87	%				10.46	%
Tamalpais Bancorp Capital Ratios:
Tier 1 leverage ratio			-0.08	%				N/A
Tier 1 risk based capital ratio			-0.11	%				N/A
Total risk based capital ratio			-0.11	%				N/A

TAMALPAIS BANCORP AND SUBSIDIARIES
Selected Loan and Asset Quality Data
Unaudited
(Dollars in Thousands Except Per Share Amounts)
Loan Portfolio:		At December 31, 2009								At December 31, 2008
		Amount				%				Amount			%
Loans Held-for-Investment
One-to-four family residential		$	32,288				6.2	%		$	33,695		5.7	%
Multifamily residential			103,700				20.0	%			171,136		28.9	%
Commercial real estate			240,615				46.4	%			322,861		54.5	%
Land			9,766				1.9	%			10,905		1.8	%
Construction real estate			33,667				6.5	%			31,077		5.2	%
Commercial, non real estate			35,716				6.9	%			18,913		3.2	%
Consumer loans			1,556				0.3	%			2,111		0.4	%
Loans Held-for-Sale
Multifamily residential			19,191				3.7	%			-		0.0	%
Commercial real estate			40,794				7.9	%			-		0.0	%
Total gross loans		$	517,293				99.8	%			590,698		99.7	%
Net deferred loan costs			1,442				0.2	%			1,845		0.3	%
Gross loans receivable		$	518,735				100.0	%		$	592,543		100.0	%
		As Of the Period Indicated
		December 31,				December 31,
		2009				2008
Nonperforming Assets:
Nonaccrual loans		$	43,053			$	16,758
Nonperforming loans			43,053				16,758
Other real estate owned			3,587				417
Nonperforming assets			46,640				17,175
		As of the Period Indicated
		December 31,				December 31,
		2009				2008
Allowance for Loan Losses:
Balance, beginning of period		$	8,093			$	4,915
Provisions for loan losses			50,846				3,190
Charge-offs			(35,845	)			(37	)
Recoveries			4				25
Net charge-offs			(35,841	)			(12	)
Balance, end of period		$	23,098			$	8,093
		As Of the Period Indicated
		December 31,				December 31,
		2009				2008
Allowance for Loan Losses:
General allowance for loan losses		$	17,103			$	8,093
Impairments of specific loans			5,995				-
Balance		$	23,098			$	8,093
		As Of the Period Indicated
		December 31,				December 31,
		2009				2008
Asset Quality:
Allowance for loan losses /			5.03	%			1.37	%
loans held-for-investment
Allowance for loan losses /			53.7	%			48.3	%
nonperforming loans
Nonperforming loans / gross loans			8.30	%			2.83	%
Nonperforming assets / total assets			7.41	%			2.44	%
Net charge-offs / gross loans			6.91	%			0.00	%

TAMALPAIS BANCORP AND SUBSIDIARIES
Average Balance Sheets (Unaudited)
		For the Three Months Ended
(dollars in thousands)		12/31/09										12/31/08
						Interest			Yields							Interest				Yields
		Average				Income/			Earned/			Average				Income/				Earned/
		Balance				Expense			Paid			Balance				Expense				Paid
Assets
Investment securities - Muni's (1,2)		$	4,157			$	42		4.01	%		$	5,226			$	51			5.47	%
Investment securities - Taxable (2)			58,337				567		3.86	%			57,539				677			4.68	%
Other investments			8,702				-		0.00	%			8,497				(32	)		-1.50	%
Interest bearing deposits in other financial institutions			343				2		1.80	%			628				7			4.43	%
Federal funds sold			24,820				19		0.31	%			9,241				16			0.69	%
Loans (3)			555,343				8,070		5.77	%			583,693				10,288			7.01	%
Loans Held For Sale			652				-		0.00	%			-				-			0.00	%
Total Interest Earning Assets			652,354				8,700		5.29	%			664,824				11,007			6.59	%
Allowance for loan losses			(21,658	)									(6,720	)
Cash and due from banks			5,381										4,348
Net premises, furniture and equipment			3,434										4,057
Other assets			37,033										20,472
Total Assets		$	676,544									$	686,981
Liabilities and Shareholders' Equity
Interest bearing checking		$	7,509				5		0.26	%		$	7,943				12			0.60	%
Savings deposits (4)			135,399				429		1.26	%			152,242				725			1.89	%
Time deposits			310,820				1,913		2.44	%			255,167				1,948			3.04	%
Other borrowings			132,498				1,324		3.96	%			180,020				1,892			4.18	%
Long term debt			6,186				84		5.39	%			6,000				94			6.23	%
Junior Subordinated Debentures			13,403				58		1.72	%			13,403				138			4.10	%
Total Interest Bearing Liabilities			605,815				3,813		2.50	%			614,775				4,809			3.11	%
Noninterest-bearing deposits			41,390										31,490
Other liabilities			2,849										3,693
Total Liabilities			650,054										649,958
Shareholders' Equity			26,490										37,023
Total Liabilities and		$	676,544									$	686,981
Shareholders' Equity
Net interest income						$	4,887									$	6,198
Net interest spread (5)									2.79	%										3.47	%
Net interest margin (6)									2.97	%										3.71	%
(1) Yields on securities and certain loans have been adjusted upward to a "fully taxable equivalent" ("FTE") basis in order to reflect the effect of  income which is exempt from federal income taxation at the current statutory tax rate.
(2) The yields for securities were computed using the average amortized cost and therefore do not give effect for changes in fair value.
(3) Loans, net of unearned income, include non-accrual loans but do not reflect average reserves for possible loan losses.
(4) Savings deposits include Money Market accounts.
(5) Net interest spread is the interest differential between total interest earning assets and total interest-bearing liabilities.
(6) Net interest margin is the net yield on average interest earning assets.

TAMALPAIS BANCORP AND SUBSIDIARIES
Average Balance Sheets (Unaudited)
		For the Twelve Months Ended
(dollars in thousands)		12/31/09										12/31/08
						Interest			Yields							Interest			Yields
		Average				Income/			Earned/			Average				Income/			Earned/
		Balance				Expense			Paid			Balance				Expense			Paid
Assets
Investment securities - Muni's (1,2)		$	4,667			$	184		5.66	%		$	6,307			$	248		5.54	%
Investment securities - taxable (2)			60,629				2,561		4.22	%			51,606				2,433		4.71	%
Other investments			9,521				25		0.26	%			8,031				298		3.71	%
Interest bearing deposits in other financial institutions			515				21		4.08	%			669				31		4.63	%
Federal funds sold			15,928				46		0.29	%			6,301				111		1.76	%
Loans (3)			583,476				37,148		6.37	%			541,544				40,051		7.40	%
Loans Held For Sale			164
Total Interest Earning Assets			674,900				39,985		5.92	%			614,458				43,172		7.03	%
Allowance for loan losses			(15,784	)									(5,790	)
Cash and due from banks			4,791										4,430
Net premises, furniture and equipment			3,680										4,319
Other assets			30,384										19,296
Total Assets		$	697,971									$	636,713
Liabilities and Shareholders' Equity
Interest bearing checking		$	8,664			$	24		0.28	%		$	7,193				44		0.61	%
Savings deposits (4)			166,420				2,126		1.28	%			151,014				3,576		2.37	%
Time deposits			270,069				6,979		2.58	%			228,140				8,367		3.67	%
Other borrowings			160,126				6,527		4.08	%			167,854				7,028		4.19	%
Long Term Debt			6,010				288		4.79	%			4,011				213		5.31	%
Junior Subordinated Debentures			13,403				724		5.40	%			13,403				636		4.75	%
Total Interest Bearing Liabilities			624,692				16,668		2.67	%			571,615				19,864		3.48	%
Noninterest-bearing deposits			37,825										26,562
Other liabilities			2,782										3,401
Total Liabilities			665,299										601,578
Shareholders' Equity			32,672										35,135
Total Liabilities and		$	697,971									$	636,713
Shareholders' Equity
Net interest income						$	23,317									$	23,308
Net interest spread (5)									3.25	%									3.55	%
Net interest margin (6)									3.45	%									3.79	%
(1) Yields on securities and certain loans have been adjusted upward to a "fully taxable equivalent" ("FTE") basis in order to reflect the effect of  income which is exempt from federal income taxation at the current statutory tax rate.
(2) The yields for securities were computed using the average amortized cost and therefore do not give effect for changes in fair value.
(3) Loans, net of unearned income, include non-accrual loans but do not reflect average reserves for possible loan losses.
(4) Savings deposits include Money Market accounts.
(5) Net interest spread is the interest differential between total interest earning assets and total interest-bearing liabilities.
(6) Net interest margin is the net yield on average interest earning assets.