Market Overview

Bank of Marin Bancorp Reports Quarterly Earnings of $4.3 Million

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NOVATO, Calif.--(BUSINESS WIRE)--

Bank of Marin Bancorp, "Bancorp" (NASDAQ: BMRC), parent company of Bank of Marin, announced earnings of $4.3 million in the second quarter of 2015, compared to $4.5 million in the first quarter of 2015 and $5.2 million in the second quarter of 2014. Diluted earnings per share totaled $0.71 in the second quarter, compared to $0.74 in the prior quarter and $0.86 in the same quarter a year ago. Year-to-date earnings totaled $8.7 million compared to $9.7 million for the same six-month period a year ago. Diluted earnings per share for the six-month period totaled $1.44 compared to $1.62 for the same period in 2014.

"Loan originations were strong for the quarter, especially commercial loans to wine related businesses, and we experienced solid deposit growth in our core market of Marin," said Russell A. Colombo, President and Chief Executive Officer. "While we experienced significant loan pay-offs, they were driven by positive events for our customers, as commercial real estate continues to attract high prices in the Bay Area. Our relationship banking model allows us to work with these clients, and we expect to finance their other opportunities in the future."

Bancorp also provided the following highlights on its operating and financial performance for the second quarter of 2015:

  • Loans totaled $1.34 billion at June 30, 2015, compared to $1.35 billion at March 31, 2015 and $1.34 billion at June 30, 2014. Strong new loan volume of approximately $52 million in the second quarter of 2015 was offset by pay-offs of approximately $55 million, and combined with utilization and amortization on existing loans resulted in a net decrease of $7.3 million since March 31, 2015. The successful completion of several construction projects and the resolution of problem credits contributed to the decline in the quarter.
  • Deposits totaled $1.6 billion at June 30, 2015, and grew $45.4 million over March 31, 2015. Non-interest bearing deposits increased $24.4 million in the second quarter and represent 45.5% of total deposits, compared to 45.2% at March 31, 2015 and 45.3% at June 30, 2014.
  • Credit quality remains strong with non-accrual loans continuing to trend downward, representing 0.53% of total loans at June 30, 2015, down from 0.70% at March 31, 2015 and 0.76% a year ago. Classified loans totaled $27.8 million, down from $34.1 million at the end of the prior quarter and $33.2 million a year ago. Net charge-offs for the second quarter totaled $801 thousand, compared to net recoveries of $57 thousand in the prior quarter and net recoveries of $68 thousand in the same quarter a year ago. No provision for loan losses was recorded in the second quarter of 2015 as the continued reduction in credit risk did not warrant a provision.
  • The total risk-based capital ratio for Bancorp was 14.1% at June 30, 2015 compared to 13.8% at March 31, 2015. The common equity tier one ratio, a regulatory ratio under Basel III (Basel Committee on Bank Supervision guidelines for determining regulatory capital), was 12.8% at June 30, 2015, compared to 12.5% at March 31, 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 10.6% at June 30, 2015, compared to 10.7% at March 31, 2015 and 9.9% at June 30, 2014.
  • On July 17, 2015, the Board of Directors declared a quarterly cash dividend of $0.22 per share. The cash dividend is payable to shareholders of record at the close of business on July 31, 2015 and will be payable on August 7, 2015.

Loans and Credit Quality

Loans totaled $1.34 billion at June 30, 2015, compared to $1.35 billion at March 31, 2015 and $1.34 billion at June 30, 2014. Non-accrual loans continued to trend downward totaling $7.1 million at June 30, 2015, compared to $9.5 million at March 31, 2015 and $10.1 million a year ago. The decrease in non-accrual loans from the prior quarter and the same quarter a year ago primarily relates to a long-time land development loan that was sold in the second quarter resulting in an $839 thousand charge-off to the allowance for loan losses. Accruing loans past due 30 to 89 days totaled $1.2 million at June 30, 2015, compared to $949 thousand at March 31, 2015 and $1.5 million a year ago.

There was no provision for loan losses recorded in the second quarter of 2015 as the continued reduction in credit risk did not warrant a provision. This compares to no provision in the prior quarter and a provision of $600 thousand in the second quarter of 2014. The ratio of loan loss reserve to loans totaled 1.07% at June 30, 2015, compared to 1.13% at March 31, 2015 and 1.11% at June 30, 2014.

Deposits

Deposits totaled $1.6 billion at June 30, 2015, and grew $45.4 million over March 31, 2015 and $31.7 million over June 30, 2014. Non-interest bearing deposits of $741.1 million at June 30, 2015 increased $24.4 million when compared to March 31, 2015 and $16.1 million when compared to June 30, 2014. While day-to-day deposit volatility continues due to normal seasonal activity and new business ventures by several of our largest business customers, the overall trend is upward in both average and ending balances.

Earnings

"What sets Bank of Marin apart is the quality of our loans and deposits, which we continue to build," said Tani Girton, Chief Financial Officer. "Our return-on-assets, return-on-equity and loan-to-deposit ratios are all at healthy levels, and we have robust loan and deposit pipelines. Our consistent credit quality, strong liquidity and expense discipline position the Bank to take advantage of growth opportunities."

Net interest income totaled $16.5 million in the second quarter of 2015, compared to $16.6 million in the prior quarter and $17.9 million in the same quarter a year ago. The tax-equivalent net interest margin was 3.86%, 4.00% and 4.23% for those respective periods. The decrease in tax-equivalent net interest margin from the prior quarter primarily relates to a higher concentration of low yielding cash balances and new loans and securities yielding lower rates. The decrease from the same quarter a year ago primarily relates to lower gains and accretion income related to acquired loans and new loans and securities yielding lower rates.

Loans acquired through the acquisition of other banks are classified as Purchase 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 pay-offs. Accretion on PCI loans fluctuates based on changes in cash flows expected to be collected. Gains on pay-offs of PCI loans are recorded as interest income when the pay-off amounts exceed the recorded investment.

Accretion and gains on pay-offs of purchased loans recorded to interest income were as follows:

     
Three months ended
June 30, 2015     March 31, 2015     June 30, 2014
    Basis point     Basis point     Basis point
Dollar impact to net Dollar impact to net Dollar impact to net
(dollars in thousands; unaudited)       Amount     interest margin     Amount     interest margin     Amount     interest margin
Accretion on PCI loans   $ 120   3 bps   $ 119   3 bps   $ 187   4 bps
Accretion on non-PCI loans $ 465 11 bps $ 371 9 bps $ 713 17 bps
Gains on pay-offs of PCI loans $ 0 bps $ 43 1 bps $ 622 14 bps
 
     
Six months ended
June 30, 2015     June 30, 2014
    Basis point     Basis point

 

Dollar impact to net Dollar impact to net

(dollars in thousands; unaudited)

      Amount     interest margin     Amount     interest margin
Accretion on PCI loans $ 239 3 bps $ 367 4 bps
Accretion on non-PCI loans $ 837 10 bps $ 2,043 24 bps
Gains on pay-offs of PCI loans $ 43 0 bps $ 622 7 bps
 

Non-interest income in the second quarter of 2015 totaled $2.6 million, compared to $2.2 million in the prior quarter and $2.4 million in the same quarter a year ago. The increase from the prior quarter and same quarter a year ago relates to a $305 thousand special dividend from the Federal Home Loan Bank of San Francisco and a $147 thousand payment from a bankruptcy claim recorded in miscellaneous income. The same increases from the second quarter of 2014 were partially offset by the absence of gains on the sale of investment securities and lower merchant card interchange fees in the second quarter of 2015.

Non-interest expense totaled $12.3 million in the second quarter of 2015, compared to $11.8 million in the prior quarter and $11.5 million in the same quarter a year ago. The increase in non-interest expense from the prior quarter primarily relates to $337 thousand in occupancy and depreciation expense relating to one-time lease accounting adjustments. The increase in non-interest expense from the same quarter a year ago primarily relates to higher personnel expense due to annual merit increases and incentive compensation, and higher occupancy expense as discussed above.

Earnings Call and Webcast Information

Bank of Marin Bancorp will webcast its second quarter earnings call on Monday, July 20, 2015 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 web site at http://www.bankofmarin.com under "Latest Press and News" or "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 $1.8 billion. Founded in 1989 and headquartered in Novato, Bank of Marin is the sole subsidiary of Bank of Marin Bancorp (NASDAQ: BMRC). With 21 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 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
June 30, 2015
 
(dollars in thousands, except per share data; unaudited)

QUARTER-TO-DATE

     

June 30, 2015

   

March 31, 2015

   

June 30, 2014

NET INCOME $ 4,286 $ 4,457 $ 5,168
DILUTED EARNINGS PER COMMON SHARE $ 0.71 $ 0.74 $ 0.86
RETURN ON AVERAGE ASSETS (ROA) 0.93 % 1.00 % 1.14 %
RETURN ON AVERAGE EQUITY (ROE) 8.33 % 8.92 % 10.96 %
EFFICIENCY RATIO 64.62 % 63.07 % 56.60 %
TAX-EQUIVALENT NET INTEREST MARGIN1 3.86 % 4.00 % 4.23 %
NET CHARGE-OFFS/(RECOVERIES) $ 801 $ (57 ) $ (68 )
NET CHARGE-OFFS/(RECOVERIES) TO AVERAGE LOANS 0.06 % % (0.01 ) %
 

YEAR-TO-DATE

NET INCOME $ 8,743 $ 9,701
DILUTED EARNINGS PER COMMON SHARE $ 1.44 $ 1.62
RETURN ON AVERAGE ASSETS (ROA) 0.96 % 1.08 %
RETURN ON AVERAGE EQUITY (ROE) 8.62 % 10.47 %
EFFICIENCY RATIO 63.86 % 60.22 %
TAX-EQUIVALENT NET INTEREST MARGIN1 3.93 % 4.24 %
NET CHARGE-OFFS/(RECOVERIES) $ 744 $ 75
NET CHARGE-OFFS/(RECOVERIES) TO AVERAGE LOANS 0.06 % 0.01 %
 

AT PERIOD END

TOTAL ASSETS $ 1,870,762 $ 1,826,149 $ 1,823,901
 
LOANS:
COMMERCIAL AND INDUSTRIAL $ 185,020 $ 196,442 $ 194,402
REAL ESTATE
COMMERCIAL OWNER-OCCUPIED $ 235,121 $ 235,337 $ 233,267
COMMERCIAL INVESTOR-OWNED $ 663,357 $ 653,848 $ 669,225
CONSTRUCTION $ 48,754 $ 57,050 $ 40,197
HOME EQUITY $ 115,493 $ 113,277 $ 106,201
OTHER RESIDENTIAL $ 73,721 $ 73,375 $ 80,399
INSTALLMENT AND OTHER CONSUMER LOANS $ 17,739   $ 17,155   $ 14,820  
TOTAL LOANS $ 1,339,205 $ 1,346,484 $ 1,338,511
 
NON-PERFORMING LOANS2:
COMMERCIAL AND INDUSTRIAL $ 347 $ 373 $ 335
REAL ESTATE
COMMERCIAL OWNER-OCCUPIED $ 1,403 $ 1,403 $ 1,403
COMMERCIAL INVESTOR-OWNED $ 2,278 $ 2,354 $ 2,618
CONSTRUCTION $ 2,733 $ 5,107 $ 5,197
HOME EQUITY $ 265 $ 166 $ 444
OTHER RESIDENTIAL $ $ $
INSTALLMENT AND OTHER CONSUMER LOANS $ 42   $ 79   $ 152  
TOTAL NON-ACCRUAL LOANS $ 7,068 $ 9,482 $ 10,149
 
CLASSIFIED LOANS (GRADED SUBSTANDARD & DOUBTFUL) $ 27,806 $ 34,129 $ 33,246
TOTAL ACCRUING LOANS 30-89 DAYS PAST DUE $ 1,151 $ 949 $ 1,471
LOAN LOSS RESERVE TO LOANS 1.07 % 1.13 % 1.11 %
LOAN LOSS RESERVE TO NON-ACCRUAL LOANS 2.03 x 1.60 x 1.47 x
NON-ACCRUAL LOANS TO TOTAL LOANS 0.53 % 0.70 % 0.76 %
TEXAS RATIO3 3.54 % 4.71 % 5.43 %
 
TOTAL DEPOSITS $ 1,630,483 $ 1,585,120 $ 1,598,823
LOAN-TO-DEPOSIT RATIO 82.1 % 84.9 % 83.7 %
STOCKHOLDERS' EQUITY $ 207,182 $ 204,506 $ 190,906
BOOK VALUE PER SHARE $ 34.63 $ 34.27 $ 32.29
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS4 10.6 % 10.7 % 9.9 %
TOTAL RISK-BASED CAPITAL RATIO-BANK5 13.8 % 13.5 % 13.0 %
TOTAL RISK-BASED CAPITAL RATIO-BANCORP5 14.1 % 13.8 % 13.5 %
FULL-TIME EQUIVALENT EMPLOYEES 261 267 263
 
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 $16.1 million, $15.6 million and $14.3 million at June 30, 2015, March 31, 2015 and June 30, 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 June 30, 2015, March 31, 2015 and June 30, 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 $5.1 million, $5.1 million and $5.2 million at June 30, 2015, March 31, 2015 and June 30, 2014.
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 $9.9 million, $10.0 million and $10.6 million at June 30, 2015, March 31, 2015 and June 30, 2014, respectively. Tangible assets exclude goodwill and intangible assets.

5 Current period estimated.

 
 
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF CONDITION

at June 30, 2015, March 31, 2015 and June 30, 2014

             
(in thousands, except share data; unaudited)       June 30, 2015     March 31, 2015     June 30, 2014
Assets
Cash and due from banks $ 117,533 $ 103,164 $ 81,380
Investment securities
Held-to-maturity, at amortized cost 94,475 107,476 123,085
Available-for-sale (at fair value; amortized cost $252,709, $201,568, and $214,627 at June 30, 2015, March 31, 2015 and June 30, 2014, respectively)       254,018       204,680       215,873
Total investment securities 348,493 312,156 338,958
Loans, net of allowance for loan losses of $14,355, $15,156 and $14,900 at June 30, 2015, March 31, 2015 and June 30, 2014, respectively 1,324,851 1,331,328 1,323,611
Bank premises and equipment, net 9,673 9,852 9,296
Goodwill 6,436 6,436 6,436
Core deposit intangible 3,423 3,577 4,117
Interest receivable and other assets       60,353       59,636       60,103
Total assets       $ 1,870,762       $ 1,826,149       $ 1,823,901
 
Liabilities and Stockholders' Equity
Liabilities
Deposits
Non-interest bearing $ 741,107 $ 716,719 $ 724,975
Interest bearing
Transaction accounts 95,622 95,439 95,052
Savings accounts 132,377 133,792 121,890
Money market accounts 502,263 478,145 500,720
Time accounts       159,114       161,025       156,186
Total deposits 1,630,483 1,585,120 1,598,823
Federal Home Loan Bank ("FHLB") borrowings 15,000 15,000 15,000
Subordinated debentures 5,291 5,238 5,077
Interest payable and other liabilities       12,806       16,285       14,095
Total liabilities       1,663,580       1,621,643       1,632,995
 
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 - 5,983,551, 5,967,614
and 5,912,774 at June 30, 2015, March 31, 2015 and
June 30, 2014, respectively
83,826 83,011 81,219
Retained earnings 122,625 119,652 108,922
Accumulated other comprehensive income, net       731       1,843       765
Total stockholders' equity       207,182       204,506       190,906
Total liabilities and stockholders' equity       $ 1,870,762       $ 1,826,149       $ 1,823,901
 
 
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
         
Three months ended Six months ended
(in thousands, except per share amounts; unaudited)      

June 30, 2015

    March 31, 2015     June 30, 2014 June 30, 2015     June 30, 2014
Interest income            
Interest and fees on loans $ 15,287 $ 15,379 $ 16,363 $ 30,666 $ 32,682
Interest on investment securities
Securities of U.S. government agencies 990 1,035 1,193 2,025 2,425
Obligations of state and political subdivisions 511 540 607 1,051 1,241
Corporate debt securities and other 179 205 256 384 524
Interest on Federal funds sold and due from banks       51       21       37   72       88  
Total interest income 17,018 17,180 18,456 34,198 36,960
Interest expense
Interest on interest-bearing transaction accounts 30 30 26 60 49
Interest on savings accounts 13 12 11 25 22
Interest on money market accounts 123 127 131 250 289
Interest on time accounts 215 231 231 437 466
Interest on FHLB and overnight borrowings 78 78 78 156 156
Interest on subordinated debentures       105       104       105   209       210  
Total interest expense       564       582       582   1,137       1,192  
Net interest income 16,454 16,598 17,874 33,061 35,768
Provision for loan losses                   600         750  
Net interest income after provision for loan losses       16,454       16,598       17,274   33,061       35,018  
Non-interest income
Service charges on deposit accounts 504 525 528 1,029 1,084
Wealth Management and Trust Services 603 638 613 1,241 1,177
Debit card interchange fees 368 347 360 715 660
Merchant interchange fees 129 130 207 259 405
Earnings on Bank-owned life insurance 203 203 211 406 424
Dividends on FHLB stock 461 148 130 608 260
Gain on sale of securities 8 97 8 89
Other income       340       190       222   531       485  
Total non-interest income       2,608       2,189       2,368   4,797       4,584  
Non-interest expense
Salaries and related benefits 6,672 6,790 6,232 13,462 13,162
Occupancy and equipment 1,493 1,342 1,329 2,835 2,663
Depreciation and amortization 650 421 403 1,071 819
Federal Deposit Insurance Corporation insurance 253 236 269 489 519
Data processing 792 786 748 1,578 2,108
Professional services 515 564 412 1,079 1,040
Directors' expense 247 191 157 438 312
Information technology 216 152 173 368 338
Reversal of losses on off-balance sheet commitments (109 ) (201 ) (15 ) (310 ) (15 )
Other expense       1,590       1,567       1,749   3,166       3,354  
Total non-interest expense       12,319       11,848       11,457   24,176       24,300  
Income before provision for income taxes 6,743 6,939 8,185 13,682 15,302
Provision for income taxes       2,457       2,482       3,017   4,939       5,601  
Net income       $ 4,286       $ 4,457       $ 5,168   $ 8,743       $ 9,701  
Net income per common share:
Basic $ 0.72 $ 0.75 $ 0.88 $ 1.47 $ 1.65
Diluted $ 0.71 $ 0.74 $ 0.86 $ 1.44 $ 1.62
Weighted average shares used to compute net income per common share:
Basic 5,945 5,921 5,888 5,933 5,879
Diluted 6,062 6,048 5,993 6,055 5,987
Dividends declared per common share       $ 0.22       $ 0.22       $ 0.19   $ 0.44       $ 0.38  
Comprehensive income:
Net income $ 4,286 $ 4,457 $ 5,168 $ 8,743 $ 9,701
Other comprehensive income

Change in net unrealized (loss) gain on available-for-sale securities

(1,803 ) 1,317 976 (486 ) 2,391

Reclassification adjustment for (gain) loss on available-for-sale securities included in net income

            (8 )       (8 )     15  

Net change in unrealized (loss) gain on available-for-sale securities, before tax

(1,803 ) 1,309 976 (494 ) 2,406
Deferred tax (benefit) expense       (691 )     554       450   (137 )     969  
Other comprehensive (loss) income, net of tax       (1,112 )     755       526   (357 )     1,437  
Comprehensive income       $ 3,174       $ 5,212       $ 5,694   $ 8,386       $ 11,138  
 
 

BANK OF MARIN BANCORP

AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME

                                     
Three months ended Three months ended Three months ended
June 30, 2015     March 31, 2015     June 30, 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 $ 76,710 $ 52 0.27 % $ 38,295 $ 21 0.22 % $ 54,313 $ 37 0.27 %
Investment securities 2, 3 319,032 1,842 2.31 % 311,978 1,927 2.47 % 350,938 2,208 2.52 %
Loans 1, 3, 4       1,336,249       15,587       4.61 %     1,351,791       15,675       4.64 %     1,303,363       16,597       5.04 %
Total interest-earning assets 1 1,731,991 17,481 3.99 % 1,702,064 17,623 4.14 % 1,708,614 18,842 4.36 %
Cash and non-interest-bearing due from banks 48,955 41,073 41,739
Bank premises and equipment, net 9,841 9,839 9,228
Interest receivable and other assets, net       58,744                   58,132                   56,954              
Total assets       $ 1,849,531                   $ 1,811,108                   $ 1,816,535              
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts $ 94,960 $ 30 0.13 % $ 92,376 $ 30 0.13 % $ 94,358 $ 26 0.11 %
Savings accounts 131,564 12 0.04 % 133,877 12 0.04 % 120,071 11 0.04 %
Money market accounts 488,422 123 0.10 % 486,830 127 0.11 % 504,597 131 0.10 %
Time accounts 157,982 215 0.55 % 154,118 231 0.61 % 157,239 231 0.59 %
FHLB borrowing and overnight borrowings1 15,000 79 2.07 % 15,397 78 2.07 % 15,000 78 2.07 %
Subordinated debentures 1       5,259       105       7.90 %     5,207       104       7.99 %     5,043       105       8.24 %
Total interest-bearing liabilities 893,187 564 0.25 % 887,805 582 0.27 % 896,308 582 0.26 %
Demand accounts 735,481 705,024 716,774
Interest payable and other liabilities 14,358 15,594 14,281
Stockholders' equity       206,505                   202,685                   189,172              
Total liabilities & stockholders' equity       $ 1,849,531                   $ 1,811,108                   $ 1,816,535              
Tax-equivalent net interest income/margin 1             $ 16,917       3.86 %           $ 17,041       4.00 %           $ 18,260       4.23 %
Reported net interest income/margin 1             $ 16,454       3.76 %           $ 16,598       3.90 %           $ 17,874       4.14 %
Tax-equivalent net interest rate spread                   3.74 %                 3.88 %                 4.10 %
 
Six months ended Six months ended
June 30, 2015     June 30, 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 $ 57,608 $ 72 0.25 % $ 69,945 $ 88 0.25 %
Investment securities 2, 3 315,525 3,770 2.39 % 356,336 4,501 2.53 %
Loans 1, 3, 4       1,343,977       31,263       4.63 %     1,286,197       33,117       5.12 %
Total interest-earning assets 1 1,717,110 35,105 4.07 % 1,712,478 37,706 4.38 %
Cash and non-interest-bearing due from banks 45,036 41,766
Bank premises and equipment, net 9,840 9,158
Interest receivable and other assets, net       58,440                   56,395              
Total assets       $ 1,830,426                   $ 1,819,797              
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts $ 93,676 $ 60 0.13 % $ 110,637 $ 49 0.09 %
Savings accounts 132,714 25 0.04 % 120,671 22 0.04 %
Money market accounts 487,630 250 0.10 % 511,743 289 0.11 %
Time accounts 156,055 437 0.56 % 159,080 466 0.59 %
FHLB borrowing and overnight borrowings1 15,197 156 2.07 % 15,000 156 2.07 %
Subordinated debentures 1       5,233       209       8.05 %     5,015       210       8.48 %
Total interest-bearing liabilities 890,505 1,137 0.26 % 922,146 1,192 0.26 %
Demand accounts 720,342 695,848
Interest payable and other liabilities 14,973 15,010
Stockholders' equity       204,606                   186,793              
Total liabilities & stockholders' equity       $ 1,830,426                   $ 1,819,797              
Tax-equivalent net interest income/margin 1             $ 33,968       3.93 %           $ 36,514       4.24 %
Reported net interest income/margin 1             $ 33,061       3.83 %           $ 35,768       4.15 %
Tax-equivalent net interest rate spread                   3.81 %                 4.12 %
 

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

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