Market Overview

Bank of Marin Bancorp Reports Earnings of $4.5 Million

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Bank of Marin Bancorp, "Bancorp" (NASDAQ:BMRC), parent company of Bank
of Marin, announced earnings of $4.5 million in the first quarter of
2017, compared to $5.7 million in the fourth quarter of 2016 and $5.6
million in the first quarter of 2016. Diluted earnings per share were
$0.74 in the first quarter of 2017, compared to $0.93 in both the prior
quarter and the same quarter last year.

"The Bank continues to operate at a very high level," said Russell A.
Colombo, President and Chief Executive Officer. "Disciplined
fundamentals are the key to remaining consistently successful over the
years, with a focus on long-term profitability. We will stay true to our
mission and our markets, and invest in the strategic initiatives we have
developed to grow in those markets and build the value of the franchise."

The Bank is investing in a number of strategic initiatives. This summer
we will be opening a new branch office in Healdsburg, California, which
will stretch our footprint north and help us solidify our presence in a
vibrant and growing market. We will also be expanding our geographic
reach by adding a commercial banking office in the East Bay, which
continues to be one of the strongest growth markets in the Bay Area
region.

Bancorp also provided the following highlights from its operating and
financial performance for the first quarter of 2017:

  • Total deposits increased $6.6 million in the first quarter to $1,779.3
    million. Non-interest bearing deposits represent 49.4% of total
    deposits, and the cost of total deposits dropped one basis point to
    0.07%, from both the prior quarter and the first quarter of 2016.
  • Gross loans decreased $9.0 million and totaled $1,477.6 million at
    March 31, 2017, compared to $1,486.6 million at December 31, 2016. New
    loan volume of $23.9 million in the first quarter of 2017 was $5.2
    million lower than the same quarter of 2016. The pipeline is
    considerably stronger than at this time last year, which should
    translate into loan growth throughout the year.
  • All capital ratios are well above regulatory requirements for a
    well-capitalized institution. Total risk-based capital ratio for
    Bancorp was 14.7% at March 31, 2017 compared to 14.3% at December 31,
    2016. Tangible common equity to tangible assets increased to 11.2% at
    March 31, 2017 from 11.0% at December 31, 2016.
  • The Board of Directors declared a cash dividend of $0.27 per share on
    April 21, 2017. This represents the 48th consecutive
    quarterly dividend paid by Bank of Marin Bancorp. The dividend is
    payable on May 12, 2017, to shareholders of record at the close of
    business on May 5, 2017.

Loans and Credit Quality

First quarter loan originations totaled $23.9 million versus $29.1
million in the same quarter last year. Loan payoffs for the quarter were
$32.7 million, down from $37.3 million the same quarter last year. The
largest portion of payoffs came from the successful completion of
construction projects and sales of other assets. The commercial
financing market continues to be competitive in general, but rate
compression seems to be stabilizing as the prospect of an increasing
rate environment becomes more prevalent. Consumer loans received a $7.9
million boost in the quarter from Tenants in Common ("TIC") loans, a
highly specialized product we offer that continues to perform well as an
affordable option for homebuyers in San Francisco.

Non-accrual loans totaled $1.2 million, or 0.08% of Bank of Marin's loan
portfolio at March 31, 2017, compared to $0.1 million, or 0.01%, at
December 31, 2016 and $2.7 million, or 0.18% a year ago. A well secured
$1.1 million commercial real estate loan with a low loan-to-value ratio
was placed on non-accrual status during the first quarter of 2017.
Classified loans increased $10.6 million to $30.2 million at March 31,
2017, up from $19.6 million at December 31, 2016. One relationship of
$9.6 million and the non-accrual loan of $1.1 million previously
mentioned were downgraded to substandard in the first quarter of 2017.
Accruing loans past due 30 to 89 days totaled $834 thousand at March 31,
2017, compared to $410 thousand at December 31, 2016 and $584 thousand a
year ago.

There was no provision for loan losses recorded in the first quarters of
2017 and 2016 as the level of reserves is deemed appropriate for the
portfolio, compared to a reversal of provision for loan losses of $300
thousand in the fourth quarter of 2016. Net charge-offs were $223
thousand in the first quarter of 2017, compared to net recoveries of $29
thousand in the prior quarter and the same quarter a year ago. The ratio
of loan loss reserves to loans was 1.03% at March 31, 2017, compared to
1.04% at both December 31, 2016 and March 31, 2016. At March 31, 2017,
total loan loss reserves to loans excluding acquired loans was 1.09%.

Investments

The investment portfolio totaled $414.0 million at March 31, 2017, a
decrease of $3.1 million from December 31, 2016. Effective February 24,
2017, $129 million of mortgage-backed securities were transferred from
available-for-sale securities to held-to-maturity at fair value to
reduce balance sheet volatility. Our strong liquidity position made this
possible.

Deposits

On-balance-sheet deposits totaled $1,779.3 million at March 31, 2017,
compared to $1,772.7 million at December 31, 2016. The normal business
activity of our customers produced $61.4 million in non-interest bearing
deposit growth during the quarter. Excess liquidity of $46.0 million was
converted to one-way money market deposit sales with our third party
deposit networks, limiting deposit growth to $6.6 million, which
otherwise would have been $52.6 million.

Earnings

"Historically, first quarter loan growth is slower than the rest of the
year. We continue to see a strong flow of commercial lending
opportunities, but we can't fully control the timing of loan closings,"
said Tani Girton, Chief Financial Officer. "With a strong pipeline and
credit quality that remains at the top of our peer group, we are looking
forward to a continuation of the success that Bank of Marin has shown
for 27 years. Our strong capital and low cost deposit base position us
well for the future."

Net interest income totaled $17.6 million in the first quarter of 2017,
compared to $18.0 million in the prior quarter and $18.6 million in the
same quarter a year ago. The decrease from earlier quarters was
primarily due to a decline in gains on early payoffs of acquired loans
and purchased loan accretion as shown in the table below. In addition,
there were fewer days in the first quarter of 2017. These variances were
partially offset by an increase in the yield on investment securities in
the first quarter of 2017. Finally, average earning assets were higher
in 2017 compared to the first quarter of 2016, while interest expense
was lower as a result of the Federal Home Loan Bank ("FHLB") fixed rate
advance prepayment last year.

The tax-equivalent net interest margin was 3.79% in the first quarter of
2017, compared to 3.78% in the prior quarter and 4.04% in the same
quarter a year ago. The minimal increase in the first quarter of 2017,
compared to the prior quarter, reflects the changes discussed above. As
presented in the table below, there were no gains on payoffs of
purchased credit impaired ("PCI") loans in the first quarter of this
year compared to $287 thousand, or six basis points impact on the net
interest margin in the fourth quarter of 2016. The decrease was offset
by increases in the yield on investment securities and average loan
balances.

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 at both March 31, 2017 and December 31, 2016, and
$2.8 million at March 31, 2016, respectively.

As our acquired loans continue to pay off, we expect the accretion on
acquired loans to continue to decline. Accretion and gains on payoffs of
purchased loans recorded to interest income were as follows:

  Three months ended
March 31, 2017   December 31, 2016   March 31, 2016
(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   $ 90     2 bps   $ 90     2 bps   $ 98     2 bps
Accretion on non-PCI loans 2 $ 150 3 bps $ 159 3 bps $ 330 7 bps
Gains on payoffs of PCI loans     $       0 bps     $ 287       6 bps     $ 740       16 bps

1 Accretable yield on PCI loans totaled $1.4 million,
$1.5 million and $1.7 million at March 31, 2017, December 31, 2016
and March 31, 2016, respectively.

2 Unaccreted purchase discounts on non-PCI loans
totaled $1.6 million, $1.8 million and $2.8 million at March 31,
2017, December 31, 2016 and March 31, 2016, respectively.

Non-interest income in the first quarter of 2017 totaled $2.1 million,
compared to $2.5 million in the prior quarter and $2.2 million in the
same quarter a year ago. The decrease compared to the prior quarter
primarily relates to a $347 thousand special cash dividend paid on FHLB
stock and $31 thousand in gains on the sale of investment securities in
the fourth quarter of 2016. These decreases were partially offset by an
increase in fees collected on one-way deposit sales placed with third
party deposit networks in the first quarter of 2017. The decrease from
the same quarter last year is partially due to a $110 thousand gain on
the sale of securities in the first quarter of 2016 and lower wealth
management and trust services fees in 2017, partially offset by an
increase of $63 thousand in cash dividends on FHLB stock and $37
thousand in fees collected on one-way deposit sales this year.

Non-interest expense totaled $13.0 million in the first quarter of 2017,
$11.8 million in the prior quarter and $12.0 million in the same quarter
a year ago. The increase from both the fourth quarter and the first
quarter of 2016 was primarily due to higher salaries and benefits
related to filling open positions, an increase in 401(k) matching, and
implementation of the new accounting rule for stock-based compensation.
In addition, a provision of $165 thousand for off-balance sheet
commitments was recorded in the first quarter of 2017, as a result of
the increase in classified loans.

Earnings Call and Webcast Information

Bank of Marin Bancorp will webcast its first quarter earnings call on
Monday, April 24, 2017 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 $2.0 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 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
March
31, 2017
 
(dollars in thousands, except per share data; unaudited)

QUARTER-TO-DATE

  March 31, 2017     December 31, 2016     March 31, 2016  
NET INCOME $ 4,548 $ 5,687 $ 5,646
DILUTED EARNINGS PER COMMON SHARE $ 0.74 $ 0.93 $ 0.93
RETURN ON AVERAGE ASSETS (ROA) 0.91 % 1.11 % 1.15 %
RETURN ON AVERAGE EQUITY (ROE) 7.92 % 9.74 % 10.38 %
EFFICIENCY RATIO 65.92 % 57.51 % 57.74 %
TAX-EQUIVALENT NET INTEREST MARGIN1 3.79 % 3.78 % 4.04 %
NET CHARGE-OFFS (RECOVERIES) $ 223 $ (29 ) $ (29 )
NET CHARGE-OFFS (RECOVERIES) TO AVERAGE LOANS 0.02 % % %
 

AT PERIOD END

TOTAL ASSETS $ 2,033,708 $ 2,023,493 $ 1,943,602
 
LOANS:
COMMERCIAL AND INDUSTRIAL $ 219,760 $ 218,615 $ 213,068
REAL ESTATE
COMMERCIAL OWNER-OCCUPIED $ 254,180 $ 247,713 $ 238,332
COMMERCIAL INVESTOR-OWNED $ 712,081 $ 724,228 $ 707,340
CONSTRUCTION $ 67,162 $ 74,809 $ 74,528
HOME EQUITY $ 115,180 $ 117,207 $ 110,893
OTHER RESIDENTIAL $ 84,720 $ 78,549 $ 73,896
INSTALLMENT AND OTHER CONSUMER LOANS $ 24,487   $ 25,495   $ 23,782  
TOTAL LOANS $ 1,477,570 $ 1,486,616 $ 1,441,839
 
NON-PERFORMING LOANS2:
COMMERCIAL AND INDUSTRIAL $ $ $ 21
REAL ESTATE
COMMERCIAL OWNER-OCCUPIED $ $ $
COMMERCIAL INVESTOR-OWNED $ 1,076 $ $ 1,789
CONSTRUCTION $ $ $
HOME EQUITY $ 87 $ 90 $ 791
OTHER RESIDENTIAL $ $ $
INSTALLMENT AND OTHER CONSUMER LOANS $ 52   $ 55   $ 65  
TOTAL NON-ACCRUAL LOANS $ 1,215 $ 145 $ 2,666
 
CLASSIFIED LOANS (GRADED SUBSTANDARD & DOUBTFUL) $ 30,230 $ 19,601 $ 22,309
TOTAL ACCRUING LOANS 30-89 DAYS PAST DUE $ 834 $ 410 $ 584
LOAN LOSS RESERVE TO LOANS 1.03 % 1.04 % 1.04 %
LOAN LOSS RESERVE TO NON-ACCRUAL LOANS 12.52 x 106.50 x 5.64 x
NON-ACCRUAL LOANS TO TOTAL LOANS 0.08 % 0.01 % 0.18 %
 
TOTAL DEPOSITS $ 1,779,269 $ 1,772,700 $ 1,681,346
LOAN-TO-DEPOSIT RATIO 83.0 % 83.9 % 85.8 %
STOCKHOLDERS' EQUITY $ 234,986 $ 230,563 $ 221,646
BOOK VALUE PER SHARE $ 38.22 $ 37.63 $ 36.24
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS3 11.2 % 11.0 % 11.0 %
TOTAL RISK BASED CAPITAL RATIO-BANK 14.3 % 14.1 % 13.6 %
TOTAL RISK BASED CAPITAL RATIO-BANCORP 14.7 % 14.3 % 13.9 %
FULL-TIME EQUIVALENT EMPLOYEES 262 262 256
 
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
$17.2 million, $18.1 million and $19.7 million at March 31, 2017,
December 31, 2016 and March 31, 2016, respectively. Excludes
purchased credit-impaired (PCI) loans with carrying values of $2.9
million, $2.9 million and $2.8 million that were accreting interest
at March 31, 2017, December 31,2016 and March 31, 2016,
respectively. These amounts are excluded as PCI loan accretable
yield interest recognition is independent from the underlying
contractual loan delinquency status.
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 $8.9
million, $9.0 million and $9.4 million at March 31, 2017, December
31, 2016 and March 31, 2016, respectively. Tangible assets exclude
goodwill and intangible assets.
 

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF CONDITION

At March 31, 2017, December 31, 2016 and March 31, 2016

     
(in thousands, except share data; unaudited)  

March 31,
2017

 

December 31,
2016

 

March 31,
2016

Assets
Cash and due from banks $ 73,162 $ 48,804 $ 39,770
Investment securities
Held-to-maturity, at amortized cost 172,272 44,438 63,246

Available-for-sale (at fair value; amortized cost $242,650,
$378,254 and $333,044 at March 31, 2017, December 31, 2016 and
March 31, 2016, respectively)

  241,684     372,580     336,234

Total investment securities

413,956 417,018 399,480
Loans, net of allowance for loan losses of $15,219, $15,442 and
$15,028 at March 31, 2017, December 31, 2016 and March 31, 2016,
respectively
1,462,351 1,471,174 1,426,811
Bank premises and equipment, net 8,336 8,520 8,909
Goodwill 6,436 6,436 6,436
Core deposit intangible 2,462 2,580 2,980
Interest receivable and other assets   67,005     68,961     59,216
Total assets   $ 2,033,708     $ 2,023,493     $ 1,943,602
 
Liabilities and Stockholders' Equity
Liabilities
Deposits
Non-interest bearing $ 878,416 $ 817,031 $ 758,869
Interest bearing
Transaction accounts 100,628 100,723 102,829
Savings accounts 159,889 163,516 145,874
Money market accounts 494,324 539,967 514,274
Time accounts   146,012     151,463     159,500
Total deposits 1,779,269 1,772,700 1,681,346
Federal Home Loan Bank ("FHLB") and other borrowings 19,350
Subordinated debentures 5,628 5,586 5,445
Interest payable and other liabilities   13,825     14,644     15,815
Total liabilities   1,798,722     1,792,930     1,721,956
 
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 - 6,148,486, 6,127,314 and 6,116,473 at March 31,
2017, December 31, 2016 and March 31, 2016, respectively

87,911 87,392 86,133
Retained earnings 149,357 146,464 133,681
Accumulated other comprehensive (loss) income, net   (2,282 )   (3,293 )   1,832
Total stockholders' equity   234,986     230,563     221,646
Total liabilities and stockholders' equity   $ 2,033,708     $ 2,023,493     $ 1,943,602
 

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 
Three months ended
(in thousands, except per share amounts; unaudited)   March 31, 2017   December 31, 2016   March 31, 2016
Interest income    
Interest and fees on loans $ 15,849 $ 16,394 $ 17,141
Interest on investment securities
Securities of U.S. government agencies 1,518 1,329 1,352
Obligations of state and political subdivisions 568 596 586
Corporate debt securities and other 37 36 105
Interest on Federal funds sold and short-term investments   60     53     11  
Total interest income 18,032 18,408 19,195
Interest expense
Interest on interest-bearing transaction accounts 29 27 27
Interest on savings accounts 15 15 14
Interest on money market accounts 113 115 111
Interest on time accounts 146 164 196
Interest on FHLB and other borrowings 100
Interest on subordinated debentures   108     111     109  
Total interest expense   411     432     557  
Net interest income 17,621 17,976 18,638
Reversal of provision for loan losses       (300 )    
Net interest income after provision for loan losses   17,621     18,276     18,638  
Non-interest income
Service charges on deposit accounts 452 445 456
Wealth Management and Trust Services 503 491 566
Debit card interchange fees 372 391 338
Merchant interchange fees 96 94 113
Earnings on bank-owned life insurance 209 218 201
Dividends on FHLB stock 232 576 169
Gains on investment securities, net 31 110
Other income   251     217     210  
Total non-interest income   2,115     2,463     2,163  
Non-interest expense
Salaries and related benefits 7,475 6,508 6,748
Occupancy and equipment 1,319 1,350 1,281
Depreciation and amortization 481 479 453
Federal Deposit Insurance Corporation insurance 161 65 261
Data processing 939 959 856
Professional services 522 516 498
Directors' expense 158 105 189
Information technology 198 197 193
Provision for losses on off-balance sheet commitments 165
Other expense   1,593     1,576     1,531  
Total non-interest expense   13,011     11,755     12,010  
Income before provision for income taxes 6,725 8,984 8,791
Provision for income taxes   2,177     3,297     3,145  
Net income   $ 4,548     $ 5,687     $ 5,646  
Net income per common share:
Basic $ 0.75 $ 0.93 $ 0.93
Diluted $ 0.74 $ 0.93 $ 0.93
Weighted average shares:
Basic 6,092 6,085 6,048
Diluted 6,172 6,142 6,090
Dividends declared per common share   $ 0.27     $ 0.27     $ 0.25  
Comprehensive income:
Net income $ 4,548 $ 5,687 $ 5,646
Other comprehensive income
Change in net unrealized gain or loss on available-for-sale
securities
1,674 (9,869 ) 2,923
Amortization of net unrealized loss on available for sale securities
transferred to held-to-maturity securities
41
Reclassification adjustment for gains on available-for-sale
securities included in net income
          (110 )
Net change in unrealized gain or loss on available-for-sale
securities, before tax
  1,715     (9,869 )   2,813  
Tax effect   704     (4,149 )   1,174  
Other comprehensive income (loss), net of tax   1,011     (5,720 )   1,639  
Comprehensive income (loss)   $ 5,559     $ (33 )   $ 7,285  
 

BANK OF MARIN BANCORP
AVERAGE STATEMENTS OF
CONDITION AND ANALYSIS OF NET INTEREST INCOME

     
Three months ended
March 31, 2017
Three months ended
December 31, 2016
Three months ended
March 31, 2016
(dollars in thousands)   Average
Balance
  Interest
Income/
Expense
  Yield/
Rate
  Average
Balance
  Interest
Income/
Expense
  Yield/
Rate
  Average
Balance
  Interest
Income/
Expense
  Yield/
Rate
Assets            
Interest-bearing due from banks 1 $ 29,339 $ 60 0.82 % $ 35,398 $ 53 0.59 % $ 8,996 $ 11 0.48 %
Investment securities 2, 3 414,552 2,361 2.28 % 414,544 2,214 2.14 % 428,055 2,264 2.12 %
Loans 1, 3, 4   1,478,487     16,222     4.39 %   1,471,134     16,723     4.45 %   1,442,601     17,456     4.79 %
Total interest-earning assets 1 1,922,378 18,643 3.88 % 1,921,076 18,990 3.87 % 1,879,652 19,731 4.15 %
Cash and non-interest-bearing due from banks 38,131 49,184 29,823
Bank premises and equipment, net 8,440 8,568 9,143
Interest receivable and other assets, net   58,014             59,890             58,195          
Total assets   $ 2,026,963             $ 2,038,718             $ 1,976,813          
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts $ 101,121 $ 29 0.12 % $ 91,692 $ 27 0.12 % $ 100,990 $ 27 0.11 %
Savings accounts 160,913 15 0.04 % 160,638 16 0.04 % 142,499 14 0.04 %
Money market accounts 518,540 113 0.09 % 529,003 115 0.09 % 528,984 111 0.08 %
Time accounts including CDARS 146,966 146 0.40 % 153,976 163 0.42 % 160,943 196 0.50 %
Overnight borrowings 1 % 3 1.33 % 20,567 22 0.42 %
FHLB fixed-rate advances 1 % % 15,000 78 2.07 %
Subordinated debentures 1   5,607     108     7.74 %   5,564     111     7.82 %   5,418     109     7.96 %
Total interest-bearing liabilities 933,147 411 0.18 % 940,876 432 0.18 % 974,401 557 0.23 %
Demand accounts 846,316 848,881 767,579
Interest payable and other liabilities 14,645 16,604 15,980
Stockholders' equity   232,855             232,357             218,853          
Total liabilities & stockholders' equity   $ 2,026,963             $ 2,038,718             $ 1,976,813          
Tax-equivalent net interest income/margin 1       $ 18,232     3.79 %       $ 18,558     3.78 %       $ 19,174     4.04 %
Reported net interest income/margin 1       $ 17,621     3.67 %       $ 17,976     3.66 %       $ 18,638     3.92 %
Tax-equivalent net interest rate spread           3.70 %           3.69 %           3.92 %
 
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.

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