Market Overview

Bank of Marin Bancorp Reports First Quarter Earnings of $6.4 Million

Share:

Announces $25 Million Share Repurchase Program and Quarterly
Dividend Increase

Bank of Marin Bancorp, "Bancorp" (NASDAQ:BMRC), parent company of Bank
of Marin, "Bank," announced earnings of $6.4 million in the first
quarter of 2018, compared to $1.1 million in the fourth quarter of 2017
and $4.5 million in the first quarter of 2017. Diluted earnings per
share were $0.91 in the first quarter of 2018, compared to $0.17 in the
prior quarter and $0.74 in the same quarter last year. Earnings in the
fourth quarter of 2017 were adversely impacted by $4.1 million ($0.63
per diluted share) related to a one-time deferred tax asset write-down
and Bank of Napa acquisition-related expenses. Earnings in the first
quarter of 2018 were favorably impacted by the new tax law and a full
quarter of combined earning assets post-acquisition.

"We delivered another quarter of excellent financial results and strong
loan originations," said Russell A. Colombo, President and Chief
Executive Officer. "Our relationship banking model continues to provide
a stable, low-cost deposit base that has allowed us to expand our net
interest margin. That strong deposit base, especially in a rising
interest rate environment, helps distinguish Bank of Marin from many
other banks."

Bancorp also announced the commencement of a program to repurchase up to
$25 million of Bancorp common stock through May 1, 2019. In addition,
the Board of Directors declared a cash dividend of $0.31 per share on
April 20, 2018, a $0.02 increase from the prior quarter. This represents
the 52nd consecutive quarterly dividend paid by Bank of Marin
Bancorp. The dividend is payable on May 11, 2018, to shareholders of
record at the close of business on May 4, 2018.

"Creating value for our shareholders remains a top priority. Our Board
of Directors has determined that the repurchase of our common stock is
an attractive investment given its belief in the positive long-term
outlook for the growth of our franchise. In combination with organic
growth and strategic acquisitions, the stock repurchase program and
increased dividend create a well-balanced approach to capital
utilization. We believe these actions are in the best interests of our
shareholders," said Colombo.

Bancorp also provided the following highlights in the first quarter of
2018:

  • Pre-tax net income was up $1.5 million from the fourth quarter of
    2017. Reported net interest margin increased 11 basis points (tax
    equivalent net interest margin increased five basis points) as the
    result of higher loan and investment yields and increased earning
    assets from the Bank of Napa acquisition.
  • Total deposits increased $37.9 million in the first quarter to
    $2,186.6 million. Non-interest bearing deposits represented 48.7% of
    total deposits and the cost of total deposits for both the current
    quarter and last quarter was 0.08%, up one basis point from first
    quarter of last year.
  • Loans totaled $1,671.7 million at March 31, 2018, compared to $1,679.0
    million at December 31, 2017. New loan volume of $37.4 million in the
    first quarter of 2018 was partially offset by payoffs of $31.5
    million, and combined with changes in lines of credit utilization and
    amortization on existing loans, resulted in the net decrease of $7.3
    million.
  • Strong credit quality remains a cornerstone of the Bank's consistent
    performance. Non-accrual loans represented 0.02% of the Bank's loan
    portfolio as of March 31, 2018. There were no provisions for loan
    losses or off-balance sheet commitments recorded in the first quarter
    of 2018.
  • All capital ratios are well above regulatory requirements for a
    well-capitalized institution. The total risk-based capital ratio for
    Bancorp was 15.1% at March 31, 2018, compared to 14.9% at December 31,
    2017. Tangible common equity to tangible assets was 10.6% at March 31,
    2018, compared to 10.7% at December 31, 2017 (refer to footnote 3 on
    page 6 for a definition of this non-GAAP financial measure).

Loans and Credit Quality

Loan originations totaled $37.4 million in the first quarter of 2018,
compared to $51.5 million last quarter and $23.9 million in the same
quarter last year. Loan payoffs for the quarter were $31.5 million,
compared to $26.4 million in the fourth quarter of 2017 and $32.7
million in the same quarter last year. The largest portion of payoffs in
the current quarter came from the successful completion of construction
projects and the sale of assets underlying other loans.

Non-accrual loans totaled $392 thousand, or 0.02% of the loan portfolio
at March 31, 2018, down from $406 thousand, or 0.02% at December 31,
2017, and $1.2 million, or 0.08% a year ago. Classified loans totaled
$27.8 million at March 31, 2018, compared to $27.9 million at
December 31, 2017 and $30.2 million at March 31, 2017. There were no
loans classified doubtful at March 31, 2018 or December 31, 2017.
Accruing loans past due 30 to 89 days totaled $388 thousand at March 31,
2018, compared to $1.9 million at December 31, 2017 and $834 thousand a
year ago.

There was no provision for loan losses recorded in either the first
quarter of 2018 or 2017 as the level of reserves was deemed appropriate
for the portfolio. A $500 thousand provision for loan losses was
recorded in the fourth quarter of 2017, which was consistent with our
organic loan growth and changing risk factors. Net recoveries were $4
thousand in the first quarter of 2018, compared to net recoveries of $21
thousand in the prior quarter and net charge-offs of $223 thousand in
the same quarter a year ago. The ratio of loan loss reserves to loans
was 0.94% at both March 31, 2018 and December 31, 2017, compared to
1.03% at March 31, 2017. Based on the Bank of Marin legacy portfolio
only, the ratio of loan loss reserve to loans was 1.06% at both March
31, 2018 and December 31, 2017.

Investments

The investment portfolio totaled $572.9 million at March 31, 2018,
compared to $483.5 million at December 31, 2017 and $414.0 million at
March 31, 2017. The increase of $89.4 million in the first quarter was
primarily due to purchases of $111.7 million in agency securities to
deploy existing cash balances and in anticipation of upcoming portfolio
maturities.

Deposits

Total deposits increased to $2,186.6 million at March 31, 2018, compared
to $2,148.7 million at December 31, 2017 and $1,779.3 million at March
31, 2017. The average cost of deposits in the first quarter of 2018
increased one basis point from the first quarter of 2017 to 0.08%.

Earnings

"Our strong earnings of $0.91 per diluted share and return on assets of
1.05% reflect net interest margin expansion and the first full quarter
of consolidated results with Bank of Napa," said Tani Girton, Executive
Vice President and Chief Financial Officer. "The conversion of the Bank
of Napa systems to Bank of Marin is now complete, and the combined team
has begun leveraging their broad expertise to uncover new opportunities
in Napa."

Net interest income totaled $21.9 million in the first quarter of 2018,
compared to $20.1 million in the prior quarter. The $1.8 million
increase in net interest income from the prior quarter reflects $170.0
million growth in average earning assets.

Net interest income increased by $4.3 million from $17.6 million for the
same quarter last year, primarily due to the $390.5 million increase in
earning assets from both the Bank of Napa acquisition and organic
growth. Higher yields on investment securities and interest-bearing
cash, and upward repricing of variable rate loans also positively
impacted interest income for the current quarter.

The tax-equivalent net interest margin was 3.85% in the first quarter of
2018, compared to 3.80% in the prior quarter and 3.79% in the same
quarter a year ago. The five basis point increase in the first quarter
of 2018 compared to the prior quarter was primarily due to higher yields
on interest-earning assets. The six basis point increase compared to the
first quarter of 2017 is also related to higher yields on earning
assets, partially offset by an increase of lower yielding cash and
securities as a percentage of total earning assets.

Loans obtained through the acquisition of other banks are classified as
either purchased credit impaired ("PCI") or non-PCI loans and are
recorded at fair value at acquisition date. For acquired loans not
considered credit impaired, the level of accretion varies due to
maturities and early payoffs. Accretion on PCI loans fluctuates based on
changes in cash flows expected to be collected. Gains on payoffs of PCI
loans are recorded as interest income when the payoff amounts exceed the
recorded investment.

As our acquired loans from prior acquisitions continue to pay off, we
expect the accretion on these 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, 2018   December 31, 2017   March 31, 2017
(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   $ 112     2 bps   $ 85     2 bps   $ 90     2 bps
Accretion on non-PCI loans 2 $ 99 2 bps $ 110 2 bps $ 150 3 bps
Gains on payoffs of PCI loans     $ 128       2 bps     $ 100       2 bps     $       0 bps
 

1 Accretable yield on PCI loans totaled $1.1 million,
$1.3 million and $1.4 million at March 31, 2018, December 31, 2017 and
March 31, 2017, respectively.

2 Unaccreted
purchase discounts on non-PCI loans totaled $1.1 million, $1.2 million
and $1.6 million at March 31, 2018, December 31, 2017 and March 31,
2017, respectively.

Non-interest income totaled $2.2 million in the first quarter of 2018,
compared to $2.0 million in the prior quarter and $2.1 million in the
same quarter of last year. The increase in 2018 primarily relates to
$195 thousand loss on the sale of investment securities in the fourth
quarter of 2017.

Non-interest expense totaled $16.1 million in the first quarter of 2018,
$15.1 million in the prior quarter, and $13.0 million in the same
quarter a year ago. The increase from the prior quarter was primarily
due to higher salaries and benefits related to the addition of Bank of
Napa employees, $340 thousand in stock-based compensation related to
certain participants meeting retirement eligibility requirements, and
the 2018 reset of 401(k) employer match and payroll taxes. Professional
services increased as a result of $750 thousand consulting expenses
related to core processing contract negotiations, which we expect to
result in future technology cost savings. The increases were partially
offset by a decrease of $1.1 million in Bank of Napa acquisition
expenses to $615 thousand in the first quarter of 2018. We expect
additional acquisition expenses of approximately $325 thousand in 2018.

The increase in non-interest expense from the same quarter a year ago
was primarily due to higher salaries and benefits related to the
addition of Bank of Napa employees, stock-based compensation, merit
increases and filling open positions. In addition, professional fees and
acquisition-related expenses mentioned above also increased non-interest
expense.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into
law. The law reduces the federal corporate income tax rate to 21% for
tax years beginning on or after January 1, 2018. Due to the passage of
the Tax Cuts and Jobs Act of 2017, the Bank has valued all of its
deferred tax assets and liabilities at the 21% rate. The adjustment to
the net deferred tax assets valuation as of December 22, 2017 was $3.0
million as recorded in provision for income taxes in the fourth quarter
of 2017. Bancorp's effective tax rate in the first quarter of 2018 was
20.7% and positively impacted diluted earnings per share by $0.09.

Share Repurchase Program

Bancorp's Board of Directors has approved the repurchase of up to $25
million of the Bancorp's common stock through May 1, 2019.

Under the stock repurchase program, Bancorp may purchase shares of its
common stock through various means such as open market transactions,
including block purchases, and privately negotiated transactions. The
number of shares repurchased and the timing, manner, price and amount of
any repurchases will be determined at the Company's discretion. Factors
include, but are not limited to, stock price, trading volume and general
market conditions, along with Bancorp's general business conditions. The
program may be suspended or discontinued at any time and does not
obligate the company to acquire any specific number of shares of its
common stock.

As part of the stock repurchase program, Bancorp is entering into a
trading plan adopted in accordance with Rule 10b5-1 of the Securities
Exchange Act of 1934, as amended. The 10b5-1 trading plan would permit
common stock to be repurchased at a time that Bancorp might otherwise be
precluded from doing so under insider trading laws or self-imposed
trading restrictions. The 10b5-1 trading plan is administered by an
independent broker and is subject to price, market volume and timing
restrictions.

Earnings Call and Webcast Information

Bank of Marin Bancorp will webcast its first quarter earnings call on
Monday, April 23, 2018 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

Founded in 1989 and headquartered in Novato, Bank of Marin is the
wholly-owned subsidiary of Bank of Marin Bancorp (NASDAQ:BMRC). A
leading business and community bank in the San Francisco Bay Area, with
assets of $2.5 billion and 23 offices throughout San Francisco, Marin,
Napa, Sonoma and Alameda counties, Bank of Marin provides business and
personal banking, commercial lending, and wealth management and trust
services. Specializing in providing legendary service to its customers
and investing in its local communities, Bank of Marin has consistently
been ranked one of the "Top Corporate Philanthropists" by the San
Francisco Business Times and one of the "Best Places to Work" by the
North Bay Business Journal. Bank of Marin Bancorp is included in the
Russell 2000 Small-Cap Index and NASDAQ ABA Community Bank Index. 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 acquisitions,
competition, changes in accounting principles, policies or guidelines,
legislation or regulation (including the Tax Cuts & Jobs Act of 2017),
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, including the impact of the Bank of
Napa acquisition, 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, 2018
 
(dollars in thousands, except per share data; unaudited)

QUARTER-TO-DATE

  March 31, 2018   December 31, 2017   March 31, 2017
  NET INCOME $ 6,389 $ 1,110 $ 4,548
DILUTED EARNINGS PER COMMON SHARE $ 0.91 $ 0.17 $ 0.74
RETURN ON AVERAGE ASSETS (ROA) 1.05 % 0.19 % 0.91 %
RETURN ON AVERAGE EQUITY (ROE) 8.70 % 1.63 % 7.92 %
EFFICIENCY RATIO 66.64 % 68.25 % 65.92 %
TAX-EQUIVALENT NET INTEREST MARGIN1 3.85 % 3.80 % 3.79 %
NET CHARGE-OFFS (RECOVERIES) $ (4 ) $ (21 ) $ 223
NET CHARGE-OFFS (RECOVERIES) TO AVERAGE LOANS % % 0.02 %
 

AT PERIOD END

TOTAL ASSETS $ 2,510,043 $ 2,468,154 $ 2,033,708
 
LOANS:
COMMERCIAL AND INDUSTRIAL $ 231,680 $ 231,166 $ 219,760
REAL ESTATE
COMMERCIAL OWNER-OCCUPIED $ 300,377 $ 268,872 $ 254,180
COMMERCIAL INVESTOR-OWNED $ 828,945 $ 858,603 $ 712,081
CONSTRUCTION $ 64,978 $ 63,828 $ 67,162
HOME EQUITY $ 124,699 $ 132,466 $ 115,180
OTHER RESIDENTIAL $ 95,621 $ 96,668 $ 84,720
INSTALLMENT AND OTHER CONSUMER LOANS $ 25,440   $ 27,410   $ 24,487  
TOTAL LOANS $ 1,671,740 $ 1,679,013 $ 1,477,570
 
NON-PERFORMING LOANS2:
REAL ESTATE
COMMERCIAL INVESTOR-OWNED $ $ $ 1,076
HOME EQUITY $ 392 $ 406 $ 87
INSTALLMENT AND OTHER CONSUMER LOANS $   $   $ 52  
TOTAL NON-ACCRUAL LOANS $ 392 $ 406 $ 1,215
 
CLASSIFIED LOANS (GRADED SUBSTANDARD & DOUBTFUL) $ 27,807 $ 27,906 $ 30,230
TOTAL ACCRUING LOANS 30-89 DAYS PAST DUE $ 388 $ 1,925 $ 834
LOAN LOSS RESERVE TO LOANS 0.94 % 0.94 % 1.03 %
LOAN LOSS RESERVE TO NON-ACCRUAL LOANS 40.26 x 38.88 x 12.52 x
NON-ACCRUAL LOANS TO TOTAL LOANS 0.02 % 0.02 % 0.08 %
 
TOTAL DEPOSITS $ 2,186,594 $ 2,148,670 $ 1,779,269
LOAN-TO-DEPOSIT RATIO 76.5 % 78.1 % 83.0 %
STOCKHOLDERS' EQUITY $ 298,464 $ 297,025 $ 234,986
BOOK VALUE PER SHARE $ 42.73 $ 42.91 $ 38.22
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS3 10.6 % 10.7 % 11.2 %
TOTAL RISK BASED CAPITAL RATIO-BANK 14.7 % 14.7 % 14.3 %
TOTAL RISK BASED CAPITAL RATIO-BANCORP 15.1 % 14.9 % 14.7 %
FULL-TIME EQUIVALENT EMPLOYEES 288 291 262
 
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
$16.2 million, $16.5 million and $17.2 million at March 31, 2018,
December 31, 2017 and March 31, 2017, respectively. Excludes
purchased credit-impaired (PCI) loans with carrying values of $2.1
million, $2.1 million and $2.9 million that were accreting interest
at March 31, 2018, December 31, 2017 and March 31, 2017,
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 $36.4
million, $36.6 million and $8.9 million at March 31, 2018, December
31, 2017 and March 31, 2017, respectively. Tangible assets exclude
goodwill and intangible assets.
 
     
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF CONDITION
At March 31, 2018, December 31, 2017 and March 31, 2017
     
(in thousands, except share data; unaudited)  

March 31,
2018

 

December 31,
2017

 

March 31,
2017

Assets
Cash and due from banks $ 159,347 $ 203,545 $ 73,162
Investment securities
Held-to-maturity, at amortized cost 149,013 151,032 172,272
Available-for-sale (at fair value; amortized cost $431,871, $334,285
and $242,650 at March 31, 2018, December 31, 2017 and March 31,
2017, respectively)
  423,882     332,467     241,684  
Total investment securities 572,895 483,499 413,956
Loans, net of allowance for loan losses of $15,771, $15,767 and
$15,219 at March 31, 2018, December 31, 2017 and March 31, 2017,
respectively
1,655,969 1,663,246 1,462,351
Bank premises and equipment, net 8,297 8,612 8,336
Goodwill 30,140 30,140 6,436
Core deposit intangible 6,262 6,492 2,462
Interest receivable and other assets   77,133     72,620     67,005  
Total assets   $ 2,510,043     $ 2,468,154     $ 2,033,708  
 
Liabilities and Stockholders' Equity
Liabilities
Deposits
Non-interest bearing $ 1,065,470 $ 1,014,103 $ 878,416
Interest bearing
Transaction accounts 166,117 169,195 100,628
Savings accounts 180,730 178,473 159,889
Money market accounts 628,335 626,783 494,324
Time accounts   145,942     160,116     146,012  
Total deposits 2,186,594 2,148,670 1,779,269
Subordinated debentures 5,772 5,739 5,628
Interest payable and other liabilities   19,213     16,720     13,825  
Total liabilities   2,211,579     2,171,129     1,798,722  
 
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 - 6,985,126, 6,921,542 and 6,148,486 at March 31,
2018, December 31, 2017 and March 31, 2017, respectively

145,282 143,967 87,911
Retained earnings 160,556 155,544 149,357
Accumulated other comprehensive loss, net of taxes   (7,374 )   (2,486 )   (2,282 )
Total stockholders' equity   298,464     297,025     234,986  
Total liabilities and stockholders' equity   $ 2,510,043     $ 2,468,154     $ 2,033,708  
 
 
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
     
Three months ended
(in thousands, except per share amounts; unaudited)  

March 31, 2018

 

December 31, 2017

 

March 31, 2017

Interest income
Interest and fees on loans $ 18,887 $ 17,789 $ 15,849
Interest on investment securities
Securities of U.S. government agencies 2,475 1,886 1,518
Obligations of state and political subdivisions 638 563 568
Corporate debt securities and other 44 40 37
Interest on Federal funds sold and due from banks   403     372     60  
Total interest income 22,447 20,650 18,032
Interest expense
Interest on interest-bearing transaction accounts 52 34 29
Interest on savings accounts 18 18 15
Interest on money market accounts 216 195 113
Interest on time accounts 156 153 146
Interest on subordinated debentures   114     111     108  
Total interest expense   556     511     411  
Net interest income 21,891 20,139 17,621
Provision for loan losses       500      
Net interest income after provision for loan losses   21,891     19,639     17,621  
Non-interest income
Service charges on deposit accounts 477 447 452
Wealth Management and Trust Services 515 544 503
Debit card interchange fees 396 385 372
Merchant interchange fees 80 102 96
Earnings on bank-owned life insurance 228 217 209
Dividends on FHLB stock 196 181 232
Losses on investment securities, net (195 )
Other income   350     310     251  
Total non-interest income   2,242     1,991     2,115  
Non-interest expense
Salaries and related benefits 9,017 7,852 7,475
Occupancy and equipment 1,507 1,409 1,319
Depreciation and amortization 547 508 481
Federal Deposit Insurance Corporation insurance 191 176 161
Data processing 1,381 2,058 939

Professional services

1,299

1,013

522

Directors' expense 174 163 158
Information technology 269 206 198
Provision for losses on off-balance sheet commitments 165
Other expense   1,696     1,719     1,593  
Total non-interest expense   16,081     15,104     13,011  
Income before provision for income taxes 8,052 6,526 6,725
Provision for income taxes   1,663     5,416     2,177  
Net income   $ 6,389     $ 1,110     $ 4,548  
Net income per common share:
Basic $ 0.92 $ 0.17 $ 0.75
Diluted $ 0.91 $ 0.17 $ 0.74
Weighted average shares:
Basic 6,914 6,455 6,092
Diluted 7,006 6,550 6,172
Dividends declared per common share   $ 0.29     $ 0.29     $ 0.27  
Comprehensive income:
Net income $ 6,389 $ 1,110 $ 4,548
Other comprehensive (loss) income
Change in net unrealized gain or loss on available-for-sale
securities
(6,170 ) (2,637 ) 4,710
Reclassification adjustment for losses on available-for-sale
securities in net income
195
Net unrealized loss on securities transferred from
available-for-sale to held-to-maturity
(3,036 )
Amortization of net unrealized losses on securities transferred from
available-for-sale to held-to-maturity
  136     126     41  
Subtotal (6,034 ) (2,316 ) 1,715
Deferred tax (benefit) expense   (1,784 )   (1,060

 

)   704  
Other comprehensive (loss) income, net of tax   (4,250 )   (1,256 )   1,011  
Comprehensive income   $ 2,139     $ (146 )   $ 5,559  
 
   
 

BANK OF MARIN BANCORP

 

AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST
INCOME

                 
Three months ended Three months ended Three months ended
March 31, 2018   December 31, 2017   March 31, 2017
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 $ 104,850 $ 403 1.54 % $ 108,255 $ 372 1.34 % $ 29,339 $ 60 0.82 %
Investment securities 2, 3 532,544 3,276 2.46 % 455,706 2,722 2.39 % 414,552 2,361 2.28 %
  Loans 1, 3, 4   1,675,490     19,119     4.56 %   1,578,959     18,245     4.52 %   1,478,487     16,222     4.39 %
Total interest-earning assets 1 2,312,884 22,798 3.94 % 2,142,920 21,339 3.89 % 1,922,378 18,643 3.88 %
Cash and non-interest-bearing due from banks 45,815 40,648 38,131
Bank premises and equipment, net 8,501 8,384 8,440
  Interest receivable and other assets, net   89,018             74,299             58,014          
Total assets   $ 2,456,218             $ 2,266,251             $ 2,026,963          
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts $ 168,371 $ 52 0.13 % $ 129,538 $ 34 0.10 % $ 101,121 $ 29 0.12 %
Savings accounts 180,253 18 0.04 % 173,057 18 0.04 % 160,913 15 0.04 %
Money market accounts 582,961 216 0.15 % 551,591 195 0.14 % 518,540 113 0.09 %
Time accounts including CDARS 154,543 156 0.41 % 150,552 153 0.40 % 146,966 146 0.40 %
Overnight borrowings 1 % 6 1.75 % %
  Subordinated debentures 1   5,753     114     7.90 %   5,720     111     7.63 %   5,607     108     7.74 %
Total interest-bearing liabilities 1,091,881 556 0.21 % 1,010,464 511 0.20 % 933,147 411 0.18 %
Demand accounts 1,049,502 971,381 846,316
Interest payable and other liabilities 16,903 14,558 14,645
  Stockholders' equity   297,932             269,848             232,855          
Total liabilities & stockholders' equity   $ 2,456,218             $ 2,266,251             $ 2,026,963          
Tax-equivalent net interest income/margin 1       $ 22,242     3.85 %       $ 20,828     3.80 %       $ 18,232     3.79 %
Reported net interest income/margin 1       $ 21,891     3.79 %       $ 20,139     3.68 %       $ 17,621     3.67 %
Tax-equivalent net interest rate spread           3.74 %           3.69 %           3.70 %
 
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 21 percent in 2018 and 35 percent in 2017.
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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