Market Overview

Bank of Marin Bancorp Reports First Quarter Earnings of $7.5 Million; Announces Quarterly Dividend

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Bank of Marin Bancorp, "Bancorp" (NASDAQ:BMRC), parent company of Bank
of Marin, "Bank," announced earnings of $7.5 million in the first
quarter of 2019, compared to $9.7 million in the fourth quarter of 2018
and $6.4 million in the first quarter of 2018. Diluted earnings per
share were $0.54 in the first quarter of 2019, compared to $0.69 in the
prior quarter and $0.46 in the same quarter last year.

"Our solid first quarter results demonstrate that staying true to a
time-tested formula leads to consistent performance through economic
cycles," said Russell A. Colombo, President and Chief Executive Officer.
"Our credit quality remains excellent, and our low cost of deposits
continues to be a competitive advantage. By maintaining disciplined
fundamentals, with rigorous lending practices and a strong relationship
banking model, we are delivering value for customers and shareholders
alike."

Bancorp also provided the following highlights in the first quarter of
2019:

  • Loans totaled $1,772.5 million at March 31, 2019, compared to $1,763.9
    million at December 31, 2018. New loan originations of $34.0 million
    in the first quarter were distributed across Commercial Banking and
    Consumer Banking.
  • Strong credit quality remains a cornerstone of the Bank's consistent
    performance. Non-accrual loans represented only 0.04% of the Bank's
    loan portfolio at March 31, 2019 and December 31, 2018. There was no
    provision for loan losses recorded in the first quarter of 2019.
  • Total deposits increased by $3.8 million in the first quarter to
    $2,178.6 million. Non-interest bearing deposits increased $10.3
    million from December 31, 2018 and represented 49% of total deposits
    at March 31, 2019. The cost of average deposits increased to 0.18% for
    the first quarter of 2019, compared to 0.14% for the prior quarter.
  • First quarter net income reflects the typical increases in expenses
    associated with year-end resets of payroll taxes and 401K
    contributions, stock-based award vesting and performance share
    payouts. The first quarter of 2019 also included accelerated
    stock-based compensation expense for three newly retirement-eligible
    employees, the purchase of new bank-owned life insurance policies and
    a one-time pay cycle adjustment.
  • All capital ratios were above regulatory requirements. The total
    risk-based capital ratio for Bancorp was 14.9% at March 31, 2019 and
    December 31, 2018. Tangible common equity to tangible assets was 11.4%
    at March 31, 2019, compared to 11.3% at December 31, 2018 (refer to
    footnote 3 in Financial Highlights table for a definition of this
    non-GAAP financial measure).
  • The Board of Directors declared a cash dividend of $0.19 per share.
    This represents the 56th consecutive quarterly dividend paid by Bank
    of Marin Bancorp. The dividend is payable on May 10, 2019, to
    shareholders of record at the close of business on May 3, 2019.
  • The Board of Directors is considering an extension of the share
    repurchase authority to utilize the remaining approved budget, and
    expects to make a final determination prior to the current May 1,
    2019, expiration.
  • On April 1, 2019, we expanded our presence in the East Bay by opening
    a loan production office in Walnut Creek that will serve commercial
    businesses across the Diablo Valley. In addition, well-established
    banker Rob Holden has joined Bank of Marin to lead our San Francisco
    team.

Loans and Credit Quality

Loans grew $8.7 million in the first quarter of 2019 and totaled
$1,772.5 million at March 31, 2019. Loan originations for the three
months ended March 31, 2019 and March 31, 2018 were $34.0 million and
$37.4 million, respectively. New loan originations were partially offset
by loan payoffs of $26.1 million in the first quarter of 2019 and $31.5
million in the same quarter last year. The largest portion of payoffs in
the current quarter came from the sale of assets underlying loans and
the successful completion of construction projects.

Non-accrual loans totaled $719 thousand, or 0.04% of the loan portfolio
at March 31, 2019, compared to $697 thousand, or 0.04% at December 31,
2018, and $392 thousand, or 0.02% a year ago. Classified loans totaled
$14.8 million at March 31, 2019, compared to $12.6 million at
December 31, 2018 and $27.8 million at March 31, 2018. The $2.2 million
increase in the first quarter of 2019 was primarily due to a
well-secured owner-occupied commercial real estate loan. In April 2019,
we received a $2.2 million paydown on a $2.7 million substandard
classified land development loan and upgraded the remaining balance to a
Pass risk rating due to the low loan-to-value ratio and the borrower's
improved financial condition. There were no loans classified doubtful at
March 31, 2019 or December 31, 2018. Accruing loans past due 30 to 89
days totaled $2,194 thousand at March 31, 2019, compared to $1,121
thousand at December 31, 2018 and $388 thousand a year ago.

There was no provision for loan losses recorded in the first quarter of
2019, consistent with last quarter and the same quarter a year ago. Net
charge-offs were $4 thousand in the first quarter of 2019, compared to
net recoveries of $4 thousand for the three months ended December 31,
2018 and March 31, 2018. The ratio of loan loss reserves to loans,
including acquired loans, was 0.89% at March 31, 2019, 0.90% at
December 31, 2018, and 0.94% at March 31, 2018.

Investments

The investment securities portfolio totaled $595.7 million at March 31,
2019, compared to $619.7 million at December 31, 2018 and $572.9 million
at March 31, 2018. The decrease from the prior quarter was primarily
attributed to calls, principal paydowns, sales and maturities of $34.6
million, partially offset by $11.3 million in purchases.

Deposits

Total deposits were $2,178.6 million at March 31, 2019, compared to
$2,174.8 million at December 31, 2018 and $2,186.6 million at March 31,
2018. The increase in deposit balances during the first quarter of 2019,
was primarily due to normal cash fluctuations in some of our large
business accounts. The average cost of deposits in the first quarter of
2019 was 0.18%, an increase of 4 basis points from the prior quarter and
an increase of 10 basis points from the same quarter a year ago,
primarily due to an increase in market interest rates.

Earnings

"Bank of Marin's investment in people, infrastructure and acquisitions
continues to produce benefits in terms of loan growth and expense
control," said Tani Girton, EVP and Chief Financial Officer. "The
ongoing strength of the Bank is reflected in the year-over-year increase
of 17 basis points in net interest margin, efficiency ratio in the low
60's and return on assets of 1.19%."

Net interest income totaled $23.8 million in the first quarter of 2019,
compared to $23.3 million in the prior quarter and $21.9 million in the
same quarter a year ago. The $574 thousand and $1,955 thousand increases
from the prior quarter and comparative quarter a year ago were
reflective of growth in average earning assets of $5.6 million and $85.7
million, respectively, and higher yields across earning asset classes.

The tax-equivalent net interest margin was 4.02% in the first quarter of
2019, compared to 3.85% in both the prior quarter and same quarter a
year ago. The 17 basis point increase from the prior quarter was
primarily due to the early redemption of a high-rate subordinated
debenture due to NorCal Community Bancorp Trust I in October 2018. The
17 basis point increase from the first quarter of 2018 was primarily due
to a more favorable mix of interest-earning assets toward higher
yielding loans and investment securities.

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. PCI loans totaled $2.1 million at March 31, 2019,
December 31, 2018 and March 31, 2018.

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, 2019   December 31, 2018   March 31, 2018
(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   $ 59     1 bps   $ 62     1 bps   $ 112     2 bps
Accretion on non-PCI loans 2 $ 42 1 bps $ 214 3 bps $ 99 2 bps
Gains on payoffs of PCI loans $ 0 bps $ 0 bps $ 128 2 bps
1     Accretable yield on PCI loans totaled $875 thousand, $934 thousand
and $1.1 million at March 31, 2019, December 31, 2018 and March 31,
2018, respectively.
2 Unaccreted purchase discounts on non-PCI loans totaled $666
thousand, $708 thousand and $1.1 million at March 31, 2019, December
31, 2018 and March 31, 2018, respectively.
 

Non-interest income of $1.8 million in the first quarter of 2019
decreased $1.7 million from $3.4 million in the fourth quarter due to a
$956 thousand pre-tax gain on sale of 6,500 shares of Visa Inc. Class B
restricted common stock and a $180 thousand Federal Home Loan Bank
special dividend in the fourth quarter. Additionally, the Bank incurred
$283 thousand non-refundable costs for underwriting two new bank-owned
life insurance policies purchased in the first quarter and deposit
network income declined $163 thousand. The decrease of $471 thousand
from $2.2 million in the first quarter last year was primarily related
to the costs associated with the newly purchased bank-owned life
insurance policies and the decrease in deposit network income mentioned
above.

Non-interest expense totaled $15.5 million in the first quarter of 2019,
$13.7 million in the prior quarter, and $16.1 million in the same
quarter a year ago. The increase of $1.8 million from the prior quarter
was primarily due to a $1.2 million increase in salaries and benefits
from stock-based compensation ($498 thousand due to certain participants
meeting retirement eligibility requirements and $64 thousand vesting of
performance awards), $136 thousand one-time pay cycle adjustment, six
additional full-time equivalent ("FTE") staff, and $339 thousand more in
401(k) employer matching contributions. Additionally, there was a $129
thousand provision for losses on off-balance sheet commitments in the
first quarter of 2019. The $553 thousand decrease from the same quarter
a year ago was primarily related to a decrease in professional fees of
$713 thousand (mostly attributed to core processing contract
negotiations) and data processing expenses of $366 thousand (mostly
attributed to Bank of Napa acquisition-related expenses in 2018). These
decreases were partially offset by additional FTE staff, merit
increases, the one-time pay cycle adjustment and the provision for
losses on off-balance sheet commitments.

Share Repurchase Program

Bancorp's Board of Directors approved the repurchase of up to $25.0
million common stock through May 1, 2019. Bancorp repurchased 113,904
shares totaling $4.8 million in the first quarter of 2019 for a
cumulative total of 285,121 shares totaling $11.8 million as of March
31, 2019.

Earnings Call and Webcast Information

Bank of Marin Bancorp will present its first quarter earnings call via
webcast on Monday, April 22, 2019 at 8:30 a.m. PT/11:30 a.m. ET.
Investors will have the opportunity to listen to the webcast online
through Bank of Marin's website at https://www.bankofmarin.com
under "Investor Relations." To listen to the webcast live, 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 1990 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, Bank of Marin has 23 retail branches, 5 commercial
banking offices and 1 loan production office located across the North
Bay, San Francisco and East Bay regions. Bank of Marin provides
commercial banking, personal banking, 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 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, 2019
       
(dollars in thousands, except per share data; unaudited)     March 31, 2019

December 31,
2018

March 31, 2018

Quarter-to-Date

Net income $ 7,479 $ 9,662 $ 6,389
Diluted earnings per common share 4 $ 0.54 $ 0.69 $ 0.46
Return on average assets 1.19 % 1.52 % 1.05 %
Return on average equity 9.54 % 12.37 % 8.70 %
Efficiency ratio 60.62 % 51.34 % 66.64 %
Tax-equivalent net interest margin 1 4.02 % 3.85 % 3.85 %
Net charge-offs (recoveries) $ 4 $ (4 ) $ (4 )
Net charge-offs (recoveries) to average loans

At Period End

Total assets $ 2,534,076 $ 2,520,892 $ 2,510,043
Loans:
Commercial and industrial $ 237,646 $ 230,739 $ 231,680
Real estate:
Commercial owner-occupied 310,588 313,277 300,377
Commercial investor-owned 878,494 873,410 828,945
Construction 72,271 76,423 64,978
Home equity 124,512 124,696 124,699
Other residential 117,558 117,847 95,621
Installment and other consumer loans 31,469   27,472   25,440  
Total loans $ 1,772,538   $ 1,763,864   $ 1,671,740  
Non-performing loans: 2
Commercial and industrial $ 309 $ 319 $
Home equity 346 313 392
Installment and other consumer loans 64   65    
Total non-accrual loans $ 719   $ 697   $ 392  
 
Classified loans (graded substandard and doubtful) $ 14,811 $ 12,608 $ 27,807
Total accruing loans 30-89 days past due $ 2,194 $ 1,121 $ 388
Allowance for loan losses to total loans 0.89 % 0.90 % 0.94 %
Allowance for loan losses to non-performing loans 21.99x 22.71x 40.26x
Non-accrual loans to total loans 0.04 % 0.04 % 0.02 %
 
Total deposits $ 2,178,629 $ 2,174,840 $ 2,186,594
Loan-to-deposit ratio 81.4 % 81.1 % 76.5 %
Stockholders' equity $ 320,664 $ 316,407 $ 298,464
Book value per share 4 $ 23.26 $ 22.85 $ 21.37
Tangible common equity to tangible assets 3 11.4 % 11.3 % 10.6 %
Total risk-based capital ratio - Bank 13.9 % 14.0 % 14.7 %
Total risk-based capital ratio - Bancorp 14.9 % 14.9 % 15.1 %
Full-time equivalent employees 296 290 288
 
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
$14.0 million, $14.3 million and $16.2 million at March 31, 2019,
December 31, 2018 and March 31, 2018, respectively. Excludes
purchased credit-impaired (PCI) loans with carrying values of $2.1
million that were accreting interest at March 31, 2019, December 31,
2018 and March 31, 2018. 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 $35.5
million, $35.7 million and $36.4 million at March 31, 2019, December
31, 2018 and March 31, 2018, respectively. Tangible assets exclude
goodwill and intangible assets.
4 Share and per share data have been adjusted to reflect
the two-for-one stock split effective November 27, 2018.
 
               

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF CONDITION

At March 31, 2019, December 31, 2018 and March 31, 2018

       
(in thousands, except share data; unaudited)    

March 31,
2019

 

December 31,
2018

 

March 31,
2018

Assets
Cash and due from banks $ 51,639 $ 34,221 $ 159,347
Investment securities
Held-to-maturity, at amortized cost 152,845 157,206 149,013

Available-for-sale (at fair value; amortized cost $442,386,
$465,910 and $431,871 at March 31, 2019, December 31, 2018 and
March 31, 2018, respectively)

    442,885     462,464     423,882  

Total investment securities

595,730 619,670 572,895

Loans, net of allowance for loan losses of $15,817, $15,821 and
$15,771 at March 31, 2019, December 31, 2018 and March 31, 2018,
respectively

1,756,721 1,748,043 1,655,969
Bank premises and equipment, net 7,237 7,376 8,297
Goodwill 30,140 30,140 30,140
Core deposit intangible 5,349 5,571 6,262
Operating lease right-of-use assets 12,465
Interest receivable and other assets     74,795     75,871     77,133  
Total assets     $ 2,534,076     $ 2,520,892     $ 2,510,043  
 
Liabilities and Stockholders' Equity
Liabilities
Deposits
Non-interest bearing $ 1,076,382 $ 1,066,051 $ 1,065,470
Interest bearing
Transaction accounts 130,001 133,403 166,117
Savings accounts 180,758 178,429 180,730
Money market accounts 680,806 679,775 628,335
Time accounts     110,682     117,182     145,942  
Total deposits 2,178,629 2,174,840 2,186,594
Borrowings and other obligations 309 7,000
Subordinated debentures 2,657 2,640 5,772
Operating lease liabilities 14,349
Interest payable and other liabilities     17,468     20,005     19,213  
Total liabilities     2,213,412     2,204,485     2,211,579  
 
Stockholders' Equity
Preferred stock, no par value,
Authorized - 5,000,000 shares, none issued

Common stock, no par value,

Authorized - 30,000,000 shares; Issued and outstanding -
13,786,808, 13,844,353 and 13,970,252 at March 31, 2019, December
31, 2018 and March 31, 2018, respectively

137,125 140,565 145,282
Retained earnings 184,793 179,944 160,556
Accumulated other comprehensive loss, net of taxes     (1,254 )   (4,102 )   (7,374 )
Total stockholders' equity     320,664     316,407     298,464  
Total liabilities and stockholders' equity     $ 2,534,076     $ 2,520,892     $ 2,510,043  
 
       
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
   
Three months ended
(in thousands, except per share amounts; unaudited)     March 31, 2019  

December 31, 2018

  March 31, 2018
Interest income    
Interest and fees on loans $ 20,695 $ 20,732 $ 18,887
Interest on investment securities 4,097 3,912 3,157
Interest on federal funds sold and due from banks     139     373     403  
Total interest income 24,931 25,017 22,447
Interest expense
Interest on interest-bearing transaction accounts 77 68 52
Interest on savings accounts 18 18 18
Interest on money market accounts 764 566 216
Interest on time accounts 119 116 156
Interest on borrowings and other obligations 47
Interest on subordinated debentures     60     977     114  
Total interest expense     1,085     1,745     556  
Net interest income 23,846 23,272 21,891
Provision for loan losses              
Net interest income after provision for loan losses     23,846     23,272     21,891  
Non-interest income
Service charges on deposit accounts 479 484 477
Wealth Management and Trust Services 438 426 515
Debit card interchange fees, net 380 403 396
Merchant interchange fees, net 87 81 80
(Losses) earnings on bank-owned life insurance, net (60 ) 228 228
Dividends on FHLB stock 196 377 196
(Losses) gains on investment securities, net (6 ) 955
Other income     257     469     350  
Total non-interest income     1,771     3,423     2,242  
Non-interest expense
Salaries and related benefits 9,146 7,933 9,017
Occupancy and equipment 1,531 1,514 1,507
Depreciation and amortization 556 518 547
Federal Deposit Insurance Corporation insurance 179 188 191
Data processing 1,015 1,004 1,381
Professional services 586 481 1,299
Directors' expense 179 170 174
Information technology 259 228 269
Amortization of core deposit intangible 222 230 230
Provision for losses on off-balance sheet commitments 129
Other expense     1,726     1,439     1,466  
Total non-interest expense     15,528     13,705     16,081  
Income before provision for income taxes 10,089 12,990 8,052
Provision for income taxes     2,610     3,328     1,663  
Net income     $ 7,479     $ 9,662     $ 6,389  
Net income per common share:1
Basic $ 0.54 $ 0.70 $ 0.46
Diluted $ 0.54 $ 0.69 $ 0.46
Weighted average shares:1
Basic 13,737 13,841 13,827
Diluted     13,924     14,033     14,011  
Comprehensive income:
Net income $ 7,479 $ 9,662 $ 6,389
Other comprehensive income (loss)
Change in net unrealized gain or loss on available-for-sale
securities
3,939 7,714 (6,170 )
Reclassification adjustment for losses on available-for-sale
securities in net income
6
Amortization of net unrealized losses on securities transferred from
available-for-sale to held-to-maturity
    101     120     136  
Subtotal 4,046 7,834 (6,034 )
Deferred tax expense (benefit)     1,198     2,318     (1,784 )
Other comprehensive income (loss), net of tax     2,848     5,516     (4,250 )
Comprehensive income     $ 10,327     $ 15,178     $ 2,139  
 
1 Share and per share data have been adjusted to reflect
the two-for-one stock split effective November 27, 2018.
 
           
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, 2019     December 31, 2018     March 31, 2018
  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 $ 22,690 $ 139 2.45 % $ 65,961 $ 373 2.21 % $ 104,850 $ 403 1.54 %
Investment securities 2, 3 619,562 4,191 2.71 % 600,914 4,000 2.66 % 532,544 3,276 2.46 %
Loans 1, 3, 4     1,756,316     20,887     4.76 %     1,726,045     20,933     4.75 %     1,675,490     19,119     4.56 %
Total interest-earning assets 1 2,398,568 25,217 4.21 % 2,392,920 25,306 4.14 % 2,312,884 22,798 3.94 %
Cash and non-interest-bearing due from banks 30,947 38,943 45,815
Bank premises and equipment, net 7,512 7,529 8,501
Interest receivable and other assets, net     104,685               84,651               89,018          
Total assets     $ 2,541,712               $ 2,524,043               $ 2,456,218          
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts $ 127,733 $ 77 0.24 % $ 130,546 $ 68 0.21 % $ 168,371 $ 52 0.13 %
Savings accounts 180,355 18 0.04 % 177,018 18 0.04 % 180,253 18 0.04 %
Money market accounts 673,137 764 0.46 % 643,459 566 0.35 % 582,961 216 0.15 %
Time accounts including CDARS 113,389 119 0.43 % 121,838 116 0.38 % 154,543 156 0.41 %
Borrowings and other obligations 1 7,414 47 2.55 % 76 2.52 % %
Subordinated debentures 1     2,647     60     9.05 %     2,770     977     138.09 %     5,753     114     7.90 %
Total interest-bearing liabilities 1,104,675 1,085 0.40 % 1,075,707 1,745 0.64 % 1,091,881 556 0.21 %
Demand accounts 1,086,947 1,118,785 1,049,502
Interest payable and other liabilities 32,163 19,662 16,903
Stockholders' equity     317,927               309,889               297,932          
Total liabilities & stockholders' equity     $ 2,541,712               $ 2,524,043               $ 2,456,218          
Tax-equivalent net interest income/margin 1         $ 24,132     4.02 %         $ 23,561     3.85 %         $ 22,242     3.85 %
Reported net interest income/margin 1         $ 23,846     3.98 %         $ 23,272     3.81 %         $ 21,891     3.79 %
Tax-equivalent net interest rate spread             3.81 %             3.49 %             3.74 %
 
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 2019 and 2018.
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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