EXHIBIT 99.1
 | ||
FOR IMMEDIATE RELEASE | CONTACT: | Sandy Pfaff |
415-819-7447 | ||
sandy@pfaffpr.com | ||
BANK OF MARIN BANCORP REPORTS SECOND QUARTER EARNINGS OF $3.1 MILLION
WILL EXPAND INTO EAST BAY WITH PLANNED ACQUISITION OF NORCAL COMMUNITY BANCORP
NOVATO, CA, July 22, 2013 - Bank of Marin Bancorp, "Bancorp" (NASDAQ: BMRC), parent company of Bank of Marin, announced second quarter 2013 earnings of $3.1 million, compared to $4.9 million in the first quarter of 2013 and $5.0 million in the second quarter of 2012. Diluted earnings per share totaled $0.55 in the second quarter, compared to $0.89 in the prior quarter and $0.91 in the same quarter a year ago. Earnings for the six-month period ended June 30, 2013 totaled $7.9 million compared to $9.9 million in the same period a year ago. Diluted earnings per share for the six-month period ended June 30, 2013 totaled $1.44 compared to $1.82 in the same period a year ago. Second quarter 2013 earnings reflect a $1.1 million provision for loan loss that is primarily related to one land development loan.
"We continue to have confidence in the strength of our overall credit portfolio. The substantial reserve that we booked this quarter relating to one loan is an isolated situation and is not a reflection of the portfolio quality overall," said Russell A. Colombo, President and Chief Executive Officer. “Our net loan growth this quarter together with the strategic acquisition of Bank of Alameda in the East Bay are two very positive developments for our shareholders.”
On July 1, 2013, Bancorp entered into a definitive agreement to acquire NorCal Community Bancorp, parent company of Bank of Alameda. Bank of Alameda has four branch offices serving Alameda, Emeryville, and Oakland, and had assets of $264.7 million, total deposits of $228.7 million, and total loans of $170.6 million as of March 31, 2013. The transaction is expected to close in the fourth quarter of 2013 and is subject to a number of conditions, including receipt of regulatory approvals and approval of NorCal Community Bancorp's shareholders1.
Bancorp also provided the following highlights on its operating and financial performance for the second quarter of 2013:
• | The current quarter provision for loan loss reflects a land development loan of $4.8 million that went onto non-accrual status during the quarter. A May appraisal indicated a decline in the collateral value resulting in a new specific reserve on this loan. |
• | Loans grew $19.6 million, or 1.8%, over March 31, 2013, and grew $66.3 million, or 6.5% over June 30, 2012, primarily due to new commercial real estate loans from existing and new relationships in Marin County. |
• | Non-interest bearing deposits increased $12.6 million from March 31, 2013 and totaled 40.7% of total deposits at June 30, 2013, compared to 39.5% at the prior quarter end. |
• | The total risk-based capital ratio for Bancorp totaled 14.0% at June 30, 2013 and March 31, 2013 and 13.9% at June 30, 2012. The risk-based capital ratio continues to be well above regulatory requirements for a well-capitalized institution. Tangible common equity to tangible assets increased to 11.1% at June 30, 2013, up from 11.0% at the end of the prior quarter and 10.3% a year ago. |
• | On July 18, 2013, the Board of Directors declared a quarterly cash dividend of $0.18 per share. The cash dividend is payable to shareholders of record at the close of business on August 1, 2013 and will be payable on August 9, 2013. |
____________________________________________________________________________________________
1 For more information concerning such transaction, please see the 8-K Reports filed by Bancorp with the Securities and Exchange Commission on July 1 and July 5, 2013.
1
Loans and Credit Quality
Gross loans totaled $1.1 billion at both June 30, 2013 and March 31, 2013, up from $1.0 billion at June 30, 2012. Classified loans continue to trend downward totaling $27.6 million at the end of the second quarter of 2013, compared to $31.1 million at the end of the prior quarter and $55.5 million a year ago. Non-performing loans totaled $18.5 million, or 1.69% of Bancorp's loan portfolio at June 30, 2013, compared to $15.3 million, or 1.43% at March 31, 2013 and $14.3 million, or 1.40% a year ago. Accruing loans past due 30 to 89 days totaled $566 thousand at June 30, 2013, compared to $8.1 million at March 31, 2013 and $9.8 million a year ago. The change in non-performing loans and past due loans primarily reflects the delinquent land development loan of $4.8 million mentioned above that went onto non-accrual status during the quarter.
"We continue to be very disciplined in how we manage our loan portfolio, working proactively with our customers to resolve any issues," said Beth Reizman, Senior Credit Administrator. "The specific reserve booked this quarter was related to a property that had been in development since 2005. It fell out of escrow and the interest reserve was depleted in April, prompting a new appraisal. The borrower continues to actively market this property. Our ongoing relationship with this developer includes many successful projects dating back to 1992.”
The provision for loan losses totaled $1.1 million in the second quarter of 2013, compared to a reversal of the provision for loan losses of $230 thousand in the prior quarter and a provision for loan losses of $100 thousand in the same quarter a year ago. The $1.1 million provision for loan losses in the second quarter of 2013 primarily relates to the non-performing land development loan mentioned earlier. Reflecting the new specific reserve established on this land development loan, the allowance for loan losses increased to 1.32% of loans at June 30, 2013, from 1.25% at March 31, 2013 and 1.31% at June 30, 2012. Net charge-offs in the second quarter of 2013 totaled $177 thousand, compared to net recoveries of $3 thousand in the prior quarter and net charge-offs of $187 thousand in the second quarter of 2012.
Deposits
Deposits totaled $1.2 billion at June 30, 2013 and remained relatively unchanged from both March 31, 2013 and June 30, 2012. Non-interest bearing deposits totaled 40.7% of total deposits at June 30, 2013, compared to 39.5% in the prior quarter and 32.5% a year ago. The increase in non-interest bearing deposits in the first and second quarter of 2013 compared to June 30, 2012 is primarily due to a strategic product change which discontinued interest on one type of consumer account in the first quarter of 2013. This resulted in a reclassification of the accounts from interest-bearing transaction to non-interest bearing accounts, with the affected balances totaling $82.6 million and $87.3 million at June 30, 2013 and March 31, 2013, respectively.
Earnings
Net interest income totaled $14.3 million in the second quarter of 2013 compared to $14.8 million in the prior quarter and $16.3 million in the same quarter a year ago. The tax-equivalent net interest margin was 4.30% in the second quarter of 2013 compared to 4.48% in the prior quarter and 4.94% in the same quarter a year ago. The net interest income decrease in the second quarter of 2013 compared to the prior quarter primarily relates to $177 thousand in accelerated amortization on an early redemption of a municipal security in the second quarter of 2013 and a lower level of gains on pay-offs of purchased credit-impaired ("PCI") loans. The decrease in net interest income in the second quarter of 2013 compared to the same quarter a year ago primarily relates to rate concessions and downward repricing on existing loans, new loans yielding lower rates and a lower level of accretion on loans acquired from the Federal Deposit Insurance Corporation in 2011 in connection with the closure of Charter Oak Bank.
2
Accretion and gains on pay-offs of purchased loans recorded to interest income were as follows:
Three months ended | |||||||||||||||
June 30, 2013 | March 31, 2013 | June 30, 2012 | |||||||||||||
(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 | $ | 156 | 5 bps | $ | 236 | 7 bps | $ | 478 | 14 bps | ||||||
Accretion on non-PCI loans | $ | 246 | 7 bps | $ | 132 | 4 bps | $ | 311 | 9 bps | ||||||
Gains on pay-offs of PCI loans | $ | 149 | 4 bps | $ | 320 | 9 bps | $ | 69 | 2 bps | ||||||
Six months ended | ||||||||||
June 30, 2013 | June 30, 2012 | |||||||||
(dollars in thousands; unaudited) | Dollar Amount | Basis point impact to net interest margin | Dollar Amount | Basis point impact to net interest margin | ||||||
Accretion on PCI loans | $ | 392 | 6 bps | $ | 988 | 15 bps | ||||
Accretion on non-PCI loans | $ | 378 | 6 bps | $ | 514 | 8 bps | ||||
Gains on pay-offs of PCI loans | $ | 469 | 7 bps | $ | 591 | 9 bps | ||||
Accretion on PCI loans fluctuates based on changes in cash flows expected to be collected. For acquired loans not considered credit-impaired, the level of accretion varies due to maturities and early pay-offs of these loans. Gains on pay-offs of PCI loans are recorded as interest income when the pay-off amounts exceed the recorded investment.
Non-interest income in the second quarter of 2013 totaled $1.9 million, compared to $2.1 million in the prior quarter and $1.8 million in the same quarter a year ago. The decrease in the second quarter of 2013 compared to the prior quarter primarily relates to a $223 thousand BOLI death benefit in the first quarter of 2013. The increase in the second quarter of 2013 compared to the same quarter a year ago primarily relates to higher Wealth Management and Trust Services fees and higher dividend income from the Federal Home Loan Bank of San Francisco.
Non-interest expense totaled $10.4 million in the second quarter of 2013, compared to $9.7 million in both the prior quarter and the same quarter a year ago. The increase compared to the prior quarter and the same quarter a year ago primarily relates to higher acquisition-related professional expenses and higher staffing costs as the Bank continues to grow. The increase in non-interest expense from the prior quarter also reflects higher data processing charges due to technological upgrades.
3
About Bank of Marin Bancorp
Bank of Marin, as the sole subsidiary of Bank of Marin Bancorp (NASDAQ: BMRC), is the premier community and business bank in Marin County with 17 offices in Marin, San Francisco, Napa and Sonoma counties. Bank of Marin offers business and personal banking, private banking and wealth management services, with a strong focus on supporting local businesses in the community. Incorporated in 1989, Bank of Marin has received the highest five star rating from Bauer Financial for more than fourteen years (www.bauerfinancial.com) and has been recognized for several years as one of the "Best Places to Work in the North Bay" by the North Bay Business Journal and one of the “Top Corporate Philanthropists" by the San Francisco Business Times. With assets exceeding $1.4 billion, Bank of Marin Bancorp is included in the Russell 2000 Small-Cap Index and has been recognized as a Top 200 Community Bank for the past five years by US Banker Magazine.
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, the economic uncertainty in the United States and abroad, changes in interest rates, deposit flows, real estate values, expected future cash flows on acquired loans, and competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; and other economic, competitive, governmental, regulatory and technological factors 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.
Additional Information about the Acquisition and where to Find It
In connection with the proposed acquisition, Bancorp will file with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 to register the shares of Bancorp common stock to be issued to the shareholders of NorCal Community Bancorp. The registration statement will include a proxy statement/prospectus which will be sent to the shareholders of NorCal Community Bancorp seeking their approval of the acquisition and related matters. In addition, Bancorp may file other relevant documents concerning the proposed acquisition with the SEC, including the two 8-K reports referenced above.
Shareholders of NorCal Community Bancorp are urged to read the registration statement on Form S-4 and the proxy statement/prospectus included within the registration statement and any other relevant documents to be filed with the SEC in connection with the proposed acquisition because they will contain important information about Bancorp, NorCal Community Bancorp and the proposed transaction. Investors and shareholders may obtain free copies of these documents through the website maintained by the SEC at www.sec.gov. Free copies of the proxy statement/prospectus and/or the 8-K reports referenced above also may be obtained by directing a request by telephone or mail to Bank of Marin Bancorp, 504 Redwood Blvd, Suite 100, Novato CA, 94947 , Attention: Investor Relations (telephone: (415) 763-4523 ), or by accessing Bank of Marin's website at www.bankofmarin.com under “Investor Relations.” The information on Bank of Marin's website is not, and shall not be deemed to be, a part of this filing or incorporated into other filings it makes with the SEC.
Participants in the Solicitation
Bancorp and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of NorCal Community Bancorp in connection with the acquisition. Information about the directors and executive officers of Bancorp is set forth in the proxy statement for Bancorp's 2013 annual meeting of shareholders filed with the SEC on April 11, 2013. Additional information regarding the interests of these participants and other persons who may be deemed participants in the acquisition may be obtained by reading the proxy statement/prospectus regarding the acquisition when it becomes available.
4
BANK OF MARIN BANCORP | ||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||
June 30, 2013 | ||||||||||||||||
(dollars in thousands, except per share data; unaudited) | ||||||||||||||||
QUARTER-TO-DATE | June 30, 2013 | March 31, 2013 | June 30, 2012 | |||||||||||||
NET INCOME | $ | 3,055 | $ | 4,866 | $ | 4,951 | ||||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 0.55 | $ | 0.89 | $ | 0.91 | ||||||||||
RETURN ON AVERAGE ASSETS (ROA) | 0.86 | % | 1.38 | % | 1.39 | % | ||||||||||
RETURN ON AVERAGE EQUITY (ROE) | 7.72 | % | 12.76 | % | 14.01 | % | ||||||||||
EFFICIENCY RATIO | 64.12 | % | 57.36 | % | 53.56 | % | ||||||||||
TAX-EQUIVALENT NET INTEREST MARGIN1 | 4.30 | % | 4.48 | % | 4.94 | % | ||||||||||
NET CHARGE-OFFS/(RECOVERIES) | $ | 177 | $ | (3 | ) | $ | 187 | |||||||||
NET CHARGE-OFFS TO AVERAGE LOANS | 0.02 | % | — | 0.02 | % | |||||||||||
YEAR-TO-DATE | ||||||||||||||||
NET INCOME | $ | 7,921 | $ | 9,891 | ||||||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 1.44 | $ | 1.82 | ||||||||||||
RETURN ON AVERAGE ASSETS (ROA) | 1.12 | % | 1.40 | % | ||||||||||||
RETURN ON AVERAGE EQUITY (ROE) | 10.19 | % | 14.20 | % | ||||||||||||
EFFICIENCY RATIO | 60.67 | % | 54.26 | % | ||||||||||||
TAX-EQUIVALENT NET INTEREST MARGIN1 | 4.39 | % | 4.96 | % | ||||||||||||
NET CHARGE-OFFS | $ | 174 | $ | 1,304 | ||||||||||||
NET CHARGE-OFFS TO AVERAGE LOANS | 0.02 | % | 0.13 | % | ||||||||||||
AT PERIOD END | ||||||||||||||||
TOTAL ASSETS | $ | 1,428,518 | $ | 1,427,022 | $ | 1,407,000 | ||||||||||
LOANS: | ||||||||||||||||
COMMERCIAL AND INDUSTRIAL | $ | 170,443 | $ | 175,735 | $ | 176,002 | ||||||||||
REAL ESTATE | ||||||||||||||||
COMMERCIAL OWNER-OCCUPIED | $ | 206,191 | $ | 196,803 | $ | 172,757 | ||||||||||
COMMERCIAL INVESTOR-OWNED | $ | 535,260 | $ | 509,829 | $ | 453,456 | ||||||||||
CONSTRUCTION | $ | 27,728 | $ | 32,835 | $ | 47,948 | ||||||||||
HOME EQUITY | $ | 90,296 | $ | 90,495 | $ | 98,565 | ||||||||||
OTHER RESIDENTIAL | $ | 43,290 | $ | 45,879 | $ | 55,316 | ||||||||||
INSTALLMENT AND OTHER CONSUMER LOANS | $ | 18,274 | $ | 20,259 | $ | 21,150 | ||||||||||
TOTAL LOANS | $ | 1,091,482 | $ | 1,071,835 | $ | 1,025,194 | ||||||||||
NON-PERFORMING LOANS2: | ||||||||||||||||
COMMERCIAL AND INDUSTRIAL | $ | 2,022 | $ | 3,884 | $ | 1,751 | ||||||||||
REAL ESTATE | ||||||||||||||||
COMMERCIAL OWNER-OCCUPIED | $ | 1,403 | $ | 1,403 | $ | 1,403 | ||||||||||
COMMERCIAL INVESTOR-OWNED | $ | 6,024 | $ | 5,714 | $ | 5,961 | ||||||||||
CONSTRUCTION | $ | 7,046 | $ | 2,239 | $ | 2,821 | ||||||||||
HOME EQUITY | $ | 524 | $ | 530 | $ | 981 | ||||||||||
OTHER RESIDENTIAL | $ | 1,148 | $ | 1,165 | $ | 740 | ||||||||||
INSTALLMENT AND OTHER CONSUMER LOANS | $ | 321 | $ | 356 | $ | 690 | ||||||||||
TOTAL NON-PERFORMING LOANS | $ | 18,488 | $ | 15,291 | $ | 14,347 | ||||||||||
CLASSIFIED LOANS (GRADED SUBSTANDARD & DOUBTFUL) | $ | 27,602 | $ | 31,141 | $ | 55,494 | ||||||||||
TOTAL ACCRUING LOANS 30-89 DAYS PAST DUE | $ | 566 | $ | 8,077 | $ | 9,837 | ||||||||||
LOAN LOSS RESERVE TO LOANS | 1.32 | % | 1.25 | % | 1.31 | % | ||||||||||
LOAN LOSS RESERVE TO NON-PERFORMING LOANS | 0.78 | x | 0.88 | x | 0.94 | x | ||||||||||
NON-PERFORMING LOANS TO TOTAL LOANS | 1.69 | % | 1.43 | % | 1.40 | % | ||||||||||
TEXAS RATIO3 | 10.82 | % | 9.09 | % | 9.14 | % | ||||||||||
TOTAL DEPOSITS | $ | 1,224,437 | $ | 1,231,551 | $ | 1,230,717 | ||||||||||
LOAN TO DEPOSIT RATIO | 89.1 | % | 87.0 | % | 83.3 | % | ||||||||||
STOCKHOLDERS' EQUITY | $ | 158,359 | $ | 156,843 | $ | 144,326 | ||||||||||
BOOK VALUE PER SHARE | $ | 29.10 | $ | 28.88 | $ | 26.92 | ||||||||||
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS4 | 11.1 | % | 11.0 | % | 10.3 | % | ||||||||||
TOTAL RISK BASED CAPITAL RATIO-BANK5 | 13.7 | % | 13.5 | % | 13.6 | % | ||||||||||
TOTAL RISK BASED CAPITAL RATIO-BANCORP5 | 14.0 | % | 14.0 | % | 13.9 | % | ||||||||||
FULL TIME EQUIVALENT EMPLOYEES | 243 | 241 | 232 | |||||||||||||
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 $10.0 million, $10.8 million and $25.2 million at June 30, 2013, March 31, 2013 and June 30, 2012, respectively. Excludes purchased credit-impaired (PCI) loans with carrying values of $2.1 million, $2.0 million and $3.1 million that were accreting interest at June 30, 2013, March 31, 2013 and June 30, 2012, 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 $3.5 million, $3.6 million and $4.7 million at June 30, 2013, March 31, 2013 and June 30, 2012. | ||||||||||||||||
3 (Non-performing assets + 90 day delinquent loans)/(tangible common equity + allowance for loan losses). | ||||||||||||||||
4 Tangible common equity includes common stock, retained earnings and unrealized gain on available for sale securities, net of tax, less intangible assets. | ||||||||||||||||
5 Current period estimated. | ||||||||||||||||
5
BANK OF MARIN BANCORP CONSOLIDATED STATEMENTS OF CONDITION |
at June 30, 2013, March 31, 2013 and June 30, 2012 |
(in thousands, except share data; unaudited) | June 30, 2013 | March 31, 2013 | June 30, 2012 | ||||||||
Assets | |||||||||||
Cash and due from banks | $ | 32,175 | $ | 31,364 | $ | 98,321 | |||||
Investment securities | |||||||||||
Held to maturity, at amortized cost | 131,839 | 138,978 | 83,134 | ||||||||
Available for sale (at fair value; amortized cost $127,989, $139,414 and $159,024 at June 30, 2013, March 31, 2013 and June 30, 2012, respectively) | 129,562 | 142,653 | 161,803 | ||||||||
Total investment securities | 261,401 | 281,631 | 244,937 | ||||||||
Loans, net of allowance for loan losses of $14,357, $13,434 and $13,435 at June 30, 2013, March 31, 2013 and June 30, 2012, respectively | 1,077,125 | 1,058,401 | 1,011,759 | ||||||||
Bank premises and equipment, net | 9,178 | 9,358 | 9,074 | ||||||||
Interest receivable and other assets | 48,639 | 46,268 | 42,909 | ||||||||
Total assets | $ | 1,428,518 | $ | 1,427,022 | $ | 1,407,000 | |||||
Liabilities and Stockholders' Equity | |||||||||||
Liabilities | |||||||||||
Deposits | |||||||||||
Non-interest bearing | $ | 498,572 | $ | 485,942 | $ | 399,835 | |||||
Interest bearing | |||||||||||
Transaction accounts | 80,221 | 86,124 | 149,822 | ||||||||
Savings accounts | 95,317 | 95,428 | 86,590 | ||||||||
Money market accounts | 410,676 | 417,293 | 423,682 | ||||||||
CDARS® time accounts | 4,296 | 7,448 | 27,297 | ||||||||
Other time accounts | 135,355 | 139,316 | 143,491 | ||||||||
Total deposits | 1,224,437 | 1,231,551 | 1,230,717 | ||||||||
Federal Home Loan Bank borrowings | 32,200 | 23,200 | 15,000 | ||||||||
Subordinated debenture | — | — | 5,000 | ||||||||
Interest payable and other liabilities | 13,522 | 15,428 | 11,957 | ||||||||
Total liabilities | 1,270,159 | 1,270,179 | 1,262,674 | ||||||||
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 - 5,442,628, 5,430,220 and 5,362,222 at June 30, 2013, March 31, 2013 and June 30, 2012, respectively | 60,312 | 59,906 | 57,543 | ||||||||
Retained Earnings | 97,135 | 95,059 | 85,171 | ||||||||
Accumulated other comprehensive income, net | 912 | 1,878 | 1,612 | ||||||||
Total stockholders' equity | 158,359 | 156,843 | 144,326 | ||||||||
Total liabilities and stockholders' equity | $ | 1,428,518 | $ | 1,427,022 | $ | 1,407,000 | |||||
6
BANK OF MARIN BANCORP CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
Three months ended | Six months ended | ||||||||||||||||||
(in thousands, except per share amounts; unaudited) | June 30, 2013 | March 31, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||||||||||
Interest income | |||||||||||||||||||
Interest and fees on loans | $ | 13,366 | $ | 13,635 | $ | 15,324 | $ | 27,001 | $ | 30,652 | |||||||||
Interest on investment securities | |||||||||||||||||||
Securities of U.S. Government agencies | 585 | 625 | 817 | 1,210 | 1,784 | ||||||||||||||
Obligations of state and political subdivisions | 437 | 638 | 455 | 1,075 | 842 | ||||||||||||||
Corporate debt securities and other | 339 | 324 | 285 | 663 | 486 | ||||||||||||||
Interest due from banks and other | 3 | 8 | 56 | 11 | 106 | ||||||||||||||
Total interest income | 14,730 | 15,230 | 16,937 | 29,960 | 33,870 | ||||||||||||||
Interest expense | |||||||||||||||||||
Interest on interest bearing transaction accounts | 12 | 11 | 45 | 23 | 89 | ||||||||||||||
Interest on savings accounts | 8 | 8 | 24 | 16 | 46 | ||||||||||||||
Interest on money market accounts | 95 | 99 | 180 | 194 | 363 | ||||||||||||||
Interest on CDARS® time accounts | 2 | 5 | 21 | 7 | 53 | ||||||||||||||
Interest on other time accounts | 224 | 232 | 269 | 456 | 573 | ||||||||||||||
Interest on borrowed funds | 84 | 79 | 117 | 163 | 264 | ||||||||||||||
Total interest expense | 425 | 434 | 656 | 859 | 1,388 | ||||||||||||||
Net interest income | 14,305 | 14,796 | 16,281 | 29,101 | 32,482 | ||||||||||||||
Provision for (reversal of) loan losses | 1,100 | (230 | ) | 100 | 870 | 100 | |||||||||||||
Net interest income after provision for (reversal of) loan losses | 13,205 | 15,026 | 16,181 | 28,231 | 32,382 | ||||||||||||||
Non-interest income | |||||||||||||||||||
Service charges on deposit accounts | 515 | 521 | 549 | 1,036 | 1,073 | ||||||||||||||
Wealth Management and Trust Services | 539 | 547 | 488 | 1,086 | 944 | ||||||||||||||
Debit card interchange fees | 280 | 252 | 259 | 532 | 493 | ||||||||||||||
Merchant interchange fees | 222 | 205 | 186 | 427 | 379 | ||||||||||||||
Earnings on Bank-owned life Insurance | 186 | 401 | 192 | 587 | 380 | ||||||||||||||
Other income | 202 | 180 | 126 | 382 | 226 | ||||||||||||||
Total non-interest income | 1,944 | 2,106 | 1,800 | 4,050 | 3,495 | ||||||||||||||
Non-interest expense | |||||||||||||||||||
Salaries and related benefits | 5,430 | 5,298 | 5,314 | 10,728 | 10,918 | ||||||||||||||
Occupancy and equipment | 1,052 | 1,073 | 1,056 | 2,125 | 2,043 | ||||||||||||||
Depreciation and amortization | 353 | 336 | 341 | 689 | 682 | ||||||||||||||
Federal Deposit Insurance Corporation insurance | 223 | 214 | 218 | 437 | 451 | ||||||||||||||
Data processing | 696 | 549 | 660 | 1,245 | 1,266 | ||||||||||||||
Professional services | 814 | 527 | 516 | 1,341 | 1,101 | ||||||||||||||
Other expense | 1,851 | 1,698 | 1,580 | 3,549 | 3,059 | ||||||||||||||
Total non-interest expense | 10,419 | 9,695 | 9,685 | 20,114 | 19,520 | ||||||||||||||
Income before provision for income taxes | 4,730 | 7,437 | 8,296 | 12,167 | 16,357 | ||||||||||||||
Provision for income taxes | 1,675 | 2,571 | 3,345 | 4,246 | 6,466 | ||||||||||||||
Net income | $ | 3,055 | $ | 4,866 | $ | 4,951 | $ | 7,921 | $ | 9,891 | |||||||||
Net income per common share: | |||||||||||||||||||
Basic | $ | 0.56 | $ | 0.90 | $ | 0.93 | $ | 1.47 | $ | 1.86 | |||||||||
Diluted | $ | 0.55 | $ | 0.89 | $ | 0.91 | $ | 1.44 | $ | 1.82 | |||||||||
Weighted average shares used to compute net income per common share: | |||||||||||||||||||
Basic | 5,419 | 5,389 | 5,337 | 5,404 | 5,331 | ||||||||||||||
Diluted | 5,509 | 5,487 | 5,419 | 5,498 | 5,422 | ||||||||||||||
Dividends declared per common share | $ | 0.18 | $ | 0.18 | $ | 0.17 | $ | 0.36 | $ | 0.34 | |||||||||
Comprehensive income: | |||||||||||||||||||
Net income | $ | 3,055 | $ | 4,866 | $ | 4,951 | $ | 7,921 | $ | 9,891 | |||||||||
Other comprehensive (loss) income | |||||||||||||||||||
Change in net unrealized gain on available for sale securities | (1,666 | ) | (303 | ) | (39 | ) | (1,969 | ) | (11 | ) | |||||||||
Reclassification adjustment for (loss) gain on sale of securities included in net income | — | — | (4 | ) | — | 34 | |||||||||||||
Net change in unrealized gain on available for sale securities, before tax | (1,666 | ) | (303 | ) | (43 | ) | (1,969 | ) | 23 | ||||||||||
Deferred tax (benefit) expense | (700 | ) | (126 | ) | (18 | ) | (826 | ) | 10 | ||||||||||
Other comprehensive (loss) income, net of tax | (966 | ) | (177 | ) | (25 | ) | (1,143 | ) | 13 | ||||||||||
Comprehensive income | $ | 2,089 | $ | 4,689 | $ | 4,926 | $ | 6,778 | $ | 9,904 | |||||||||
7
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, 2013 | March 31, 2013 | June 30, 2012 | |||||||||||||||||||||||
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 | $ | 4,485 | $ | 3 | 0.26 | % | $ | 5,710 | $ | 8 | 0.56 | % | $ | 70,003 | $ | 56 | 0.32 | % | |||||||
Investment securities 2, 3 | 266,774 | 1,452 | 2.18 | % | 284,429 | 1,780 | 2.50 | % | 230,609 | 1,750 | 3.04 | % | |||||||||||||
Loans 1, 3, 4 | 1,070,333 | 13,537 | 5.00 | % | 1,062,957 | 13,808 | 5.20 | % | 1,028,761 | 15,466 | 5.95 | % | |||||||||||||
Total interest-earning assets 1 | 1,341,592 | 14,992 | 4.42 | % | 1,353,096 | 15,596 | 4.61 | % | 1,329,373 | 17,272 | 5.14 | % | |||||||||||||
Cash and non-interest-bearing due from banks | 27,331 | 28,250 | 53,269 | ||||||||||||||||||||||
Bank premises and equipment, net | 9,313 | 9,425 | 9,136 | ||||||||||||||||||||||
Interest receivable and other assets, net | 38,981 | 37,892 | 35,813 | ||||||||||||||||||||||
Total assets | $ | 1,417,217 | $ | 1,428,663 | $ | 1,427,591 | |||||||||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 83,285 | $ | 12 | 0.06 | % | $ | 129,379 | $ | 11 | 0.03 | % | $ | 147,463 | $ | 45 | 0.12 | % | |||||||
Savings accounts | 95,083 | 8 | 0.03 | % | 96,561 | 8 | 0.03 | % | 85,118 | 24 | 0.11 | % | |||||||||||||
Money market accounts | 410,823 | 95 | 0.09 | % | 432,154 | 99 | 0.09 | % | 431,625 | 180 | 0.17 | % | |||||||||||||
CDARS® time accounts | 5,194 | 2 | 0.15 | % | 12,866 | 5 | 0.16 | % | 28,045 | 21 | 0.30 | % | |||||||||||||
Other time accounts | 136,759 | 224 | 0.66 | % | 140,254 | 232 | 0.67 | % | 142,189 | 269 | 0.76 | % | |||||||||||||
Overnight borrowings 1 | 12,785 | 5 | 0.15 | % | 3,513 | 2 | 0.23 | % | — | — | — | % | |||||||||||||
FHLB fixed-rate advances | 15,000 | 79 | 2.07 | % | 15,000 | 77 | 2.07 | % | 15,000 | 78 | 2.07 | % | |||||||||||||
Subordinated debenture 1 | — | — | — | % | — | — | — | % | 5,000 | 39 | 3.09 | % | |||||||||||||
Total interest-bearing liabilities | 758,929 | 425 | 0.22 | % | 829,727 | 434 | 0.21 | % | 854,440 | 656 | 0.31 | % | |||||||||||||
Demand accounts | 486,410 | 429,335 | 417,354 | ||||||||||||||||||||||
Interest payable and other liabilities | 13,092 | 14,892 | 13,646 | ||||||||||||||||||||||
Stockholders' equity | 158,786 | 154,709 | 142,151 | ||||||||||||||||||||||
Total liabilities & stockholders' equity | $ | 1,417,217 | $ | 1,428,663 | $ | 1,427,591 | |||||||||||||||||||
Tax-equivalent net interest income/margin 1 | $ | 14,567 | 4.30 | % | $ | 15,162 | 4.48 | % | $ | 16,616 | 4.94 | % | |||||||||||||
Reported net interest income/margin 1 | $ | 14,305 | 4.21 | % | $ | 14,796 | 4.37 | % | $ | 16,281 | 4.85 | % | |||||||||||||
Tax-equivalent net interest rate spread | 4.20 | % | 4.40 | % | 4.83 | % | |||||||||||||||||||
Six months ended | Six months ended | ||||||||||||||||||||||||
June 30, 2013 | June 30, 2012 | ||||||||||||||||||||||||
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 | $ | 5,094 | $ | 11 | 0.43 | % | $ | 78,552 | $ | 106 | 0.27 | % | |||||||||||||
Investment securities 2, 3 | 275,553 | 3,236 | 2.35 | % | 214,426 | 3,472 | 3.24 | % | |||||||||||||||||
Loans 1, 3, 4 | 1,066,665 | 27,346 | 5.10 | % | 1,028,667 | 30,939 | 5.95 | % | |||||||||||||||||
Total interest-earning assets 1 | 1,347,312 | 30,593 | 4.52 | % | 1,321,645 | 34,517 | 5.17 | % | |||||||||||||||||
Cash and non-interest-bearing due from banks | 27,788 | 52,640 | |||||||||||||||||||||||
Bank premises and equipment, net | 9,369 | 9,260 | |||||||||||||||||||||||
Interest receivable and other assets, net | 38,440 | 35,310 | |||||||||||||||||||||||
Total assets | $ | 1,422,909 | $ | 1,418,855 | |||||||||||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 106,205 | $ | 23 | 0.04 | % | $ | 145,311 | $ | 89 | 0.12 | % | |||||||||||||
Savings accounts | 95,818 | 16 | 0.03 | % | 81,974 | 46 | 0.11 | % | |||||||||||||||||
Money market accounts | 421,430 | 194 | 0.09 | % | 433,979 | 363 | 0.17 | % | |||||||||||||||||
CDARS® time accounts | 9,009 | 7 | 0.16 | % | 34,068 | 53 | 0.31 | % | |||||||||||||||||
Other time accounts | 138,496 | 456 | 0.66 | % | 145,709 | 573 | 0.79 | % | |||||||||||||||||
Overnight borrowings 1 | 8,175 | 7 | 0.17 | % | — | — | — | % | |||||||||||||||||
FHLB fixed-rate advances | 15,000 | 156 | 2.07 | % | 17,418 | 185 | 2.10 | % | |||||||||||||||||
Subordinated debenture 1 | — | — | — | % | 5,000 | 79 | 3.13 | % | |||||||||||||||||
Total interest-bearing liabilities | 794,133 | 859 | 0.22 | % | 863,459 | 1,388 | 0.32 | % | |||||||||||||||||
Demand accounts | 458,030 | 401,063 | |||||||||||||||||||||||
Interest payable and other liabilities | 13,987 | 14,230 | |||||||||||||||||||||||
Stockholders' equity | 156,759 | 140,103 | |||||||||||||||||||||||
Total liabilities & stockholders' equity | $ | 1,422,909 | $ | 1,418,855 | |||||||||||||||||||||
Tax-equivalent net interest income/margin 1 | $ | 29,734 | 4.39 | % | $ | 33,129 | 4.96 | % | |||||||||||||||||
Reported net interest income/margin 1 | $ | 29,101 | 4.30 | % | $ | 32,482 | 4.86 | % | |||||||||||||||||
Tax-equivalent net interest rate spread | 4.30 | % | 4.85 | % | |||||||||||||||||||||
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. | |||||||||||||||||||||||||
8