Attached files
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| 8-K - 8-K - Bank of Marin Bancorp | form8k-q32014.htm |
EXHIBIT 99.1
 | ||
FOR IMMEDIATE RELEASE | CONTACT: | Sandy Pfaff |
415-819-7447 | ||
sandy@pfaffpr.com | ||
BANK OF MARIN BANCORP REPORTS RECORD EARNINGS OF $5.4 MILLION
Loan Growth and Increased Dividend Highlight the Quarter
NOVATO, CA, October 20, 2014 - Bank of Marin Bancorp, "Bancorp" (NASDAQ: BMRC), parent company of Bank of Marin, announced record earnings of $5.4 million in the third quarter of 2014, compared to $5.2 million in the second quarter of 2014 and $4.0 million in the third quarter of 2013. Diluted earnings per share totaled $0.89 in the third quarter, compared to $0.86 in the prior quarter and $0.72 in the same quarter a year ago. September 30, 2014 year-to-date earnings totaled $15.1 million compared to $11.9 million for the same period a year ago. Diluted earnings per share for the nine-month period totaled $2.51 as compared to $2.16 for the same period in 2013.
"We are pleased to report record earnings again this quarter and are seeing tangible results from our recent acquisition,” said Russell A. Colombo, President and Chief Executive Officer. “Our ongoing commitment to strong credit quality and relationship banking continues to pay off in this competitive environment."
Bancorp also provided the following highlights on its operating and financial performance for the third quarter of 2014:
• | Loans grew to $1.4 billion, an increase of $22.5 million, or 1.7%, over June 30, 2014, and $268.1 million, or 24.5% over September 30, 2013. The increase in loans from a year ago reflects both acquired loans and organic growth. Credit quality improved with non-accrual loans representing 0.73% of total loans at September 30, 2014, down from 0.76% at June 30, 2014 and 1.58% a year ago. Net recoveries for the third quarter totaled $149 thousand, compared to net recoveries of $68 thousand in the prior quarter and net charge-offs of $68 thousand in the same quarter a year ago. |
• | Quarterly return on assets (“ROA”) of 1.15% for the quarter ended September 30, 2014, increased from 1.14% in the previous quarter and 1.07% a year ago. Quarterly return on equity (“ROE”) totaled 10.98% for the quarter ended September 30, 2014, compared to 10.96% for the quarter ended June 30, 2014 and 9.91% for the quarter ended September 30, 2013. The increase in ROA and ROE in the current quarter was driven by strong earnings. |
• | The total risk-based capital ratio for Bancorp was 13.6% at September 30, 2014, compared to 13.5% at June 30, 2014 and 14.1% at September 30, 2013. The ratio declined compared to a year ago due to the NorCal Community Bancorp ("NorCal") acquisition. The risk-based capital ratio continues to be well above both current regulatory requirements for a well-capitalized institution and new requirements that will take effect in 2015 (Basel Committee on Bank Supervision guidelines for determining regulatory capital). Tangible common equity to tangible assets totaled 10.3% at September 30, 2014, compared to 9.9% at the end of the prior quarter. |
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• | On October 17, 2014, the Board of Directors declared a quarterly cash dividend of $0.22 per share, a $0.02 increase from the prior quarter. The cash dividend is payable to shareholders of record at the close of business on October 31, 2014 and will be payable on November 7, 2014. |
Loans and Credit Quality
Gross loans increased $22.5 million from the prior quarter, which was driven substantially by commercial and industrial lending and related owner-occupied commercial real estate lending in the Marin, Oakland and Napa markets. Loans increased $268.1 million from a year ago which reflects both loans acquired from NorCal and organic growth.
Non-accrual loans decreased to $9.8 million at September 30, 2014 from $17.3 million a year ago and $10.1 million at June 30, 2014. The decrease in non-accrual loans from June 30, 2014 primarily relates to pay-downs associated with two borrowers. Accruing loans past due 30 to 89 days decreased to $299 thousand at September 30, 2014, from $1.5 million at June 30, 2014 and $2.2 million a year ago. Classified loans increased $5.8 million in the third quarter when compared to the prior quarter. The newly classified loans are well secured and present minimal risk of loss.
There was no provision for loan losses in the third quarter of 2014 compared to $600 thousand in the prior quarter and reversal of $480 thousand in the same quarter a year ago. The ratio of loan loss reserve to loans remained unchanged from June 30, 2014 at 1.11%. The decline compared to 1.26% at September 30, 2013 is primarily due to purchase accounting rules which call for acquired loans to be marked down to fair value without separate allowances established.
Deposits
Deposits totaled $1.6 billion at both September 30, 2014 and June 30, 2014, compared to $1.3 billion at September 30, 2013. The $279 million increase in deposits from a year ago reflects the Bank's expansion into the East Bay market as well as organic growth in Marin and Sonoma markets. The $27.2 million decrease compared to June 30, 2014 is primarily due to normal business activity among several large depositors. Non-interest bearing deposits totaled $718 million at September 30, 2014, a decrease of $7.3 million when compared to June 30, 2014. This represents 45.7% of total deposits as of September 30, 2014, up from 41.6% at September 30, 2013.
Earnings
"We are successfully balancing a disciplined growth strategy combined with expense management," said Tani Girton, Chief Financial Officer. "As a result, we are seeing continued strength in our ROA, ROE and efficiency ratio this quarter."
Net interest income totaled $17.5 million in the third quarter of 2014, compared to $17.9 million in the prior quarter and $14.0 million in the same quarter a year ago. The increase from the same quarter a year ago relates to higher balances on loans and investments, as well as accretion on acquired loans. The tax-equivalent net interest margin was 4.03%, 4.23% and 3.99% for those respective periods. The decrease in the third quarter of 2014 compared to the prior quarter is primarily due to the absence of gains on pay-offs of purchased credit impaired ("PCI") loans in the third quarter of 2014.
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Summary of Charter Oak and NorCal acquisitions' impact on net interest margin:
Three months ended | ||||||||||||||||||||||
September 30, 2014 | June 30, 2014 | September 30, 2013 | ||||||||||||||||||||
(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 | $ | 126 | 3 bps | $ | 187 | 4 bps | $ | 154 | 4 bps | |||||||||||||
Accretion on non-PCI loans | $ | 774 | 17 bps | $ | 713 | 17 bps | $ | 214 | 6 bps | |||||||||||||
Gains on pay-offs of PCI loans | $ | — | 0 bps | $ | 622 | 14 bps | $ | — | 0 bps | |||||||||||||
Nine months ended | ||||||||||
September 30, 2014 | September 30, 2013 | |||||||||
(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 | $ | 494 | 4 bps | $ | 545 | 5 bps | ||||
Accretion on non-PCI loans | $ | 2,817 | 22 bps | $ | 591 | 6 bps | ||||
Gains on pay-offs of PCI loans | $ | 622 | 5 bps | $ | 469 | 5 bps | ||||
For acquired loans not considered credit impaired, the level of accretion varies due to maturities and early pay-offs of these loans. Accretion on PCI loans fluctuates based on changes in cash flows expected to be collected. Gains on pay-offs of PCI loans are recorded as interest income when the pay-off amounts exceed the recorded investment.
Non-interest income in the third quarter of 2014 totaled $2.3 million, compared to $2.4 million in the prior quarter and $2.0 million in the same quarter a year ago. The decrease from the prior quarter primarily relates to lower gains on the sale of investment securities. The increase from the same quarter a year ago reflects higher service charges due to higher transaction volume from the acquisition, higher dividend income from the Federal Home Loan Bank of San Francisco and higher recent debit card interchange fees.
Non-interest expense totaled $11.4 million in the third quarter of 2014, compared to $11.5 million in the prior quarter and $10.1 million in the same quarter a year ago. The increase in non-interest expense from the same quarter a year ago reflects the higher cost base associated with a larger-sized bank, expansion into the East Bay, and increased lending staff in the North Bay.
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Earnings Call and Webcast Information
Bank of Marin Bancorp will webcast its third quarter earnings call on Monday, October 20, 2014 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 “Latest Press and News.” To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available at the same website location shortly after the call.
About Bank of Marin Bancorp
Bank of Marin is a leading business and community bank in the San Francisco Bay Area, with assets of $1.8 billion. Founded in 1989 and headquartered in Novato, Bank of Marin is the sole subsidiary of Bank of Marin Bancorp (NASDAQ: BMRC). With 21 offices in San Francisco, Marin, Napa, Sonoma and Alameda counties, Bank of Marin provides business and personal banking, commercial lending, and wealth management services. Specializing in providing legendary service to its customers and investing in its local communities, Bank of Marin has consistently been ranked one of the “Top Corporate Philanthropists" by the San Francisco Business Times and one of the “Best Places to Work” by the North Bay Business Journal. Bank of Marin Bancorp is included in the Russell 2000 Small-Cap Index and has been recognized as a Top 200 Community Bank by US Banker Magazine for the past five years. For more information, visit 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, our ability to integrate the business of NorCal, general economic conditions, economic uncertainty in the United States and abroad, changes in interest rates, deposit flows, real estate values, expected future cash flows on acquired loans, competition, changes in accounting principles, policies or guidelines, 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, including the impact of the NorCal 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.
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BANK OF MARIN BANCORP | ||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||
September 30, 2014 | ||||||||||||||||
(dollars in thousands, except per share data; unaudited) | ||||||||||||||||
QUARTER-TO-DATE | September 30, 2014 | June 30, 2014 | September 30, 2013 | |||||||||||||
NET INCOME | $ | 5,378 | $ | 5,168 | $ | 4,004 | ||||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 0.89 | $ | 0.86 | $ | 0.72 | ||||||||||
RETURN ON AVERAGE ASSETS (ROA) | 1.15 | % | 1.14 | % | 1.07 | % | ||||||||||
RETURN ON AVERAGE EQUITY (ROE) | 10.98 | % | 10.96 | % | 9.91 | % | ||||||||||
EFFICIENCY RATIO | 57.23 | % | 56.60 | % | 63.19 | % | ||||||||||
TAX-EQUIVALENT NET INTEREST MARGIN1 | 4.03 | % | 4.23 | % | 3.99 | % | ||||||||||
NET CHARGE-OFFS/(RECOVERIES) | $ | (149 | ) | $ | (68 | ) | $ | 68 | ||||||||
NET CHARGE-OFFS/(RECOVERIES) TO AVERAGE LOANS | (0.01 | ) | % | (0.01 | ) | % | 0.01 | % | ||||||||
YEAR-TO-DATE | ||||||||||||||||
NET INCOME | $ | 15,079 | $ | 9,701 | $ | 11,925 | ||||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 2.51 | $ | 1.62 | $ | 2.16 | ||||||||||
RETURN ON AVERAGE ASSETS (ROA) | 1.10 | % | 1.08 | % | 1.10 | % | ||||||||||
RETURN ON AVERAGE EQUITY (ROE) | 10.65 | % | 10.47 | % | 10.09 | % | ||||||||||
EFFICIENCY RATIO | 59.24 | % | 60.22 | % | 61.49 | % | ||||||||||
TAX-EQUIVALENT NET INTEREST MARGIN1 | 4.17 | % | 4.24 | % | 4.25 | % | ||||||||||
NET CHARGE-OFFS/(RECOVERIES) | $ | (74 | ) | $ | 75 | $ | 242 | |||||||||
NET CHARGE-OFFS/(RECOVERIES) TO AVERAGE LOANS | (0.01 | ) | % | 0.01 | % | 0.02 | % | |||||||||
AT PERIOD END | ||||||||||||||||
TOTAL ASSETS | $ | 1,802,657 | $ | 1,823,901 | $ | 1,483,603 | ||||||||||
LOANS: | ||||||||||||||||
COMMERCIAL AND INDUSTRIAL | $ | 201,516 | $ | 194,402 | $ | 168,840 | ||||||||||
REAL ESTATE | ||||||||||||||||
COMMERCIAL OWNER-OCCUPIED | $ | 234,493 | $ | 233,267 | $ | 206,173 | ||||||||||
COMMERCIAL INVESTOR-OWNED | $ | 674,428 | $ | 669,225 | $ | 547,337 | ||||||||||
CONSTRUCTION | $ | 45,948 | $ | 40,197 | $ | 24,993 | ||||||||||
HOME EQUITY | $ | 109,655 | $ | 106,201 | $ | 86,204 | ||||||||||
OTHER RESIDENTIAL | $ | 75,992 | $ | 80,399 | $ | 43,572 | ||||||||||
INSTALLMENT AND OTHER CONSUMER LOANS | $ | 18,953 | $ | 14,820 | $ | 15,732 | ||||||||||
TOTAL LOANS | $ | 1,360,985 | $ | 1,338,511 | $ | 1,092,851 | ||||||||||
NON-PERFORMING LOANS2: | ||||||||||||||||
COMMERCIAL AND INDUSTRIAL | $ | 193 | $ | 335 | $ | 1,229 | ||||||||||
REAL ESTATE | ||||||||||||||||
COMMERCIAL OWNER-OCCUPIED | $ | 1,403 | $ | 1,403 | $ | 1,403 | ||||||||||
COMMERCIAL INVESTOR-OWNED | $ | 2,505 | $ | 2,618 | $ | 5,832 | ||||||||||
CONSTRUCTION | $ | 5,173 | $ | 5,197 | $ | 7,045 | ||||||||||
HOME EQUITY | $ | 436 | $ | 444 | $ | 359 | ||||||||||
OTHER RESIDENTIAL | $ | — | $ | — | $ | 1,117 | ||||||||||
INSTALLMENT AND OTHER CONSUMER LOANS | $ | 128 | $ | 152 | $ | 311 | ||||||||||
TOTAL NON-ACCRUAL LOANS | $ | 9,838 | $ | 10,149 | $ | 17,296 | ||||||||||
CLASSIFIED LOANS (GRADED SUBSTANDARD & DOUBTFUL) | $ | 38,999 | $ | 33,246 | $ | 30,913 | ||||||||||
TOTAL ACCRUING LOANS 30-89 DAYS PAST DUE | $ | 299 | $ | 1,471 | $ | 2,213 | ||||||||||
LOAN LOSS RESERVE TO LOANS | 1.11 | % | 1.11 | % | 1.26 | % | ||||||||||
LOAN LOSS RESERVE TO NON-ACCRUAL LOANS | 1.53 | x | 1.47 | x | 0.80 | x | ||||||||||
NON-ACCRUAL LOANS TO TOTAL LOANS | 0.73 | % | 0.76 | % | 1.58 | % | ||||||||||
TEXAS RATIO3 | 5.14 | % | 5.43 | % | 9.85 | % | ||||||||||
TOTAL DEPOSITS | $ | 1,571,624 | $ | 1,598,823 | $ | 1,292,476 | ||||||||||
LOAN-TO-DEPOSIT RATIO | 86.6 | % | 83.7 | % | 84.6 | % | ||||||||||
STOCKHOLDERS' EQUITY | $ | 195,674 | $ | 190,906 | $ | 161,711 | ||||||||||
BOOK VALUE PER SHARE | $ | 33.00 | $ | 32.29 | $ | 29.61 | ||||||||||
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS4 | 10.3 | % | 9.9 | % | 10.9 | % | ||||||||||
TOTAL RISK-BASED CAPITAL RATIO-BANK5 | 13.3 | % | 13.0 | % | 13.9 | % | ||||||||||
TOTAL RISK-BASED CAPITAL RATIO-BANCORP5 | 13.6 | % | 13.5 | % | 14.1 | % | ||||||||||
FULL-TIME EQUIVALENT EMPLOYEES | 257 | 263 | 234 | |||||||||||||
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 $16.9 million, $14.3 million and $12.6 million at September 30, 2014, June 30, 2014 and September 30, 2013, respectively. Excludes purchased credit-impaired (PCI) loans with carrying values of $3.8 million, $3.8 million and $2.2 million that were accreting interest at September 30, 2014, June 30, 2014 and September 30, 2013, respectively. These amounts are excluded as PCI loan accretable yield interest recognition is independent from the underlying contractual loan delinquency status. Total PCI loans were $5.2 million, $5.2 million and $3.6 million at September 30, 2014, June 30, 2014 and September 30, 2013. | ||||||||||||||||
3 (Non-performing assets + 90 day delinquent loans)/(tangible common equity + allowance for loan losses). | ||||||||||||||||
4 Tangible common equity to tangible assets is considered to be a meaningful non-GAAP financial measure of capital adequacy and is useful for investors to assess Bancorp's ability to absorb potential losses. Tangible common equity includes common stock, retained earnings and unrealized gain on available for sale securities, net of tax, less goodwill and intangible assets of $10.4 million and $10.6 million at September 30, 2014 and June 30, 2014, respectively. Tangible assets excludes goodwill and intangible assets. | ||||||||||||||||
5 Current period estimated. | ||||||||||||||||
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BANK OF MARIN BANCORP CONSOLIDATED STATEMENTS OF CONDITION |
at September 30, 2014, June 30, 2014 and September 30, 2013 |
(in thousands, except share data; unaudited) | September 30, 2014 | June 30, 2014 | September 30, 2013 | |||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 46,424 | $ | 81,380 | $ | 99,358 | ||||||
Investment securities | ||||||||||||
Held-to-maturity, at amortized cost | 118,843 | 123,085 | 130,085 | |||||||||
Available-for-sale (at fair value; amortized cost $210,676, $214,627, and $118,353 at September 30, 2014, June 30, 2014, and September 30, 2013, respectively) | 211,582 | 215,873 | 119,340 | |||||||||
Total investment securities | 330,425 | 338,958 | 249,425 | |||||||||
Loans, net of allowance for loan losses of $15,049, $14,900 and $13,808 at September 30, 2014, June 30, 2014 and September 30, 2013, respectively | 1,345,936 | 1,323,611 | 1,079,043 | |||||||||
Bank premises and equipment, net | 9,277 | 9,296 | 8,947 | |||||||||
Goodwill | 6,436 | 6,436 | — | |||||||||
Core deposit intangible | 3,925 | 4,117 | — | |||||||||
Interest receivable and other assets | 60,234 | 60,103 | 46,830 | |||||||||
Total assets | $ | 1,802,657 | $ | 1,823,901 | $ | 1,483,603 | ||||||
Liabilities and Stockholders' Equity | ||||||||||||
Liabilities | ||||||||||||
Deposits | ||||||||||||
Non-interest bearing | $ | 717,720 | $ | 724,975 | $ | 537,104 | ||||||
Interest bearing | ||||||||||||
Transaction accounts | 89,891 | 95,052 | 76,221 | |||||||||
Savings accounts | 127,774 | 121,890 | 102,898 | |||||||||
Money market accounts | 485,626 | 500,720 | 437,247 | |||||||||
Time accounts | 150,613 | 156,186 | 139,006 | |||||||||
Total deposits | 1,571,624 | 1,598,823 | 1,292,476 | |||||||||
Federal Home Loan Bank borrowings | 15,000 | 15,000 | 15,000 | |||||||||
Subordinated debentures | 5,131 | 5,077 | — | |||||||||
Interest payable and other liabilities | 15,228 | 14,095 | 14,416 | |||||||||
Total liabilities | 1,606,983 | 1,632,995 | 1,321,892 | |||||||||
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 - 5,930,100, 5,912,774 and 5,462,061 at September 30, 2014, June 30, 2014 and September 30, 2013, respectively | 81,993 | 81,219 | 60,982 | |||||||||
Retained earnings | 113,115 | 108,922 | 100,157 | |||||||||
Accumulated other comprehensive income, net | 566 | 765 | 572 | |||||||||
Total stockholders' equity | 195,674 | 190,906 | 161,711 | |||||||||
Total liabilities and stockholders' equity | $ | 1,802,657 | $ | 1,823,901 | $ | 1,483,603 | ||||||
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BANK OF MARIN BANCORP CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
Three months ended | Nine months ended | ||||||||||||||||||
(in thousands, except per share amounts; unaudited) | September 30, 2014 | June 30, 2014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | ||||||||||||||
Interest income | |||||||||||||||||||
Interest and fees on loans | $ | 16,195 | $ | 16,363 | $ | 13,049 | $ | 48,877 | $ | 40,050 | |||||||||
Interest on investment securities | |||||||||||||||||||
Securities of U.S. Government agencies | 1,126 | 1,193 | 553 | 3,551 | 1,763 | ||||||||||||||
Obligations of state and political subdivisions | 496 | 607 | 524 | 1,737 | 1,599 | ||||||||||||||
Corporate debt securities and other | 254 | 256 | 311 | 778 | 974 | ||||||||||||||
Interest due from banks and other | 37 | 37 | 34 | 125 | 45 | ||||||||||||||
Total interest income | 18,108 | 18,456 | 14,471 | 55,068 | 44,431 | ||||||||||||||
Interest expense | |||||||||||||||||||
Interest on interest-bearing transaction accounts | 25 | 26 | 12 | 74 | 35 | ||||||||||||||
Interest on savings accounts | 12 | 11 | 9 | 34 | 25 | ||||||||||||||
Interest on money market accounts | 126 | 131 | 101 | 415 | 295 | ||||||||||||||
Interest on time accounts | 229 | 231 | 227 | 695 | 690 | ||||||||||||||
Interest on FHLB and overnight borrowings | 79 | 78 | 80 | 235 | 243 | ||||||||||||||
Interest on subordinated debentures | 106 | 105 | — | 316 | — | ||||||||||||||
Total interest expense | 577 | 582 | 429 | 1,769 | 1,288 | ||||||||||||||
Net interest income | 17,531 | 17,874 | 14,042 | 53,299 | 43,143 | ||||||||||||||
Provision for loan losses | — | 600 | (480 | ) | 750 | 390 | |||||||||||||
Net interest income after provision for loan losses | 17,531 | 17,274 | 14,522 | 52,549 | 42,753 | ||||||||||||||
Non-interest income | |||||||||||||||||||
Service charges on deposit accounts | 552 | 528 | 509 | 1,636 | 1,545 | ||||||||||||||
Wealth Management and Trust Services | 567 | 613 | 532 | 1,744 | 1,618 | ||||||||||||||
Debit card interchange fees | 375 | 360 | 288 | 1,035 | 820 | ||||||||||||||
Merchant interchange fees | 224 | 207 | 196 | 629 | 623 | ||||||||||||||
Earnings on Bank-owned life Insurance | 208 | 211 | 179 | 632 | 766 | ||||||||||||||
Gain (loss) on sale of securities | 4 | 97 | (35 | ) | 93 | (35 | ) | ||||||||||||
Other income | 371 | 352 | 284 | 1,116 | 666 | ||||||||||||||
Total non-interest income | 2,301 | 2,368 | 1,953 | 6,885 | 6,003 | ||||||||||||||
Non-interest expense | |||||||||||||||||||
Salaries and related benefits | 6,108 | 6,232 | 5,389 | 19,270 | 16,117 | ||||||||||||||
Occupancy and equipment | 1,381 | 1,329 | 1,040 | 4,044 | 3,165 | ||||||||||||||
Depreciation and amortization | 383 | 403 | 343 | 1,202 | 1,032 | ||||||||||||||
Federal Deposit Insurance Corporation insurance | 261 | 269 | 244 | 780 | 681 | ||||||||||||||
Data processing | 748 | 748 | 612 | 2,856 | 1,857 | ||||||||||||||
Professional services | 537 | 412 | 775 | 1,577 | 2,116 | ||||||||||||||
Other expense | 1,932 | 2,064 | 1,704 | 5,921 | 5,253 | ||||||||||||||
Total non-interest expense | 11,350 | 11,457 | 10,107 | 35,650 | 30,221 | ||||||||||||||
Income before provision for income taxes | 8,482 | 8,185 | 6,368 | 23,784 | 18,535 | ||||||||||||||
Provision for income taxes | 3,104 | 3,017 | 2,364 | 8,705 | 6,610 | ||||||||||||||
Net income | $ | 5,378 | $ | 5,168 | $ | 4,004 | $ | 15,079 | $ | 11,925 | |||||||||
Net income per common share: | |||||||||||||||||||
Basic | $ | 0.91 | $ | 0.88 | $ | 0.74 | $ | 2.56 | $ | 2.20 | |||||||||
Diluted | $ | 0.89 | $ | 0.86 | $ | 0.72 | $ | 2.51 | $ | 2.16 | |||||||||
Weighted average shares used to compute net income per common share: | |||||||||||||||||||
Basic | 5,903 | 5,888 | 5,433 | 5,887 | 5,414 | ||||||||||||||
Diluted | 6,014 | 5,993 | 5,538 | 5,996 | 5,511 | ||||||||||||||
Dividends declared per common share | $ | 0.20 | $ | 0.19 | $ | 0.18 | $ | 0.58 | $ | 0.54 | |||||||||
Comprehensive income: | |||||||||||||||||||
Net income | $ | 5,378 | $ | 5,168 | $ | 4,004 | $ | 15,079 | $ | 11,925 | |||||||||
Other comprehensive income (loss) | |||||||||||||||||||
Change in net unrealized (loss) gain on available-for-sale securities | (344 | ) | 976 | (621 | ) | 2,047 | (2,591 | ) | |||||||||||
Reclassification adjustment for loss on sale of available-for-sale securities included in net income | 4 | — | 35 | 19 | 35 | ||||||||||||||
Net change in unrealized (loss) gain on available-for-sale securities, before tax | (340 | ) | 976 | (586 | ) | 2,066 | (2,556 | ) | |||||||||||
Deferred tax (benefit) expense | (141 | ) | 450 | (246 | ) | 828 | (1,073 | ) | |||||||||||
Other comprehensive (loss) income, net of tax | (199 | ) | 526 | (340 | ) | 1,238 | (1,483 | ) | |||||||||||
Comprehensive income | $ | 5,179 | $ | 5,694 | $ | 3,664 | $ | 16,317 | $ | 10,442 | |||||||||
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BANK OF MARIN BANCORP |
AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME |
Three months ended | Three months ended | Three months ended | |||||||||||||||||||||||
September 30, 2014 | June 30, 2014 | September 30, 2013 | |||||||||||||||||||||||
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 | $ | 58,088 | $ | 37 | 0.25 | % | $ | 54,313 | $ | 37 | 0.27 | % | $ | 61,409 | $ | 34 | 0.22 | % | |||||||
Investment securities 2, 3 | 332,920 | 1,997 | 2.40 | % | 350,938 | 2,208 | 2.52 | % | 254,515 | 1,539 | 2.42 | % | |||||||||||||
Loans 1, 3, 4 | 1,349,740 | 16,489 | 4.78 | % | 1,303,363 | 16,597 | 5.04 | % | 1,093,846 | 13,248 | 4.74 | % | |||||||||||||
Total interest-earning assets 1 | 1,740,748 | 18,523 | 4.16 | % | 1,708,614 | 18,842 | 4.36 | % | 1,409,770 | 14,821 | 4.11 | % | |||||||||||||
Cash and non-interest-bearing due from banks | 46,258 | 41,739 | 32,482 | ||||||||||||||||||||||
Bank premises and equipment, net | 9,337 | 9,228 | 9,092 | ||||||||||||||||||||||
Interest receivable and other assets, net | 56,855 | 56,954 | 34,796 | ||||||||||||||||||||||
Total assets | $ | 1,853,198 | $ | 1,816,535 | $ | 1,486,140 | |||||||||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 92,907 | $ | 25 | 0.11 | % | $ | 94,358 | $ | 26 | 0.11 | % | $ | 78,109 | $ | 12 | 0.06 | % | |||||||
Savings accounts | 127,457 | 12 | 0.04 | % | 120,071 | 11 | 0.04 | % | 100,730 | 9 | 0.03 | % | |||||||||||||
Money market accounts | 501,843 | 126 | 0.10 | % | 504,597 | 131 | 0.10 | % | 431,332 | 101 | 0.09 | % | |||||||||||||
Time accounts | 152,995 | 229 | 0.59 | % | 157,239 | 231 | 0.59 | % | 140,606 | 227 | 0.64 | % | |||||||||||||
FHLB borrowing 1 | 15,000 | 79 | 2.07 | % | 15,000 | 78 | 2.07 | % | 15,000 | 80 | 2.07 | % | |||||||||||||
Subordinated debentures 1 | 5,096 | 106 | 8.14 | % | 5,043 | 105 | 8.24 | % | — | — | — | % | |||||||||||||
Total interest-bearing liabilities | 895,298 | 577 | 0.26 | % | 896,308 | 582 | 0.26 | % | 765,777 | 429 | 0.22 | % | |||||||||||||
Demand accounts | 749,361 | 716,774 | 547,634 | ||||||||||||||||||||||
Interest payable and other liabilities | 14,167 | 14,281 | 12,409 | ||||||||||||||||||||||
Stockholders' equity | 194,372 | 189,172 | 160,320 | ||||||||||||||||||||||
Total liabilities & stockholders' equity | $ | 1,853,198 | $ | 1,816,535 | $ | 1,486,140 | |||||||||||||||||||
Tax-equivalent net interest income/margin 1 | $ | 17,946 | 4.03 | % | $ | 18,260 | 4.23 | % | $ | 14,392 | 3.99 | % | |||||||||||||
Reported net interest income/margin 1 | $ | 17,531 | 3.94 | % | $ | 17,874 | 4.14 | % | $ | 14,042 | 3.90 | % | |||||||||||||
Tax-equivalent net interest rate spread | 3.91 | % | 4.10 | % | 3.89 | % | |||||||||||||||||||
Nine months ended | Nine months ended | ||||||||||||||||||||||||
September 30, 2014 | September 30, 2013 | ||||||||||||||||||||||||
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 | $ | 65,949 | $ | 125 | 0.25 | % | $ | 24,072 | $ | 45 | 0.25 | % | |||||||||||||
Investment securities 2, 3 | 348,445 | 6,498 | 2.49 | % | 268,463 | 4,775 | 2.37 | % | |||||||||||||||||
Loans 1, 3, 4 | 1,307,611 | 49,606 | 5.00 | % | 1,075,825 | 40,595 | 4.98 | % | |||||||||||||||||
Total interest-earning assets 1 | 1,722,005 | 56,229 | 4.31 | % | 1,368,360 | 45,415 | 4.38 | % | |||||||||||||||||
Cash and non-interest-bearing due from banks | 43,280 | 29,370 | |||||||||||||||||||||||
Bank premises and equipment, net | 9,218 | 9,277 | |||||||||||||||||||||||
Interest receivable and other assets, net | 56,550 | 37,211 | |||||||||||||||||||||||
Total assets | $ | 1,831,053 | $ | 1,444,218 | |||||||||||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 104,662 | $ | 74 | 0.09 | % | $ | 96,736 | $ | 35 | 0.05 | % | |||||||||||||
Savings accounts | 122,958 | 34 | 0.04 | % | 97,474 | 25 | 0.03 | % | |||||||||||||||||
Money market accounts | 508,544 | 415 | 0.11 | % | 424,767 | 295 | 0.09 | % | |||||||||||||||||
Time accounts | 156,892 | 695 | 0.59 | % | 145,180 | 690 | 0.64 | % | |||||||||||||||||
Overnight borrowings 1 | — | — | — | % | 5,420 | 7 | 0.17 | % | |||||||||||||||||
FHLB borrowings 1 | 15,000 | 235 | 2.07 | % | 15,000 | 236 | 2.07 | % | |||||||||||||||||
Subordinated debentures 1 | 5,043 | 316 | 8.42 | % | — | — | — | % | |||||||||||||||||
Total interest-bearing liabilities | 913,099 | 1,769 | 0.26 | % | 784,577 | 1,288 | 0.22 | % | |||||||||||||||||
Demand accounts | 713,882 | 488,227 | |||||||||||||||||||||||
Interest payable and other liabilities | 14,725 | 13,455 | |||||||||||||||||||||||
Stockholders' equity | 189,347 | 157,959 | |||||||||||||||||||||||
Total liabilities & stockholders' equity | $ | 1,831,053 | $ | 1,444,218 | |||||||||||||||||||||
Tax-equivalent net interest income/margin 1 | $ | 54,460 | 4.17 | % | $ | 44,127 | 4.25 | % | |||||||||||||||||
Reported net interest income/margin 1 | $ | 53,299 | 4.08 | % | $ | 43,143 | 4.16 | % | |||||||||||||||||
Tax-equivalent net interest rate spread | 4.05 | % | 4.16 | % | |||||||||||||||||||||
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