FOR IMMEDIATE RELEASE | CONTACT: PAM HAMILTON |
July 12, 2007 | 415-381-8198 |
pam@hamiltoninkpr.com |
BANK OF MARIN ANNOUNCES
SECOND QUARTER EARNINGS
Novato, CA--- Bank of Marin Bancorp (Nasdaq: BMRC) President and CEO Russell A. Colombo announced second quarter earnings for the Bank of Marin of $2.9 million, up $262 thousand, or 9.9%, from the same period in 2006.
Diluted earnings per share were $0.54 in the second quarter of 2007, compared to $0.47 in the second quarter of 2006, up seven cents, or 14.9%.
Earnings for the six-month period ended June 30, 2007 were $5.9 million, an increase of $326 thousand, or 5.9%, over the same period a year ago. Diluted earnings per share for the six- month period were $1.09, an increase of ten cents per share, or 10.1%, over the same period in 2006.
In June 2007, the Bank finalized the sale of its indirect auto loan portfolio with a fair value totaling approximately $76 million. The Bank elected to record these loans at fair value beginning in March 2007 in anticipation of their sale. Pre-tax non-recurring net gains of $190 thousand and $520 thousand were recorded in the second and first quarters, respectively, related to market valuation of the auto loan portfolio.
Loans totaled $653.9 million at June 30, 2007 after the sale of the indirect auto portfolio. Excluding the auto portfolio, loans increased 5.0% from a year ago. Credit quality remains strong with nominal non-performing loans of $5 thousand at June 30, 2007. Deposits grew 4.5% to $776.5 million in the same period. “We are pleased that our core business continues to grow in a very competitive marketplace,” said Colombo, “because we provide the highest quality products and service.”
Net interest income of $10.5 million in the second quarter increased 1% from the same period a year ago. Net interest income of $20.5 million in the six-month period ending June 30, 2007 represented a 1.3% decrease over the six-month period ended June 30, 2006.
The net interest margin was 5.07% in the second quarter of 2007 compared to 5.16% in the second quarter of 2006. The net interest margin was 5.04% in the first half of 2007 compared to 5.23% in the first half of 2006.
“The net interest margin was affected by a combination of upward pressure on deposit rates in our marketplace and economic factors contributing to competition on loan rates. The proceeds from the sale of the indirect auto portfolio will allow us to reinvest over time in higher-yielding relationship loans,” said Colombo.
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Non interest income, excluding the net gain in the auto portfolio, totaled $2.2 million for the six months ended June 30, 2007, an increase of 13% over the same period a year ago. Increases in service charge income, Wealth Management Services income and other income, including Bank-owned life insurance income, Visa fees and merchant interchange income contributed to the growth. Approximately $52 thousand of recoveries on indirect auto loans were recorded in other income in the second quarter and first six months of 2007, subsequent to recording these loans at their fair value.
“Our efforts to grow stable sources of non-interest income are having success,” said Colombo. “We continue to expand our product base to serve our customers’ needs.”
Non-interest expense in the first half of 2007 increased by $884 thousand, or 6.9%, to $13.7 million from $12.8 million a year ago, reflecting costs associated with the move of administrative functions to a new facility in Novato and the hiring of key personnel. Other expenses increased $220 thousand, or 8.9% in the first half of 2007 compared to the same period a year ago, including increased supplies, postage and IT costs. “The move of headquarters has improved communication and provided greater efficiencies for our administrative staff, while the hiring of key personnel will provide the knowledge base necessary to maintain our competitive edge,” said Colombo.
Stockholders’ equity declined 1.1% to $84.2 million at June 30, 2007 from $85.1 million a year ago. The decline reflected the Bank’s effort to proactively manage its capital and included the impact of the share repurchase program totaling $15 million, which was concluded in the first quarter of 2007. “The Bank’s capitalization remains well above regulatory guidelines,” said Colombo.
In May 2007, the Bank opened a commercial loan production office in San Francisco, which provides a central Bay Area location for delivering loans to the commercial market. “We are excited to expand into a new marketplace with excellent growth potential,” said Colombo. “The move reflects our continued effort to be alert for opportunities to grow our core business.”
As noted in the Bank’s press release dated July 2, 2007, the formation of a bank holding company, Bank of Marin Bancorp, with Bank of Marin as its wholly-owned subsidiary has been completed. In the transaction, shareholders of the Bank became shareholders of the holding company on a “one-share for one-share” basis. The formation of a bank holding company will, among other things, allow the Bank the flexibility to manage its capital more actively through alternative forms of funding. For trading purposes, Bank of Marin Bancorp has assumed the Bank of Marin’s ticker symbol “BMRC.”
Bank of Marin has eleven branch offices with locations in Strawberry, Corte Madera, downtown San Rafael, Andersen Drive and Northgate in San Rafael, Ignacio, downtown Novato, Sausalito and three offices in Petaluma. The Bank has a commercial loan production office in San Francisco. The Bank’s administrative offices are located in Novato, and its Wealth Management Services are located in Corte Madera, Novato and Petaluma.
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 the Bank’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, changes in interest rates, deposit flows, real estate values, and competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; and other economic, competitive, governmental, regulatory and technological factors affecting the Bank’s operations, pricing, products and services. These and other important factors are detailed in various Federal Deposit Insurance Corporation filings made periodically by the Bank, copies of which are available from the Bank without charge. The Bank 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 | ||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||
Year To Year Comparison | ||||||||||||||||
June 30, 2007 | ||||||||||||||||
SECOND QUARTER | QTR 2007 | QTR 2006 | CHANGE | % CHANGE | ||||||||||||
NET INCOME | $ | 2,903,000 | $ | 2,641,000 | $ | 262,000 | 9.92 | % | ||||||||
DILUTED EARNINGS PER SHARE | $ | 0.54 | $ | 0.47 | $ | 0.07 | 14.89 | % | ||||||||
RETURN ON ASSETS (ROA) | 1.32 | % | 1.24 | % | 0.08 | % | 6.45 | % | ||||||||
RETURN ON EQUITY (ROE) | 13.90 | % | 12.62 | % | 1.28 | % | 10.14 | % | ||||||||
YEAR TO DATE | YTD 2007 | YTD 2006 | CHANGE | % CHANGE | ||||||||||||
NET INCOME | $ | 5,877,000 | $ | 5,551,000 | $ | 326,000 | 5.87 | % | ||||||||
DILUTED EARNINGS PER SHARE | $ | 1.09 | $ | 0.99 | $ | 0.10 | 10.10 | % | ||||||||
RETURN ON ASSETS (ROA) | 1.36 | % | 1.32 | % | 0.04 | % | 3.03 | % | ||||||||
RETURN ON EQUITY (ROE) | 14.13 | % | 13.61 | % | 0.52 | % | 3.82 | % | ||||||||
AT PERIOD END | Jun 30 2007 | Jun 30 2006 | CHANGE | % CHANGE | ||||||||||||
TOTAL ASSETS | $ | 890,377,000 | $ | 868,182,000 | $ | 22,195,000 | 2.56 | % | ||||||||
TOTAL DEPOSITS | $ | 776,477,000 | $ | 743,177,000 | $ | 33,300,000 | 4.48 | % | ||||||||
TOTAL LOANS | $ | 653,924,000 | $ | 705,457,000 | $ | (51,533,000 | ) | (7.30 | %) | |||||||
LOAN LOSS RESERVE TO LOANS | 1.08 | % | 1.07 | % | 0.01 | % | 0.93 | % | ||||||||
TOTAL NONPERFORMING LOANS | $ | 5,000 | $ | 2,608,000 | $ | (2,603,000 | ) | (99.81 | %) | |||||||
STOCKHOLDERS' EQUITY | $ | 84,150,000 | $ | 85,067,000 | $ | (917,000 | ) | (1.08 | %) | |||||||
BOOK VALUE PER SHARE | $ | 16.21 | $ | 15.86 | $ | 0.35 | 2.21 | % | ||||||||
TOTAL CAPITAL TO ASSETS | 9.45 | % | 9.80 | % | (0.35 | %) | (3.57 | %) | ||||||||
TOTAL RISK BASED CAPITAL RATIO * | 12.7 | % | 12.1 | % | 0.6 | % | 5.0 | % | ||||||||
* Current period estimated |
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CONDENSED STATEMENT OF CONDITION | ||||||||||||
at June 30, 2007, March 31, 2007 and June 30, 2006 | ||||||||||||
(in thousands, except share data - 2007 unaudited | ||||||||||||
June 30, 2007 | March 31, 2007 | June 30, 2006 | ||||||||||
Assets | ||||||||||||
Cash and due from banks | $ | 29,319 | $ | 31,088 | $ | 34,091 | ||||||
Fed funds sold | 76,500 | 900 | --- | |||||||||
Cash and cash equivalents | 105,819 | 31,988 | 34,091 | |||||||||
Investment securities | ||||||||||||
Held to maturity, at amortized cost | 15,161 | 13,132 | 16,473 | |||||||||
Available for sale (at fair market value, cost $88,054 at 6/30/07, $71,222 at 3/31/07 and $89,236 at 6/30/06) | 86,740 | 70,430 | 86,791 | |||||||||
Total investment securities | 101,901 | 83,562 | 103,264 | |||||||||
Auto loans held for sale (at fair market value, unpaid principal $81,465 at March 31, 2007) | --- | 79,999 | --- | |||||||||
Loans held in portfolio (at amortized cost, net of allowance for loan losses of $7,053 at 6/30/07, $7,042 at 3/31/07 and $7,519 at 6/30/06 | 646,871 | 649,074 | 697,938 | |||||||||
Total loans, net | 646,871 | 729,073 | 697,938 | |||||||||
Bank premises and equipment, net | 8,216 | 8,259 | 6,328 | |||||||||
Interest receivable and other assets | 27,570 | 28,668 | 26,561 | |||||||||
Total assets | $ | 890,377 | $ | 881,550 | $ | 868,182 | ||||||
Liabilities and Stockholders' Equity | ||||||||||||
Liabilities | ||||||||||||
Deposits | ||||||||||||
Non-interest bearing | $ | 204,335 | $ | 211,756 | $ | 205,615 | ||||||
Interest bearing | ||||||||||||
Transaction accounts | 74,387 | 77,186 | 79,612 | |||||||||
Savings and money market | 409,795 | 397,978 | 352,939 | |||||||||
Time | 87,960 | 87,109 | 105,011 | |||||||||
Total deposits | 776,477 | 774,029 | 743,177 | |||||||||
Federal funds purchased and | ||||||||||||
Federal Home Loan Bank borrowings | 10,000 | 14,600 | 30,300 | |||||||||
Subordinated debenture | 5,000 | 5,000 | 5,000 | |||||||||
Interest payable and other liabilities | 14,750 | 6,265 | 4,638 | |||||||||
Total liabilities | 806,227 | 799,894 | 783,115 | |||||||||
Stockholders' Equity | ||||||||||||
Common stock, no par value | ||||||||||||
Authorized - 15,000,000 shares | ||||||||||||
Issued and outstanding - 5,190,791 shares at 6/30/07, 5,165,857 at 3/31/07 and 5,363,164 at 6/30/06 | 53,032 | 52,458 | 62,750 | |||||||||
Retained earnings | 31,880 | 29,657 | 23,735 | |||||||||
Accumulated other comprehensive loss, net | (762 | ) | (459 | ) | (1,418 | ) | ||||||
Total stockholders' equity | 84,150 | 81,656 | 85,067 | |||||||||
Total liabilities and stockholders' equity | $ | 890,377 | $ | 881,550 | $ | 868,182 |
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CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
for the three months ended June 30, 2007, March 31, 2007 and June 30, 2006 | ||||||||||||
(in thousands, except per share amounts - unaudited) | June 30, 2007 | March 31, 2007 | June 30, 2006 | |||||||||
Interest income | ||||||||||||
Interest and fees on loans held in portfolio | $ | 13,027 | $ | 12,696 | $ | 13,061 | ||||||
Interest on auto loans held for sale | 954 | 1,108 | --- | |||||||||
Interest on investment securities | ||||||||||||
U.S. Treasury securities | --- | 8 | 20 | |||||||||
Securities of U.S. Government agencies | 809 | 842 | 914 | |||||||||
Obligations of state and political subdivisions (tax exempt) | 111 | 118 | 150 | |||||||||
Corporate debt securities and other | 123 | 98 | 69 | |||||||||
Interest on Federal funds sold | 415 | 2 | 88 | |||||||||
Total interest income | 15,439 | 14,872 | 14,302 | |||||||||
Interest expense | ||||||||||||
Interest on interest bearing transaction accounts | 74 | 77 | 80 | |||||||||
Interest on savings and money market deposits | 3,778 | 3,392 | 2,474 | |||||||||
Interest on time deposits | 882 | 869 | 963 | |||||||||
Interest on borrowed funds | 227 | 537 | 406 | |||||||||
Total interest expense | 4,961 | 4,875 | 3,923 | |||||||||
Net interest income | 10,478 | 9,997 | 10,379 | |||||||||
Provision for loan losses | 75 | 65 | 242 | |||||||||
Net interest income after provision for loan losses | 10,403 | 9,932 | 10,137 | |||||||||
Non-interest income | ||||||||||||
Service charges on deposit accounts | 321 | 248 | 248 | |||||||||
Wealth Management Services | 298 | 275 | 267 | |||||||||
Net gain on indirect auto portfolio | 190 | 520 | --- | |||||||||
Other income | 584 | 465 | 482 | |||||||||
Total non-interest income | 1,393 | 1,508 | 997 | |||||||||
Non-interest expense | ||||||||||||
Salaries and related benefits | 4,163 | 3,963 | 4,112 | |||||||||
Occupancy and equipment | 729 | 710 | 602 | |||||||||
Depreciation and amortization | 310 | 301 | 224 | |||||||||
Data processing | 425 | 418 | 361 | |||||||||
Other expense | 1,403 | 1,297 | 1,294 | |||||||||
Total non-interest expense | 7,030 | 6,689 | 6,593 | |||||||||
Income before provision for income taxes | 4,766 | 4,751 | 4,541 | |||||||||
Provision for income taxes | 1,863 | 1,777 | 1,900 | |||||||||
Net income | $ | 2,903 | $ | 2,974 | $ | 2,641 | ||||||
Net income per common share: | ||||||||||||
Basic | $ | 0.56 | $ | 0.57 | $ | 0.50 | ||||||
Diluted | $ | 0.54 | $ | 0.55 | $ | 0.47 | ||||||
Weighted average shares used to compute net income per common share: | ||||||||||||
Basic | 5,187 | 5,231 | 5,324 | |||||||||
Diluted | 5,329 | 5,417 | 5,597 | |||||||||
Dividends declared per common share | $ | 0.13 | $ | 0.12 | $ | 0.12 |
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CONDENSED STATEMENT OF OPERATIONS | ||||||||
for the six months ended June 30, 2007 and June 30, 2006 | ||||||||
(in thousands, except per share amounts - unaudited) | June 30, 2007 | June 30, 2006 | ||||||
Interest income | ||||||||
Interest and fees on loans held in portfolio | $ | 25,723 | $ | 25,734 | ||||
Interest on auto loans held for sale | 2,062 | --- | ||||||
Interest on investment securities | ||||||||
U.S. Treasury securities | 8 | 43 | ||||||
Securities of U.S. Government agencies | 1,651 | 1,820 | ||||||
Obligations of state and political subdivisions (tax exempt) | 229 | 317 | ||||||
Corporate debt securities and other | 221 | 140 | ||||||
Interest on Federal funds sold | 417 | 92 | ||||||
Total interest income | 30,311 | 28,146 | ||||||
Interest expense | ||||||||
Interest on interest bearing transaction accounts | 151 | 152 | ||||||
Interest on savings and money market deposits | 7,170 | 4,499 | ||||||
Interest on time deposits | 1,751 | 1,945 | ||||||
Interest on borrowed funds | 764 | 800 | ||||||
Total interest expense | 9,836 | 7,396 | ||||||
Net interest income | 20,475 | 20,750 | ||||||
Provision for loan losses | 140 | 502 | ||||||
Net interest income after provision for loan losses | 20,335 | 20,248 | ||||||
Non-interest income | ||||||||
Service charges on deposit accounts | 569 | 498 | ||||||
Wealth Management Services | 573 | 523 | ||||||
Net gain on indirect auto portfolio | 710 | --- | ||||||
Other income | 1,049 | 918 | ||||||
Total non-interest income | 2,901 | 1,939 | ||||||
Non-interest expense | ||||||||
Salaries and related benefits | 8,126 | 8,024 | ||||||
Occupancy and equipment | 1,439 | 1,171 | ||||||
Depreciation and amortization | 611 | 443 | ||||||
Data processing | 843 | 717 | ||||||
Other expense | 2,700 | 2,480 | ||||||
Total non-interest expense | 13,719 | 12,835 | ||||||
Income before provision for income taxes | 9,517 | 9,352 | ||||||
Provision for income taxes | 3,640 | 3,801 | ||||||
Net income | $ | 5,877 | $ | 5,551 | ||||
Net income per common share: | ||||||||
Basic | $ | 1.13 | $ | 1.05 | ||||
Diluted | $ | 1.09 | $ | 0.99 | ||||
Weighted average shares used to compute net income per common share: | ||||||||
Basic | 5,209 | 5,285 | ||||||
Diluted | 5,376 | 5,588 | ||||||
Dividends declared per common share | $ | 0.25 | $ | 0.22 |
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