EXHIBIT 99.1
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FOR IMMEDIATE RELEASE | CONTACT: | Sandy Pfaff |
| | | 415-819-7447 |
| | | sandy@pfaffpr.com |
BANK OF MARIN BANCORP REPORTS ANNUAL EARNINGS OF $14.3 MILLION
NORCAL ACQUISITION PROVIDES STRONG FUTURE GROWTH POTENTIAL
NOVATO, CA, January 27, 2014 - Bank of Marin Bancorp, "Bancorp" (NASDAQ: BMRC), parent company of Bank of Marin, announced fourth quarter 2013 earnings of $2.3 million, compared to $4.0 million in the third quarter of 2013 and $4.7 million in the fourth quarter of 2012. Fourth quarter 2013 results include $3.4 million in one-time expenses related to the acquisition of NorCal Community Bancorp, ("NorCal"), parent company of Bank of Alameda, ("the Acquisition"), which negatively impacted diluted earnings per share by $0.38. Diluted earnings per share totaled $0.41 in the fourth quarter of 2013, compared to $0.72 in the prior quarter and $0.86 in the same quarter a year ago. 2013 annual earnings totaled $14.3 million, compared to $17.8 million a year ago. Diluted earnings of $2.57 per share for the year ended December 31, 2013 included a negative impact of $0.43 per share related to Acquisition expenses and compared to $3.28 per share in the prior year.
The Acquisition closed on November 29, 2013, adding $173.8 million in loans, $241.0 million in deposits and $53.7 million in investment securities to Bank of Marin. The acquired assets and assumed liabilities were recorded at fair value at closing, subject to change for up to one year after the Acquisition as additional information relative to Acquisition-date fair values becomes available.
“In addition to closing the Bank of Alameda acquisition, we finished the year with organic growth in core deposits and loans, and with exceptionally high credit quality,” said Russell A. Colombo, President and Chief Executive Officer. “We are very pleased with our team’s ability to deliver these results and are focused on a continued smooth integration with significant growth potential in 2014.”
Bancorp also provided the following highlights on its operating and financial performance for the fourth quarter and year ended December 31, 2013:
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• | Credit quality improved with non-accrual loans representing 0.92% of total loans at December 31, 2013, down from 1.58% last quarter and 1.64% from a year ago. Net recoveries for the fourth quarter totaled $266 thousand, compared to net charge-offs of $68 thousand in the prior quarter and net charge-offs of $178 thousand in the same quarter a year ago. Net recoveries for the year ended December 31, 2013 totaled $24 thousand, compared to net charge-offs totaling $3.9 million in the prior year. |
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• | Deposits totaled $1.6 billion at December 31, 2013, compared to $1.3 billion at both September 30, 2013 and December 31, 2012. Based on December 31, 2013 balances, the increase reflects $245.5 million in deposits acquired from Bank of Alameda. Non-interest bearing deposits totaled 40.8% of total deposits as of December 31, 2013, compared to 41.6% at the prior quarter-end and 31.1% at December 31, 2012. |
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• | The total risk-based capital ratio for Bancorp was 13.1% at December 31, 2013 compared to 14.1% at September 30, 2013 and 13.7% at December 31, 2012. The ratio fell due to the addition of $10.7 million in goodwill and intangibles related to the Acquisition, which are excluded from regulatory capital. The risk-based capital ratio continues to be well above regulatory requirements for a well-capitalized institution. |
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| • | On January 23, 2014, the Board of Directors declared a quarterly cash dividend of $0.19 per share. The cash dividend is payable to shareholders of record at the close of business on February 7, 2014 and will be payable on February 14, 2014. |
"Solid earnings exceeded Bank of Alameda acquisition costs this quarter, and active management of credit and investments kept net interest margin compression at bay” said Tani Girton, Chief Financial Officer. “While most of the acquisition-related expenses were absorbed in 2013, we anticipate further costs through next quarter with the system conversion expected to be complete in March 2014."
Loans and Credit Quality
Gross loans totaled $1.3 billion at December 31, 2013, an increase of $176.5 million, or 16.1% over last quarter, and $195.4 million, or 18.2% over a year ago. Based on December 31, 2013 balances, the increase primarily reflects $172.3 million in loans acquired from Bank of Alameda. Non-accrual loans totaled $11.7 million, or 0.92%, of Bancorp's loan portfolio at December 31, 2013, a decrease from $17.3 million, or 1.58%, at September 30, 2013 and $17.7 million, or 1.64%, a year ago. The decrease in non-accrual loans from the prior quarter primarily relates to a $2.8 million commercial real estate loan that paid off as the property was sold, $2.3 million in pay-downs, and $440 thousand that has been placed back onto accrual status as the loan is performing. Accruing loans past due 30 to 89 days totaled $995 thousand at December 31, 2013, compared to $2.2 million at September 30, 2013 and $588 thousand a year ago.
The provision for loan losses totaled $150 thousand in the fourth quarter of 2013, compared to a reversal in the provision for loan losses totaling $480 thousand in the prior quarter and a provision for loan losses totaling $700 thousand in the same quarter a year ago. The ratio of loan loss reserve to loans decreased from 1.26% at September 30, 2013 to 1.12% at December 31, 2013. The decrease compared to the prior quarter primarily relates to: 1) the reversal of a specific reserve on a land development loan due to improved collateral values; 2) loans acquired from Bank of Alameda marked down to fair value without allowances established; and 3) a continued low level of newly identified non-accrual loans. The provision for loan losses totaled $540 thousand and $2.9 million in 2013 and 2012, respectively. The decrease compared to the prior year primarily relates to a lower level of newly identified non-accrual loans.
Deposits
Deposits totaled $1.6 billion at December 31, 2013, compared to $1.3 billion at both September 30, 2013 and December 31, 2012. The increase in deposits from the prior year reflects both deposits acquired from Bank of Alameda and organic growth. Non-interest bearing deposits totaled 40.8% of total deposits as of December 31, 2013, compared to 41.6% at the prior quarter-end and 31.1% at December 31, 2012. The change in non-interest bearing deposits from the prior year is primarily due to an inflow of non-interest bearing deposits and 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 $85.1 million at December 31, 2013 and $83.1 million at September 30, 2013.
Earnings
Net interest income totaled $15.6 million in the fourth quarter of 2013 compared to $14.0 million in the prior quarter and $15.8 million in the same quarter a year ago. The tax-equivalent net interest margin was 4.05%, 3.99% and 4.62% for those respective periods. The accretion on loans acquired from Bank of Alameda, credit recoveries and new investments contributed to the increase in net-interest margin in the fourth quarter of 2013 compared to the prior quarter. The decrease in the fourth quarter of 2013 compared to the same quarter a year ago relates to new loans yielding lower rates, rate concessions and a lower level of income recognition on acquired loans from our 2011 acquisition.
Net interest income totaled $58.8 million and $63.2 million in 2013 and 2012, respectively. The tax-equivalent net interest margin was 4.20% in 2013 compared to 4.74% in 2012. The decrease in 2013 compared to 2012 primarily relates to lower yields on investments and new loans and rate concessions. In addition, a lower level of income recognition on acquired loans from our 2011 acquisition also negatively impacted the loan yield.
Summary of Charter Oak and NorCal acquisitions' impact on net interest margin:
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| | Three months ended |
| | December 31, 2013 | | September 30, 2013 | | December 31, 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 | $ | 161 |
| 4 bps | | $ | 154 |
| 4 bps | | $ | 423 |
| 12 bps |
| Accretion on non-PCI loans | $ | 571 |
| 14 bps | | $ | 214 |
| 6 bps | | $ | 42 |
| 1 bps |
| Gains on pay-offs of PCI loans | $ | — |
| 0 bps | | $ | — |
| 0 bps | | $ | 1,022 |
| 29 bps |
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| | Years ended |
| | December 31, 2013 | | December 31, 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 | $ | 706 |
| 5 bps | | $ | 1,641 |
| 12 bps |
| Accretion on non-PCI loans | $ | 1,163 |
| 8 bps | | $ | 789 |
| 6 bps |
| Gains on pay-offs of PCI loans | $ | 469 |
| 3 bps | | $ | 1,714 |
| 13 bps |
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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. Fourth quarter 2013 accretion includes $290 thousand of accretion on loans acquired from Bank of Alameda ($288 thousand on non-PCI loans and $2 thousand on PCI loans).
Non-interest income in the fourth quarter of 2013 totaled $2.1 million, compared to $2.0 million in the prior quarter and $1.8 million in the same quarter a year ago. The increase from the prior quarter primarily reflects gains on the sale of securities and higher commission fees. The increase in the fourth quarter of 2013 compared to the same quarter a year ago primarily relates to higher dividend income from the Federal Home Loan Bank of San Francisco, debit card and merchant interchange fees and gains on the sale of securities. The 2013 non-interest income totaled $8.1 million, an increase of $954 thousand, or 13.4% from last year. The increase in 2013 compared to 2012 primarily relates to higher dividend income from the Federal Home Loan Bank of San Francisco, higher Wealth Management and Trust Services fees and higher BOLI income due to a BOLI death benefit in the first quarter of 2013.
Non-interest expense totaled $13.9 million in the fourth quarter of 2013, compared to $10.1 million in the prior quarter and $9.6 million in the same quarter a year ago. The increases in non-interest expense from the prior quarter and same quarter a year ago primarily reflect one-time acquisition-related expenses totaling $3.4 million in the fourth quarter of 2013 (see table below) and higher staffing costs as the Bank continues to grow. Non-interest expense increased from $38.7 million in 2012 to $44.1 million in 2013 for the same reasons mentioned above. We expect approximately $800 thousand remaining one-time acquisition-related expenses to occur in the first quarter of 2014, with the majority relating to data processing and personnel costs.
Acquisition
The following table presents the one-time Acquisition-related expenses recognized:
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| (Dollars in thousands, unaudited) | | Three months ended December 31, 2013 | | Three months ended September 30, 2013 | | Year Ended December 31, 2013 |
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| Data processing* | | $ | 2,807 |
| | $ | — |
| | $ | 2,807 |
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| Professional services | | 289 |
| | 243 |
| | 660 |
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| Personnel severance | | 203 |
| | — |
| | 203 |
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| Other | | 73 |
| | 1 |
| | 74 |
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| Total | | $ | 3,372 |
| | $ | 244 |
| | $ | 3,744 |
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| *Primarily relates to NorCal's core processing system contract termination and deconversion fees. |
The following table reflects the estimated fair values of the assets acquired and liabilities assumed related to the Acquisition:
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| (Dollars in thousands, unaudited) | Acquisition Date November 29, 2013 |
| Assets: | |
| Cash and cash equivalents | $ | 31,804 |
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| Investment securities | 53,731 |
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| Loans | 173,759 |
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| Core deposit intangible | 4,572 |
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| Deferred tax asset | 4,359 |
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| Goodwill | 6,190 |
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| Bank premises and equipment | 203 |
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| Other assets | 6,299 |
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| Total assets acquired | $ | 280,917 |
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| Liabilities: | |
| Deposits: | |
| Non-interest bearing | $ | 69,123 |
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| Interest bearing | |
| Transaction accounts | 57,337 |
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| Savings accounts | 10,835 |
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| Money market accounts | 81,464 |
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| Other time accounts | 22,267 |
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| Total deposits | 241,026 |
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| Junior subordinated debentures | 4,950 |
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| Other liabilities | 408 |
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| Total liabilities assumed | $ | 246,384 |
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| Merger consideration (cash payment of $16.019 million and $18.514 million in stock) | $ | 34,533 |
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The following table presents the net assets acquired from NorCal and the estimated fair value adjustments:
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| (Dollars in thousands, unaudited) | | Acquisition Date November 29, 2013 |
| Book value of net assets acquired from NorCal | | $ | 25,797 |
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| Fair value adjustments: | | |
| Loans | | (3,462) |
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| Junior subordinated debentures | | 3,298 |
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| Core deposit intangible asset | | 4,572 |
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| Time deposits | | (14) |
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| Total purchase accounting adjustments | | 4,394 |
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| Deferred tax liabilities (tax effect of purchase accounting adjustments at 42.05%) | | (1,848) |
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| Fair value of net assets acquired from NorCal | | 28,343 |
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| Merger consideration | | 34,533 |
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| Less: fair value of net assets acquired | | (28,343) |
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| Goodwill | | $ | 6,190 |
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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 21 offices in Marin, San Francisco, Napa, Sonoma and Alameda 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 $1.8 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, 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 | |
| December 31, 2013 | |
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| (dollars in thousands, except per share data; unaudited) | Dec. 31, 2013 |
| | | Sept. 30, 2013 |
| | | Dec. 31, 2012 |
| | |
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| QUARTER-TO-DATE |
| | | |
| |
| | NET INCOME | $ | 2,345 |
|
| | $ | 4,004 |
| | | $ | 4,702 |
|
| |
| | DILUTED EARNINGS PER COMMON SHARE | $ | 0.41 |
|
| | $ | 0.72 |
| | | $ | 0.86 |
|
| |
| | RETURN ON AVERAGE ASSETS (ROA) | 0.57 |
| % | | 1.07 |
| % | | 1.28 |
| % | |
| | RETURN ON AVERAGE EQUITY (ROE) | 5.47 |
| % | | 9.91 |
| % | | 12.50 |
| % | |
| | EFFICIENCY RATIO | 78.39 |
| % | | 63.19 |
| % | | 54.42 |
| % | |
| | TAX-EQUIVALENT NET INTEREST MARGIN1 | 4.05 |
| % | | 3.99 |
| % | | 4.62 |
| % | |
| | NET (RECOVERIES)/CHARGE-OFFS | $ | (266 | ) |
| | $ | 68 |
| | | $ | 178 |
|
| |
| | NET (RECOVERIES) CHARGE-OFFS TO AVERAGE LOANS | (0.02 | ) | % | | 0.01 |
| % | | 0.02 |
| % | |
| YEAR-TO-DATE | | | | | | | | | |
| NET INCOME | $ | 14,270 |
|
| | | | | $ | 17,817 |
|
| |
| DILUTED EARNINGS PER COMMON SHARE | $ | 2.57 |
|
| | | | | $ | 3.28 |
|
| |
| RETURN ON AVERAGE ASSETS (ROA) | 0.96 |
| % | | | | | 1.24 |
| % | |
| RETURN ON AVERAGE EQUITY (ROE) | 8.86 |
| % | | | | | 12.36 |
| % | |
| EFFICIENCY RATIO | 65.97 |
| % | | | | | 55.04 |
| % | |
| TAX-EQUIVALENT NET INTEREST MARGIN1 | 4.20 |
| % | | | | | 4.74 |
| % | |
| NET (RECOVERIES)/CHARGE-OFFS | $ | (24 | ) |
| | | | | $ | 3,878 |
|
| |
| NET CHARGE-OFFS TO AVERAGE LOANS | — |
| % | | | | | 0.38 |
| % | |
| AT PERIOD END | | | | | | | | | |
| | TOTAL ASSETS | $ | 1,805,194 |
|
| | $ | 1,483,603 |
| | | $ | 1,434,749 |
|
| |
| | LOANS: | | | | | | | | | |
| | COMMERCIAL AND INDUSTRIAL | $ | 183,291 |
|
| | $ | 168,840 |
| | | $ | 176,431 |
|
| |
| | REAL ESTATE |
|
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| | | | | |
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| | COMMERCIAL OWNER-OCCUPIED | $ | 241,113 |
|
| | $ | 206,173 |
| | | $ | 196,406 |
|
| |
| | COMMERCIAL INVESTOR-OWNED | $ | 625,019 |
|
| | $ | 547,337 |
| | | $ | 509,006 |
|
| |
| | CONSTRUCTION | $ | 31,577 |
|
| | $ | 24,993 |
| | | $ | 30,665 |
|
| |
| | HOME EQUITY | $ | 98,469 |
|
| | $ | 86,204 |
| | | $ | 93,237 |
|
| |
| | OTHER RESIDENTIAL | $ | 72,634 |
|
| | $ | 43,572 |
| | | $ | 49,432 |
|
| |
| | INSTALLMENT AND OTHER CONSUMER LOANS | $ | 17,219 |
|
| | $ | 15,732 |
| | | $ | 18,775 |
|
| |
| | TOTAL LOANS | $ | 1,269,322 |
|
| | $ | 1,092,851 |
| | | $ | 1,073,952 |
|
| |
| | NON-ACCRUAL LOANS2: |
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|
| | | | | |
| |
| | COMMERCIAL AND INDUSTRIAL | $ | 1,187 |
|
| | $ | 1,229 |
| | | $ | 4,893 |
|
| |
| | REAL ESTATE |
|
|
| | | | | |
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| | COMMERCIAL OWNER-OCCUPIED | $ | 1,403 |
|
| | $ | 1,403 |
| | | $ | 1,403 |
|
| |
| | COMMERCIAL INVESTOR-OWNED | $ | 2,807 |
|
| | $ | 5,832 |
| | | $ | 6,843 |
|
| |
| | CONSTRUCTION | $ | 5,218 |
|
| | $ | 7,045 |
| | | $ | 2,239 |
|
| |
| | HOME EQUITY | $ | 234 |
|
| | $ | 359 |
| | | $ | 545 |
|
| |
| | OTHER RESIDENTIAL | $ | 660 |
|
| | $ | 1,117 |
| | | $ | 1,196 |
|
| |
| | INSTALLMENT AND OTHER CONSUMER LOANS | $ | 169 |
|
| | $ | 311 |
| | | $ | 533 |
|
| |
| | TOTAL NON-ACCRUAL LOANS | $ | 11,678 |
|
| | $ | 17,296 |
| | | $ | 17,652 |
|
| |
| | CLASSIFIED LOANS (GRADED SUBSTANDARD & DOUBTFUL) | $ | 31,140 |
| | | $ | 30,913 |
| | | $ | 36,916 |
| | |
| | TOTAL ACCRUING LOANS 30-89 DAYS PAST DUE | $ | 995 |
|
| | $ | 2,213 |
| | | $ | 588 |
|
| |
| | LOAN LOSS RESERVE TO LOANS | 1.12 |
| % | | 1.26 |
| % | | 1.27 |
| % | |
| | LOAN LOSS RESERVE TO NON-ACCRUAL LOANS | 1.22 |
| x | | 0.80 |
| x | | 0.77 |
| x | |
| | NON-ACCRUAL LOANS TO TOTAL LOANS | 0.92 |
| % | | 1.58 |
| % | | 1.64 |
| % | |
| | TEXAS RATIO3 | 6.58 |
| % | | 9.85 |
| % | | 10.69 |
| % | |
| | TOTAL DEPOSITS | $ | 1,587,102 |
|
| | $ | 1,292,476 |
| | | $ | 1,253,289 |
|
| |
| | LOAN TO DEPOSIT RATIO | 80.0 |
| % | | 84.6 |
| % | | 85.7 |
| % | |
| | STOCKHOLDERS' EQUITY | $ | 180,887 |
|
| | $ | 161,711 |
| | | $ | 151,792 |
|
| |
| | BOOK VALUE PER SHARE | $ | 30.78 |
|
| | $ | 29.61 |
| | | $ | 28.17 |
|
| |
| | TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS4 | 9.48 |
| % | | 10.90 |
| % | | 10.58 |
| % | |
| | TOTAL RISK BASED CAPITAL RATIO-BANK5 | 12.5 |
| % | | 13.9 |
| % | | 13.6 |
| % | |
| | TOTAL RISK BASED CAPITAL RATIO-BANCORP5 | 13.1 |
| % | | 14.1 |
| % | | 13.7 |
| % | |
| | FULL TIME EQUIVALENT EMPLOYEES | 281 |
| | | 234 |
| | | 238 |
| | |
| | | | | | | | | | | |
| | 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 $12.9 million, $12.6 million and $10.8 million at December 31, 2013, September 30, 2013 and December 31, 2012, respectively. Excludes purchased credit-impaired (PCI) loans with carrying values of $5.7 million, $2.2 million and $3.0 million that were accreting interest at December 31, 2013, September 30, 2013 and December 31, 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 $7.1 million at December 31, 2013, $3.6 million at September 30, 2013 and $4.5 million at December 31, 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. |
|
|
BANK OF MARIN BANCORP CONSOLIDATED STATEMENTS OF CONDITION |
| at December 31, 2013, September 30, 2013 and December 31, 2012 |
|
| | | | | | | | | | | |
| (in thousands, except share data; unaudited) | December 31, 2013 | | September 30, 2013 | | December 31, 2012 |
| Assets | |
| | | | |
| Cash and due from banks | $ | 103,773 |
| | $ | 99,358 |
| | $ | 28,349 |
|
| Investment securities | |
| | |
| | |
| Held to maturity, at amortized cost | 122,495 |
| | 130,085 |
| | 139,452 |
|
| Available for sale (at fair value; amortized cost $245,158, $118,353 and $150,420 at December 31, 2013, September 30, 2013 and December 31, 2012, respectively) | 243,998 |
| | 119,340 |
| | 153,962 |
|
| Total investment securities | 366,493 |
| | 249,425 |
| | 293,414 |
|
| Loans, net of allowance for loan losses of $14,224, $13,808 and $13,661 at December 31, 2013, September 30, 2013 and December 31, 2012, respectively | 1,255,098 |
| | 1,079,043 |
| | 1,060,291 |
|
| Bank premises and equipment, net | 9,110 |
| | 8,947 |
| | 9,344 |
|
| Interest receivable and other assets | 70,720 |
| | 46,830 |
| | 43,351 |
|
| Total assets | $ | 1,805,194 |
| | $ | 1,483,603 |
| | $ | 1,434,749 |
|
| | | | | | |
| Liabilities and Stockholders' Equity | |
| | |
| | |
| Liabilities | |
| | |
| | |
| Deposits | | | |
| | |
| Non-interest bearing | $ | 648,191 |
| | $ | 537,104 |
| | $ | 389,722 |
|
| Interest bearing | | | |
| | |
| Transaction accounts | 137,748 |
| | 76,221 |
| | 169,647 |
|
| Savings accounts | 118,770 |
| | 102,898 |
| | 93,404 |
|
| Money market accounts | 520,525 |
| | 437,247 |
| | 443,742 |
|
| CDARS® time accounts | 400 |
| | 1,474 |
| | 15,718 |
|
| Other time accounts | 161,468 |
| | 137,532 |
| | 141,056 |
|
| Total deposits | 1,587,102 |
| | 1,292,476 |
| | 1,253,289 |
|
| Federal Home Loan Bank borrowings | 15,000 |
| | 15,000 |
| | 15,000 |
|
| Junior subordinated debentures | 4,969 |
| | — |
| | — |
|
| Interest payable and other liabilities | 17,236 |
| | 14,416 |
| | 14,668 |
|
| Total liabilities | 1,624,307 |
| | 1,321,892 |
| | 1,282,957 |
|
| | | | | | |
| 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 - 5,877,524, 5,462,061
and 5,389,210 at December 31, 2013, September
30, 2013 and December 31, 2012, respectively | 80,095 |
| | 60,982 |
| | 58,573 |
|
| Retained earnings | 101,464 |
| | 100,157 |
| | 91,164 |
|
| Accumulated other comprehensive (loss) income, net | (672 | ) | | 572 |
| | 2,055 |
|
| Total stockholders' equity | 180,887 |
| | 161,711 |
| | 151,792 |
|
| Total liabilities and stockholders' equity | $ | 1,805,194 |
| | $ | 1,483,603 |
| | $ | 1,434,749 |
|
|
|
BANK OF MARIN BANCORP CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |
|
| | | | | | | | | | | | | | | | | | | |
| | Three months ended | | Years ended |
| (in thousands, except per share amounts; unaudited) | December 31, 2013 | | September 30, 2013 | | December 31, 2012 | | December 31, 2013 | | December 31, 2012 |
| Interest income | | | | | | | | | |
| Interest and fees on loans | $ | 14,358 |
| | $ | 13,049 |
| | $ | 14,634 |
| | $ | 54,408 |
| | $ | 59,403 |
|
| Interest on investment securities |
|
| |
|
| | |
| | | | |
| Securities of U.S. government agencies | 810 |
| | 553 |
| | 680 |
| | 2,573 |
| | 3,195 |
| Obligations of state and political subdivisions | 615 |
| | 524 |
| | 565 |
| | 2,214 |
| | 1,789 |
|
| Corporate debt securities and other | 271 |
| | 311 |
| | 353 |
| | 1,245 |
| | 1,165 |
|
| Interest on Federal funds sold and due from banks | 75 |
| | 34 |
| | 66 |
| | 120 |
| | 214 |
|
| Total interest income | 16,129 |
| | 14,471 |
| | 16,298 |
| | 60,560 |
| | 65,766 |
|
| Interest expense | |
| | |
| | |
| | |
| | |
|
| Interest on interest bearing transaction accounts | 17 |
| | 12 |
| | 14 |
| | 52 |
| | 151 |
|
| Interest on savings accounts | 10 |
| | 9 |
| | 16 |
| | 35 |
| | 88 |
|
| Interest on money market accounts | 124 |
| | 101 |
| | 145 |
| | 419 |
| | 689 |
|
| Interest on CDARS® time accounts | — |
| | 1 |
| | 11 |
| | 8 |
| | 83 |
|
| Interest on other time accounts | 232 |
| | 226 |
| | 241 |
| | 914 |
| | 1,068 |
|
| Interest on borrowed funds | 79 |
| | 80 |
| | 80 |
| | 322 |
| | 497 |
|
| Interest on junior subordinated debentures | 35 |
| | — |
| | — |
| | 35 |
| | — |
|
| Total interest expense | 497 |
|
| 429 |
|
| 507 |
| | 1,785 |
| | 2,576 |
|
| Net interest income | 15,632 |
| | 14,042 |
| | 15,791 |
| | 58,775 |
| | 63,190 |
|
| Provision for (reversal of) loan losses | 150 |
| | (480 | ) | | 700 |
| | 540 |
| | 2,900 |
|
| Net interest income after provision for loan losses | 15,482 |
| | 14,522 |
| | 15,091 |
| | 58,235 |
| | 60,290 |
|
| Non-interest income | |
| | |
| | |
| | |
| | |
|
| Service charges on deposit accounts | 517 |
| | 509 |
| | 529 |
| | 2,062 |
| | 2,130 |
|
| Wealth Management and Trust Services | 544 |
| | 532 |
| | 513 |
| | 2,162 |
| | 1,964 |
|
| Debit card interchange fees | 284 |
| | 288 |
| | 261 |
| | 1,104 |
| | 1,015 |
|
| Merchant interchange fees | 199 |
| | 196 |
| | 177 |
| | 822 |
| | 739 |
|
| Earnings on Bank-owned life Insurance | 188 |
| | 179 |
| | 190 |
| | 954 |
| | 762 |
|
| Gain (loss) on sale of securities | 34 |
| | (35 | ) | | — |
| | (1 | ) |
| (34 | ) |
| Other income | 297 |
| | 284 |
| | 146 |
| | 963 |
| | 536 |
|
| Total non-interest income | 2,063 |
| | 1,953 |
|
| 1,816 |
| | 8,066 |
| | 7,112 |
|
| Non-interest expense | |
| | |
| | |
| | |
| | |
|
| Salaries and related benefits | 5,857 |
| | 5,389 |
| | 5,010 |
| | 21,974 |
| | 21,139 |
|
| Occupancy and equipment | 1,182 |
| | 1,040 |
| | 1,098 |
| | 4,347 |
| | 4,230 |
|
| Depreciation and amortization | 363 |
| | 343 |
| | 334 |
| | 1,395 |
| | 1,355 |
|
| Federal Deposit Insurance Corporation insurance | 240 |
| | 244 |
| | 245 |
| | 921 |
| | 917 |
|
| Data processing | 3,477 |
| | 612 |
| | 652 |
| | 5,334 |
| | 2,514 |
|
| Professional services | 869 |
| | 775 |
| | 720 |
| | 2,985 |
| | 2,340 |
|
| Other expense | 1,883 |
| | 1,704 |
| | 1,523 |
| | 7,136 |
| | 6,199 |
|
| Total non-interest expense | 13,871 |
|
| 10,107 |
|
| 9,582 |
| | 44,092 |
| | 38,694 |
|
| Income before provision for income taxes | 3,674 |
| | 6,368 |
| | 7,325 |
| | 22,209 |
| | 28,708 |
|
| Provision for income taxes | 1,329 |
| | 2,364 |
| | 2,623 |
| | 7,939 |
| | 10,891 |
|
| Net income | $ | 2,345 |
| | $ | 4,004 |
| | $ | 4,702 |
| | $ | 14,270 |
| | $ | 17,817 |
|
| Net income per common share: | |
| | |
| | |
| | | | |
| Basic | $ | 0.42 |
| | $ | 0.74 |
| | $ | 0.88 |
| | $ | 2.62 |
| | $ | 3.34 |
|
| Diluted | $ | 0.41 |
| | $ | 0.72 |
| | $ | 0.86 |
| | $ | 2.57 |
| | $ | 3.28 |
|
| Weighted average shares used to compute net income per common share: |
|
| |
|
| | |
| | | | |
| Basic | 5,585 |
| | 5,433 |
| | 5,357 |
| | 5,457 |
| | 5,341 |
|
| Diluted | 5,697 |
| | 5,538 |
| | 5,451 |
| | 5,558 |
| | 5,438 |
|
| Dividends declared per common share | $ | 0.19 |
| | $ | 0.18 |
| | $ | 0.18 |
| | $ | 0.73 |
| | $ | 0.70 |
|
| Comprehensive income | | | | | | | | | |
| Net income | $ | 2,345 |
| | $ | 4,004 |
| | $ | 4,702 |
| | $ | 14,270 |
| | $ | 17,817 |
|
| Other comprehensive income (loss) |
|
| |
|
| |
|
| |
|
| |
|
|
| Change in net unrealized gain on available for sale securities | (2,113 | ) | | (621 | ) | | 16 |
| | (4,703 | ) | | 752 |
|
| Reclassification adjustment for (gain) loss on sale of securities included in net income | (34 | ) | | 35 |
| | — |
| | 1 |
| | 34 |
|
| Net change in unrealized gain on available for sale securities, before tax | (2,147 | ) | | (586 | ) | | 16 |
| | (4,702 | ) | | 786 |
|
| Deferred tax (benefit) expense | (903 | ) | | (246 | ) | | 6 |
| | (1,975 | ) | | 330 |
|
| Other comprehensive (loss) income, net of tax | (1,244 | ) | | (340 | ) | | 10 |
| | (2,727 | ) | | 456 |
|
| Comprehensive income | $ | 1,101 |
| | $ | 3,664 |
| | $ | 4,712 |
| | $ | 11,543 |
| | $ | 18,273 |
|
|
|
| BANK OF MARIN BANCORP |
| AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | Three months ended | Three months ended | Three months ended |
| | | December 31, 2013 | September 30, 2013 | December 31, 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 | $ | 116,627 |
| $ | 75 |
| 0.25 | % | $ | 61,409 |
| $ | 34 |
| 0.22 | % | $ | 80,884 |
| $ | 66 |
| 0.32 | % |
| | Investment securities 2, 3 | 285,537 |
| 1,873 |
| 2.62 | % | 254,515 |
| 1,539 |
| 2.42 | % | 265,316 |
| 1,779 |
| 2.68 | % |
| | Loans 1, 3, 4 | 1,143,509 |
| 14,563 |
| 4.98 | % | 1,093,846 |
| 13,248 |
| 4.74 | % | 1,020,737 |
| 14,788 |
| 5.67 | % |
| | Total interest-earning assets 1 | 1,545,673 |
| 16,511 |
| 4.18 | % | 1,409,770 |
| 14,821 |
| 4.11 | % | 1,366,937 |
| 16,633 |
| 4.76 | % |
| | Cash and non-interest-bearing due from banks | 43,385 |
| | | 32,482 |
| | | 44,225 |
| | |
| | Bank premises and equipment, net | 9,033 |
| | | 9,092 |
| | | 9,173 |
| | |
| | Interest receivable and other assets, net | 44,278 |
| | | 34,796 |
| | | 37,512 |
| | |
| Total assets | $ | 1,642,369 |
| | | $ | 1,486,140 |
| | | $ | 1,457,847 |
| | |
| Liabilities and Stockholders' Equity | | | | | | | | | |
| | Interest-bearing transaction accounts | $ | 99,116 |
| $ | 17 |
| 0.07 | % | $ | 78,109 |
| $ | 12 |
| 0.06 | % | $ | 160,605 |
| $ | 14 |
| 0.03 | % |
| | Savings accounts | 108,229 |
| 10 |
| 0.03 | % | 100,730 |
| 9 |
| 0.03 | % | 91,609 |
| 16 |
| 0.07 | % |
| | Money market accounts | 475,051 |
| 124 |
| 0.10 | % | 431,332 |
| 101 |
| 0.09 | % | 442,006 |
| 145 |
| 0.13 | % |
| | CDARS® time accounts | 889 |
| — |
| — | % | 2,873 |
| 1 |
| 0.14 | % | 22,497 |
| 11 |
| 0.19 | % |
| | Other time accounts | 146,549 |
| 232 |
| 0.63 | % | 137,733 |
| 226 |
| 0.65 | % | 141,375 |
| 241 |
| 0.68 | % |
| | FHLB borrowings 1 | 15,003 |
| 79 |
| 2.07 | % | 15,000 |
| 80 |
| 2.07 | % | 15,010 |
| 80 |
| 2.08 | % |
| | Junior subordinated debentures 1 | 1,616 |
| 35 |
| 8.48 | % | — |
| — |
| — | % | — |
| — |
| — | % |
| | Total interest-bearing liabilities | 846,453 |
| 497 |
| 0.23 | % | 765,777 |
| 429 |
| 0.22 | % | 873,102 |
| 507 |
| 0.23 | % |
| | Demand accounts | 610,261 |
| | | 547,634 |
| | | 420,517 |
| | |
| | Interest payable and other liabilities | 15,498 |
| | | 12,409 |
| | | 14,524 |
| | |
| | Stockholders' equity | 170,157 |
| | | 160,320 |
| | | 149,704 |
| | |
| Total liabilities & stockholders' equity | $ | 1,642,369 |
| | | $ | 1,486,140 |
| | | $ | 1,457,847 |
| | |
Tax-equivalent net interest income/margin 1 | | $ | 16,014 |
| 4.05 | % | | $ | 14,392 |
| 3.99 | % | | $ | 16,126 |
| 4.62 | % |
Reported net interest income/margin 1 | | $ | 15,632 |
| 3.96 | % | | $ | 14,042 |
| 3.90 | % | | $ | 15,791 |
| 4.52 | % |
| Tax-equivalent net interest rate spread | | | 3.95 | % | | | 3.89 | % | | | 4.53 | % |
| | | | | | | | | | | |
| | | Year ended | Year ended | |
| | | December 31, 2013 | December 31, 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 | $ | 47,401 |
| $ | 120 |
| 0.25 | % | $ | 80,643 |
| $ | 214 |
| 0.26 | % | | | |
| | Investment securities 2, 3 | 272,767 |
| 6,648 |
| 2.44 | % | 234,014 |
| 6,829 |
| 2.92 | % | | | |
| | Loans 1, 3, 4 | 1,092,885 |
| 55,157 |
| 4.98 | % | 1,023,165 |
| 59,991 |
| 5.77 | % | | | |
| | Total interest-earning assets 1 | 1,413,053 |
| 61,925 |
| 4.32 | % | 1,337,822 |
| 67,034 |
| 4.93 | % | | | |
| | Cash and non-interest-bearing due from banks | 32,903 |
|
| | 51,301 |
| | | | | |
| | Bank premises and equipment, net | 9,214 |
|
| | 9,183 |
| | | | | |
| | Interest receivable and other assets, net | 38,993 |
|
| | 36,155 |
| | | | | |
| Total assets | $ | 1,494,163 |
| | | $ | 1,434,461 |
| | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | |
| | Interest-bearing transaction accounts | $ | 97,336 |
| $ | 52 |
| 0.05 | % | $ | 152,778 |
| $ | 151 |
| 0.10 | % | | | |
| | Savings accounts | 100,185 |
| 35 |
| 0.03 | % | 86,670 |
| 88 |
| 0.10 | % | | | |
| | Money market accounts | 437,441 |
| 419 |
| 0.10 | % | 436,281 |
| 689 |
| 0.16 | % | | | |
| | CDARS® time accounts | 5,416 |
| 8 |
| 0.15 | % | 30,016 |
| 83 |
| 0.28 | % | | | |
| | Other time accounts | 140,334 |
| 914 |
| 0.65 | % | 144,106 |
| 1,068 |
| 0.74 | % | | | |
| | FHLB borrowings and overnight borrowings 1 | 19,054 |
| 322 |
| 1.67 | % | 16,205 |
| 345 |
| 2.09 | % | | | |
| | Junior subordinated debentures and subordinated debenture1 | 407 |
| 35 |
| 8.48 | % | 3,552 |
| 152 |
| 4.21 | % | | | |
| | Total interest-bearing liabilities | 800,173 |
| 1,785 |
| 0.22 | % | 869,608 |
| 2,576 |
| 0.30 | % | | | |
| | Demand accounts | 518,986 |
| | | 406,861 |
| | | | | |
| | Interest payable and other liabilities | 13,970 |
| | | 13,881 |
| | | | | |
| | Stockholders' equity | 161,034 |
| | | 144,111 |
| | | | | |
| Total liabilities & stockholders' equity | $ | 1,494,163 |
| | | $ | 1,434,461 |
| | | | | |
Tax-equivalent net interest income/margin 1 | | $ | 60,140 |
| 4.20 | % | | $ | 64,458 |
| 4.74 | % | | | |
Reported net interest income/margin 1 | | $ | 58,775 |
| 4.10 | % | | $ | 63,190 |
| 4.65 | % | | | |
| Tax-equivalent net interest rate spread | | | 4.10 | % | | | 4.63 | % | | | |
| | | | | |
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. | |
