Attached files
| file | filename |
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| 8-K - 8-K - Bank of Marin Bancorp | form8k-q42014.htm |
EXHIBIT 99.1
 | ||
FOR IMMEDIATE RELEASE | CONTACT: | Sandy Pfaff |
415-819-7447 | ||
sandy@pfaffpr.com | ||
BANK OF MARIN BANCORP REPORTS RECORD ANNUAL EARNINGS OF $19.8 MILLION
STRONG LOAN GROWTH IN 2014, EXCELLENT CREDIT QUALITY
NOVATO, CA, January 26, 2015 - Bank of Marin Bancorp, "Bancorp" (NASDAQ: BMRC), parent company of Bank of Marin, announced 2014 annual earnings of $19.8 million, compared to $14.3 million a year ago. Diluted earnings per share totaled $3.29 for the year ended December 31, 2014, compared to $2.57 per share for the same period in 2013 which included a negative impact of $0.43 per share related to NorCal Community Bancorp ("NorCal") acquisition expenses. Fourth quarter 2014 earnings totaled $4.7 million, compared to $5.4 million in the third quarter of 2014 and $2.3 million in the fourth quarter of 2013. Diluted earnings per share totaled $0.78 in the fourth quarter of 2014, compared to $0.89 in the prior quarter and $0.41 in the same quarter a year ago. Fourth quarter 2013 results included $3.4 million in one-time expenses related to the acquisition of NorCal which negatively impacted diluted earnings per share by $0.38.
“We are pleased to report record earnings for the year as we finished 2014 with strong loan growth and exceptional credit quality,” said Russell A. Colombo, President and Chief Executive Officer. “Our disciplined credit approach and relationship style of banking continue to pay off as evidenced by these results.”
Bancorp also provided the following highlights on its operating and financial performance for the fourth quarter and year ended December 31, 2014:
• | Loans totaled $1.4 billion at both December 31, 2014 and September 30, 2014, and increased $94.0 million, or 7.4%, over December 31, 2013. Loan fundings were strong in the fourth quarter of 2014 offset by high pay-offs primarily due to the sale of underlying commercial real estate or business assets and bridge loan repayments. Credit quality improved with non-accrual loans representing 0.69% of total loans at December 31, 2014, down from 0.73% last quarter and 0.92% from a year ago. Net recoveries for the fourth quarter totaled $50 thousand, compared to $149 thousand in the prior quarter and $266 thousand in the same quarter a year ago. Net recoveries for the year ended December 31, 2014 totaled $124 thousand, compared to $24 thousand in the prior year. |
• | Return on assets ("ROA") of 1.08% for the year ended December 31, 2014, increased from 0.96% for the same period last year. Return on equity ("ROE") totaled 10.31% in 2014, compared to 8.86% for the year ended December 31, 2013. The increase in ROA and ROE in 2014 was driven by strong earnings, resulting from the successful acquisition of NorCal, a decrease of one-time acquisition related expenses and active relationship management. |
• | The total risk-based capital ratio for Bancorp was 13.9% at December 31, 2014 compared to 13.6% at September 30, 2014 and 13.1% at December 31, 2013. The risk-based capital ratio continued to be well above both current regulatory requirements for a well-capitalized institution and the new requirements that took effect January 1, 2015 (Basel Committee on Bank Supervision guidelines for determining regulatory capital). Tangible common equity to tangible assets totaled 10.7% at December 31, 2014, compared to 10.3% at the end of the prior quarter. |
• | On January 23, 2015, the Board of Directors declared a quarterly cash dividend of $0.22 per share. The cash dividend is payable to shareholders of record at the close of business on February 6, 2015 and will be payable on February 13, 2015. |
1
Loans and Credit Quality
Loans totaled $1.4 billion at both December 31, 2014 and September 30, 2014, compared to $1.3 billion at December 31, 2013, an increase of $94.0 million, or 7.4% over last year, which was driven substantially by commercial and industrial lending and related owner-occupied commercial real estate, and investor-owned commercial real estate lending in Marin, Napa and San Francisco. In addition to advances on existing loans, new loan volume totaled $35 million in the fourth quarter of 2014 which was offset by pay-offs of $44 million for a net increase of $2.4 million over September 30, 2014.
Non-accrual loans totaled $9.4 million, or 0.69%, of Bancorp's loan portfolio at December 31, 2014, a decrease from $9.8 million, or 0.73%, at September 30, 2014 and $11.7 million, or 0.92%, a year ago. The decrease in non-accrual loans from the prior year primarily relates to the pay-off and pay-down of certain loans. Accruing loans past due 30 to 89 days totaled $1.0 million at December 31, 2014, compared to $299 thousand at September 30, 2014 and $995 thousand a year ago.
There was no provision for loan losses recorded in the fourth quarter of 2014 or the prior quarter, compared to a provision for loan losses totaling $150 thousand in the fourth quarter of 2013. The ratio of loan loss reserve to loans totaled 1.11% at both December 31, 2014 and September 30, 2014, compared to 1.12% at December 31, 2013. The provision for loan losses totaled $750 thousand and $540 thousand in 2014 and 2013, respectively. The increase compared to the prior year primarily relates to the increase in total loans.
Deposits
Deposits totaled $1.6 billion at December 31, 2014, September 30, 2014 and December 31, 2013. Non-interest bearing deposits totaled $671 million at December 31, 2014, an increase of $22.7 million when compared to December 31, 2013. Non-interest bearing deposits totaled 43.2% of total deposits as of December 31, 2014, compared to 45.7% at the prior quarter end and 40.8% at December 31, 2013. Total deposits decreased $35.5 million, or 2.2%, compared to December 31, 2013, which is primarily due to the normal business activity of several large depositors.
Earnings
"The NorCal transaction is exceeding expectations, and we ended the year with very strong results as we balance operating expenses with our overall growth strategy," said Tani Girton, Chief Financial Officer. "Most importantly, we continue to deliver high value to our customers and shareholders.”
Net interest income totaled $17.1 million in the fourth quarter of 2014 compared to $17.5 million in the prior quarter and $15.6 million in the same quarter a year ago. The increase from the same quarter a year ago relates to higher average balances on loans and investments. The tax-equivalent net interest margin was 3.99%, 4.03% and 4.05% for those respective periods. The decrease in the fourth quarter of 2014 compared to the prior quarter primarily relates to a lower level of income recognition on acquired loans.
Net interest income totaled $70.4 million and $58.8 million in 2014 and 2013, respectively, with the increase reflecting higher loan and securities balances. The tax-equivalent net interest margin was 4.13% in 2014 compared to 4.20% in 2013. The net interest margin decrease in 2014 compared to 2013 primarily relates to lower yields on new and renewed loans, partially offset by accretion and gains on pay-offs of acquired loans.
2
Loans acquired through the acquisition of other banks are classified as Purchased Credit Impaired ("PCI") or non-PCI loans and recorded at fair value at acquisition date. For acquired loans not considered credit-impaired, the level of accretion varies due to maturities and early pay-offs. 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.
Accretion and gains on pay-offs of purchased loans recorded to interest income were as follows:
Three months ended | ||||||||||||||
December 31, 2014 | September 30, 2014 | December 31, 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 | $ | 120 | 3 bps | $ | 126 | 3 bps | $ | 161 | 4 bps | |||||
Accretion on non-PCI loans | $ | 475 | 11 bps | $ | 774 | 17 bps | $ | 571 | 14 bps | |||||
Years ended | |||||||||
December 31, 2014 | December 31, 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 | $ | 614 | 4 bps | $ | 725 | 5 bps | |||
Accretion on non-PCI loans | $ | 3,292 | 19 bps | $ | 1,163 | 8 bps | |||
Gains on pay-offs of PCI loans | $ | 622 | 4 bps | $ | 469 | 3 bps | |||
Non-interest income in the fourth quarter of 2014 totaled $2.2 million, compared to $2.3 million in the prior quarter and $2.1 million in the same quarter a year ago. The decrease from the prior quarter primarily reflects lower merchant and debit card interchange fees due to decreased transaction volume. The increase 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 interchange fees due to increased volume, and bank-owned life insurance income due to policies acquired from NorCal. Those improvements were partially offset by the absence of gains on the sale of investment securities recorded in the fourth quarter of 2013. The 2014 non-interest income totaled $9.0 million, an increase of $975 thousand, or 12.1% from last year. The increase in 2014 compared to 2013 primarily relates to higher dividend income from the Federal Home Loan Bank of San Francisco, debit card interchange fees due to increased volume and Wealth Management and Trust Services fees.
Non-interest expense totaled $11.6 million in the fourth quarter of 2014, compared to $11.4 million in the prior quarter and $13.9 million in the same quarter a year ago. The increase in non-interest expense from the prior quarter reflects an increase of $323 thousand in the provision for off-balance sheet commitments due to a refinement in methodology. Non-interest expense increased from $44.1 million in 2013 to $47.3 million in 2014. The increase in 2014 reflects the Bank's expansion into the East Bay including increased salaries and benefits, facilities, and amortization of core deposit intangible, partially offset by the absence of one-time acquisition costs.
3
Earnings Call and Webcast Information
Bank of Marin Bancorp will webcast its fourth quarter earnings call on Monday, January 26, 2015 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, 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.
4
BANK OF MARIN BANCORP | ||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||
December 31, 2014 | ||||||||||||||||
(dollars in thousands, except per share data; unaudited) | Dec. 31, 2014 | Sept. 30, 2014 | Dec. 31, 2013 | |||||||||||||
QUARTER-TO-DATE | ||||||||||||||||
NET INCOME | $ | 4,692 | $ | 5,378 | $ | 2,345 | ||||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 0.78 | $ | 0.89 | $ | 0.41 | ||||||||||
RETURN ON AVERAGE ASSETS (ROA) | 1.01 | % | 1.15 | % | 0.57 | % | ||||||||||
RETURN ON AVERAGE EQUITY (ROE) | 9.36 | % | 10.98 | % | 5.47 | % | ||||||||||
EFFICIENCY RATIO | 60.18 | % | 57.23 | % | 78.39 | % | ||||||||||
TAX-EQUIVALENT NET INTEREST MARGIN1 | 3.99 | % | 4.03 | % | 4.05 | % | ||||||||||
NET CHARGE-OFFS/(RECOVERIES) | $ | (50 | ) | $ | (149 | ) | $ | (266 | ) | |||||||
NET CHARGE-OFFS/(RECOVERIES) TO AVERAGE LOANS | — | % | (0.01 | ) | % | (0.02 | ) | % | ||||||||
YEAR-TO-DATE | ||||||||||||||||
NET INCOME | $ | 19,771 | $ | 14,270 | ||||||||||||
DILUTED EARNINGS PER COMMON SHARE | $ | 3.29 | $ | 2.57 | ||||||||||||
RETURN ON AVERAGE ASSETS (ROA) | 1.08 | % | 0.96 | % | ||||||||||||
RETURN ON AVERAGE EQUITY (ROE) | 10.31 | % | 8.86 | % | ||||||||||||
EFFICIENCY RATIO | 59.46 | % | 65.97 | % | ||||||||||||
TAX-EQUIVALENT NET INTEREST MARGIN1 | 4.13 | % | 4.20 | % | ||||||||||||
NET CHARGE-OFFS/(RECOVERIES) | $ | (124 | ) | $ | (24 | ) | ||||||||||
NET CHARGE-OFFS/(RECOVERIES) TO AVERAGE LOANS | (0.01 | ) | % | — | % | |||||||||||
AT PERIOD END | ||||||||||||||||
TOTAL ASSETS | $ | 1,787,130 | $ | 1,802,657 | $ | 1,805,194 | ||||||||||
LOANS: | ||||||||||||||||
COMMERCIAL AND INDUSTRIAL | $ | 210,223 | $ | 201,516 | $ | 183,291 | ||||||||||
REAL ESTATE | ||||||||||||||||
COMMERCIAL OWNER-OCCUPIED | $ | 230,605 | $ | 234,493 | $ | 241,113 | ||||||||||
COMMERCIAL INVESTOR-OWNED | $ | 673,499 | $ | 674,428 | $ | 625,019 | ||||||||||
CONSTRUCTION | $ | 48,413 | $ | 45,948 | $ | 31,577 | ||||||||||
HOME EQUITY | $ | 110,788 | $ | 109,655 | $ | 98,469 | ||||||||||
OTHER RESIDENTIAL | $ | 73,035 | $ | 75,992 | $ | 72,634 | ||||||||||
INSTALLMENT AND OTHER CONSUMER LOANS | $ | 16,788 | $ | 18,953 | $ | 17,219 | ||||||||||
TOTAL LOANS | $ | 1,363,351 | $ | 1,360,985 | $ | 1,269,322 | ||||||||||
NON-ACCRUAL LOANS2: | ||||||||||||||||
COMMERCIAL AND INDUSTRIAL | $ | — | $ | 193 | $ | 1,187 | ||||||||||
REAL ESTATE | ||||||||||||||||
COMMERCIAL OWNER-OCCUPIED | $ | 1,403 | $ | 1,403 | $ | 1,403 | ||||||||||
COMMERCIAL INVESTOR-OWNED | $ | 2,429 | $ | 2,505 | $ | 2,807 | ||||||||||
CONSTRUCTION | $ | 5,134 | $ | 5,173 | $ | 5,218 | ||||||||||
HOME EQUITY | $ | 280 | $ | 436 | $ | 234 | ||||||||||
OTHER RESIDENTIAL | $ | — | $ | — | $ | 660 | ||||||||||
INSTALLMENT AND OTHER CONSUMER LOANS | $ | 104 | $ | 128 | $ | 169 | ||||||||||
TOTAL NON-ACCRUAL LOANS | $ | 9,350 | $ | 9,838 | $ | 11,678 | ||||||||||
CLASSIFIED LOANS (GRADED SUBSTANDARD & DOUBTFUL) | $ | 36,237 | $ | 38,999 | $ | 31,140 | ||||||||||
TOTAL ACCRUING LOANS 30-89 DAYS PAST DUE | $ | 1,009 | $ | 299 | $ | 995 | ||||||||||
LOAN LOSS RESERVE TO LOANS | 1.11 | % | 1.11 | % | 1.12 | % | ||||||||||
LOAN LOSS RESERVE TO NON-ACCRUAL LOANS | 1.61 | x | 1.53 | x | 1.22 | x | ||||||||||
NON-ACCRUAL LOANS TO TOTAL LOANS | 0.69 | % | 0.73 | % | 0.92 | % | ||||||||||
TEXAS RATIO3 | 4.79 | % | 5.14 | % | 6.58 | % | ||||||||||
TOTAL DEPOSITS | $ | 1,551,619 | $ | 1,571,624 | $ | 1,587,102 | ||||||||||
LOAN TO DEPOSIT RATIO | 87.9 | % | 86.6 | % | 80.0 | % | ||||||||||
STOCKHOLDERS' EQUITY | $ | 200,026 | $ | 195,674 | $ | 180,887 | ||||||||||
BOOK VALUE PER SHARE | $ | 33.68 | $ | 33.00 | $ | 30.78 | ||||||||||
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS4 | 10.7 | % | 10.3 | % | 9.5 | % | ||||||||||
TOTAL RISK-BASED CAPITAL RATIO-BANK5 | 13.7 | % | 13.3 | % | 12.5 | % | ||||||||||
TOTAL RISK-BASED CAPITAL RATIO-BANCORP5 | 13.9 | % | 13.6 | % | 13.1 | % | ||||||||||
FULL TIME EQUIVALENT EMPLOYEES | 260 | 257 | 281 | |||||||||||||
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 $15.9 million, $16.9 million and $12.9 million at December 31, 2014, September 30, 2014 and December 31, 2013, respectively. Excludes purchased credit-impaired (PCI) loans with carrying values of $3.8 million, $3.8 million and $5.7 million that were accreting interest at December 31, 2014, September 30, 2014 and December 31, 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 $7.1 million at December 31, 2014, September 30,2014 and December 31, 2013 respectively. | ||||||||||||||||
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 $10.2 million, $10.4 million and $10.9 million at December 31, 2014, September 30, 2014 and December 31, 2013, respectively. Tangible assets excludes goodwill and intangible assets. | ||||||||||||||||
5 Current period estimated. | ||||||||||||||||
5
BANK OF MARIN BANCORP CONSOLIDATED STATEMENTS OF CONDITION |
at December 31, 2014, September 30, 2014 and December 31, 2013 |
(in thousands, except share data; unaudited) | December 31, 2014 | September 30, 2014 | December 31, 2013 | ||||||||
Assets | |||||||||||
Cash and due from banks | $ | 41,367 | $ | 46,424 | $ | 103,773 | |||||
Investment securities | |||||||||||
Held to maturity, at amortized cost | 116,437 | 118,843 | 122,495 | ||||||||
Available for sale (at fair value; amortized cost $199,045, $210,676 and $245,158 at December 31, 2014, September 30, 2014 and December 31, 2013, respectively) | 200,848 | 211,582 | 243,998 | ||||||||
Total investment securities | 317,285 | 330,425 | 366,493 | ||||||||
Loans, net of allowance for loan losses of $15,099, $15,049 and $14,224 at December 31, 2014, September 30, 2014 and December 31, 2013, respectively | 1,348,252 | 1,345,936 | 1,255,098 | ||||||||
Bank premises and equipment, net | 9,859 | 9,277 | 9,110 | ||||||||
Goodwill | 6,436 | 6,436 | 6,436 | ||||||||
Core deposit intangible | 3,732 | 3,925 | 4,503 | ||||||||
Interest receivable and other assets | 60,199 | 60,234 | 59,781 | ||||||||
Total assets | $ | 1,787,130 | $ | 1,802,657 | $ | 1,805,194 | |||||
Liabilities and Stockholders' Equity | |||||||||||
Liabilities | |||||||||||
Deposits | |||||||||||
Non-interest bearing | $ | 670,890 | $ | 717,720 | $ | 648,191 | |||||
Interest bearing | |||||||||||
Transaction accounts | 93,758 | 89,891 | 137,748 | ||||||||
Savings accounts | 133,714 | 127,774 | 118,770 | ||||||||
Money market accounts | 503,543 | 485,626 | 520,525 | ||||||||
Time accounts | 149,714 | 150,613 | 161,868 | ||||||||
Total deposits | 1,551,619 | 1,571,624 | 1,587,102 | ||||||||
Federal Home Loan Bank borrowings | 15,000 | 15,000 | 15,000 | ||||||||
Subordinated debentures | 5,185 | 5,131 | 4,969 | ||||||||
Interest payable and other liabilities | 15,300 | 15,228 | 17,236 | ||||||||
Total liabilities | 1,587,104 | 1,606,983 | 1,624,307 | ||||||||
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 - 5,939,482, 5,930,100 and 5,877,524 at December 31, 2014, September 30, 2014 and December 31, 2013, respectively | 82,436 | 81,993 | 80,095 | ||||||||
Retained earnings | 116,502 | 113,115 | 101,464 | ||||||||
Accumulated other comprehensive income (loss), net | 1,088 | 566 | (672 | ) | |||||||
Total stockholders' equity | 200,026 | 195,674 | 180,887 | ||||||||
Total liabilities and stockholders' equity | $ | 1,787,130 | $ | 1,802,657 | $ | 1,805,194 | |||||
6
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, 2014 | September 30, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | ||||||||||||||
Interest income | |||||||||||||||||||
Interest and fees on loans | $ | 15,946 | $ | 16,195 | $ | 14,358 | $ | 64,823 | $ | 54,408 | |||||||||
Interest on investment securities | |||||||||||||||||||
Securities of U.S. government agencies | 951 | 1,126 | 810 | 4,502 | 2,573 | ||||||||||||||
Obligations of state and political subdivisions | 536 | 496 | 615 | 2,273 | 2,214 | ||||||||||||||
Corporate debt securities and other | 253 | 254 | 271 | 1,031 | 1,245 | ||||||||||||||
Interest on Federal funds sold and due from banks | 36 | 37 | 75 | 161 | 120 | ||||||||||||||
Total interest income | 17,722 | 18,108 | 16,129 | 72,790 | 60,560 | ||||||||||||||
Interest expense | |||||||||||||||||||
Interest on interest bearing transaction accounts | 25 | 25 | 17 | 99 | 52 | ||||||||||||||
Interest on savings accounts | 12 | 12 | 10 | 46 | 35 | ||||||||||||||
Interest on money market accounts | 135 | 126 | 124 | 550 | 419 | ||||||||||||||
Interest on time accounts | 222 | 229 | 232 | 917 | 922 | ||||||||||||||
Interest on FHLB and overnight borrowings | 80 | 79 | 79 | 315 | 322 | ||||||||||||||
Interest on subordinated debentures | 106 | 106 | 35 | 422 | 35 | ||||||||||||||
Total interest expense | 580 | 577 | 497 | 2,349 | 1,785 | ||||||||||||||
Net interest income | 17,142 | 17,531 | 15,632 | 70,441 | 58,775 | ||||||||||||||
Provision for loan losses | — | — | 150 | 750 | 540 | ||||||||||||||
Net interest income after provision for loan losses | 17,142 | 17,531 | 15,482 | 69,691 | 58,235 | ||||||||||||||
Non-interest income | |||||||||||||||||||
Service charges on deposit accounts | 531 | 552 | 517 | 2,167 | 2,062 | ||||||||||||||
Wealth Management and Trust Services | 565 | 567 | 544 | 2,309 | 2,162 | ||||||||||||||
Debit card interchange fees | 343 | 375 | 284 | 1,378 | 1,104 | ||||||||||||||
Merchant interchange fees | 174 | 224 | 199 | 803 | 822 | ||||||||||||||
Earnings on Bank-owned life Insurance | 209 | 208 | 188 | 841 | 954 | ||||||||||||||
(Loss) gain on investment securities, net | (13 | ) | 4 | 34 | 80 | (1 | ) | ||||||||||||
Other income | 347 | 371 | 297 | 1,463 | 963 | ||||||||||||||
Total non-interest income | 2,156 | 2,301 | 2,063 | 9,041 | 8,066 | ||||||||||||||
Non-interest expense | |||||||||||||||||||
Salaries and related benefits | 5,735 | 6,108 | 5,857 | 25,005 | 21,974 | ||||||||||||||
Occupancy and equipment | 1,426 | 1,381 | 1,182 | 5,470 | 4,347 | ||||||||||||||
Depreciation and amortization | 383 | 383 | 363 | 1,585 | 1,395 | ||||||||||||||
Federal Deposit Insurance Corporation insurance | 252 | 261 | 240 | 1,032 | 921 | ||||||||||||||
Data processing | 809 | 748 | 3,477 | 3,665 | 5,334 | ||||||||||||||
Professional services | 653 | 537 | 869 | 2,230 | 2,985 | ||||||||||||||
Provision for (reversal of) losses on off-balance sheet commitments | 336 | 13 | 25 | 334 | 112 | ||||||||||||||
Other expense | 2,019 | 1,919 | 1,858 | 7,942 | 7,024 | ||||||||||||||
Total non-interest expense | 11,613 | 11,350 | 13,871 | 47,263 | 44,092 | ||||||||||||||
Income before provision for income taxes | 7,685 | 8,482 | 3,674 | 31,469 | 22,209 | ||||||||||||||
Provision for income taxes | 2,993 | 3,104 | 1,329 | 11,698 | 7,939 | ||||||||||||||
Net income | $ | 4,692 | $ | 5,378 | $ | 2,345 | $ | 19,771 | $ | 14,270 | |||||||||
Net income per common share: | |||||||||||||||||||
Basic | $ | 0.79 | $ | 0.91 | $ | 0.42 | $ | 3.35 | $ | 2.62 | |||||||||
Diluted | $ | 0.78 | $ | 0.89 | $ | 0.41 | $ | 3.29 | $ | 2.57 | |||||||||
Weighted average shares used to compute net income per common share: | |||||||||||||||||||
Basic | 5,913 | 5,903 | 5,585 | 5,893 | 5,457 | ||||||||||||||
Diluted | 6,037 | 6,014 | 5,697 | 6,006 | 5,558 | ||||||||||||||
Dividends declared per common share | $ | 0.22 | $ | 0.20 | $ | 0.19 | $ | 0.80 | $ | 0.73 | |||||||||
Comprehensive income | |||||||||||||||||||
Net income | $ | 4,692 | $ | 5,378 | $ | 2,345 | $ | 19,771 | $ | 14,270 | |||||||||
Other comprehensive income (loss) | |||||||||||||||||||
Change in net unrealized gain (loss) on available-for-sale securities | 884 | (336 | ) | (2,130 | ) | 2,939 | (4,720 | ) | |||||||||||
Reclassification adjustment for loss (gain) on available-for-sale securities included in net income | 13 | (4 | ) | (17 | ) | 24 | 18 | ||||||||||||
Net change in unrealized gain (loss) on available-for-sale securities, before tax | 897 | (340 | ) | (2,147 | ) | 2,963 | (4,702 | ) | |||||||||||
Deferred tax expense (benefit) | 375 | (141 | ) | (903 | ) | 1,203 | (1,975 | ) | |||||||||||
Other comprehensive income (loss), net of tax | 522 | (199 | ) | (1,244 | ) | 1,760 | (2,727 | ) | |||||||||||
Comprehensive income | $ | 5,214 | $ | 5,179 | $ | 1,101 | $ | 21,531 | $ | 11,543 | |||||||||
7
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, 2014 | September 30, 2014 | December 31, 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 | $ | 54,845 | $ | 36 | 0.26 | % | $ | 58,088 | $ | 37 | 0.25 | % | $ | 116,627 | $ | 75 | 0.25 | % | |||||||||
Investment securities 2, 3 | 322,027 | 1,887 | 2.34 | % | 332,920 | 1,997 | 2.40 | % | 285,537 | 1,873 | 2.62 | % | |||||||||||||||
Loans 1, 3, 4 | 1,348,013 | 16,251 | 4.72 | % | 1,349,740 | 16,489 | 4.78 | % | 1,143,509 | 14,563 | 4.98 | % | |||||||||||||||
Total interest-earning assets 1 | 1,724,885 | 18,174 | 4.12 | % | 1,740,748 | 18,523 | 4.16 | % | 1,545,673 | 16,511 | 4.18 | % | |||||||||||||||
Cash and non-interest-bearing due from banks | 47,930 | 46,258 | 43,385 | ||||||||||||||||||||||||
Bank premises and equipment, net | 9,503 | 9,337 | 9,033 | ||||||||||||||||||||||||
Interest receivable and other assets, net | 56,718 | 56,855 | 44,278 | ||||||||||||||||||||||||
Total assets | $ | 1,839,036 | $ | 1,853,198 | $ | 1,642,369 | |||||||||||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 90,659 | $ | 25 | 0.11 | % | $ | 92,907 | $ | 25 | 0.11 | % | $ | 99,116 | $ | 17 | 0.07 | % | |||||||||
Savings accounts | 131,728 | 12 | 0.04 | % | 127,457 | 12 | 0.04 | % | 108,229 | 10 | 0.03 | % | |||||||||||||||
Money market accounts | 502,637 | 135 | 0.11 | % | 501,843 | 126 | 0.10 | % | 475,051 | 124 | 0.10 | % | |||||||||||||||
CDARS® time accounts | — | — | — | % | — | — | — | % | 889 | — | — | % | |||||||||||||||
Other time accounts | 150,298 | 222 | 0.59 | % | 152,995 | 229 | 0.59 | % | 146,549 | 232 | 0.63 | % | |||||||||||||||
FHLB borrowings and overnight borrowings 1 | 15,015 | 80 | 2.07 | % | 15,000 | 79 | 2.07 | % | 15,003 | 79 | 2.07 | % | |||||||||||||||
Junior subordinated debentures 1 | 5,152 | 106 | 8.05 | % | 5,096 | 106 | 8.14 | % | 1,616 | 35 | 8.48 | % | |||||||||||||||
Total interest-bearing liabilities | 895,489 | 580 | 0.26 | % | 895,298 | 577 | 0.26 | % | 846,453 | 497 | 0.23 | % | |||||||||||||||
Demand accounts | 729,183 | 749,361 | 610,261 | ||||||||||||||||||||||||
Interest payable and other liabilities | 15,551 | 14,167 | 15,498 | ||||||||||||||||||||||||
Stockholders' equity | 198,813 | 194,372 | 170,157 | ||||||||||||||||||||||||
Total liabilities & stockholders' equity | $ | 1,839,036 | $ | 1,853,198 | $ | 1,642,369 | |||||||||||||||||||||
Tax-equivalent net interest income/margin 1 | $ | 17,594 | 3.99 | % | $ | 17,946 | 4.03 | % | $ | 16,014 | 4.05 | % | |||||||||||||||
Reported net interest income/margin 1 | $ | 17,142 | 3.89 | % | $ | 17,531 | 3.94 | % | $ | 15,632 | 3.96 | % | |||||||||||||||
Tax-equivalent net interest rate spread | 3.86 | % | 3.91 | % | 3.95 | % | |||||||||||||||||||||
Year ended | Year ended | ||||||||||||||||||||||||||
December 31, 2014 | December 31, 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 | $ | 63,150 | $ | 161 | 0.25 | % | $ | 47,401 | $ | 120 | 0.25 | % | |||||||||||||||
Investment securities 2, 3 | 341,787 | 8,385 | 2.45 | % | 272,767 | 6,648 | 2.44 | % | |||||||||||||||||||
Loans 1, 3, 4 | 1,317,794 | 65,856 | 4.93 | % | 1,092,885 | 55,157 | 4.98 | % | |||||||||||||||||||
Total interest-earning assets 1 | 1,722,731 | 74,402 | 4.26 | % | 1,413,053 | 61,925 | 4.32 | % | |||||||||||||||||||
Cash and non-interest-bearing due from banks | 44,452 | 32,903 | |||||||||||||||||||||||||
Bank premises and equipment, net | 9,290 | 9,214 | |||||||||||||||||||||||||
Interest receivable and other assets, net | 56,592 | 38,993 | |||||||||||||||||||||||||
Total assets | $ | 1,833,065 | $ | 1,494,163 | |||||||||||||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 101,133 | $ | 99 | 0.10 | % | $ | 97,336 | $ | 52 | 0.05 | % | |||||||||||||||
Savings accounts | 125,169 | 46 | 0.04 | % | 100,185 | 35 | 0.03 | % | |||||||||||||||||||
Money market accounts | 507,055 | 550 | 0.11 | % | 437,441 | 419 | 0.10 | % | |||||||||||||||||||
CDARS® time accounts | — | — | — | % | 5,416 | 8 | 0.15 | % | |||||||||||||||||||
Other time accounts | 155,229 | 917 | 0.59 | % | 140,334 | 914 | 0.65 | % | |||||||||||||||||||
FHLB borrowings and overnight borrowings 1 | 15,004 | 315 | 2.07 | % | 19,054 | 322 | 1.67 | % | |||||||||||||||||||
Junior subordinated debentures and subordinated debenture1 | 5,070 | 422 | 8.36 | % | 407 | 35 | 8.48 | % | |||||||||||||||||||
Total interest-bearing liabilities | 908,660 | 2,349 | 0.26 | % | 800,173 | 1,785 | 0.22 | % | |||||||||||||||||||
Demand accounts | 717,738 | 518,986 | |||||||||||||||||||||||||
Interest payable and other liabilities | 14,934 | 13,970 | |||||||||||||||||||||||||
Stockholders' equity | 191,733 | 161,034 | |||||||||||||||||||||||||
Total liabilities & stockholders' equity | $ | 1,833,065 | $ | 1,494,163 | |||||||||||||||||||||||
Tax-equivalent net interest income/margin 1 | $ | 72,053 | 4.13 | % | $ | 60,140 | 4.20 | % | |||||||||||||||||||
Reported net interest income/margin 1 | $ | 70,441 | 4.03 | % | $ | 58,775 | 4.10 | % | |||||||||||||||||||
Tax-equivalent net interest rate spread | 4.00 | % | 4.10 | % | |||||||||||||||||||||||
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