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Novato, CA --- Bank of Marin Bancorp (Nasdaq: BMRC) President and CEO Russell A. Colombo announced 2007 earnings for Bank of Marin Bancorp (Bancorp) of $12.3 million, up $441 thousand, or 3.7%, from 2006. Diluted earnings per share were $2.31 in 2007, compared to $2.11 in 2006, up 20 cents, or 9.5%.
For the quarter ended December 31, 2007, Bancorp's earnings totaled $3.3 million, up $31 thousand, or 1.0%, from $3.2 million in the comparable quarter of 2006. Diluted earnings per share for the quarter ended December 31, 2007 were $.62, an increase of 5 cents per share, or 8.8%, over the same period in 2006.
The 2007 net income includes pre-tax non-recurring net gains of $710 thousand related to the second-quarter sale of the $76 million indirect auto loan portfolio and pre-tax non-recurring gains of $387 thousand from the third-quarter sale of the Bank's $1.5 million VISA portfolio. The 2007 net income also includes a pre-tax non-recurring charge of $242k recorded in the fourth quarter for the potential obligation to Visa Inc. in connection with certain litigation indemnifications provided to Visa Inc. by Visa member banks.
Loans totaled $725.0 million at December 31, 2007. Excluding the indirect auto portfolio, which was sold in the second quarter of 2007, loans increased 14.1% over 2006. Credit quality remains strong with $144 thousand in non-performing loans at December 31, 2007. Bank of Marin Bancorp holds no subprime loans in its portfolio nor does it hold investment securities backed by subprime loans.
"One of the Bank's most notable strengths is our excellent credit quality. Our solid and consistent underwriting standards combined with significant liquidity have allowed us to continue to support our customer base and build market share. We have not participated in the subprime lending market and our focus on relationship banking has allowed us to grow our portfolio at a strong double-digit pace, while maintaining excellent credit quality," said Colombo. "The sale of the $76 million indirect auto portfolio in the second quarter of 2007 provides a source of funding for higher-yielding relationship loans, which drive core growth. The sale of the $1.5 million Visa portfolio in the third quarter of 2007 allows the Bank to offer a third-party product that better meets customers' needs."
Deposits totaled $834.6 million at December 31, 2007, which represents growth of 13.3%. The 2007 year-end deposit balance includes a $53 million short-term deposit placed with the Bank in December. Excluding this short-term deposit, growth over 2006 totaled 6.1%. "We grew our market share of total deposits in Marin County from 8.95% at December 2006 to 9.50% at June 30, 2007, the latest date for which figures are available. We are pleased that Bank of Marin ranks number one in business core deposits in Marin County holding 23.81% of these deposits as of June 30, 2007, per the California Banksite Corporation, which provides bank deposit statistics for banks throughout California" said Colombo.
Net interest income of $42.7 million in the year ended December 31, 2007 increased $1.0 million, or 2.4%, from the prior year reflecting a combination of growth in interest-earning assets and higher loan yields, partially offset by deposit growth and a higher overall cost of deposits in 2007 compared to 2006. Fourth quarter net interest income totaled $11.5 million, up $914 thousand, or 8.7%, from the comparable quarter a year ago, and reflected lower money market deposit rates. The net interest margin equaled 5.07% in 2007 compared to 5.15% in 2006. The net interest margin for the fourth quarter of 2007 totaled 5.27%, up 17 basis points from the same quarter a year ago and up 33 basis points from 4.94% in the third quarter of 2007. The margin compression in the first nine months of the year reflected both economic and competitive pressures. This pressure eased in the latter part of 2007 as the Bank's liquidity improved with the proceeds from the sale of the indirect auto portfolio and the Bank's active management of expenses related to deposits. "Given the interest rate compression experienced by the banking industry in 2007, we are very satisfied with these results and the balance sheet changes we accomplished. Our increased liquidity and reduction in other borrowings should help to support profitable loan growth in the coming year," said Colombo.
For the year ended December 31, 2007 non-interest income, excluding non-recurring gains, totaled $4.6 million, an increase of $649 thousand, or 16.3% over the same period a year ago. Non-interest income totaled $1.2 million in the fourth quarter of 2007, which represents an increase of $194 thousand, or 18.7% compared to the same quarter a year ago. Increases in service charge income, Wealth Management Services income and other income, including Bank-owned life insurance income contributed to the growth. Approximately $89 thousand and $14 thousand of recoveries on indirect auto loans were recorded in other income during 2007 and the fourth quarter of 2007, respectively, subsequent to recording these loans at their fair value.
In 2007, non-interest expense increased by $1.8 million to $27.7 million, an increase of 6.9% over 2006. The increase reflects the hiring of new key personnel, one-time costs associated with the formation of the holding company and higher FDIC insurance premiums. In the fourth quarter of 2007, non-interest expense totaled $7.0 million, an increase of $557 thousand, or 8.6%, from the fourth quarter of 2006. The increase includes higher personnel costs and FDIC premiums. The full year and fourth quarter of 2007 also include the $242 thousand non-recurring Visa Inc. litigation indemnification charge discussed earlier.
In November 2007, Bancorp initiated a stock repurchase plan to buy back up to $5 million of its common stock. Bancorp repurchased 51,732 shares during the fourth quarter of 2007 at an average price of $29.96, for a total cost of $1.6 million, including commissions. Due to the active management of capital, including the repurchase of common shares in 2006 and 2007, Bancorp's return on equity increased to 14.44%, up 61 basis points in 2007 compared to 2006 and increased to 14.64%, up 55 basis points in the fourth quarter of 2007 compared to the same quarter a year ago.
"2007 was marked by a year of proactive management including the sale of the indirect auto and Visa portfolios, the formation of a holding company, the repurchase of common shares, the establishment of a loan production office in San Francisco and the announcement of a new branch in downtown Mill Valley which is expected to open in April 2008," said Colombo. "We continue to actively pursue areas that will enhance our banking franchise so that we can maintain our premier community banking status."
The formation of a bank holding company, Bank of Marin Bancorp, with Bank of Marin as its wholly-owned subsidiary was completed on July 2, 2007. In the transaction, shareholders of the Bank became shareholders of the holding company on a "one-share for one-share" basis. For trading purposes, Bank of Marin Bancorp assumed the Bank of Marin's ticker symbol "BMRC."
The financial information for the current period presented relates to Bank of Marin Bancorp, while certain prior periods relate to the Bank of Marin, if these periods were prior to the formation of the bank holding company. This information is comparable between periods as the only subsidiary of Bank of Marin Bancorp is the Bank of Marin.
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.
Bank of Marin Bancorp
Year to Year Comparison
December 31, 2007
|
| Fourth Quarter |
QTR 2007
|
QTR 2006
|
Change
|
% Change
|
| Net Income |
$3,258,000 |
$3,227,000 |
$31,000 |
0.96% |
| Diluted Earnings Per Share* |
$0.62 |
$0.57 |
$0.05 |
8.77% |
| Return On Assets (ROA) |
1.41% |
1.46% |
(0.05%) |
(3.42%) |
| Return On Equity (ROE) |
14.64% |
14.09% |
0.55% |
3.90% |
| Efficiency Ratio |
55.30% |
57.77% |
(0.67%) |
(1.16%) |
| Net Interest Margin |
5.27% |
5.10% |
0.17% |
3.33% |
| Year To Date |
YTD 2007
|
YTD 2006
|
Change
|
% Change
|
| Net Income |
$12,324,000 |
$11,883,000 |
$441,000 |
3.71% |
| Diluted Earnings Per Share |
$2.31 |
$2.11 |
$0.20 |
9.48% |
| Return On Assets (ROA) |
1.38% |
1.38% |
0.00% |
0.00% |
| Return On Equity (ROE) |
14.44% |
13.83% |
0.61% |
4.41% |
| Efficiency Ratio |
57.10% |
56.65% |
0.45% |
0.79% |
| Net Interest Margin |
5.07% |
5.15% |
(0.08%) |
(1.55%) |
| At Period End |
Dec 31, 2007
|
Dec 31, 2006
|
Change
|
% Change
|
| Total Assets |
$933,901,000 |
$876,578,000 |
$57,323,000 |
6.54% |
| Total Deposits |
$834,642,000 |
$736,697,000 |
$97,945,000 |
13.30% |
| Total Loans |
$724,878,000 |
$719,778,000 |
$5,100,000 |
0.71% |
| Total Nonperforming Loans |
$144,000 |
$48,981 |
$95,019 |
193.99% |
| Loan Loss Reserve to Loans |
1.05% |
1.11% |
(0.06%) |
(5.41%) |
Loan Loss Reserve
To Non-Performing Loans |
5260.42% |
16379.82% |
(11119.40%) |
NM |
| Stockholders' Equity |
$87,774,000 |
$89,525,000 |
($1,751,000) |
(1.96%) |
| Book Value Per Share* |
$17.13 |
$16.68 |
$0.45 |
2.70% |
| Total Capital to Assets |
9.40% |
10.21% |
(0.81%) |
(7.93%) |
| Total Risk Based Capital Ratio-Bank* |
11.6% |
12.6% |
(1.00%) |
(7.94%) |
| Total Risk Based Capital Ratio-Bancorp* |
12.1% |
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NM |
NM |
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*Current period estimated
NM - Not meaningful
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