Bank of Marin Bancorp Reports Record Annual Earnings

  Bank of Marin Bancorp Reports Record Annual Earnings

        Significant Loan Growth of $60.2 Million in the Fourth Quarter

Business Wire

NOVATO, Calif. -- January 22, 2013

Bank of Marin Bancorp, "Bancorp" (NASDAQ: BMRC), parent company of Bank of
Marin, announced earnings for the quarter ended December31, 2012 of $4.7
million, an increase of $1.5 million, or 45.8% from $3.2 million in the third
quarter of 2012, and an increase of $1.3 million, or 39.0% from $3.4 million
in the fourth quarter of 2011. Diluted earnings per share totaled $0.86 in the
fourth quarter of 2012, up $0.27, or 45.8% from $0.59 in the prior quarter,
and up $0.23, or 36.5% from $0.63 in the same quarter a year ago. Earnings for
the fourth quarter of 2012 reflect a $1.0 million pre-tax gain on the pay-off
of a purchased-credit impaired ("PCI") loan. This gain increased fourth
quarter diluted earnings per share by 12 cents on an after-tax basis.

2012 record annual earnings totaled $17.8 million, an increase of $2.3
million, or 14.5%, from $15.6 million a year ago. Diluted earnings per share
for the year ended December31, 2012 totaled $3.28, up $0.39, or 13.5%, from
$2.89 in the prior year.

“The Bank's overall strong performance demonstrates the solid relationships we
have built with customers while also maintaining our high credit quality
standards," said Russell A. Colombo, President and Chief Executive Officer.
"Our robust loan growth in the fourth quarter reflects our continued focus on
business development to build the loan portfolio."

Bancorp also provided the following highlights on its operating and financial
performance for the fourth quarter and year ended December31, 2012:

  *Loan growth in the fourth quarter of 2012 totaled $60.2 million, or 5.9%,
    primarily due to investor-owned commercial real estate loan originations
    in the Marin and San Francisco markets. Gross loans totaled $1.1 billion
    at December31, 2012.
  *Credit quality remains solid with non-performing loans at 1.64% of total
    loans, down from 1.90% in the prior quarter. Accruing loans past due 30 to
    89 days decreased from $2.1 million in the prior quarter to $588 thousand
    at December31, 2012.
  *Deposits increased $50.3 million, or 4.2% in 2012 to $1.3 billion,
    reflecting a favorable shift in the deposit mix from higher-interest
    bearing time accounts to core deposits. Non-interest bearing deposits
    comprised 31.1% of total deposits at December31, 2012.
  *In a conscious effort to deploy excess liquidity, Bancorp grew the
    investment portfolio by $52.1 million in the fourth quarter of 2012 and
    $98.6 million in the year ended December31, 2012 (primarily
    investment-grade municipal securities and corporate bonds).
  *On January 17, 2013, the Board of Directors declared a quarterly cash
    dividend of $0.18 per share. The cash dividend is payable to shareholders
    of record at the close of business on February 1, 2013 and will be payable
    on February 15, 2013.

"By funding a significant volume of new loans, increasing security purchases,
and strategically running off higher-cost, non-relationship deposit accounts,
we reduced our excess liquidity and managed our net interest margin," said
Christina Cook, Chief Financial Officer. "The strong lending effort also
increased the loan-to-deposit ratio from last quarter, reflecting improved
utilization of our funding sources."

Loans and Credit Quality

Gross loans totaled $1.1 billion at December31, 2012 and increased $60.2
million, or 5.9% over last quarter, and increased $42.8 million, or 4.2% over
a year ago. The uncertainty of the current economic environment makes the
predictability of loan growth for the industry difficult going forward.
Non-performing loans totaled $17.7 million, or 1.64%, of Bancorp's loan
portfolio at December31, 2012, compared to $19.2 million, or 1.90%, at
September30, 2012 and $12.0 million, or 1.16%, a year ago. The decrease in
non-performing loans from the prior quarter includes a $3.0 million
construction loan that was paid off as expected in November 2012, which had
been placed on non-accrual status in the preceding quarter. Accruing loans
past due 30 to 89 days totaled $588 thousand at December31, 2012, down from
$2.1 million at September30, 2012 and $7.4 million a year ago.

The provision for loan losses totaled $700 thousand in the fourth quarter of
2012, compared to $2.1 million in the prior quarter and $2.5 million in the
same quarter a year ago. The decreases in the fourth quarter of 2012 compared
to the prior quarter and same quarter a year ago are primarily due to fewer
newly identified problem loans that have significant credit loss exposure. The
provision for loan loss totaled $2.9 million and $7.1 million in 2012 and
2011, respectively.

The allowance for loan losses totaled 1.27% of loans at December31, 2012,
compared to 1.30% at September30, 2012 and 1.42% at December31, 2011. The
decline from the prior quarter end primarily relates to a shift in the mix of
loans towards those that have a lower reserve factor. The decline from prior
year primarily relates to current year charge-offs of specific reserves
established in 2011. Net charge-offs in the fourth quarter of 2012 totaled
$178 thousand, compared to $2.4 million in the prior quarter and $1.1 million
in the fourth quarter of 2011. Net charge-offs in 2012 totaled $3.9 million
compared to $4.8 million in the prior year.

Deposits

Deposits totaled $1.3 billion at both December31, 2012 and September30,
2012, and increased $50.3 million, or 4.2% from $1.2 billion at December31,
2011. The increase in deposits from the prior year primarily reflects
increases of $35.0 million in transaction accounts, $30.1 million in
non-interest bearing accounts, $17.8 million in savings accounts and $9.3
million in money market accounts, partially offset by decreases of $30.9
million in CDARS® time accounts and $10.9 million in other time accounts.

Earnings

Net interest income totaled $15.8 million in the fourth quarter of 2012, up
from $14.9 million in the prior quarter and $15.7 million in the same quarter
last year. The tax-equivalent net interest margin was 4.62%, 4.44% and 4.79%
for those respective periods. The increase in the fourth quarter of 2012
compared to the prior quarter primarily relates to a $1.0 million gain on the
pay-off of a purchased-credit impaired loan.

Net interest income totaled $63.2 million and $63.8 million in 2012 and 2011,
respectively. The tax-equivalent net interest margin was 4.74% in 2012
compared to 5.13% in 2011. The decreases in 2012 compared to 2011 primarily
relate to a lower level of accretion on purchased loans. In addition, rate
concessions and downward repricing on existing loans, as well as new loans
yielding lower rates continue to negatively impact the loan yield. The
decreases are partially offset by a reduction in the cost of interest-bearing
liabilities, as the prior year reflects a $924 thousand pre-payment penalty on
a Federal Home Loan Bank ("FHLB") advance in September 2011. Furthermore, the
current year reflects the maturity of another FHLB advance in January 2012, as
well as the downward repricing on deposits.

Key components of our net interest margin were as follows:

             Three months ended
               December 31, 2012        September 30, 2012      December 31, 2011
                           Basis                   Basis                  Basis
                             point                     point                    point
               Dollar        impact       Dollar       impact       Dollar      impact
                             to net                    to net                   to net
(dollars
in           Amount      interest   Amount     interest   Amount    interest
thousands;                   margin                    margin                   margin
unaudited)
Accretion
on PCI         $ 423         12 bps       $ 231        7 bps        $ 639       19 bps
loans
Accretion
on non-PCI     $ 42          1 bps        $ 232        7 bps        $ 241       7 bps
loans
Gains on
pay-offs       $ 1,022       29 bps       $ 101        3 bps        $ 208       6 bps
of PCI
loans
                                                                                
Interest       $ 182         5 bps        $ —          —            $ 6         —
recoveries
Interest     $ (40   )   (1 bps)    $ (115 )   (3 bps)    $ (30 )   (1 bps)
reversals

                   
                       Years ended
                       December 31, 2012           December 31, 2011
                                   Basis point                 Basis point
                       Dollar        impact to       Dollar        impact to
                                     net                           net
(dollars in                          interest                      interest
thousands;          Amount      margin        Amount      margin
unaudited)
Accretion on PCI       $ 1,641       12 bps          $ 1,418       11 bps
loans
Accretion on           $ 789         6 bps           $ 2,857       23 bps
non-PCI loans
Gains on
pay-offs of PCI        $ 1,714       13 bps          $ 1,879       15 bps
loans
                                                                   
Interest               $ 182         1 bps           $ 6           —
recoveries
Interest               $ (231  )     (2 bps)         $ (233  )     (2 bps)
reversals
FHLB Prepayment
Penalty -           N/A         N/A           $ (924  )   (7 bps)
September 2011
                                                                   

Accretion on PCI loans fluctuates based on changes in cash flows expected to
be collected. For acquired loans not considered credit-impaired, the level of
accretion varies due to maturities and early pay-offs of these loans. Gains on
pay-offs of PCI loans are recorded as interest income when the pay-off amounts
exceed the recorded investment.

Non-interest income in the fourth quarter of 2012 totaled $1.8 million and
remained relatively consistent with the prior quarter and increased $292
thousand, or 19.2%, from the same quarter a year ago. The 2012 non-interest
income totaled $7.1 million, an increase of $843 thousand, or 13.4% from last
year. The increases in the year and fourth quarter of 2012 compared to the
same periods a year ago primarily relate to higher merchant interchange income
and service charges on deposit accounts.

Non-interest expense totaled $9.6 million in both the fourth quarter of 2012
and the prior quarter. Non-interest expense decreased from $9.7 million in the
same quarter a year ago, which included a $683 thousand core deposit
intangible asset write-off, partially offset by higher personnel costs in the
fourth quarter of 2012. Non-interest expense totaled $38.7 million and $38.3
million in 2012 and 2011, respectively, representing a $411 thousand or 1.1%
increase. The increase in the full year of 2012 compared to 2011 primarily
reflects higher personnel costs associated with merit increases, and to a
lesser extent, new hires in the lending and deposit services areas.

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 17 offices in
Marin, San Francisco, Napa and Sonoma 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 thirteen 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
$1.4 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, the economic uncertainty in the United States and abroad, changes
in interest rates, deposit flows, real estate values, expected future cash
flows on acquired loans, and competition; changes in accounting principles,
policies or guidelines; changes in 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 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.


BANK OF MARIN BANCORP
FINANCIAL HIGHLIGHTS
December 31, 2012
                                                                             
(dollars in
thousands,                                              
except per share       Dec. 31, 2012       Sept. 30,           Dec. 31, 2011
data; unaudited)                           2012
                                                                             
QUARTER-TO-DATE
NET INCOME             $ 4,702             $ 3,224             $ 3,383
DILUTED EARNINGS       $ 0.86              $ 0.59              $ 0.63
PER COMMON SHARE
RETURN ON
AVERAGE ASSETS         1.28          %     0.89          %     0.96          %
(ROA)
RETURN ON
AVERAGE EQUITY         12.50         %     8.76          %     9.97          %
(ROE)
EFFICIENCY RATIO       54.42         %     57.38         %     56.46         %
TAX-EQUIVALENT
NET INTEREST           4.62          %     4.44          %     4.79          %
MARGIN^1
NET CHARGE-OFFS        $ 178               $ 2,396             $ 1,085
NET CHARGE-OFFS        0.02          %     0.24          %     0.11          %
TO AVERAGE LOANS
YEAR-TO-DATE
NET INCOME             $ 17,817                                $ 15,564
DILUTED EARNINGS       $ 3.28                                  $ 2.89
PER COMMON SHARE
RETURN ON
AVERAGE ASSETS         1.24          %                         1.16          %
(ROA)
RETURN ON
AVERAGE EQUITY         12.36         %                         12.01         %
(ROE)
EFFICIENCY RATIO       55.04         %                         54.62         %
TAX-EQUIVALENT
NET INTEREST           4.74          %                         5.13          %
MARGIN^1
NET CHARGE-OFFS        $ 3,878                                 $ 4,803
NET CHARGE-OFFS        0.38          %                         0.49          %
TO AVERAGE LOANS
AT PERIOD END
TOTAL ASSETS           $ 1,434,749         $ 1,435,114         $ 1,393,263
LOANS:
COMMERCIAL AND         $ 176,431           $ 171,662           $ 175,790
INDUSTRIAL
REAL ESTATE
COMMERCIAL             $ 196,406           $ 191,397           $ 174,705
OWNER-OCCUPIED
COMMERCIAL             $ 509,006           $ 438,685           $ 446,425
INVESTOR-OWNED
CONSTRUCTION           $ 30,665            $ 42,857            $ 51,957
HOME EQUITY            $ 93,237            $ 94,939            $ 98,043
OTHER                  $ 49,432            $ 53,590            $ 61,502
RESIDENTIAL
INSTALLMENT AND
OTHER CONSUMER         $ 18,775           $ 20,580           $ 22,732    
LOANS
TOTAL LOANS            $ 1,073,952         $ 1,013,710         $ 1,031,154
NON-PERFORMING
LOANS^2:
COMMERCIAL AND         $ 4,893             $ 6,048             $ 2,955
INDUSTRIAL
REAL ESTATE
COMMERCIAL             $ 1,403             $ 1,403             $ 2,033
OWNER-OCCUPIED
COMMERCIAL             $ 6,843             $ 3,725             $ 741
INVESTOR-OWNED
CONSTRUCTION           $ 2,239             $ 5,787             $ 3,014
HOME EQUITY            $ 545               $ 881               $ 766
OTHER                  $ 1,196             $ 736               $ 1,942
RESIDENTIAL
INSTALLMENT AND
OTHER CONSUMER         $ 533              $ 652              $ 519       
LOANS
TOTAL
NON-PERFORMING         $ 17,652            $ 19,232            $ 11,970
LOANS
CLASSIFIED LOANS
(GRADED                $ 36,916            $ 42,602            $ 64,670
SUBSTANDARD &
DOUBTFUL)
TOTAL ACCRUING
LOANS 30-89 DAYS       $ 588               $ 2,055             $ 7,382
PAST DUE
LOAN LOSS              1.27          %     1.30          %     1.42          %
RESERVE TO LOANS
LOAN LOSS
RESERVE TO             0.77          x     0.68          x     1.22          x
NON-PERFORMING
LOANS
NON-PERFORMING
LOANS TO TOTAL         1.64          %     1.90          %     1.16          %
LOANS
TEXAS RATIO^3          10.69         %     12.01         %     7.99          %
TOTAL DEPOSITS         $ 1,253,289         $ 1,258,873         $ 1,202,972
LOAN TO DEPOSIT        85.7          %     80.5          %     85.7          %
RATIO
STOCKHOLDERS'          $ 151,792           $ 147,336           $ 135,551
EQUITY
BOOK VALUE PER         $ 28.17             $ 27.45             $ 25.40
SHARE
TANGIBLE COMMON
EQUITY TO              10.58         %     10.27         %     9.73          %
TANGIBLE
ASSETS^4
TOTAL RISK BASED
CAPITAL                13.6          %     13.8          %     12.9          %
RATIO-BANK^5
TOTAL RISK BASED
CAPITAL                13.7          %     14.0          %     13.1          %
RATIO-BANCORP^5
FULL TIME
EQUIVALENT             238                 234                 232
EMPLOYEES
                                                                             
^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 $10.8 million, $15.7
million and $6.3 million at December 31, 2012, September 30, 2012 and December
31, 2011, respectively. Excludes purchased credit-impaired (PCI) loans with
carrying values of $3.0 million, $3.1 million and $3.4 million that were
accreting interest at December 31, 2012, September 30, 2012 and December 31,
2011, 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 $4.5 million at December 31, 2012,
$4.7 million at September 30, 2012 and $6.0 million at December 31, 2011.
^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, 2012, September 30, 2012 and December 31, 2011
                                                         
(in thousands, except
share data;              Dec. 31, 2012   Sept. 30, 2012   Dec. 31, 2011
unaudited)
Assets
Cash and due from           $ 28,349          $  141,438         $  127,732
banks
Short-term               —              —               2,011
investments
Cash and cash               28,349            141,438            129,743
equivalents
Investment securities
Held to maturity, at        139,452           94,571             59,738
amortized cost
Available for sale
(at fair value;
amortized cost
$150,420, $143,263
and $132,348 at          153,962        146,789         135,104
December 31, 2012,
September 30, 2012
and December 31,
2011, respectively)
Total investment            293,414           241,360            194,842
securities
Loans, net of
allowance for loan
losses of $13,661,
$13,139 and $14,639         1,060,291         1,000,571          1,016,515
at December 31, 2012,
September 30, 2012
and December 31,
2011, respectively
Bank premises and           9,344             8,989              9,498
equipment, net
Interest receivable      43,351         42,756          42,665
and other assets
Total assets             $ 1,434,749    $  1,435,114    $  1,393,263
                                                                 
Liabilities and
Stockholders' Equity
Liabilities
Deposits
Non-interest bearing        $ 389,722         $  408,565         $  359,591
Interest bearing
Transaction accounts        169,647           158,957            134,673
Savings accounts            93,404            91,506             75,617
Money market accounts       443,742           422,874            434,461
CDARS® time accounts        15,718            33,699             46,630
Other time accounts      141,056        143,272         152,000
Total deposits              1,253,289         1,258,873          1,202,972
Federal Home Loan           15,000            15,000             35,000
Bank borrowings
Subordinated                —                 —                  5,000
debenture
Interest payable and     14,668         13,905          14,740
other liabilities
Total liabilities        1,282,957      1,287,778       1,257,712
                                                                 
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 -
5,389,210, 5,368,386        58,573            57,862             56,854
and 5,336,927 at
December 31, 2012,
September 30, 2012
and December 31,
2011, respectively
Retained earnings           91,164            87,429             77,098
Accumulated other
comprehensive income,    2,055          2,045           1,599
net
Total stockholders'      151,792        147,336         135,551
equity
Total liabilities and    $ 1,434,749    $  1,435,114    $  1,393,263
stockholders' equity
                                                                    


BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                                              
                       Three months ended                           Years ended
(in thousands,
except per share    Dec. 31,     Sept. 30,    Dec. 31,       Dec. 31,     Dec. 31,
amounts;               2012           2012           2011           2012           2011
unaudited)
Interest income                                                             
Interest and           $ 14,634       $ 14,117       $ 15,150       $ 59,403       $ 63,479
fees on loans
Interest on
investment
securities
Securities of
U.S. government        680            731            847            3,195          3,478
agencies
Obligations of
state and              565            382            396            1,789          1,299
political
subdivisions
Corporate debt
securities and         353            326            203            1,165          636
other
Interest on
Federal funds
sold and            66          42          70            214         222
short-term
investments
Total interest         16,298         15,598         16,666         65,766         69,114
income
Interest expense
Interest on
interest bearing       14             48             30             151            151
transaction
accounts
Interest on            16             26             23             88             98
savings accounts
Interest on
money market           145            181            282            689            1,286
accounts
Interest on
CDARS® time            11             19             45             83             237
accounts
Interest on
other time             241            254            336            1,068          1,314
accounts
Interest on         80          153         232           497         2,209
borrowed funds
Total interest      507         681         948           2,576       5,295
expense
Net interest           15,791         14,917         15,718         63,190         63,819
income
Provision for       700         2,100       2,500         2,900       7,050
loan losses
Net interest
income after        15,091      12,817      13,218        60,290      56,769
provision for
loan losses
Non-interest
income
Service charges
on deposit             529            528            447            2,130          1,836
accounts
Wealth
Management and         513            507            445            1,964          1,834
Trust Services
Debit card             261            261            233            1,015          845
interchange fees
Merchant               177            183            30             739            353
interchange fees
Earnings on
Bank-owned life        190            192            196            762            752
Insurance
Other income        146         130         173           502         649
Total
non-interest        1,816       1,801       1,524         7,112       6,269
income
Non-interest
expense
Salaries and           5,010          5,211          4,742          21,139         20,211
related benefits
Occupancy and          1,098          1,089          981            4,230          4,002
equipment
Depreciation and       334            339            342            1,355          1,293
amortization
Federal Deposit
Insurance              245            221            210            917            1,000
Corporation
insurance
Data processing        652            596            557            2,514          2,690
Professional           720            519            561            2,340          2,499
services
Other expense       1,523       1,617       2,341         6,199       6,588
Total
non-interest        9,582       9,592       9,734         38,694      38,283
expense
Income before
provision for          7,325          5,026          5,008          28,708         24,755
income taxes
Provision for       2,623       1,802       1,625         10,891      9,191
income taxes
Net income          $ 4,702     $ 3,224     $ 3,383       $ 17,817    $ 15,564
Net income per
common share:
Basic                  $ 0.88         $ 0.60         $ 0.64         $ 3.34         $ 2.94
Diluted                $ 0.86         $ 0.59         $ 0.63         $ 3.28         $ 2.89
Weighted average
shares used to
compute net
income per
common share:
Basic                  5,357          5,344          5,313          5,341          5,302
Diluted                5,451          5,455          5,394          5,438          5,384
Dividends
declared per        $ 0.18      $ 0.18      $ 0.17        $ 0.70      $ 0.65
common share
Comprehensive
income
Net income             $ 4,702        $ 3,224        $ 3,383        $ 17,817       $ 15,564
Other
comprehensive
income (loss)
Change in net
unrealized gain        16             747            (191     )     752            90
on available for
sale securities
Reclassification
adjustment for
loss on sale of     —           —           —             34          —
securities
included in net
income
Net change in
unrealized gain
on available for       16             747            (191     )     786            90
sale securities,
before tax
Deferred tax
expense             6           314         (81      )     330         37
(benefit)
Other
comprehensive       10          433         (110     )     456         53
income (loss),
net of tax
Comprehensive       $ 4,712     $ 3,657     $ 3,273       $ 18,273    $ 15,617
income
                                                                                     


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, 2012                    September 30, 2012                   December 31, 2011
                                         Interest                              Interest                              Interest
                         Average         Income/      Yield/   Average         Income/      Yield/   Average         Income/      Yield/
(Dollars in
thousands;             Balance        Expense     Rate    Balance        Expense     Rate    Balance        Expense     Rate
unaudited)
Assets
Interest-bearing due     $ 80,884        $ 66         0.32 %   $ 84,539        $ 42         0.19 %   $ 104,190       $ 70         0.26 %
from banks ^1
Investment               265,316         1,779        2.68 %   241,461         1,578        2.61 %   194,533         1,616        3.32 %
securities ^2, 3
Loans ^1, 3, 4         1,020,737     14,788     5.67 %  1,014,708     14,265     5.50 %  1,009,916     15,289     5.92 %
Total
interest-earning         1,366,937       16,633       4.76 %   1,340,708       15,885       4.64 %   1,308,639       16,975       5.08 %
assets ^1
Cash and
non-interest-bearing     44,225                                55,727                                52,574
due from banks
Bank premises and        9,173                                 9,042                                 9,610
equipment, net
Interest receivable
and other assets,      37,512                          36,474                          34,324                   
net
Total assets           $ 1,457,847                     $ 1,441,951                     $ 1,405,147              
Liabilities and
Stockholders' Equity
Interest-bearing         $ 160,605       $ 14         0.03 %   $ 159,721       $ 48         0.12 %   $ 130,894       $ 30         0.09 %
transaction accounts
Savings accounts         91,609          16           0.07 %   91,020          26           0.11 %   75,217          23           0.12 %
Money market             442,006         145          0.13 %   435,110         181          0.17 %   432,728         282          0.26 %
accounts
CDARS® time accounts     22,497          11           0.19 %   29,519          19           0.25 %   39,850          45           0.45 %
Other time accounts      141,375         241          0.68 %   143,668         254          0.70 %   152,619         336          0.87 %
FHLB borrowings and
overnight borrowings     15,010          80           2.08 %   15,000          79           2.07 %   35,000          195          2.21 %
^1
Subordinated           —             —          —      4,239         74         6.83 %  5,000         37         2.90 %
debenture ^1
Total
interest-bearing         873,102         507          0.23 %   878,277         681          0.31 %   871,308         948          0.43 %
liabilities
Demand accounts          420,517                               404,677                               386,066
Interest payable and     14,524                                12,548                                13,214
other liabilities
Stockholders' equity   149,704                         146,449                         134,559                  
Total liabilities &    $ 1,457,847                     $ 1,441,951                     $ 1,405,147              
stockholders' equity
Tax-equivalent net
interest                             $ 16,126   4.62 %                $ 15,204   4.44 %                $ 16,027   4.79 %
income/margin ^1
Reported net
interest                             $ 15,791   4.52 %                $ 14,917   4.35 %                $ 15,718   4.70 %
income/margin ^1
Tax-equivalent net                              4.53 %                           4.33 %                           4.65 %
interest rate spread
                                                                                                                                  
                         Year ended                            Year ended
                         December 31, 2012                    December 31, 2011
                                         Interest                              Interest
                         Average         Income/      Yield/   Average         Income/      Yield/
(Dollars in
thousands;             Balance        Expense     Rate    Balance        Expense     Rate
unaudited)
Assets
Interest-bearing due     $ 80,643        $ 214        0.26 %   $ 87,365        $ 222        0.25 %
from banks ^1
Investment               234,014         6,829        2.92 %   175,571         6,049        3.45 %
securities ^2, 3
Loans ^1, 3, 4         1,023,165     59,991     5.77 %  984,211       63,914     6.40 %
Total
interest-earning         1,337,822       67,034       4.93 %   1,247,147       70,185       5.55 %
assets ^1
Cash and
non-interest-bearing     51,301                                46,673
due from banks
Bank premises and        9,183                                 9,136
equipment, net
Interest receivable
and other assets,      36,155                          34,183                   
net
Total assets           $ 1,434,461                     $ 1,337,139              
Liabilities and
Stockholders' Equity
Interest-bearing         $ 152,778       $ 151        0.10 %   $ 125,316       $ 151        0.12 %
transaction accounts
Savings accounts         86,670          88           0.10 %   69,792          98           0.14 %
Money market             436,281         689          0.16 %   405,726         1,286        0.32 %
accounts
CDARS® time accounts     30,016          83           0.28 %   39,514          237          0.60 %
Other time accounts      144,106         1,068        0.74 %   151,866         1,314        0.87 %
FHLB borrowings and
overnight borrowings     16,205          345          2.09 %   49,722          2,062        4.15 %
^1
Subordinated           3,552         152        4.21 %  5,000         147        2.90 %
debenture ^1
Total
interest-bearing         869,608         2,576        0.30 %   846,936         5,295        0.63 %
liabilities
Demand accounts          406,861                               347,682
Interest payable and     13,881                                12,983
other liabilities
Stockholders' equity   144,111                         129,538                  
Total liabilities &    $ 1,434,461                     $ 1,337,139              
stockholders' equity
Tax-equivalent net
interest                             $ 64,458   4.74 %                $ 64,890   5.13 %
income/margin ^1
Reported net
interest                             $ 63,190   4.65 %                $ 63,819   5.05 %
income/margin ^1
Tax-equivalent net                              4.63 %                           4.92 %
interest rate spread
                                                                                                                                       
^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.
                                                                                                                                  

Contact:

for Bank of Marin Bancorp
Sandy Pfaff, 415-819-7447
sandy@pfaffpr.com
 
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