Bank of Marin Bancorp (?Bancorp?) (NASDAQ:BMRC) announced 2010 annual earnings of $13.6 million, an increase of $787 thousand, or 6.2% from $12.8 million a year ago. Diluted earnings per share for the year ended December 31, 2010 totaled $2.55, up $0.36 from $2.19 in the prior year.

2010 fourth quarter earnings totaled $3.9 million, an increase of $549 thousand, or 16.3%, from $3.4 million in the third quarter of 2010, and an increase of $1.1 million, or 39.5%, from $2.8 million in the fourth quarter of 2009. Diluted earnings per share increased to $0.73 from $0.63 in the third quarter of 2010 and $0.53 in the fourth quarter of 2009.

?We are pleased to end the year with record earnings,? said Russell A. Colombo, President and CEO. ?Earnings growth reflects a lower level of credit losses, continued focus on cost controls and loan growth in our two newest markets, San Francisco and Santa Rosa.?

Bancorp also provided the following highlights on its operating and financial performance for the fourth quarter of 2010:

  • Deposits grew $71.7 million, or 7.6%, over a year ago. Demand deposits grew $51.6 million or 22.4% over a year ago and comprised 27.8% of total deposits at December 31, 2010.
  • Credit quality remains solid with a modest level of non-performing loans at 1.37% of loans. Net charge-offs in the fourth quarter of 2010 decreased to $682 thousand from $1.2 million in the prior quarter and $3.0 million in the same quarter a year ago. The provision for loan losses of $1.1 million decreased $350 thousand from the prior quarter and decreased $1.5 million from the same quarter a year ago.
  • Total risk-based capital ratio grew to 13.3%, up from 12.9% at September 30, 2010 and 12.3% at December 31, 2009, and continues to be well above industry requirements for a well-capitalized institution.
  • In the fourth quarter, Bancorp declared and paid an increased quarterly cash dividend of $0.16 per share, up from $0.15 in the previous quarter.
  • Bank of Marin (the ?Bank?) expanded its community banking footprint into Sonoma County. On October 14, 2010, the Bank opened a loan production office in Santa Rosa, which will be converted to a full service commercial banking office in the second quarter of 2011. In addition, in December 2010, the Bank signed a lease for a branch in downtown Sonoma. This office will open as the Bank's fifth branch in Sonoma County by late spring 2011.

Loans and Credit Quality

Total loans reached $941.4 million at December 31, 2010, representing an increase of $23.7 million, or 2.6%, over December 31, 2009. This growth primarily reflects growth in the Bank's San Francisco and Santa Rosa markets and represents an increase in commercial real estate loans, partially offset by decreases in construction and commercial loans.

?Our credit risk is proactively managed,? said Christina J. Cook, Chief Financial Officer. ?We apply prudent underwriting fundamentals, build strong relationships with our customers and operate within markets we know.?

Non-performing loans totaled $12.9 million, or 1.37% of Bancorp's loan portfolio at December 31, 2010, compared to $10.6 million, or 1.13% at September 30, 2010 and $11.6 million or 1.26% a year ago. Accruing loans past due 30 to 89 days decreased to $352 thousand at December 31, 2010 from $4.6 million at September 30, 2010 and $835 thousand a year ago.

In the fourth quarter of 2010, Bancorp's loan loss provision totaled $1.1 million, down $350 thousand from the prior quarter and down $1.5 million from the same quarter a year ago. The provision for loan losses totaled $5.4 million and $5.5 million in 2010 and 2009, respectively. The allowance for loan losses of $12.4 million totaled 1.32% of loans at December 31, 2010 compared to 1.28% and 1.16% at September 30, 2010 and December 31, 2009, respectively. The increases in the allowance for loan losses as a percentage of loans from both a quarter ago and a year ago reflect a higher level of non-performing loans and the related specific reserves. Net charge-offs in the fourth quarter of 2010 decreased to $682 thousand from $1.2 million in the prior quarter and $3.0 million in the same quarter a year ago. Net charge-offs in 2010 decreased to $3.6 million in 2010 from $4.8 million in 2009.

Deposits

Total deposits grew $71.7 million or 7.6% over a year ago to $1.0 billion. The higher level of deposits reflects growth in most deposit categories, most notably in demand deposits of $51.6 million, or 22.4%.

?We have built a strong core deposit base reflecting the continued trust our customers place in us,? said Mr. Colombo. ?Our high level of demand deposits is attributable to the relationships we have built and the personalized service we provide.?

Earnings

Net interest income of $14.1 million in the fourth quarter of 2010 increased $669 thousand, or 5.0%, from the same period last year. Net interest income of $54.9 million for the full year increased $2.3 million, or 4.5% from 2009. The increases reflect growth in the interest-earning assets and reduction in the cost of funds, partially offset by reduction in the yield on investment securities. The tax-equivalent net interest margin was 4.92% in the fourth quarter of 2010, compared to 5.18% in the fourth quarter of 2009 and 4.88% in the prior quarter. The tax-equivalent net interest margin was 4.95% in 2010 compared to 5.17% in 2009. Decreases in the tax-equivalent net interest margin were primarily due to lower yields on investment securities (as a result of increased prepayments and lower yields on recent purchases) and a shift in the relative composition of interest-earning assets from higher-yielding loans to lower-yielding cash held at the Federal Reserve Bank and other short-term investments. The excess liquidity from deposit inflows has not been deployed as the banking industry as a whole is experiencing challenges with loan demand from qualified borrowers.

Non-interest income in the fourth quarter of 2010 remained relatively unchanged from the same period last year. The 2010 non-interest income of $5.5 million increased $339 thousand, or 6.5% from last year due to higher Wealth Management and Trust Services fees and higher Visa debit card and merchant interchange fees.

Non-interest expense totaled $8.0 million in the fourth quarter of 2010, an increase of $274 thousand, or 3.5% from the same quarter a year ago, primarily due to higher personnel costs associated with franchise expansion. Non-interest expense totaled $33.4 million in 2010, up $1.7 million, or 5.2% from $31.7 million in 2009. This increase reflected higher personnel costs and occupancy costs associated with franchise expansion, higher professional costs associated with strategic expansion initiatives and higher data processing costs, partially offset by the 2009 Federal Deposit Insurance Corporation special assessment of $496 thousand.

About Bank of Marin Bancorp

Bank of Marin Bancorp's assets currently exceed $1 billion. Bank of Marin, as the sole subsidiary of Bank of Marin Bancorp, is the largest community bank in Marin County with sixteen offices in Marin, San Francisco and Sonoma counties. The Bank's Administrative offices are located in Novato, California. Bank of Marin offers business and personal banking, private banking and wealth management services, with a strong focus on supporting the local community. Bank of Marin Bancorp is included in the Russell 2000 Small-Cap Index, is recognized as a Top 200 Community Bank, ranked number 42 in the U.S. by US Banker Magazine, and has received the highest five star rating from Bauer Financial for more than ten years (www.bauerfinancial.com). Celebrating its 21st anniversary in 2011, Bank of Marin has been recognized as one of the "Best Places to Work in the Bay Area" and one of the "Top Corporate Philanthropists" by the San Francisco Business Times.

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 downturn in the United States and abroad, 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 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
Year To Year Comparison
December 31, 2010
(dollars in thousands, except per share data; unaudited)        
 

FOURTH QUARTER

QTD 2010

QTD 2009

CHANGE

% CHANGE

 
NET INCOME $3,908 $2,802 $1,106 39.5%
DILUTED EARNINGS PER COMMON SHARE $0.73 $0.53 $0.20 37.7%
RETURN ON AVERAGE ASSETS (ROA) 1.28% 0.97% 0.31% 32.0%
RETURN ON AVERAGE EQUITY (ROE) 12.81% 10.15% 2.66% 26.2%
EFFICIENCY RATIO 52.12% 52.70% (0.58%) (1.1%)
TAX-EQUIVALENT NET INTEREST MARGIN 1 4.92% 5.18% (0.26%) (5.0%)
NET CHARGE-OFFS $682 $3,025 ($2,343) (77.5%)
NET CHARGE-OFFS TO AVERAGE LOANS 0.07% 0.33% (0.26%) (78.8%)
 

YEAR-TO-DATE

YTD 2010

YTD 2009

CHANGE

% CHANGE

 
NET INCOME $13,552 $12,765 $787 6.2%
DILUTED EARNINGS PER COMMON SHARE 2 $2.55 $2.19 $0.36 16.4%
RETURN ON AVERAGE ASSETS (ROA) 1.14% 1.16% (0.02%) (1.7%)
RETURN ON AVERAGE EQUITY (ROE) 11.67% 11.46% 0.21% 1.8%
EFFICIENCY RATIO 55.20% 54.89% 0.31% 0.6%
TAX-EQUIVALENT NET INTEREST MARGIN 1 4.95% 5.17% (0.22%) (4.3%)
NET CHARGE-OFFS $3,577 $4,842 ($1,265) (26.1%)
NET CHARGE-OFFS TO AVERAGE LOANS 0.38% 0.53% (0.15%) (28.3%)
 

AT PERIOD END

December 31, 2010

December 31, 2009

CHANGE

% CHANGE

 
TOTAL ASSETS $1,208,150 $1,121,672 $86,478 7.7%
 
LOANS:
COMMERCIAL $153,836 $164,643 ($10,807) (6.6%)
REAL ESTATE
COMMERCIAL OWNER-OCCUPIED $142,590 $146,133 ($3,543) (2.4%)
COMMERCIAL INVESTOR $383,553 $332,752 $50,801 15.3%
CONSTRUCTION $77,619 $91,289 ($13,670) (15.0%)
HOME EQUITY $86,932 $83,977 $2,955 3.5%
OTHER RESIDENTIAL $69,991 $69,369 $622 0.9%
INSTALLMENT AND OTHER CONSUMER LOANS $26,879 $29,585 ($2,706) (9.1%)
TOTAL LOANS $941,400 $917,748 $23,652 2.6%
 
NON-PERFORMING LOANS 3:
COMMERCIAL $2,486 $910 $1,576 173.2%
REAL ESTATE
COMMERCIAL OWNER-OCCUPIED $632 $3,722 ($3,090) (83.0%)
CONSTRUCTION $9,297 $6,520 $2,777 42.6%
HOME EQUITY $0 $100 ($100) (100.0%)
OTHER RESIDENTIAL $148 $0 $148 NM
INSTALLMENT AND OTHER CONSUMER LOANS $362 $313 $49 15.7%
TOTAL NON-PERFORMING LOANS $12,925 $11,565 $1,360 11.8%
 
TOTAL ACCRUING LOANS 30-89 DAYS PAST DUE $352 $835 ($483) (57.8%)
LOAN LOSS RESERVE TO LOANS 1.32% 1.16% 0.16% 13.8%
LOAN LOSS RESERVE TO NON-PERFORMING LOANS 0.96x 0.92x 0.04x 4.3%
NON-PERFORMING LOANS TO TOTAL LOANS 1.37% 1.26% 0.11% 8.7%
TEXAS RATIO 4 9.72% 9.74% (0.02%) (0.2%)
TOTAL DEPOSITS $1,015,739 $944,061 $71,678 7.6%
LOAN TO DEPOSIT RATIO 92.7% 97.2% (4.5%) (4.6%)
STOCKHOLDERS' EQUITY $121,920 $109,051 $12,869 11.8%
BOOK VALUE PER SHARE $23.05 $20.85 $2.20 10.6%
TANGIBLE COMMON EQUITY TO ASSETS 5 10.09% 9.72% 0.37% 3.8%
TOTAL RISK BASED CAPITAL RATIO-BANK 6 12.7% 11.6% 1.10% 9.5%
TOTAL RISK BASED CAPITAL RATIO-BANCORP 6 13.3% 12.3% 1.00% 8.1%
 
1 Net interest income is annualized by dividing actual number of days in the period times 360 days.
2 The earnings per common share of $2.19 in 2009 were reduced by $0.25 as a result of Bancorp's participation and withdrawal from the U.S. Department of the Treasury Capital Purchase Program (?TCPP?) and $0.06 related to an FDIC special assessment. In March 2009, Bancorp repurchased all 28,000 shares of preferred stock issued under the TCPP on December 5, 2008. A total of $28.2 million was paid to the Treasury, including accrued dividends of $179 thousand. As a result of the participation in the TCPP and the related repurchase, net income available to common stockholders in 2009 was reduced by $354 thousand in preferred stock dividends and $945 thousand in accelerated accretion on the preferred stock.
3 Excludes accruing troubled-debt restructured loans of $1.2 million and $615 thousand at December 31, 2010 and 2009, respectively.
4 (Non-performing assets + 90 day delinquent loans)/(tangible common equity + allowance for loan losses)
5 Tangible common equity includes common stock, retained earnings and unrealized gain on available for sale securities, net of tax.
6 Current period estimated.
 
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF CONDITION
at December 31, 2010, September 30, 2010 and December 31, 2009
     
(in thousands, except share data; 2010 unaudited)   December 31, 2010   September 30, 2010   December 31, 2009
 
Assets
Cash and due from banks $ 65,724 $ 73,546 $ 23,660
Short-term investments     19,508     24,208     15,000
Cash and cash equivalents 85,232 97,754 38,660
 
Investment securities
Held to maturity, at amortized cost 34,917 29,809 30,396

Available for sale (at fair value; amortized cost $109,070, $114,625 and $96,752 at December 31, 2010, September 30, 2010, and December 31, 2009, respectively)

    111,736     118,113     97,818
Total investment securities 146,653 147,922 128,214
 

Loans, net of allowance for loan losses of $12,392, $12,023 and $10,618 at December 31, 2010, September 30, 2010 and December 31, 2009, respectively)

929,008 926,111 907,130
Bank premises and equipment, net 8,419 8,584 8,043
Interest receivable and other assets     38,838     38,843     39,625
 
Total assets   $ 1,208,150   $ 1,219,214   $ 1,121,672
 
Liabilities and Stockholders' Equity
 
Liabilities
Deposits
Non-interest bearing $ 282,195 $ 276,320 $ 230,551
Interest bearing
Transaction accounts 105,177 99,367 89,660
Savings accounts 56,760 52,991 47,871
Money market accounts 371,352 392,381 416,481
CDARS® time accounts 67,261 70,661 51,819
Other time accounts     132,994     131,558     107,679
Total deposits 1,015,739 1,023,278 944,061
 
Federal Home Loan Bank borrowings 55,000 55,000 55,000
Subordinated debenture 5,000 5,000 5,000
Interest payable and other liabilities     10,491     17,322     8,560
 
Total liabilities     1,086,230     1,100,600     1,012,621
 
Stockholders' Equity
Preferred stock, no par value, $1,000 per share liquidation preference
Authorized - 5,000,000 shares; none issued --- --- ---
Common stock, no par value
Authorized - 15,000,000 shares

Issued and outstanding - 5,290,082 shares, 5,258,487 shares and 5,229,529 shares at December 31, 2010, September 30, 2010 and December 31, 2009, respectively

55,383 54,664 53,789
Retained earnings 64,991 61,927 54,644
Accumulated other comprehensive income, net     1,546     2,023     618
 
Total stockholders' equity     121,920     118,614     109,051
 
Total liabilities and stockholders' equity   $ 1,208,150   $ 1,219,214   $ 1,121,672
 
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF INCOME
         
3 Months Ended Year Ended
(in thousands, except per share amounts; 2010 and quarterly data unaudited)

Dec. 31,
2010

Sep. 30,
2010

Dec. 31,
2009

Dec. 31,
2010

Dec. 31,
2009

 
Interest income
Interest and fees on loans $ 14,093 $ 14,296 $ 13,871 $ 56,239 $ 54,816
Interest on investment securities
Securities on U.S. Government agencies 792 829 833 3,234 3,304
Obligations of state and political subdivisions 291 284 285 1,146 1,103
Corporate debt securities and other 141 144 214 593 506
Interest on Federal funds sold and short-term investments     47     48     1   145     5  
Total interest income 15,364 15,601 15,204 61,357 59,734
 
Interest expense
Interest on interest-bearing transaction accounts 29 32 29 110 115
Interest on savings accounts 25 27 25 104 94
Interest on money market accounts 339 602 876 2,467 3,235
Interest on CDARS® time accounts 179 221 171 842 721
Interest on other time accounts 373 391 353 1,495 1,541
Interest on borrowed funds     360     363     360   1,430     1,461  
Total interest expense     1,305     1,636     1,814   6,448     7,167  
 
Net interest income 14,059 13,965 13,390 54,909 52,567
Provision for loan losses     1,050     1,400     2,525   5,350     5,510  
Net interest income after provision for loan losses     13,009     12,565     10,865   49,559     47,057  
 
Non-interest income
Service charges on deposit accounts 442 446 459 1,797 1,782
Wealth Management and Trust Services 394 364 366 1,521 1,383
Other income     524     497     516   2,203     2,017  
Total non-interest income     1,360     1,307     1,341   5,521     5,182  
 
Non-interest expense
Salaries and related benefits 4,408 4,665 3,951 18,240 17,001
Occupancy and equipment 884 880 947 3,576 3,516
Depreciation and amortization 311 335 349 1,344 1,370
FDIC insurance 381 388 344 1,506 1,800
Data processing 494 491 477 1,916 1,650
Professional services 481 550 543 1,917 1,727
Other expense     1,078     1,198     1,152   4,858     4,632  
Total non-interest expense     8,037     8,507     7,763   33,357     31,696  
Income before provision for income taxes 6,332 5,365 4,443 21,723 20,543
 
Provision for income taxes     2,424     2,006     1,641   8,171     7,778  
Net income   $ 3,908   $ 3,359   $ 2,802 $ 13,552   $ 12,765  
 
Preferred stock dividends and accretion --- --- --- --- $ (1,299 )
Net income available to common stockholders $ 3,908 $ 3,359 $ 2,802 $ 13,552 $ 11,466
 
Net income per common share:
Basic $ 0.74 $ 0.64 $ 0.54 $ 2.59 $ 2.21
Diluted $ 0.73 $ 0.63 $ 0.53 $ 2.55 $ 2.19
 

Weighted average shares used to compute net income per common share:

Basic 5,259 5,241 5,210 5,238 5,182
Diluted 5,342 5,311 5,295 5,314 5,242
 
Dividends declared per common share $ 0.16 $ 0.15 $ 0.15 $ 0.61 $ 0.57
 
Average Statements of Condition and Analysis of Net Interest Income
                 
Three months ended
December 31, 2010 		  Three months ended
September 30, 2010 		  Three months ended
December 31, 2009
(Dollars in thousands; unaudited)   Average
Balance 		  Interest
Income/
Expense 		  Yield/
Rate 		  Average
Balance 		  Interest
Income/
Expense 		  Yield/
Rate 		  Average
Balance 		  Interest
Income/
Expense 		  Yield/
Rate
Assets
Interest-bearing due from banks (1) $ 60,050 $ 47 0.31 % $ 65,461 $ 48 0.29 % $ 652 $ 1 0.60 %
Investment securities
U.S. Government agencies (2) 95,910 792 3.30 94,255 829 3.52 69,312 833 4.81
Corporate CMOs and other (2) 15,628 141 3.61 12,333 144 4.67 13,046 214 6.56
Obligations of state and political subdivisions (3) 32,756 443 5.41 30,068 431 5.73 30,233 434 5.74
Loans and banker's acceptances (1) (3) (4)     932,570     14,184   5.95       935,116     14,374   6.01       913,538     13,934   5.97  
Total interest-earning assets (1) 1,136,914 15,607 5.37 1,137,233 15,826 5.45 1,026,781 15,416 5.88
Cash and non-interest-bearing due from banks 36,567 34,464 88,060
Bank premises and equipment, net 8,531 8,524 8,201
Interest receivable and other assets, net     32,144             32,056             26,669        
Total assets   $ 1,214,156           $ 1,212,277           $ 1,149,711        
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts $ 102,117 $ 29 0.11 % $ 102,982 $ 32 0.12 % $ 91,256 $ 29 0.13 %
Savings accounts 55,259 25 0.18 52,091 27 0.21 47,410 25 0.21
Money market accounts 380,165 339 0.35 388,549 602 0.61 428,843 876 0.81
CDARS® time accounts 70,453 179 1.01 78,318 221 1.12 51,303 171 1.32
Other time accounts 132,062 373 1.12 130,276 391 1.19 103,996 353 1.35
Overnight borrowings (1) 8 --- 0.29 --- --- --- 2 --- 1.09
FHLB fixed-rate advances 55,000 323 2.33 55,000 323 2.33 55,000 323 2.33
Subordinated debenture (1)     5,000     37   2.90       5,000     40   3.13       5,000     37   2.90  
Total interest-bearing liabilities 800,064 1,305 0.65 812,216 1,636 0.80 782,810 1,814 0.92
Demand accounts 281,563 271,591 247,085
Interest payable and other liabilities 11,524 10,744 10,326
Stockholders' equity     121,005             117,726             109,490        
Total liabilities & stockholders' equity   $ 1,214,156           $ 1,212,277           $ 1,149,711        
Tax-equivalent net interest income/margin (1)       $ 14,302   4.92 %       $ 14,190   4.88 %       $ 13,602   5.18 %
Reported net interest income/margin       $ 14,059   4.84 %       $ 13,965   4.81 %       $ 13,390   5.10 %
Tax-equivalent net interest rate spread           4.72 %           4.65 %           4.96 %
 
 
Year ended
December 31, 2010 		  Year ended
December 31, 2009
(Dollars in thousands; unaudited)   Average
Balance 		  Interest
Income/
Expense 		  Yield/
Rate 		  Average
Balance 		  Interest
Income/
Expense 		  Yield/
Rate
Assets
Interest-bearing due from banks (1) $ 43,028 $ 143 0.33 % $ 164 $ 1 0.60 %
Federal funds sold 3,049 2 0.07 1,752 4 0.23
Investment securities
U.S. Government agencies (2) 91,869 3,234 3.52 70,268 3,304 4.70
Corporate CMOs and other (2) 13,675 593 4.34 7,397 506 6.84
Obligations of state and political subdivisions (3) 30,893 1,741 5.64 29,221 1,677 5.74
Loans and banker's acceptances (1) (3) (4)     929,755     56,542   6.00       910,456     55,071   5.97  
Total interest-earning assets (1) 1,112,269 62,255 5.52 1,019,258 60,563 5.86
Cash and non-interest-bearing due from banks 34,383 46,594
Bank premises and equipment, net 8,259 8,140
Interest receivable and other assets, net     31,262             26,041        
Total assets   $ 1,186,173           $ 1,100,033        
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts $ 98,168 $ 110 0.11 % $ 90,159 115 0.13 %
Savings accounts 51,738 104 0.20 45,944 94 0.20
Money market accounts 390,575 2,467 0.63 391,571 3,235 0.83
CDARS® time accounts 71,432 842 1.18 51,248 721 1.41
Other time accounts 124,631 1,495 1.20 97,924 1,541 1.57
Overnight borrowings (1) 2 --- 0.29 10,659 28 0.26
FHLB fixed-rate advances 55,000 1,281 2.33 53,794 1,253 2.33
Subordinated debenture (1)     5,000     149   2.94       5,000     180   3.55  
Total interest-bearing liabilities 796,546 6,448 0.81 746,299 7,167 0.96
Demand accounts 263,742 232,502
Interest payable and other liabilities 9,791 9,873
Stockholders' equity     116,094             111,359        
Total liabilities & stockholders' equity   $ 1,186,173           $ 1,100,033        
Tax-equivalent net interest income/margin (1)       $ 55,807   4.95 %       $ 53,396   5.17 %
Reported net interest income/margin       $ 54,909   4.87 %       $ 52,567   5.09 %
Tax-equivalent net interest rate spread           4.71 %           4.90 %
 
(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.

(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.

for Bank of Marin Bancorp
Sandy Pfaff, 415-459-8800
sandy@pfaffpr.com