BMRC Bank of Marin Bancorp

Bank of Marin Bancorp, "Bancorp" (NASDAQ: BMRC), parent company of Bank of Marin, "Bank," announced earnings of $7.5 million in the first quarter of 2019, compared to $9.7 million in the fourth quarter of 2018 and $6.4 million in the first quarter of 2018. Diluted earnings per share were $0.54 in the first quarter of 2019, compared to $0.69 in the prior quarter and $0.46 in the same quarter last year.

“Our solid first quarter results demonstrate that staying true to a time-tested formula leads to consistent performance through economic cycles,” said Russell A. Colombo, President and Chief Executive Officer. “Our credit quality remains excellent, and our low cost of deposits continues to be a competitive advantage. By maintaining disciplined fundamentals, with rigorous lending practices and a strong relationship banking model, we are delivering value for customers and shareholders alike.”

Bancorp also provided the following highlights in the first quarter of 2019:

• Loans totaled $1,772.5 million at March 31, 2019, compared to $1,763.9 million at December 31, 2018. New loan originations of $34.0 million in the first quarter were distributed across Commercial Banking and Consumer Banking.
• Strong credit quality remains a cornerstone of the Bank's consistent performance. Non-accrual loans represented only 0.04% of the Bank's loan portfolio at March 31, 2019 and December 31, 2018. There was no provision for loan losses recorded in the first quarter of 2019.
• Total deposits increased by $3.8 million in the first quarter to $2,178.6 million. Non-interest bearing deposits increased $10.3 million from December 31, 2018 and represented 49% of total deposits at March 31, 2019. The cost of average deposits increased to 0.18% for the first quarter of 2019, compared to 0.14% for the prior quarter.
• First quarter net income reflects the typical increases in expenses associated with year-end resets of payroll taxes and 401K contributions, stock-based award vesting and performance share payouts. The first quarter of 2019 also included accelerated stock-based compensation expense for three newly retirement-eligible employees, the purchase of new bank-owned life insurance policies and a one-time pay cycle adjustment.
• All capital ratios were above regulatory requirements. The total risk-based capital ratio for Bancorp was 14.9% at March 31, 2019 and December 31, 2018. Tangible common equity to tangible assets was 11.4% at March 31, 2019, compared to 11.3% at December 31, 2018 (refer to footnote 3 in Financial Highlights table for a definition of this non-GAAP financial measure).
• The Board of Directors declared a cash dividend of $0.19 per share. This represents the 56th consecutive quarterly dividend paid by Bank of Marin Bancorp. The dividend is payable on May 10, 2019, to shareholders of record at the close of business on May 3, 2019.
• The Board of Directors is considering an extension of the share repurchase authority to utilize the remaining approved budget, and expects to make a final determination prior to the current May 1, 2019, expiration.
• On April 1, 2019, we expanded our presence in the East Bay by opening a loan production office in Walnut Creek that will serve commercial businesses across the Diablo Valley. In addition, well-established banker Rob Holden has joined Bank of Marin to lead our San Francisco team.

Loans and Credit Quality

Loans grew $8.7 million in the first quarter of 2019 and totaled $1,772.5 million at March 31, 2019. Loan originations for the three months ended March 31, 2019 and March 31, 2018 were $34.0 million and $37.4 million, respectively. New loan originations were partially offset by loan payoffs of $26.1 million in the first quarter of 2019 and $31.5 million in the same quarter last year. The largest portion of payoffs in the current quarter came from the sale of assets underlying loans and the successful completion of construction projects.

Non-accrual loans totaled $719 thousand, or 0.04% of the loan portfolio at March 31, 2019, compared to $697 thousand, or 0.04% at December 31, 2018, and $392 thousand, or 0.02% a year ago. Classified loans totaled $14.8 million at March 31, 2019, compared to $12.6 million at December 31, 2018 and $27.8 million at March 31, 2018. The $2.2 million increase in the first quarter of 2019 was primarily due to a well-secured owner-occupied commercial real estate loan. In April 2019, we received a $2.2 million paydown on a $2.7 million substandard classified land development loan and upgraded the remaining balance to a Pass risk rating due to the low loan-to-value ratio and the borrower’s improved financial condition. There were no loans classified doubtful at March 31, 2019 or December 31, 2018. Accruing loans past due 30 to 89 days totaled $2,194 thousand at March 31, 2019, compared to $1,121 thousand at December 31, 2018 and $388 thousand a year ago.

There was no provision for loan losses recorded in the first quarter of 2019, consistent with last quarter and the same quarter a year ago. Net charge-offs were $4 thousand in the first quarter of 2019, compared to net recoveries of $4 thousand for the three months ended December 31, 2018 and March 31, 2018. The ratio of loan loss reserves to loans, including acquired loans, was 0.89% at March 31, 2019, 0.90% at December 31, 2018, and 0.94% at March 31, 2018.

Investments

The investment securities portfolio totaled $595.7 million at March 31, 2019, compared to $619.7 million at December 31, 2018 and $572.9 million at March 31, 2018. The decrease from the prior quarter was primarily attributed to calls, principal paydowns, sales and maturities of $34.6 million, partially offset by $11.3 million in purchases.

Deposits

Total deposits were $2,178.6 million at March 31, 2019, compared to $2,174.8 million at December 31, 2018 and $2,186.6 million at March 31, 2018. The increase in deposit balances during the first quarter of 2019, was primarily due to normal cash fluctuations in some of our large business accounts. The average cost of deposits in the first quarter of 2019 was 0.18%, an increase of 4 basis points from the prior quarter and an increase of 10 basis points from the same quarter a year ago, primarily due to an increase in market interest rates.

Earnings

“Bank of Marin's investment in people, infrastructure and acquisitions continues to produce benefits in terms of loan growth and expense control,” said Tani Girton, EVP and Chief Financial Officer. “The ongoing strength of the Bank is reflected in the year-over-year increase of 17 basis points in net interest margin, efficiency ratio in the low 60's and return on assets of 1.19%.”

Net interest income totaled $23.8 million in the first quarter of 2019, compared to $23.3 million in the prior quarter and $21.9 million in the same quarter a year ago. The $574 thousand and $1,955 thousand increases from the prior quarter and comparative quarter a year ago were reflective of growth in average earning assets of $5.6 million and $85.7 million, respectively, and higher yields across earning asset classes.

The tax-equivalent net interest margin was 4.02% in the first quarter of 2019, compared to 3.85% in both the prior quarter and same quarter a year ago. The 17 basis point increase from the prior quarter was primarily due to the early redemption of a high-rate subordinated debenture due to NorCal Community Bancorp Trust I in October 2018. The 17 basis point increase from the first quarter of 2018 was primarily due to a more favorable mix of interest-earning assets toward higher yielding loans and investment securities.

Loans obtained through the acquisition of other banks are classified as either purchased credit impaired ("PCI") or non-PCI loans and are recorded at fair value at acquisition date. For acquired loans not considered credit impaired, the level of accretion varies due to maturities and early payoffs. Accretion on PCI loans fluctuates based on changes in cash flows expected to be collected. Gains on payoffs of PCI loans are recorded as interest income when the payoff amounts exceed the recorded investment. PCI loans totaled $2.1 million at March 31, 2019, December 31, 2018 and March 31, 2018.

As our acquired loans from prior acquisitions continue to pay off, we expect the accretion on these loans to continue to decline. Accretion and gains on payoffs of purchased loans recorded to interest income were as follows:

    Three months ended March 31, 2019   December 31, 2018   March 31, 2018 (dollars in thousands; unaudited)    

DollarAmount

 

Basis pointimpact to netinterest margin

 

DollarAmount

 

Basis pointimpact to netinterest margin

 

DollarAmount

 

Basis pointimpact to netinterest margin

Accretion on PCI loans 1   $ 59     1 bps   $ 62     1 bps   $ 112     2 bps Accretion on non-PCI loans 2 $ 42 1 bps $ 214 3 bps $ 99 2 bps Gains on payoffs of PCI loans $ — 0 bps $ — 0 bps $ 128 2 bps 1     Accretable yield on PCI loans totaled $875 thousand, $934 thousand and $1.1 million at March 31, 2019, December 31, 2018 and March 31, 2018, respectively. 2 Unaccreted purchase discounts on non-PCI loans totaled $666 thousand, $708 thousand and $1.1 million at March 31, 2019, December 31, 2018 and March 31, 2018, respectively.  

Non-interest income of $1.8 million in the first quarter of 2019 decreased $1.7 million from $3.4 million in the fourth quarter due to a $956 thousand pre-tax gain on sale of 6,500 shares of Visa Inc. Class B restricted common stock and a $180 thousand Federal Home Loan Bank special dividend in the fourth quarter. Additionally, the Bank incurred $283 thousand non-refundable costs for underwriting two new bank-owned life insurance policies purchased in the first quarter and deposit network income declined $163 thousand. The decrease of $471 thousand from $2.2 million in the first quarter last year was primarily related to the costs associated with the newly purchased bank-owned life insurance policies and the decrease in deposit network income mentioned above.

Non-interest expense totaled $15.5 million in the first quarter of 2019, $13.7 million in the prior quarter, and $16.1 million in the same quarter a year ago. The increase of $1.8 million from the prior quarter was primarily due to a $1.2 million increase in salaries and benefits from stock-based compensation ($498 thousand due to certain participants meeting retirement eligibility requirements and $64 thousand vesting of performance awards), $136 thousand one-time pay cycle adjustment, six additional full-time equivalent ("FTE") staff, and $339 thousand more in 401(k) employer matching contributions. Additionally, there was a $129 thousand provision for losses on off-balance sheet commitments in the first quarter of 2019. The $553 thousand decrease from the same quarter a year ago was primarily related to a decrease in professional fees of $713 thousand (mostly attributed to core processing contract negotiations) and data processing expenses of $366 thousand (mostly attributed to Bank of Napa acquisition-related expenses in 2018). These decreases were partially offset by additional FTE staff, merit increases, the one-time pay cycle adjustment and the provision for losses on off-balance sheet commitments.

Share Repurchase Program

Bancorp's Board of Directors approved the repurchase of up to $25.0 million common stock through May 1, 2019. Bancorp repurchased 113,904 shares totaling $4.8 million in the first quarter of 2019 for a cumulative total of 285,121 shares totaling $11.8 million as of March 31, 2019.

Earnings Call and Webcast Information

Bank of Marin Bancorp will present its first quarter earnings call via webcast on Monday, April 22, 2019 at 8:30 a.m. PT/11:30 a.m. ET. Investors will have the opportunity to listen to the webcast online through Bank of Marin’s website at https://www.bankofmarin.com under “Investor Relations.” To listen to the webcast live, 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

Founded in 1990 and headquartered in Novato, Bank of Marin is the wholly owned subsidiary of Bank of Marin Bancorp (NASDAQ: BMRC). A leading business and community bank in the San Francisco Bay Area, with assets of $2.5 billion, Bank of Marin has 23 retail branches, 5 commercial banking offices and 1 loan production office located across the North Bay, San Francisco and East Bay regions. Bank of Marin provides commercial banking, personal banking, and wealth management and trust 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 NASDAQ ABA Community Bank Index. For more information, go to 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, costs or effects of acquisitions, competition, changes in accounting principles, policies or guidelines, legislation or regulation (including the Tax Cuts & Jobs Act of 2017), and other economic, competitive, governmental, regulatory and technological factors (including external fraud and cyber-security threats) 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 March 31, 2019         (dollars in thousands, except per share data; unaudited)     March 31, 2019

December 31, 2018

March 31, 2018

Quarter-to-Date

Net income $ 7,479 $ 9,662 $ 6,389 Diluted earnings per common share 4 $ 0.54 $ 0.69 $ 0.46 Return on average assets 1.19 % 1.52 % 1.05 % Return on average equity 9.54 % 12.37 % 8.70 % Efficiency ratio 60.62 % 51.34 % 66.64 % Tax-equivalent net interest margin 1 4.02 % 3.85 % 3.85 % Net charge-offs (recoveries) $ 4 $ (4 ) $ (4 ) Net charge-offs (recoveries) to average loans — — —

At Period End

Total assets $ 2,534,076 $ 2,520,892 $ 2,510,043 Loans: Commercial and industrial $ 237,646 $ 230,739 $ 231,680 Real estate: Commercial owner-occupied 310,588 313,277 300,377 Commercial investor-owned 878,494 873,410 828,945 Construction 72,271 76,423 64,978 Home equity 124,512 124,696 124,699 Other residential 117,558 117,847 95,621 Installment and other consumer loans 31,469   27,472   25,440   Total loans $ 1,772,538   $ 1,763,864   $ 1,671,740   Non-performing loans: 2 Commercial and industrial $ 309 $ 319 $ — Home equity 346 313 392 Installment and other consumer loans 64   65   —   Total non-accrual loans $ 719   $ 697   $ 392     Classified loans (graded substandard and doubtful) $ 14,811 $ 12,608 $ 27,807 Total accruing loans 30-89 days past due $ 2,194 $ 1,121 $ 388 Allowance for loan losses to total loans 0.89 % 0.90 % 0.94 % Allowance for loan losses to non-performing loans 21.99x 22.71x 40.26x Non-accrual loans to total loans 0.04 % 0.04 % 0.02 %   Total deposits $ 2,178,629 $ 2,174,840 $ 2,186,594 Loan-to-deposit ratio 81.4 % 81.1 % 76.5 % Stockholders' equity $ 320,664 $ 316,407 $ 298,464 Book value per share 4 $ 23.26 $ 22.85 $ 21.37 Tangible common equity to tangible assets 3 11.4 % 11.3 % 10.6 % Total risk-based capital ratio - Bank 13.9 % 14.0 % 14.7 % Total risk-based capital ratio - Bancorp 14.9 % 14.9 % 15.1 % Full-time equivalent employees 296 290 288   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 $14.0 million, $14.3 million and $16.2 million at March 31, 2019, December 31, 2018 and March 31, 2018, respectively. Excludes purchased credit-impaired (PCI) loans with carrying values of $2.1 million that were accreting interest at March 31, 2019, December 31, 2018 and March 31, 2018. These amounts are excluded as PCI loan accretable yield interest recognition is independent from the underlying contractual loan delinquency status. 3 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 $35.5 million, $35.7 million and $36.4 million at March 31, 2019, December 31, 2018 and March 31, 2018, respectively. Tangible assets exclude goodwill and intangible assets. 4 Share and per share data have been adjusted to reflect the two-for-one stock split effective November 27, 2018.                  

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF CONDITION

At March 31, 2019, December 31, 2018 and March 31, 2018

        (in thousands, except share data; unaudited)    

March 31,2019

 

December 31,2018

 

March 31,2018

Assets Cash and due from banks $ 51,639 $ 34,221 $ 159,347 Investment securities Held-to-maturity, at amortized cost 152,845 157,206 149,013

Available-for-sale (at fair value; amortized cost $442,386, $465,910 and $431,871 at March 31, 2019, December 31, 2018 and March 31, 2018, respectively)

    442,885     462,464     423,882  

Total investment securities

595,730 619,670 572,895

Loans, net of allowance for loan losses of $15,817, $15,821 and $15,771 at March 31, 2019, December 31, 2018 and March 31, 2018, respectively

1,756,721 1,748,043 1,655,969 Bank premises and equipment, net 7,237 7,376 8,297 Goodwill 30,140 30,140 30,140 Core deposit intangible 5,349 5,571 6,262 Operating lease right-of-use assets 12,465 — — Interest receivable and other assets     74,795     75,871     77,133   Total assets     $ 2,534,076     $ 2,520,892     $ 2,510,043     Liabilities and Stockholders' Equity Liabilities Deposits Non-interest bearing $ 1,076,382 $ 1,066,051 $ 1,065,470 Interest bearing Transaction accounts 130,001 133,403 166,117 Savings accounts 180,758 178,429 180,730 Money market accounts 680,806 679,775 628,335 Time accounts     110,682     117,182     145,942   Total deposits 2,178,629 2,174,840 2,186,594 Borrowings and other obligations 309 7,000 — Subordinated debentures 2,657 2,640 5,772 Operating lease liabilities 14,349 — — Interest payable and other liabilities     17,468     20,005     19,213   Total liabilities     2,213,412     2,204,485     2,211,579     Stockholders' Equity Preferred stock, no par value, Authorized - 5,000,000 shares, none issued — — —

Common stock, no par value,

Authorized - 30,000,000 shares; Issued and outstanding - 13,786,808, 13,844,353 and 13,970,252 at March 31, 2019, December 31, 2018 and March 31, 2018, respectively

137,125 140,565 145,282 Retained earnings 184,793 179,944 160,556 Accumulated other comprehensive loss, net of taxes     (1,254 )   (4,102 )   (7,374 ) Total stockholders' equity     320,664     316,407     298,464   Total liabilities and stockholders' equity     $ 2,534,076     $ 2,520,892     $ 2,510,043             BANK OF MARIN BANCORP CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME     Three months ended (in thousands, except per share amounts; unaudited)     March 31, 2019  

December 31, 2018

  March 31, 2018 Interest income     Interest and fees on loans $ 20,695 $ 20,732 $ 18,887 Interest on investment securities 4,097 3,912 3,157 Interest on federal funds sold and due from banks     139     373     403   Total interest income 24,931 25,017 22,447 Interest expense Interest on interest-bearing transaction accounts 77 68 52 Interest on savings accounts 18 18 18 Interest on money market accounts 764 566 216 Interest on time accounts 119 116 156 Interest on borrowings and other obligations 47 — — Interest on subordinated debentures     60     977     114   Total interest expense     1,085     1,745     556   Net interest income 23,846 23,272 21,891 Provision for loan losses     —     —     —   Net interest income after provision for loan losses     23,846     23,272     21,891   Non-interest income Service charges on deposit accounts 479 484 477 Wealth Management and Trust Services 438 426 515 Debit card interchange fees, net 380 403 396 Merchant interchange fees, net 87 81 80 (Losses) earnings on bank-owned life insurance, net (60 ) 228 228 Dividends on FHLB stock 196 377 196 (Losses) gains on investment securities, net (6 ) 955 — Other income     257     469     350   Total non-interest income     1,771     3,423     2,242   Non-interest expense Salaries and related benefits 9,146 7,933 9,017 Occupancy and equipment 1,531 1,514 1,507 Depreciation and amortization 556 518 547 Federal Deposit Insurance Corporation insurance 179 188 191 Data processing 1,015 1,004 1,381 Professional services 586 481 1,299 Directors' expense 179 170 174 Information technology 259 228 269 Amortization of core deposit intangible 222 230 230 Provision for losses on off-balance sheet commitments 129 — — Other expense     1,726     1,439     1,466   Total non-interest expense     15,528     13,705     16,081   Income before provision for income taxes 10,089 12,990 8,052 Provision for income taxes     2,610     3,328     1,663   Net income     $ 7,479     $ 9,662     $ 6,389   Net income per common share:1 Basic $ 0.54 $ 0.70 $ 0.46 Diluted $ 0.54 $ 0.69 $ 0.46 Weighted average shares:1 Basic 13,737 13,841 13,827 Diluted     13,924     14,033     14,011   Comprehensive income: Net income $ 7,479 $ 9,662 $ 6,389 Other comprehensive income (loss) Change in net unrealized gain or loss on available-for-sale securities 3,939 7,714 (6,170 ) Reclassification adjustment for losses on available-for-sale securities in net income 6 — — Amortization of net unrealized losses on securities transferred from available-for-sale to held-to-maturity     101     120     136   Subtotal 4,046 7,834 (6,034 ) Deferred tax expense (benefit)     1,198     2,318     (1,784 ) Other comprehensive income (loss), net of tax     2,848     5,516     (4,250 ) Comprehensive income     $ 10,327     $ 15,178     $ 2,139     1 Share and per share data have been adjusted to reflect the two-for-one stock split effective November 27, 2018.               BANK OF MARIN BANCORP AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME   Three months ended Three months ended Three months ended March 31, 2019     December 31, 2018     March 31, 2018   Interest     Interest     Interest   Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ (dollars in thousands)     Balance   Expense   Rate     Balance   Expense   Rate     Balance   Expense   Rate Assets Interest-bearing due from banks 1 $ 22,690 $ 139 2.45 % $ 65,961 $ 373 2.21 % $ 104,850 $ 403 1.54 % Investment securities 2, 3 619,562 4,191 2.71 % 600,914 4,000 2.66 % 532,544 3,276 2.46 % Loans 1, 3, 4     1,756,316     20,887     4.76 %     1,726,045     20,933     4.75 %     1,675,490     19,119     4.56 % Total interest-earning assets 1 2,398,568 25,217 4.21 % 2,392,920 25,306 4.14 % 2,312,884 22,798 3.94 % Cash and non-interest-bearing due from banks 30,947 38,943 45,815 Bank premises and equipment, net 7,512 7,529 8,501 Interest receivable and other assets, net     104,685               84,651               89,018           Total assets     $ 2,541,712               $ 2,524,043               $ 2,456,218           Liabilities and Stockholders' Equity Interest-bearing transaction accounts $ 127,733 $ 77 0.24 % $ 130,546 $ 68 0.21 % $ 168,371 $ 52 0.13 % Savings accounts 180,355 18 0.04 % 177,018 18 0.04 % 180,253 18 0.04 % Money market accounts 673,137 764 0.46 % 643,459 566 0.35 % 582,961 216 0.15 % Time accounts including CDARS 113,389 119 0.43 % 121,838 116 0.38 % 154,543 156 0.41 % Borrowings and other obligations 1 7,414 47 2.55 % 76 — 2.52 % — — — % Subordinated debentures 1     2,647     60     9.05 %     2,770     977     138.09 %     5,753     114     7.90 % Total interest-bearing liabilities 1,104,675 1,085 0.40 % 1,075,707 1,745 0.64 % 1,091,881 556 0.21 % Demand accounts 1,086,947 1,118,785 1,049,502 Interest payable and other liabilities 32,163 19,662 16,903 Stockholders' equity     317,927               309,889               297,932           Total liabilities & stockholders' equity     $ 2,541,712               $ 2,524,043               $ 2,456,218           Tax-equivalent net interest income/margin 1         $ 24,132     4.02 %         $ 23,561     3.85 %         $ 22,242     3.85 % Reported net interest income/margin 1         $ 23,846     3.98 %         $ 23,272     3.81 %         $ 21,891     3.79 % Tax-equivalent net interest rate spread             3.81 %             3.49 %             3.74 %   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 21 percent in 2019 and 2018. 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.

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Beth DrummeyMarketing & Corporate Communications Manager415-763-4529 | bethdrummey@bankofmarin.com