NOVATO -- Bank of Marin Bancorp today announced 2010 earnings increased 6.2 percent from the year before.

Earnings for 2010 were $13.6 million, an increase of $787,000 from $12.8 million in 2009.

Fourth-quarter earnings totaled $3.9 million, an increase of $1.1 million or 39.5 percent from $2.8 million at the end of 2009.

“We are pleased to end the year with record earnings,” said Russell Colombo, bank president and chief executive officer. “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.”

Deposits grew $71.7 million, or 7.6 percent, over a year ago. Demand deposits grew $51.6 million or 22.4 percent over a year ago and comprised 27.8 percent of total deposits at Dec. 31, 2010.

In the fourth quarter, the bancorp declared and paid an increased quarterly cash dividend of 16 cents per share, up from 15 cents in the previous quarter.

Total loans reached $941.4 million on Dec. 31, 2010, representing an increase of $23.7 million or 2.6 percent from a year before.

“Our credit risk is proactively managed,” said Christina  Cook, chief financial officer. “We apply prudent underwriting fundamentals, build strong relationships with our customers and operate within markets we know.”

Non-performing loans were reported at 1.37 percent of total loans. The total risk-based capital ratio grew to 13.3 percent, up from 12.9 percent on Sept. 30 and 12.3 percent on Dec. 31, 2009. However, the bank said it continues to be well above industry requirements for a well-capitalized institution.

In the fourth quarter of last year, the bank's loan-loss provision totaled $1.1 million, down $350,000 from the prior quarter and down $1.5 million from the same quarter a year ago. The provision totaled $5.4 million and $5.5 million in 2010 and 2009, respectively.

Total deposits grew $71.7 million, or 7.6 percent, from 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 percent, according to the bank.

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

Net interest income of $14.1 million in the fourth quarter of 2010 increased $669,000, or 5.0 percent, from the same period last year.

The bancorp's assets currently exceed $1 billion. Bank of Marin, its sole subsidiary, is the largest community lender in Marin County with has sixteen offices in Marin, San Francisco and Sonoma counties.