NOVATO -- Bank of Marin Bancorp (NASDAQ: BMRC), parent company of Bank of Marin, today announced a 25 percent increase in third-quarter earnings compared to the same three-month period in 2012.

The Novato-based institution announced $4 million in net income for the quarter, and that it would increase its quarterly shareholder dividend from the prior quarter by 1 cent. The bank will pay 19 cents on Nov. 8 to shareholders of record as of Nov. 1.

The bank grew its loan portfolio to $1.1 billion, up $100 million from the same quarter last year.

Growth in that loan portfolio is expected to accelerate in the coming years after the acquisition of East Bay-based bank of Alameda, said Russell Colombo, president and CEO. Shareholders of the bank's parent company, NorCal Community Bancorp, approved the transaction on Oct. 17.

"That's part of the reason we pursued the acquisition -- to grow in these markets," said Mr. Colombo. Regulators have also approved the transaction, which could be completed by the end of November, he said.

The bank reabsorbed $480,000 previously set aside as a provision for loan losses in the three-month period ended Sept. 30, after a loss provision of $1.1 million in the prior quarter and $2.1 million at the same period last year. The bank attributed that reversal to improving collateral values, a low level of failing loans and a low level of newly identified non-performing loans.

Deposits reached $1.3 billion for the quarter, with 41.6 percent of those deposits being non-interest bearing. Bank of Marin had $1.4 billion in net assets as of Sept. 30.

Net interest income of $14 million was down from $14.3 million in the prior quarter and $14.9 million one year ago. The bank cited a downward trend in interest rates as a factor in that decline, with a margin of 3.99 percent for interest income and various expenses that compared to 4.3 percent in the prior quarter and 4.44 percent one year ago.

One-time expenses related to the upcoming acquisition have also had an impact, though 85 percent of those costs are expected to be completed by the end of 2013, said chief financial officer Tani Girton.

The bank earned 72 cents per share for the quarter, compared to 55 cents in the prior quarter and 59 cents one year ago. The $11.9 million earned during the first nine months of 2013 was down 9 percent versus the prior year.

Amid the activity surrounding the acquisition, Bank of Marin has also launched a new mobile banking platform spearheaded under its newly appointed chief information officer, Jim Burke. The bank selected a scalable platform by FIS, its existing processor of financial data, which provides services like remote check deposit to both commercial and retail customers, Mr. Colombo said.

While currently available, the bank plans to make a bigger push in the coming months to market the new platform, he said.