NOVATO -- Bank of Marin Bancorp (NASDAQ: BMRC), parent company of Novato-based Bank of Marin, today announced that it had completed the final round of one-time expenses related to the integration of the recently acquired Bank of Alameda.

The announcement came as part of the bank's regular quarterly earnings announcement, with results that included $4.5 million in net income -- 76 cents per diluted share -- for the first three months of 2014.

While merger-related expenses have dragged on Bank of Marin's quarterly income -- down 8.2 percent compared to the same quarter in 2013 -- the final integration costs for Bank of Alameda were approximately 15 percent less than anticipated, said chief financial officer Tani Girton.

"There are two parts to an acquisition -- first, there is the systems side, and the costs of conversion. The harder part of it -- and it takes time, and it's where the rubber really hits the road -- is integrating the people into our culture. That part is ongoing," said Russ Colombo, president and CEO of Bank of Marin.

Bank of Marin ended the quarter with $1.3 billion in loans, an 18.2 percent increase from the first quarter 2013. The Bank of Alameda acquisition added around $174 million in loans to the bank's portfolio, with remaining growth occurring organically throughout the bank's footprint.

Non-accruing loans totaled $10.1 million as of March 31, equivalent to 0.79 percent of the bank's portfolio. Bank of Marin had $15.3 million in non-accruing loans one year prior, and resolved $1.4 million in commercial and construction loans over the recent quarter.

The bank announced $17.9 million in net interest income for the first quarter, up 12.6 percent from the prior quarter and 20.9 percent from the first quarter of 2013. A full quarter of interest income from the newly acquired Bank of Alameda portfolio was a primary driver of that increases, along with a higher volume of investment securities.

Bank of Marin's net interest margin, measuring the spread of interest income versus interest expenses, rose one-fifth of one percent from the end of 2013 to an annualized 4.25 percent for the quarter. That margin had narrowed from the 4.48 percent reported one year ago, largely due to the current low-interest rate environment.

Deposits have grown 28 percent compared from one year ago, to $1.6 billion. Non-interest bearing deposits represented 44.5 percent of total deposits, up from 40.8 percent at the end of 2013 and 39.5 percent one year ago. The bank cited the conversion of some interest-bearing accounts at the Bank of Alameda to non-interest bearing accounts for that increase.

Bank of Marin had expenses totaling $746,000 connected to the Bank of Alameda integration for the quarter, and $3.4 million in expenses in the fourth quarter of 2013. The acquisition added two branches for the bank in Alameda, as well as a commercial banking office in the city of Oakland.

Around 30 of Bank of Alameda's 58 employees have transferred to Bank of Marin, including the entirety of the Oakland lending team, Mr. Colombo said.

Bank of Marin has also made key hires outside of those associated with the acquisition during the first quarter, including Veronica King to lead the Santa Rosa market and Ruth Edwards in Napa.

"Sonoma and Napa are great opportunities for us. They key to executing in any market is having the right people," Mr. Colombo said.

 Bank of Marin Bancorp's board of directors approved a 19 cent quarterly dividend on April 17, payable on May 9 to shareholders of record as of May 2.

Shares in the company were trading at 45.43 near the end of trading on Wednesday, down 0.35 percent from opening. The bank had $1.79 billion in assets at quarter-end.