Bank of Marin gains through one-time earnings boost

Novato-based Bank of Marin (NASDAQ: BMRC) reported third-quarter earnings of $7 million, a one-time 46 percent jump compared to the same quarter last year, rising to record levels.

The bank on October 24 reported that earnings per share in the third quarter rose to $1.14, up from 79 cents in the same quarter of 2015.

The quarterly boost in earnings resulted from resolution of a problem commercial real estate credit that added $1.4 million of interest recovery and resulted in a nearly $1.6 million reversal of the provision for loan losses. Non-accrual loans now account for only .04 percent of total loans as of Sept. 30, an extremely low amount.

“That is a one-time event,” said Russell Colombo, president and chief executive officer, referring to the roughly $2.9 million boost. “We had been working with the borrower for years. They sold the project. We got a big recovery and everybody’s happy.”

Without the one-time commercial real estate credit and loan-loss reversal, the bank’s earnings would have been $4.9 million for the quarter, up slightly from $4.8 million in the same quarter a year earlier. It is unlikely that the bank will have a similar earnings boost in the fourth quarter.

The bank had deposit growth of $96 million for the third quarter. Loans increased by $19.3 million, for a total of $1.5 billion.

In a December 2013 merger with Bank of Alameda, Bank of Marin acquired $170 million worth of loans along with $230 million in deposits. The acquisition of Bank of Alameda is completely integrated.

Bank of Marin has a highly favorable deposit base: nearly 45 percent of the bank’s deposits are non-interest-bearing demand deposits. “We have a very strong core deposit base. That is a huge benefit we have over our competitors,” Colombo said. “When rates rise, our costs don’t rise equally.”

Bank of Marin had total assets of $2.1 billion on Sept. 30.

Founded in 1989 and with headquarters in Novato, Bank of Marin is the sole subsidiary of Bank of Marin Bancorp, and has 20 offices in Marin, Napa, Sonoma, San Francisco and Alameda counties.

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