Novato’s Bank of Marin Q4 earnings ‘tremendous’

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Bank of Marin (NASDAQ: BMRC) earned $4.9 million in the fourth quarter of 2015, up $100,000 from the previous quarter. Earnings for the full year dipped about 7 percent to $18.4 million, down from $19.8 million in 2014.

“Earnings are down for the year because last year had a number of unusual items,” said Russell Colombo, president and CEO of the Novato-based bank, including accretion from the acquisition of Bank of Alameda. “It was a clean year,” and the fourth quarter was “a tremendous quarter. We had great loan growth, great deposit growth.”

Credit quality improved significantly from the year earlier. “Credit quality is not perfect, but it’s pretty close,” Colombo said in an interview with the Business Journal.

Last year brought financial reporting benefits of the acquisition of Bank of Alameda by Bank of Marin, creating a boost in loan revenue. The acquisition is now completely integrated. There remains slight accretion from the acquisition, which boosts the company’s earnings per share following the transaction. Eight percent of Bank of Marin’s interest margin in the fourth quarter was attributable to accretion on loans acquired — lower than occurred in previous quarters.

The quarter-point interest rate hike by the Federal Reserve in December may help boost 2016 profits of Bank of Marin and most other banks.

“It’s a potential slight profit increase,” Colombo said. “We are asset-sensitive. We benefit from higher interest rates. We are in particularly good shape because we have such a large percentage of deposits that are non-interest-bearing. When rates rise on loans and our costs don’t rise, we get a benefit. If we get to 50 or 75 or 100 basis points, then it will be more significant.”

Nearly 45 percent of the bank’s deposits are non-interest-bearing.

Bank of Marin had total assets of $2 billion and deposits of $1.7 billion on December 31, up $177 million or about 11.4 percent from the deposit total at the end of 2014.

After overseeing the acquisition of Bank of Alameda, Colombo remains on the lookout for other attractive acquisition targets.

“We are looking all the time. We are of the mindset that we are a bank that will acquire as opposed to being acquired,” he said. “Our strategic plan is to grow” internally along with acquisitions.

Founded in 1989, 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.

Colombo, a Marin County native, joined Bank of Marin in 2004 and became president and CEO in 2006.

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