x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
California
|
20-8859754
|
|
(State
or other jurisdiction of incorporation)
|
(IRS
Employer Identification No.)
|
504
Redwood Blvd., Suite 100, Novato, CA
|
94947
|
|
(Address
of principal executive office)
|
(Zip
Code
)
|
Large
accelerated filer
o
|
Accelerated
filer
x
|
Non-accelerated
filer
o
|
PART I
|
FINANCIAL
INFORMATION
|
|
Item
1
|
Financial
Statements
|
|
|
4
|
|
5
|
||
7
|
||
8
|
||
9
|
||
|
||
Item 2 |
18
|
|
|
||
Item
3
|
32
|
|
|
||
Item
4
|
32
|
|
|
||
PART
II
|
OTHER
INFORMATION
|
|
|
||
Item
1
|
33
|
|
|
||
Item
1A
|
33
|
|
|
||
Item
2
|
33
|
|
|
||
Item
3
|
34
|
|
|
||
Item
4
|
34
|
|
|
||
Item
5
|
34
|
|
|
||
Item
6
|
34
|
|
|
||
35
|
||
|
||
36
|
C
ON
DENSED
CONSOLIDATED STATEMENT OF
CONDITION
|
||||||||
at
September 30, 2007 and December 31, 2006
|
||||||||
(in
thousands, except share data - 2007 unaudited)
|
September
30, 2007
|
December
31, 2006
|
||||||
Assets
|
||||||||
Cash
and due from banks
|
$ |
25,245
|
$ |
37,283
|
||||
Fed
funds sold
|
70,200
|
1,500
|
||||||
Other
short-term investments
|
15,000
|
---
|
||||||
Cash
and cash equivalents
|
110,445
|
38,783
|
||||||
Investment
securities
|
||||||||
Held
to maturity, at amortized cost
|
13,544
|
14,159
|
||||||
Available
for sale (at fair market value, amortized cost $85,591 at 9/30/07
and
$76,231 at 12/31/06)
|
85,076
|
75,214
|
||||||
Total
investment securities
|
98,620
|
89,373
|
||||||
Loans,
net of allowance for loan losses of $7,227 at
9/30/07 and $8,023 at 12/31/06
|
678,748
|
711,755
|
||||||
Bank
premises and equipment, net
|
8,019
|
8,446
|
||||||
Interest
receivable and other assets
|
28,212
|
28,221
|
||||||
Total
assets
|
$ |
924,044
|
$ |
876,578
|
||||
Liabilities
and Stockholders' Equity
|
||||||||
Liabilities
|
||||||||
Deposits
|
||||||||
Non-interest
bearing
|
$ |
201,896
|
$ |
206,201
|
||||
Interest
bearing
|
||||||||
Transaction
accounts
|
78,782
|
75,993
|
||||||
Savings
and money market
|
446,865
|
365,850
|
||||||
Time
|
81,871
|
88,653
|
||||||
Total
deposits
|
809,414
|
736,697
|
||||||
Federal
funds purchased and Federal Home Loan Bank borrowings
|
15,300
|
39,400
|
||||||
Subordinated
debenture
|
5,000
|
5,000
|
||||||
Interest
payable and other liabilities
|
7,755
|
5,956
|
||||||
Total
liabilities
|
837,469
|
787,053
|
||||||
Stockholders'
Equity
|
||||||||
Common
stock, no par value
|
||||||||
Authorized
- 15,000,000 shares
|
||||||||
Issued
and outstanding - 5,174,147 shares at 9/30/07 and 5,366,416 at
12/31/06
|
52,476
|
61,355
|
||||||
Retained
earnings
|
34,397
|
28,760
|
||||||
Accumulated
other comprehensive loss, net
|
(298 | ) | (590 | ) | ||||
Total
stockholders' equity
|
86,575
|
89,525
|
||||||
Total
liabilities and stockholders' equity
|
$ |
924,044
|
$ |
876,578
|
C
ON
DENSED
CONSOLIDATED STATEMENT OF
OPERATIONS
|
||||||||
for
the nine months ended September 30, 2007 and September 30,
2006
|
||||||||
(in
thousands, except per share data - unaudited)
|
September
30, 2007
|
September
30, 2006
|
||||||
Interest
income
|
||||||||
Interest
and fees on loans held in portfolio
|
$ |
39,006
|
$ |
39,352
|
||||
Interest
on auto loans held for sale
|
2,062
|
---
|
||||||
Interest
on investment securities
|
||||||||
U.S.
Treasury securities
|
8
|
60
|
||||||
Securities
of U.S. Government agencies
|
2,714
|
2,741
|
||||||
Obligations
of state and political subdivisions (tax exempt)
|
358
|
435
|
||||||
Corporate
debt securities and other
|
329
|
215
|
||||||
Interest
on Federal funds sold and other short-term investments
|
1,664
|
218
|
||||||
Total
interest income
|
46,141
|
43,021
|
||||||
Interest
expense
|
||||||||
Interest
on interest bearing transaction accounts
|
225
|
222
|
||||||
Interest
on savings and money market deposits
|
11,052
|
7,650
|
||||||
Interest
on time deposits
|
2,628
|
2,921
|
||||||
Interest
on borrowed funds
|
973
|
1,060
|
||||||
Total
interest expense
|
14,878
|
11,853
|
||||||
Net
interest income
|
31,263
|
31,168
|
||||||
Provision
for loan losses
|
340
|
789
|
||||||
Net
interest income after provision for loan losses
|
30,923
|
30,379
|
||||||
Non-interest
income
|
||||||||
Service
charges on deposit accounts
|
894
|
757
|
||||||
Wealth
Management Services
|
904
|
794
|
||||||
Net
gain on indirect auto and Visa portfolios
|
1,097
|
---
|
||||||
Other
income
|
1,592
|
1,384
|
||||||
Total
non-interest income
|
4,487
|
2,935
|
||||||
Non-interest
expense
|
||||||||
Salaries
and related benefits
|
12,064
|
11,756
|
||||||
Occupancy
and equipment
|
2,155
|
1,912
|
||||||
Depreciation
and amortization
|
929
|
704
|
||||||
Data
processing
|
1,254
|
1,139
|
||||||
Professional
services
|
1,239
|
873
|
||||||
Other
expense
|
3,004
|
3,036
|
||||||
Total
non-interest expense
|
20,645
|
19,420
|
||||||
Income
before provision for income taxes
|
14,765
|
13,894
|
||||||
Provision
for income taxes
|
5,699
|
5,238
|
||||||
Net
income
|
$ |
9,066
|
$ |
8,656
|
||||
Net
income per common share:
|
||||||||
Basic
|
$ |
1.74
|
$ |
1.62
|
||||
Diluted
|
$ |
1.70
|
$ |
1.55
|
||||
Weighted
average shares used to compute net income per common
share:
|
||||||||
Basic
|
5,197
|
5,335
|
||||||
Diluted
|
5,347
|
5,602
|
||||||
Dividends
declared per common share
|
$ |
0.38
|
$ |
0.34
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
|
||||||||||||
for
the three months ended September 30, 2007, June 30, 2007 and
September 30,
2006
|
||||||||||||
(in
thousands, except per share data - unaudited)
|
September 30, 2007
|
June 30, 2007
|
September 30, 2006
|
|||||||||
Interest
income
|
||||||||||||
Interest
and fees on loans held in portfolio
|
$ |
13,283
|
$ |
13,027
|
$ |
13,618
|
||||||
Interest
on auto loans held for sale
|
---
|
954
|
---
|
|||||||||
Interest
on investment securities
|
||||||||||||
U.S.
Treasury securities
|
---
|
---
|
17
|
|||||||||
Securities
of U.S. Government agencies
|
1,063
|
809
|
921
|
|||||||||
Obligations
of state and political subdivisions (tax exempt)
|
129
|
111
|
118
|
|||||||||
Corporate
debt securities and other
|
108
|
123
|
75
|
|||||||||
Interest
on Federal funds sold and other short-term investments
|
1,247
|
415
|
126
|
|||||||||
Total
interest income
|
15,830
|
15,439
|
14,875
|
|||||||||
Interest
expense
|
||||||||||||
Interest
on interest bearing transaction accounts
|
74
|
74
|
70
|
|||||||||
Interest
on savings and money market deposits
|
3,882
|
3,778
|
3,151
|
|||||||||
Interest
on time deposits
|
877
|
882
|
976
|
|||||||||
Interest
on borrowed funds
|
209
|
227
|
260
|
|||||||||
Total
interest expense
|
5,042
|
4,961
|
4,457
|
|||||||||
Net
interest income
|
10,788
|
10,478
|
10,418
|
|||||||||
Provision
for loan losses
|
200
|
75
|
287
|
|||||||||
Net
interest income after provision for loan losses
|
10,588
|
10,403
|
10,131
|
|||||||||
Non-interest
income
|
||||||||||||
Service
charges on deposit accounts
|
325
|
321
|
259
|
|||||||||
Wealth
Management Services
|
331
|
298
|
271
|
|||||||||
Net
gain on indirect auto and Visa portfolios
|
387
|
190
|
---
|
|||||||||
Other
income
|
543
|
584
|
466
|
|||||||||
Total
non-interest income
|
1,586
|
1,393
|
996
|
|||||||||
Non-interest
expense
|
||||||||||||
Salaries
and related benefits
|
3,938
|
4,163
|
3,732
|
|||||||||
Occupancy
and equipment
|
716
|
729
|
741
|
|||||||||
Depreciation
and amortization
|
318
|
310
|
261
|
|||||||||
Data
processing
|
411
|
425
|
422
|
|||||||||
Professional
Services
|
536
|
384
|
343
|
|||||||||
Other
expense
|
1,007
|
1,019
|
1,086
|
|||||||||
Total
non-interest expense
|
6,926
|
7,030
|
6,585
|
|||||||||
Income
before provision for income taxes
|
5,248
|
4,766
|
4,542
|
|||||||||
Provision
for income taxes
|
2,059
|
1,863
|
1,437
|
|||||||||
Net
income
|
$ |
3,189
|
$ |
2,903
|
$ |
3,105
|
||||||
Net
income per common share:
|
||||||||||||
Basic
|
$ |
0.62
|
$ |
0.56
|
$ |
0.57
|
||||||
Diluted
|
$ |
0.60
|
$ |
0.54
|
$ |
0.55
|
||||||
Weighted
average shares used to compute net income per common
share:
|
||||||||||||
Basic
|
5,172
|
5,187
|
5,430
|
|||||||||
Diluted
|
5,301
|
5,329
|
5,630
|
|||||||||
Dividends
declared per common share
|
$ |
0.13
|
$ |
0.13
|
$ |
0.12
|
C
ON
DENSED
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY
|
||||||||||||||||||||
for
the year ended December 31, 2006 and the nine months ended September
30,
2007
|
||||||||||||||||||||
Common
Stock
|
Retained
|
Accumulated
Other
Comprehensive
Gain
(Loss),
|
||||||||||||||||||
(dollar
amounts in thousands - 2007 unaudited)
|
Shares
|
Amount
|
Earnings
|
Net
of Taxes
|
Total
|
|||||||||||||||
Balance
at December 31, 2005
|
4,960,248
|
$ |
50,957
|
$ |
28,030
|
$ | (766 | ) | $ |
78,221
|
||||||||||
Comprehensive
income:
|
||||||||||||||||||||
Net
income
|
---
|
---
|
11,883
|
---
|
11,883
|
|||||||||||||||
Other
comprehensive income
|
||||||||||||||||||||
Net
change in unrealized loss on available for sale securities (net of
tax
liability of $128)
|
---
|
---
|
---
|
176
|
176
|
|||||||||||||||
Comprehensive
income
|
---
|
---
|
11,883
|
176
|
12,059
|
|||||||||||||||
Stock
options exercised
|
258,207
|
3,307
|
---
|
---
|
3,307
|
|||||||||||||||
Tax
benefit from exercised stock options
|
---
|
1,394
|
---
|
---
|
1,394
|
|||||||||||||||
Stock
repurchased, including commission costs
|
(115,625 | ) | (3,968 | ) |
---
|
---
|
(3,968 | ) | ||||||||||||
Stock-based
compensation
|
---
|
555
|
---
|
---
|
555
|
|||||||||||||||
Stock
issued on 5% dividend declared on April 13
|
250,658
|
8,678
|
(8,705 | ) |
---
|
(27 | ) | |||||||||||||
Cash
dividends paid
|
---
|
---
|
(2,448 | ) |
---
|
(2,448 | ) | |||||||||||||
Stock
issued in payment of director fees
|
12,928
|
432
|
---
|
---
|
432
|
|||||||||||||||
Balance
at December 31, 2006
|
5,366,416
|
$ |
61,355
|
$ |
28,760
|
$ | (590 | ) | $ |
89,525
|
||||||||||
Cumulative-effect
adjustment of adoption of SFAS
No.159
|
---
|
---
|
(1,452 | ) |
---
|
(1,452 | ) | |||||||||||||
Comprehensive
income:
|
||||||||||||||||||||
Net
income
|
---
|
---
|
9,066
|
---
|
9,066
|
|||||||||||||||
Other
comprehensive income
|
||||||||||||||||||||
Net
change in unrealized loss on available for sale securities (net of
tax
liability of $211)
|
---
|
---
|
---
|
292
|
292
|
|||||||||||||||
Comprehensive
income
|
---
|
---
|
9,066
|
292
|
9,358
|
|||||||||||||||
Stock
options exercised
|
112,128
|
1,614
|
---
|
---
|
1,614
|
|||||||||||||||
Tax
benefit from exercised stock options
|
---
|
728
|
---
|
---
|
728
|
|||||||||||||||
Stock
repurchased, including commission costs
|
(314,091 | ) | (11,931 | ) |
---
|
---
|
(11,931 | ) | ||||||||||||
Stock
issued under employee stock purchase plan
|
104
|
3
|
---
|
---
|
3
|
|||||||||||||||
Stock-based
compensation
|
---
|
379
|
379
|
|||||||||||||||||
Cash
dividends paid
|
---
|
---
|
(1,977 | ) |
---
|
(1,977 | ) | |||||||||||||
Stock
issued in payment of director fees
|
9,590
|
328
|
---
|
---
|
328
|
|||||||||||||||
Balance
at September 30, 2007
|
5,174,147
|
$ |
52,476
|
$ |
34,397
|
$ | (298 | ) | $ |
86,575
|
C
ON
DENSED
CONSOLIDATED STATEMENT OF CASH
FLOWS
|
||||||||
for
the nine months ended September 30, 2007 and 2006
|
||||||||
(in
thousands - unaudited)
|
September 30, 2007
|
September 30, 2006
|
||||||
Cash
Flows from Operating Activities:
|
||||||||
Net
income
|
$ |
9,066
|
$ |
8,656
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Provision
for loan losses
|
340
|
789
|
||||||
Compensation
payable in common stock
|
193
|
353
|
||||||
Stock-based
compensation expense
|
379
|
428
|
||||||
Excess
tax benefits from exercised stock options
|
(534 | ) | (1,137 | ) | ||||
Amortization
and accretion of investment security premiums, net
|
142
|
448
|
||||||
Depreciation
and amortization
|
929
|
704
|
||||||
Net
gain on indirect auto and Visa portfolios
|
(1,097 | ) |
---
|
|||||
Gain
on sale of equipment
|
---
|
(8 | ) | |||||
Net
change in operating assets and liabilities:
|
||||||||
Interest
receivable
|
139
|
129
|
||||||
Interest
payable
|
125
|
181
|
||||||
Deferred
rent and other rent-related expenses
|
83
|
135
|
||||||
Other
assets
|
707
|
(2,408 | ) | |||||
Other
liabilities
|
2,454
|
826
|
||||||
Total
adjustments
|
3,860
|
440
|
||||||
Net
cash provided by operating activities
|
12,926
|
9,096
|
||||||
Cash
Flows from Investing Activities:
|
||||||||
Purchase
of securities held-to-maturity
|
(2,056 | ) | (1,087 | ) | ||||
Purchase
of securities available-for-sale
|
(24,445 | ) | (7,976 | ) | ||||
Proceeds
from paydowns/maturity of:
|
||||||||
Securities
held-to-maturity
|
2,590
|
6,570
|
||||||
Securities
available-for-sale
|
15,024
|
11,708
|
||||||
Proceeds
from sale of indirect auto and Visa loans
|
78,599
|
---
|
||||||
Loans
originated and principal collected, net
|
(47,334 | ) | (26,364 | ) | ||||
Purchase
of bank owned life insurance policies
|
---
|
(1,159 | ) | |||||
Proceeds
from disposition of assets
|
---
|
12
|
||||||
Additions
to premises and equipment
|
(502 | ) | (2,265 | ) | ||||
Net
cash provided by (used in) investing activities
|
21,876
|
(20,561 | ) | |||||
Cash
Flows from Financing Activities:
|
||||||||
Net
increase in deposits
|
72,717
|
21,046
|
||||||
Proceeds
from stock options exercised
|
1,614
|
2,964
|
||||||
Net
decrease in Federal Funds purchased and Federal Home Loan Bank
borrowings
|
(24,100 | ) | (800 | ) | ||||
Common
stock repurchased
|
(11,931 | ) |
---
|
|||||
Dividends
paid in cash
|
(1,977 | ) | (1,796 | ) | ||||
Stock
issued under employee stock purchase plan
|
3
|
---
|
||||||
Cash
paid for fractional shares
|
---
|
(27 | ) | |||||
Excess
tax benefits from exercised stock options
|
534
|
1,137
|
||||||
Net
cash provided by financing activities
|
36,860
|
22,524
|
||||||
Net
increase in cash and cash equivalents
|
71,662
|
11,059
|
||||||
Cash
and cash equivalents at beginning of period
|
38,783
|
22,262
|
||||||
Cash
and cash equivalents at end of period
|
$ |
110,445
|
$ |
33,321
|
||||
Supplemental
disclosure of cash flow information:
|
||||||||
Cash
paid for interest
|
$ |
14,751
|
$ |
12,477
|
||||
Cash
paid for income taxes
|
$ |
2,418
|
$ |
4,145
|
Three
months ended
|
Nine
months ended
|
|||||||||||||||||||
(in
thousands)
|
Sept.
30, 2007
|
June
30, 2007
|
Sept.
30, 2006
|
Sept.
30, 2007
|
Sept.
30, 2006
|
|||||||||||||||
Weighted
average basic shares outstanding
|
5,172
|
5,187
|
5,430
|
5,197
|
5,335
|
|||||||||||||||
Add:
Potential common shares related to stock options
|
129
|
142
|
200
|
150
|
267
|
|||||||||||||||
Weighted
average diluted shares outstanding
|
5,301
|
5,329
|
5,630
|
5,347
|
5,602
|
|||||||||||||||
Anti-dilutive
shares not included in the calculation of diluted earnings per
share
|
187
|
67
|
150
|
60
|
75
|
|||||||||||||||
Net
income
|
$ |
3,189
|
$ |
2,903
|
$ |
3,105
|
$ |
9,066
|
$ |
8,656
|
||||||||||
Earnings
per share (basic)
|
$ |
0.62
|
$ |
0.56
|
$ |
0.57
|
$ |
1.74
|
$ |
1.62
|
||||||||||
Earnings
per share (diluted)
|
$ |
0.60
|
$ |
0.54
|
$ |
0.55
|
$ |
1.70
|
$ |
1.55
|
(Dollars
in thousands)
|
||||||||||||||||
Description
of Financial Instruments
|
Sept.
30, 2007
|
Quoted
Prices in Active Markets for Identical Assets (Level 1)
|
Significant
Other Observable Inputs (Level 2)
|
Significant
Unobservable Inputs (Level 3)
|
||||||||||||
Securities
available for sale
|
$ |
85,076
|
$ |
85,076
|
$ |
---
|
$ |
---
|
||||||||
Derivative
financial instruments (assets)
|
174
|
---
|
174
|
---
|
||||||||||||
Total
assets
|
$ |
85,250
|
$ |
85,076
|
$ |
174
|
$ |
---
|
||||||||
Derivative
financial instruments (liabilities)
|
$ |
265
|
$ |
---
|
$ |
265
|
$ |
---
|
January 1, 2007
|
Net Gain (Loss)
|
January 1, 2007
|
|||||||||||
(Dollars
in thousands)
|
Prior to Adoption
|
Upon Adoption
|
|
After Adoption
|
|||||||||
Assets
|
|||||||||||||
Auto
loans, net
|
$ |
83,327
|
$ | (2,499 | ) |
(a)
|
$ |
80,828
|
|||||
Pre-tax
cumulative effect of adoption of the fair value option
|
(2,499 | ) | |||||||||||
Increase
in deferred tax asset
|
1,047
|
||||||||||||
Cumulative
effect of adoption of the fair value option
(charged
to retained earnings)
|
$ | (1,452 | ) |
Three months ended
|
Nine months ended
|
|||||||||||||||||||
(in
thousands - unaudited)
|
Sept. 30, 2007
|
June 30, 2007
|
Sept. 30, 2006
|
Sept. 30, 2007
|
Sept. 30, 2006
|
|||||||||||||||
Beginning
balance
|
$ |
7,053
|
$ |
7,042
|
$ |
7,519
|
$ |
8,023
|
$ |
7,115
|
||||||||||
Cumulative-effect
adjustment of adoption of SFAS No. 159
|
---
|
---
|
---
|
(1,048 | ) |
---
|
||||||||||||||
Provision
for loan loss charged to expense
|
200
|
75
|
287
|
340
|
789
|
|||||||||||||||
Loans
charged off
|
(33 | ) | (77 | ) | (150 | ) | (111 | ) | (316 | ) | ||||||||||
Loan
loss recoveries
|
7
|
13
|
74
|
23
|
142
|
|||||||||||||||
Ending
balance
|
$ |
7,227
|
$ |
7,053
|
$ |
7,730
|
$ |
7,227
|
$ |
7,730
|
||||||||||
Total
loans held in portfolio at end of period, before deducting allowance
for
loan losses
|
$ |
685,975
|
$ |
653,924
|
$ |
712,851
|
$ |
685,975
|
$ |
712,851
|
||||||||||
Ratio
of allowance for loan losses to loans held in portfolio
|
1.05 | % | 1.08 | % | 1.08 | % | 1.05 | % | 1.08 | % | ||||||||||
Nonaccrual
loans at period end
|
$ |
150
|
$ |
5
|
$ |
4,374
|
$ |
150
|
$ |
4,374
|
|
Three months ended
|
Nine months ended
|
||||||||||||||||||
(in
thousands except per share data - unaudited)
|
Sept. 30, 2007
|
June 30, 2007
|
Sept. 30, 2006
|
Sept. 30, 2007
|
Sept. 30, 2006
|
|||||||||||||||
Cash
dividends
|
$ |
672
|
$ |
680
|
$ |
655
|
$ |
1,977
|
$ |
1,796
|
||||||||||
Cash
dividends per share
|
$ |
0.13
|
$ |
0.13
|
$ |
0.12
|
$ |
0.38
|
$ |
0.34
|
Three months ended
|
Nine months ended
|
|||||||||||||||||||
(in
thousands - unaudited)
|
Sept. 30, 2007
|
June 30, 2007
|
Sept. 30, 2006
|
Sept. 30, 2007
|
Sept. 30, 2006
|
|||||||||||||||
Stock-based
compensation
|
$ |
124
|
$ |
133
|
$ |
145
|
$ |
379
|
$ |
428
|
||||||||||
Tax
benefits on exercised options
|
$ |
4
|
$ |
126
|
$ |
181
|
$ |
728
|
$ |
1,137
|
Weighted
|
||||||||||||||||
Average
|
||||||||||||||||
Aggregate
|
Remaining
|
|||||||||||||||
Weighted
|
Intrinsic
|
Contractual
|
||||||||||||||
Number
of
|
Average
|
Value
|
Term
|
|||||||||||||
Shares
|
Exercise
Price
|
(in
thousands)
|
(in
years)
|
|||||||||||||
For
the quarter ending March 31, 2007:
|
||||||||||||||||
Options
outstanding at December 31, 2006
|
546,265
|
$
|
20.69
|
---
|
---
|
|||||||||||
Granted
|
---
|
---
|
---
|
---
|
||||||||||||
Cancelled/forfeited
|
(2,443 | ) |
28.60
|
---
|
---
|
|||||||||||
Exercised
|
(83,582 | ) |
14.88
|
$
|
1,895
|
---
|
||||||||||
Options
outstanding at March 31, 2007
|
460,240
|
21.70
|
$
|
6,379
|
5.5
|
|||||||||||
Exercisable
(vested) at March 31, 2007
|
308,035
|
$
|
16.93
|
$
|
5,739
|
4.2
|
||||||||||
For
the quarter ending June 30, 2007:
|
||||||||||||||||
Options
outstanding at March 31, 2007
|
460,240
|
$
|
21.70
|
---
|
---
|
|||||||||||
Granted
|
54,551
|
34.87
|
---
|
---
|
||||||||||||
Cancelled/forfeited
|
(1,442 | ) |
30.31
|
---
|
---
|
|||||||||||
Exercised
|
(24,934 | ) |
12.65
|
$
|
572
|
---
|
||||||||||
Options
outstanding at June 30, 2007
|
488,415
|
23.61
|
$
|
4,415
|
6.0
|
|||||||||||
Exercisable
(vested) at June 30, 2007
|
312,494
|
$
|
18.38
|
$
|
4,459
|
4.6
|
||||||||||
For
the quarter ending September 30, 2007:
|
||||||||||||||||
Options
outstanding at June 30, 2007
|
488,415
|
$
|
23.61
|
---
|
---
|
|||||||||||
Granted
|
---
|
---
|
---
|
---
|
||||||||||||
Cancelled/forfeited
|
(2,460 | ) |
31.66
|
---
|
---
|
|||||||||||
Exercised
|
(3,612 | ) |
15.19
|
$
|
60
|
---
|
||||||||||
Options
outstanding at September 30, 2007
|
482,343
|
$
|
4,429
|
5.7
|
||||||||||||
Exercisable
(vested) at September 30, 2007
|
321,740
|
$
|
18.86
|
$
|
4,346
|
4.4
|
Nine months ended
|
Year ended
|
|||||||
|
September 30, 2007
|
December 31, 2006
|
||||||
Risk-free
interest rate
|
4.64%
|
5.06
%
|
||||||
Expected
dividend yield
|
1.38%
|
1.37%
|
||||||
Expected
life in years
|
7
|
7
|
||||||
Expected
price volatility
|
12.30%
|
12.53%
|
Fair
Value
|
Fair
Value
|
|||||||||||
Swap
|
Swap
|
|||||||||||
(in
thousands)
|
(Shortcut
Accounting Treatment)
|
(Non-shortcut
Accounting Treatment)
|
Yield Maintenance
Agreement
|
|||||||||
At
September
30, 2007:
|
||||||||||||
Notional
or contractual amount
|
$ |
7,289
|
$ |
8,300
|
$ |
---
|
||||||
Credit
risk amount (1)
|
174
|
---
|
---
|
|||||||||
Estimated
net fair value
|
174
|
(265 | ) |
66
|
||||||||
At
December 31, 2006:
|
||||||||||||
Notional
or contractual amount
|
$ |
7,513
|
$ |
8,300
|
$ |
8,300
|
||||||
Credit
risk amount (1)
|
220
|
---
|
295
|
|||||||||
Estimated
net fair value
|
220
|
(295 | ) |
295
|
Three months ended
|
Nine months ended
|
|||||||||||||||||||
Sept. 30, 2007
|
June 30, 2007
|
Sept. 30, 2006
|
Sept. 30, 2007
|
Sept. 30, 2006
|
||||||||||||||||
Fair
Value Swap
|
||||||||||||||||||||
(Shortcut
Accounting Treatment):
|
||||||||||||||||||||
Weighted
average pay rate
|
4.59 | % | 4.59 | % | 4.59 | % | 4.59 | % | 4.59 | % | ||||||||||
Weighted
average receive rate
|
5.47 | % | 5.32 | % | 5.35 | % | 5.37 | % | 4.97 | % | ||||||||||
Fair
Value Swap
|
||||||||||||||||||||
(Non-Shortcut
Accounting Treatment):
|
||||||||||||||||||||
Weighted
average pay rate
|
5.54 | % | 5.54 | % | 5.54 | % | 5.54 | % | 5.54 | % | ||||||||||
Weighted
average receive rate
|
5.44 | % | 5.32 | % | 5.35 | % | 5.41 | % | 4.97 | % | ||||||||||
Yield
maintenance agreement
|
||||||||||||||||||||
Weighted
average receive rate (2)
|
5.15 | % | 5.15 | % | 5.15 | % | 5.15 | % | 5.15 | % | ||||||||||
(Loss)
gain on designated and undesignated interest rate
contracts
|
$ | (500 | ) | $ |
482
|
$ | (630 | ) | $ | (16 | ) | $ | (201 | ) | ||||||
Increase
(decrease) in value of designated loans and yield maintenance agreement
qualifying as derivatives
|
491
|
(483 | ) |
630
|
6
|
201
|
||||||||||||||
Net
(loss) gain on derivatives used to hedge loans recorded in
income
|
$ | (9 | ) | $ | (1 | ) | $ |
---
|
$ | (10 | ) | $ |
---
|
1
|
Credit
risk represents the amount of unrealized gain included in derivative
assets which is subject to counterparty credit risk. It reflects
the
effect of master netting agreements and includes credit risk
on virtual derivatives.
|
2
|
Tax
equivalent yield equals 8.26%.
|
CONDENSED
UNCONSOLIDATED STATEMENT OF CONDITION
|
||||
at
September 30, 2007
|
||||
(in
thousands - unaudited)
|
September
30, 2007
|
|||
Assets
|
||||
Cash
and due from Bank of Marin
|
$ |
1,091
|
||
Investment
in subsidiary
|
85,380
|
|||
Other
assets
|
125
|
|||
Total
assets
|
$ |
86,596
|
||
Liabilities
and Stockholders' Equity
|
||||
Accrued
expenses payable
|
$ |
20
|
||
Intercompany
payable
|
1
|
|||
Total
liabilities
|
21
|
|||
Stockholders'
equity
|
86,575
|
|||
Total
liabilities and stockholders' equity
|
$ |
86,596
|
CONDENSED
UNCONSOLIDATED STATEMENT OF OPERATIONS
|
||||
for
the three months ended September 30, 2007
|
||||
(in
thousands - unaudited)
|
September
30, 2007
|
|||
Income
|
||||
Dividends
from bank subsidiary
|
$ |
2,000
|
||
Total
income
|
2,000
|
|||
Expense
|
||||
Non-interest
expense
|
228
|
|||
Total
expense
|
228
|
|||
Income
before income taxes and equity in undistributed net income of
subsidiary
|
1,772
|
|||
Income
tax benefit
|
95
|
|||
Income
before equity in undistributed net income of subsidiary
|
1,867
|
|||
Equity
in undistributed net income of subsidiary
|
1,322
|
|||
Net
income
|
$ |
3,189
|
CONDENSED
UNCONSOLIDATED STATEMENT OF CASH FLOWS
|
||||
for
three months ended September 30, 2007
|
||||
(in
thousands - unaudited)
|
September
30, 2007
|
|||
Cash
Flows from Operating Activities:
|
||||
Net
income
|
$ |
3,189
|
||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||
Equity
in undistrubuted net income of subsidiary
|
(1,322 | ) | ||
Net
change in operating assets and liabilities
|
||||
Other
assets
|
(125 | ) | ||
Other
liabilities
|
20
|
|||
Intercompany
payable
|
1
|
|||
Net
cash provided by operating activities
|
1,763
|
|||
Cash
Flows from Investing Activities:
|
||||
Capital
contribution to subsidiary
|
(55 | ) | ||
Net
cash used in investing activities
|
(55 | ) | ||
Cash
Flows from Financing Activities:
|
||||
Stock
options exercised
|
55
|
|||
Dividends
paid in cash
|
(672 | ) | ||
Net
cash used by financing activities
|
(617 | ) | ||
Net
increase in cash and cash equivalents
|
1,091
|
|||
Cash
and cash equivalents at beginning of period
|
---
|
|||
Cash
and cash equivalents at end of period
|
$ |
1,091
|
|
|
|||||||||||||||||||
|
As of and for the
|
As of and for the
|
||||||||||||||||||
|
three months ended
|
nine months ended
|
||||||||||||||||||
(dollars in thousands except per share data) |
Sept. 30, 2007
|
June 30, 2007
|
Sept. 30, 2006
|
Sept. 30, 2007
|
Sept. 30, 2006
|
|||||||||||||||
For
the period:
|
||||||||||||||||||||
Net
income
|
$ |
3,189
|
$ |
2,903
|
$ |
3,105
|
$ |
9,066
|
$ |
8,656
|
||||||||||
Net
income per share
|
||||||||||||||||||||
Basic
|
$ |
0.62
|
$ |
0.56
|
$ |
0.57
|
$ |
1.74
|
$ |
1.62
|
||||||||||
Diluted
|
$ |
0.60
|
$ |
0.54
|
$ |
0.55
|
$ |
1.70
|
$ |
1.55
|
||||||||||
Return
on average equity
|
14.83 | % | 13.90 | % | 13.98 | % | 14.37 | % | 13.74 | % | ||||||||||
Return
on average assets
|
1.38 | % | 1.32 | % | 1.41 | % | 1.36 | % | 1.35 | % | ||||||||||
Cash
dividend payout ratio
|
20.97 | % | 23.21 | % | 21.05 | % | 21.84 | % | 20.99 | % | ||||||||||
Efficiency
ratio
|
55.97 | % | 59.22 | % | 57.69 | % | 57.75 | % | 56.95 | % | ||||||||||
At
period end:
|
||||||||||||||||||||
Book
value per share
|
$ |
16.73
|
$ |
16.21
|
$ |
16.51
|
$ |
16.73
|
$ |
16.51
|
||||||||||
Total
assets
|
$ |
924,044
|
$ |
890,377
|
$ |
873,237
|
$ |
924,044
|
$ |
873,237
|
||||||||||
Total
loans
|
$ |
685,975
|
$ |
653,924
|
$ |
712,851
|
$ |
685,975
|
$ |
712,851
|
||||||||||
Total
deposits
|
$ |
809,414
|
$ |
776,477
|
$ |
742,218
|
$ |
809,414
|
$ |
742,218
|
||||||||||
Loan-to-deposit
ratio
|
84.7 | % | 84.2 | % | 96.0 | % | 84.7 | % | 96.0 | % |
Three months ended
|
Three months ended
|
Three months ended
|
||||||||||||||||||||||||||||||||||
September 30, 2007
|
June 30, 2007
|
September 30, 2006
|
||||||||||||||||||||||||||||||||||
Interest
|
Interest
|
Interest
|
||||||||||||||||||||||||||||||||||
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
||||||||||||||||||||||||||||
(dollars
in thousands)
|
Balance
|
Expense (1)
|
Rate (1)
|
Balance
|
Expense (1)
|
Rate (1)
|
Balance
|
Expense (1)
|
Rate (1)
|
|||||||||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||||||||||
Federal
funds sold and other short-term investments
|
$ |
94,220
|
$ |
1,247
|
5.25 | % | $ |
31,739
|
$ |
415
|
5.24 | % | $ |
9,603
|
$ |
126
|
5.24 | % | ||||||||||||||||||
Investment
securities
|
||||||||||||||||||||||||||||||||||||
U.S.
Treasury securities
|
---
|
---
|
---
|
---
|
---
|
---
|
2,646
|
17
|
2.47 | % | ||||||||||||||||||||||||||
U.S.
Government agencies
|
85,557
|
1,063
|
4.93 | % |
68,916
|
809
|
4.71 | % |
84,437
|
921
|
4.33 | % | ||||||||||||||||||||||||
Other
|
7,164
|
108
|
5.91 | % |
7,567
|
123
|
6.56 | % |
6,113
|
75
|
4.87 | % | ||||||||||||||||||||||||
Municipal
bonds
|
13,909
|
172
|
4.90 | % |
12,201
|
148
|
4.84 | % |
13,049
|
158
|
4.82 | % | ||||||||||||||||||||||||
Loans
and banker's acceptances (2)
|
668,636
|
13,283
|
7.88 | % |
711,502
|
13,981
|
7.88 | % |
706,994
|
13,618
|
7.64 | % | ||||||||||||||||||||||||
Total
interest-earning assets
|
869,486
|
15,873
|
7.24 | % |
831,925
|
15,476
|
7.46 | % |
822,842
|
14,915
|
7.19 | % | ||||||||||||||||||||||||
Cash
and due from banks
|
22,847
|
25,078
|
29,741
|
|||||||||||||||||||||||||||||||||
Bank
premises and equipment, net
|
8,132
|
8,303
|
6,907
|
|||||||||||||||||||||||||||||||||
Interest
receivable and other assets, net
|
15,397
|
16,564
|
13,481
|
|||||||||||||||||||||||||||||||||
Total
assets
|
$ |
915,862
|
$ |
881,870
|
$ |
872,971
|
||||||||||||||||||||||||||||||
Liabilities
and Stockholders' Equity
|
||||||||||||||||||||||||||||||||||||
Interest-bearing
transaction accounts
|
$ |
76,189
|
$ |
74
|
0.38 | % | $ |
76,969
|
$ |
74
|
0.39 | % | $ |
72,099
|
$ |
70
|
0.39 | % | ||||||||||||||||||
Savings
and money market accounts
|
440,131
|
3,882
|
3.50 | % |
405,754
|
3,778
|
3.73 | % |
377,735
|
3,151
|
3.31 | % | ||||||||||||||||||||||||
Time
accounts
|
85,770
|
877
|
4.05 | % |
87,123
|
882
|
4.06 | % |
102,896
|
976
|
3.77 | % | ||||||||||||||||||||||||
Purchased
funds
|
10,246
|
107
|
4.15 | % |
11,603
|
126
|
4.35 | % |
13,786
|
158
|
4.55 | % | ||||||||||||||||||||||||
Borrowed
funds
|
5,000
|
102
|
8.19 | % |
5,000
|
101
|
8.04 | % |
5,000
|
102
|
8.17 | % | ||||||||||||||||||||||||
Total
interest-bearing liabilities
|
617,336
|
5,042
|
3.24 | % |
586,449
|
4,961
|
3.39 | % |
571,516
|
4,457
|
3.09 | % | ||||||||||||||||||||||||
Demand
accounts
|
206,579
|
205,394
|
207,983
|
|||||||||||||||||||||||||||||||||
Interest
payable and other liabilities
|
6,597
|
6,263
|
5,360
|
|||||||||||||||||||||||||||||||||
Stockholders'
equity
|
85,350
|
83,764
|
88,112
|
|||||||||||||||||||||||||||||||||
Total
liabilities & stockholders' equity
|
$ |
915,862
|
$ |
881,870
|
$ |
872,971
|
||||||||||||||||||||||||||||||
Net
interest income
|
$ |
10,831
|
$ |
10,515
|
$ |
10,458
|
||||||||||||||||||||||||||||||
Net
interest margin
|
4.94 | % | 5.07 | % | 5.04 | % | ||||||||||||||||||||||||||||||
Net
interest rate spread
|
4.00 | % | 4.07 | % | 4.10 | % |
Nine months ended
|
Nine months ended
|
|||||||||||||||||||||||
September 30, 2007
|
September 30, 2006
|
|||||||||||||||||||||||
Interest
|
Interest
|
|||||||||||||||||||||||
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
|||||||||||||||||||
(dollars
in thousands)
|
Balance
|
Expense (1)
|
Rate (1)
|
Balance
|
Expense (1)
|
Rate (1)
|
||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Federal
funds sold and other short-term investments
|
$ |
42,372
|
$ |
1,664
|
5.25 | % | $ |
5,839
|
$ |
218
|
5.00 | % | ||||||||||||
Investment
securities
|
||||||||||||||||||||||||
U.S.
Treasury securities
|
423
|
8
|
2.42 | % |
3,274
|
60
|
2.45 | % | ||||||||||||||||
U.S.
Government agencies
|
74,509
|
2,714
|
4.87 | % |
85,094
|
2,741
|
4.31 | % | ||||||||||||||||
Other
|
7,571
|
329
|
5.80 | % |
6,050
|
215
|
4.76 | % | ||||||||||||||||
Municipal
bonds
|
12,991
|
477
|
4.91 | % |
15,534
|
594
|
5.11 | % | ||||||||||||||||
Loans
and banker's acceptances (2)
|
700,712
|
41,068
|
7.84 | % |
694,732
|
39,352
|
7.57 | % | ||||||||||||||||
Total
interest-earning assets
|
838,578
|
46,260
|
7.38 | % |
810,523
|
43,180
|
7.12 | % | ||||||||||||||||
Cash
and due from banks
|
25,017
|
27,874
|
||||||||||||||||||||||
Bank
premises and equipment, net
|
8,270
|
5,782
|
||||||||||||||||||||||
Interest
receivable and other assets, net
|
16,223
|
12,836
|
||||||||||||||||||||||
Total
assets
|
$ |
888,088
|
$ |
857,015
|
||||||||||||||||||||
Liabilities
and Stockholders' Equity
|
||||||||||||||||||||||||
Interest-bearing
transaction accounts
|
$ |
75,994
|
$ |
225
|
0.40 | % | $ |
76,098
|
$ |
222
|
0.39 | % | ||||||||||||
Savings
and money market accounts
|
407,852
|
11,052
|
3.62 | % |
352,446
|
7,650
|
2.90 | % | ||||||||||||||||
Time
accounts
|
86,959
|
2,628
|
4.04 | % |
108,305
|
2,921
|
3.61 | % | ||||||||||||||||
Purchased
funds
|
18,880
|
671
|
4.75 | % |
22,424
|
771
|
4.60 | % | ||||||||||||||||
Borrowed
funds
|
5,000
|
302
|
8.06 | % |
5,000
|
289
|
7.73 | % | ||||||||||||||||
Total
interest-bearing liabilities
|
594,685
|
14,878
|
3.34 | % |
564,273
|
11,853
|
2.81 | % | ||||||||||||||||
Demand
accounts
|
202,660
|
203,540
|
||||||||||||||||||||||
Interest
payable and other liabilities
|
6,366
|
4,960
|
||||||||||||||||||||||
Stockholders'
equity
|
84,377
|
84,242
|
||||||||||||||||||||||
Total
liabilities & stockholders' equity
|
$ |
888,088
|
$ |
857,015
|
||||||||||||||||||||
Net
interest income
|
$ |
31,382
|
$ |
31,327
|
||||||||||||||||||||
Net
interest margin
|
5.00 | % | 5.17 | % | ||||||||||||||||||||
Net
interest rate spread
|
4.04 | % | 4.31 | % |
(1)
|
Yields
and interest income are presented on a taxable-equivalent basis using
the
Federal statutory rate of 35
percent.
|
(2)
|
Average
balances on loans outstanding include non-performing loans, if any.
The
amortized portion of net loan origination fees (costs) is
included
in interest income on loans, representing an adjustment to the
yield.
|
9/30/07 compared
|
9/30/07 compared
|
|||||||||||||||||||||||||||
to 6/30/07
|
to 9/30/06
|
|||||||||||||||||||||||||||
Three months ended
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||||||||||||
Sept. 30,
|
June 30,
|
Sept. 30,
|
Increase
|
Increase
|
Increase
|
Increase
|
||||||||||||||||||||||
(dollars
in thousands)
|
2007
|
2007
|
2006
|
(Decrease)
|
(Decrease)
|
(Decrease)
|
(Decrease)
|
|||||||||||||||||||||
Service
charges on deposit accounts
|
$ |
325
|
$ |
321
|
$ |
259
|
$ |
4
|
1.2 | % | $ |
66
|
25.5 | % | ||||||||||||||
Wealth
Management Services
|
331
|
298
|
271
|
33
|
11.1 | % |
60
|
22.1 | % | |||||||||||||||||||
Net
gain on indirect auto and
|
||||||||||||||||||||||||||||
Visa
portfolios
|
387
|
190
|
---
|
197
|
103.7 | % |
387
|
NM
|
||||||||||||||||||||
Other
non-interest income
|
||||||||||||||||||||||||||||
Earnings
on Bank owned life insurance
|
146
|
144
|
123
|
2
|
1.4 | % |
23
|
18.7 | % | |||||||||||||||||||
Customer
banking fees and other charges
|
133
|
155
|
126
|
(22 | ) | (14.2 | %) |
7
|
5.6 | % | ||||||||||||||||||
Other
income
|
264
|
285
|
217
|
(21 | ) | (7.4 | %) |
47
|
21.7 | % | ||||||||||||||||||
Total
other non-interest income
|
543
|
584
|
466
|
(41 | ) | (7.0 | %) |
77
|
16.5 | % | ||||||||||||||||||
Total
non-interest income
|
$ |
1,586
|
$ |
1,393
|
$ |
996
|
$ |
193
|
13.9 | % | $ |
590
|
59.2 | % |
Nine months ended
|
Amount
|
Percent
|
||||||||||||||
Sept. 30,
|
Sept. 30,
|
Increase
|
Increase
|
|||||||||||||
(dollars
in thousands)
|
2007
|
2006
|
(Decrease)
|
(Decrease)
|
||||||||||||
Service
charges on deposit accounts
|
$ |
894
|
$ |
757
|
$ |
137
|
18.1% | |||||||||
Wealth
Management
Services
|
904
|
794
|
110
|
13.9% | ||||||||||||
Net
gain on indirect auto and
|
||||||||||||||||
Visa
portfolios
|
1,097
|
---
|
1,097
|
NM
|
||||||||||||
Other
non-interest income
|
||||||||||||||||
Earnings
on Bank owned life insurance
|
429
|
362
|
67
|
18.5% | ||||||||||||
Customer
banking fees and other charges
|
408
|
368
|
40
|
10.9% | ||||||||||||
Other
income
|
755
|
654
|
101
|
15.4% | ||||||||||||
Total
other non-interest income
|
1,592
|
1,384
|
208
|
15.0% | ||||||||||||
Total
non-interest income
|
$ |
4,487
|
$ |
2,935
|
$ |
1,552
|
52.9% |
9/30/07 compared
|
9/30/07 compared
|
||||||||||||||||||||||||||
to 6/30/07
|
to 9/30/06
|
||||||||||||||||||||||||||
Three months ended
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||||||
Sept. 30,
|
June 30,
|
Sept. 30,
|
Increase
|
Increase
|
Increase
|
Increase
|
|||||||||||||||||||||
(dollars
in thousands)
|
2007
|
2007
|
2006
|
(Decrease)
|
(Decrease)
|
(Decrease)
|
(Decrease)
|
||||||||||||||||||||
Salaries
and related benefits
|
$ |
3,938
|
$ |
4,163
|
$ |
3,732
|
$ | (225 | ) | (5.4 | %) | $ |
206
|
5.5% | |||||||||||||
Occupancy
and equipment
|
716
|
729
|
741
|
(13 | ) | (1.8 | %) | (25 | ) | (3.4%) | |||||||||||||||||
Depreciation
& amortization
|
318
|
310
|
261
|
8
|
2.6 | % |
57
|
21.8% | |||||||||||||||||||
Data
processing fees
|
411
|
425
|
422
|
(14 | ) | (3.3 | %) | (11 | ) | (2.6%) | |||||||||||||||||
Professional
services
|
536
|
384
|
343
|
152
|
39.6 | % |
193
|
56.3% | |||||||||||||||||||
Other
non-interest expense
|
|||||||||||||||||||||||||||
Advertising
|
79
|
108
|
86
|
(29 | ) | (26.9 | %) | (7 | ) | (8.1%) | |||||||||||||||||
Director
expense
|
65
|
114
|
120
|
(49 | ) | (43.0 | %) | (55 | ) | (45.8%) | |||||||||||||||||
Other
expense
|
863
|
797
|
880
|
66
|
8.3 | % | (17 | ) | (1.9%) | ||||||||||||||||||
Total
other non-interest expense
|
1,007
|
1,019
|
1,086
|
(12 | ) | (1.2 | %) | (79 | ) | (7.3%) | |||||||||||||||||
Total
non-interest expense
|
$ |
6,926
|
$ |
7,030
|
$ |
6,585
|
$ | (104 | ) | (1.5 | %) | $ |
341
|
5.2% |
Nine months ended
|
Amount
|
Percent
|
||||||||||||||
Sept. 30,
|
Sept. 30,
|
Increase
|
Increase
|
|||||||||||||
(dollars
in thousands)
|
2007
|
2006
|
(Decrease)
|
(Decrease)
|
||||||||||||
Salaries
and related benefits
|
$ |
12,064
|
$ |
11,756
|
$ |
308
|
2.6% | |||||||||
Occupancy
and equipment
|
2,155
|
1,912
|
243
|
12.7% | ||||||||||||
Depreciation
& amortization
|
929
|
704
|
225
|
32.0% | ||||||||||||
Data
processing fees
|
1,254
|
1,139
|
115
|
10.1% | ||||||||||||
Professional
services
|
1,239
|
873
|
366
|
41.9% | ||||||||||||
Other
non-interest expense
|
||||||||||||||||
Advertising
|
250
|
308
|
(58 | ) | (18.8%) | |||||||||||
Director
expense
|
291
|
373
|
(82 | ) | (22.0%) | |||||||||||
Other
expense
|
2,463
|
2,355
|
108
|
4.6% | ||||||||||||
Total
other non-interest expense
|
3,004
|
3,036
|
(32 | ) | (1.1%) | |||||||||||
Total
non-interest expense
|
$ |
20,645
|
$ |
19,420
|
$ |
1,225
|
6.3% |
(Dollars
in thousands)
|
September 30, 2007
|
December 31, 2006
|
||||||
Commercial
loans
|
$ |
123,164
|
$ |
117,391
|
||||
Real
estate
|
||||||||
Commercial
|
354,731
|
311,692
|
||||||
Construction
|
98,915
|
116,790
|
||||||
Residential
(a)
|
73,952
|
58,912
|
||||||
Installment
|
||||||||
Indirect
auto loans
|
---
|
84,141
|
||||||
Other
installment
|
35,213
|
30,852
|
||||||
Total
loans held in portfolio (at amortized cost)
|
685,975
|
719,778
|
||||||
Allowance
for loan losses
|
7,227
|
8,023
|
||||||
Total
net loans
|
$ |
678,748
|
$ |
711,755
|
(a)
|
The
residential loan portfolio includes no sub-prime loans at September
30,
2007 and December 31, 2006.
|
|
Actual Ratio
|
Ratio
for Capital
Adequacy Purposes
|
|||
Capital
Ratios for Bancorp:
|
|||||
As
of September 30, 2007
|
|||||
Total
Capital (to risk-weighted assets)
|
12.37 | % |
=>8.0%
|
||
Tier
I Capital (to risk-weighted assets)
|
10.80 | % |
=>4.0%
|
||
Tier
I Capital (to average assets)
|
9.49 | % |
=>4.0%
|
|
Actual Ratio
|
Ratio
for Capital
Adequacy Purposes
|
Ratio
to be Well
Capitalized
under
Prompt
Corrective
Action Provisions
|
|||
Capital
Ratios for the Bank:
|
||||||
As
of September 30, 2007
|
||||||
Total
Capital (to risk-weighted assets)
|
12.23 | % |
=>8.0%
|
=>10.0%
|
||
Tier
I Capital (to risk-weighted assets)
|
10.65 | % |
=>4.0%
|
=>6.0%
|
||
Tier
I Capital (to average assets)
|
9.35 | % |
=>4.0%
|
=>5.0%
|
||
As
of December 31, 2006
|
||||||
Total
Capital (to risk-weighted assets)
|
12.56 | % |
=>8.0%
|
=>10.0%
|
||
Tier
I Capital (to risk-weighted assets)
|
10.93 | % |
=>4.0%
|
=>6.0%
|
||
Tier
I Capital (to average assets)
|
10.27 | % |
=>4.0%
|
=>5.0%
|
Total Number
|
||||||||||||||||
of Shares
|
||||||||||||||||
(Dollars
in thousands, except per share data)
|
Purchased as
|
Approximate
|
||||||||||||||
Period
|
Total
Number of
Shares
Purchased
|
Average
Price
|
Part of
Publicly
Announced
Plans or
Programs
|
Dollar Value
that May Yet be
Purchased
Under the
Program
|
||||||||||||
January
1-31, 2007
|
74,980
|
$ |
37.10
|
74,980
|
$ |
8,257
|
||||||||||
February
1-28, 2007
|
214,712
|
$ |
38.45
|
214,712
|
---
|
|||||||||||
Total
Purchases Under Regulatory-Approved Plan
|
289,692
|
$ |
38.10
|
289,692
|
$ |
---
|
||||||||||
July
1-31
|
24,399
|
$ |
35.92
|
24,399
|
N/A
|
|||||||||||
Total
Repurchased from Dissenting Shareholders
|
24,399
|
$ |
35.92
|
24,399
|
N/A
|
Item
3
|
Defaults
Upon Senior Securities
|
Item
4
|
Submission
of Matters to a Vote of Security
Holders
|
Item
5
|
Other
Information
|
Item
6
|
Exhibits
|
|
2.01
|
Plan
of Reorganization and Agreement of Merger dated March 8, 2007 is
incorporated by reference to Exhibit 2.1 to Current Report Form 8-K12G3
filed with the Securities and Exchange Commission on June 29,
2007.
|
|
Articles
of Incorporation for Bank of Marin
Bancorp.
|
|
Bylaws
of Bank of Marin Bancorp.
|
|
4.01
|
Rights
Agreement dated as of July 2, 2007 is incorporated by reference to
Exhibit
4.1 to Registration Statement on Form 8-A12B filed with the Securities
and
Exchange Commission on July 2,
2007.
|
|
10.01
|
2007
Employee Stock Purchase Plan is incorporated by reference to Exhibit
4.1
to Registration Statement on Form S-8 filed with the Securities and
Exchange Commission on July 24,
2007.
|
|
10.02
|
1989
Stock Option Plan is incorporated by reference to Exhibit 4.1 to
Registration Statement on Form S-8 filed with the Securities and
Exchange
Commission on July 24, 2007.
|
|
10.03
|
1999
Stock Option Plan is incorporated by reference to Exhibit 4.1 to
Registration Statement on Form S-8 filed with the Securities and
Exchange
Commission on July 24, 2007.
|
|
10.04
|
2007
Equity Plan is incorporated by reference to Exhibit 4.1 to Registration
Statement on Form S-8 filed with the Securities and Exchange Commission
on
July 24, 2007.
|
|
10.05
|
Form
of Change in Control Agreement is incorporated by reference to Exhibit
10.1 to Current Report Form 8-K filed with the Securities and Exchange
Commission on October 30, 2007.
|
|
Form
of Indemnification Agreement for Directors and Executive Officers
dated
August 9, 2007.
|
|
Certification
of Principal Executive Officer pursuant
to
Rule
13a-14(a)/15d-14(a) as adopted pursuant to §302 of the Sarbanes-Oxley Act
of 2002.
|
|
Certification
of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
as
adopted pursuant to §302 of the Sarbanes-Oxley Act of
2002.
|
|
Certification
pursuant to 18 U.S.C. §1350 as adopted pursuant to §906 of the
Sarbanes-Oxley Act of 2002.
|
Bank
of Marin Bancorp
|
||||
(registrant)
|
||||
November
6, 2007
|
/s/
Russell A. Colombo
|
|||
Date
|
Russell
A. Colombo
|
|||
President
&
|
||||
Chief
Executive Officer
|
||||
November
6, 2007
|
/s/
Christina J. Cook
|
|||
Date
|
Christina
J. Cook
|
|||
Executive
Vice President &
|
||||
Chief
Financial Officer
|
||||
November
6, 2007
|
/s/
Larry R. Olafson
|
|||
Date
|
Larry
R. Olafson
|
|||
Controller
|
Exhibit
Number
|
Description
|
Location
|
||
Articles
of Incorporation for Bank of Marin Bancorp.
|
Filed
herewith.
|
|||
Bylaws
of Bank of Marin Bancorp.
|
Filed
herewith.
|
|||
Form
of Indemnification Agreement for Directors and Executive Officers
dated
August 9, 2007.
|
Filed
herewith.
|
|||
Certification
of Principal Executive Officer pursuant
to
Rule
13a-14(a)/15d-14(a) as adopted pursuant to §302 of the Sarbanes-Oxley Act
of 2002.
|
Filed
herewith.
|
|||
Certification
of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
as
adopted pursuant to §302 of the Sarbanes-Oxley Act of
2002.
|
Filed
herewith.
|
|||
Certification
pursuant to 18 U.S.C. §1350 as adopted pursuant to §906 of the
Sarbanes-Oxley Act of 2002.
|
Furnished
herewith.
|
/s/
John F. Stuart
|
|
JOHN
F. STUART
|
|
Incorporator
|
OFFICES
|
4
|
|
1.1
|
Principal
Offices.
|
4
|
1.2
|
Other
Offices.
|
4
|
|
||
MEETINGS
OF SHAREHOLDERS
|
4
|
|
2.1
|
Place
of Meetings.
|
4
|
2.2
|
Annual
Meeting.
|
4
|
2.3
|
Special
Meeting.
|
4
|
2.4
|
Notice
of Shareholders' Meetings.
|
5
|
2.5
|
Manner
of Giving Notice: Affidavit of Notice.
|
5
|
2.6
|
Quorum.
|
6
|
2.7
|
Adjourned
Meeting: Notice.
|
6
|
2.8
|
Voting.
|
6
|
2.9
|
Waiver
of Notice or Consent by Absent Shareholders.
|
7
|
2.10
|
Shareholder
Action by Written Consent Without a Meeting.
|
7
|
2.11
|
Record
Date for Shareholder Notice, Voting, and Giving Consents.
|
8
|
2.12
|
Proxies.
|
8
|
2.13
|
Inspectors
of Election.
|
9
|
|
||
DIRECTORS
|
10
|
|
3.1
|
Powers.
|
10
|
3.2
|
Number
of Directors.
|
10
|
3.3
|
Election
and Term of Office of Directors.
|
10
|
3.4
|
Vacancies.
|
11
|
3.5
|
Place
of Meetings and Meetings by Telephone.
|
11
|
3.6
|
Annual
Directors' Meeting.
|
11
|
3.7
|
Other
Regular Meetings.
|
12
|
3.8
|
Special
Meetings.
|
12
|
3.9
|
Quorum.
|
12
|
3.10
|
Waiver
of Notice.
|
12
|
3.11
|
Adjournment.
|
12
|
3.12
|
Notice
of Adjournment.
|
13
|
3.13
|
Action
Without Meeting.
|
13
|
3.14
|
Fees
and Compensation of Directors.
|
13
|
|
||
COMMITTEES
|
13
|
|
4.1
|
Committees
of Directors.
|
13
|
4.2
|
Meetings
and Action of Committees.
|
14
|
|
(a)
|
Determine
the number of shares outstanding and the voting power of each,
the shares
represented at the meeting, the existence of a quorum, and the
authenticity, validity, and effect of
proxies;
|
|
(b)
|
Receive
votes, ballots or consents;
|
|
(c)
|
Hear
and determine all challenges and questions in any way arising in
connection with the right to vote;
|
|
(d)
|
Count
and tabulate all votes or consents;
|
|
(e)
|
Determine
when the polls shall close;
|
|
(f)
|
Determine
the result; and
|
|
(g)
|
Do
any other acts that may be proper to conduct the election or vote
with
fairness to all shareholders.
|
|
(a)
|
the
approval of any action which, under the General Corporation Law of
California, also requires shareholders' approval or approval of the
outstanding shares;
|
|
(b)
|
the
filling of vacancies on the board of directors or in any
committee;
|
|
(c)
|
the
fixing of compensation of the directors for serving on the board
or on any
committee;
|
|
(d)
|
the
amendment or repeal of bylaws or the adoption of new
bylaws;
|
|
(e)
|
the
amendment or repeal of any resolution of the board of directors which
by
its express terms is not so amendable or
reparable;
|
|
(f)
|
a
distribution to the shareholders of the corporation, except at a
rate or
in a periodic amount or within a price range determined by the board
of
directors; or
|
|
(g)
|
the
appointment of any other committees of the board of directors or
the
members of these committees.
|
/s/
Nancy Boatright
|
|
Nancy
Boatright, Secretary
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Bank of Marin
Bancorp
(the Registrant);
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this
report;
|
4.
|
The
Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a
-15(f) and 15d-15(f)) for the Registrant and
have:
|
|
(a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the Registrant including its
consolidated subsidiary is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
|
(b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
evaluated
the effectiveness of the Registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures as of the end of the period
covered
by this report based on such evaluation;
and
|
|
(d)
|
disclosed
in this report any change in the Registrant's internal control over
financial reporting that occurred during the Registrant's most recent
fiscal quarter (the Registrant's fourth fiscal quarter in the case
of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the Registrant's internal control over financial
reporting; and
|
5.
|
The
Registrant's other certifying officer and I have disclosed, based
on our
most recent evaluation of internal control over financial reporting,
to
the Registrant's auditors and the audit committee of Registrant's
Board of
Directors (or persons performing the equivalent
functions):
|
|
(a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting, which are
reasonably likely to adversely affect the Registrant's ability to
record,
process, summarize and report financial information;
and
|
|
(b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
controls over financial reporting.
|
November
6, 2007
|
/s/
Russell A. Colombo
|
|||
Date
|
Russell
A. Colombo
|
|||
Chief
Executive Officer
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Bank of Marin
Bancorp
(the Registrant);
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this
report;
|
4.
|
The
Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the Registrant and
have:
|
|
(a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the Registrant including its
consolidated subsidiary is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
|
(b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
evaluated
the effectiveness of the Registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures as of the end of the period
covered
by this report based on such evaluation;
and
|
|
(d)
|
disclosed
in this report any change in the Registrant's internal control over
financial reporting that occurred during the Registrant's most recent
fiscal quarter (the Registrant's fourth fiscal quarter in the case
of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the Registrant's internal control over financial
reporting; and
|
5.
|
The
Registrant's other certifying officer and I have disclosed, based
on our
most recent evaluation of internal control over financial reporting,
to
the Registrant's auditors and the audit committee of Registrant's
Board of
Directors (or persons performing the equivalent
functions):
|
|
(a)
|
all
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting, which are
reasonably likely to adversely affect the Registrant's ability to
record,
process, summarize and report financial information;
and
|
|
(b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
controls over financial reporting.
|
November
6, 2007
|
/s/
Christina J. Cook
|
|||
Date
|
Christina
J. Cook
|
|||
Chief
Financial Officer
|
|
1)
|
such
Form 10-Q fully complies with the requirements of Section 13(a) or
15(d)
of the Securities Exchange Act of 1934;
and
|
|
2)
|
the
information contained in such Form 10-Q fairly presents, in all material
respects, the financial condition and results of operations of the
Registrant.
|
November
6, 2007
|
/s/
Russell A. Colombo
|
|||
Date
|
Russell
A. Colombo
|
|||
President
&
|
||||
Chief
Executive Officer
|
||||
November
6, 2007
|
/s/
Christina J. Cook
|
|||
Date
|
Christina
J. Cook
|
|||
Executive
Vice President &
|
||||
Chief
Financial Officer
|