Bank of Marin 1st-quarter profit falls 9 percent as charge-offs jump

Bank of Marin 1Q profit falls, charge-offs jump

NOVATO, Calif. — Bank of Marin Bancorp posted a 9 percent drop in first-quarter profit Monday as the community bank wrote off more bad loans and it set aside more money to cover further deterioration in lending.

For the three months ended March 31, the bank reported a profit of $2.9 million, or 56 cents per share, compared with $3.2 million, or 37 cents per share, in the first quarter of 2009.

Analysts polled by Thomson Reuters, on average, expected Bank of Marin to post profit of 51 cents per share.

Results in the 2009 quarter were reduced by 25 cents per share because of the bank’s participation in the government’s Capital Purchase Program. The Bank of Marin paid $28.2 million back to the Treasury Department in April 2009.

Net interest income, or money earned from deposits, rose 2 percent to $13.1 million from $12.8 million.

Total deposits rose 15 percent to $987.3 million, from $859.4 million last year.

Non-interest income, or money earned from fees and other charges, edged up 1 percent to $1.3 million from $1.2 million, boosted by growth in wealth management services.

Bank of Marin’s provision for loan losses, or the money set aside to cover souring loans, totaled $1.6 million for the quarter, up 33 percent from $1.2 million a year ago.

Net charge-offs, or loans written off as unpaid, shot up 77 percent to $1.5 million from $846,000 last year.

Non-performing loans, or those that have fallen behind payments, jumped 54 percent to $11.4 million from $7.4 million a year ago. Total loans reached $920.4 million at the end of the quarter, down $1.2 million from the year before, reflecting lower demand and stronger competition for creditworthy borrowers.

Bank of Marin shares added 71 cents, or 2.2 percent, to close at $33.72. The stock has changed hands between $23.75 and $35.75 in the past 52 weeks.