Merger puts dent in 3rd-quarter earnings

Bank of Marin Bancorp, the parent company of Novato-based Bank of Marin, reported Monday that its third-quarter earnings were reduced by costs associated with its acquisition of American River Bank.

The bank announced earnings of $5.3 million for the quarter ended Sept. 30, compared with earnings of $7.5 million in the third quarter of 2020 and earnings of $9.3 million in the second quarter of this year.

For the first nine months of 2021, the bank earned $23.5 million, compared to $22.1 million in the same period last year.

The bank reported that merger-related costs reduced net income by $3.9 million, net of taxes, in the third quarter, and by $4.1 million, net of taxes, yearto-date.

Russell Colombo, Bank of Marin’s chief executive, said all of the costs associated with the merger were anticipated. Expenses included one-time investment banking and legal fees, as well as severance pay for about 30 former employees of American River Bank.

That bank’s allowance for credit losses also increased by $3.3 million because of the merger. Nonaccrual loans represented 0.36% of the bank’s total loans at the end of the third quarter, compared to 0.07% at the end of the third quarter of 2020 and 0.46% as of June 30.

The merger became effective on Aug. 6. Through the merger, Bank of Marin gained $419.4 million in loans and $790 million in deposits and increased its total assets to $4.26 billion.

The bank also announced that on Friday its board increased its share repurchase program from $25 million to $57 million. The July 31, 2023, expiration date of the program remained unchanged.

“During 2021, the pace of repurchases picked up significantly,” said Tani Girton, Bank of Marin’s chief financial officer. “That is why we’re providing more room to grow the program.”

The stock buyback, which was announced in July, is Bank of Marin’s third such repurchase program since April 2018. Each previous program was for $25 million.

Bank of Marin’s stock, which trades under the symbol BMRC on the Nasdaq, closed at $38.52 per share, up 49 cents per share, on Monday.