Oct. 17--Bank of Marin Bancorp third-quarter earnings declined slightly but officials said deposits are increasing and conservative operating practices are paying off.

Earnings for the third quarter were $2.7 million, or 52 cents a share, down from $3.2 million, or 60 cents per share, in the same quarter in 2007.

The results reflect an increase in the Novato-based bank's provision for loan losses to $1.7 million from $200,000 in the third quarter of 2007.

"We recognize that these are tumultuous times but given our capital strength, high-quality balance sheet and deep ties within the community, we believe we are well positioned to serve our clients through the cycle," said Russell Colombo, president and chief executive officer. "As a testament to the confidence our clients place in the strength of the bank, our deposits increased by 4.9 percent from a year ago."

Colombo said the bank added loan loss reserves in the quarter to be prudent given the uncertain times.

"Our capital levels exceed the regulatory well-capitalized standards with a total risk-based capital ratio of 11.6 percent," Colombo said.

The strong capital levels mean the bank can make loans unlike banks that have fallen below 10 percent capitalization.

At the end of the third quarter loans totaled $839 million, a 22 percent increase from Sept. 30, 2007.

"Monitoring the quality of investments and loans in the portfolio is very important," said Christina Cook, chief financial officer.

Deposits were

ahead of last year at $849 million from $809 million, a 4.9 percent increase.

For the first nine months ended Sept. 30, Bank of Marin earned $9.4 million, or $1.79 per share, up 3.2 percent from a year ago.

Jeff Wishner, managing director at Keefe, Bruyette & Woods in San Francisco, said in the context of the state of the banking industry, Bank of Marin is doing well. He said non-performing loans are low for the current environment.

"Most institutions are having a hard time with deposits," Wishner said. "There has been a general migration from smaller banks to larger banks and Bank of Marin is bucking that trend -- and that is a good thing."

Bank of Marin shares rose 1.56 percent Friday, closing at $29.25. Shares have ranged from $24 to $33.60 in the last 52 weeks.

Bank of Marin has 12 branches in Marin and Sonoma, including its newest office in Mill Valley. A Greenbrae branch is expected to open next year.

Another Novato-based bank, Circle Bancorp, the parent company of Circle Bank, reported an increase in third-quarter income to $467,000 from $203,000 in the same quarter in 2007.

The privately held Circle had assets of $260 million, up 22 percent from September 2007. Loans grew 17 percent to $231 million from $199 million on Sept. 30, 2007.

"Given the current economic climate, we are pleased with our continued and improved financial performance," said Kim Kaselionis, president and chief executive officer. "The philosophy of advocating, being fair and supporting our clients' and the communities in which we serve, have yielded high dividends for our company."

Contact Nancy Isles Nation via e-mail at nnation@marinij.com

Read more Business and stocks stories at the IJ's Business and stocks section.

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