Bank of Marin applies to give back $28 million in federal TARP funds

NOVATO, March 16, 2009 – Bank of Marin Bancorp, parent company of Bank of Marin, announced today it filed notice with the Treasury Department to repurchase the 28,000 preferred shares sold to Treasury as part of the federal government’s economic stimulus program intended to spur lending.

In November of last year, the bank received $28 million for the preferred shares sold to the Treasury under its Capital Purchase Program, part of the federal Troubled Asset Relief Program. The program was designed to make it possible for banks to loan money to stimulate the economy. The bank made $27.1 million in loans between Dec. 5 and Dec. 31. However, part of the agreement said that Treasury could modify the rules at any time.

“While we think we made an informed decision back in November, given the changes in the rules, there is nothing guaranteed about anything,” said Russell Colombo, president and chief executive officer of the bank, which joins a growing number of institutions that have expressed concerns about the program.

“We were selected to participate in this program because we are a healthy institution. We operated in the spirit of the CPP to help stimulate our local economy during a very volatile time in the financial markets,” Mr. Colombo said. “However, the rules of the program have continued to change with unforeseen negative implications as to how we can best run our business and maintain a competitive advantage. “

If the application is approved and the shares are repurchased, the financial institution’s risk-based capital ratio will be at approximately 11 percent, according to the bank, above the standard to be considered well-capitalized.

“We are confident and hopeful we will get approval and hope to return the money by the end of the month,” he said. “We are going to remain a well-capitalized institution.”

“A lot of time was spent with senior management at the board level, and we gained a unanimous vote to make the application,” Mr. Colombo said. “We feel this is the right thing for shareholders, employees and customers.”

As of Dec. 31, 2008, total assets reached more than $1 billion.

Deposits were at $852.3 million for the year compared with $834.6 in 2007.