SAN RAFAEL, Calif.--(BUSINESS WIRE)--Tamalpais Bancorp (the “Company”) (NASDAQ: TAMB), the parent company for Tamalpais Bank and Tamalpais Wealth Advisors, reported today a net loss of $5,098,000 for the quarter ended September 30, 2009 as compared to a net income of $1,486,000 for the quarter ended September 30, 2008. The quarterly diluted loss per share was $1.33 as compared to earnings per diluted share of $0.39 in the comparable period last year.

The net loss for the nine months ended September 30, 2009 was $9,433,000 as compared to net income of $3,979,000 for the same period in 2008. The 2009 year-to-date diluted loss per share was $2.47 compared to earnings per diluted share of $1.04 in the comparable nine month period last year.

The net loss for the quarter reflected a $9,431,000 provision for loan losses, as compared to a provision of $653,000 in the third quarter of 2008. The loss provision for the third quarter primarily was attributable to a $50.3 million increase in non-performing loans in the quarter.

“Our targeted core deposit gathering efforts continue to produce positive results, led by Jamie Williams and our business banking team. Year-to-date, we increased the Bank’s noninterest-bearing deposits by 25.3%, which, when added to other core deposits, improves our liquidity and funding sources,” said Mark Garwood, president and CEO.

The Company also reported today that it continues to implement an aggressive action plan to reduce non-performing assets. A major step of the plan taken in October was to offer $37.4 million of non-performing loans for sale. The Company has received offers from various third parties and is in the process of negotiating a definitive sale agreement.

If such agreements are finalized shortly, the Company anticipates closing the sale by the end of November 2009. Additionally, a $3.9 million non-performing loan was paid-off in October, on which the Company recognized as a modest gain relative to its carrying value. All of the loans in the sale that are expected to close in November and the loan that paid-off in October was first classified non-performing during the third quarter 2009.

“The Company recognizes the importance of reducing exposure to substandard loans and non-performing assets in a timely and efficient manner,” said Garwood. “We continue to allocate resources towards troubled asset resolution and have reassigned internal staff as well as engaged external assistance.”

The Bank’s allowance for loan loss reserves was $26,259,000 at September 30, 2009, or 4.56% of total gross loans and 36.8% of nonperforming loans, as compared to 1.37% of gross loans and 48.3% of nonperforming loans as of December 31, 2008.

Third Quarter Highlights:

• Successful efforts to reduce the size of the balance sheet were implemented during the quarter to improve liquidity, the funding mix and to manage capital resources. In the quarter, total assets declined $7.5 million (1.1%) as gross loans declined $19.8 million (3.3%) due to a sale of $19.8 million of loans, which was partially offset by a $17.1 million (21.9%) increase in liquid assets (cash, cash equivalents and investment securities).
• Noninterest-bearing deposits increased 6.3% to $41.7 million.
• The Company and a member of the Board of Directors executed an agreement whereby the Company received $0.5 million in exchange for an unsecured promissory note that accrues interest at 0.75% per annum over its three year term, and a warrant to purchase 12,500 shares of the Company’s common stock at an exercise price of $6.00 per share over its five year term. The promissory note was subsequently donated to the Marin Community Foundation.

“We greatly appreciate the support of our loyal customers during this challenging time,” said Garwood. “Our experienced management and staff continue to provide quality advice and solutions to help our customers achieve their goals.”

The Company has several ongoing strategic initiatives to address the current environment, including:

• Identify and evaluate a broad range of strategic alternatives to further strengthen the Bank’s capital base. As part of this process, the Board of Directors has retained a financial advisor;
• Taking prudent reserves and identifying potential problem borrowers;
• Continue the timely disposition of nonperforming and substandard loans and other real estate owned (OREO);
• Manage the loan portfolio to reduce concentrations in commercial real estate, multifamily and hospitality loans;
• Reduce the reliance on brokered funding sources and continue to generate low cost core deposits with the Marin County based team of business banking professionals.

About Tamalpais Bancorp

Tamalpais Bancorp, through its wholly owned subsidiaries Tamalpais Bank and Tamalpais Wealth Advisors, offers business and consumer banking through its seven Marin County full service branches, and wealth advisory services to high net worth families and institutional clients. The Company had $695 million in assets and $394 million in assets under management as of September 30, 2009. Shares of the Company's common stock are traded on the NASDAQ Capital Market System under the symbol TAMB.

This news release contains forward-looking statements with respect to the financial condition, results of operation and business of Tamalpais Bancorp and its subsidiaries. These include, but are not limited to, statements that relate to or are dependent on estimates or assumptions relating to the prospects of loan growth, credit quality, liquidity, capital adequacy, reduction of loan concentrations, diversification of the deposit base, sales of nonperforming loans, changes in securities or financial markets, and certain operating efficiencies resulting from the operations of Tamalpais Bank and Tamalpais Wealth Advisors. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) higher than expected credit losses; (2) our ability to enhance the capital ratios of the Bank and the Company; (3) our ability to diversify our loan portfolio; (4) our ability to sell loans and OREO and the resulting net incremental gains or losses on sales relative to the carrying value of these assets; (5) our ability to reduce reliance on wholesale funding and generate low cost deposits from our market area; (6) competitive pressure among financial services companies increases significantly; (7) changes in the interest rate environment reduce interest margins; (8) general economic conditions, internationally, nationally or in the State of California are less favorable than expected; (9) legislation or regulatory requirements or changes adversely affect the businesses in which the consolidated organization is or will be engaged; (10) the ability to satisfy the requirements of the Sarbanes-Oxley Act and other regulations governing internal controls; (11) volatility or significant changes in the equity and bond markets which can affect our ability to raise capital as well as overall growth and profitability of our wealth management business; (12) our ability to sell nonperforming loans or sell such loans on terms acceptable to the Company; and (13) other risks detailed in the Tamalpais Bancorp filings with the Securities and Exchange Commission. When relying on forward-looking statements to make decisions with respect to Tamalpais Bancorp, investors and others are cautioned to consider these and other risks and uncertainties. Tamalpais Bancorp disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

TAMALPAIS BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets
		September 30, 2009				December 31, 2008				Percent Change vs. 12/31/2008
		(unaudited)
Assets
Cash and cash equivalents:
Cash and due from banks		$	22,310,765			$	15,918,826			40.2	%
Federal funds sold			315,000				838			37489.5	%
Total Cash and Cash Equivalents			22,625,765				15,919,664			42.1	%
Interest-bearing time deposits in other financial institutions			177,176				558,034			-68.2	%
Investment securities
Available-for-sale			66,098,119				56,415,727			17.2	%
Held-to-maturity, at cost			6,248,745				10,773,579			-42.0	%
Federal Home Loan Bank restricted stock, at cost			8,652,000				8,652,000			0.0	%
Pacific Coast Banker's Bank restricted stock, at cost			50,000				50,000			0.0	%
Loans receivable			575,861,783				592,543,181			-2.8	%
Less: Allowance for loan losses			(26,259,367	)			(8,093,499	)		224.5	%
			549,602,416				584,449,682			-6.0	%
Bank premises and equipment, net			3,490,675				3,935,230			-11.3	%
Accrued interest receivable			3,415,394				3,861,854			-11.6	%
Other real estate owned			6,003,819				417,207			1339.1	%
Cash surrender value of bank-owned life insurance			11,123,099				10,828,936			2.7	%
Other assets			17,793,378				7,945,510			123.9	%
Total Assets		$	695,280,586			$	703,807,423			-1.2	%
Liabilities and Stockholders' Equity
Liabilities
Deposits
Noninterest-bearing deposits			41,671,261				33,259,929			25.3	%
Interest-bearing checking deposits			7,772,029				9,735,689			-20.2	%
Money market and saving deposits			146,380,708				156,479,340			-6.5	%
Certificates of deposit			297,284,081				260,826,102			14.0	%
Total Deposits			493,108,079				460,301,060			7.1	%
Federal Home Loan Bank Advances			150,085,000				183,085,000			-18.0	%
Long term debt			6,185,614				6,000,000			3.1	%
Junior Subordinated Debentures			13,403,000				13,403,000			0.0	%
Accrued interest payable and other liabilities			4,128,055				3,227,823			27.9	%
Total Liabilities			666,909,748				666,016,883			0.1	%
Commitment and Contingencies			-				-			N/A
Stockholders' Equity
Common stock, no par value; 10,000,000 shares authorized; 3,823,634 shares issued and outstanding at September 30, 2009 and December 31, 2008, and September 30, 2008			12,027,473				12,027,473			0.0	%
Paid-In-Capital			1,127,668				949,488			18.8	%
Retained earnings			14,420,131				24,082,473			-40.1	%
Accumulated other comprehensive income/loss			795,566				313,899			153.4	%
Total Stockholders' Equity			28,370,838				37,373,333			-24.1	%
Total Liabilities and Stockholders' Equity		$	695,280,586			$	703,390,216			-1.2	%

TAMALPAIS BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
For the Periods Indicated
		For the Three Months Ended
		September 30, 2009				September 30, 2008				Percent Change vs. 9/30/08
		(Unaudited)
Interest Income
Interest and fees on loans		$	9,093,012			$	10,399,017			-12.6	%
Interest on investment securities			664,041				644,872			3.0	%
Interest on Federal funds sold			15,064				43,474			-65.3	%
Interest on other investments			18,216				124,481			-85.4	%
Interest on deposits in other financial institutions			5,040				7,691			-34.5	%
Total Interest Income			9,795,373				11,219,535			-12.7	%
Interest Expense
Interest expense on deposits			2,337,907				2,928,303			-20.2	%
Interest expense on borrowed funds			1,620,273				1,858,216			-12.8	%
Interest expense on long term debt			89,168				80,741			10.4	%
Interest expense on Junior Subordinated Debentures			361,050				145,064			148.9	%
Total Interest Expense			4,408,398				5,012,324			-12.0	%
Net Interest Income Before Provision for Loan Losses			5,386,975				6,207,211			-13.2	%
Provision for Loan Losses			9,431,171				653,000			1344.3	%
Net Interest (Loss) Income After Provision for Loan Losses			(4,044,196	)			5,554,211			-172.8	%
Noninterest Income
Gain (Loss) on sale of securities, net			246,340				(5,780	)		-4361.9	%
Gain on sale of other real estate owned, net			15,803				-			-
Loan servicing			27,790				47,103			-41.0	%
Registered Investment Advisory Services fee income			134,537				157,283			-14.5	%
Other income			326,897				324,874			0.6	%
Total Noninterest Income			751,367				523,480			43.5	%
Noninterest Expenses
Salaries and benefits			1,866,041				2,190,224			-14.8	%
Occupancy			347,157				375,669			-7.6	%
Advertising			134,996				85,598			57.7	%
Professional			808,309				88,313			815.3	%
Data processing			168,034				142,624			17.8	%
Equipment and depreciation			203,856				213,005			-4.3	%
Other administrative			2,198,414				689,919			218.6	%
Total Noninterest Expense			5,726,807				3,785,352			51.3	%
(Loss) Income Before Income Taxes			(9,019,636	)			2,292,339			-493.5	%
(Benefit) Provision for Income Taxes			(3,921,876	)			806,748			-586.1	%
Net (Loss) Income		$	(5,097,760	)		$	1,485,591			-443.1	%
(Loss) Earnings Per Share
Basic		$	(1.33	)		$	0.39			-441.0	%
Diluted		$	(1.33	)		$	0.39			-441.0	%

TAMALPAIS BANCORP AND SUBSIDIARIES
Consolidated Statements of Income
For the Periods Indicated
		For the Nine Months Ended								Percent
		September 30, 2009				September 30, 2008				Change Vs. 9/30/2008
		(Unaudited)
Interest Income
Interest and fees on loans		$	29,077,970			$	29,764,998			-2.3	%
Interest on investment securities			2,136,745				1,952,504			9.4	%
Interest on Federal funds sold			26,764				94,430			-71.7	%
Interest on other investments			20,674				330,432			-93.7	%
Interest on deposits in other financial institutions			19,142				23,613			-18.9	%
Total Interest Income			31,281,295				32,165,977			-2.8	%
Interest Expense
Interest expense on deposits			6,782,949				9,302,869			-27.1	%
Interest expense on borrowed funds			5,203,239				5,135,603			1.3	%
Interest expense on long term debt			203,736				118,914			71.3	%
Interest expense on Junior Subordinated Debentures			664,812				498,005			33.5	%
Total Interest Expense			12,854,736				15,055,391			-14.6	%
Net Interest Income Before Provision for Loan Losses			18,426,559				17,110,586			7.7	%
Provision for Loan Losses			23,435,171				1,596,957			1367.5	%
Net Interest Income (Loss) After Provision for Loan Losses			(5,008,612	)			15,513,629			-132.3	%
Noninterest Income
Gain on sale of loans, net			-				166,293			-100.0	%
Gain (Loss) on sale of securities, net			237,487				(5,780	)		-4208.8	%
Gain on sale of other real estate owned, net			77,781				-			100.0	%
Loan servicing			119,339				131,861			-9.5	%
Registered Investment Advisory Services fee income			393,077				464,117			-15.3	%
Other income			950,301				907,813			4.7	%
Total Noninterest Income			1,777,985				1,664,304			6.8	%
Noninterest Expenses
Salaries and benefits			5,969,794				6,412,496			-6.9	%
Occupancy			1,069,699				1,120,204			-4.5	%
Advertising			386,208				233,839			65.2	%
Professional			1,254,876				386,489			224.7	%
Data processing			471,007				423,884			11.1	%
Equipment and depreciation			562,509				650,364			-13.5	%
Other administrative			4,084,593				1,957,672			108.6	%
Total Noninterest Expense			13,798,686				11,184,948			23.4	%
(Loss) Income Before Income Taxes			(17,029,313	)			5,992,985			-384.2	%
(Benefit) Provision for Income Taxes			(7,596,289	)			2,013,977			-477.2	%
Net (Loss) Income		$	(9,433,024	)		$	3,979,008			-337.1	%
(Loss) Earnings Per Share
Basic		$	(2.47	)		$	1.04			-337.5	%
Diluted		$	(2.47	)		$	1.04			-337.5	%

TAMALPAIS BANCORP AND SUBSIDIARIES
Selected Ratios and Other Data
Unaudited
(Dollars in Thousands Except Per Share Amounts)
		At or For the Three Months Ended								At or For the Nine Months Ended
		September 30 2009				September 30 2008				September 30 2009				September 30 2008
Profitability Ratios:
Return on average assets			-2.83	%			0.89	%			-1.80	%			0.86	%
Return on average equity			-61.99	%			16.61	%			-36.29	%			15.38	%
Net Interest Margin			3.10	%			3.83	%			3.61	%			3.83	%
Efficiency ratio			93.3	%			56.2	%			68.3	%			59.6	%
Other Information:
Average total assets		$	713,985			$	666,192			$	705,136			$	619,901
Average interest earning assets		$	689,344			$	644,115			$	682,497			$	597,545
Average equity		$	32,651			$	35,769			$	34,755			$	34,502
Period Ending Shares Outstanding			3,823,634				3,823,634				3,823,634				3,823,634
Average Basic Shares Outstanding			3,823,634				3,821,889				3,823,634				3,819,495
Average Diluted Shares Outstanding			3,825,229				3,833,518				3,827,699				3,832,121
Book value per share		$	7.42			$	9.55			$	7.42			$	9.55
Basic (loss) / earnings per share		$	(1.33	)		$	0.39			$	(2.47	)		$	1.04
Diluted (loss) / earnings per share		$	(1.33	)		$	0.39			$	(2.47	)		$	1.04
Tamalpais Bank Capital Ratios:
Tier 1 leverage ratio			6.46	%			8.19	%
Tier 1 risk based capital ratio			7.95	%			9.34	%
Total risk based capital ratio			9.24	%			10.45	%
Tamalpais Bancorp Capital Ratios:
Tier 1 leverage ratio			5.15	%			N/A
Tier 1 risk based capital ratio			6.32	%			N/A
Total risk based capital ratio			8.26	%			N/A

TAMALPAIS BANCORP AND SUBSIDIARIES
Selected Loan and Asset Quality Data
Unaudited
(Dollars in Thousands Except Per Share Amounts)
		As Of the Period Indicated
		September 30, 2009				December 31, 2008
Loan Portfolio:
One-to-four family residential		$	32,857			$	33,695
Multifamily residential			158,028				171,136
Commercial real estate			305,245				322,861
Land			9,788				10,905
Construction real estate			37,427				31,077
Commercial, non real estate			29,340				18,913
Consumer loans			1,512				2,111
Total gross loans			574,197				590,698
Net deferred loan costs			1,664				1,845
Gross loans receivable		$	575,861			$	592,543
		As Of the Period Indicated
		September 30, 2009				December 31, 2008
Nonperforming Assets:
Nonaccrual loans		$	71,264			$	16,758
Nonperforming loans			71,264				16,758
Other real estate owned			6,004				417
Nonperforming assets			77,268				17,175
		For the Three Months								For the Nine Months Ended
		September 30, 2009				September 30, 2008				September 30, 2009			September 30, 2008
Allowance for Loan Losses:
Balance, beginning of period		$	17,599			$	4,915			$	8,093		$	4,915
Provisions for loan losses			9,431				653				23,435			1,597
Charge-offs			771				37				5,269			37
Recoveries			-				1				-			1
Net charge-offs			771				36				5,269			36
Balance, end of period		$	26,259			$	5,532			$	26,259		$	6,476
		As Of the Period Indicated
		September 30, 2009				December 31, 2008
Allowance for Loan Losses:
General allowance for loan losses		$	12,705			$	8,093
Impairments of specific loans			13,555				-
Balance		$	26,260			$	8,093
		As Of the Period Indicated
		September 30, 2009				December 31, 2008
Asset Quality:
Allowance for loan losses / gross loans			4.56	%			1.37	%
Allowance for loan losses / nonperforming loans			36.8	%			48.3	%
Nonperforming loans / gross loans			12.38	%			2.83	%
Nonperforming assets / total assets			11.11	%			2.44	%
Net charge-offs / gross loans			0.92	%			0.69	%

TAMALPAIS BANCORP AND SUBSIDIARIES
Average Balance Sheets (Unaudited)
		For the Three Months Ended
(dollars in thousands)		September 30, 2009											September 30, 2008
		Average Balance				Interest Income/ Expense			Yields Earned/ Paid				Average Balance				Interest Income/ Expense			Yields Earned/ Paid
Assets
Investment securities - Muni's (1,2)		$	4,774			$	47		5.58	%			$	6,733			$	66		5.49	%
Investment securities - Taxable (2)			57,959				617		4.22	%				49,546				579		4.65	%
Other investments			8,702				18		0.82	%				8,367				125		5.94	%
Interest bearing deposits in other financial institutions			516				5		3.84	%				713				8		4.46	%
Federal funds sold			22,025				15		0.27	%				8,649				43		1.98	%
Loans (3)			595,368				9,093		6.06	%				570,107				10,399		7.26	%
Total Interest Earning Assets			689,344				9,795		5.64	%				644,115				11,220		6.93	%
Allowance for loan losses			(18,232	)										(5,981	)
Cash and due from banks			5,827											4,545
Net premises, furniture and equipment			3,621											4,224
Other assets			33,425											19,289
Total Assets		$	713,985										$	666,192
Liabilities and Shareholders' Equity
Interest bearing checking		$	8,990				6		0.26	%			$	7,128				11		0.61	%
Savings deposits (4)			179,723				558		1.23	%				156,724				915		2.32	%
Time deposits			273,579				1,774		2.57	%				239,709				2,001		3.32	%
Other borrowings			155,982				1,620		4.12	%				176,356				1,858		4.19	%
Long term debt			5,861				89		6.02	%				6,000				81		5.37	%
Junior Subordinated Debentures			13,403				361		10.69	%				13,403				145		4.30	%
Total Interest Bearing Liabilities			637,538				4,408		2.74	%				599,320				5,011		3.33	%
Noninterest deposits			40,869											27,222
Other liabilities			2,927											3,881
Total Liabilities			681,334											630,423
Shareholders' Equity			32,651											35,769
Total Liabilities and Shareholders' Equity		$	713,985										$	666,192
Net interest income						$	5,387										$	6,209
Net interest spread (5)									2.90	%										3.60	%
Net interest margin (6)									3.10	%										3.83	%
(1) Yields on securities and certain loans have been adjusted upward to a "fully taxable equivalent" ("FTE") basis in order to reflect the effect of income which is exempt from federal income taxation at the current statutory tax rate.
(2) The yields for securities were computed using the average amortized cost and therefore do not give effect for changes in fair value.
(3) Loans, net of unearned income, include non-accrual loans but do not reflect average reserves for possible loan losses.
(4) Savings deposits include Money Market accounts.

TAMALPAIS BANCORP AND SUBSIDIARIES
Average Balance Sheets (Unaudited)
		For the Nine Months Ended
(dollars in thousands)		September 30, 2009											September 30, 2008
		Average Balance				Interest Income/ Expense			Yields Earned/ Paid				Average Balance				Interest Income/ Expense			Yields Earned/ Paid
Assets
Investment securities - Muni's (1,2)		$	4,839			$	142		5.58	%			$	6,670			$	197		5.56	%
Investment securities - taxable (2)			61,401				1,994		4.34	%				49,613				1,756		4.73	%
Other investments			9,797				25		0.34	%				7,874				330		5.60	%
Interest bearing deposits in other financial institutions			573				19		4.43	%				682				24		4.70	%
Federal funds sold			12,931				27		0.28	%				5,313				94		2.36	%
Loans (3)			592,956				29,078		6.56	%				527,393				29,766		7.54	%
Total Interest Earning Assets			682,497				31,285		6.13	%				597,545				32,167		7.19	%
Allowance for loan losses			(13,804	)										(5,478	)
Cash and due from banks			4,591											4,458
Net premises, furniture and equipment			3,763											4,407
Other assets			28,089											18,969
Total Assets		$	705,136										$	619,901
Liabilities and Shareholders' Equity
Interest bearing checking		$	9,053			$	19		0.28	%			$	6,942				33		0.63	%
Savings deposits (4)			176,875				1,697		1.28	%				150,601				2,852		2.53	%
Time deposits			256,337				5,066		2.64	%				219,065				6,418		3.91	%
Other borrowings			169,436				5,203		4.11	%				163,770				5,136		4.19	%
Long Term Debt			5,950				204		4.58	%				3,343				119		4.75	%
Junior Subordinated Debentures			13,403				666		6.64	%				13,403				498		4.96	%
Total Interest Bearing Liabilities			631,054				12,855		2.72	%				557,124				15,056		3.61	%
Noninterest deposits			36,623											24,907
Other liabilities			2,704											3,368
Total Liabilities			670,381											585,399
Shareholders' Equity			34,755											34,502
Total Liabilities and Shareholders' Equity		$	705,136										$	619,901
Net interest income						$	18,430										$	17,111
Net interest spread (5)									3.41	%										3.58	%
Net interest margin (6)									3.61	%										3.83	%
(1) Yields on securities and certain loans have been adjusted upward to a "fully taxable equivalent" ("FTE") basis in order to reflect the effect of income which is exempt from federal income taxation at the current statutory tax rate.
(2) The yields for securities were computed using the average amortized cost and therefore do not give effect for changes in fair value.
(3) Loans, net of unearned income, include non-accrual loans but do not reflect average reserves for possible loan losses.
(4) Savings deposits include Money Market accounts.
(5) Net interest spread is the interest differential between total interest earning assets and total interest-bearing liabilities.
(6) Net interest margin is the net yield on average interest earning assets.

Tamalpais Bancorp
Mark Chapman, 415-526-6400
SVP/Director of Corporate Communications