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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Bank of Marin Bancorp | NASDAQ:BMRC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.25 | -1.14% | 21.77 | 13.75 | 26.90 | 22.37 | 21.805 | 22.32 | 67,058 | 05:00:10 |
Strong Deposit Growth Bolsters Balance Sheet
Bank of Marin Bancorp, "Bancorp" (Nasdaq: BMRC), parent company of Bank of Marin, "Bank," announced earnings of $4.6 million for the second quarter of 2023, compared to $9.4 million for the first quarter of 2023. The decline in earnings stemmed from the cost of interest bearing deposits catching up to market interest rates and higher average balances on borrowings. Diluted earnings per share were $0.28 for the second quarter, compared to $0.59 for the prior quarter. Earnings for the first six months of 2023 totaled $14.0 million, compared to $21.5 million for the same period last year. Diluted earnings per share were $0.87 and $1.35 for the first six months of 2023 and 2022, respectively. Periods of earnings presented from 2022 were impacted by the costs associated with our most recent acquisition, the details of which were discussed in previous filings.
Concurrent with this release, Bancorp issued presentation slides providing supplemental information, some of which will be discussed during the second quarter 2023 earnings call. The earnings release and presentation slides are intended to be reviewed together and can be found online through Bank of Marin’s website at www.bankofmarin.com, under “Investor Relations.”
“Our relationship banking model enabled our teams to meaningfully increase deposits in the second quarter and thereafter through existing customer growth and new customer acquisitions. We have robust liquidity and capital levels, and maintain a strong credit risk profile,” said Tim Myers, President and Chief Executive Officer. “While the economic environment presents elevated uncertainty, and higher interest rates and market disruptions have impacted both our funding costs and lending activity, we are well-positioned to navigate current market conditions and further position the Bank for improved, sustainable profitability.”
Bancorp also provided the following highlights from the second quarter of 2023:
“Our ability to nimbly adapt to the industry disruption in March and quickly stabilize our deposits empowered us to focus on customer growth and balance sheet strength in the second quarter, consistent with our proven model and success over three decades,” said Tani Girton, Executive Vice President and Chief Financial Officer. “We believe the strength of our deposit franchise, diligent expense control and prudent risk management positions us to invest in strategic initiatives and drive shareholder returns over the long term.”
Loans and Credit Quality
Loans decreased by $9.5 million for the second quarter of 2023 and totaled $2.103 billion at June 30, 2023, compared to $2.112 billion at March 31, 2023. Loan originations for the second quarter of 2023 were $22.8 million, compared to $44.9 million for the first quarter of 2023. Loan payoffs were $24.6 million for the second quarter, compared to $22.2 million for the first quarter of 2023. Bank of Marin has continued its usual steadfast conservative underwriting practices, and has not programmatically changed its credit standards or policies specifically in reaction to the current market conditions. The Bank continues to be focused on achieving risk adjusted returns.
Loans increased $10.3 million during the six months ended June 30, 2023, compared to a $93.0 million decrease in total loans during the six months ended June 30, 2022. Loan originations were $67.7 million for the six months ended June 30, 2023, compared to $152.0 million for the six months ended June 30, 2022. In 2023, utilization and amortization netted a decrease of $10.2 million. Excluding PPP loans, payoffs were $45.0 million in the six months ended June 30, 2023, compared to $159.1 million for the same period in 2022. PPP loan payoffs during the six months ended June 30, 2023 and 2022 were $1.8 million and $94.2 million, respectively.
Non-accrual loans totaled $2.1 million, or 0.10%, of the loan portfolio at June 30, 2023, compared to $2.0 million, or 0.10% at March 31, 2023. Non-accrual loans at June 30, 2023 included the addition of two loans totaling $395 thousand for the second quarter, offset by decreases due to payoffs and paydowns of $309 thousand. All of the non-accrual loans are collateralized by real estate with no expected credit loss as of June 30, 2023.
Classified loans totaled $38.1 million at June 30, 2023, compared to $31.0 million at March 31, 2023, increasing primarily due to a $2.2 million increase in the usage of a revolving line of credit that was previously downgraded and the addition of five loans to four borrowers totaling $6.1 million. Approximately 90% of the additions were comprised of one commercial loan and one non-owner occupied commercial real estate loan. In addition, there were $664 thousand in payoffs and paydowns and $585 thousand in upgrades to pass risk rating. Accruing loans past due 30 to 89 days totaled $983 thousand at June 30, 2023, compared to $1.2 million at March 31, 2023.
Net recoveries for the second quarter of 2023 totaled $2 thousand, compared to net charge-offs of $3 thousand for the first quarter of 2023. The ratio of allowance for credit losses to total loans was 1.13% at June 30, 2023, compared to 1.10% at March 31, 2023.
The $500 thousand provision for credit losses on loans in the second quarter was due primarily to increases in qualitative factors related to our multi-family real estate and non-owner occupied commercial real estate office portfolios that have been impacted by continued negative trends in adversely graded loans and collateral values. These increases were partially offset by the impact of the decrease in loan balances.
The $350 thousand provision for credit losses on loans in the first quarter was due primarily to increases in qualitative risk factors to account for continued uncertainty about inflation and recession risks. Management believed that these risk factors were not adequately captured in the modeled quantitative portion of the allowance and took the more prudent approach to account for loan and collateral concentration risks, mainly in our construction and commercial real estate portfolios, and the need for heightened portfolio management in light of economic conditions at the time. In addition, the $19.8 million increase in loans contributed modestly to the provision in the first quarter. These increases were partially offset by the quantitative impact of an improvement in Moody's Analytics' baseline California unemployment rate forecasts over the next four quarters at the time.
The $168 thousand reversal of the provision for credit losses on unfunded loan commitments in the second quarter of 2023 was due primarily to a $39.9 million decrease in total unfunded commitments. This compares to $174 thousand reversal of the provision in the prior quarter, due mainly to a $37.4 million decrease in total unfunded commitments.
Cash, Cash Equivalents and Restricted Cash
Total cash, cash equivalents and restricted cash were $39.7 million at June 30, 2023, compared to $38.0 million at March 31, 2023. The $1.7 million increase was due primarily to normal course of business transactions.
Investments
The investment securities portfolio totaled $1.718 billion at June 30, 2023, a decrease of $38.3 million from March 31, 2023. The decrease was primarily the result of principal repayments and maturities totaling $26.0 million and a $10.9 million increase in pre-tax unrealized losses on available-for-sale investment securities, along with $1.4 million in net amortization in the quarter. Both the AFS and HTM portfolios are eligible for pledging to FHLB or the Federal Reserve as collateral for borrowing. The portfolios are comprised of high credit quality investments with average effective durations of 3.8 on available-for-sale securities and 5.8 on held-to-maturity securities. Both portfolios generate cash inflows monthly from interest, principal amortization and payoffs, which supports the Bank's liquidity. Those cash inflows totaled $36.7 million and $46.2 million in the second and first quarters of 2023, respectively. Subsequent to quarter end, the Bank sold $82.7 million of available-for-sale securities and recognized a $2.8 million net loss. The net loss was offset with the $2.8 million gain from the sale of its remaining investment in Visa Inc. Class B restricted common stock, which had a zero carrying value.
Deposits
Deposits totaled $3.325 billion at June 30, 2023, an increase of $74.6 million compared to $3.251 billion at March 31, 2023 and a decrease of $248.1 million from $3.573 billion at December 31, 2022. There was a small shift in deposit composition in the second quarter, dropping non-interest bearing deposits from 50.3% of total deposits to 47.8%, raising money markets from 28.0% to 30.9% and time deposits from 4.4% to 6.1%. While there was some runoff in the first quarter attributed to industry disruptions and bank deposits moving to money market funds, we have seen growth in deposit balances and new account activity. We are closing the gap on the deposit outflows experienced in the first quarter of 2023. The Bank's competitive and balanced approach to relationship management and focused outreach supported the growth, with the addition of over 1,400 new accounts during the second quarter, 41% of which were new relationships to the Bank. As of June 30, 2023, the largest depositor represented 1.3% of total deposits and the combined four largest depositors represented 3.9% of total deposits. Our liquidity policies require that compensating cash or investment security balances be held against concentrations over a certain level.
Borrowings and Liquidity
At June 30, 2023, the Bank had $292.2 million outstanding in borrowings from the Federal Home Loan Bank, compared to $405.4 million at March 31, 2023, a reduction of $113.2 million. This strategic reduction was made possible through deposit growth and investment cash flows. While 100% of June 30, 2023 borrowings were overnight, the Bank actively manages borrowings and liquidity by balancing costs and risks over the short- and long-term. Total immediate contingent funding sources, including unrestricted cash, unencumbered available-for-sale securities, and remaining borrowing capacity was $1.992 billion, or 60% of total deposits and 209% of estimated uninsured deposits as of June 30, 2023. The Federal Reserve Bank Term Funding Program ("BTFP") facility offers borrowing capacity based on par values of securities pledged and attractive borrowing rates. While the Bank has pledged securities and tested the facility, it has not been utilized for funding. The following table details the components of liquidity as of quarter-end.
(in millions)
Total Available
Amount Used
Net Availability
Internal Sources
Unrestricted cash 1
$
16.7
$
—
$
16.7
Unencumbered securities at market value
761.5
—
761.5
External Sources
FHLB line of credit
1,033.8
(292.2
)
741.6
FRB line of credit and BTFP facility
337.0
—
337.0
Lines of credit at correspondent banks
135.0
—
135.0
Total Liquidity
$
2,284.0
$
(292.2
)
$
1,991.8
1 Excludes cash items in transit as of June 30, 2023.
Note: Brokered deposits available through third-party networks are not included above.
Capital Resources
The total risk-based capital ratio for Bancorp was 16.4% at June 30, 2023, compared to 16.2% at March 31, 2023. The total risk-based capital ratio for the Bank was 16.0% at June 30, 2023, compared to 15.6% at March 31, 2023.
Bancorp's tangible common equity to tangible assets ("TCE ratio") was 8.6% at June 30, 2023, compared to 8.7% at March 31, 2023. The pro forma TCE ratio if held-to-maturity securities were treated the same as available-for-sale securities at June 30, 2023 would have been 6.7% (refer to pages 6 and 7 for a discussion and reconciliation of this non-GAAP financial measures). Management believes these non-GAAP measures are important because they reflect the level of capital available to withstand drastic changes in market conditions. Contingent funding sources, such as the Federal Home Loan Bank and the Federal Reserve BTFP facility, provide funding diversification and ensure that banks have immediate access to liquidity when market values on securities change.
Earnings
Net Interest Income
Net interest income totaled $24.1 million for the second quarter of 2023, compared to $29.9 million for the prior quarter. The $5.8 million decrease from the prior quarter was primarily related to an increase in the cost of deposits and higher average borrowing balances.
Net interest income totaled $54.0 million for the six months ended June 30, 2023, compared to $61.1 million for the same period in the prior year. The $7.1 million decrease from prior year was primarily due to higher costing deposits resulting in an incremental $6.2 million in interest expense and borrowing costs of $7.6 million, partially offset by higher average balances and yields on investments generating incremental income of $5.1 million and higher yields on loans adding $1.8 million.
The tax-equivalent net interest margin was 2.45% for the second quarter of 2023, compared to 3.04% for the prior quarter. The decline from prior quarter was primarily due to higher deposit and borrowing costs slightly offset by higher interest rates on loans. Average interest-bearing deposit balances decreased by $39.2 million while the cost increased by 95 basis points. Average borrowing balances increased by $149.7 million and the cost of borrowings increased by 30 basis points. Average loan balances decreased by $13.5 million while the average yield increased by 3 basis points.
The tax-equivalent net interest margin was 2.74% for the six months ended June 30, 2023, compared to 3.01% for the same period in the prior year. The decrease was primarily attributed to higher borrowing and deposit costs partially offset by higher interest rates on investments and loans. Average interest-bearing deposits balances decreased by $226.1 million while the cost increased by 77 basis points, mainly for money market and time deposit account types. Average borrowings increased by $297.5 million at a cost of 4.45%. Average loan balances decreased by $96.1 million while the average yield increased by 36 basis points.
Non-Interest Income
Non-interest income totaled $2.7 million for the second quarter of 2023, compared to $2.9 million for the prior quarter. The $196 thousand decrease from the prior quarter was primarily related to the recognition of a death benefit on bank-owned life insurance in the prior quarter, partially offset by increases in ATM and debit card interchange fees.
Non-interest income totaled $5.7 million for the six months ended June 30, 2023, compared to $5.6 million for the same period of the prior year. The $79 thousand increase from the prior year period was mostly attributable to the higher death benefits and balances on bank-owned life insurance, partially offset by decreases in wealth management and trust services income and other income including one-way deposit and cash management fees.
Non-Interest Expense
Non-interest expense totaled $20.7 million for the second quarter of 2023, compared to $19.8 million for the prior quarter. The $885 thousand increase from the prior quarter included $589 thousand in charitable contributions as part of our annual grant program, $486 thousand in salaries and related benefits, which included annual merit increases, and $393 thousand in expenses and fees associated with an increase our customers' participation in reciprocal deposit networks to bolster their FDIC insured balances, as mentioned on page 1. In addition, our FDIC insurance expense increased by $377 thousand as the statutory rates increased uniformly by 2 basis points for all depository institutions effective January 1, 2023 in order to strengthen the FDIC's Deposit Insurance Fund. These and other lesser increases were partially offset by a $482 thousand reduction in depreciation and amortization expense and $434 thousand decrease in occupancy and equipment expense, primarily due to the acceleration of lease-related costs for branches closed in the first quarter. These branch closures also reduced maintenance, janitorial and utilities expenses for the quarter. In addition, professional services decreased by $326 thousand, mainly due to the timing of audit work performed.
Non-interest expense totaled $40.4 million for the six months ended June 30, 2023, compared to $38.3 million for the same period of prior year, an increase of $2.2 million. The most significant increases over prior year came from occupancy and equipment and depreciation and amortization expenses, which rose $596 thousand and $437 thousand, respectively, from branch closures in the first quarter of 2023. In addition, expenses associated with reciprocal deposits placed into deposit networks included in other expenses increased $497 thousand due to higher average balances and fees. Salaries and related benefits increased by $457 thousand primarily due to regularly scheduled annual merit and other increases and lower deferred origination costs, which were partially offset by an adjustment to our incentive bonus accrual. The FDIC insurance assessment and professional services also increased by $369 thousand and $342 thousand, respectively, for the same reasons mentioned above. These increases were partially offset by a $509 thousand decrease in data processing expenses due to our core system contract renegotiation for the current period and because the prior year included data processing expenses largely eliminated after the systems conversion associated with the American River Bankshares merger. In addition, the pre-tax savings in 2023 from the branch closures, net of accelerated costs, are expected to be approximately $470 thousand, and future annual pre-tax savings are expected to be approximately $1.4 million.
Statement Regarding use of Non-GAAP Financial Measures
Our second quarter and first half of 2022 were impacted by costs associated with our acquisition of American River Bank ("ARB"), which we considered immaterial to discuss in this release. For additional information regarding the impact of non-GAAP adjustments to our second quarter 2022 performance measures, refer to Form 10-Q filed on August 8, 2022.
In this press release, financial results are presented in accordance with GAAP and with reference to certain non-GAAP financial measures. Management believes that, given recent industry turmoil, the presentation of Bancorp's non-GAAP TCE ratio reflecting the after tax impact of unrealized losses on HTM securities provides useful supplemental information to investors. Because there are limits to the usefulness of this measure to investors, Bancorp encourages readers to consider its annual and quarterly consolidated financial statements and notes related thereto for their entirety, as filed with the Securities and Exchange Commission, and not to rely on any single financial measure. A reconciliation of the non-GAAP TCE ratio is presented below.
Reconciliation of GAAP and Non-GAAP Financial Measures
(in thousands, unaudited)
June 30, 2023
Tangible Common Equity - Bancorp
Total stockholders' equity
$
423,941
Goodwill and core deposit intangible
(77,185
)
Total TCE
a
346,756
Unrealized losses on HTM securities, net of tax
(85,046
)
TCE, net of unrealized losses on HTM securities (non-GAAP)
b
$
261,710
Total assets
$
4,092,133
Goodwill and core deposit intangible
(77,185
)
Total tangible assets
d
4,014,948
Unrealized losses on HTM securities, net of tax
(85,046
)
Total tangible assets, net of unrealized losses on HTM securities (non-GAAP)
e
$
3,929,902
Bancorp TCE ratio
a / d
8.6
%
Bancorp TCE ratio, net of unrealized losses on HTM securities (non-GAAP)
b / e
6.7
%
Share Repurchase Program
Bancorp's share repurchase program had $34.7 million available for repurchase as of June 30, 2023. There have been no repurchases in 2023. On July 21, 2023, the Board of Directors approved the adoption of Bancorp's new share repurchase program, which replaces the existing program expiring on July 31, 2023, for up to $25.0 million and expiring on July 31, 2025.
Earnings Call and Webcast Information
Bank of Marin Bancorp (Nasdaq: BMRC) will present its second quarter earnings call via webcast on Monday, July 24, 2023, at 8:30 a.m. PT/11:30 a.m. ET. Investors can listen to the webcast online through Bank of Marin’s website at www.bankofmarin.com, under “Investor Relations.” To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available at the same website location shortly after the call. Closed captioning will be available during the live webcast, as well as on the webcast replay.
About Bank of Marin Bancorp
Founded in 1990 and headquartered in Novato, Bank of Marin is the wholly owned subsidiary of Bank of Marin Bancorp (Nasdaq: BMRC). A leading business and community bank in Northern California, with assets of $4.1 billion, Bank of Marin has 27 retail branches and 8 commercial banking offices located across 10 counties. Bank of Marin provides commercial banking, personal banking, and wealth management and trust services. Specializing in providing legendary service to its customers and investing in its local communities, Bank of Marin has consistently been ranked one of the “Top Corporate Philanthropists" by the San Francisco Business Times and one of the “Best Places to Work” by the North Bay Business Journal. Bank of Marin Bancorp is included in the Russell 2000 Small-Cap Index and Nasdaq ABA Community Bank Index. For more information, go to www.bankofmarin.com.
Forward-Looking Statements
This release may contain certain forward-looking statements that are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact Bancorp's earnings in future periods. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “intend,” “estimate” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions and the economic uncertainty in the United States and abroad, including economic or other disruptions to financial markets caused by acts of terrorism, war or other conflicts such as Russia's military action in Ukraine, impacts from inflation, supply change disruptions, changes in interest rates (including the actions taken by the Federal Reserve to control inflation), California's unemployment rate, deposit flows, real estate values, and expected future cash flows on loans and securities; costs or effects of acquisitions; competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; natural disasters (such as wildfires and earthquakes in our area); adverse weather conditions; interruptions of utility service in our markets for sustained periods; and other economic, competitive, governmental, regulatory and technological factors (including external fraud and cybersecurity threats) affecting our operations, pricing, products and services; and successful integration of acquisitions. These and other important factors are detailed in various securities law filings made periodically by Bancorp, copies of which are available from Bancorp without charge. Bancorp undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.
BANK OF MARIN BANCORP FINANCIAL HIGHLIGHTS
Three months ended
Six months ended
(in thousands, except per share amounts; unaudited)
June 30,
2023
March 31,
2023
June 30,
2022
June 30,
2023
June 30,
2022
Selected operating data and performance ratios:
Net income
$
4,551
$
9,440
$
11,066
$
13,991
$
21,531
Diluted earnings per common share
$
0.28
$
0.59
$
0.69
$
0.87
$
1.35
Return on average assets
0.44
%
0.92
%
1.03
%
0.68
%
1.00
%
Return on average equity
4.25
%
9.12
%
10.74
%
6.65
%
10.16
%
Efficiency ratio
76.91
%
60.24
%
55.73
%
67.74
%
57.40
%
Tax-equivalent net interest margin 1
2.45
%
3.04
%
3.05
%
2.74
%
3.01
%
Cost of deposits
0.69
%
0.20
%
0.06
%
0.44
%
0.06
%
Net (recoveries) charge-offs
$
(2
)
$
3
$
8
$
1
$
(1
)
(in thousands; unaudited)
June 30,
2023
March 31,
2023
December 31,
2022
Selected financial condition data:
Total assets
$
4,092,133
$
4,135,279
$
4,147,464
Loans:
Commercial and industrial
$
183,157
$
195,964
$
173,547
Real estate:
Commercial owner-occupied
344,951
352,529
354,877
Commercial non-owner occupied
1,196,158
1,189,962
1,191,889
Construction
108,986
110,386
114,373
Home equity
85,587
86,572
88,748
Other residential
118,646
116,447
112,123
Installment and other consumer loans
65,311
60,468
56,989
Total loans
$
2,102,796
$
2,112,328
$
2,092,546
Non-accrual loans: 1
Real estate:
Commercial owner-occupied
$
457
$
331
$
1,563
Commercial non-owner occupied
906
924
—
Home equity
749
768
778
Installment and other consumer loans
—
3
91
Total non-accrual loans
$
2,112
$
2,026
$
2,432
Classified loans (graded substandard and doubtful)
$
38,061
$
31,014
$
28,109
Total accruing loans 30-89 days past due
$
983
$
1,223
$
664
Allowance for credit losses to total loans
1.13
%
1.10
%
1.10
%
Allowance for credit losses to non-accrual loans
11.28x
11.52x
9.45x
Non-accrual loans to total loans
0.10
%
0.10
%
0.12
%
Total deposits
$
3,325,212
$
3,250,574
$
3,573,348
Loan-to-deposit ratio
63.2
%
65.0
%
58.6
%
Stockholders' equity
$
423,941
$
430,174
$
412,092
Book value per share
$
26.32
$
26.71
$
25.71
Tangible common equity to tangible assets - Bank
8.4
%
8.3
%
8.1
%
Tangible common equity to tangible assets - Bancorp
8.6
%
8.7
%
8.2
%
Total risk-based capital ratio - Bank
16.0
%
15.6
%
15.7
%
Total risk-based capital ratio - Bancorp
16.4
%
16.2
%
15.9
%
Full-time equivalent employees
317
311
313
1 There were no non-performing loans over 90 days past due and accruing interest as of June 30, 2023, March 31, 2023 and December 31, 2022.
BANK OF MARIN BANCORPCONSOLIDATED STATEMENTS OF CONDITION
(in thousands, except share data; unaudited)
June 30,
2023
March 31,
2023
December 31,
2022
Assets
Cash, cash equivalents and restricted cash
$
39,657
$
37,993
$
45,424
Investment securities:
Held-to-maturity, at amortized cost (net of zero allowance for credit losses at June 30, 2023, March 31, 2023 and December 31, 2022)
946,808
958,560
972,207
Available-for-sale (at fair value; amortized cost of $856,166, $871,829 and $892,605 at June 30, 2023, March 31, 2023 and December 31, 2022, respectively; net of zero allowance for credit losses at June 30, 2023, March 31, 2023 and December 31, 2022)
770,942
797,533
802,096
Total investment securities
1,717,750
1,756,093
1,774,303
Loans, at amortized cost
2,102,796
2,112,328
2,092,546
Allowance for credit losses on loans
(23,832
)
(23,330
)
(22,983
)
Loans, net of allowance for credit losses on loans
2,078,964
2,088,998
2,069,563
Goodwill
72,754
72,754
72,754
Bank-owned life insurance
67,367
67,006
67,066
Operating lease right-of-use assets
22,739
22,854
24,821
Bank premises and equipment, net
8,683
8,690
8,134
Core deposit intangible, net
4,431
4,771
5,116
Other real estate owned
415
455
455
Interest receivable and other assets
79,373
75,665
79,828
Total assets
$
4,092,133
$
4,135,279
$
4,147,464
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Non-interest bearing
$
1,588,723
$
1,636,651
$
1,839,114
Interest bearing
Transaction accounts
229,434
251,716
287,651
Savings accounts
274,510
306,951
338,163
Money market accounts
1,029,082
911,189
989,390
Time accounts
203,463
144,067
119,030
Total deposits
3,325,212
3,250,574
3,573,348
Short-term borrowings and other obligations
292,572
405,802
112,439
Operating lease liabilities
25,220
25,433
26,639
Interest payable and other liabilities
25,188
23,296
22,946
Total liabilities
3,668,192
3,705,105
3,735,372
Stockholders' Equity
Preferred stock, no par value,
Authorized - 5,000,000 shares, none issued
—
—
—
Common stock, no par value,
Authorized - 30,000,000 shares; issued and outstanding - 16,107,192, 16,107,210 and 16,029,138 at June 30, 2023, March 31, 2023 and December 31, 2022, respectively
216,589
215,965
215,057
Retained earnings
276,732
276,209
270,781
Accumulated other comprehensive loss, net of taxes
(69,380
)
(62,000
)
(73,746
)
Total stockholders' equity
423,941
430,174
412,092
Total liabilities and stockholders' equity
$
4,092,133
$
4,135,279
$
4,147,464
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Three months ended
Six months ended
(in thousands, except per share amounts; unaudited)
June 30,
2023
March 31,
2023
June 30,
2023
June 30,
2022
Interest income
Interest and fees on loans
$
24,579
$
24,258
$
48,837
$
47,011
Interest on investment securities
9,994
10,033
20,027
14,966
Interest on federal funds sold and due from banks
48
56
104
286
Total interest income
34,621
34,347
68,968
62,263
Interest expense
Interest on interest-bearing transaction accounts
234
254
488
109
Interest on savings accounts
146
170
316
61
Interest on money market accounts
4,292
1,085
5,377
916
Interest on time accounts
946
223
1,169
81
Interest on borrowings and other obligations
4,873
2,716
7,589
1
Total interest expense
10,491
4,448
14,939
1,168
Net interest income
24,130
29,899
54,029
61,095
Provision for (reversal of) credit losses on loans
500
350
850
(485
)
Reversal of credit losses on unfunded loan commitments
(168
)
(174
)
(342
)
(318
)
Net interest income after provision for (reversal of) credit losses
23,798
29,723
53,521
61,898
Non-interest income
Wealth Management and Trust Services
559
511
1,070
1,230
Earnings on bank-owned life insurance, net
362
705
1,067
711
Service charges on deposit accounts
520
533
1,053
953
Debit card interchange fees, net
555
447
1,002
1,036
Dividends on Federal Home Loan Bank stock
290
302
592
508
Merchant interchange fees, net
127
133
260
289
Other income
326
304
630
868
Total non-interest income
2,739
2,935
5,674
5,595
Non-interest expense
Salaries and related benefits
11,416
10,930
22,346
21,889
Occupancy and equipment
1,980
2,414
4,394
3,798
Data processing
922
1,045
1,967
2,476
Professional services
797
1,123
1,920
1,578
Depreciation and amortization
400
882
1,282
845
Federal Deposit Insurance Corporation insurance
666
289
955
586
Information technology
357
370
727
946
Charitable contributions
638
49
687
556
Amortization of core deposit intangible
340
345
685
754
Directors' expense
300
321
621
605
Other real estate owned
44
4
48
5
Other expense
2,805
2,008
4,813
4,243
Total non-interest expense
20,665
19,780
40,445
38,281
Income before provision for income taxes
5,872
12,878
18,750
29,212
Provision for income taxes
1,321
3,438
4,759
7,681
Net income
$
4,551
$
9,440
$
13,991
$
21,531
Net income per common share:
Basic
$
0.28
$
0.59
$
0.88
$
1.35
Diluted
$
0.28
$
0.59
$
0.87
$
1.35
Weighted average shares:
Basic
16,009
15,970
15,990
15,898
Diluted
16,016
15,999
16,008
15,950
Comprehensive (loss) income:
Net income
$
4,551
$
9,440
$
13,991
$
21,531
Other comprehensive (loss) income:
Change in net unrealized gains or losses on available-for-sale securities
(10,928
)
16,213
5,285
(65,278
)
Net unrealized losses on securities transferred from available-for-sale to held-to-maturity
—
—
—
(14,847
)
Amortization of net unrealized losses on securities transferred from available-for-sale to held-to-maturity
451
463
914
616
Other comprehensive (loss) income, before tax
(10,477
)
16,676
6,199
(79,509
)
Deferred tax (benefit) expense
(3,097
)
4,930
1,833
(23,505
)
Other comprehensive (loss) income, net of tax
(7,380
)
11,746
4,366
(56,004
)
Total comprehensive (loss) income
$
(2,829
)
$
21,186
$
18,357
$
(34,473
)
BANK OF MARIN BANCORP
AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME
Three months ended
Three months ended
June 30, 2023
March 31, 2023
Interest
Interest
Average
Income/
Yield/
Average
Income/
Yield/
(in thousands)
Balance
Expense
Rate
Balance
Expense
Rate
Assets
Interest-earning deposits with banks 1
$
3,578
$
48
5.35
%
$
4,863
$
56
4.58
%
Investment securities 2, 3
1,819,486
10,103
2.22
%
1,851,743
10,194
2.20
%
Loans 1, 3, 4
2,108,260
24,700
4.63
%
2,121,718
24,415
4.60
%
Total interest-earning assets 1
3,931,324
34,851
3.51
%
3,978,324
34,665
3.49
%
Cash and non-interest-bearing due from banks
38,154
39,826
Bank premises and equipment, net
8,546
8,396
Interest receivable and other assets, net
141,130
137,114
Total assets
$
4,119,154
$
4,163,660
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts
$
232,090
$
234
0.41
%
$
272,353
$
254
0.38
%
Savings accounts
285,745
146
0.20
%
329,299
170
0.21
%
Money market accounts
948,670
4,292
1.81
%
952,479
1,085
0.46
%
Time accounts including CDARS
174,471
946
2.18
%
126,030
223
0.72
%
Short-term borrowings and other obligations 1
372,308
4,873
5.18
%
222,571
2,716
4.88
%
Total interest-bearing liabilities
2,013,284
10,491
2.09
%
1,902,732
4,448
0.95
%
Demand accounts
1,627,730
1,792,998
Interest payable and other liabilities
49,116
48,233
Stockholders' equity
429,024
419,697
Total liabilities & stockholders' equity
$
4,119,154
$
4,163,660
Tax-equivalent net interest income/margin 1
$
24,360
2.45
%
$
30,217
3.04
%
Reported net interest income/margin 1
$
24,130
2.43
%
$
29,899
3.01
%
Tax-equivalent net interest rate spread
1.42
%
2.54
%
Six months ended
Six months ended
June 30, 2023
June 30, 2022
Interest
Interest
Average
Income/
Yield/
Average
Income/
Yield/
(in thousands)
Balance
Expense
Rate
Balance
Expense
Rate
Assets
Interest-earning deposits with banks 1
$
4,217
$
104
4.91
%
$
163,064
$
286
0.35
%
Investment securities 2, 3
1,835,525
20,297
2.21
%
1,717,624
15,340
1.79
%
Loans 1, 3, 4
2,114,952
49,115
4.62
%
2,211,062
47,403
4.26
%
Total interest-earning assets 1
3,954,694
69,516
3.50
%
4,091,750
63,029
3.06
%
Cash and non-interest-bearing due from banks
38,985
62,679
Bank premises and equipment, net
8,471
7,305
Interest receivable and other assets, net
139,134
167,265
Total assets
$
4,141,284
$
4,328,999
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts
$
252,110
$
488
0.39
%
$
297,734
$
109
0.07
%
Savings accounts
307,402
316
0.21
%
343,333
61
0.04
%
Money market accounts
950,564
5,377
1.14
%
1,099,439
916
0.17
%
Time accounts including CDARS
150,384
1,169
1.57
%
146,061
81
0.11
%
Short-term borrowings and other obligations 1
297,853
7,589
5.07
%
384
1
0.62
%
Total interest-bearing liabilities
1,958,313
14,939
1.54
%
1,886,951
1,168
0.12
%
Demand accounts
1,709,907
1,963,832
Interest payable and other liabilities
48,678
50,846
Stockholders' equity
424,386
427,370
Total liabilities & stockholders' equity
$
4,141,284
$
4,328,999
Tax-equivalent net interest income/margin 1
$
54,577
2.74
%
$
61,861
3.01
%
Reported net interest income/margin 1
$
54,029
2.72
%
$
61,095
2.97
%
Tax-equivalent net interest rate spread
1.96
%
2.94
%
1 Interest income/expense is divided by actual number of days in the period times 360 days to correspond to stated interest rate terms, where applicable.
2 Yields on available-for-sale securities are calculated based on amortized cost balances rather than fair value, as changes in fair value are reflected as a component of stockholders' equity. Investment security interest is earned on 30/360 day basis monthly.
3 Yields and interest income on tax-exempt securities and loans are presented on a taxable-equivalent basis using the Federal statutory rate of 21 percent in 2023 and 2022.
4 Average balances on loans outstanding include non-performing loans. The amortized portion of net loan origination fees is included in interest income on loans, representing an adjustment to the yield.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230724481684/en/
MEDIA CONTACT: Yahaira Garcia-Perea Marketing & Corporate Communications Manager 916-823-7214 | YahairaGarcia-Perea@bankofmarin.com
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