Strong Balance Sheet Management Provides
Ample Liquidity
Bank of Marin Bancorp, "Bancorp" (Nasdaq: BMRC), parent company
of Bank of Marin, "Bank," announced earnings of $9.4 million in the
first quarter of 2023, compared to $12.9 million in the fourth
quarter of 2022 and $10.5 million in the first quarter of 2022. The
decline in earnings was a result of higher interest expense
reflecting higher market interest rates on a lagged basis. Diluted
earnings per share were $0.59 in the first quarter, compared to
$0.81 in the prior quarter, and $0.66 in the same quarter last
year.
Bancorp issued an earnings presentation, concurrently with this
release, to provide additional financial detail for items that will
be discussed during the first quarter 2023 earnings call. The
earnings release and presentation slides are intended to be
reviewed together. The presentation can be found online through
Bank of Marin’s website at www.bankofmarin.com. under “Investor
Relations.”
“Given industry volatility in mid-March, we expanded strategic
pricing conversations already underway with customers to alleviate
concerns and reinforce their confidence in our financial strength,
ample liquidity and robust capital levels,” said Tim Myers,
President and Chief Executive Officer. “While it is not unusual for
us to experience a decline in deposits in the first quarter,
customer insights and daily transaction monitoring helped us to
understand this year's more-pronounced activity. We are pleased to
report that our deposit balances have been stable since March 22nd,
which we believe is a reflection of our effective relationship
management and strong, diversified deposit franchise.”
Bancorp also provided the following highlights from the first
quarter of 2023:
- Following recent industry events, our deposit franchise
remained strong at $3.251 billion on March 31, 2023, a decrease of
$322.8 million from $3.573 billion at December 31, 2022. While
there have been some outflows related to industry concerns in March
and pandemic surge deposits redeploying to money market funds, the
largest transactions were related to the normal operating
activities of our customers. Those activities include vendor
payments, taxes, payroll and singular events such as disbursement
of proceeds from the sale of a business, real property acquisitions
for cash, trust distributions or estate settlements. The cost of
deposits increased 12 basis points quarter over quarter due to
targeted relationship-based pricing adjustments. Non-interest
bearing deposits made up 50.3% of total deposits at March 31, 2023,
compared to 51.5% at December 31, 2022, and we estimated that 67%
of total deposits were fully covered by FDIC insurance as of March
31, 2023.
- Liquidity is strong, providing 181% coverage of estimated
uninsured deposits. The Bank has long followed liquidity management
practices similar to large banks with robust liquidity requirements
and regular liquidity stress testing. While the Bank has the
ability to utilize the Federal Reserve Bank Term Funding Program
("BTFP") and has tested it for contingency planning purposes, there
has been no need to utilize the facility at this time.
- Loan balances of $2.112 billion at March 31, 2023, increased
$19.8 million from $2.093 billion at December 31, 2022 reflecting
originations of $44.9 million and payoffs of $22.2 million.
Utilization of credit lines was mostly offset by loan amortization
from scheduled repayments during the quarter and unfunded
commitments declined $37.4 million from December 31, 2022 to $529.5
million at March 31, 2023.
- Non-accrual loans were only 0.10% of total loans as of March
31, 2023, compared to 0.12% at December 31, 2022. We recorded a
$350 thousand provision for credit losses on loans in the first
quarter, compared to no provision in the previous quarter and a
$485 thousand provision reversal in the same quarter of 2022. The
provision in the first quarter of 2023 was due primarily to
qualitative risk factor adjustments.
- Credit quality remains sound notwithstanding the trends in the
commercial real estate market. Our loan portfolio continues to
perform well, with classified loans at only 1.47% of total loans
and manageable delinquencies, Non-owner occupied commercial real
estate loans made up 73% of total classified loans as of March 31,
2023, compared to 76% at December 31, 2022, and all are currently
paying as agreed. We continue to maintain diversity among property
types and within our geographic footprint. In particular, our
office commercial real estate portfolio in the City of San
Francisco represents just 3% of our total loan portfolio and 6% of
our total non-owner occupied commercial real estate portfolio. As
of the last measurement period, the average loan-to-value and
debt-service coverage for the entire non-owner occupied office
portfolio were 55% and 1.67x, respectively. For the eleven
non-owner occupied office loans in the City of San Francisco, the
average loan-to-value and debt-service coverage were 60% and 1.20x,
respectively. More details are available in the supplementary
earnings presentation.
- The first quarter tax-equivalent net interest margin decreased
22 basis points to 3.04% from 3.26% for the previous quarter due
primarily to increased deposit costs and average borrowing
balances, partially offset by higher loan yields. The margin was up
from 2.96% in the same period of 2022.
- Return on average assets ("ROA") was 0.92% for the first
quarter of 2023, compared to 1.21% for the fourth quarter of 2022
and 0.98% for the first quarter of 2022. Return on average equity
("ROE") was 9.12%, compared to 12.77% for the prior quarter and
9.61% for the first quarter in the prior year. The efficiency ratio
for the first quarter of 2023 was 60.24%, compared to 50.92% for
the prior quarter and 59.13% for the first quarter of 2022. The
sequential declines in ROA and ROE and increase in the efficiency
ratio were due primarily to the $5.1 million total increase in both
interest and non-interest expense.
- The Bank closed four branch locations in the first quarter of
2023. The acquisition of American River Bank ("ARB") resulted in an
overlap in the Bank’s branch network in Santa Rosa and Healdsburg,
prompting branch consolidations within Northern Sonoma County. In
addition, our Tiburon and Buckhorn branches in Marin and Amador
counties were in close proximity to other branches fully able to
meet our customers' needs. These closures represented the remaining
expense savings anticipated from the acquisition, optimizing
efficiency and our ability to fund strategic initiatives going
forward. The pre-tax savings in 2023 from the branch closures, net
of accelerated costs, is expected to be approximately $470
thousand, and future annual pre-tax savings are expected to be
approximately $1.4 million.
- All capital ratios were above well-capitalized regulatory
requirements. The total risk-based capital ratios at March 31, 2023
for Bancorp and the Bank were 16.2% and 15.6%, respectively.
Bancorp's tangible common equity to tangible assets ("TCE ratio")
was 8.7% at March 31, 2023, and the Bank's TCE ratio was 8.3%.
- The Board of Directors declared a cash dividend of $0.25 per
share on April 21, 2023, which represents the 72nd consecutive
quarterly dividend paid by Bancorp. The dividend is payable on May
12, 2023, to shareholders of record at the close of business on May
5, 2023.
“We are well positioned to meet our customers’ credit needs, as
evidenced by the loan growth we achieved in the first quarter and
our strong liquidity,” said Tani Girton, Executive Vice President
and Chief Financial Officer. “We have not wavered from our prudent
risk management discipline that has proven successful for more than
30 years. Our balance sheet is strong, and our credit quality
continues to be excellent. This gives us confidence in our ability
to navigate this environment while delivering strong returns for
our shareholders.”
Loans and Credit Quality
Loans increased by $19.8 million in the first quarter of 2023
and totaled $2.112 billion at March 31, 2023, compared to $2.093
billion at December 31, 2022. Loan originations for the first
quarter of 2023 were $44.9 million, compared to $36.1 million for
the fourth quarter of 2022 and $49.8 million for the first quarter
of 2022. Loan payoffs were $22.2 million for the first quarter,
compared to $55.3 million for the fourth quarter of 2022 and $119.7
million for the first quarter of 2022, which included $70.4 million
in PPP loan payoffs. First quarter 2023 loan payoffs were the
lowest first quarter payoffs since 2017 and consisted mainly of a
large construction project completed.
Non-accrual loans totaled $2.0 million, or 0.10%, of the loan
portfolio at March 31, 2023, compared to $2.4 million, or 0.12% at
December 31, 2022. Non-accrual loans at March 31, 2023 included the
addition of six loans totaling $1.4 million in the first quarter,
68% of which were well-secured by commercial real estate, offset by
decreases due to payoffs of $1.4 million, upgrades of $413
thousand, and paydowns of $27 thousand. Over 99% of the non-accrual
loans were collateralized by real estate with no expected credit
loss as of March 31, 2023.
Classified loans totaled $31.0 million at March 31, 2023,
compared to $28.1 million at December 31, 2022, increasing
primarily due to higher usage of a revolving line of credit that
was previously downgraded. Other changes included $1.4 million in
downgrades, $1.7 million in payoffs and paydowns and $314 thousand
in upgrades to pass risk rating. All of the downgrades in the first
quarter were for loans that are secured by real estate collateral.
Accruing loans past due 30 to 89 days totaled $1.2 million at March
31, 2023, compared to $664 thousand at December 31, 2022.
Net charge-offs for the first quarter of 2023 totaled $3
thousand, compared to net recoveries of $20 thousand for the fourth
quarter of 2022 and net recoveries of $9 thousand for the first
quarter of 2022. The ratio of allowance for credit losses to total
loans was 1.10% at both March 31, 2023 and December 31, 2022.
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 current economic conditions. In
addition, the $19.8 million increase in loans contributed modestly
to the provision. 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. There was no adjustment to the provision in the prior
quarter and a $485 thousand provision reversal in the first quarter
of 2022, due primarily to an improvement in underlying economic
forecasts at the time.
The $174 thousand reversal of the provision for credit losses on
unfunded loan commitments in the first quarter of 2023 was due
primarily to a $37.4 million decrease in total unfunded
commitments. This compares to no provision in the prior quarter and
a $318 thousand provision reversal in the first quarter of 2022,
due mainly to an improvement in the underlying economic forecasts
at the time.
Cash, Cash Equivalents and Restricted Cash
Total cash, cash equivalents and restricted cash were $38.0
million at March 31, 2023, compared to $45.4 million at December
31, 2022. The $7.4 million decrease was due primarily to increases
in loans and decreases in deposits partially offset by cash flows
from investment securities and increased borrowings.
Investments
The investment securities portfolio totaled $1.756 billion at
March 31, 2023, a decrease of $18.2 million from December 31, 2022.
The decrease was primarily the result of principal repayments
totaling $32.9 million, offset by a $16.2 million reduction in
pre-tax unrealized losses on available-for-sale investment
securities. Both portfolios are eligible for pledging to FHLB or
the Federal Reserve as collateral for borrowing, which protects the
Bank from being forced to sell any securities at a loss. The
portfolio is comprised of high credit quality investments with
average effective durations of 3.8 on available-for-sale securities
and 5.9 on held-to-maturity securities. Both portfolios generate
cash flow monthly from interest, principal amortization and
payoffs, which supports the Bank's liquidity. In the first quarter
investment cash flows totaled $46.2 million.
Deposits
Deposits totaled $3.251 billion at March 31, 2023, a decrease of
$322.8 million compared to $3.573 billion at December 31, 2022. Up
until the regulatory closures of Silicon Valley Bank on March 10,
2023 and Signature Bank on March 12, 2023, deposit fluctuations
were fairly consistent with prior years' first quarter customer
activity with some additional outflows to alternative investments
observed. In 2022, the Bank maintained excess liquidity in
anticipation of planned customer activities and expected outflows
from pandemic surge deposits received in 2020 and 2021. As outflows
materialized, our low cost of funds relative to the industry
provided an opportunity to balance deposit levels against costs.
Early in the first quarter of 2023, our bankers engaged in
discussions with clients about account structure and pricing, which
positioned the Bank well to navigate uncertainty in the marketplace
later in the quarter. The Bank experienced a $203.6 million decline
in deposits between March 10th and March 31st. Of the 100
relationships with the largest net outflows totaling approximately
$206.4 million, 83% was attributed to normal business activities
including vendor payments, taxes, payroll and singular events such
as estate settlements and sales of businesses, 14% moved to outside
brokerage firms or other financial institutions, and the remaining
3% moved to assets under management of our Wealth Management and
Trust Services department. Since March 22nd and through April 20th
deposits have been relatively stable. We believe that our customer
outreach has been effective. and it has resulted in a 32 basis
point increase in the cost of our deposits to 40 basis points in
the month of March from 8 basis points in the month of December, as
we balanced the level of deposits against cost. Additionally, we
opened over 1,000 accounts in the first quarter with $60 million in
new deposits.
Borrowings and Liquidity
At March 31, 2023, the Bank had $155.4 million outstanding in
overnight borrowings and $250.0 million outstanding in short-term
borrowings from the Federal Home Loan Bank, compared to $112.0
million in overnight borrowings at December 31, 2022. Total
immediate contingent funding sources, including unrestricted cash,
unencumbered available-for-sale securities, and remaining borrowing
capacity was $1.932 billion, or 59% of total deposits and 181% of
estimated uninsured deposits as of March 31, 2023. The Federal
Reserve 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, there has not
been a need to use it. The following table details the components
of liquidity as of quarter-end.
(in millions)
Total Available
Amount Used
Net Availability
Internal Sources
Unrestricted Cash
$
38.0
$
—
$
38.0
Unencumbered Securities
767.7
—
767.7
External Sources
FHLB
1,037.2
(405.4
)
631.8
FRB
344.2
—
344.2
Contingent Lines at Correspondents
150.0
—
150.0
Total Liquidity
$
2,337.1
$
(405.4
)
$
1,931.7
Note: Access to brokered deposit purchases through networks such
as Intrafi and Reich & Tang and brokered CD sales is not
included above.
Capital Resources
The total risk-based capital ratio for Bancorp was 16.2% at
March 31, 2023, compared to 15.9% at December 31, 2022. The total
risk-based capital ratio for the Bank was 15.6% at March 31, 2023,
compared to 15.7% at December 31, 2022.
Bancorp's tangible common equity to tangible assets ("TCE
ratio") was 8.7% at March 31, 2023, compared to 8.2% at December
31, 2022. The pro forma TCE ratio if held-to-maturity ("HTM")
securities were treated the same as available-for-sale securities
at March 31, 2023 would have been 6.9% (refer to pages 5 and 6 for
a discussion and reconciliation of these 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, ensure that banks have immediate access to liquidity
and alleviate the need to sell securities in an unrealized loss
position.
Earnings
Net Interest Income
Net interest income totaled $29.9 million in the first quarter
of 2023, compared to $33.4 million in the prior quarter and $29.9
million in the first quarter of 2022. The $3.5 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 was close to that of first quarter 2022, as the
increase in interest income on investments offset the increases in
interest expense on deposits and borrowings.
The tax-equivalent net interest margin was 3.04% for the first
quarter of 2023, compared to 3.26% for the prior quarter, and 2.96%
for the first quarter of 2022. The decline from prior quarter was
primarily due to higher borrowing and deposit costs partially
offset by higher interest rates on loans. The increase over the
same quarter last year was primarily due to higher yields on loans
and investments partially offset by higher deposit and borrowing
costs.
Non-Interest Income
Non-interest income totaled $2.9 million in the first quarter of
2023, compared to $2.6 million in the prior quarter and $2.9
million in the first quarter a year ago. The $348 thousand increase
from the prior quarter was primarily related to the recognition of
a death benefit on bank-owned life insurance, partially offset by
decreases in debit card interchange fees and other income. The $68
thousand increase from the first quarter of 2022 was primary due to
the death benefit, partially offset by decreases in wealth
management and trust services and other income.
Non-Interest Expense
Non-interest expense totaled $19.8 million in the first quarter
of 2023, compared to $18.3 million for the prior quarter and $19.4
million in the first quarter of 2022. The $1.5 million increase
from the prior quarter included $417 thousand in adjustments to
estimated incentive and supplemental executive retirement plan
accruals, and $432 thousand from accelerated amortization and lease
costs associated with branch closures. Other increases to salaries
and related benefits included $389 thousand in 401(k) matching
contributions, which is typically higher in the first quarter, and
$383 thousand of additional salaries, insurance and payroll taxes.
Meaningful decreases in expenses included $343 thousand in
information technology and data processing costs due largely to
timing of purchases and the renegotiation of our data processing
contract.
The $405 thousand increase from the first quarter of 2022 was
primarily related to $646 thousand in accelerated amortization and
lease costs for branches closed and a $210 thousand increase in
professional services fees from the completion of multiple internal
audit and consulting engagements. These increases were partially
offset by $466 thousand in net changes to estimated incentive,
vacation and retirement plan accruals included within salaries and
related benefits expense and acquisition costs included within data
processing expense.
Statement Regarding use of Non-GAAP Financial
Measures
Our first quarter 2022 was 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 first quarter
2022 performance measures, refer to Form 10-Q filed on May 9,
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 in 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)
March 31, 2023
Tangible Common Equity -
Bancorp
Total stockholders' equity
$
430,174
Goodwill and core deposit intangible
(77,525
)
Total TCE
a
352,649
Unrealized losses on HTM securities, net
of tax
(76,378
)
TCE, net of unrealized losses on HTM
securities (non-GAAP)
b
$
276,271
Total assets
$
4,135,279
Goodwill and core deposit intangible
(77,525
)
Total tangible assets
d
4,057,754
Unrealized losses on HTM securities, net
of tax
(76,378
)
Total tangible assets, net of unrealized
losses on HTM securities (non-GAAP)
e
$
3,981,376
Bancorp TCE ratio
a / d
8.7
%
Bancorp TCE ratio, net of unrealized
losses on HTM securities (non-GAAP)
b / e
6.9
%
Share Repurchase Program
Bancorp's share repurchase program had $34.7 million available
to repurchase as of March 31, 2023. There have been no repurchases
in 2023.
Earnings Call and Webcast Information
Bank of Marin Bancorp (Nasdaq: BMRC) will present its first
quarter earnings call via webcast on Monday, April 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
(in thousands, except per share amounts;
unaudited)
March 31, 2023
December 31, 2022
March 31, 2022
Selected operating data and performance
ratios:
Net income
$
9,440
$
12,881
$
10,465
Diluted earnings per common share
$
0.59
$
0.81
$
0.66
Return on average assets
0.92
%
1.21
%
0.98
%
Return on average equity
9.12
%
12.77
%
9.61
%
Efficiency ratio
60.24
%
50.92
%
59.13
%
Tax-equivalent net interest margin 1
3.04
%
3.26
%
2.96
%
Cost of deposits
0.20
%
0.08
%
0.06
%
Net charge-offs (recoveries)
$
3
$
(20
)
$
(9
)
(in thousands; unaudited)
March 31, 2023
December 31, 2022
Selected financial condition
data:
Total assets
$
4,135,279
$
4,147,464
Loans:
Commercial and industrial
$
195,964
$
173,547
Real estate:
Commercial owner-occupied
352,529
354,877
Commercial non-owner occupied
1,189,962
1,191,889
Construction
110,386
114,373
Home equity
86,572
88,748
Other residential
116,447
112,123
Installment and other consumer loans
60,468
56,989
Total loans
$
2,112,328
$
2,092,546
Non-accrual loans: 1
Real estate:
Commercial owner-occupied
$
331
$
1,563
Commercial non-owner occupied
924
—
Home equity
768
778
Installment and other consumer loans
3
91
Total non-accrual loans
$
2,026
$
2,432
Classified loans (graded substandard and
doubtful)
$
31,014
$
28,109
Total accruing loans 30-89 days past
due
$
1,223
$
664
Allowance for credit losses to total
loans
1.10
%
1.10
%
Allowance for credit losses to non-accrual
loans
11.52x
9.45x
Non-accrual loans to total loans
0.10
%
0.12
%
Total deposits
$
3,250,574
$
3,573,348
Loan-to-deposit ratio
65.0
%
58.6
%
Stockholders' equity
$
430,174
$
412,092
Book value per share
$
26.71
$
25.71
Tangible common equity to tangible assets
- Bank
8.3
%
8.1
%
Tangible common equity to tangible assets
- Bancorp
8.7
%
8.2
%
Total risk-based capital ratio - Bank
15.6
%
15.7
%
Total risk-based capital ratio -
Bancorp
16.2
%
15.9
%
Full-time equivalent employees
311
313
1 There were no non-performing loans over
90 days past due and accruing interest as of March 31, 2023 and
December 31, 2022.
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF
CONDITION
(in thousands, except share data;
unaudited)
March 31, 2023
December 31, 2022
Assets
Cash, cash equivalents and restricted
cash
$
37,993
$
45,424
Investment securities:
Held-to-maturity, at amortized cost (net
of zero allowance for credit losses at March 31, 2023 and December
31, 2022)
958,560
972,207
Available-for-sale (at fair value;
amortized cost of $871,829 and $892,605 at March 31, 2023 and
December 31, 2022, respectively; net of zero allowance for credit
losses at March 31, 2023 and December 31, 2022)
797,533
802,096
Total investment securities
1,756,093
1,774,303
Loans, at amortized cost
2,112,328
2,092,546
Allowance for credit losses on loans
(23,330
)
(22,983
)
Loans, net of allowance for credit losses
on loans
2,088,998
2,069,563
Goodwill
72,754
72,754
Bank-owned life insurance
67,006
67,066
Operating lease right-of-use assets
22,854
24,821
Bank premises and equipment, net
8,690
8,134
Core deposit intangible, net
4,771
5,116
Other real estate owned
455
455
Interest receivable and other assets
75,665
79,828
Total assets
$
4,135,279
$
4,147,464
Liabilities and Stockholders'
Equity
Liabilities
Deposits:
Non-interest bearing
$
1,636,651
$
1,839,114
Interest bearing
Transaction accounts
251,716
287,651
Savings accounts
306,951
338,163
Money market accounts
911,189
989,390
Time accounts
144,067
119,030
Total deposits
3,250,574
3,573,348
Short-term borrowings and other
obligations
405,802
112,439
Operating lease liabilities
25,433
26,639
Interest payable and other liabilities
23,296
22,946
Total liabilities
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 - 16,107,210 and
16,029,138 at March 31, 2023 and December
31, 2022, respectively
215,965
215,057
Retained earnings
276,209
270,781
Accumulated other comprehensive loss, net
of taxes
(62,000
)
(73,746
)
Total stockholders' equity
430,174
412,092
Total liabilities and stockholders'
equity
$
4,135,279
$
4,147,464
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
Three months ended
(in thousands, except per share amounts;
unaudited)
March 31, 2023
December 31, 2022
March 31, 2022
Interest income
Interest and fees on loans
$
24,258
$
23,500
$
23,677
Interest on investment securities
10,033
10,126
6,693
Interest on federal funds sold and due
from banks
56
575
106
Total interest income
34,347
34,201
30,476
Interest expense
Interest on interest-bearing transaction
accounts
254
191
56
Interest on savings accounts
170
32
29
Interest on money market accounts
1,085
405
478
Interest on time accounts
223
114
14
Interest on borrowings and other
obligations
2,716
89
1
Total interest expense
4,448
831
578
Net interest income
29,899
33,370
29,898
Provision for (reversal of) credit losses
on loans
350
—
(485
)
Reversal of credit losses on unfunded loan
commitments
(174
)
—
(318
)
Net interest income after provision for
(reversal of) credit losses
29,723
33,370
30,701
Non-interest income
Earnings on bank-owned life insurance,
net
705
296
413
Service charges on deposit accounts
533
519
488
Wealth Management and Trust Services
511
490
600
Debit card interchange fees, net
447
513
505
Dividends on Federal Home Loan Bank
stock
302
297
259
Merchant interchange fees, net
133
119
140
Other income
304
353
462
Total non-interest income
2,935
2,587
2,867
Non-interest expense
Salaries and related benefits
10,930
9,600
11,548
Occupancy and equipment
2,414
2,084
1,907
Professional services
1,123
985
913
Data processing
1,045
1,080
1,277
Depreciation and amortization
882
581
452
Information technology
370
678
478
Amortization of core deposit
intangible
345
365
380
Directors' expense
321
269
311
Federal Deposit Insurance Corporation
insurance
289
293
290
Charitable contributions
49
104
45
Other real estate owned
4
4
2
Other expense
2,008
2,267
1,772
Total non-interest expense
19,780
18,310
19,375
Income before provision for income
taxes
12,878
17,647
14,193
Provision for income taxes
3,438
4,766
3,728
Net income
$
9,440
$
12,881
$
10,465
Net income per common share:
Basic
$
0.59
$
0.81
$
0.66
Diluted
$
0.59
$
0.81
$
0.66
Weighted average shares:
Basic
15,970
15,948
15,876
Diluted
15,999
16,001
15,946
Comprehensive income (loss):
Net income
$
9,440
$
12,881
$
10,465
Other comprehensive income (loss):
Change in net unrealized gains or losses
on available-for-sale securities
16,213
8,474
(38,228
)
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
463
454
144
Other comprehensive income (loss), before
tax
16,676
8,928
(52,931
)
Deferred tax expense (benefit)
4,930
2,639
(15,648
)
Other comprehensive income (loss), net of
tax
11,746
6,289
(37,283
)
Total comprehensive income
(loss)
$
21,186
$
19,170
$
(26,818
)
BANK OF MARIN BANCORP
AVERAGE STATEMENTS OF
CONDITION AND ANALYSIS OF NET INTEREST INCOME
Three months ended
Three months ended
Three months ended
March 31, 2023
December 31, 2022
March 31, 2022
Interest
Interest
Interest
Average
Income/
Yield/
Average
Income/
Yield/
Average
Income/
Yield/
(in thousands)
Balance
Expense
Rate
Balance
Expense
Rate
Balance
Expense
Rate
Assets
Interest-earning deposits with banks 1
$
4,863
$
56
4.58
%
$
61,878
$
575
3.64
%
$
231,555
$
106
0.18
%
Investment securities 2, 3
1,851,743
10,194
2.20
%
1,873,028
10,319
2.20
%
1,626,537
6,871
1.69
%
Loans 1, 3, 4
2,121,718
24,415
4.60
%
2,113,201
23,670
4.38
%
2,227,495
23,881
4.29
%
Total interest-earning assets 1
3,978,324
34,665
3.49
%
4,048,107
34,564
3.34
%
4,085,587
30,858
3.02
%
Cash and non-interest-bearing due from
banks
39,826
44,480
69,019
Bank premises and equipment, net
8,396
7,933
7,430
Interest receivable and other assets,
net
137,114
125,483
183,222
Total assets
$
4,163,660
$
4,226,003
$
4,345,258
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts
$
272,353
$
254
0.38
%
$
290,064
$
191
0.26
%
$
295,183
$
56
0.08
%
Savings accounts
329,299
170
0.21
%
338,760
32
0.04
%
343,327
29
0.03
%
Money market accounts
952,479
1,085
0.46
%
1,036,932
405
0.15
%
1,122,215
478
0.17
%
Time accounts including CDARS
126,030
223
0.72
%
127,906
114
0.35
%
147,707
14
0.04
%
Short-term borrowings and other
obligations 1
222,571
2,716
4.88
%
8,014
89
4.34
%
399
1
0.62
%
Total interest-bearing liabilities
1,902,732
4,448
0.95
%
1,801,676
831
0.18
%
1,908,831
578
0.12
%
Demand accounts
1,792,998
1,975,390
1,942,804
Interest payable and other liabilities
48,233
48,592
51,997
Stockholders' equity
419,697
400,345
441,626
Total liabilities & stockholders'
equity
$
4,163,660
$
4,226,003
$
4,345,258
Tax-equivalent net interest income/margin
1
$
30,217
3.04
%
$
33,733
3.26
%
$
30,280
2.96
%
Reported net interest income/margin 1
$
29,899
3.01
%
$
33,370
3.23
%
$
29,898
2.93
%
Tax-equivalent net interest rate
spread
2.54
%
3.16
%
2.90
%
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/20230424005322/en/
Yahaira Garcia-Perea Marketing & Corporate Communications
Manager 916-823-7214 | YahairaGarcia-Perea@bankofmarin.com
Grafico Azioni Bank of Marin Bancorp (NASDAQ:BMRC)
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Grafico Azioni Bank of Marin Bancorp (NASDAQ:BMRC)
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Da Giu 2023 a Giu 2024