Bank of Marin Bancorp, "Bancorp" (NASDAQ: BMRC), parent company
of Bank of Marin, "Bank," announced record earnings of $9.7 million
in the fourth quarter of 2018, compared to $8.7 million in the
third quarter of 2018 and $1.1 million in the fourth quarter of
2017. Diluted earnings per share were $0.69 in the fourth quarter
of 2018, compared to $0.62 in the prior quarter and $0.08 in the
same quarter a year ago. Annual earnings were $32.6 million in 2018
compared to $16.0 million a year ago. Diluted earnings per share
were $2.33 for the year ended December 31, 2018, compared to
$1.27 per share for the year ended December 31, 2017. 2017 periods
were affected by a $3.0 million deferred tax asset write-down
associated with the Tax Cuts and Jobs Act of 2017. Share and per
share data has been adjusted throughout this document to reflect
the two-for-one stock split effective November 27, 2018.
“Balance was the key to our tremendous success in 2018,” said
Russell A. Colombo, President and Chief Executive Officer. “Our
record-breaking performance is a testament to our consistent
execution of disciplined fundamentals across all areas of the Bank.
With a low cost and stable deposit base, solid opportunities for
loan growth, and our unwavering commitment to relationship banking,
we are well-positioned for continued success in 2019."
Bancorp also provided the following highlights for the fourth
quarter and year ended December 31, 2018:
- Pre-tax net income in the fourth
quarter of 2018 was up $1.2 million from the prior quarter and $6.5
million from the fourth quarter of 2017. Higher average balances
and yields on both loans and investment securities favorably
impacted earnings in the current quarter. As discussed below, a
$956 thousand gain on the sale of Visa Inc. Class B restricted
common stock was mostly offset by a $916 thousand accelerated
purchase discount on the early redemption of a subordinated
debenture assumed in the 2013 NorCal Community Bancorp
acquisition.
- The Bank achieved loan growth of $84.9
million in 2018, or 5.1% to $1,763.9 million at December 31,
2018, from $1,679.0 million at December 31, 2017. Loans
increased $35.0 million in the fourth quarter from $1,728.9 million
at September 30, 2018.
- In 2018, we expanded our footprint in
the East Bay and strengthened our team in Sonoma County. Wim-Kees
van Hout was hired as Regional Manager to open a new commercial
banking office in Walnut Creek, and David Casassa was named
Commercial Banking Regional Manager for our Santa Rosa market.
- Strong credit quality remains a
cornerstone of the Bank’s consistent performance. Non-accrual loans
represent 0.04% of the Bank's loan portfolio as of
December 31, 2018. There was no provision for loan losses
recorded in 2018 due to continuing high credit quality.
- Deposits grew $26.1 million, to
$2,174.8 million at December 31, 2018, compared to $2,148.7
million at December 31, 2017. Non-interest bearing deposits
grew by $51.9 million in 2018 and made up 49% of total deposits at
year end. In 2018, cost of deposits remained low at 0.10% despite
the higher interest rate environment, compared to 0.07% in
2017.
- The efficiency ratio decreased to 51.3%
in the fourth quarter from 54.2% in the third quarter of 2018, and
68.3% in the fourth quarter last year. The efficiency ratio was
57.3% for the full year, down from 64.7% in 2017.
- For the quarter ended December 31,
2018, return on assets ("ROA") was 1.52% and return on equity
("ROE") was 12.37%, up from 1.38% and 11.20%, respectively, in the
third quarter.
- All capital ratios are well above
regulatory requirements for a well-capitalized institution. The
total risk-based capital ratio for Bancorp was 14.9% at both
December 31, 2018 and December 31, 2017. Tangible common
equity to tangible assets increased to 11.3% at December 31,
2018, from 10.7% at December 31, 2017 (refer to footnote 3 on
page 6 for definition of this non-GAAP financial measure).
- The Board of Directors declared a cash
dividend of $0.19 per share on January 25, 2019, a $0.015 increase
from the prior quarter. This is the 55th consecutive quarterly
dividend paid by Bank of Marin Bancorp. Since August 2005,
Bancorp's average annual dividend growth rate has been 10.2%. The
cash dividend is payable on February 15, 2019 to shareholders of
record at the close of business on February 8, 2019.
- On April 23, 2018, Bancorp announced
that its Board of Directors approved a Share Repurchase Program
under which Bancorp may repurchase up to $25.0 million of its
outstanding common stock through May 1, 2019. During 2018,
Bancorp repurchased 171,217 shares for a total amount of $7.0
million.
Loans and Credit Quality
Loans grew $35.0 million in the fourth quarter of 2018 and
totaled $1,763.9 million at December 31, 2018. For the three
months and year ended December 31, 2018, new loan originations
of $73.6 million and $239.4 million, respectively, exceeded 2017
loan originations of $51.5 million and $173.1 million for the same
periods. New loan originations were partially offset by payoffs of
$36.5 million in the fourth quarter and $157.3 million for the full
year ended December 31, 2018.
Non-accrual loans totaled $697 thousand, or 0.04%, of the Bank's
loan portfolio at December 31, 2018, an increase from $386
thousand, or 0.02%, at September 30, 2018 and $406 thousand,
or 0.02%, a year ago. Loans classified substandard totaled $12.6
million at December 31, 2018, compared to $12.4 million at
September 30, 2018 and $27.9 million at December 31, 2017. There
were no loans classified doubtful at December 31, 2018 or December
31, 2017. Accruing loans past due 30 to 89 days totaled $1.1
million at December 31, 2018, compared to $301 thousand at
September 30, 2018 and $1.9 million a year ago.
There was no provision for loan losses recorded in the fourth
quarter of 2018, compared to a $500 thousand provision for loan
losses in the fourth quarter a year ago. Net recoveries for both
the fourth quarter of 2018 and the prior quarter totaled $4
thousand compared to $21 thousand in the fourth quarter a year ago.
Net recoveries totaled $54 thousand for the year ended
December 31, 2018, compared to net charge-offs of $175
thousand in 2017. The ratio of loan loss reserve to loans,
including acquired loans, was 0.9% at December 31, 2018, September
30, 2018 and December 31, 2017.
Investments
The investment portfolio totaled $619.7 million at
December 31, 2018, an increase of $49.9 million from
September 30, 2018 and $136.2 million from December 31,
2017. Purchases of securities totaling $61.3 million and $237.9
million were made during the fourth quarter and year ended December
31, 2018, respectively. These purchases consisted primarily of
securities issued or guaranteed by the U.S. government to take
advantage of the higher interest rate environment. Purchases were
partially offset by principal paydowns, maturities, calls, and
$17.1 million in investments sold in 2018.
Deposits
Deposits totaled $2,174.8 million at December 31, 2018,
compared to $2,212.8 million at September 30, 2018 and
$2,148.7 million at December 31, 2017. While there was a $38.0
million decrease in deposits from the prior quarter primarily due
to the normal cash fluctuations of our large business clients,
total average deposits increased $34.2 million in the fourth
quarter. The average cost of deposits increased four basis points
in the fourth quarter to 0.14%. The average cost of deposits for
the full year of 2018 was 0.10%, up three basis points from
2017.
Loan and investment growth in the fourth quarter was largely
funded by cash and one overnight FHLB borrowing of $7.0 million on
the last day of the year.
Earnings
“Our record results for 2018 were powered by a well-executed
strategy for growth combined with staying true to our rigorous
lending standards,” said Tani Girton, EVP and Chief Financial
Officer. “With a 1.31% ROA, tax equivalent net interest margin of
3.9%, a 10.73% ROE and efficiency ratio of 57.3%, we are excited to
enter 2019 with great momentum.”
Net interest income totaled $23.3 million in the fourth quarter
of 2018 compared to $23.5 million in the prior quarter and $20.1
million in the same quarter a year ago. The tax-equivalent net
interest margin was 3.85%, 3.97% and 3.80% for those respective
periods. The $200 thousand net interest income decrease from the
prior quarter relates to $916 thousand in accelerated discount
accretion from the early redemption of a high-rate subordinated
debenture assumed in the NorCal Community Bancorp acquisition and
increases in certain deposit rates, partially offset by higher
yields and average balances on loans and investments and
accelerated accretion from the payoff of acquired loans. While the
accelerated accretion from the early redemption of the subordinated
debenture reduced net interest margin by 15 basis points for the
current quarter, the Bank's interest expense will be lower going
forward as a result of this transaction.
The $3.2 million net interest income increase from the same
quarter last year was primarily due to the acquisition of Bank of
Napa earning assets, organic loan growth, investment security
growth, and higher yields across all earning asset categories. The
increase was partially offset by the effect of the subordinated
debenture redemption and an increase in certain deposit rates.
Net interest income totaled $91.5 million and $74.9 million in
2018 and 2017, respectively. The increase of $16.6 million in 2018
was primarily due to a $337.7 million increase in average earning
assets. Additionally, higher yields on loans, investment securities
and interest-bearing cash positively impacted interest income. The
tax-equivalent net interest margin increased to 3.90% in 2018
compared to 3.80% in 2017 for the same reasons, despite the 0.04%
negative impact from the early redemption of the subordinated
debenture.
Loans acquired through the acquisition of other banks are
classified as purchased credit impaired ("PCI") or non-PCI loans
and are recorded at fair value at acquisition date. For acquired
loans not considered credit impaired, the level of accretion varies
due to maturities and early payoffs. Accretion on PCI loans
fluctuates based on changes in cash flows expected to be collected.
Gains on payoffs of PCI loans are recorded as interest income when
the payoff amounts exceed the recorded investment. PCI loans
totaled $2.1 million at December 31, 2018, September 30,
2018, and December 31, 2017.
Accretion and gains on payoffs of purchased loans recorded to
interest income were as follows:
Three months ended December 31, 2018 September 30,
2018 December 31, 2017 (dollars in thousands; unaudited)
DollarAmount
Basis pointimpact to netinterest
margin
DollarAmount
Basis pointimpact to netinterest
margin
DollarAmount
Basis pointimpact to netinterest
margin
Accretion on PCI loans 1 $ 62 1 bps $ 63 1 bps $ 85
2 bps Accretion on non-PCI loans 2 $ 214 3 bps $ 41 1 bps $
110 2 bps Gains on pay-offs of PCI loans $ — 0 bps $
6 0 bps $ 100 2 bps Years ended
December 31, 2018 December 31, 2017 (dollars in thousands;
unaudited)
DollarAmount
Basis pointimpact to netinterest
margin
DollarAmount
Basis pointimpact to netinterest
margin
Accretion on PCI loans 1 $ 320 1 bps $ 331 2 bps
Accretion on non-PCI loans 2 $ 487 2 bps $ 571 3 bps Gains on
pay-offs of PCI loans $ 135 1 bps $ 184 1 bps 1 Accretable yield on
PCI loans totaled $934 thousand, $996 thousand and $1.3 million at
December 31, 2018, September 30, 2018 and December 31, 2017,
respectively. 2 Unaccreted purchase discounts on non-PCI loans
totaled $708 thousand, $922 thousand and $1.2 million at December
31, 2018, September 30, 2018 and December 31, 2017, respectively.
Non-interest income in the fourth quarter of 2018 totaled $3.4
million, compared to $2.2 million in the prior quarter and $2.0
million in the same quarter a year ago. The increase compared to
the prior quarter and the same quarter a year ago primarily relates
to a $956 thousand pre-tax gain on sale of 6,500 shares of Visa
Inc. Class B restricted common stock to a member bank of Visa
U.S.A, a $180 thousand Federal Home Loan Bank special dividend and
an increase in deposit network income. The Bank sold less than half
of its Visa Inc. position to realize recent appreciation in market
prices and hedge against market volatility. Additionally, there was
a net loss of $195 thousand on the sale of investment securities in
the fourth quarter of 2017. Non-interest income of $10.1 million in
2018 increased from $8.3 million in 2017 primarily due to the same
reasons mentioned above.
Non-interest expense totaled $13.7 million in the fourth quarter
of 2018, compared to $14.0 million in the prior quarter and $15.1
million in the same quarter a year ago. The decrease in the fourth
quarter of 2018 compared to the same period a year ago was mainly
due to Bank of Napa acquisition-related expenses in 2017.
Non-interest expense of $58.3 million in 2018 increased from
$53.8 million in 2017, primarily resulting from an increase of
approximately $3.4 million in salaries and benefits related to the
addition of full-time equivalent personnel (including Bank of Napa
employees), annual merit increases, higher employee insurance and
stock based compensation awards reaching retirement eligiblity.
Additionally, $1.0 million in consulting expenses related to core
processing contract negotiations, higher core deposit intangible
amortization and acquisition-related rent contributed to the
year-over-year increase.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was
signed into law. The law reduced the federal statutory income tax
rate to 21% for tax years beginning on or after January 1, 2018.
The effective tax rate decreased from 44.6% in 2017 to 24.9% in
2018, 10.5 percentage points of which was attributable to the
write-down of the net deferred tax assets in 2017.
Earnings Call and Webcast Information
Bank of Marin Bancorp will webcast its fourth quarter and year
end 2018 earnings call on Monday, January 28, 2019 at 8:30 a.m.
PT/11:30 a.m. ET. Investors will have the opportunity to listen to
the conference call online through Bank of Marin’s website at
https://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.
About Bank of Marin Bancorp
Founded in 1989 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 the San Francisco
Bay Area, with assets of $2.5 billion and 23 retail offices
throughout San Francisco, Marin, Napa, Sonoma and Alameda counties,
Bank of Marin provides business and personal banking, commercial
lending, 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, economic
uncertainty in the United States and abroad, changes in interest
rates, deposit flows, real estate values, costs or effects of
acquisitions, competition, changes in accounting principles,
policies or guidelines, legislation or regulation (including the
Tax Cuts & Jobs Act of 2017), and other economic, competitive,
governmental, regulatory and technological factors (including
external fraud and cyber-security threats) affecting Bancorp's
operations, pricing, products and services. 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
December 31, 2018 (dollars in thousands, except per
share data; unaudited)
December 31, 2018
September 30, 2018 December 31, 2017
Quarter-to-Date
Net income $ 9,662 $ 8,680 $ 1,110 Diluted earnings per
common share 4 $ 0.69 $ 0.62 $ 0.08 Return on average assets 1.52 %
1.38 % 0.19 % Return on average equity 12.37 % 11.20 % 1.63 %
Efficiency ratio 51.34 % 54.20 % 68.25 % Tax-equivalent net
interest margin 1 3.85 % 3.97 % 3.80 % Net (recoveries) charge-offs
$ (4 ) $ (4 ) $ (21 ) Net (recoveries) charge-offs to average loans
— % —
%
—
%
Year-to-Date
Net income $ 32,622 $ 15,976 Diluted earnings per common share 4 $
2.33 $ 1.27 Return on average assets 1.31 % 0.75 % Return on
average equity 10.73 % 6.49 % Efficiency ratio 57.30 % 64.70 %
Tax-equivalent net interest margin 1 3.90 % 3.80 % Net (recoveries)
charge-offs $ (54 ) $ 175 Net (recoveries) charge-offs to average
loans —
%
0.01
%
At Period
End
Total assets $ 2,520,892 $ 2,545,715 $ 2,468,154 Loans: Commercial
and industrial $ 230,739 $ 238,771 $ 235,835 Real estate:
Commercial owner-occupied $ 313,277 $ 316,467 $ 300,963 Commercial
investor-owned $ 873,410 $ 841,493 $ 822,984 Construction $ 76,423
$ 68,739 $ 63,828 Home Equity $ 124,696 $ 121,243 $ 132,467 Other
residential $ 117,847 $ 113,383 $ 95,526 Installment and other
consumer loans $ 27,472 $ 28,775 $
27,410 Total loans $ 1,763,864 $ 1,728,871 $ 1,679,013
Non-performing loans2: Commercial and industrial $ 319 $ — $
— Home equity $ 313 $ 318 $ 406 Installment and other consumer
loans $ 65 $ 68 $ — Total
non-accrual loans $ 697 $ 386 $ 406 Classified loans (graded
substandard and doubtful) $ 12,608 $ 12,401 $ 27,906 Total accruing
loans 30-89 days past due $ 1,121 $ 301 $ 1,925 Allowance for loan
losses to total loans 0.90 % 0.91 % 0.94 %
Allowance for loan losses to
non-performing loans
22.71
x
41.00
x
38.88
x
Non-accrual loans to total loans 0.04 % 0.02 % 0.02 % Total
deposits $ 2,174,840 $ 2,212,846 $ 2,148,670 Loan-to-deposit ratio
81.1 % 78.1 % 78.1 % Stockholders' equity $ 316,407 $ 308,603 $
297,025 Book value per share 4 $ 22.85 $ 22.10 $ 21.46 Tangible
common equity to tangible assets 3 11.3 % 10.9 % 10.7 % Total
risk-based capital ratio - Bank 14.0 % 13.7 % 14.7 % Total
risk-based capital ratio - Bancorp 14.9 % 15.3 % 14.9 % Full-time
equivalent employees 290 287 291
1 Net interest income is annualized by dividing actual number of
days in the period times 360 days. 2 Excludes accruing
troubled-debt restructured loans of $14.3 million, $15.1 million
and $16.5 million at December 31, 2018, September 30, 2018 and
December 31, 2017, respectively. Excludes purchased credit-impaired
(PCI) loans with carrying values of $2.1 million that were
accreting interest at December 31, 2018, September 30, 2018 and
December 31, 2017. These amounts are excluded as PCI loan
accretable yield. Interest recognition is independent from the
underlying contractual loan delinquency status. 3 Tangible
common equity to tangible assets is considered to be a meaningful
non-GAAP financial measure of capital adequacy and is useful for
investors to assess Bancorp's ability to absorb potential losses.
Tangible common equity includes common stock, retained earnings and
unrealized gain on available for sale securities, net of tax, less
goodwill and intangible assets of $35.7 million, $35.9 million and
$36.6 million at December 31, 2018, September 30, 2018 and December
31, 2017, respectively. Tangible assets excludes goodwill and
intangible assets. 4 Per share data has been adjusted to
reflect the two-for-one stock split effective November 27, 2018.
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF
CONDITION
at December 31, 2018, September 30, 2018 and December 31,
2017 (in thousands, except share data; unaudited)
December 31,2018
September 30,2018
December 31,2017
Assets Cash and due from banks $ 34,221
$ 142,718 $ 203,545 Investment securities Held-to-maturity, at
amortized cost 157,206 164,222 151,032 Available-for-sale (at fair
value; amortized cost of $465,910, $416,732 and $334,285 at
December 31, 2018, September 30, 2018 and December 31, 2017,
respectively) 462,464 405,571
332,467 Total investment securities 619,670 569,793 483,499
Loans, net of allowance for loan losses of $15,821, $15,817 and
$15,767 at December 31, 2018, September 30, 2018 and December 31,
2017, respectively 1,748,043 1,713,054 1,663,246 Bank premises and
equipment, net 7,376 7,602 8,612 Goodwill 30,140 30,140 30,140 Core
deposit intangible 5,571 5,802 6,492 Interest receivable and other
assets 75,871 76,606 72,620
Total assets $ 2,520,892 $
2,545,715 $ 2,468,154
Liabilities
and Stockholders' Equity Liabilities Deposits
Non-interest bearing $ 1,066,051 $ 1,109,909 $ 1,014,103 Interest
bearing Transaction accounts 133,403 138,838 169,195 Savings
accounts 178,429 178,171 178,473 Money market accounts 679,775
659,788 626,783 Time accounts 117,182 126,140
160,116 Total deposits 2,174,840 2,212,846
2,148,670 Federal Home Loan Bank borrowing 7,000 — — Subordinated
debentures 2,640 5,831 5,739 Interest payable and other liabilities
20,005 18,435 16,720
Total liabilities 2,204,485 2,237,112
2,171,129
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-13,844,353 , 13,964,358 and 13,843,084 at December
31, 2018, September 30,2018 and December 31, 2017, respectively
140,565 145,498 143,967 Retained earnings 179,944 172,723 155,544
Accumulated other comprehensive loss, net (4,102 )
(9,618 ) (2,486 ) Total stockholders' equity 316,407
308,603 297,025
Total
liabilities and stockholders' equity $ 2,520,892
$ 2,545,715 $ 2,468,154
BANK
OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
Three months ended Years ended (in thousands, except
per share amounts; unaudited)
December 31,2018
September 30,2018
December 31,2017
December 31,2018
December 31,2017
Interest income Interest and fees on
loans $ 20,732 $ 20,284 $ 17,789 $ 79,527 $ 66,799 Interest on
investment securities 3,912 3,524 2,489 14,092 8,802 Interest on
federal funds sold and due from banks 373 400
372 1,461 995 Total interest
income 25,017 24,208 20,650 95,080 76,596
Interest expense
Interest on interest-bearing transaction accounts 68 58 34 226 108
Interest on savings accounts 18 18 18 72 66 Interest on money
market accounts 566 337 195 1,355 555 Interest on time accounts 116
130 153 542 576 Interest on FHLB and overnight borrowings — 1 — 2 —
Interest on subordinated debentures 977 125
111 1,339 439 Total
interest expense 1,745 669 511
3,536 1,744 Net interest income 23,272 23,539
20,139 91,544 74,852 Provision for loan losses — —
500 — 500 Net interest
income after provision for loan losses 23,272 23,539
19,639 91,544 74,352
Non-interest income Service charges on deposit accounts 484
475 447 1,891 1,784 Wealth Management and Trust Services 426 490
544 1,919 2,090 Debit card interchange fees, net 403 402 385 1,561
1,531 Merchant interchange fees, net 81 99 102 378 398 Earnings on
bank-owned life Insurance 227 227 217 913 845 Dividends on FHLB
stock 377 194 181 959 766 Gains (losses) on investment securities,
net 956 (90 ) (195 ) 876 (185 ) Other income 469 439
310 1,642 1,039 Total
non-interest income 3,423 2,236 1,991
10,139 8,268
Non-interest
expense Salaries and related benefits 7,933 8,069 7,852 33,335
29,958 Occupancy and equipment 1,514 1,444 1,409 5,976 5,472
Depreciation and amortization 518 532 508 2,143 1,941 Federal
Deposit Insurance Corporation insurance 188 186 176 756 666 Data
processing 1,004 950 2,058 4,358 4,906 Professional services 481
727 1,013 3,317 2,858 Directors' expense 170 173 163 700 720
Information technology 228 262 206 1,023 769 Provision for losses
on off-balance sheet commitments — — — — 57 Other expense 1,669
1,628 1,719 6,658
6,435 Total non-interest expense 13,705 13,971
15,104 58,266 53,782
Income before provision for income taxes 12,990 11,804 6,526 43,417
28,838 Provision for income taxes 3,328 3,124
5,416 10,795 12,862
Net
income $ 9,662 $
8,680 $ 1,110 $
32,622 $ 15,976 Net
income per common share:1 Basic $ 0.70 $ 0.62 $ 0.09 $ 2.35 $ 1.29
Diluted $ 0.69 $ 0.62 $ 0.08 $ 2.33 $ 1.27 Weighted average
shares:1 Basic 13,841 13,900 12,911 13,864 12,392 Diluted 14,033
14,110 13,100 14,029
12,545
Comprehensive income: Net income $
9,662 $ 8,680 $ 1,110 $ 32,622 $ 15,976 Other comprehensive (loss)
income: Change in net unrealized gain or loss on available-for-sale
securities 7,714 (2,120 ) (2,637 ) (1,707 ) 3,671 Reclassification
adjustment for losses (gains) on available-for-sale securities in
net income — 90 195 79 185 Net unrealized loss on securities
transferred from available-for-sale to held-to-maturity — — — (278
) (3,036 ) Amortization of net unrealized losses on securities
transferred from available-for-sale to held-to-maturity 120
128 126 516 426
Subtotal 7,834 (1,902 ) (2,316 ) (1,390 ) 1,246 Deferred tax
(benefit) expense 2,318 (562 ) (1,060 ) (412 )
439 Other comprehensive income (loss), net of tax
5,516 (1,340 ) (1,256 ) (978 ) 807
Comprehensive income (loss) $ 15,178 $
7,340 $ (146 ) $ 31,644 $ 16,783
1 Share and per share data has been adjusted to reflect the
two-for-one stock split effective November 27, 2018.
BANK
OF MARIN BANCORP AVERAGE STATEMENTS OF CONDITION AND
ANALYSIS OF NET INTEREST INCOME Three months ended Three
months ended Three months ended December 31, 2018 September 30,
2018 December 31, 2017 Interest Interest Interest Average Income/
Yield/ Average Income/ Yield/ Average Income/ Yield/ (dollars in
thousands; unaudited) Balance Expense Rate Balance Expense Rate
Balance Expense Rate Assets Interest-bearing due from banks 1 $
65,961 $ 373 2.21 % $ 79,674 $ 400 1.96 % $ 108,255 $ 372 1.34 %
Investment securities 2, 3 600,914 4,000 2.66 % 558,741 3,624 2.59
% 455,706 2,722 2.39 % Loans 1, 3, 4 1,726,045 20,933
4.75 % 1,715,295 20,504 4.68 % 1,578,959
18,245 4.52 % Total interest-earning assets 1
2,392,920 25,306 4.14 % 2,353,710 24,528 4.08 % 2,142,920 21,339
3.89 % Cash and non-interest-bearing due from banks 38,943 41,316
40,548 Bank premises and equipment, net 7,529 7,866 8,384
Interest receivable and other assets, net 84,651
86,039 74,299
Total assets $ 2,524,043
$ 2,488,931 $
2,266,151 Liabilities and Stockholders'
Equity Interest-bearing transaction accounts $ 130,546 $ 68 0.21 %
$ 134,293 $ 58 0.17 % $ 129,538 $ 34 0.10 % Savings accounts
177,018 18 0.04 % 179,429 18 0.04 % 173,057 18 0.04 % Money market
accounts 643,459 566 0.35 % 609,821 337 0.22 % 551,591 195 0.14 %
Time accounts, including CDARS 121,838 116 0.38 % 132,588 130 0.39
% 150,552 153 0.40 % FHLB and overnight borrowings 1 76 — 2.52 %
112 1 2.06 % 6 — 1.75 % Subordinate debentures 1 2,770
977 138.09 % 5,815 125 8.43 % 5,720
111 7.63 % Total interest-bearing liabilities
1,075,707 1,745 0.64 % 1,062,058 669 0.25 % 1,010,464 511 0.20 %
Demand accounts 1,118,785 1,101,288 971,381 Interest payable and
other liabilities 19,662 18,022 14,558 Stockholders' equity
309,889 307,563 269,848
Total liabilities & stockholders'
equity $ 2,524,043 $
2,488,931 $ 2,266,251
Tax-equivalent net interest income/margin 1
$ 23,561 3.85 % $ 23,859 3.97 %
$ 20,828 3.80 % Reported net interest income/margin 1
$ 23,272 3.81 % $ 23,539 3.91 % $
20,139 3.68 % Tax-equivalent net interest rate spread
3.49 % 3.83 % 3.69 % Year
ended Year ended December 31, 2018 December 31, 2017 Interest
Interest Average Income/ Yield/ Average Income/ Yield/ (dollars in
thousands; unaudited) Balance Expense Rate Balance Expense Rate
Assets Interest-bearing due from banks 1 $ 78,185 $ 1,461 1.84 % $
80,351 $ 995 1.22 % Investment securities 2, 3 566,883 14,512 2.56
% 419,873 9,732 2.32 % Loans 1, 3, 4 1,704,390 80,406
4.65 % 1,511,503 68,562 4.47 % Total
interest-earning assets 1 2,349,458 96,379 4.05 % 2,011,727 79,289
3.89 % Cash and non-interest-bearing due from banks 41,595 42,511
Bank premises and equipment, net 8,021 8,411 Interest
receivable and other assets, net 86,709 63,301
Total assets $ 2,485,783
$ 2,125,950
Liabilities and Stockholders' Equity Interest-bearing transaction
accounts $ 143,706 $ 226 0.16 % $ 105,544 $ 108 0.10 % Savings
accounts 178,907 72 0.04 % 167,190 66 0.04 % Money market accounts
612,372 1,355 0.22 % 542,592 555 0.10 % Time accounts, including
CDARS 137,339 542 0.39 % 146,069 576 0.39 % FHLB and overnight
borrowings 1 105 2 2.03 % 1 — 1.75 % Subordinated debentures
1 5,025 1,339 26.29 % 5,664 439 7.65 %
Total interest-bearing liabilities 1,077,454 3,536 0.33 % 967,060
1,744 0.18 % Demand accounts 1,085,870 899,289 Interest payable and
other liabilities 18,514 13,506 Stockholders' equity 303,945
246,095
Total
liabilities & stockholders' equity $
2,485,783 $ 2,125,950
Tax-equivalent net interest income/margin 1
$ 92,843 3.90 % $ 77,545 3.80 %
Reported net interest income/margin 1 $ 91,544 3.84 %
$ 74,852 3.67 % Tax-equivalent net interest rate
spread 3.72 % 3.71 % 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 2018 and 35 percent in 2017. 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/20190128005100/en/
Beth DrummeyMarketing & Community Relations
Manager415-763-4529 | bethdrummey@bankofmarin.com
Bank of Marin Bancorp (NASDAQ:BMRC)
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