Holds Dividend Steady at 23 Cents Per
Share
Bank of Marin Bancorp, "Bancorp" (Nasdaq: BMRC), parent company
of Bank of Marin, "Bank," announced earnings of $7.4 million in the
second quarter of 2020, compared to $7.2 million in the first
quarter of 2020 and $8.2 million in the second quarter of 2019.
Diluted earnings per share were $0.55 in the second quarter of 2020
compared to $0.53 in the prior quarter and $0.60 in the same
quarter last year. Earnings for the first six months of 2020
totaled $14.6 million compared to $15.7 million in the same period
last year. Diluted earnings per share were $1.07 and $1.13 in the
first six months of 2020 and 2019, respectively.
Net income included the positive pretax impact of $1.7 million
in interest income and accreted processing fees, net of amortized
loan origination costs, related to Small Business Administration
("SBA") Paycheck Protection Program ("PPP") loans, which
contributed $0.09 to diluted earnings per share in the second
quarter and first six months of 2020. A $2.0 million provision for
loan losses negatively impacted diluted earnings per share by
approximately $0.11 in the second quarter. Year-to-date provisions
of $4.2 million reduced EPS by $0.23 in the first half of 2020.
The Bank has responded to the COVID-19 pandemic in a number of
ways, funding over $300 million in SBA PPP loans to over 1,800
small businesses, reaching nearly 28,000 employees in our markets,
while also accommodating loan payment relief requests for over 260
loans with balances exceeding $386 million, lowering interest rate
floors on commercial Prime Rate loans, waiving ATM and overdraft
fees, and cancelling early withdrawal penalties for certificates of
deposit when allowed by law.
"Though the pandemic created sudden and substantial financial
hardship for many, our sound underwriting and strong capital and
liquidity positions enabled us to efficiently help businesses
access resources like the Paycheck Protection Program," said
Russell A. Colombo, President and Chief Executive Officer. "Our
more than 30-year history of consistently strong performance is
proof of our ability to navigate through economic downturns and
emerge ready to grow along with our customers. We will continue to
work together now to ensure they bridge the gap to recovery.”
Bancorp provided the following highlights from the second
quarter of 2020:
- Loans totaled $2,110.2 million at June 30, 2020, compared to
$1,843.9 million at March 31, 2020, an increase of $266 million,
primarily due to SBA PPP loans, which totaled $298.9 million or 14%
of loan balances at June 30, 2020.
- In the first quarter of 2020, with the onset of the pandemic,
we identified industries within our loan portfolio that could be
most impacted by the pandemic, including retail, transportation and
energy, medical and dental, hospitality, health clubs and movie
theaters, private schools, and the wine industry. Not including SBA
PPP loans, exposure to these segments totaled $429.8 million at
June 30, 2020, or 20% of the loan portfolio, $365.7 million (or
85%) of which was real estate secured with an average loan-to-value
ratio ("LTV") of 38%. The greatest exposure was related to retail
businesses and retail-related commercial real estate at $198.0
million or 9% of the total portfolio, $184.8 million of which is
secured by commercial real estate with an average LTV of 39%. The
wine-industry exposure was $76.7 million, or 4% of the total
portfolio, of which $42.1 million is real estate secured, education
was $67.4 million, or 3% of the total portfolio, of which $63.0
million is secured by real estate, and hospitality was $48.1
million, of which $45.3 million is secured by real estate.
- As of June 30, 2020, we had made $102.5 million in PPP loans to
industries most impacted by the pandemic, the largest of which were
in the medical and dental sector at $33.4 million, hospitality at
$16.6 million, retail (mostly commercial real estate) at $16.3
million and education at $11.7 million.
- While our credit quality remains strong, with non-accrual loans
representing only 0.08% of total loans, we considered the impact of
the COVID-19 pandemic and recorded a $2.0 million provision for
loan losses and $260 thousand provision for losses on off-balance
sheet commitments in the second quarter of 2020 versus $2.2 million
and $102 thousand, respectively, in the prior quarter. SBA PPP
loans are fully guaranteed by the SBA and did not contribute to the
provisions.
- Total deposits increased $472.8 million in the second quarter
to $2,779.9 million, primarily due to temporary increases in our
deposits from SBA PPP borrowers. Non-interest bearing deposits
represented 52% of total deposits in the second quarter compared to
49% in the prior quarter. The cost of average deposits decreased 12
basis points to 0.09% in the second quarter, compared to 0.21% in
the first quarter of 2020.
- All capital ratios were above regulatory requirements. The
total risk-based capital ratio for Bancorp was 15.8% at June 30,
2020, compared to 15.3% at March 31, 2020. Tangible common equity
to tangible assets was 10.1% at June 30, 2020, compared to 11.7% at
March 31, 2020 (refer to footnote 3 on page 7 for a definition of
this non-GAAP financial measure). The decrease is related to the
rise in total loans associated with SBA PPP loans.
- The Board of Directors has suspended its search for a Chief
Executive Officer. Our current CEO, Russell A. Colombo, is
committed to remaining in the job as long as needed.
- As announced on June 30, 2020, Timothy D. Myers was appointed
Executive Vice President and Chief Operating Officer of Bank of
Marin. Mr. Myers will be responsible for the management of
Commercial Banking, Retail Banking, Wealth Management & Trust
Services and Marketing.
- Also in June, the Bank hired Jake Nguyen, Senior Vice President
and Commercial Banking Regional Manager for the San Mateo
Commercial Banking Office ("CBO"), which will open in the third
quarter of 2020 to serve commercial banking clients in the
Peninsula and South Bay regions.
- The Board of Directors declared a cash dividend of $0.23 per
share on July 17, 2020. This represents the 61st consecutive
quarterly dividend paid by Bank of Marin Bancorp. The dividend is
payable on August 7, 2020, to shareholders of record at the close
of business on July 31, 2020.
Loans and Credit Quality
Loans increased by $266 million in the second quarter and
totaled $2,110.2 million at June 30, 2020, primarily due to $298.9
million in SBA PPP loans. Non-PPP-related loan originations were
$41.8 million and $71.6 million for the second quarter and first
six months of 2020, compared to $42.2 million and $76.1 million for
the same periods in 2019. Loan payoffs totaled $31.7 million in the
second quarter and $83.4 million in the first six months of 2020,
compared to $43.3 million and $69.3 million in the respective 2019
periods. These loan payoffs did not include $45.7 million and $16.8
million decreases in line utilization during the three and six
months ended June 30, 2020. Loan payoffs in the second quarter,
outside of home equity line of credit and consumer loan payoffs,
consisted largely of loans refinanced by outside parties and
payoffs with borrower cash.
As of June 30, 2020, the Bank had originated $298.9 million in
SBA PPP loans to small businesses that needed funding to weather
the economic downturn. We were able to assist 178 non-profit
organizations that received $57.4 million, which helped protect
payroll for over 6,000 of their employees. Notably, 73% of the PPP
loans were for $150 thousand or less, and almost 90% were $350
thousand or less. Only 48 loans were one million dollars or
greater, representing approximately 30% of the total balance.
The Bank has provided payment relief for over 260 loans with
balances exceeding $386 million. Of the loans on payment relief,
almost 50% fell into pandemic-impacted industries, the largest
being retail-related commercial real estate at $69.7 million,
hotels and motels at $36.9 million, and education-related
commercial real estate at $25.3 million. Over 90% of the payment
relief loans are secured by real estate and have an average LTV of
45%, with the average LTVs being 43% for retail-related properties,
39% for hotels and motels, and 37% for education properties.
Non-accrual loans totaled $1,587 thousand, or 0.08% of the loan
portfolio at June 30, 2020, compared to $1,632 thousand, or 0.09%
at March 31, 2020, and $574 thousand, or 0.03% a year ago.
Classified loans totaled $13.5 million at June 30, 2020, compared
to $12.1 million at March 31, 2020 and $10.3 million at June 30,
2019. There were no loans classified doubtful at June 30, 2020,
March 31, 2020, or June 30, 2019. Accruing loans past due 30 to 89
days totaled $83 thousand at June 30, 2020, compared to $1,315
thousand at March 31, 2020 and $343 thousand a year ago.
In accordance with the accounting relief provisions of the
Coronavirus Aid, Relief and Economic Security ("CARES") Act passed
in March 2020, the Bank postponed the adoption of the current
expected credit loss ("CECL") accounting standard. Implementation
may be delayed until the end of the national emergency or December
31, 2020, whichever occurs first. The Bank will be prepared to
adopt CECL in the event that the national emergency ends prior to
year-end. Had we adopted the CECL standard as of January 1, 2020,
the increase to our allowance for loan losses would have ranged
from 5% to 15% of the amount recorded as of December 31, 2019 based
on economic forecasts at that time and not including the subsequent
COVID-19 pandemic related impact.
Under the existing incurred loss model we made certain
adjustments to qualitative factors impacted by the COVID-19
pandemic, primarily to account for the significant increase in the
unemployment rate, and recorded a $2.0 million and $2.2 million
loan loss provision in the second and first quarters of 2020,
respectively. There was no provision for loan losses recorded in
the first half of last year. Net charge-offs were $16 thousand in
the second quarter of 2020, compared to net recoveries of $7
thousand for the prior quarter and $18 thousand in the second
quarter a year ago. The ratio of allowance for loan losses to total
loans, including acquired loans and SBA-guaranteed PPP loans, was
0.99% at June 30, 2020, 1.02% at March 31, 2020, and 0.90% at June
30, 2019. Excluding $298.9 million in SBA PPP loans, the ratio of
allowance for loan losses to total loans would have been 1.15% at
June 30, 2020.
Cash, Cash Equivalents and Restricted Cash
Total cash, cash equivalents and restricted cash were $397.7
million at June 30, 2020, compared to $156.3 million at March 31,
2020. The $241.4 million increase was primarily due to temporary
increases in SBA PPP borrowers' deposit accounts. Effective March
26, 2020, the Federal Reserve reduced the reserve requirement
ratios to zero percent in response to the COVID-19 pandemic
resulting in no restricted cash requirements as of March 31, 2020
and June 30, 2020.
Investments
The investment securities portfolio decreased from $580.0
million at March 31, 2020 to $555.6 million at June 30, 2020. The
decrease was primarily attributed to paydowns, maturities and calls
of $21.3 million, and sales of $6.2 million, partially offset by
purchases of $2.0 million.
Deposits
Total deposits were $2,779.9 million at June 30, 2020, compared
to $2,307.1 million at March 31, 2020. The $472.8 million increase
during the second quarter was primarily due to temporary increases
in deposits from SBA PPP borrowers. The average cost of deposits in
the second quarter of 2020 was 0.09%, a decrease of 12 basis points
from the prior quarter, primarily attributed to lower interest
rates impacting money market accounts.
Earnings
"Even in the strongest economic times, Bank of Marin
continuously prepared for an eventual downturn. Given our
conservative posture, we entered this environment from a position
of strength,” said Tani Girton, EVP and Chief Financial Officer.
“Our foundation of disciplined risk management enables us to adapt
to challenges and continue to make necessary investments for the
future, so we are confident about the long-term prospects for our
customers and the Bank."
Net interest income totaled $24.4 million in the second quarter
of 2020, compared to $24.1 million in the prior quarter and $23.8
million a year ago. The $256 thousand increase from the prior
quarter was primarily related to the recognition of $1.2 million in
SBA PPP loan fees, $532 thousand interest on SBA PPP loans and
lower deposit interest expense, largely offset by the full quarter
impact of lower interest rates across all interest earning asset
categories. The $586 thousand increase from the comparative quarter
a year ago was reflective of the reasons mentioned above and higher
average loan balances.
Net interest income totaled $48.5 million in the first six
months of 2020, compared to $47.6 million for the same period in
2019. The $859 thousand increase is attributable to the same
drivers mentioned above.
The tax-equivalent net interest margin was 3.53% in the second
quarter, 3.88% in the prior quarter, and 4.02% in the second
quarter of 2019. The tax-equivalent net interest margin was 3.70%
in the first six months of 2020, compared to 4.03% for the same
period in 2019. The decreases in tax-equivalent net interest margin
were mostly attributed to the full quarter impact of lower interest
rates. SBA PPP loans lowered 2020 net interest margin by 3 basis
points in the second quarter, and 2 basis points in the first
half.
Non-interest income totaled $1.8 million in the second quarter
of 2020, $3.1 million in the prior quarter, and $2.3 million in the
same quarter a year ago. The decrease of $1.3 million from the
prior quarter was due to fewer gains from the sale of investment
securities, lower ATM fees and service charges on deposit accounts
related to waivers in response to the pandemic, and lower deposit
network fees. The $461 thousand decrease from the same quarter a
year ago was due to lower ATM fees and service charges on deposit
accounts and small decreases in most other non-interest income
categories.
Non-interest income increased $888 thousand to $4.9 million in
the first six months of 2020, compared to $4.0 million in 2019,
mostly attributable to higher gains on the sale of investment
securities in the first half of 2020 and $283 thousand
non-refundable costs for underwriting two new bank-owned life
insurance policies purchased in the first quarter of 2019.
Increases were partially offset by lower service charges and
interchange fees in the first six months of 2020.
Non-interest expense decreased $1.4 million to $14.1 million in
the second quarter of 2020 from $15.5 million in the prior quarter.
The decrease was primarily due to lower salaries and benefits as
the second quarter included $890 thousand in SBA PPP-related
deferred loan origination costs. Additionally, the first quarter
typically includes higher expenses such as the reset of 401K
matching and payroll taxes, prior year bonus accrual true-ups, and
stock-based compensation for participants meeting retirement
eligibility criteria not present in the second quarter. These
positive variances were partially offset by a $158 thousand
increase in the provision for losses on off-balance sheet loan
commitments.
Non-interest expense decreased $775 thousand to $14.1 million in
the second quarter of 2020 from $14.9 million in the second quarter
of 2019. The decrease was primarily due to deferral of SBA PPP loan
origination costs and lower data processing expenses due to our
digital platform conversion, partially offset by the provision for
losses on off-balance sheet loan commitments.
Non-interest expense decreased $834 thousand to $29.6 million in
the first half of 2020 from $30.4 million in the first half of
2019. The decrease was primarily associated with $890 thousand in
SBA PPP-related deferred loan origination costs, decreases in
expenses related to data processing costs due to the digital
platform conversion, and lower FDIC deposit insurance expense.
These positive variances were partially offset by the provision for
losses on off-balance sheet loan commitments and higher occupancy
and equipment costs.
Share Repurchase Program
In response to the COVID-19 pandemic, the share repurchase
program approved by the Board on January 24, 2020, was suspended on
March 20, 2020. The program will be monitored with the opportunity
to reinstitute when the Board deems appropriate. There were no
share repurchases by Bancorp in the second quarter of 2020,
compared to 92,664 shares repurchased totaling $3.2 million in the
prior quarter, and 134,620 share repurchases totaling $5.6 million
in the second quarter of 2019.
Earnings Call and Webcast Information
Bank of Marin Bancorp will present its second quarter earnings
call via webcast on Monday, July 20, 2020 at 8:30 a.m. PT/11:30
a.m. ET. Investors will have the opportunity to listen to the
webcast online through Bank of Marin’s website at
https://www.bankofmarin.com under “Investor Relations.” To listen
to the webcast live, 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 $3.2 billion, Bank of Marin has 22
branches, 5 commercial banking offices and 1 loan production office
located across 8 Bay Area 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, natural disasters (such as wildfires and
earthquakes), pandemics such as COVID-19 and the economic impact
caused directly by the disease and by government responses thereto,
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 the Coronavirus Aid, Relief and Economic Security Act of
2020, as amended), 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 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
June 30, 2020
(dollars in thousands, except per share
data; unaudited)
June 30, 2020
March 31, 2020
June 30, 2019
Quarter-to-Date
Net income
$
7,406
$
7,228
$
8,235
Diluted earnings per common share
$
0.55
$
0.53
$
0.60
Return on average assets
1.01
%
1.09
%
1.32
%
Return on average equity
8.52
%
8.54
%
10.26
%
Efficiency ratio
54.00
%
56.79
%
57.23
%
Tax-equivalent net interest margin 1
3.53
%
3.88
%
4.04
%
Cost of deposits
0.09
%
0.21
%
0.20
%
Net charge-offs (recoveries)
$
16
$
(7)
$
(18)
Year-to-Date
Net income
$
14,634
$
15,714
Diluted earnings per common share
$
1.07
$
1.13
Return on average assets
1.05
%
1.26
%
Return on average equity
8.53
%
9.90
%
Efficiency ratio
55.42
%
58.91
%
Tax-equivalent net interest margin 1
3.70
%
4.03
%
Cost of deposits
0.15
%
0.19
%
Net charge-offs (recoveries)
$
9
$
(14)
At Period End
Total assets
$
3,181,540
$
2,697,738
$
2,463,987
Loans:
Commercial and industrial 2
$
525,117
$
264,405
$
234,832
Real estate:
Commercial owner-occupied
296,163
306,371
306,327
Commercial investor-owned
946,389
930,479
878,969
Construction
66,368
63,425
63,563
Home equity
112,911
116,968
125,968
Other residential
136,859
135,929
124,120
Installment and other consumer loans
26,394
26,283
31,100
Total loans
$
2,110,201
$
1,843,860
$
1,764,879
Non-performing loans: 3
Commercial and industrial
$
—
$
—
$
354
Real estate:
Commercial investor-owned
907
$
942
—
Home equity
625
633
157
Installment and other consumer loans
55
57
63
Total non-accrual loans
$
1,587
$
1,632
$
574
Classified loans (graded substandard and
doubtful)
$
13,545
$
12,056
$
10,251
Total accruing loans 30-89 days past
due
$
83
$
1,315
$
343
Allowance for loan losses to total
loans
0.99
%
1.02
%
0.90
%
Allowance for loan losses to
non-performing loans
13.15x
11.57x
27.59x
Non-accrual loans to total loans
0.08
%
0.09
%
0.03
%
Total deposits
$
2,779,866
$
2,307,110
$
2,102,040
Loan-to-deposit ratio
75.9
%
79.9
%
84.0
%
Stockholders' equity
$
352,240
$
345,940
$
327,667
Book value per share
$
25.92
$
25.50
$
23.99
Tangible common equity to tangible assets
4
10.1
%
11.7
%
12.0
%
Total risk-based capital ratio - Bank
15.0
%
14.4
%
14.6
%
Total risk-based capital ratio -
Bancorp
15.8
%
15.3
%
15.2
%
Full-time equivalent employees
295
296
293
1 Net interest income is annualized by
dividing actual number of days in the period times 360 days.
2 Includes SBA PPP loans of $298.9 million
at June 30, 2020.
3 Excludes accruing troubled-debt
restructured loans of $10.3 million, $11.1 million and $11.7
million at June 30, 2020, March 31, 2020 and June 30, 2019,
respectively.
4 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 $34.4 million, $34.6 million and $35.3 million at June
30, 2020, March 31, 2020, and June 30, 2019, respectively. Tangible
assets exclude goodwill and intangible assets.
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF
CONDITION
At June 30, 2020, March 31,
2020 and June 30, 2019
(in thousands, except share data;
unaudited)
June 30, 2020
March 31, 2020
June 30, 2019
Assets
Cash, cash equivalents and restricted
cash
$
397,699
$
156,274
$
58,757
Investment securities
Held-to-maturity, at amortized cost
125,781
131,140
148,879
Available-for-sale (at fair value;
amortized cost $411,047, $431,519, and $368,712 at June 30, 2020,
March 31, 2020, and June 30, 2019 respectively)
429,775
448,868
378,131
Total investment securities
555,556
580,008
527,010
Loans, net of allowance for loan losses of
$20,868, $18,884 and $15,835 at June 30, 2020, March 31, 2020 and
June 30, 2019 respectively
2,089,333
1,824,976
1,749,044
Bank premises and equipment, net
5,278
5,708
6,872
Goodwill
30,140
30,140
30,140
Core deposit intangible
4,258
4,471
5,128
Operating lease right-of-use assets
23,090
22,225
12,515
Interest receivable and other assets
76,186
73,936
74,521
Total assets
$
3,181,540
$
2,697,738
$
2,463,987
Liabilities and Stockholders'
Equity
Liabilities
Deposits
Non-interest bearing
$
1,442,849
$
1,130,460
$
1,056,655
Interest bearing
Transaction accounts
146,811
137,802
121,232
Savings accounts
190,561
167,210
172,255
Money market accounts
904,163
776,271
647,592
Time accounts
95,482
95,367
104,306
Total deposits
2,779,866
2,307,110
2,102,040
Borrowings and other obligations
140
185
297
Subordinated debenture
2,743
2,725
2,674
Operating lease liabilities
24,574
23,726
14,332
Interest payable and other liabilities
21,977
18,052
16,977
Total liabilities
2,829,300
2,351,798
2,136,320
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 - 13,591,835, 13,565,969
and 13,659,143 at June 30, 2020, March 31, 2020 and June 30, 2019,
respectively
128,633
127,684
132,151
Retained earnings
211,613
207,328
190,416
Accumulated other comprehensive income,
net of taxes
11,994
10,928
5,100
Total stockholders' equity
352,240
345,940
327,667
Total liabilities and stockholders'
equity
$
3,181,540
$
2,697,738
$
2,463,987
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three months ended
Six months ended
(in thousands, except per share amounts;
unaudited)
June 30, 2020
March 31, 2020
June 30, 2019
June 30, 2020
June 30, 2019
Interest income
Interest and fees on loans
$
21,217
$
20,887
$
20,988
$
42,104
$
41,683
Interest on investment securities
3,741
4,165
3,763
7,906
7,860
Interest on federal funds sold and due
from banks
39
332
190
371
329
Total interest income
24,997
25,384
24,941
50,381
49,872
Interest expense
Interest on interest-bearing transaction
accounts
39
66
91
105
168
Interest on savings accounts
17
16
17
33
35
Interest on money market accounts
383
971
787
1,354
1,551
Interest on time accounts
142
161
175
303
294
Interest on borrowings and other
obligations
1
2
24
3
71
Interest on subordinated debenture
40
49
58
89
118
Total interest expense
622
1,265
1,152
1,887
2,237
Net interest income
24,375
24,119
23,789
48,494
47,635
Provision for loan losses
2,000
2,200
—
4,200
—
Net interest income after provision for
loan losses
22,375
21,919
23,789
44,294
47,635
Non-interest income
Service charges on deposit accounts
293
451
485
744
964
Wealth Management and Trust Services
421
504
473
925
911
Debit card interchange fees, net
308
360
414
668
794
Merchant interchange fees, net
47
73
87
120
174
Earnings on bank-owned life insurance
234
275
235
509
175
Dividends on Federal Home Loan Bank
stock
146
208
193
354
389
Gains on sale of investment securities,
net
115
800
61
915
55
Other income
249
449
326
698
583
Total non-interest income
1,813
3,120
2,274
4,933
4,045
Non-interest expense
Salaries and related benefits
7,864
9,477
8,868
17,341
18,014
Occupancy and equipment
1,661
1,663
1,578
3,324
3,109
Depreciation and amortization
526
526
572
1,052
1,128
Federal Deposit Insurance Corporation
insurance
116
2
174
118
353
Data processing
829
786
1,004
1,615
2,019
Professional services
550
544
535
1,094
1,121
Directors' expense
175
174
187
349
366
Information technology
252
250
284
502
543
Amortization of core deposit
intangible
213
213
221
426
443
Provision for losses on off-balance sheet
commitments
260
102
—
362
129
Other expense
1,695
1,732
1,493
3,427
3,219
Total non-interest expense
14,141
15,469
14,916
29,610
30,444
Income before provision for income
taxes
10,047
9,570
11,147
19,617
21,236
Provision for income taxes
2,641
2,342
2,912
4,983
5,522
Net income
$
7,406
$
7,228
$
8,235
$
14,634
$
15,714
Net income per common share:
Basic
$
0.55
$
0.53
$
0.60
$
1.08
$
1.15
Diluted
$
0.55
$
0.53
$
0.60
$
1.07
$
1.13
Weighted average shares:
Basic
13,514
13,525
13,655
13,519
13,696
Diluted
13,585
13,656
13,818
13,621
13,871
Comprehensive income:
Net income
$
7,406
$
7,228
$
8,235
$
14,634
$
15,714
Other comprehensive income
Change in net unrealized gains or losses
on available- for-sale securities included in net income
1,494
9,812
8,982
11,306
12,921
Reclassification adjustment for (gains) on
available-for- sale securities in net income
(115)
(800)
(61)
(915)
(55)
Amortization of net unrealized losses on
securities transferred from available-for-sale to
held-to-maturity
135
110
104
245
205
Other comprehensive income, before tax
1,514
9,122
9,025
10,636
13,071
Deferred tax expense
448
2,697
2,671
3,145
3,869
Other comprehensive income, net of tax
1,066
6,425
6,354
7,491
9,202
Total comprehensive income
$
8,472
$
13,653
$
14,589
$
22,125
$
24,916
BANK OF MARIN BANCORP
AVERAGE STATEMENTS OF
CONDITION AND ANALYSIS OF NET INTEREST INCOME
Three months ended
Three months ended
Three months ended
June 30, 2020
March 31, 2020
June 30, 2019
Interest
Interest
Interest
Average
Income/
Yield/
Average
Income/
Yield/
Average
Income/
Yield/
(in thousands; unaudited)
Balance
Expense
Rate
Balance
Expense
Rate
Balance
Expense
Rate
Assets
Interest-earning deposits with banks 1
$
173,161
$
39
0.09
%
$
99,362
$
332
1.32
%
$
30,928
$
190
2.43
%
Investment securities 2, 3
550,483
3,886
2.82
%
556,897
4,266
3.06
%
567,813
3,844
2.71
%
Loans 1, 3, 4
2,043,197
21,399
4.14
%
1,833,180
21,066
4.55
%
1,758,874
21,180
4.76
%
Total interest-earning assets 1
2,766,841
25,324
3.62
%
2,489,439
25,664
4.08
%
2,357,615
25,214
4.23
%
Cash and non-interest-bearing due from
banks
37,680
40,844
34,437
Bank premises and equipment, net
5,543
5,939
7,108
Interest receivable and other assets,
net
133,639
118,909
107,089
Total assets
$
2,943,703
$
2,655,131
$
2,506,249
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts
$
142,778
$
39
0.11
%
$
138,395
$
66
0.19
%
$
124,620
$
91
0.29
%
Savings accounts
182,371
17
0.04
%
163,439
16
0.04
%
174,102
17
0.04
%
Money market accounts
794,654
383
0.19
%
760,616
971
0.51
%
661,363
787
0.48
%
Time accounts including CDARS
95,076
142
0.60
%
96,157
161
0.67
%
115,272
175
0.61
%
Borrowings and other obligations 1
156
1
2.62
%
358
2
1.81
%
3,608
24
2.59
%
Subordinated debenture 1
2,733
40
5.73
%
2,715
49
7.19
%
2,664
58
8.69
%
Total interest-bearing liabilities
1,217,768
622
0.21
%
1,161,680
1,265
0.44
%
1,081,629
1,152
0.43
%
Demand accounts
1,332,986
1,119,975
1,073,909
Interest payable and other liabilities
43,255
33,045
28,621
Stockholders' equity
349,694
340,431
322,090
Total liabilities & stockholders'
equity
$
2,943,703
$
2,655,131
$
2,506,249
Tax-equivalent net interest income/margin
1
$
24,702
3.53
%
$
24,399
3.88
%
$
24,062
4.02
%
Reported net interest income/margin 1
$
24,375
3.49
%
$
24,119
3.83
%
$
23,789
3.98
%
Tax-equivalent net interest rate
spread
3.41
%
3.64
%
3.80
%
Six months ended
Six months ended
June 30, 2020
June 30, 2019
Interest
Interest
Average
Income/
Yield/
Average
Income/
Yield/
(in thousands; unaudited)
Balance
Expense
Rate
Balance
Expense
Rate
Assets
Interest-earning deposits with banks 1
$
136,261
$
371
0.54
%
$
26,832
$
329
2.44
%
Investment securities 2, 3
553,690
8,151
2.94
%
593,545
8,034
2.71
%
Loans 1, 3, 4
1,938,189
42,465
4.33
%
1,757,602
42,067
4.76
%
Total interest-earning assets 1
2,628,140
50,987
3.84
%
2,377,979
50,430
4.22
%
Cash and non-interest-bearing due from
banks
39,262
32,702
Bank premises and equipment, net
5,741
7,308
Interest receivable and other assets,
net
126,274
105,894
Total assets
$
2,799,417
$
2,523,883
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts
$
140,587
$
105
0.15
%
$
126,168
$
168
0.27
%
Savings accounts
172,905
33
0.04
%
177,211
35
0.04
%
Money market accounts
777,635
1,354
0.35
%
667,218
1,551
0.47
%
Time accounts including CDARS
95,616
303
0.64
%
114,336
294
0.52
%
Borrowings and other obligations 1
257
3
2.06
%
5,500
71
2.56
%
Subordinated debenture 1
2,724
89
6.46
%
2,655
118
8.87
%
Total interest-bearing liabilities
1,189,724
1,887
0.32
%
1,093,088
2,237
0.41
%
Demand accounts
1,226,481
1,080,392
Interest payable and other liabilities
38,150
30,383
Stockholders' equity
345,062
320,020
Total liabilities & stockholders'
equity
$
2,799,417
$
2,523,883
Tax-equivalent net interest income/margin
1
$
49,100
3.70
%
$
48,193
4.03
%
Reported net interest income/margin 1
$
48,494
3.65
%
$
47,635
3.98
%
Tax-equivalent net interest rate
spread
3.52
%
3.81
%
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 2020 and
2019.
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/20200720005129/en/
MEDIA: Beth Drummey Marketing & Corporate Communications
Manager 415-763-4529 | bethdrummey@bankofmarin.com
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