Announces $0.23 Dividend
Bank of Marin Bancorp, "Bancorp" (Nasdaq: BMRC), parent company
of Bank of Marin, "Bank," announced earnings of $8.1 million in the
fourth quarter of 2020, compared to $7.5 million in the third
quarter of 2020 and $9.1 million in the fourth quarter of 2019.
Diluted earnings per share were $0.60 in the fourth quarter of
2020, compared to $0.55 in the prior quarter and $0.66 the same
quarter a year ago. Annual earnings were $30.2 million in 2020
compared to $34.2 million in 2019. Diluted earnings per share were
$2.22 for the year ended December 31, 2020, compared to $2.48 per
share for the year ended December 31, 2019.
"We effectively served our clients and produced strong results
for our shareholders in an extraordinary and challenging year,”
said Russell A. Colombo, President and Chief Executive Officer. “We
have gained actionable insight into the future of our relationship
banking model, adapting to customers' increased adoption of
technology and leveraging remote work to recruit and retain the
best talent."
Bancorp also provided the following highlights for the fourth
quarter and year ended December 31, 2020:
- Loans increased $245.3 million in 2020, or 13%, to $2.089
billion at December 31, 2020, from $1.843 billion at December 31,
2019. SBA PPP loans outstanding at December 31, 2020 were $291.6
million. Loans decreased $19.4 million, or 1%, in the fourth
quarter from $2.108 billion at September 30, 2020, which included
$10.9 million of PPP loans forgiven in the fourth quarter of
2020.
- Credit quality remains strong, with non-accrual loans
representing 0.44% of the Bank's loan portfolio as of December 31,
2020. We adopted the current expected credit loss ("CECL") standard
in the fourth quarter of 2020, which resulted in an increase to the
allowance for credit losses for loans of $748 thousand and a $1.1
million increase to the allowance for unfunded loan commitments.
See the Loan and Credit Quality section, below, for detail on the
adoption of CECL.
- Deposits grew $167.8 million, or 7%, to $2.504 billion at
December 31, 2020, compared to $2.336 billion at December 31, 2019.
Non-interest bearing deposits grew by $225.8 million, or 20%, in
2020 and made up 54% of total deposits at year end. Cost of
deposits remained low at 0.11% for the full year of 2020, down from
0.20% in 2019. Cost of deposits was 0.07% for the fourth quarter of
2020, compared to 0.09% in the prior quarter. Additionally, the
Bank maintained $173.4 million deposits off-balance sheet with
deposit networks as part of our liquidity management.
- For the full year 2020, return on assets ("ROA") and return on
equity ("ROE") were 1.04% and 8.60%, respectively, compared to
1.34% and 10.49% in the prior year. For the quarter ended December
31, 2020, ROA was 1.09% and ROE was 8.98%, compared to 0.98% and
8.37%, respectively, in the prior quarter.
- All capital ratios were above regulatory requirements for a
well-capitalized institution. The total risk-based capital ratio
for Bancorp was 16.0% at December 31, 2020 and 15.1% at December
31, 2019. Tangible common equity to tangible assets was 11.3% at
both December 31, 2020 and December 31, 2019 (refer to footnote 5
on page 6 for definition of this non-GAAP financial measure). The
total risk-based capital ratio for the Bank was 15.8% at December
31, 2020 and 14.6% at December 31, 2019.
- The Board of Directors declared a cash dividend of $0.23 per
share on January 22, 2021. This is the 63rd consecutive quarterly
dividend paid by Bank of Marin Bancorp. The cash dividend is
payable on February 12, 2021 to shareholders of record at the close
of business on February 5, 2021.
- Our strong capital and liquidity position affords us the
opportunity to eliminate a high cost funding source. On March 15,
2021 we intend to redeem the $2.8 million subordinated debentures,
which carried a rate of 4.85% in the fourth quarter. The redemption
will consist of $4.1 million principal balance, quarterly interest
due, and $1.3 million in accelerated accretion of purchase
discount. The contractual interest rate on the subordinated
debentures is 3-month LIBOR plus 1.40%, or 1.62% as of December 31,
2020.
Pandemic-Related Response Update
As of December 31, 2020, there were 1,777 PPP loans outstanding
totaling $291.6 million, net of $5.4 million in unaccreted fees and
costs. During the fourth quarter Bank of Marin opened a secure PPP
loan forgiveness application portal and gave all PPP borrowers
access to apply. As of December 31, 2020 we received SBA loan
forgiveness payments totaling $10.9 million for 35 loans that were
forgiven. Of the total PPP loans remaining, 74% (1,309 loans)
totaling $58.7 million are less than or equal to $150 thousand and
have access to streamlined forgiveness processing. On January 19,
2021, the Bank launched the application process and began accepting
loan requests for the PPP program as revised by the Economic Aid to
Hard-Hit Small Businesses, Nonprofits, and Venues Act.
Of the 269 loans totaling $402.9 million granted payment relief
since the onset of the pandemic, 222 loans or $324.2 million have
resumed normal payments and 18 loans or $7.7 million paid off. As
of December 31, 2020, 14 borrowing relationships with 29 loans
totaling $71.0 million had requested additional payment relief. We
know each of these clients very well and anticipate that the vast
majority will work through current adverse conditions and resume
payments. The following table summarizes these loans by industry or
collateral type.
Payment Relief by Type
Industry/Collateral Type
Outstanding Loan Balance
(in thousands)
Weighted Average LTV
Education
$
17,580
26
%
Health Clubs
16,551
38
%
Office and Mixed Use
15,883
44
%
Hospitality
12,439
49
%
Retail Related CRE
6,899
52
%
Auto Dealership
393
49
%
Non-CRE Related
121
N/A
Residential Real Estate
1,130
60
%
Payment Relief Totals
$
70,996
40
%
Loans and Credit Quality
Loans declined $19.4 million in the fourth quarter of 2020 and
totaled $2.089 billion at December 31, 2020. For the quarter and
year ended December 31, 2020, new non-PPP-related loan originations
were $43.1 million and $165.5 million, respectively, compared to
2019 loan originations of $103.4 million and $259.6 million for the
same periods. New loan originations were more than offset by
payoffs of $55.4 million in the fourth quarter and $180.1 million
for the full year ended December 31, 2020. Fourth quarter and year
to date 2020 loan payoffs were concentrated in consumer and retail
loans (mostly tenant in common and HELOC) and commercial loans on
which underlying assets were sold or paid off with cash. Other
sources of payoffs were loans refinanced with other banks and SBA
PPP loans forgiven.
Non-accrual loans totaled $9.2 million, or 0.44% of the Bank's
loan portfolio at December 31, 2020, an increase from $1.4 million,
or 0.07%, at September 30, 2020 and $226 thousand, or 0.01%, a year
ago. The increase from the prior quarter was primarily due to one
well-secured commercial real estate loan where the primary tenant
is a health club that was severely affected by the prolonged
shutdown due to the pandemic. Loans classified substandard totaled
$25.8 million at December 31, 2020, $11.0 million at September 30,
2020, and $9.9 million at December 31, 2019. There were no loans
classified doubtful at December 31, 2020 or December 31, 2019. The
increase in substandard loans was primarily due to two well-secured
loans for hotel properties and one well-secured commercial real
estate loan, mentioned above, that were negatively impacted by the
pandemic. Accruing loans past due 30 to 89 days totaled $1.8
million at December 31, 2020, compared to $318 thousand at
September 30, 2020 and $1.5 million a year ago.
Net recoveries for the fourth quarter of 2020 totaled $13
thousand compared to net charge-offs of $4 thousand last quarter
and $63 thousand in the fourth quarter of 2019. Net charge-offs
totaled $1 thousand for the year ended December 31, 2020, compared
to $44 thousand in 2019. The ratio of loan loss reserve to loans
was 1.10% at December 31, 2020, 1.05% at September 30, 2020 and
0.90% at December 31, 2019.
Adoption of CECL
We adopted the CECL accounting standard on December 31, 2020,
which was previously postponed under the optional accounting relief
provisions of the Coronavirus Aid, Relief and Economic Security
("CARES") Act passed in March 2020 to the earlier of the end of the
national emergency or December 31, 2020. During the first nine
months of 2020, we applied the incurred loss method in determining
the allowance for credit losses on loans ("ACL") and recorded a
$5.5 million provision for credit losses and a $610 thousand
provision for credit losses on unfunded loan commitments. Upon
adoption of the CECL standard, we increased the ACL by $748
thousand and the allowance for credit losses on unfunded loan
commitments by $1.1 million, which represented the difference
between allowances calculated under the CECL method as of December
31, 2020 and the incurred loss method as of September 30, 2020. The
$1.1 million increase in the allowance for unfunded loan
commitments includes approximately $550 thousand related to a $36.9
million increase in available commitments during the fourth quarter
of 2020.
The following table shows the impact to our financial statement
due to adoption of CECL as of and during the quarter ended December
31, 2020.
(in thousands)
Pre-tax increase (decrease) upon
the adoption of CECL
Deferred tax effect
After tax impact of adoption of
CECL
Impact to allowance for credit losses
on loans:
Allowance for credit losses on loans
$
748
Retained earnings (cumulative transition
adjustment)
$
(1,604
)
$
474
$
(1,130
)
Net income (reversal of provision for
credit losses on loans)
$
856
$
(253
)
$
603
Impact to allowance for credit losses
on unfunded loan commitments:
Allowance for credit losses on unfunded
commitments
$
1,082
Retained earnings (cumulative transition
adjustment)
$
(122
)
$
36
$
(86
)
Net income (provision for credit losses on
unfunded commitments)
$
(960
)
$
284
$
(676
)
Cash, Cash Equivalents and Restricted Cash
Total cash, cash equivalents and restricted cash were $200.3
million at December 31, 2020, compared to $213.6 million at
September 30, 2020. The $13.3 million decrease was primarily due to
temporary transfers of deposits to third-party deposit networks as
part of our liquidity management. 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 December 31, 2020 and September
30, 2020.
Investments
The investment portfolio totaled $501.4 million at December 31,
2020, a decrease of $29.4 million from September 30, 2020 and a
decrease of $68.3 million from December 31, 2019. The decrease in
the fourth quarter of 2020 was primarily attributed to calls of
$25.4 million, principal paydowns of $28.7 million, and maturities
of $1.1 million, partially offset by purchases of securities
totaling $25.8 million. The year-over-year decrease was a
combination of principal paydowns of $89.8 million, calls of $38.4
million, sales of $32.8 million, and maturities of $15.0 million,
partially offset by purchases of $97.5 million, and an $11.0
million increase in the fair value of available-for-sale
securities.
Deposits
Deposits totaled $2.504 billion at December 31, 2020, compared
to $2.569 billion at September 30, 2020 and $2.336 billion at
December 31, 2019. The $65.1 million decrease in deposits from the
prior quarter primarily resulted from normal year-end cash
fluctuations in some of our large clients' business accounts and
continued PPP spending. The average cost of deposits decreased 2
basis points in the fourth quarter to 0.07%. The average cost of
deposits for the full year of 2020 was 0.11%, down 9 basis points
from 2019.
Earnings
“Bank of Marin remains true to our disciplined fundamentals of
solid credit quality, capital, liquidity and expense management.
Our low-cost deposit franchise is a testament to our relationship
banking model,” said Tani Girton, EVP and Chief Financial Officer.
“We enter 2021 confident in our ability to shift into growth mode
when we transition to a post-pandemic economy."
Net Interest Income
Net interest income totaled $23.6 million in the fourth quarter
of 2020, compared to $24.6 million in the prior quarter and $23.9
million in the same quarter a year ago. The $1.0 million decrease
from the prior quarter primarily related to lower SBA PPP loan
income, lower average loan balances across all categories (with the
exception of commercial real-estate), lower average investment
securities balances, and lower yields on commercial real-estate
loans. Yields on investment securities partially offset the
negative variances.
The $295 thousand net interest income decrease from the same
quarter last year was primarily due to lower yields across
interest-earning assets and lower average balances across several
loan categories and investment securities. Decreases were largely
offset by higher SBA PPP loan income, lower rates on
interest-bearing deposits, and higher average commercial
real-estate and construction loan balances.
The tax-equivalent net interest margin was 3.40% for the fourth
quarter of 2020, compared to 3.44% in the prior quarter and 3.82%
in the fourth quarter of 2019. The 4 basis point decrease from the
prior quarter was primarily due to extension of payment deferral
from six months to sixteen months on SBA PPP loans, which extended
the period over which the net fees are accreted, lower loan volume,
and lower rates on loans. The impact of the SBA PPP loans lowered
the fourth quarter 2020 net interest margin by 13 basis points as
compared to 4 basis points in the prior quarter. The 42 basis point
decrease from the same quarter a year ago was due to lower yields
on most interest-earning asset categories, partially offset by
lower rates on interest-bearing deposits.
Net interest income totaled $96.7 million and $95.7 million in
2020 and 2019, respectively. The $1.0 million increase in 2020 was
primarily due to SBA PPP loans and lower rates on interest-bearing
deposits, largely offset by lower yields on earning-assets. Notable
balance increases occurred in interest-earning balances with other
banks, commercial real estate loans and deposits. The
tax-equivalent net interest margin decreased 43 basis points to
3.55% in 2020, from 3.98% in 2019 for the reasons mentioned above,
somewhat offset by higher loan balances.
Non-Interest Income
Non-interest income totaled $1.8 million in the fourth and third
quarter of 2020, compared to $2.3 million in the fourth quarter of
2019. The $491 thousand decrease in the fourth quarter of 2020,
compared to the fourth quarter a year ago, primarily resulted from
lower fee income related to lower interest rates on one-way deposit
sales to third-party networks, fewer service charges on deposit
accounts, and lower dividends on Federal Home Loan Bank ("FHLB")
stock.
Non-interest income totaled $8.6 million in 2020, a $534
thousand decrease from $9.1 million in 2019. The decline was
primarily due to $699 thousand fewer service charges on deposit
accounts and ATM fees, lower income from bank-owned life insurance
("BOLI") policies due to the $562 thousand benefit collected on
BOLI policies in the third quarter of 2019 (partially offset by
$283 thousand underwriting expenses for two new BOLI policies in
the first quarter of 2019), $182 thousand lower fee income from
one-way deposit sales to third-party deposit networks and $145
thousand lower dividends on FHLB stock, partially offset by $860
thousand net gains on the sale of investment securities.
Non-Interest Expense
Non-interest expense totaled $15.2 million in the fourth and
third quarter of 2020. Decreases in charitable contributions,
salaries and related benefits, and professional service fees were
almost entirely offset by a higher provision for credit losses on
unfunded loan commitments.
The $1.9 million increase in non-interest expense from $13.3
million in fourth quarter of 2019 was mainly attributed to a $960
thousand provision for losses on unfunded loan commitments in the
fourth quarter of 2020, $587 thousand higher salaries and related
benefits primarily due to annual merit increases and incentive
bonuses, $316 thousand higher occupancy and equipment expenses
mostly due to lease renewals for our existing headquarters offices
and new lease for a loan production office in San Mateo, and $168
thousand higher Federal Deposit Insurance Corporation ("FDIC")
insurance expense due to the receipt of FDIC assessment credits in
2019.
Non-interest expense increased $2.0 million from $58.0 million
in 2019 to $60.0 million in 2020. The largest increases came from
the provision for unfunded loan commitments, occupancy expenses
(primarily due to lease renewals mentioned above, common area
maintenance and janitorial expenses), and charitable contributions.
The decrease in data processing costs was due to our digital
platform conversion in 2019. While salaries and related benefits
were relatively unchanged year over year, annual merit and related
increases were mostly offset by $915 thousand in SBA PPP-related
deferred loan origination costs.
Share Repurchase Program
On October 23, 2020, the Board reactivated the $25.0 million
share repurchase program that was suspended in March 2020. Bancorp
repurchased 111,045 shares totaling $4.0 million in the fourth
quarter of 2020 for a cumulative total of 169,571 shares totaling
$5.8 million under this program. Repurchases for the full year
2020, under our current and prior repurchase program, were 203,709
shares totaling $7.2 million.
Earnings Call and Webcast Information
Bank of Marin Bancorp will webcast its fourth quarter and year
end 2020 earnings call on Monday, January 25, 2021 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 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 the San Francisco
Bay Area, with assets of $2.9 billion, Bank of Marin has 21 retail
branches, 5 commercial banking offices and 2 loan production
offices located across 7 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), our borrowers’ actual payment performance as loan
deferrals related to the COVID-19 pandemic expire, changes to
statutes, regulations, or regulatory policies or practices as a
result of, or in response to COVID-19, including the potential
adverse impact of loan modifications and payment deferrals
implemented consistent with recent regulatory guidance, 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.
(BMRC-ER)
BANK OF MARIN BANCORP
FINANCIAL HIGHLIGHTS
(dollars in thousands, except per share
data; unaudited)
December 31,
2020
September 30,
2020
December 31,
2019
Quarter-to-Date
Net income
$
8,117
$
7.491
$
9,079
Diluted earnings per common share
$
0.60
$
0.55
$
0.66
Return on average assets
1.09
%
0.98
%
1.37
%
Return on average equity
8.98
%
8.37
%
10.75
%
Efficiency ratio
59.70
%
57.82
%
50.84
%
Tax-equivalent net interest margin 1
3.40
%
3.44
%
3.82
%
Cost of deposits
0.07
%
0.09
%
0.23
%
Net (recoveries) charge-offs
$
(13
)
$
4
$
63
Year-to-Date
Net income
$
30,242
$
34,241
Diluted earnings per common share
$
2.22
$
2.48
Return on average assets
1.04
%
1.34
%
Return on average equity
8.60
%
10.49
%
Efficiency ratio
57.06
%
55.33
%
Tax-equivalent net interest margin 1
3.55
%
3.98
%
Cost of deposits
0.11
%
0.20
%
Net charge-offs
$
1
$
44
At Period
End
Total assets
$
2,911,926
$
2,975,225
$
2,707,280
Loans:
Commercial and industrial 2
$
498,408
$
512,973
$
246,687
Real estate:
Commercial owner-occupied
304,963
299,754
308,824
Commercial investor-owned
961,208
966,517
946,317
Construction
73,046
66,663
61,095
Home Equity
104,813
107,364
116,024
Other residential
123,395
130,915
136,657
Installment and other consumer loans
22,723
23,805
27,682
Total loans
$
2,088,556
$
2,107,991
$
1,843,286
Non-performing loans:3
Real estate:
Commercial owner-occupied
$
7,147
$
—
$
—
Commercial investor-owned
1,610
886
—
Home equity
459
532
168
Installment and other consumer loans
17
24
58
Total non-accrual loans
$
9,233
$
1,442
$
226
Classified loans (graded substandard and
doubtful)
$
25,829
$
10,999
$
9,934
Total accruing loans 30-89 days past
due
$
1,827
$
318
$
1,481
Allowance for credit losses to total
loans
1.10
%
1.05
%
0.90
%
Allowance for credit losses to total
loans, excluding acquired and SBA PPP loans 4
1.27
%
1.29
%
0.96
%
Allowance for credit losses to
non-performing loans
2.48
x
15.34
x
73.86
x
Non-accrual loans to total loans
0.44
%
0.07
%
0.01
%
Total deposits
$
2,504,249
$
2,569,289
$
2,336,489
Loan-to-deposit ratio
83.4
%
82.0
%
78.9
%
Stockholders' equity
$
358,253
$
357,570
$
336,788
Book value per share
$
26.54
$
26.28
$
24.81
Tangible common equity to tangible assets
5
11.3
%
11.0
%
11.3
%
Total risk-based capital ratio - Bank
15.8
%
15.5
%
14.6
%
Total risk-based capital ratio -
Bancorp
16.0
%
16.1
%
15.1
%
Full-time equivalent employees
289
291
290
1 Net interest income is annualized by
dividing actual number of days in the period times 360 days.
2 Includes SBA PPP loans of $291.6 million
and $301.7 million at December 31, 2020 and September 30, 2020,
respectively. There were no SBA PPP loans at December 31, 2019.
3 Excludes accruing troubled-debt
restructured loans of $12.5 million, $12.6 million and $11.3
million at December 31, 2020, September 30, 2020 and December 31,
2019, respectively.
4 The allowance for credit losses to total
loans, excluding non-impaired acquired loans and guaranteed SBA PPP
loans, is considered a meaningful non-GAAP financial measure, as it
represents only those loans that were considered in the calculation
of the allowance for credit losses. Due to the adoption of CECL on
December 31, 2020, all loans previously considered "acquired" are
now included in the calculation of the allowance for credit losses.
Acquired loans that were not impaired at September 30, 2020 and
December 31, 2019 totaled $90.4 million and $106.8 million,
respectively. Refer to footnote 2 above for SBA PPP loan
totals.
5 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 gains on available
for sale securities, net of tax, less goodwill and core deposit
intangible assets of $34.0 million, $34.2 million and $34.8 million
at December 31, 2020, September 30, 2020 and December 31, 2019,
respectively. Tangible assets excludes goodwill and core deposit
intangible assets.
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF
CONDITION
at December 31, 2020,
September 30, 2020 and December 31, 2019
(in thousands, except share data;
unaudited)
December 31, 2020
September 30, 2020
December 31, 2019
Assets
Cash, cash equivalents and restricted
cash
$
200,320
$
213,584
$
183,388
Investment securities:
Held-to-maturity, at amortized cost; net
of zero allowance for credit losses, respectively
109,036
117,350
137,413
Available-for-sale (at fair value;
amortized cost of $373,038, $394,437 and $423,923 at December 31,
2020, September 30, 2020 and December 31, 2019, respectively)
392,351
413,464
432,260
Total investment securities
501,387
530,814
569,673
Loans, amortized cost
2,088,556
2,107,991
1,843,286
Allowance for credit losses
(22,874
)
(22,113
)
(16,677
)
Loans, net of allowance for credit
losses
2,065,682
2,085,878
1,826,609
Bank premises and equipment, net
4,919
5,266
6,070
Goodwill
30,140
30,140
30,140
Core deposit intangible
3,831
4,045
4,684
Operating lease right-of-use assets
25,612
26,041
11,002
Interest receivable and other assets
80,035
79,457
75,714
Total assets
$
2,911,926
$
2,975,225
$
2,707,280
Liabilities and Stockholders'
Equity
Liabilities
Deposits
Non-interest bearing
$
1,354,650
$
1,383,719
$
1,128,823
Interest bearing
Transaction accounts
183,552
156,061
142,329
Savings accounts
201,507
192,764
162,817
Money market accounts
667,107
738,661
804,710
Time accounts
97,433
98,084
97,810
Total deposits
2,504,249
2,569,289
2,336,489
Borrowings and other obligations
58
99
212
Subordinated debentures
2,777
2,760
2,708
Operating lease liabilities
27,062
27,527
12,615
Interest payable and other liabilities
19,527
17,980
18,468
Total liabilities
2,553,673
2,617,655
2,370,492
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 - 13,500,453, 13,605,363
and 13,577,008 at December 31, 2020, September 30, 2020 and
December 31, 2019, respectively
125,905
129,284
129,058
Retained earnings
219,747
215,976
203,227
Accumulated other comprehensive income,
net of taxes
12,601
12,310
4,503
Total stockholders' equity
358,253
357,570
336,788
Total liabilities and stockholders'
equity
$
2,911,926
$
2,975,225
$
2,707,280
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, 2020
September 30, 2020
December 31, 2019
December 31, 2020
December 31, 2019
Interest income
Interest and fees on loans
$
20,794
$
21,776
$
21,123
$
84,674
$
84,331
Interest on investment securities
3,254
3,343
3,543
14,503
14,785
Interest on federal funds sold and due
from banks
40
50
567
461
1,321
Total interest income
24,088
25,169
25,233
99,638
100,437
Interest expense
Interest on interest-bearing transaction
accounts
40
41
78
186
347
Interest on savings accounts
18
17
18
68
70
Interest on money market accounts
278
377
1,033
2,009
3,439
Interest on time accounts
118
133
154
554
595
Interest on borrowings and other
obligations
1
—
2
4
77
Interest on subordinated debentures
34
35
54
158
229
Total interest expense
489
603
1,339
2,979
4,757
Net interest income
23,599
24,566
23,894
96,659
95,680
(Reversal of) provision for credit
losses
(856
)
1,250
500
4,594
900
Net interest income after provision for
credit losses
24,455
23,316
23,394
92,065
94,780
Non-interest income
Service charges on deposit accounts
286
284
462
1,314
1,865
Wealth Management and Trust Services
476
450
501
1,851
1,907
Debit card interchange fees, net
387
383
386
1,438
1,586
Merchant interchange fees, net
56
63
78
239
331
Earnings on bank-owned life Insurance,
net
232
232
226
973
1,196
Dividends on FHLB stock
151
149
208
654
799
Gains on investment securities, net
—
—
—
915
55
Other income
239
229
457
1,166
1,345
Total non-interest income
1,827
1,790
2,318
8,550
9,084
Non-interest expense
Salaries and related benefits
8,414
8,638
7,827
34,393
34,253
Occupancy and equipment
1,843
1,776
1,527
6,943
6,143
Depreciation and amortization
558
539
527
2,149
2,228
Federal Deposit Insurance Corporation
insurance
175
181
7
474
361
Data processing
747
822
775
3,184
3,717
Professional services
432
655
431
2,181
2,132
Directors' expense
180
184
180
713
735
Information technology
292
256
243
1,050
1,065
Amortization of core deposit
intangible
214
213
222
853
887
Provision for credit losses on unfunded
loan commitments
960
248
—
1,570
129
Charitable contributions
113
481
130
1,034
508
Other expense
1,252
1,245
1,457
5,484
5,812
Total non-interest expense
15,180
15,238
13,326
60,028
57,970
Income before provision for income
taxes
11,102
9,868
12,386
40,587
45,894
Provision for income taxes
2,985
2,377
3,307
10,345
11,653
Net income
$
8,117
$
7,491
$
9,079
$
30,242
$
34,241
Net income per common share:
Basic
$
0.60
$
0.55
$
0.67
$
2.24
$
2.51
Diluted
$
0.60
$
0.55
$
0.66
$
2.22
$
2.48
Weighted average shares:
Basic
13,523
13,539
13,521
13,525
13,620
Diluted
13,615
13,610
13,703
13,617
13,794
Comprehensive income:
Net income
$
8,117
$
7,491
$
9,079
$
30,242
$
34,241
Other comprehensive income (loss):
Change in net unrealized gains or losses
on available-for-sale securities
286
299
(2,018
)
11,891
11,839
Reclassification adjustment for gains on
available-for-sale securities included in net income
—
—
—
(915
)
(55
)
Amortization of net unrealized losses on
securities transferred from available-for-sale to
held-to-maturity
129
149
117
524
445
Subtotal
415
448
(1,901
)
11,500
12,229
Deferred tax expense (benefit)
124
132
(558
)
3,402
3,624
Other comprehensive income (loss), net of
tax
291
316
(1,343
)
8,098
8,605
Comprehensive income
$
8,408
$
7,807
$
7,736
$
38,340
$
42,846
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, 2020
September 30, 2020
December 31, 2019
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-earning deposits with banks 1
$
157,389
$
40
0.10
%
$
184,883
$
50
0.11
%
$
136,320
$
567
1.63
%
Investment securities 2, 3
498,730
3,395
2.72
%
527,077
3,488
2.64
%
530,596
3,625
2.73
%
Loans 1, 3, 4
2,096,908
20,975
3.91
%
2,117,679
21,957
4.06
%
1,804,667
21,276
4.61
%
Total interest-earning assets 1
2,753,027
24,410
3.47
%
2,829,639
25,495
3.53
%
2,471,583
25,468
4.03
%
Cash and non-interest-bearing due from
banks
64,600
55,353
39,882
Bank premises and equipment, net
5,213
5,412
6,326
Interest receivable and other assets,
net
135,520
138,938
112,895
Total assets
$
2,958,360
$
3,029,342
$
2,630,686
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts
$
160,827
$
41
0.10
%
$
153,089
$
41
0.11
%
$
145,237
$
79
0.22
%
Savings accounts
198,616
18
0.04
%
191,915
17
0.04
%
164,664
17
0.04
%
Money market accounts
697,203
279
0.16
%
802,585
377
0.19
%
725,192
1,033
0.57
%
Time accounts, including CDARS
97,512
118
0.48
%
97,465
133
0.54
%
97,302
154
0.63
%
Borrowings and other obligations 1
72
—
2.37
%
113
—
2.51
%
226
2
2.80
%
Subordinate debentures 1
2,768
34
4.85
%
2,751
35
4.97
%
2,698
54
7.79
%
Total interest-bearing liabilities
1,156,998
490
0.17
%
1,247,918
603
0.19
%
1,135,319
1,339
0.47
%
Demand accounts
1,397,349
1,380,708
1,129,068
Interest payable and other liabilities
44,532
44,486
31,270
Stockholders' equity
359,481
356,230
335,029
Total liabilities & stockholders'
equity
$
2,958,360
$
3,029,342
$
2,630,686
Tax-equivalent net interest income/margin
1
$
23,920
3.40
%
$
24,892
3.44
%
$
24,129
3.82
%
Reported net interest income/margin 1
$
23,599
3.35
%
$
24,566
3.40
%
$
23,894
3.78
%
Tax-equivalent net interest rate
spread
3.30
%
3.33
%
3.56
%
Year ended
Year ended
December 31, 2020
December 31, 2019
Interest
Interest
Average
Income/
Yield/
Average
Income/
Yield/
(dollars in thousands; unaudited)
Balance
Expense
Rate
Balance
Expense
Rate
Assets
Interest-earning deposits with banks 1
$
153,794
$
461
0.29
%
$
67,192
$
1,321
1.94
%
Investment securities 2, 3
533,186
15,025
2.82
%
555,618
15,102
2.72
%
Loans 1, 3, 4
2,023,203
85,398
4.15
%
1,775,193
85,062
4.73
%
Total interest-earning assets 1
2,710,183
100,884
3.66
%
2,398,003
101,485
4.17
%
Cash and non-interest-bearing due from
banks
49,676
35,956
Bank premises and equipment, net
5,526
6,911
Interest receivable and other assets,
net
131,780
109,837
Total assets
$
2,897,165
$
2,550,707
Liabilities and Stockholders' Equity
Interest-bearing transaction accounts
$
148,817
$
186
0.13
%
$
133,922
$
347
0.26
%
Savings accounts
184,146
68
0.04
%
172,273
70
0.04
%
Money market accounts
763,689
2,009
0.26
%
680,296
3,439
0.51
%
Time accounts, including CDARS
96,558
554
0.57
%
106,783
595
0.56
%
Borrowings and other obligations 1
174
4
2.16
%
2,935
77
2.57
%
Subordinated debentures 1
2,741
158
5.68
%
2,673
229
8.44
%
Total interest-bearing liabilities
1,196,125
2,979
0.25
%
1,098,882
4,757
0.43
%
Demand accounts
1,308,199
1,094,806
Interest payable and other liabilities
41,347
30,578
Stockholders' equity
351,494
326,441
Total liabilities & stockholders'
equity
$
2,897,165
$
2,550,707
Tax-equivalent net interest income/margin
1
$
97,905
3.55
%
$
96,728
3.98
%
Reported net interest income/margin 1
$
96,659
3.51
%
$
95,680
3.94
%
Tax-equivalent net interest rate
spread
3.41
%
3.74
%
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.
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/20210125005149/en/
Beth Drummey Marketing & Corporate Communications Manager
415-763-4529 | bethdrummey@bankofmarin.com
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