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Investor Relations
Press Release

Bank of Marin Bancorp Reports Second Quarter Earnings of $8.2 Million; Increases Quarterly Dividend Ten Percent

Company Release - 7/22/2019 8:00 AM ET

NOVATO, Calif.--(BUSINESS WIRE)-- Bank of Marin Bancorp, “Bancorp” (NASDAQ: BMRC), parent company of Bank of Marin, “Bank,” announced earnings of $8.2 million in the second quarter of 2019, compared to $7.5 million in the first quarter of 2019 and $7.9 million in the second quarter of 2018. Diluted earnings per share were $0.60 in the second quarter of 2019 compared to $0.54 in the prior quarter and $0.56 in the same quarter last year (adjusted for stock-split). Earnings for the first six months of 2019 totaled $15.7 million compared to $14.3 million in the same period last year. Diluted earnings per share were $1.13 and $1.02 (adjusted for stock-split) in the first six months of 2019 and 2018, respectively.

“We delivered another strong quarter for our shareholders,” said Russell A. Colombo, President and Chief Executive Officer. “In this competitive environment, we've maintained our low cost, stable deposit base and disciplined underwriting standards, and our credit quality remains excellent. We’re well-positioned to meet the steady loan demand we’re seeing across our markets.”

Bancorp also provided the following highlights from the second quarter of 2019:

  • Loans totaled $1,764.9 million at June 30, 2019, compared to $1,772.5 million at March 31, 2019. New loan originations of $42.2 million in the second quarter were distributed across Commercial Banking and Consumer Banking. Payoffs of $43.3 million in the second quarter included the successful completion of a large construction project.
  • While total deposits decreased $76.6 million in the second quarter to $2,102.0 million, non-interest bearing deposits declined only $19.7 million. Non-interest bearing deposits represented 50% of total deposits versus 49% last quarter, and have been at or near this level since the beginning of last year. The cost of average deposits increased to 0.20% in the second quarter compared to 0.18% in the first quarter of 2019.
  • Strong credit quality remains a cornerstone of the Bank’s consistent performance. Non-accrual loans represented only 0.03% of the Bank’s loan portfolio at June 30, 2019. There were no provisions for loan losses or off-balance sheet commitments recorded in the second quarter of 2019.
  • All capital ratios were above regulatory requirements. The total risk-based capital ratio for Bancorp was 15.2% at June 30, 2019, compared to 14.9% at March 31, 2019. Tangible common equity to tangible assets was 12.0% at June 30, 2019, compared to 11.4% at March 31, 2019 (refer to footnote 3 in Financial Highlights table for a definition of this non-GAAP financial measure).
  • Based on the size of the market and reduced branch foot traffic driven by digital banking offerings, we have decided to close the Petaluma Downtown Branch on August 9, 2019. We will focus our resources on growing our two remaining branches in Petaluma, where most Downtown customers have already moved their business. Our commitment to the Petaluma community remains strong, and employees have accepted positions in other Bank of Marin branches.
  • On June 17, 2019, we upgraded to a new digital banking platform that offers our customers enhanced features and additional functionality for an improved online and mobile banking experience. The conversion is substantially complete, and the implementation and operations teams are working closely with our customers to make their transition to the new platform as smooth as possible.
  • The Board of Directors declared a cash dividend of $0.21 per share on July 19, 2019. This represents the 57th consecutive quarterly dividend paid by Bank of Marin Bancorp. The dividend is payable on August 9, 2019, to shareholders of record at the close of business on August 2, 2019.
  • As a result of her expanded responsibilities, Cecilia Situ, First Vice President, has been named Treasurer of the Bank. David A. Merck, Vice President and Financial Reporting Manager, has assumed the position of Principal Accounting Officer that was previously occupied by Ms. Situ.

Loans and Credit Quality

Loans decreased by $7.6 million in the second quarter and totaled $1,764.9 million at June 30, 2019. For the second quarter and first six months of 2019, new loan originations of $42.2 million and $76.1 million, respectively, were below 2018 loan originations of $75.8 million and $113.2 million for the same periods. Loan payoffs of $43.3 million in the second quarter and $69.3 million in the first six months of 2019, moderately exceeded $37.3 million and $68.8 million in the respective 2018 periods, and included the successful completion of a large construction project.

Non-accrual loans totaled $574 thousand, or 0.03% of the loan portfolio at June 30, 2019, compared to $719 thousand, or 0.04% at March 31, 2019, and $385 thousand, or 0.02% a year ago. Classified loans totaled $10.3 million at June 30, 2019, compared to $14.8 million at March 31, 2019 and $13.9 million at June 30, 2018. The $4.5 million decrease in the second quarter of 2019 was primarily due to a $2.2 million paydown received in April 2019 on a $2.7 million substandard classified loan (the remaining balance was upgraded to a Pass risk rating). Additionally, there were upgrades on loan balances of approximately $1.6 million with improvements in credit quality and a payoff of $188 thousand on a substandard classified loan. There were no loans classified doubtful at June 30, 2019 or March 31, 2019. Accruing loans past due 30 to 89 days totaled $343 thousand at June 30, 2019, compared to $2.2 million at March 31, 2019 and $88 thousand a year ago.

There was no provision for loan losses recorded in the second quarter of 2019, consistent with last quarter and the same quarter a year ago. Recoveries were $18 thousand in the second quarter of 2019, compared to net charge-offs of $4 thousand for the prior quarter and net recoveries of $42 thousand in the second quarter a year ago. The ratio of loan loss reserves to loans, including acquired loans, was 0.90% at June 30, 2019, 0.89% at March 31, 2019, and 0.92% at June 30, 2018.

Investments

The investment securities portfolio totaled $527.0 million at June 30, 2019, compared to $595.7 million at March 31, 2019. The decrease from the prior quarter was primarily attributed to sales of $61.8 million in lower yielding shorter term securities to manage our interest rate spread and cash position.

Deposits

Total deposits were $2,102.0 million at June 30, 2019, compared to $2,178.6 million at March 31, 2019. The $76.6 million decrease during the second quarter primarily resulted from normal cash fluctuations in some of our large business accounts and a $16.1 million increase in one-way deposit sales to third party deposit networks. The average cost of deposits in the second quarter of 2019 was 0.20%, an increase of 2 basis points from the prior quarter.

Earnings

“Bank of Marin’s commitment to our markets and our customers is yielding great results,” said Tani Girton, EVP and Chief Financial Officer. “With a return on assets of 1.26% and efficiency ratio of 58.91% year-to-date, and an increase in tax-equivalent net interest margin of 14 basis points year-over-year, we are seeing what can be achieved when you combine consistent credit and expense management with a focus on relationship banking.”

Net interest income totaled $23.8 million in both the first and second quarters of 2019 and $22.8 million in the second quarter of 2018. The $947 thousand increase from the comparative quarter a year ago was reflective of higher average loan balances and higher yields across earning asset categories, partially offset by higher rates on deposits.

Net interest income totaled $47.6 million in the first six months of 2019, compared to $44.7 million for the same period in 2018. The $2.9 million increase primarily relates to higher average loan and investment securities balances and higher yields across earning asset categories, partially offset by higher rates on deposits.

The tax-equivalent net interest margin was 4.04% in the second quarter of 2019, compared to 4.02% in the prior quarter and 3.92% in the same quarter a year ago. The 2 basis point increase from the prior quarter was primarily due to a more favorable mix of interest-earning assets toward higher yielding loans. The 12 basis point increase from the same quarter a year ago was primarily due to higher interest rates.

The tax-equivalent net interest margin was 4.03% in the first six months of 2019, compared to 3.89% for the same period in 2018. The 14 basis point increase from the same period a year ago was mostly attributed to growth in earning assets and higher interest rates.

Loans obtained through the acquisition of other banks are classified as either 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 June 30, 2019, March 31, 2019 and June 30, 2018.

As our acquired loans from prior acquisitions continue to pay off, we expect the accretion on these loans to continue to decline. Accretion and gains on payoffs of purchased loans recorded to interest income were as follows:

 

Three months ended

 

June 30, 2019

 

March 31, 2019

 

June 30, 2018

(dollars in thousands; unaudited)

Dollar
Amount

Basis point
impact to net
interest margin

 

Dollar
Amount

Basis point
impact to net
interest margin

 

Dollar
Amount

Basis point
impact to net
interest margin

Accretion on PCI loans 1

$

56

 

1 bps

 

$

59

 

1 bps

 

$

83

 

1 bps

Accretion on non-PCI loans 2

$

(3

)

0 bps

 

$

42

 

1 bps

 

$

133

 

2 bps

Gains on payoffs of PCI loans

$

 

0 bps

 

$

 

0 bps

 

$

1

 

0 bps

 

Six months ended

 

June 30, 2019

 

June 30, 2018

(dollars in thousands; unaudited)

Dollar
Amount

Basis point
impact to net
interest margin

 

Dollar
Amount

Basis point
impact to net
interest margin

Accretion on PCI loans 1

$

115

 

1 bps

 

$

195

 

2 bps

Accretion on non-PCI loans 2

$

39

 

0 bps

 

$

233

 

2 bps

Gains on payoffs of PCI loans

$

 

0 bps

 

$

129

 

1 bps

1 Accretable yield on PCI loans totaled $819 thousand, $875 thousand and $1.1 million at June 30, 2019, March 31, 2019 and June 30, 2018, respectively.

2 Unaccreted purchase discounts on non-PCI loans totaled $669 thousand, $666 thousand and $1.0 million at June 30, 2019, March 31, 2019 and June 30, 2018, respectively.

Non-interest income totaled $2.3 million in the second quarter of 2019, $1.8 million in the prior quarter, and $2.2 million in the same quarter a year ago. The increase of $503 thousand from the prior quarter was due to $283 thousand non-refundable costs for underwriting two new bank-owned life insurance policies purchased in the first quarter and gains on the sale of investment securities in the second quarter. The $36 thousand increase from the same quarter a year ago was attributed to fee income and gains on the sale of investment securities, partially offset by a decrease in deposit network income.

Non-interest income decreased $435 thousand to $4.0 million in the first six months of 2019, compared to $4.5 million in 2018, primarily due to the underwriting costs of new bank-owned life insurance policies and the decrease in deposit network income.

Non-interest expense decreased $612 thousand to $14.9 million in the second quarter of 2019, from $15.5 million in the prior quarter. The decrease was primarily due to lower salaries and benefits as the first quarter included $498 thousand due to participants meeting stock-based compensation retirement eligibility requirements and $239 thousand more in 401K contributions that are typical in the first quarter. The higher expenses were partially offset by a $372 thousand bonus reversal, also in the first quarter of 2019. Additionally, the first quarter included a $129 thousand provision for losses on off-balance sheet commitments.

Non-interest expense increased $407 thousand from $14.5 million in the second quarter of 2018. The increase primarily related to $655 thousand more in salaries (due to five additional full-time equivalent staff and annual merit increases), partially offset by $268 thousand less in professional fees (mostly attributed to core processing contract negotiations in 2018).

Non-interest expense totaled $30.4 million in the first half of 2019, compared to $30.6 million in the first half of 2018. The $146 thousand decrease was primarily attributed to fewer professional fees and data processing expenses (mostly related to Bank of Napa acquisition expenses in 2018), partially offset by the higher expenses in the first half of 2019 mentioned above.

Share Repurchase Program

Bancorp's Board of Directors approved the extension of the $25.0 million Stock Repurchase Program to February 28, 2020. Bancorp repurchased 134,620 shares totaling $5.6 million in the second quarter of 2019 for a cumulative total of 419,741 shares and $17.5 million as of June 30, 2019.

Earnings Call and Webcast Information

Bank of Marin Bancorp will present its second quarter earnings call via webcast on Monday, July 22, 2019 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 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 $2.5 billion, Bank of Marin has 23 retail branches, 5 commercial banking offices and 1 loan production office located across the North Bay, San Francisco and East Bay regions. Bank of Marin provides commercial banking, personal banking, and wealth management and trust services. Specializing in providing legendary service to its customers and investing in its local communities, Bank of Marin has consistently been ranked one of the “Top Corporate Philanthropists” by the San Francisco Business Times and one of the “Best Places to Work” by the North Bay Business Journal. Bank of Marin Bancorp is included in the Russell 2000 Small-Cap Index and NASDAQ ABA Community Bank Index. For more information, go to www.bankofmarin.com.

Forward-Looking Statements

This release may contain certain forward-looking statements that are based on management’s current expectations regarding economic, legislative, and regulatory issues that may impact Bancorp's earnings in future periods. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “intend,” “estimate” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, 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

June 30, 2019

(dollars in thousands, except per share data; unaudited)

June 30, 2019

 

March 31, 2019

 

June 30, 2018

Quarter-to-Date

 

 

 

 

 

Net income

$

8,235

 

 

$

7,479

 

 

$

7,891

 

Diluted earnings per common share 4

$

0.60

 

 

$

0.54

 

 

$

0.56

 

Return on average assets

1.32

%

 

1.19

%

 

1.28

%

Return on average equity

10.26

%

 

9.54

%

 

10.54

%

Efficiency ratio

57.23

%

 

60.62

%

 

57.85

%

Tax-equivalent net interest margin 1

4.04

%

 

4.02

%

 

3.92

%

Cost of deposits

0.20

%

 

0.18

%

 

0.08

%

Net (recoveries) charge-offs

$

(18

)

 

$

4

 

 

$

(42

)

Net (recoveries) charge-offs to average loans

%

 

%

 

%

Year-to-Date

 

 

 

 

 

Net income

$

15,714

 

 

 

 

$

14,280

 

Diluted earnings per common share 4

$

1.13

 

 

 

 

$

1.02

 

Return on average assets

1.26

%

 

 

 

1.17

%

Return on average equity

9.90

%

 

 

 

9.63

%

Efficiency ratio

58.91

%

 

 

 

62.16

%

Tax-equivalent net interest margin 1

4.03

%

 

 

 

3.89

%

Cost of deposits

0.19

%

 

 

 

0.08

%

Net (recoveries) charge-offs

$

(14

)

 

 

 

$

(46

)

Net (recoveries) charge-offs to average loans

%

 

 

 

%

At Period End

 

 

 

 

 

Total assets

$

2,463,987

 

 

$

2,534,076

 

 

$

2,465,042

 

Loans:

 

 

 

 

 

Commercial and industrial

$

234,832

 

 

$

237,646

 

 

$

241,994

 

Real estate:

 

 

 

 

 

Commercial owner-occupied

306,327

 

 

310,588

 

 

317,587

 

Commercial investor-owned

878,969

 

 

878,494

 

 

839,667

 

Construction

63,563

 

 

72,271

 

 

57,015

 

Home equity

125,968

 

 

124,512

 

 

126,031

 

Other residential

124,120

 

 

117,558

 

 

108,829

 

Installment and other consumer loans

31,100

 

 

31,469

 

 

26,488

 

Total loans

$

1,764,879

 

 

$

1,772,538

 

 

$

1,717,611

 

Non-performing loans: 2

 

 

 

 

 

Commercial and industrial

$

354

 

 

$

309

 

 

$

 

Home equity

157

 

 

346

 

 

385

 

Installment and other consumer loans

63

 

 

64

 

 

 

Total non-accrual loans

$

574

 

 

$

719

 

 

$

385

 

Classified loans (graded substandard and doubtful)

$

10,251

 

 

$

14,811

 

 

$

13,917

 

Total accruing loans 30-89 days past due

$

343

 

 

$

2,194

 

 

$

88

 

Allowance for loan losses to total loans

0.90

%

 

0.89

%

 

0.92

%

Allowance for loan losses to non-performing loans

27.59x

 

21.99x

 

41.11x

Non-accrual loans to total loans

0.03

%

 

0.04

%

 

0.02

%

Total deposits

$

2,102,040

 

 

$

2,178,629

 

 

$

2,137,723

 

Loan-to-deposit ratio

84.0

%

 

81.4

%

 

80.3

%

Stockholders' equity

$

327,667

 

 

$

320,664

 

 

$

304,198

 

Book value per share 4

$

23.99

 

 

$

23.26

 

 

$

21.76

 

Tangible common equity to tangible assets 3

12.0

%

 

11.4

%

 

11.0

%

Total risk-based capital ratio - Bank

14.6

%

 

13.9

%

 

13.5

%

Total risk-based capital ratio - Bancorp

15.2

%

 

14.9

%

 

15.2

%

Full-time equivalent employees

293

 

 

296

 

 

288

 

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 $11.7 million, $14.0 million and $15.5 million at June 30, 2019, March 31, 2019 and June 30, 2018, respectively. Excludes purchased credit-impaired (PCI) loans with carrying values of $2.1 million that were accreting interest at June 30, 2019, March 31, 2019, and June 30, 2018. 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 $35.3 million, $35.5 million and $36.2 million at June 30, 2019, March 31, 2019, and June 30, 2018, respectively. Tangible assets exclude goodwill and intangible assets.

4 Share and per share data have been adjusted to reflect the two-for-one stock split effective November 27, 2018.

BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF CONDITION

At June 30, 2019, March 31, 2019 and June 30, 2018

(in thousands, except share data; unaudited)

June 30,
2019

March 31,
2019

June 30,
2018

Assets

 

 

 

Cash and due from banks

$

58,757

 

$

51,639

 

$

83,855

 

Investment securities

 

 

 

Held-to-maturity, at amortized cost

148,879

 

152,845

 

170,652

 

Available-for-sale (at fair value; amortized cost $368,712, $442,386 and $397,268 at June 30, 2019, March 31, 2019 and June 30, 2018 respectively)

378,131

 

442,885

 

388,137

 

Total investment securities

527,010

 

595,730

 

558,789

 

Loans, net of allowance for loan losses of $15,835, $15,817 and $15,813 at June 30, 2019, March 31, 2019 and June 30, 2018, respectively

1,749,044

 

1,756,721

 

1,701,798

 

Bank premises and equipment, net

6,872

 

7,237

 

7,965

 

Goodwill

30,140

 

30,140

 

30,140

 

Core deposit intangible

5,128

 

5,349

 

6,032

 

Operating lease right-of-use assets

12,515

 

12,465

 

 

Interest receivable and other assets

74,521

 

74,795

 

76,463

 

Total assets

$

2,463,987

 

$

2,534,076

 

$

2,465,042

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Liabilities

 

 

 

Deposits

 

 

 

Non-interest bearing

$

1,056,655

 

$

1,076,382

 

$

1,057,745

 

Interest bearing

 

 

 

Transaction accounts

121,232

 

130,001

 

132,272

 

Savings accounts

172,255

 

180,758

 

179,187

 

Money market accounts

647,592

 

680,806

 

631,479

 

Time accounts

104,306

 

110,682

 

137,040

 

Total deposits

2,102,040

 

2,178,629

 

2,137,723

 

Borrowings and other obligations

297

 

309

 

 

Subordinated debentures

2,674

 

2,657

 

5,802

 

Operating lease liabilities

14,332

 

14,349

 

 

Interest payable and other liabilities

16,977

 

17,468

 

17,319

 

Total liabilities

2,136,320

 

2,213,412

 

2,160,844

 

 

 

 

 

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 - 13,659,143, 13,786,808 and 13,983,642 at June 30, 2019, March 31, 2019 and June 30, 2018, respectively

132,151

 

137,125

 

146,195

 

Retained earnings

190,416

 

184,793

 

166,281

 

Accumulated other comprehensive income (loss), net of taxes

5,100

 

(1,254

)

(8,278

)

Total stockholders' equity

327,667

 

320,664

 

304,198

 

Total liabilities and stockholders' equity

$

2,463,987

 

$

2,534,076

 

$

2,465,042

 

BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

Three months ended

 

Six months ended

(in thousands, except per share amounts; unaudited)

June 30,
2019

March 31,
2019

June 30,
2018

 

June 30,
2019

June 30,
2018

Interest income

 

 

 

 

 

 

Interest and fees on loans

$

20,988

 

$

20,695

 

$

19,624

 

 

$

41,683

 

$

38,511

 

Interest on investment securities

3,763

 

4,097

 

3,499

 

 

7,860

 

6,656

 

Interest on federal funds sold and due from banks

190

 

139

 

285

 

 

329

 

688

 

Total interest income

24,941

 

24,931

 

23,408

 

 

49,872

 

45,855

 

Interest expense

 

 

 

 

 

 

Interest on interest-bearing transaction accounts

91

 

77

 

48

 

 

168

 

100

 

Interest on savings accounts

17

 

18

 

18

 

 

35

 

36

 

Interest on money market accounts

787

 

764

 

236

 

 

1,551

 

452

 

Interest on time accounts

175

 

119

 

140

 

 

294

 

296

 

Interest on borrowings and other obligations

24

 

47

 

1

 

 

71

 

1

 

Interest on subordinated debentures

58

 

60

 

123

 

 

118

 

237

 

Total interest expense

1,152

 

1,085

 

566

 

 

2,237

 

1,122

 

Net interest income

23,789

 

23,846

 

22,842

 

 

47,635

 

44,733

 

Provision for loan losses

 

 

 

 

 

 

Net interest income after provision for loan losses

23,789

 

23,846

 

22,842

 

 

47,635

 

44,733

 

Non-interest income

 

 

 

 

 

 

Service charges on deposit accounts

485

 

479

 

455

 

 

964

 

932

 

Wealth Management and Trust Services

473

 

438

 

488

 

 

911

 

1,003

 

Debit card interchange fees, net

414

 

380

 

360

 

 

794

 

756

 

Merchant interchange fees, net

87

 

87

 

118

 

 

174

 

198

 

Earnings on (cost of) bank-owned life insurance, net

235

 

(60

)

230

 

 

175

 

458

 

Dividends on FHLB stock

193

 

196

 

192

 

 

389

 

388

 

Gains (losses) on investment securities, net

61

 

(6

)

11

 

 

55

 

11

 

Other income

326

 

257

 

384

 

 

583

 

734

 

Total non-interest income

2,274

 

1,771

 

2,238

 

 

4,045

 

4,480

 

Non-interest expense

 

 

 

 

 

 

Salaries and related benefits

8,868

 

9,146

 

8,316

 

 

18,014

 

17,333

 

Occupancy and equipment

1,578

 

1,531

 

1,511

 

 

3,109

 

3,018

 

Depreciation and amortization

572

 

556

 

546

 

 

1,128

 

1,093

 

Federal Deposit Insurance Corporation insurance

174

 

179

 

191

 

 

353

 

382

 

Data processing

1,004

 

1,015

 

1,023

 

 

2,019

 

2,404

 

Professional services

535

 

586

 

810

 

 

1,121

 

2,109

 

Directors' expense

187

 

179

 

183

 

 

366

 

357

 

Information technology

284

 

259

 

264

 

 

543

 

533

 

Amortization of core deposit intangible

221

 

222

 

230

 

 

443

 

460

 

Provision for losses on off-balance sheet commitments

 

129

 

 

 

129

 

 

Other expense

1,493

 

1,726

 

1,435

 

 

3,219

 

2,901

 

Total non-interest expense

14,916

 

15,528

 

14,509

 

 

30,444

 

30,590

 

Income before provision for income taxes

11,147

 

10,089

 

10,571

 

 

21,236

 

18,623

 

Provision for income taxes

2,912

 

2,610

 

2,680

 

 

5,522

 

4,343

 

Net income

$

8,235

 

$

7,479

 

$

7,891

 

 

$

15,714

 

$

14,280

 

Net income per common share:1

 

 

 

 

 

 

Basic

$

0.60

 

$

0.54

 

$

0.57

 

 

$

1.15

 

$

1.03

 

Diluted

$

0.60

 

$

0.54

 

$

0.56

 

 

$

1.13

 

$

1.02

 

Weighted average shares:1

 

 

 

 

 

 

Basic

13,655

 

13,737

 

13,888

 

 

13,696

 

13,858

 

Diluted

13,818

 

13,924

 

14,066

 

 

13,871

 

14,039

 

Comprehensive income:

 

 

 

 

 

 

Net income

$

8,235

 

$

7,479

 

$

7,891

 

 

$

15,714

 

$

14,280

 

Other comprehensive income (loss)

 

 

 

 

 

 

Change in net unrealized gains or losses on available-for-sale securities

8,982

 

3,939

 

(1,131

)

 

12,921

 

(7,301

)

Reclassification adjustment for (gains) losses on available-for-sale securities in net income

(61

)

6

 

(11

)

 

(55

)

(11

)

Net unrealized losses on securities transferred from available-for-sale to held-to-maturity

 

 

(278

)

 

 

(278

)

Amortization of net unrealized losses on securities transferred from available-for-sale to held-to-maturity

104

 

101

 

132

 

 

205

 

268

 

Subtotal

9,025

 

4,046

 

(1,288

)

 

13,071

 

(7,322

)

Deferred tax expense (benefit)

2,671

 

1,198

 

(384

)

 

3,869

 

(2,168

)

Other comprehensive income (loss), net of tax

6,354

 

2,848

 

(904

)

 

9,202

 

(5,154

)

Comprehensive income

$

14,589

 

$

10,327

 

$

6,987

 

 

$

24,916

 

$

9,126

 

1 Share and per share data have 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

 

June 30, 2019

March 31, 2019

June 30, 2018

 

 

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-bearing due from banks 1

$

30,928

 

$

190

 

2.43

%

$

22,690

 

$

139

 

2.45

%

$

62,665

 

$

285

 

1.80

%

Investment securities 2, 3

567,813

 

3,844

 

2.71

%

619,562

 

4,191

 

2.71

%

574,669

 

3,611

 

2.51

%

Loans 1, 3, 4

1,758,874

 

21,180

 

4.76

%

1,756,316

 

20,887

 

4.76

%

1,700,057

 

19,852

 

4.62

%

Total interest-earning assets 1

2,357,615

 

25,214

 

4.23

%

2,398,568

 

25,217

 

4.21

%

2,337,391

 

23,748

 

4.02

%

Cash and non-interest-bearing due from banks

34,437

 

 

 

30,947

 

 

 

40,383

 

 

 

Bank premises and equipment, net

7,108

 

 

 

7,512

 

 

 

8,203

 

 

 

Interest receivable and other assets, net

107,089

 

 

 

104,685

 

 

 

87,183

 

 

 

Total assets

$

2,506,249

 

 

 

$

2,541,712

 

 

 

$

2,473,160

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

$

124,620

 

$

91

 

0.29

%

$

127,733

 

$

77

 

0.24

%

$

142,133

 

$

48

 

0.14

%

Savings accounts

174,102

 

17

 

0.04

%

180,355

 

18

 

0.04

%

178,956

 

18

 

0.04

%

Money market accounts

661,363

 

787

 

0.48

%

673,137

 

764

 

0.46

%

612,612

 

236

 

0.15

%

Time accounts including CDARS

115,272

 

175

 

0.61

%

113,389

 

119

 

0.43

%

140,799

 

140

 

0.40

%

Borrowings and other obligations 1

3,608

 

24

 

2.59

%

7,414

 

47

 

2.55

%

231

 

1

 

1.84

%

Subordinated debentures 1

2,664

 

58

 

8.69

%

2,647

 

60

 

9.05

%

5,786

 

123

 

8.40

%

Total interest-bearing liabilities

1,081,629

 

1,152

 

0.43

%

1,104,675

 

1,085

 

0.40

%

1,080,517

 

566

 

0.21

%

Demand accounts

1,073,909

 

 

 

1,086,947

 

 

 

1,072,976

 

 

 

Interest payable and other liabilities

28,621

 

 

 

32,163

 

 

 

19,443

 

 

 

Stockholders' equity

322,090

 

 

 

317,927

 

 

 

300,224

 

 

 

Total liabilities & stockholders' equity

$

2,506,249

 

 

 

$

2,541,712

 

 

 

$

2,473,160

 

 

 

Tax-equivalent net interest income/margin 1

 

$

24,062

 

4.04

%

 

$

24,132

 

4.02

%

 

$

23,182

 

3.92

%

Reported net interest income/margin 1

 

$

23,789

 

3.99

%

 

$

23,846

 

3.98

%

 

$

22,842

 

3.87

%

Tax-equivalent net interest rate spread

 

 

3.80

%

 

 

3.81

%

 

 

3.81

%

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended

Six months ended

 

 

June 30, 2019

June 30, 2018

 

 

 

 

 

Interest

 

 

Interest

 

 

 

 

 

Average

Income/

Yield/

Average

Income/

Yield/

(in thousands; unaudited)

 

 

 

Balance

Expense

Rate

Balance

Expense

Rate

Assets

 

 

 

 

 

 

 

 

 

Interest-bearing due from banks 1

 

 

 

$

26,832

 

$

329

 

2.44

%

83,641

 

688

 

1.64

%

Investment securities 2, 3

 

 

 

593,545

 

8,034

 

2.71

%

553,723

 

6,887

 

2.49

%

Loans 1, 3, 4

 

 

 

1,757,602

 

42,067

 

4.76

%

1,687,841

 

38,971

 

4.59

%

Total interest-earning assets 1

 

 

 

2,377,979

 

50,430

 

4.22

%

2,325,205

 

46,546

 

3.98

%

Cash and non-interest-bearing due from banks

 

 

 

32,702

 

 

 

43,084

 

 

 

Bank premises and equipment, net

 

 

 

7,308

 

 

 

8,351

 

 

 

Interest receivable and other assets, net

 

 

 

105,894

 

 

 

88,096

 

 

 

Total assets

 

 

 

$

2,523,883

 

 

 

2,464,736

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

 

 

 

$

126,168

 

$

168

 

0.27

%

155,180

 

100

 

0.13

%

Savings accounts

 

 

 

177,211

 

35

 

0.04

%

179,601

 

36

 

0.04

%

Money market accounts

 

 

 

667,218

 

1,551

 

0.47

%

597,868

 

452

 

0.15

%

Time accounts including CDARS

 

 

 

114,336

 

294

 

0.52

%

147,633

 

296

 

0.40

%

Borrowings and other obligations 1

 

 

 

5,500

 

71

 

2.56

%

116

 

1

 

1.84

%

Subordinated debentures 1

 

 

 

2,655

 

118

 

8.87

%

5,770

 

237

 

8.16

%

Total interest-bearing liabilities

 

 

 

1,093,088

 

2,237

 

0.41

%

1,086,168

 

1,122

 

0.21

%

Demand accounts

 

 

 

1,080,392

 

 

 

1,061,304

 

 

 

Interest payable and other liabilities

 

 

 

30,383

 

 

 

18,180

 

 

 

Stockholders' equity

 

 

 

320,020

 

 

 

299,084

 

 

 

Total liabilities & stockholders' equity

 

 

 

$

2,523,883

 

 

 

2,464,736

 

 

 

Tax-equivalent net interest income/margin 1

 

 

 

 

$

48,193

 

4.03

%

 

45,424

 

3.89

%

Reported net interest income/margin 1

 

 

 

 

$

47,635

 

3.98

%

 

44,733

 

3.83

%

Tax-equivalent net interest rate spread

 

 

 

 

 

3.81

%

 

 

3.77

%

 

 

 

 

 

 

 

 

 

 

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 2019 and 2018.

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.

 

Beth Drummey
Marketing & Corporate Communications Manager
415-763-4529 | bethdrummey@bankofmarin.com

Source: Bank of Marin Bancorp