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Investor Relations

Investor Relations
Press Release

Bank of Marin Bancorp Reports First Quarter Earnings of $7.2 Million

Company Release - 4/20/2020 8:00 AM ET

Rapidly Responding to Evolving Impacts of the Novel Coronavirus

NOVATO, Calif.--(BUSINESS WIRE)-- Bank of Marin Bancorp, "Bancorp" (Nasdaq: BMRC), parent company of Bank of Marin, "Bank," announced earnings of $7.2 million in the first quarter of 2020, compared to $9.1 million in the fourth quarter of 2019 and $7.5 million in the first quarter of 2019. Diluted earnings per share were $0.53 in the first quarter of 2020 compared to $0.66 in the prior quarter and $0.54 in the same quarter last year. Net income reflected a $2.2 million provision for loan losses related to the economic uncertainties of the COVID-19 pandemic as well as typical first quarter increases in non-interest expenses. The provision for loan losses negatively impacted diluted earnings per share by approximately $0.12. Partially offsetting the downward pressure on earnings were gains on investment securities sales and accelerated discount accretion from the early call on an investment security, which positively impacted diluted earnings per share by approximately $0.07.

During the first quarter, Bank of Marin was actively engaged in responding to the COVID-19 pandemic. All branches remain open to serve our customers and local communities, with modified hours and strict social distancing protocols in place as well as a maximum of two customers allowed in a branch at one time. To protect the health of everyone, many employees are working remotely, travel restrictions are in effect, and cleaning protocols have been enhanced across all locations.

We announced in March the waiver of all ATM and overdraft fees, and the cancellation of early withdrawal penalties for time certificate of deposits when allowed by law. We are providing payment relief for 120 days to borrowers with hardship requests, have reduced interest rate floors on mostly commercial Prime Rate based loans and are participating in the Small Business Administration’s ("SBA's") Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security ("CARES") Act. In addition, we have suspended our share repurchase program.

"We want to extend our sincere best wishes to all those directly fighting the Coronavirus in Northern California and across the country," said Russell A. Colombo, President and Chief Executive Officer. "Bank of Marin is focusing its capital, liquidity, financial strength and expertise on the broad-based solutions required to respond to this crisis," Colombo continued. "Thanks to the success of our pandemic response plan and the tireless work of our staff, we are prepared to support our communities as long as they need us.”

Bancorp also provided the following highlights from the first quarter of 2020:

  • Loans totaled $1,843.9 million at March 31, 2020, compared to $1,843.3 million at December 31, 2019, an increase of $574 thousand. Loan originations of $29.8 million and line utilization increases of $28.9 million were mostly offset by payoffs of $51.7 million.
  • Our loan portfolio exposure to industries most affected by the shelter-in-place order includes 10.4% retail properties and businesses, 4.6% wine-related businesses and 2.7% hospitality. Transportation, dental, recreation and entertainment combined represent less than 1.5% of the total portfolio. Loans to these customers are generally secured by real estate with low loan-to-value ratios and strong guarantors.
  • As of April 14, 2020, the Bank had received approximately $322 million loan relief requests for conversion to interest only or payment deferral. Ninety-three percent of the total requests were secured by real estate with loan-to-value ratios averaging less than 45%, and $129 million were linked to industries most impacted by the shelter-in-place order.
  • Prior to receiving approval to participate in the Payroll Protection Program, we put in place a system, team and process to begin accepting and reviewing applications. To date, we have received approximately 1,300 applications for an estimated total of $350 million. We were able to submit and receive SBA approval for a meaningful portion of those applications prior to SBA’s suspension of the program due to funds being fully allocated. We continue to internally process customer applications and remain poised to submit them for approval as soon as the program is restarted.
  • Total deposits decreased $29.4 million in the first quarter to $2,307.1 million. Non-interest bearing deposits represented 49% of total deposits in the first quarter and have been at or near this level since the beginning of 2018. The cost of average deposits decreased to 0.21% in the first quarter, compared to 0.23% in the fourth quarter of 2019. In addition to our stable deposit base, cash and investments of $736.3 million, which accounted for 27.3% of total assets, provide substantial liquidity.
  • Strong credit quality remains a cornerstone of the Bank's consistent performance. Non-accrual loans represented only 0.09% of the Bank's loan portfolio at March 31, 2020. A $2.2 million provision for loan losses and $102 thousand provision for losses on off-balance sheet commitments were recorded in the first quarter of 2020 to take into account the impact of the COVID-19 pandemic.
  • All capital ratios were above regulatory requirements. The total risk-based capital ratio for Bancorp was 15.3% at March 31, 2020, compared to 15.1% at December 31, 2019. Tangible common equity to tangible assets was 11.7% at March 31, 2020, compared to 11.3% at December 31, 2019 (refer to footnote 3 on page 6 for a definition of this non-GAAP financial measure).
  • Because of our continued profitability, the Board of Directors declared a cash dividend of $0.23 per share on April 17, 2020. This represents the 60th consecutive quarterly dividend paid by Bank of Marin Bancorp. The dividend is payable on May 8, 2020, to shareholders of record at the close of business on May 1, 2020.

Loans and Credit Quality

Loans increased by $574 thousand in the first quarter and totaled $1,843.9 million at March 31, 2020. Loan originations for the three months ended March 31, 2020 and March 31, 2019 were $29.8 million and $34.0 million, respectively. Loan payoffs were $51.7 million in the first quarter of 2020 and $26.1 million in the same quarter last year. Payoffs in the first quarter consisted largely of loans whereby underlying assets were sold, including construction loans, and planned payoffs expected to refinance elsewhere as part of risk concentration management. Commitment line utilization contributed to the overall increase in loans in the first quarter.

Non-accrual loans totaled $1,632 thousand, or 0.09% of the loan portfolio at March 31, 2020, compared to $226 thousand, or 0.01% at December 31, 2019, and $719 thousand, or 0.04% a year ago. Classified loans totaled $12.1 million at March 31, 2020, compared to $9.9 million at December 31, 2019 and $14.8 million at March 31, 2019. There were no loans classified doubtful at March 31, 2020, December 31, 2019, or March 31, 2019. Accruing loans past due 30 to 89 days totaled $1,315 thousand at March 31, 2020, compared to $1,481 thousand at December 31, 2019 and $2,194 thousand a year ago.

In accordance with the accounting relief provisions of the CARES Act, the Bank has postponed the adoption of the current expected credit losses (“CECL”) accounting standards, primarily due to the impact the COVID-19 pandemic is having on the economy and the lack of reasonable and supportable economic forecasts. Had we adopted CECL as of January 1, 2020, the increase to our allowance for loan losses would have ranged from 5% to 15% of the amount recorded at December 31, 2019, which did not consider potential COVID-19 pandemic related impacts.

Under the existing incurred loss model we adjusted certain qualitative factors, taking into account the uncertain impacts of the pandemic, and recorded a $2.2 million loan loss provision in the first quarter of 2020. There was a $500 thousand provision for loan losses recorded in the fourth quarter and no provision for loan losses recorded in the first period last year. Net recoveries were $7 thousand in the first quarter of 2020, compared to net charge-offs of $63 thousand for the prior quarter and $4 thousand in the first quarter a year ago. The ratio of loan loss reserves to loans, including acquired loans, was 1.02% at March 31, 2020, 0.90% at December 31, 2019, and 0.89% at March 31, 2019.

Investments

The investment securities portfolio increased from $569.7 million at December 31, 2019 to $580.0 million at March 31, 2020. During the first quarter 2020, we sold $26.6 million short duration agency residential mortgage-backed securities subject to increasing prepayment speeds, which resulted in a gain of $800 thousand, and purchased $54.9 million longer-duration high credit quality bonds.

Deposits

Total deposits were $2,307.1 million at March 31, 2020, compared to $2,336.5 million at December 31, 2019. The $29.4 million decrease during the first quarter primarily resulted from normal cash fluctuations in some of our large business accounts. The average cost of deposits in the first quarter of 2020 was 0.21%, a decrease of 2 basis points from the prior quarter.

Operating Leases

Operating lease right-of-use assets increased $11.2 million and operating lease liabilities increased $11.1 million in the first quarter of 2020 as compared to the prior quarter. These changes reflect modified lease terms for our existing headquarters office and a new lease agreement for one of our retail branches.

Earnings

"The pandemic has resulted in lower interest rates, higher volatility and some deterioration in household, business, and market conditions that will impact all of us in the coming quarters," said Tani Girton, EVP and Chief Financial Officer. "The strength of Bank of Marin’s relationship banking model, underlying operations and expense discipline positions us well to navigate the challenges ahead."

Net interest income totaled $24.1 million in the first quarter of 2020, compared to $23.9 million in the prior quarter and $23.8 million a year ago. The $225 thousand increase from the prior quarter was primarily related to higher average earning asset balances, $436 thousand accelerated accretion on an investment security call and lower deposit rates, partially offset by lower yields on loans and one less day in the quarter. The $273 thousand increase from the comparative quarter a year ago was reflective of higher average loan balances, accelerated accretion on the called bond and one more day of interest, partially offset by lower yields on loans and higher deposit balances and rates.

The tax-equivalent net interest margin was 3.88% in the first quarter, 3.82% in the prior quarter, and 4.02% in the first quarter of 2019. The same factors that drove changes in net interest income accounted for the differences in net interest margin between the quarters. Accelerated accretion on the called investment security added 7 basis points to the first quarter margin.

In response to the evolving risks to economic activity posed by the COVID-19 pandemic, the Federal Reserve Open Market Committee ("FOMC") made two emergency cuts totaling 150 basis points to the federal funds rate in March. This will put downward pressure on our asset yields and net interest margin with the full effect to be seen in future quarters.

Non-interest income totaled $3.1 million in the first quarter of 2020, $2.3 million in the prior quarter, and $1.8 million in the same quarter a year ago. The increase of $802 thousand from the prior quarter was primarily due to $800 thousand in gains from the sale of investment securities. The $1.3 million increase from the same quarter a year ago was attributed primarily to the gains on investment security sales, higher wealth management and trust service income, annual dividend on bank-owned life insurance investments, and several small changes in other income in the first quarter of 2020. In addition, there were $283 thousand non-refundable costs for underwriting two bank-owned life insurance policies in the same quarter a year ago.

Non-interest expense increased $2.2 million to $15.5 million in the first quarter of 2020, from $13.3 million in the prior quarter. The increase was primarily due to $1.7 million higher salaries and benefits expense typical in the first quarter of the year related to January resets of 401K matching and payroll taxes, 2019 bonus accrual true-ups, 401K matching on bonus payments, and stock-based compensation, which included $388 thousand for participants meeting retirement eligibility criteria. In addition, deferred costs declined due to the lower level of loan originations and there were four additional full-time equivalent staff in the first quarter. Occupancy and equipment expense was up $136 thousand primarily due to common area maintenance adjustments and there was a $102 thousand provision for losses on off-balance sheet loan commitments in the first quarter.

First quarter non-interest expense decreased $59 thousand from the same quarter last year. Decreases in data processing costs of $229 thousand (mostly attributed to the digital platform conversion) and the absence of Federal Deposit Insurance Corporation ("FDIC") deposit insurance expense as the FDIC Deposit Insurance Fund reserve exceeded its billing threshold were partially offset by higher salaries and benefits related to merit increases and occupancy and equipment expense mentioned above.

Share Repurchase Program

During the quarter, Bancorp repurchased 92,664 shares totaling $3.2 million. Bancorp's $25.0 million share repurchase program originally announced by the Board April 23, 2018 and subsequently extended to February 28, 2020 expired with cumulative purchases of 561,355 shares totaling $23.5 million. The new $25.0 million share repurchase program approved by the Board on January 24, 2020, began subsequent to the February 28, 2020 expiration, and was suspended on March 20, 2020 in response to the COVID-19 pandemic. Repurchases under the new program were 58,526 shares totaling $1.8 million. The program will be monitored with the opportunity to reinstitute when the Board deems appropriate.

Earnings Call and Webcast Information

Bank of Marin Bancorp will present its first quarter earnings call via webcast on Monday, April 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 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 $2.7 billion, Bank of Marin has 22 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, 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), 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

March 31, 2020

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

March 31, 2020

 

December 31, 2019

 

March 31, 2019

Quarter-to-Date

 

 

 

 

 

Net income

$

7,228

 

 

$

9,079

 

 

$

7,479

 

Diluted earnings per common share

$

0.53

 

 

$

0.66

 

 

$

0.54

 

Return on average assets

1.09

%

 

1.37

%

 

1.19

%

Return on average equity

8.54

%

 

10.75

%

 

9.54

%

Efficiency ratio

56.79

%

 

50.84

%

 

60.62

%

Tax-equivalent net interest margin 1

3.88

%

 

3.82

%

 

4.02

%

Cost of deposits

0.21

%

 

0.23

%

 

0.18

%

Net (recoveries) charge-offs

$

(7

)

 

$

63

 

 

$

4

 

Net (recoveries) charge-offs to average loans

%

 

%

 

%

At Period End

 

 

 

 

 

Total assets

$

2,697,738

 

 

$

2,707,280

 

 

$

2,534,076

 

Loans:

 

 

 

 

 

Commercial and industrial

$

264,405

 

 

$

246,687

 

 

$

237,646

 

Real estate:

 

 

 

 

 

Commercial owner-occupied

306,371

 

 

308,824

 

 

310,588

 

Commercial investor-owned

930,479

 

 

946,317

 

 

878,494

 

Construction

63,425

 

 

61,095

 

 

72,271

 

Home equity

116,968

 

 

116,024

 

 

124,512

 

Other residential

135,929

 

 

136,657

 

 

117,558

 

Installment and other consumer loans

26,283

 

 

27,682

 

 

31,469

 

Total loans

$

1,843,860

 

 

$

1,843,286

 

 

$

1,772,538

 

Non-performing loans: 2

 

 

 

 

 

Commercial and industrial

$

 

 

$

 

 

$

309

 

Real estate:

 

 

 

 

 

Commercial investor-owned

942

 

 

 

 

 

Home equity

633

 

 

168

 

 

346

 

Installment and other consumer loans

57

 

 

58

 

 

64

 

Total non-accrual loans

$

1,632

 

 

$

226

 

 

$

719

 

Classified loans (graded substandard and doubtful)

$

12,056

 

 

$

9,934

 

 

$

14,811

 

Total accruing loans 30-89 days past due

$

1,315

 

 

$

1,481

 

 

$

2,194

 

Allowance for loan losses to total loans

1.02

%

 

0.90

%

 

0.89

%

Allowance for loan losses to non-performing loans

 

11.57

x

 

 

73.86

x

 

 

21.99

x

Non-accrual loans to total loans

0.09

%

 

0.01

%

 

0.04

%

Total deposits

$

2,307,110

 

 

$

2,336,489

 

 

$

2,178,629

 

Loan-to-deposit ratio

79.9

%

 

78.9

%

 

81.4

%

Stockholders' equity

$

345,940

 

 

$

336,788

 

 

$

320,664

 

Book value per share

$

25.50

 

 

$

24.81

 

 

$

23.26

 

Tangible common equity to tangible assets 3

11.7

%

 

11.3

%

 

11.4

%

Total risk-based capital ratio - Bank

14.4

%

 

14.6

%

 

13.9

%

Total risk-based capital ratio - Bancorp

15.3

%

 

15.1

%

 

14.9

%

Full-time equivalent employees

296

 

 

290

 

 

296

 

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 $11.1 million, $11.3 million and $14.0 million at March 31, 2020, December 31, 2019 and March 31, 2019, respectively.

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 $34.6 million, $34.8 million and $35.5 million at March 31, 2020, December 31, 2019, and March 31, 2019, respectively. Tangible assets exclude goodwill and intangible assets.

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF CONDITION

At March 31, 2020, December 31, 2020 and March 31, 2019

(in thousands, except share data; unaudited)

March 31,

2020

December 31,

2019

March 31,

2019

Assets

 

 

 

Cash, cash equivalents and restricted cash

$

156,274

 

$

183,388

 

$

51,639

 

Investment securities

 

 

 

Held-to-maturity, at amortized cost

131,140

 

137,413

 

152,845

 

Available-for-sale (at fair value; amortized cost $431,519, $423,923 and $442,386 at March 31, 2020, December 31, 2019 and March 31, 2019 respectively)

448,868

 

432,260

 

442,885

 

Total investment securities

580,008

 

569,673

 

595,730

 

Loans, net of allowance for loan losses of $18,884, $16,677 and $15,817 at March 31, 2020, December 31, 2019 and March 31, 2019 respectively

1,824,976

 

1,826,609

 

1,756,721

 

Bank premises and equipment, net

5,708

 

6,070

 

7,237

 

Goodwill

30,140

 

30,140

 

30,140

 

Core deposit intangible

4,471

 

4,684

 

5,349

 

Operating lease right-of-use assets

22,225

 

11,002

 

12,465

 

Interest receivable and other assets

73,936

 

75,714

 

74,795

 

Total assets

$

2,697,738

 

$

2,707,280

 

$

2,534,076

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Liabilities

 

 

 

Deposits

 

 

 

Non-interest bearing

$

1,130,460

 

$

1,128,823

 

$

1,076,382

 

Interest bearing

 

 

 

Transaction accounts

137,802

 

142,329

 

130,001

 

Savings accounts

167,210

 

162,817

 

180,758

 

Money market accounts

776,271

 

804,710

 

680,806

 

Time accounts

95,367

 

97,810

 

110,682

 

Total deposits

2,307,110

 

2,336,489

 

2,178,629

 

Borrowings and other obligations

185

 

212

 

309

 

Subordinated debentures

2,725

 

2,708

 

2,657

 

Operating lease liabilities

23,726

 

12,615

 

14,349

 

Interest payable and other liabilities

18,052

 

18,468

 

17,468

 

Total liabilities

2,351,798

 

2,370,492

 

2,213,412

 

 

 

 

 

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 - 13,565,969, 13,577,008 and 13,786,808 at March 31 2020, December 31, 2019 and March 31, 2019, respectively

127,684

 

129,058

 

137,125

 

Retained earnings

207,328

 

203,227

 

184,793

 

Accumulated other comprehensive income (loss), net of taxes

10,928

 

4,503

 

(1,254

)

Total stockholders' equity

345,940

 

336,788

 

320,664

 

Total liabilities and stockholders' equity

$

2,697,738

 

$

2,707,280

 

$

2,534,076

 

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

Three months ended

(in thousands, except per share amounts; unaudited)

March 31, 2020

December 31, 2019

March 31, 2019

Interest income

 

 

 

Interest and fees on loans

$

20,887

 

$

21,123

 

$

20,695

 

Interest on investment securities

4,165

 

3,543

 

4,097

 

Interest on federal funds sold and due from banks

332

 

567

 

139

 

Total interest income

25,384

 

25,233

 

24,931

 

Interest expense

 

 

 

Interest on interest-bearing transaction accounts

66

 

78

 

77

 

Interest on savings accounts

16

 

18

 

18

 

Interest on money market accounts

971

 

1,033

 

764

 

Interest on time accounts

161

 

154

 

119

 

Interest on borrowings and other obligations

2

 

2

 

47

 

Interest on subordinated debentures

49

 

54

 

60

 

Total interest expense

1,265

 

1,339

 

1,085

 

Net interest income

24,119

 

23,894

 

23,846

 

Provision for loan losses

2,200

 

500

 

 

Net interest income after provision for loan losses

21,919

 

23,394

 

23,846

 

Non-interest income

 

 

 

Service charges on deposit accounts

451

 

462

 

479

 

Wealth Management and Trust Services

504

 

501

 

438

 

Debit card interchange fees, net

360

 

386

 

380

 

Merchant interchange fees, net

73

 

78

 

87

 

Earnings on (cost of) bank-owned life insurance

275

 

226

 

(60

)

Dividends on FHLB stock

208

 

208

 

196

 

Gains (losses) on sale of investment securities, net

800

 

 

(6

)

Other income

449

 

457

 

257

 

Total non-interest income

3,120

 

2,318

 

1,771

 

Non-interest expense

 

 

 

Salaries and related benefits

9,477

 

7,827

 

9,146

 

Occupancy and equipment

1,663

 

1,527

 

1,531

 

Depreciation and amortization

526

 

527

 

556

 

Federal Deposit Insurance Corporation insurance

2

 

7

 

179

 

Data processing

786

 

775

 

1,015

 

Professional services

544

 

431

 

586

 

Directors' expense

174

 

180

 

179

 

Information technology

250

 

243

 

259

 

Amortization of core deposit intangible

213

 

222

 

222

 

Provision for losses on off-balance sheet commitments

102

 

 

129

 

Other expense

1,732

 

1,587

 

1,726

 

Total non-interest expense

15,469

 

13,326

 

15,528

 

Income before provision for income taxes

9,570

 

12,386

 

10,089

 

Provision for income taxes

2,342

 

3,307

 

2,610

 

Net income

$

7,228

 

$

9,079

 

$

7,479

 

Net income per common share:

 

 

 

Basic

$

0.53

 

$

0.67

 

$

0.54

 

Diluted

$

0.53

 

$

0.66

 

$

0.54

 

Weighted average shares:

 

 

 

Basic

13,525

 

13,521

 

13,737

 

Diluted

13,656

 

13,703

 

13,924

 

Comprehensive income:

 

 

 

Net income

$

7,228

 

$

9,079

 

$

7,479

 

Other comprehensive income (loss)

 

 

 

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

9,812

 

(2,018

)

3,939

 

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

(800

)

 

6

 

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

110

 

117

 

101

 

Subtotal

9,122

 

(1,901

)

4,046

 

Deferred tax expense (benefit)

2,697

 

(558

)

1,198

 

Other comprehensive income (loss), net of tax

6,425

 

(1,343

)

2,848

 

Comprehensive income

$

13,653

 

$

7,736

 

$

10,327

 

BANK OF MARIN BANCORP

AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME

 

Three months ended

Three months ended

Three months ended

 

March 31, 2020

December 31, 2019

March 31, 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-bearing due from banks 1

$

99,362

 

$

332

 

1.32

%

$

136,320

 

$

566

 

1.63

%

$

22,690

 

$

139

 

2.45

%

Investment securities 2, 3

556,897

 

4,266

 

3.06

%

530,596

 

3,625

 

2.73

%

619,562

 

4,191

 

2.71

%

Loans 1, 3, 4

1,833,180

 

21,066

 

4.55

%

1,804,667

 

21,276

 

4.61

%

1,756,316

 

20,887

 

4.76

%

Total interest-earning assets 1

2,489,439

 

25,664

 

4.08

%

2,471,583

 

25,467

 

4.03

%

2,398,568

 

25,217

 

4.21

%

Cash and non-interest-bearing due from banks

40,844

 

 

 

39,882

 

 

 

30,947

 

 

 

Bank premises and equipment, net

5,939

 

 

 

6,326

 

 

 

7,512

 

 

 

Interest receivable and other assets, net

118,909

 

 

 

112,895

 

 

 

104,685

 

 

 

Total assets

$

2,655,131

 

 

 

$

2,630,686

 

 

 

$

2,541,712

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

$

138,395

 

$

66

 

0.19

%

$

145,237

 

$

79

 

0.22

%

$

127,733

 

$

77

 

0.24

%

Savings accounts

163,439

 

16

 

0.04

%

164,664

 

17

 

0.04

%

180,355

 

18

 

0.04

%

Money market accounts

760,616

 

971

 

0.51

%

725,192

 

1,033

 

0.57

%

673,137

 

764

 

0.46

%

Time accounts including CDARS

96,157

 

161

 

0.67

%

97,302

 

154

 

0.63

%

113,389

 

119

 

0.43

%

Borrowings and other obligations 1

358

 

2

 

1.81

%

226

 

2

 

2.80

%

7,414

 

47

 

2.55

%

Subordinated debentures 1

2,715

 

49

 

7.19

%

2,698

 

54

 

7.79

%

2,647

 

60

 

9.05

%

Total interest-bearing liabilities

1,161,680

 

1,265

 

0.44

%

1,135,319

 

1,339

 

0.47

%

1,104,675

 

1,085

 

0.40

%

Demand accounts

1,119,975

 

 

 

1,129,068

 

 

 

1,086,947

 

 

 

Interest payable and other liabilities

33,045

 

 

 

31,270

 

 

 

32,163

 

 

 

Stockholders' equity

340,431

 

 

 

335,029

 

 

 

317,927

 

 

 

Total liabilities & stockholders' equity

$

2,655,131

 

 

 

$

2,630,686

 

 

 

$

2,541,712

 

 

 

Tax-equivalent net interest income/margin 1

 

$

24,399

 

3.88

%

 

$

24,128

 

3.82

%

 

$

24,132

 

4.02

%

Reported net interest income/margin 1

 

$

24,119

 

3.83

%

 

$

23,894

 

3.78

%

 

$

23,846

 

3.98

%

Tax-equivalent net interest rate spread

 

 

3.64

%

 

 

3.56

%

 

 

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.

 

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

Source: Bank of Marin Bancorp