Bank of Marin Bancorp Reports Record Earnings in 2019; Announces Dividend Increase & New Share Repurchase Program

NOVATO, Calif.--()--Bank of Marin Bancorp, "Bancorp" (Nasdaq: BMRC), parent company of Bank of Marin, "Bank," announced record annual earnings of $34.2 million in 2019 compared to $32.6 million in 2018 as a result of consistent loan growth and lower expenses. Diluted earnings per share were $2.48 for the year ended December 31, 2019, compared to $2.33 per share for the year ended December 31, 2018.

Earnings were $9.1 million in the fourth quarter of 2019, compared to $9.4 million in the third quarter of 2019 and $9.7 million in the fourth quarter of 2018. Earnings were slightly down in the fourth quarter of 2019 due to a benefit on bank-owned-life insurance ("BOLI") policies and deferred tax liability true up in the prior quarter. Diluted earnings per share were $0.66 in the fourth quarter of 2019, compared to $0.69 in the prior quarter and same quarter a year ago. Share and per share data has been adjusted throughout this document to reflect the two-for-one stock split effective November 27, 2018.

The robust financial performance we delivered in 2019 is a testament to the Bank's commitment to relationship banking,” said Russell A. Colombo, President and Chief Executive Officer. “We believe the future looks bright as we move into 2020 with consistently growing loan volume, a low cost and stable deposit base, and exceptional credit quality.”

Bancorp also provided the following highlights for the fourth quarter and year ended December 31, 2019:

  • The Bank achieved loan growth of $79.4 million in 2019, or 4.5%, to $1,843.3 million at December 31, 2019, from $1,763.9 million at December 31, 2018. Loans increased $44.6 million in the fourth quarter from $1,798.7 million at September 30, 2019.
  • Strong credit quality remains a cornerstone of the Bank’s consistent performance. Non-accrual loans represented 0.01% of the Bank's loan portfolio as of December 31, 2019. There was a $500 thousand provision for loan losses recorded in the fourth quarter of 2019, reflecting loan growth.
  • Deposits grew $161.7 million, or 7.4%, to $2,336.5 million at December 31, 2019, compared to $2,174.8 million at December 31, 2018. Non-interest bearing deposits grew by $62.8 million in 2019 and made up 48.3% of total deposits at year end. Cost of deposits remained low at 0.20% for the full year of 2019, up only 0.10% from 2018.
  • For the full year 2019, return on assets ("ROA") and return on equity ("ROE") were 1.34% and 10.49%, respectively, compared to 1.31% and 10.73% in the prior year. For the quarter ended December 31, 2019, ROA was 1.37% and ROE was 10.75%, compared to 1.49% and 11.34%, 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 15.1% at December 31, 2019 and 14.9% at December 31, 2018. Tangible common equity to tangible assets was 11.3% at both December 31, 2019 and December 31, 2018 (refer to footnote 3 on page 6 for definition of this non-GAAP financial measure).
  • The Board of Directors declared a cash dividend of $0.23 per share on January 24, 2020, a $0.02 increase from the prior quarter. This is the 59th consecutive quarterly dividend paid by Bank of Marin Bancorp. The cash dividend is payable on February 14, 2020 to shareholders of record at the close of business on February 7, 2020.
  • With the current Share Repurchase Plan nearing expiration, on January 24, 2020, the Bancorp Board of Directors approved a new Share Repurchase Program under which Bancorp may repurchase up to $25.0 million of its outstanding common stock through February 28, 2022.

Loans and Credit Quality

Loans grew $44.6 million in the fourth quarter of 2019 and totaled $1,843.3 million at December 31, 2019. For the quarter and year ended December 31, 2019, new loan originations of $103.4 million and $259.6 million, respectively, exceeded 2018 loan originations of $73.6 million and $239.4 million for the same periods. New loan originations were partially offset by payoffs of $37.9 million in the fourth quarter and $145.7 million for the full year ended December 31, 2019.

Non-accrual loans totaled $226 thousand, or 0.01% of the Bank's loan portfolio at December 31, 2019, a decrease from $422 thousand, or 0.02%, at September 30, 2019 and $697 thousand, or 0.04%, a year ago. Loans classified substandard totaled $9.9 million at both December 31, 2019 and September 30, 2019, down $2.7 million from $12.6 million at December 31, 2018. There were no loans classified doubtful at December 31, 2019 or December 31, 2018. Accruing loans past due 30 to 89 days totaled $1.5 million at December 31, 2019, compared to $574 thousand at September 30, 2019 and $1.1 million a year ago.

The Bank recorded a $500 thousand provision for loan losses in the fourth quarter and $400 thousand in the third quarter of 2019. No provision for loan losses was recorded in the fourth quarter a year ago. Net charge-offs for the fourth quarter of 2019 totaled $63 thousand compared to net recoveries of $6 thousand last quarter and $4 thousand in the fourth quarter of 2018. Net charge-offs totaled $44 thousand for the year ended December 31, 2019, compared to net recoveries of $54 thousand in 2018. The ratio of loan loss reserve to loans, including acquired loans, was 0.90% at December 31, 2019, September 30, 2019 and December 31, 2018.

The new current expected credit loss ("CECL") accounting standard became effective on January 1, 2020 and had no impact on our 2019 results. Under CECL, our primary credit loss methodology will utilize a discounted cash flow approach that considers the probability of default and loss given default. Parallel testing occurred throughout 2019 and we estimate that our implementation of CECL will result in an increase to our allowance for credit losses between 5% and 15%, which will be recorded as an adjustment to retained earnings net of tax.

Investments

The investment portfolio totaled $569.7 million at December 31, 2019, an increase of $68.7 million from September 30, 2019 and a decrease of $50.0 million from December 31, 2018. The increase in the fourth quarter of 2019 was primarily attributed to purchases of securities totaling $95.6 million, partially offset by principal paydowns and maturities. The year-over-year decrease was a combination of sales of $66.0 million, principal paydowns of $62.9 million, and maturities and calls of $46.1 million, partially offset by purchases of $114.5 million, and an increase in the fair value of available-for-sale securities.

Deposits

Deposits totaled $2,336.5 million at December 31, 2019, compared to $2,224.5 million at September 30, 2019 and $2,174.8 million at December 31, 2018. The $112.0 million increase in deposits from the prior quarter primarily resulted from cash fluctuations in some of our large clients' business accounts. The average cost of deposits increased 2 basis points in the fourth quarter to 0.23%. The average cost of deposits for the full year of 2019 was 0.20%, up 10 basis points from 2018.

Earnings

Our record 2019 results are a product of a well-executed strategy to invest in people focused on performing at a high level,” said Tani Girton, EVP and Chief Financial Officer. “With a fourth quarter tax equivalent net interest margin of 3.82%, and a 50.84% efficiency ratio that demonstrates a commitment to making every expense dollar count, we feel that our team is poised to deliver another good year in 2020.”

Net interest income totaled $23.9 million in the fourth quarter of 2019, compared to $24.2 million in the prior quarter and $23.3 million in the same quarter a year ago. The $257 thousand decrease from the prior quarter primarily related to a $388 thousand interest recovery on a land development loan in the third quarter and lower earning asset yields in the fourth quarter, partially offset by higher average balances in the fourth quarter. Increases in interest-bearing deposit balances and rates also contributed to the decrease.

The $622 thousand net interest income increase from the same quarter last year was primarily due to a decrease in interest expense from the early redemption of a subordinated debenture ($916 thousand in accelerated discount accretion) in the fourth quarter of 2018, and higher average loan balances in the fourth quarter of 2019. Positive variances were partially offset by lower investment securities balances and higher interest-bearing deposit balances and rates.

The tax-equivalent net interest margin was 3.82% for the fourth quarter of 2019, compared to 4.04% in the prior quarter and 3.85% in the fourth quarter of 2018. The 22 basis point decrease from the prior quarter was primarily attributed to interest recovered from the land development loan in the third quarter, lower loan rates and higher interest-bearing deposit rates and balances. The 3 basis point decrease from the same quarter a year ago was primarily attributed to lower yields on loans and cash and higher interest-bearing deposit balances and rates, largely offset by higher loan balances and the accelerated accretion from the early redemption of the high-rate subordinated debenture in the fourth quarter of 2018.

Net interest income totaled $95.7 million and $91.5 million in 2019 and 2018, respectively. The increase of $4.2 million in 2019 was primarily due to higher average loan balances and asset yields and the early redemption of subordinated debt mentioned above. Positive variances were partially offset by higher balances and rates on money market accounts. The tax-equivalent net interest margin increased 8 basis points to 3.98% in 2019, from 3.90% in 2018 for the same reasons.

Non-interest income in the fourth quarter of 2019 totaled $2.3 million, compared to $2.7 million in the prior quarter and $3.4 million in the same quarter a year ago. The $403 thousand decrease compared to the prior quarter was primarily related to a $562 thousand benefit collected on BOLI policies in the third quarter, partially offset by higher fee income from one-way deposit sales to third-party deposit networks. The $1.1 million decrease from the same quarter a year ago primarily related to a $956 thousand pre-tax gain on sale of 6,500 shares of Visa Inc. Class B restricted common stock to a member bank of Visa U.S.A and a $180 thousand Federal Home Loan Bank ("FHLB") special dividend in the fourth quarter of 2018. The Bank sold less than half of its Visa Inc. position in 2018 to realize appreciation in market prices and hedge against market volatility. Non-interest income of $9.1 million in 2019 decreased from $10.1 million in 2018 primarily due to the Visa Inc. Class B stock sale and FHLB special dividend in 2018, as well as lower fee income from one-way deposit sales in 2019. The negative variance was partially offset by the benefit collected on BOLI in 2019.

Non-interest expense totaled $13.3 million in the fourth quarter of 2019, compared to $14.2 million in the prior quarter and $13.7 million in the same quarter a year ago. The $874 thousand decrease in the fourth quarter of 2019 compared to the prior quarter was mainly due to lower incentive bonus expense and higher deferred loan origination costs due to a higher volume of loan originations. The same items contributed to the $379 thousand decrease from the same quarter last year in addition to lower data processing costs and the reversal of Federal Deposit Insurance Corporation ("FDIC") deposit insurance expense when the FDIC Deposit Insurance Fund reserve exceeded its billing threshold.

Non-interest expense of $58.0 million in 2019 decreased from $58.3 million in 2018, primarily due to consulting expenses related to core processing contract negotiations and Bank of Napa acquisition-related expenses in 2018, lower employee health insurance expenses due to change in carrier in 2019, and cost reductions mentioned above. Reductions were partially offset by staffing and annual merit increases.

Share Repurchase Program

Bancorp's existing $25.0 million Share Repurchase Program expires February 28, 2020. Bancorp repurchased 42,349 shares totaling $1.9 million in the fourth quarter of 2019 for a cumulative total of 527,217 shares and $22.0 million as of December 31, 2019.

With the current Share Repurchase Program nearing expiration, Bancorp’s Board of Directors approved a new repurchase program on January 24, 2020 of up to $25.0 million of Bancorp’s common stock. Repurchases will not begin under this new program until Bancorp is no longer in a trading blackout or otherwise in possession of material non-public information and the program will continue through February 28, 2022.

Under the new Share Repurchase Program, Bancorp may purchase shares of its common stock through various means such as open market transactions, including block purchases, and privately negotiated transactions. The number of shares repurchased and the timing, manner, price and amount of any repurchases will be determined at Bancorp’s discretion. Factors include, but are not limited to, stock price, trading volume and general market conditions, along with Bancorp’s general business conditions. The program may be suspended or discontinued at any time and does not obligate Bancorp to acquire any specific number of shares of its common stock.

As part of the new Share Repurchase Program, Bancorp intends to enter into a trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The 10b5-1 trading plan would permit common stock to be repurchased at a time that Bancorp might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions. The 10b5-1 trading plan will be administered by an independent broker and will be subject to price, market volume and timing restrictions.

Earnings Call and Webcast Information

Bank of Marin Bancorp will webcast its fourth quarter and year end 2019 earnings call on Monday, January 27, 2020 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 $2.7 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, 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), natural disasters (such as wildfires and earthquakes), interruptions of utility service in our markets for sustained periods, and other economic, competitive, governmental, regulatory and technological factors (including external fraud and cyber-security threats) affecting Bancorp's operations, pricing, products and services. These and other important factors are detailed in various securities law filings made periodically by Bancorp, copies of which are available from Bancorp without charge. Bancorp undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

BANK OF MARIN BANCORP

FINANCIAL HIGHLIGHTS

December 31, 2019

 

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

December 31,
2019

 

September 30,
2019

 

December 31,
2018

Quarter-to-Date

 

 

 

 

 

Net income

$

9,079

 

 

$

9,448

 

 

$

9,662

 

Diluted earnings per common share 4

$

0.66

 

 

$

0.69

 

 

$

0.69

 

Return on average assets

 

1.37

%

 

 

1.49

%

 

 

1.52

%

Return on average equity

 

10.75

%

 

 

11.34

%

 

 

12.37

%

Efficiency ratio

 

50.84

%

 

 

52.84

%

 

 

51.34

%

Tax-equivalent net interest margin 1

 

3.82

%

 

 

4.04

%

 

 

3.85

%

Cost of deposits

 

0.23

%

 

 

0.21

%

 

 

0.14

%

Net charge-offs (recoveries)

$

63

 

 

$

(6

)

 

$

(4

)

Net charge-offs (recoveries) to average loans

%

 

%

 

%

Year-to-Date

 

 

 

 

 

Net income

$

34,241

 

 

 

 

$

32,622

 

Diluted earnings per common share 4

$

2.48

 

 

 

 

$

2.33

 

Return on average assets

 

1.34

%

 

 

 

 

1.31

%

Return on average equity

 

10.49

%

 

 

 

 

10.73

%

Efficiency ratio

 

55.33

%

 

 

 

 

57.30

%

Tax-equivalent net interest margin 1

 

3.98

%

 

 

 

 

3.90

%

Cost of deposits

 

0.20

%

 

 

 

 

0.10

%

Net charge-offs (recoveries)

$

44

 

 

 

 

$

(54

)

Net (recoveries) charge-offs to average loans

%

 

 

 

%

At Period End

 

 

 

 

 

Total assets

$

2,707,280

 

 

$

2,592,071

 

 

$

2,520,892

 

Loans:

 

 

 

 

 

Commercial and industrial

$

246,687

 

 

$

260,828

 

 

$

230,739

 

Real estate:

 

 

 

 

 

Commercial owner-occupied

$

308,824

 

 

$

310,486

 

 

$

313,277

 

Commercial investor-owned

$

946,317

 

 

$

896,066

 

 

$

873,410

 

Construction

$

61,095

 

 

$

50,254

 

 

$

76,423

 

Home Equity

$

116,024

 

 

$

121,814

 

 

$

124,696

 

Other residential

$

136,657

 

 

$

130,781

 

 

$

117,847

 

Installment and other consumer loans

$

27,682

 

 

$

28,461

 

 

$

27,472

 

Total loans

$

1,843,286

 

 

$

1,798,690

 

 

$

1,763,864

 

 

 

 

 

 

 

Non-performing loans2:

 

 

 

 

 

Commercial and industrial

$

 

 

$

195

 

 

$

319

 

Home equity

$

168

 

 

$

167

 

 

$

313

 

Installment and other consumer loans

$

58

 

 

$

60

 

 

$

65

 

Total non-accrual loans

$

226

 

 

$

422

 

 

$

697

 

 

 

 

 

 

 

Classified loans (graded substandard and doubtful)

$

9,934

 

 

$

9,935

 

 

$

12,608

 

Total accruing loans 30-89 days past due

$

1,481

 

 

$

574

 

 

$

1,121

 

Allowance for loan losses to total loans

 

0.90

%

 

 

0.90

%

 

 

0.90

%

Allowance for loan losses to non-performing loans

73.86x

 

38.45x

 

22.71x

Non-accrual loans to total loans

 

0.01

%

 

 

0.02

%

 

 

0.04

%

 

 

 

 

 

 

Total deposits

$

2,336,489

 

 

$

2,224,524

 

 

$

2,174,840

 

Loan-to-deposit ratio

 

78.9

%

 

 

80.9

%

 

 

81.1

%

Stockholders' equity

$

336,788

 

 

$

333,065

 

 

$

316,407

 

Book value per share 4

$

24.81

 

 

$

24.47

 

 

$

22.85

 

Tangible common equity to tangible assets 3

 

11.3

%

 

 

11.7

%

 

 

11.3

%

Total risk-based capital ratio - Bank

 

14.6

%

 

 

14.6

%

 

 

14.0

%

Total risk-based capital ratio - Bancorp

 

15.1

%

 

 

15.3

%

 

 

14.9

%

Full-time equivalent employees

 

290

 

 

 

291

 

 

 

290

 

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 $11.3 million, $11.9 million and $14.3 million at December 31, 2019, September 30, 2019 and December 31, 2018, respectively. Excludes purchased credit-impaired (PCI) loans with carrying values that were accreting interest of $2.0 million at December 31, 2019, and $2.1 million at September 30, 2019 and December 31, 2018, respectively. 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 gains on available for sale securities, net of tax, less goodwill and intangible assets of $34.8 million, $35.0 million and $35.7 million at December 31, 2019, September 30, 2019 and December 31, 2018, respectively. Tangible assets excludes goodwill and intangible assets.

4 Per share data has been adjusted to reflect the two-for-one stock split effective November 27, 2018.

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF CONDITION

at December 31, 2019, September 30, 2019 and December 31, 2018

(in thousands, except share data; unaudited)

December 31,
2019

September 30,
2019

December 31,
2018

Assets

 

 

 

Cash, cash equivalents and restricted cash

$

183,388

 

$

182,486

 

$

34,221

 

Investment securities

 

 

 

Held-to-maturity, at amortized cost

137,413

 

142,213

 

157,206

 

Available-for-sale (at fair value; amortized cost of $423,923, $348,369 and $465,910 at December 31, 2019, September 30, 2019 and December 31, 2018, respectively)

432,260

 

358,724

 

462,464

 

Total investment securities

569,673

 

500,937

 

619,670

 

Loans, net of allowance for loan losses of $16,677, $16,240 and $15,821 at December 31, 2019, September 30, 2019 and December 31, 2018, respectively

1,826,609

 

1,782,450

 

1,748,043

 

Bank premises and equipment, net

6,070

 

6,474

 

7,376

 

Goodwill

30,140

 

30,140

 

30,140

 

Core deposit intangible

4,684

 

4,906

 

5,571

 

Operating lease right-of-use assets

11,002

 

11,934

 

 

Interest receivable and other assets

75,714

 

72,744

 

75,871

 

Total assets

$

2,707,280

 

$

2,592,071

 

$

2,520,892

 

Liabilities and Stockholders' Equity

 

 

 

Liabilities

 

 

 

Deposits

 

 

 

Non-interest bearing

$

1,128,823

 

$

1,101,288

 

$

1,066,051

 

Interest bearing

 

 

 

Transaction accounts

142,329

 

162,015

 

133,403

 

Savings accounts

162,817

 

170,007

 

178,429

 

Money market accounts

804,710

 

693,137

 

679,775

 

Time accounts

97,810

 

98,077

 

117,182

 

Total deposits

2,336,489

 

2,224,524

 

2,174,840

 

Borrowings and other obligations

212

 

255

 

7,000

 

Subordinated debentures

2,708

 

2,691

 

2,640

 

Operating lease liabilities

12,615

 

13,665

 

 

Interest payable and other liabilities

18,468

 

17,871

 

20,005

 

Total liabilities

2,370,492

 

2,259,006

 

2,204,485

 

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-
13,577,008, 13,608,525 and 13,844,353 at December 31, 2019, September 30,
2019 and December 31, 2018, respectively

129,058

 

130,220

 

140,565

 

Retained earnings

203,227

 

196,999

 

179,944

 

Accumulated other comprehensive income (loss), net of taxes

4,503

 

5,846

 

(4,102

)

Total stockholders' equity

336,788

 

333,065

 

316,407

 

Total liabilities and stockholders' equity

$

2,707,280

 

$

2,592,071

 

$

2,520,892

 

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,
2019

September 30,
2019

December 31,
2018

December 31,
2019

December 31,
2018

Interest income

 

 

 

 

 

Interest and fees on loans

$

21,123

 

$

21,525

 

$

20,732

 

$

84,331

 

$

79,527

 

Interest on investment securities

3,543

 

3,382

 

3,912

 

14,785

 

14,092

 

Interest on federal funds sold and due from banks

567

 

425

 

373

 

1,321

 

1,461

 

Total interest income

25,233

 

25,332

 

25,017

 

100,437

 

95,080

 

Interest expense

 

 

 

 

 

Interest on interest-bearing transaction accounts

78

 

101

 

68

 

347

 

226

 

Interest on savings accounts

18

 

17

 

18

 

70

 

72

 

Interest on money market accounts

1,033

 

855

 

566

 

3,439

 

1,355

 

Interest on time accounts

154

 

147

 

116

 

595

 

542

 

Interest on borrowings and other obligations

2

 

4

 

 

77

 

2

 

Interest on subordinated debentures

54

 

57

 

977

 

229

 

1,339

 

Total interest expense

1,339

 

1,181

 

1,745

 

4,757

 

3,536

 

Net interest income

23,894

 

24,151

 

23,272

 

95,680

 

91,544

 

Provision for loan losses

500

 

400

 

 

900

 

 

Net interest income after provision for loan losses

23,394

 

23,751

 

23,272

 

94,780

 

91,544

 

Non-interest income

 

 

 

 

 

Service charges on deposit accounts

462

 

439

 

484

 

1,865

 

1,891

 

Wealth Management and Trust Services

501

 

495

 

426

 

1,907

 

1,919

 

Debit card interchange fees, net

386

 

406

 

403

 

1,586

 

1,561

 

Merchant interchange fees, net

78

 

79

 

81

 

331

 

378

 

Earnings on bank-owned life Insurance, net

226

 

795

 

227

 

1,196

 

913

 

Dividends on FHLB stock

208

 

202

 

377

 

799

 

959

 

Gains on investment securities, net

 

 

956

 

55

 

876

 

Other income

457

 

305

 

469

 

1,345

 

1,642

 

Total non-interest income

2,318

 

2,721

 

3,423

 

9,084

 

10,139

 

Non-interest expense

 

 

 

 

 

Salaries and related benefits

7,827

 

8,412

 

7,933

 

34,253

 

33,335

 

Occupancy and equipment

1,527

 

1,507

 

1,514

 

6,143

 

5,976

 

Depreciation and amortization

527

 

573

 

518

 

2,228

 

2,143

 

Federal Deposit Insurance Corporation insurance

7

 

1

 

188

 

361

 

756

 

Data processing

775

 

923

 

1,004

 

3,717

 

4,358

 

Professional services

431

 

580

 

481

 

2,132

 

3,317

 

Directors' expense

180

 

189

 

170

 

735

 

700

 

Information technology

243

 

279

 

228

 

1,065

 

1,023

 

Amortization of core deposit intangible

222

 

222

 

230

 

887

 

921

 

Provision for losses on off-balance sheet commitments

 

 

 

129

 

 

Other expense

1,587

 

1,514

 

1,439

 

6,320

 

5,737

 

Total non-interest expense

13,326

 

14,200

 

13,705

 

57,970

 

58,266

 

Income before provision for income taxes

12,386

 

12,272

 

12,990

 

45,894

 

43,417

 

Provision for income taxes

3,307

 

2,824

 

3,328

 

11,653

 

10,795

 

Net income

$

9,079

 

$

9,448

 

$

9,662

 

$

34,241

 

$

32,622

 

Net income per common share:1

 

 

 

 

 

Basic

$

0.67

 

$

0.70

 

$

0.70

 

$

2.51

 

$

2.35

 

Diluted

$

0.66

 

$

0.69

 

$

0.69

 

$

2.48

 

$

2.33

 

Weighted average shares:1

 

 

 

 

 

Basic

13,521

 

13,571

 

13,841

 

13,620

 

13,864

 

Diluted

13,703

 

13,735

 

14,033

 

13,794

 

14,029

 

Comprehensive income:

 

 

 

 

 

Net income

$

9,079

 

$

9,448

 

$

9,662

 

$

34,241

 

$

32,622

 

Other comprehensive (loss) income:

 

 

 

 

 

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

(2,018

)

936

 

7,714

 

11,839

 

(1,707

)

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

 

 

 

(55

)

79

 

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

 

 

 

 

(278

)

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

117

 

123

 

120

 

445

 

516

 

Subtotal

(1,901

)

1,059

 

7,834

 

12,229

 

(1,390

)

Deferred tax (benefit) expense

(558

)

313

 

2,318

 

3,624

 

(412

)

Other comprehensive (loss) income, net of tax

(1,343

)

746

 

5,516

 

8,605

 

(978

)

Comprehensive income

$

7,736

 

$

10,194

 

$

15,178

 

$

42,846

 

$

31,644

 

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

BANK OF MARIN BANCORP

AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME

 

 

 

 

 

 

 

 

Three months ended

 

Three months ended

 

Three months ended

 

December 31, 2019

 

September 30, 2019

 

December 31, 2018

 

 

Interest

 

 

Interest

 

Interest

 

Average

Income/

Yield/

Average

Income/

Yield/

Average Income/ Yield/

(dollars in thousands; unaudited)

Balance

Expense

Rate

Balance

Expense

Rate

Balance Expense Rate

Assets

 

 

 

 

 

 

Interest-bearing due from banks 1

$

136,320

 

$

566

 

1.63

%

$

77,467

 

$

425

 

2.15

%

$

65,961

 

$

373

 

2.21

%

Investment securities 2, 3

530,596

 

3,625

 

2.73

%

506,023

 

3,443

 

2.72

%

600,914

 

4,000

 

2.66

%

Loans 1, 3, 4

1,804,667

 

21,276

 

4.61

%

1,780,325

 

21,719

 

4.77

%

1,726,045

 

20,933

 

4.75

%

Total interest-earning assets 1

2,471,583

 

25,467

 

4.03

%

2,363,815

 

25,587

 

4.24

%

2,392,920

 

25,306

 

4.14

%

Cash and non-interest-bearing due from banks

39,882

 

 

 

38,434

 

 

 

38,943

 

Bank premises and equipment, net

6,326

 

 

 

6,713

 

 

 

7,529

 

Interest receivable and other assets, net

112,895

 

 

 

114,537

 

 

 

84,651

 

Total assets

$

2,630,686

 

 

 

$

2,523,499

 

 

 

$

2,524,043

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Interest-bearing transaction accounts

$

145,237

 

$

79

 

0.22

%

$

137,861

 

$

101

 

0.29

%

$

130,546

 

$

68

 

0.21

%

Savings accounts

164,664

 

17

 

0.04

%

170,166

 

17

 

0.04

%

177,018

 

18

 

0.04

%

Money market accounts

725,192

 

1,033

 

0.57

%

661,131

 

855

 

0.51

%

643,459

 

566

 

0.35

%

Time accounts, including CDARS

97,302

 

154

 

0.63

%

101,404

 

147

 

0.57

%

121,838

 

116

 

0.38

%

Borrowings and other obligations 1

226

 

2

 

2.80

%

599

 

4

 

2.69

%

76

 

 

2.52

%

Subordinate debentures 1

2,698

 

54

 

7.79

%

2,682

 

57

 

8.27

%

2,770

 

977

 

138.09

%

Total interest-bearing liabilities

1,135,319

 

1,339

 

0.47

%

1,073,843

 

1,181

 

0.44

%

1,075,707

 

1,745

 

0.64

%

Demand accounts

1,129,068

 

 

 

1,088,903

 

 

 

1,118,785

 

Interest payable and other liabilities

31,270

 

 

 

30,268

 

 

 

19,662

 

Stockholders' equity

335,029

 

 

 

330,485

 

 

 

309,889

 

Total liabilities & stockholders' equity

$

2,630,686

 

 

 

$

2,523,499

 

 

 

$

2,524,043

 

Tax-equivalent net interest income/margin 1

 

$

24,128

 

3.82

%

 

$

24,406

 

4.04

%

$

23,561

 

3.85

%

Reported net interest income/margin 1

 

$

23,894

 

3.78

%

 

$

24,151

 

4.00

%

$

23,272

 

3.81

%

Tax-equivalent net interest rate spread

 

 

3.56

%

 

 

3.80

%

3.49

%

 

 

 

 

 

 

 

 

Year ended

Year ended

 

December 31, 2019

December 31, 2018

 

 

Interest

 

 

Interest

 

 

Average

Income/

Yield/

Average

Income/

Yield/

(dollars in thousands; unaudited)

Balance

Expense

Rate

Balance

Expense

Rate

Assets

 

 

 

 

 

 

Interest-bearing due from banks 1

$

67,192

 

$

1,321

 

1.94

%

$

78,185

 

$

1,461

 

1.84

%

Investment securities 2, 3

555,618

 

15,102

 

2.72

%

566,883

 

14,512

 

2.56

%

Loans 1, 3, 4

1,775,193

 

85,062

 

4.73

%

1,704,390

 

80,406

 

4.65

%

Total interest-earning assets 1

2,398,003

 

101,485

 

4.17

%

2,349,458

 

96,379

 

4.05

%

Cash and non-interest-bearing due from banks

35,956

 

 

 

41,595

 

 

 

Bank premises and equipment, net

6,911

 

 

 

8,021

 

 

 

Interest receivable and other assets, net

109,837

 

 

 

86,709

 

 

 

Total assets

$

2,550,707

 

 

 

$

2,485,783

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Interest-bearing transaction accounts

$

133,922

 

$

347

 

0.26

%

$

143,706

 

$

226

 

0.16

%

Savings accounts

172,273

 

70

 

0.04

%

178,907

 

72

 

0.04

%

Money market accounts

680,296

 

3,439

 

0.51

%

612,372

 

1,355

 

0.22

%

Time accounts, including CDARS

106,783

 

595

 

0.56

%

137,339

 

542

 

0.39

%

Borrowings and other obligations 1

2,935

 

77

 

2.57

%

105

 

2

 

2.03

%

Subordinated debentures 1

2,673

 

229

 

8.44

%

5,025

 

1,339

 

26.29

%

Total interest-bearing liabilities

1,098,882

 

4,757

 

0.43

%

1,077,454

 

3,536

 

0.33

%

Demand accounts

1,094,806

 

 

 

1,085,870

 

 

 

Interest payable and other liabilities

30,578

 

 

 

18,514

 

 

 

Stockholders' equity

326,441

 

 

 

303,945

 

 

 

Total liabilities & stockholders' equity

$

2,550,707

 

 

 

$

2,485,783

 

 

 

Tax-equivalent net interest income/margin 1

 

$

96,728

 

3.98

%

 

$

92,843

 

3.90

%

Reported net interest income/margin 1

 

$

95,680

 

3.94

%

 

$

91,544

 

3.84

%

Tax-equivalent net interest rate spread

 

 

3.74

%

 

 

3.72

%

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.

 

Contacts

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

Release Summary

BANK OF MARIN BANCORP REPORTS RECORD EARNINGS IN 2019; ANNOUNCES DIVIDEND INCREASE & NEW SHARE REPURCHASE PROGRAM

Contacts

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