Financial News
Bank of Marin Bancorp Reports Third Quarter Earnings of $9.4 Million; 15% Increase Over Prior Quarter
Bank of Marin Bancorp, "Bancorp" (Nasdaq: BMRC), parent company of Bank of Marin, "Bank," announced earnings of $9.4 million in the third quarter of 2019, compared to $8.2 million in the second quarter of 2019 and $8.7 million in the third quarter of 2018. Diluted earnings per share were $0.69 in the third quarter of 2019 compared to $0.60 in the prior quarter and $0.62 in the same quarter last year (adjusted for stock-split). Earnings for the first nine months of 2019 totaled $25.2 million compared to $23.0 million in the same period last year. Diluted earnings per share were $1.82 and $1.64 (adjusted for stock-split) in the first nine months of 2019 and 2018, respectively.
“Our third quarter performance was once again very good, with strong deposit and loan growth while maintaining excellent credit quality,” said Russell A. Colombo, President and Chief Executive Officer. “We are seeing positive results from our investment in organic growth, specifically the consistent loan volume coming from a number of our offices.”
Bancorp also provided the following highlights from the third quarter of 2019:
- Loans totaled $1,798.7 million at September 30, 2019, compared to $1,764.9 million at June 30, 2019, an increase of $33.8 million. New loan originations of $77.3 million in the third quarter were mainly distributed across Commercial Banking and Consumer Banking. Payoffs of $38.5 million in the third quarter consisted largely of loans for which the underlying assets were sold and the successful completion of construction projects.
- Total deposits increased $122.5 million in the third quarter to $2,224.5 million. Non-interest bearing deposits represented 50% of total deposits in the third quarter and have been at or near this level since the beginning of last year. The cost of average deposits increased to 0.21% in the third quarter, compared to 0.20% in the second quarter of 2019.
- Strong credit quality remains a cornerstone of the Bank's consistent performance. Non-accrual loans represented only 0.02% of the Bank's loan portfolio at September 30, 2019, compared to 0.03% at June 30, 2019. A $400 thousand provision for loan losses was recorded in the third quarter of 2019 to account for the loan growth, and there was no provision for losses on off-balance sheet commitments.
- Earnings were positively impacted by a benefit collected on bank-owned-life insurance ("BOLI") policies and a $327 thousand adjustment to the income tax provision related to a deferred tax liability true-up. These items positively impacted diluted earnings per share by approximately $0.06 for the quarter and first nine months of 2019. Without these two positive impacts, return on assets and return on equity for the third quarter would have been 1.35% and 10.28%, respectively.
- All capital ratios were above regulatory requirements. The total risk-based capital ratio for Bancorp was 15.3% at September 30, 2019, compared to 15.2% at June 30, 2019. Tangible common equity to tangible assets was 11.7% at September 30, 2019, compared to 12.0% at June 30, 2019 (refer to footnote 3 on page 5 for a definition of this non-GAAP financial measure).
- The Board of Directors declared a cash dividend of $0.21 per share on October 18, 2019. This represents the 58th consecutive quarterly dividend paid by Bank of Marin Bancorp. The dividend is payable on November 8, 2019, to shareholders of record at the close of business on November 1, 2019.
Loans and Credit Quality
Loans increased by $33.8 million in the third quarter and totaled $1,798.7 million at September 30, 2019. For the third quarter and first nine months of 2019, new loan originations of $77.3 million and $156.1 million, respectively, compared with 2018 loan originations of $52.6 million and $165.8 million for the same periods. Loan payoffs of $38.5 million in the third quarter and $107.8 million in the first nine months of 2019, were lower than $52.0 million and $120.8 million in the respective 2018 periods.
Non-accrual loans totaled $422 thousand, or 0.02% of the loan portfolio at September 30, 2019, compared to $574 thousand, or 0.03% at June 30, 2019, and $386 thousand, or 0.02% a year ago. Classified loans totaled $9.9 million at September 30, 2019, compared to $10.3 million at June 30, 2019 and $12.4 million at September 30, 2018. There were no loans classified doubtful at September 30, 2019, June 30, 2019, or September 30, 2018. Accruing loans past due 30 to 89 days totaled $574 thousand at September 30, 2019, compared to $343 thousand at June 30, 2019 and $301 thousand a year ago.
There was a $400 thousand provision for loan losses recorded in the third quarter of 2019, which was consistent with loan growth. There was no provision for loan losses recorded in the second quarter or in the comparable period last year. Net recoveries were $6 thousand in the third quarter of 2019, compared to $18 thousand for the prior quarter and $4 thousand in the third quarter a year ago. The ratio of loan loss reserves to loans, including acquired loans, was 0.90% at both September 30, 2019 and June 30, 2019, and 0.91% at September 30, 2018.
Investments
The investment securities portfolio totaled $500.9 million at September 30, 2019, compared to $527.0 million at June 30, 2019. The decrease from the prior quarter was primarily attributed to calls, paydowns, and maturities of $34.4 million, partially offset by purchases of $7.6 million.
Deposits
Total deposits were $2,224.5 million at September 30, 2019, compared to $2,102.0 million at June 30, 2019. The $122.5 million increase during the third quarter primarily resulted from normal cash fluctuations in some of our large business accounts. The average cost of deposits in the third quarter of 2019 was 0.21%, an increase of 1 basis point from the prior quarter.
Earnings
“Bank of Marin’s third quarter results reflect the success of our commitment to consistent, disciplined relationship banking,” said Tani Girton, EVP and Chief Financial Officer. “With a return on assets of 1.33% and efficiency ratio of 56.83% year-to-date, and an increase in tax-equivalent net interest margin of 12 basis points year-over-year, we are well-positioned to finish the year strong.”
Net interest income totaled $24.2 million in the third quarter of 2019, compared to $23.8 million in the prior quarter and $23.5 million a year ago. The $362 thousand increase from the prior quarter was primarily related to a $388 thousand interest recovery on a land development loan. The $612 thousand increase from the comparative quarter a year ago was reflective of higher average loan balances, higher yields across earning asset categories, and the land development loan interest recovery, partially offset by higher rates on deposits.
Net interest income totaled $71.8 million in the first nine months of 2019, compared to $68.3 million for the same period in 2018. The $3.5 million increase primarily relates to higher average loan 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 third quarter and second quarter of 2019, and 3.97% in the third quarter of 2018. The 7 basis point margin expansion over the same quarter a year ago was primarily due to higher interest rates and loan growth.
The tax-equivalent net interest margin was 4.03% in the first nine months of 2019, compared to 3.91% for the same period in 2018. The 12 basis point increase from the same period a year ago was mostly attributed to higher interest rates and higher loan balances.
Non-interest income totaled $2.7 million in the third quarter of 2019, $2.3 million in the prior quarter, and $2.2 million in the same quarter a year ago. The increase of $447 thousand from the prior quarter was primarily due to a $562 thousand benefit collected on BOLI policies, partially offset by the absence of gains on sales of investment securities. The $485 thousand increase from the same quarter a year ago was attributed to the BOLI benefit, partially offset by lower fee income from one-way deposit sales to third-party deposit networks.
Non-interest income increased $50 thousand to $6.8 million in the first nine months of 2019, compared to $6.7 million in 2018, primarily due to the same fluctuations mentioned above.
Non-interest expense decreased $716 thousand to $14.2 million in the third quarter of 2019, from $14.9 million in the prior quarter. The decrease in the third quarter was primarily due to reduced salaries expense (primarily related to personnel severance in the second quarter) and fewer digital banking fees due to the conversion to a new platform. In the third quarter of 2019, we reversed second quarter Federal Deposit Insurance Corporation ("FDIC") deposit insurance expense when notified that the FDIC Deposit Insurance Fund reserve exceeded its billing threshold. Additionally, deferred loan origination costs increased due to a higher volume of loan originations in the third quarter of 2019.
Non-interest expense increased $229 thousand from $14.0 million in the third quarter of 2018. The increase was primarily related to $416 thousand more in salaries due to six additional full-time equivalent staff and annual merit increases, partially offset by relief on the FDIC assessment mentioned above.
Non-interest expense increased $83 thousand to $44.6 million in the first nine months of 2019, compared to the first nine months of 2018. The increase was primarily attributable to higher salaries as mentioned above, partially offset by the absence of core processing contract negotiation costs and Bank of Napa acquisition expenses in 2018.
Share Repurchase Program
Bancorp's $25.0 million Stock Repurchase Program expires February 28, 2020. Bancorp repurchased 65,127 shares totaling $2.7 million in the third quarter of 2019 for a cumulative total of 484,868 shares and $20.2 million as of September 30, 2019.
Earnings Call and Webcast Information
Bank of Marin Bancorp will present its third quarter earnings call via webcast on Monday, October 21, 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 $2.6 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 | |||||||||||
September 30, 2019 | |||||||||||
(dollars in thousands, except per share data; unaudited) | September 30, 2019 | June 30, 2019 | September 30, 2018 | ||||||||
Quarter-to-Date | |||||||||||
Net income | $ | 9,448 | $ | 8,235 | $ | 8,680 | |||||
Diluted earnings per common share 4 | $ | 0.69 | $ | 0.60 | $ | 0.62 | |||||
Return on average assets | 1.49 | % | 1.32 | % | 1.38 | % | |||||
Return on average equity | 11.34 | % | 10.26 | % | 11.20 | % | |||||
Efficiency ratio | 52.84 | % | 57.23 | % | 54.20 | % | |||||
Tax-equivalent net interest margin 1 | 4.04 | % | 4.04 | % | 3.97 | % | |||||
Cost of deposits | 0.21 | % | 0.20 | % | 0.10 | % | |||||
Net (recoveries) charge-offs | $ | (6 | ) | $ | (18 | ) | $ | (4 | ) | ||
Net (recoveries) charge-offs to average loans | — | % | — | % | — | % | |||||
Year-to-Date | |||||||||||
Net income | $ | 25,162 | $ | 22,960 | |||||||
Diluted earnings per common share 4 | $ | 1.82 | $ | 1.64 | |||||||
Return on average assets | 1.33 | % | 1.24 | % | |||||||
Return on average equity | 10.40 | % | 10.17 | % | |||||||
Efficiency ratio | 56.83 | % | 59.42 | % | |||||||
Tax-equivalent net interest margin 1 | 4.03 | % | 3.91 | % | |||||||
Cost of deposits | 0.20 | % | 0.09 | % | |||||||
Net (recoveries) charge-offs | $ | (19 | ) | $ | (50 | ) | |||||
Net (recoveries) charge-offs to average loans | — | % | — | % | |||||||
At Period End | |||||||||||
Total assets | $ | 2,592,071 | $ | 2,463,987 | $ | 2,545,715 | |||||
Loans: | |||||||||||
Commercial and industrial | $ | 260,828 | $ | 234,832 | $ | 238,771 | |||||
Real estate: | |||||||||||
Commercial owner-occupied | 310,486 | 306,327 | 316,467 | ||||||||
Commercial investor-owned | 896,066 | 878,969 | 841,493 | ||||||||
Construction | 50,254 | 63,563 | 68,739 | ||||||||
Home equity | 121,814 | 125,968 | 121,243 | ||||||||
Other residential | 130,781 | 124,120 | 113,383 | ||||||||
Installment and other consumer loans | 28,461 | 31,100 | 28,775 | ||||||||
Total loans | $ | 1,798,690 | $ | 1,764,879 | $ | 1,728,871 | |||||
Non-performing loans: 2 | |||||||||||
Commercial and industrial | $ | 195 | $ | 354 | $ | — | |||||
Home equity | 167 | 157 | 318 | ||||||||
Installment and other consumer loans | 60 | 63 | 68 | ||||||||
Total non-accrual loans | $ | 422 | $ | 574 | $ | 386 | |||||
Classified loans (graded substandard and doubtful) | $ | 9,935 | $ | 10,251 | $ | 12,401 | |||||
Total accruing loans 30-89 days past due | $ | 574 | $ | 343 | $ | 301 | |||||
Allowance for loan losses to total loans | 0.90 | % | 0.90 | % | 0.91 | % | |||||
Allowance for loan losses to non-performing loans | 38.45x | 27.59x | 41.00x | ||||||||
Non-accrual loans to total loans | 0.02 | % | 0.03 | % | 0.02 | % | |||||
Total deposits | $ | 2,224,524 | $ | 2,102,040 | $ | 2,212,846 | |||||
Loan-to-deposit ratio | 80.9 | % | 84.0 | % | 78.1 | % | |||||
Stockholders' equity | $ | 333,065 | $ | 327,667 | $ | 308,603 | |||||
Book value per share 4 | $ | 24.47 | $ | 23.99 | $ | 22.10 | |||||
Tangible common equity to tangible assets 3 | 11.7 | % | 12.0 | % | 10.9 | % | |||||
Total risk-based capital ratio - Bank | 14.6 | % | 14.6 | % | 13.7 | % | |||||
Total risk-based capital ratio - Bancorp | 15.3 | % | 15.2 | % | 15.3 | % | |||||
Full-time equivalent employees | 291 | 293 | 287 | ||||||||
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 $11.9 million, $11.7 million and $15.1 million at September 30, 2019, June 30, 2019 and September 30, 2018, respectively. Excludes purchased credit-impaired (PCI) loans with carrying values of $2.1 million that were accreting interest at September 30, 2019, June 30, 2019, and September 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 $35.0 million, $35.3 million and $35.9 million at September 30, 2019, June 30, 2019, and September 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 September 30, 2019, June 30, 2019 and September 30, 2018 | |||||||||
(in thousands, except share data; unaudited) | September 30, 2019 | June 30, 2019 | September 30, 2018 | ||||||
Assets | |||||||||
Cash, cash equivalents and restricted cash | $ | 182,486 | $ | 58,757 | $ | 142,718 | |||
Investment securities | |||||||||
Held-to-maturity, at amortized cost | 142,213 | 148,879 | 164,222 | ||||||
Available-for-sale (at fair value; amortized cost $348,369, $368,712 and $416,732 at September 30, 2019, June 30, 2019 and September 30, 2018 respectively) | 358,724 | 378,131 | 405,571 | ||||||
Total investment securities | 500,937 | 527,010 | 569,793 | ||||||
Loans, net of allowance for loan losses of $16,240, $15,835 and $15,817 at September 30, 2019, June 30, 2019 and September 30, 2018, respectively | 1,782,450 | 1,749,044 | 1,713,054 | ||||||
Bank premises and equipment, net | 6,474 | 6,872 | 7,602 | ||||||
Goodwill | 30,140 | 30,140 | 30,140 | ||||||
Core deposit intangible | 4,906 | 5,128 | 5,802 | ||||||
Operating lease right-of-use assets | 11,934 | 12,515 | — | ||||||
Interest receivable and other assets | 72,744 | 74,521 | 76,606 | ||||||
Total assets | $ | 2,592,071 | $ | 2,463,987 | $ | 2,545,715 | |||
Liabilities and Stockholders' Equity | |||||||||
Liabilities | |||||||||
Deposits | |||||||||
Non-interest bearing | $ | 1,101,288 | $ | 1,056,655 | $ | 1,109,909 | |||
Interest bearing | |||||||||
Transaction accounts | 162,015 | 121,232 | 138,838 | ||||||
Savings accounts | 170,007 | 172,255 | 178,171 | ||||||
Money market accounts | 693,137 | 647,592 | 659,788 | ||||||
Time accounts | 98,077 | 104,306 | 126,140 | ||||||
Total deposits | 2,224,524 | 2,102,040 | 2,212,846 | ||||||
Borrowings and other obligations | 255 | 297 | — | ||||||
Subordinated debentures | 2,691 | 2,674 | 5,831 | ||||||
Operating lease liabilities | 13,665 | 14,332 | — | ||||||
Interest payable and other liabilities | 17,871 | 16,977 | 18,435 | ||||||
Total liabilities | 2,259,006 | 2,136,320 | 2,237,112 | ||||||
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 - 13,608,525, 13,659,143 and 13,964,358 at September 30, 2019, June 30, 2019 and September 30, 2018, respectively | 130,220 | 132,151 | 145,498 | ||||||
Retained earnings | 196,999 | 190,416 | 172,723 | ||||||
Accumulated other comprehensive income (loss), net of taxes | 5,846 | 5,100 | (9,618 | ) | |||||
Total stockholders' equity | 333,065 | 327,667 | 308,603 | ||||||
Total liabilities and stockholders' equity | $ | 2,592,071 | $ | 2,463,987 | $ | 2,545,715 | |||
BANK OF MARIN BANCORP | ||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
(in thousands, except per share amounts; unaudited) |
September 30,
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June 30,
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September 30,
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September 30,
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September 30,
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Interest income | ||||||||||||||||
Interest and fees on loans | $ | 21,525 | $ | 20,988 | $ | 20,284 | $ | 63,208 | $ | 58,795 | ||||||
Interest on investment securities | 3,382 | 3,763 | 3,524 | 11,242 | 10,180 | |||||||||||
Interest on federal funds sold and due from banks | 425 | 190 | 400 | 754 | 1,088 | |||||||||||
Total interest income | 25,332 | 24,941 | 24,208 | 75,204 | 70,063 | |||||||||||
Interest expense | ||||||||||||||||
Interest on interest-bearing transaction accounts | 101 | 91 | 58 | 269 | 158 | |||||||||||
Interest on savings accounts | 17 | 17 | 18 | 52 | 54 | |||||||||||
Interest on money market accounts | 855 | 787 | 337 | 2,406 | 789 | |||||||||||
Interest on time accounts | 147 | 175 | 130 | 441 | 426 | |||||||||||
Interest on borrowings and other obligations | 4 | 24 | 1 | 75 | 2 | |||||||||||
Interest on subordinated debentures | 57 | 58 | 125 | 175 | 362 | |||||||||||
Total interest expense | 1,181 | 1,152 | 669 | 3,418 | 1,791 | |||||||||||
Net interest income | 24,151 | 23,789 | 23,539 | 71,786 | 68,272 | |||||||||||
Provision for loan losses | 400 | — | — | 400 | — | |||||||||||
Net interest income after provision for loan losses | 23,751 | 23,789 | 23,539 | 71,386 | 68,272 | |||||||||||
Non-interest income | ||||||||||||||||
Service charges on deposit accounts | 439 | 485 | 475 | 1,403 | 1,407 | |||||||||||
Wealth Management and Trust Services | 495 | 473 | 490 | 1,406 | 1,493 | |||||||||||
Debit card interchange fees, net | 406 | 414 | 402 | 1,200 | 1,158 | |||||||||||
Merchant interchange fees, net | 79 | 87 | 99 | 253 | 297 | |||||||||||
Earnings on bank-owned life insurance, net | 795 | 235 | 227 | 970 | 685 | |||||||||||
Dividends on FHLB stock | 202 | 193 | 194 | 591 | 582 | |||||||||||
Gains (losses) on investment securities, net | — | 61 | (90 | ) | 55 | (79 | ) | |||||||||
Other income | 305 | 326 | 439 | 888 | 1,173 | |||||||||||
Total non-interest income | 2,721 | 2,274 | 2,236 | 6,766 | 6,716 | |||||||||||
Non-interest expense | ||||||||||||||||
Salaries and related benefits | 8,412 | 8,868 | 8,069 | 26,426 | 25,402 | |||||||||||
Occupancy and equipment | 1,507 | 1,578 | 1,444 | 4,616 | 4,462 | |||||||||||
Depreciation and amortization | 573 | 572 | 532 | 1,701 | 1,625 | |||||||||||
Federal Deposit Insurance Corporation insurance | 1 | 174 | 186 | 354 | 568 | |||||||||||
Data processing | 923 | 1,004 | 950 | 2,942 | 3,354 | |||||||||||
Professional services | 580 | 535 | 727 | 1,701 | 2,836 | |||||||||||
Directors' expense | 189 | 187 | 173 | 555 | 530 | |||||||||||
Information technology | 279 | 284 | 262 | 822 | 795 | |||||||||||
Amortization of core deposit intangible | 222 | 221 | 230 | 665 | 691 | |||||||||||
Provision for losses on off-balance sheet commitments | — | — | — | 129 | — | |||||||||||
Other expense | 1,514 | 1,493 | 1,398 | 4,733 | 4,298 | |||||||||||
Total non-interest expense | 14,200 | 14,916 | 13,971 | 44,644 | 44,561 | |||||||||||
Income before provision for income taxes | 12,272 | 11,147 | 11,804 | 33,508 | 30,427 | |||||||||||
Provision for income taxes | 2,824 | 2,912 | 3,124 | 8,346 | 7,467 | |||||||||||
Net income | $ | 9,448 | $ | 8,235 | $ | 8,680 | $ | 25,162 | $ | 22,960 | ||||||
Net income per common share:1 | ||||||||||||||||
Basic | $ | 0.70 | $ | 0.60 | $ | 0.63 | $ | 1.84 | $ | 1.66 | ||||||
Diluted | $ | 0.69 | $ | 0.60 | $ | 0.62 | $ | 1.82 | $ | 1.64 | ||||||
Weighted average shares:1 | ||||||||||||||||
Basic | 13,571 | 13,655 | 13,900 | 13,654 | 13,872 | |||||||||||
Diluted | 13,735 | 13,818 | 14,110 | 13,825 | 14,062 | |||||||||||
Comprehensive income: | ||||||||||||||||
Net income | $ | 9,448 | $ | 8,235 | $ | 8,680 | $ | 25,162 | $ | 22,960 | ||||||
Other comprehensive income (loss) | ||||||||||||||||
Change in net unrealized gains or losses on available-for-sale securities | 936 | 8,982 | (2,120 | ) | 13,857 | (9,421 | ) | |||||||||
Reclassification adjustment for (gains) losses on available-for-sale securities in net income | — | (61 | ) | 90 | (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 | 123 | 104 | 128 | 328 | 396 | |||||||||||
Subtotal | 1,059 | 9,025 | (1,902 | ) | 14,130 | (9,224 | ) | |||||||||
Deferred tax expense (benefit) | 313 | 2,671 | (562 | ) | 4,182 | (2,730 | ) | |||||||||
Other comprehensive income (loss), net of tax | 746 | 6,354 | (1,340 | ) | 9,948 | (6,494 | ) | |||||||||
Comprehensive income | $ | 10,194 | $ | 14,589 | $ | 7,340 | $ | 35,110 | $ | 16,466 | ||||||
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 | ||||||||||||||||||||||
September 30, 2019 | June 30, 2019 | September 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 | $ | 77,467 | $ | 425 | 2.15 | % | $ | 30,928 | $ | 190 | 2.43 | % | $ | 79,674 | $ | 400 | 1.96 | % | ||||||
Investment securities 2, 3 | 506,023 | 3,443 | 2.72 | % | 567,813 | 3,844 | 2.71 | % | 558,741 | 3,624 | 2.59 | % | ||||||||||||
Loans 1, 3, 4 | 1,780,325 | 21,719 | 4.77 | % | 1,758,874 | 21,180 | 4.76 | % | 1,715,295 | 20,504 | 4.68 | % | ||||||||||||
Total interest-earning assets 1 | 2,363,815 | 25,587 | 4.24 | % | 2,357,615 | 25,214 | 4.23 | % | 2,353,710 | 24,528 | 4.08 | % | ||||||||||||
Cash and non-interest-bearing due from banks | 38,434 | 34,437 | 41,316 | |||||||||||||||||||||
Bank premises and equipment, net | 6,713 | 7,108 | 7,866 | |||||||||||||||||||||
Interest receivable and other assets, net | 114,537 | 107,089 | 86,039 | |||||||||||||||||||||
Total assets | $ | 2,523,499 | $ | 2,506,249 | $ | 2,488,931 | ||||||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 137,861 | $ | 101 | 0.29 | % | $ | 124,620 | $ | 91 | 0.29 | % | $ | 134,293 | $ | 58 | 0.17 | % | ||||||
Savings accounts | 170,166 | 17 | 0.04 | % | 174,102 | 17 | 0.04 | % | 179,429 | 18 | 0.04 | % | ||||||||||||
Money market accounts | 661,131 | 855 | 0.51 | % | 661,363 | 787 | 0.48 | % | 609,821 | 337 | 0.22 | % | ||||||||||||
Time accounts including CDARS | 101,404 | 147 | 0.57 | % | 115,272 | 175 | 0.61 | % | 132,588 | 130 | 0.39 | % | ||||||||||||
Borrowings and other obligations 1 | 599 | 4 | 2.69 | % | 3,608 | 24 | 2.59 | % | 112 | 1 | 2.06 | % | ||||||||||||
Subordinated debentures 1 | 2,682 | 57 | 8.27 | % | 2,664 | 58 | 8.69 | % | 5,815 | 125 | 8.43 | % | ||||||||||||
Total interest-bearing liabilities | 1,073,843 | 1,181 | 0.44 | % | 1,081,629 | 1,152 | 0.43 | % | 1,062,058 | 669 | 0.25 | % | ||||||||||||
Demand accounts | 1,088,903 | 1,073,909 | 1,101,288 | |||||||||||||||||||||
Interest payable and other liabilities | 30,268 | 28,621 | 18,022 | |||||||||||||||||||||
Stockholders' equity | 330,485 | 322,090 | 307,563 | |||||||||||||||||||||
Total liabilities & stockholders' equity | $ | 2,523,499 | $ | 2,506,249 | $ | 2,488,931 | ||||||||||||||||||
Tax-equivalent net interest income/margin 1 | $ | 24,406 | 4.04 | % | $ | 24,062 | 4.04 | % | $ | 23,859 | 3.97 | % | ||||||||||||
Reported net interest income/margin 1 | $ | 24,151 | 4.00 | % | $ | 23,789 | 3.99 | % | $ | 23,539 | 3.91 | % | ||||||||||||
Tax-equivalent net interest rate spread | 3.80 | % | 3.80 | % | 3.83 | % | ||||||||||||||||||
Nine months ended | Nine months ended | |||||||||||||||||||||||
September 30, 2019 | September 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 | $ | 43,896 | $ | 754 | 2.27 | % | 82,304 | 1,088 | 1.74 | % | ||||||||||||||
Investment securities 2, 3 | 564,050 | 11,477 | 2.71 | % | 555,414 | 10,512 | 2.52 | % | ||||||||||||||||
Loans 1, 3, 4 | 1,765,260 | 63,786 | 4.76 | % | 1,697,093 | 59,475 | 4.62 | % | ||||||||||||||||
Total interest-earning assets 1 | 2,373,206 | 76,017 | 4.22 | % | 2,334,811 | 71,075 | 4.01 | % | ||||||||||||||||
Cash and non-interest-bearing due from banks | 34,634 | 42,488 | ||||||||||||||||||||||
Bank premises and equipment, net | 7,108 | 8,188 | ||||||||||||||||||||||
Interest receivable and other assets, net | 108,806 | 87,403 | ||||||||||||||||||||||
Total assets | $ | 2,523,754 | $ | 2,472,890 | ||||||||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||||||||
Interest-bearing transaction accounts | $ | 130,109 | $ | 269 | 0.28 | % | 148,141 | 158 | 0.14 | % | ||||||||||||||
Savings accounts | 174,837 | 52 | 0.04 | % | 179,543 | 54 | 0.04 | % | ||||||||||||||||
Money market accounts | 665,167 | 2,406 | 0.48 | % | 601,896 | 789 | 0.18 | % | ||||||||||||||||
Time accounts including CDARS | 109,978 | 441 | 0.54 | % | 142,563 | 426 | 0.40 | % | ||||||||||||||||
Borrowings and other obligations 1 | 3,848 | 75 | 2.57 | % | 115 | 2 | 1.92 | % | ||||||||||||||||
Subordinated debentures 1 | 2,664 | 175 | 8.66 | % | 5,785 | 362 | 8.25 | % | ||||||||||||||||
Total interest-bearing liabilities | 1,086,603 | 3,418 | 0.42 | % | 1,078,043 | 1,791 | 0.22 | % | ||||||||||||||||
Demand accounts | 1,083,260 | 1,074,778 | ||||||||||||||||||||||
Interest payable and other liabilities | 30,344 | 18,127 | ||||||||||||||||||||||
Stockholders' equity | 323,547 | 301,942 | ||||||||||||||||||||||
Total liabilities & stockholders' equity | $ | 2,523,754 | $ | 2,472,890 | ||||||||||||||||||||
Tax-equivalent net interest income/margin 1 | $ | 72,599 | 4.03 | % | 69,284 | 3.91 | % | |||||||||||||||||
Reported net interest income/margin 1 | $ | 71,786 | 3.99 | % | 68,272 | 3.86 | % | |||||||||||||||||
Tax-equivalent net interest rate spread | 3.80 | % | 3.79 | % | ||||||||||||||||||||
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. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20191021005105/en/
Contacts:
Marketing & Corporate Communications Manager
415-763-4529 | bethdrummey@bankofmarin.com
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