NOVATO, Calif.–(BUSINESS WIRE)–Bank of Marin Bancorp, “Bancorp” (Nasdaq: BMRC), parent company of Bank of Marin, “Bank,” announced earnings of $10.5 million in the first quarter of 2022, compared to $9.7 million in the fourth quarter of 2021 and $8.9 million in the first quarter of 2021. Diluted earnings per share were $0.66 in the first quarter, $0.61 in the prior quarter, and $0.66 in the same quarter last year. First quarter 2022 and fourth quarter 2021 earnings were impacted by the costs associated with our recent acquisition, the details of which are discussed throughout this report.

During the first quarter, we successfully completed the system conversion of American River Bankshares, our largest conversion to date, with minimal disruption to customers,” said Tim Myers, President and Chief Executive Officer. “As loan demand increases in the market, our talented teams are well positioned to capitalize on this trend and drive new loan originations across our newly expanded footprint.”

Bancorp also provided the following highlights from the first quarter of 2022:

  • Conversion of our core systems occurred in March, bringing acquired American River Bank (“ARB”) accounts and key systems under the umbrella of Bank of Marin. For a smooth end-user experience in line with standards of legendary service, extra resources were deployed to assist our customers with the transition.
  • Merger-related one-time and conversion costs reduced net income by $385 thousand, net of taxes, or $0.02 per share in the quarter. As shown in the reconciliation of GAAP to non-GAAP financial measures on page 3, without those acquisition related components, ROA of 0.98% and ROE of 9.61% would have been 1.01% and 9.96%, respectively, compared to 0.97% and 9.19% for the quarter ended December 31, 2021. ROA and ROE were 1.21% and 10.22% for the first three months of 2021.
  • A good indicator of the merger’s positive impact on operating earnings is the efficiency ratio, as it neither includes provisions for losses on loans and unfunded commitments, nor is it impacted by changes in share counts. As shown in the reconciliation of GAAP to non-GAAP financial measures on page 3, the efficiency ratios excluding merger-related one-time and conversion costs were 57.46% and 53.63% for the quarters ended March 31, 2022 and December 31, 2021, respectively, as compared to 59.13% and 56.92%. The change over the prior quarter was primarily due to typical first quarter increases in salaries, benefits and professional services expenses. The significant improvement in operating leverage generated by the acquisition is evident in the decline in efficiency ratio from 64.60% in first quarter of 2021, which was not impacted by merger costs.
  • Loan balances of $2.202 billion at March 31, 2022 included an increase of $16.6 million in traditional commercial loans and a decrease of $70.6 million in Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans forgiven and paid off, resulting in a net decrease in loans of $53.8 million from December 31, 2021. First quarter loan originations of $49.8 million represented a six year peak for first quarter originations, and commercial line utilization increased to 38% of total commitments as of March 31, 2022, from 34% at December 31, 2021.
  • Credit quality remains strong, with non-accrual loans representing 0.35% of total loans as of March 31, 2022, compared to 0.37% at December 31, 2021. While classified loans did not change significantly from the prior quarter end, special mention loans decreased by $10.0 million, the majority of which was due to payoffs and upgrades to pass risk ratings. Reversals of $485 thousand to the allowance for credit losses on loans and $318 thousand to the allowance for credit losses on unfunded loan commitments resulted from improved economic forecasts.
  • Deposits grew by $52.8 million to $3.861 billion at March 31, 2022, compared to $3.809 billion at December 31, 2021, with most of the growth coming from non-interest bearing balances. Non-interest bearing deposits made up 51% of total deposits as of March 31, 2022 versus 50% as of December 31, 2021. The 0.06% cost of average deposits in the first quarter was unchanged from the fourth quarter of 2021 and compared to 0.07% in the first quarter of 2021. Additionally, as part of our liquidity management, the Bank maintained $180.0 million in deposits off-balance sheet with deposit networks at March 31, 2022.
  • All capital ratios were above well-capitalized regulatory requirements. The total risk-based capital ratio for Bancorp was 14.4% at March 31, 2022, compared to 14.6% at December 31, 2021. Bancorp’s tangible common equity to tangible assets was 8.0% at March 31, 2022, compared to 8.8% at December 31, 2021 (refer to footnote 5 on page 7 for a discussion of this non-GAAP financial measure). The decline in tangible equity from December 31, 2021 was primarily due to the $37.3 million other comprehensive loss, net of taxes, related to significant increases in interest rates during the quarter. The Bank’s total risk-based capital ratio was 14.3% at March 31, 2022, compared to 14.4% at December 31, 2021.
  • The Board of Directors declared a cash dividend of $0.24 per share on April 22, 2022, which represents the 68th consecutive quarterly dividend paid by Bank of Marin Bancorp. The dividend is payable on May 13, 2022, to shareholders of record at the close of business on May 6, 2022.

Statement Regarding use of Non-GAAP Financial Measures

In this press release, Bancorp’s financial results are presented in accordance with GAAP and refer to certain non-GAAP financial measures. Management believes that presentation of operating results using non-GAAP financial measures provides useful supplemental information to investors and facilitates the analysis of Bancorp’s operating results and comparison of operating results across reporting periods. Management also uses non-GAAP financial measures to establish budgets and manage Bancorp’s business. A reconciliation of the GAAP financial measures to comparable non-GAAP financial measures is presented below.

Reconciliation of GAAP and Non-GAAP Financial Measures

(in thousand, unaudited)

Three months ended

Net income

March 31,

2022

December 31,

2021

March 31,

2021

Net income (GAAP)

$

10,465

 

$

9,714

 

$

8,947

 

Merger-related one-time and conversion costs:

 

 

 

Personnel and severance

 

335

 

 

336

 

 

 

Professional services

 

67

 

 

 

 

 

Data processing

 

48

 

 

695

 

 

 

Other

 

97

 

 

67

 

 

 

Total merger costs before tax benefits

 

547

 

 

1,098

 

 

 

Income tax benefit of merger-related expenses

 

(162

)

 

(307

)

 

 

Total merger-related one-time and conversion costs, net of tax benefits

 

385

 

 

791

 

 

 

Comparable net income (non-GAAP)

$

10,850

 

$

10,505

 

$

8,947

 

Diluted earnings per share

 

 

 

Weighted average diluted shares

 

15,946

 

 

16,027

 

 

13,469

 

Diluted earnings per share (GAAP)

$

0.66

 

$

0.61

 

$

0.66

 

Merger-related one-time and conversion costs, net of tax benefits

$

0.02

 

$

0.05

 

$

 

Comparable diluted earnings per share (non-GAAP)

$

0.68

 

$

0.66

 

$

0.66

 

Return on average assets

 

 

 

Average assets

$

4,345,258

 

$

4,298,766

 

$

2,966,006

 

Return on average assets (GAAP)

 

0.98

%

 

0.90

%

 

1.21

%

Comparable return on average assets (non-GAAP)

 

1.01

%

 

0.97

%

 

1.21

%

Return on average equity

 

 

 

Average stockholders’ equity

$

441,626

 

$

453,468

 

$

355,022

 

Return on average equity (GAAP)

 

9.61

%

 

8.50

%

 

10.22

%

Comparable return on average equity (non-GAAP)

 

9.96

%

 

9.19

%

 

10.22

%

Efficiency ratio

 

 

 

Non-interest expense (GAAP)

$

19,375

 

$

18,984

 

$

15,412

 

Merger-related expenses

 

(547

)

 

(1,098

)

 

 

Non-interest expense (non-GAAP)

$

18,828

 

$

17,886

 

$

15,412

 

Net interest income

$

29,898

 

$

30,633

 

$

22,031

 

Non-interest income

$

2,867

 

$

2,719

 

$

1,826

 

Efficiency ratio (GAAP)

 

59.13

%

 

56.92

%

 

64.60

%

Comparable efficiency ratio (non-GAAP)

 

57.46

%

 

53.63

%

 

64.60

%

We produced solid earnings in the first quarter, primarily due to new loan production paired with disciplined expense and liquidity management,” said Tani Girton, EVP and Chief Financial Officer. “Our balance sheet and credit quality remain strong, enabling us to grow and deepen customer relationships in the year ahead.”

Loans and Credit Quality

Loans totaled $2.202 billion at March 31, 2022 compared to $2.256 billion at December 31, 2021. Loan originations were $49.8 million for the first quarter of 2022, compared to $80.0 million in the fourth quarter of 2021 and $25.3 million in the first quarter of 2021 (excludes $119.5 million of SBA PPP loans originated in the first quarter of 2021). Non-PPP loan payoffs were $49.3 million in the first quarter 2022, compared to $72.8 million for the fourth quarter of 2021 and $34.6 million for first quarter of 2021. Loan payoffs in the first quarter were driven by investor commercial real estate assets outside the Bank’s risk appetite or market area.

Bank of Marin and ARB originated a combined total of 3,556 loans amounting to $550.3 million in two rounds of SBA PPP loan financing. Of these amounts, as of March 31, 2022 there were 191 loans still outstanding totaling $40.6 million (net of $993 thousand in unrecognized fees and costs) compared to 368 loans outstanding at December 31, 2021 for a total of $111.2 million (net of $2.5 million in unrecognized fees and costs). In the first quarter of 2022, Bank of Marin recognized $1.5 million in PPP fees, net of costs, compared to $1.8 million in the prior quarter and $1.7 million in the same quarter of 2021.

During the onset of the pandemic, Bank of Marin granted payment relief for 269 loans totaling $402.9 million. As of March 31, 2022, two borrowing relationships with three loans totaling $23.6 million were continuing to benefit from payment relief. We monitor the financial situation of these clients closely and expect them to resume payments as the economy continues to recover.

Non-accrual loans totaled $7.7 million, or 0.35%, of the Bank’s portfolio at March 31, 2022, compared to $8.4 million, or 0.37% at December 31, 2021, and $9.2 million, or 0.43%, a year ago. Non-accrual loans at March 31, 2022 and year end included two secured owner-occupied commercial real estate loans totaling $7.1 million, which were placed on non-accrual status in fourth quarter 2020. Classified loans totaled $36.5 million at March 31, 2022, compared to $36.2 million at December 31, 2021 and $26.4 million at March 31, 2021. Accruing loans past due 30 to 89 days totaled $2.3 million at March 31, 2022, compared to $1.7 million at December 31, 2021.

Net recoveries for both the first quarter of 2022 and fourth quarter of 2021 totaled $9 thousand, compared to $13 thousand in the first quarter a year ago. The ratio of allowance for credit losses to total loans was 1.02% at March 31, 2022 and December 31, 2021.

In the first quarter of 2022, we recorded a reversal of provision for credit losses on loans of $485 thousand, compared to a provision of $600 thousand in the prior quarter and a reversal of provision of $2.9 million in the first quarter of 2021. There was a reversal of provision for credit losses on unfunded commitments of $318 thousand in the first quarter of 2022, compared to a $210 thousand provision in the prior quarter and a $590 thousand reversal in the first quarter of 2021. Current quarter provision reversals were due primarily to the improvement in underlying economic forecasts.

Cash, Cash Equivalents and Restricted Cash

Total cash, cash equivalents and restricted cash were $170.9 million at March 31, 2022, compared to $347.6 million at December 31, 2021. The $176.7 million decrease was primarily due to the deployment of funds into investment securities, as noted below.

Investments

The investment securities portfolio totaled $1.746 billion at March 31, 2022, an increase of $235.9 million from December 31, 2021. The increase was primarily the result of securities purchases totaling $339.4 million, partially offset by maturities, calls, and paydowns totaling $48.0 million and an increase in unrealized losses of $53.0 million on available-for-sale investment securities primarily due to a sharp rise in market interest rates during the first quarter of 2022.

The Bank’s strong liquidity position enabled the transfer of $357.5 million in available-for-sale securities to held-to-maturity classification, effective March 1, 2022, which serves to partially insulate other comprehensive income and equity from changes in interest rates. This transfer had no impact on net income, and future price changes on these securities due to changes in interest rates will not affect capital.

Deposits

Deposits totaled $3.861 billion at March 31, 2022, compared to $3.809 billion at December 31, 2021. The $52.8 million increase in deposits from the prior quarter is consistent with activity experienced throughout 2021 from larger business clients. The average cost of deposits remained consistent in the first quarter at 0.06%.

Earnings

Net Interest Income

Net interest income totaled $29.9 million in the first quarter of 2022, compared to $30.6 million in the prior quarter and $22.0 million in the first quarter a year ago. The $735 thousand decrease from the prior quarter was primarily attributable to changes in amortization and accretion on acquired loans, lower loan prepayment fees, lower PPP fee recognition and fewer days in the quarter, partially offset by higher average balances and yields on investment securities. The $7.9 million increase from the comparative quarter a year ago was reflective of the ARB merger, a larger allocation of the loan portfolio to higher rate loans, deployment of cash into investment securities, and costs associated with the early redemption of subordinated debt in the first quarter of 2021. Increases were partially offset by a lower average yield on the investment portfolio.

The tax-equivalent net interest margin was 2.96% in the first quarter, 3.03% in the prior quarter, and 3.19% in the first quarter of 2021. The decrease from the prior quarter was primarily due to changes in amortization and accretion on acquired loans, lower loan prepayment fees, lower PPP fee recognition, and a higher proportion of investment securities from balance sheet growth. Average yields on the non-PPP portion of the loan portfolio and the investment portfolio are beginning to reflect recent increases in interest rates, particularly commercial loans.

The decrease in tax-equivalent net interest margin from the same period a year ago was primarily attributed to a higher proportion of investment securities in the larger balance sheet associated with ARB’s lower loan-to-deposit ratio and other deposit growth with average yields 74 basis points lower.

Non-Interest Income

Non-interest income totaled $2.9 million in the first quarter of 2022, compared to $2.7 million in the prior quarter and $1.8 million in the first quarter a year ago. The $148.0 thousand increase from the prior quarter was related to a payment on bank-owned life insurance. The $1.0 million increase from the first quarter of 2021 was mostly attributable to increased activity associated with the ARB acquisition.

Non-Interest Expense

Non-interest expense totaled $19.4 million in the first quarter of 2022, $19.0 million in the prior quarter and $15.4 million in the same quarter last year. The increase from the prior quarter was primarily due to seasonal increases related to annual incentives, share-based compensation and 401(k) contributions included in salaries and related benefits. Additionally, the cost of professional services increased due to audit work performed in the first quarter related to both the year-end financial statement audit and the acquisition. Increases were partially offset by a decrease in acquisition-related one-time data processing expenses. The largest increases over prior year first quarter expenses came from salaries and related benefits, which rose $2.3 million due to increased numbers of employees in acquired branch and loan offices, regularly scheduled annual merit and related increases, and lower deferred loan origination costs. Higher expenses across most other categories reflect the acquisition, including one-time and conversion costs of $547 thousand and additional amortization associated with the ARB core deposit intangible asset in the first quarter of 2022.

Share Repurchase Program

The Bancorp Board of Directors approved a share repurchase program on July 16, 2021 under which Bancorp may repurchase up to $25.0 million of its outstanding common stock through July 31, 2023. On October 22, 2021, the Board of Directors approved an amendment that increased the total authorization from $25.0 million to $57.0 million. Bancorp repurchased 23,275 shares totaling $877 thousand in the first quarter of 2022. From the start of this program, the Bancorp has repurchased 618,991 shares totaling $22.3 million as of March 31, 2022.

Earnings Call and Webcast Information

Bank of Marin Bancorp will webcast its first quarter 2022 earnings call on Monday, April 25, 2022 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 Northern California, with assets of $4.3 billion, Bank of Marin has 31 retail branches and 8 commercial banking offices located across 10 counties. Bank of Marin provides commercial banking, personal banking, and wealth management and trust services. Specializing in providing legendary service to its customers and investing in its local communities, Bank of Marin has consistently been ranked one of the “Top Corporate Philanthropists” by the San Francisco Business Times and one of the “Best Places to Work” by the North Bay Business Journal. Bank of Marin Bancorp is included in the Russell 2000 Small-Cap Index and Nasdaq ABA Community Bank Index. For more information, go to www.bankofmarin.com.

Forward-Looking Statements

This release may contain certain forward-looking statements that are based on management’s current expectations regarding economic, legislative, and regulatory issues that may impact Bancorp’s earnings in future periods. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “intend,” “estimate” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Factors that could cause future results to vary materially from current management expectations include, but are not limited to, our ability to successfully integrate the acquisition of American River Bankshares and American River Bank into the Company and Bank, natural disasters (such as wildfires, floods and earthquakes), our borrowers’ actual payment performance as loan deferrals related to the COVID-19 pandemic expire, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance, general economic conditions, economic uncertainty in the United States and abroad, impacts from inflation, 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, interruptions of utility service in our markets for sustained periods, and other economic, competitive, governmental, regulatory and technological factors (including external fraud and cybersecurity threats) affecting Bancorp’s operations, pricing, products and services. These and other important factors are detailed in various securities law filings made periodically by Bancorp, copies of which are available from Bancorp without charge. Bancorp undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

(BMRC-ER)

BANK OF MARIN BANCORP FINANCIAL HIGHLIGHTS

 

Three months ended

(in thousands, except per share amounts; unaudited)

March 31,

2022

December 31,

2021

March 31,

2021

Selected operating data and performance ratios:

 

 

 

Net income

$

10,465

 

$

9,714

 

$

8,947

 

Diluted earnings per common share

$

0.66

 

$

0.61

 

$

0.66

 

Return on average assets

 

0.98

%

 

0.90

%

 

1.21

%

Return on average equity

 

9.61

%

 

8.50

%

 

10.22

%

Efficiency ratio

 

59.13

%

 

56.92

%

 

64.60

%

Tax-equivalent net interest margin 1

 

2.96

%

 

3.03

%

 

3.19

%

Cost of deposits

 

0.06

%

 

0.06

%

 

0.07

%

Net (recoveries) charge-offs

$

(9

)

$

(9

)

$

(13

)

(in thousands; unaudited)

March 31,

2022

December 31,

2021

Selected financial condition data:

 

 

Total assets

$

4,330,424

 

$

4,314,209

 

Loans:

 

 

Commercial and industrial 2

$

248,625

 

$

301,602

 

Real estate:

 

 

Commercial owner-occupied

 

391,924

 

 

392,345

 

Commercial investor-owned

 

1,176,918

 

 

1,189,021

 

Construction

 

131,015

 

 

119,840

 

Home equity

 

88,092

 

 

88,746

 

Other residential

 

114,277

 

 

114,558

 

Installment and other consumer loans

 

51,003

 

 

49,533

 

Total loans

$

2,201,854

 

$

2,255,645

 

Non-performing loans: 3

 

 

Real estate:

 

 

Commercial owner-occupied

$

7,272

 

$

7,269

 

Commercial investor-owned

 

 

 

694

 

Home equity

 

390

 

 

413

 

Installment and other consumer loans

 

16

 

 

 

Total non-accrual loans

$

7,678

 

$

8,376

 

Classified loans (graded substandard and doubtful)

$

36,460

 

$

36,235

 

Total accruing loans 30-89 days past due

$

2,323

 

$

1,673

 

Allowance for credit losses to total loans

 

1.02

%

 

1.02

%

Allowance for credit losses to total loans, excluding SBA PPP loans 4

 

1.04

%

 

1.07

%

Allowance for credit losses to non-performing loans

2.94x

2.75x

Non-accrual loans to total loans

 

0.35

%

 

0.37

%

Total deposits

$

3,861,342

 

$

3,808,550

 

Loan-to-deposit ratio

 

57.0

%

 

59.2

%

Stockholders’ equity

$

420,408

 

$

450,368

 

Book value per share

$

26.27

 

$

28.27

 

Tangible common equity to tangible assets 5

 

8.0

%

 

8.8

%

Total risk-based capital ratio – Bank

 

14.3

%

 

14.4

%

Total risk-based capital ratio – Bancorp

 

14.4

%

 

14.6

%

Full-time equivalent employees

 

312

 

 

328

 

1 Net interest income is annualized by dividing actual number of days in the period times 360 days.

2 Includes SBA PPP loans of $40.6 million and $111.2 million at March 31, 2022 and December 31, 2021, respectively.

3 Excludes accruing troubled-debt restructured loans of $2.1 million and $2.1 million at March 31, 2022 and December 31, 2021, respectively.

4 The allowance for credit losses to total loans, excluding non-impaired acquired loans and guaranteed SBA PPP loans, is considered a meaningful non-GAAP financial measure, as it represents only those loans that were considered in the calculation of the allowance for credit losses. Refer to footnote 2 above for SBA PPP loan totals.

5 Tangible common equity to tangible assets is considered to be a meaningful non-GAAP financial measure of capital adequacy and is useful for investors to assess Bancorp’s ability to absorb potential losses. Tangible common equity includes common stock, retained earnings and unrealized gain on available for sale securities, net of tax, less goodwill and intangible assets of $79.0 million and $79.4 million at March 31, 2022 and December 31, 2021, respectively. Tangible assets exclude goodwill and intangible assets.

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF CONDITION

(in thousands, except share data; unaudited)

March 31,

2022

December 31,

2021

Assets

 

 

Cash, cash equivalents and restricted cash

$

170,901

 

$

347,641

 

Investment securities

 

 

Held-to-maturity, at amortized cost (net of zero allowance for credit losses at March 31, 2022 and

December 31, 2021)

 

790,264

 

 

342,222

 

Available-for-sale (at fair value; amortized cost of $995,637 and $1,169,520 at March 31, 2022 and December 31, 2021, respectively; net of zero allowance for credit losses at March 31, 2022 and

December 31, 2021)

 

955,457

 

 

1,167,568

 

Total investment securities

 

1,745,721

 

 

1,509,790

 

Loans, at amortized cost

 

2,201,854

 

 

2,255,645

 

Allowance for credit losses on loans

 

(22,547

)

 

(23,023

)

Loans, net of allowance for credit losses on loans

 

2,179,307

 

 

2,232,622

 

Goodwill

 

72,754

 

 

72,754

 

Bank-owned life insurance

 

61,536

 

 

61,473

 

Operating lease right-of-use assets

 

23,544

 

 

23,604

 

Bank premises and equipment, net

 

7,236

 

 

7,558

 

Core deposit intangible, net

 

6,225

 

 

6,605

 

Other real estate owned

 

800

 

 

800

 

Interest receivable and other assets

 

62,400

 

 

51,362

 

Total assets

$

4,330,424

 

$

4,314,209

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

Liabilities

 

 

Deposits

 

 

Non-interest bearing

$

1,960,684

 

$

1,910,240

 

Interest bearing

 

 

Transaction accounts

 

299,336

 

 

290,813

 

Savings accounts

 

347,335

 

 

340,959

 

Money market accounts

 

1,108,852

 

 

1,116,303

 

Time accounts

 

145,135

 

 

150,235

 

Total deposits

 

3,861,342

 

 

3,808,550

 

Borrowings and other obligations

 

388

 

 

419

 

Operating lease liabilities

 

25,351

 

 

25,429

 

Interest payable and other liabilities

 

22,935

 

 

29,443

 

Total liabilities

 

3,910,016

 

 

3,863,841

 

 

 

 

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 – 16,003,847 and 15,929,243 at March 31, 2022 and December 31, 2021, respectively

 

213,204

 

 

212,524

 

Retained earnings

 

246,511

 

 

239,868

 

Accumulated other comprehensive loss, net of taxes

 

(39,307

)

 

(2,024

)

Total stockholders’ equity

 

420,408

 

 

450,368

 

Total liabilities and stockholders’ equity

$

4,330,424

 

$

4,314,209

 

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

 

Three months ended

(in thousands, except per share amounts; unaudited)

March 31,

2022

December 31,

2021

March 31,

2021

Interest income

 

 

 

Interest and fees on loans

$

23,677

 

$

25,495

 

$

20,661

 

Interest on investment securities

 

6,693

 

 

5,625

 

 

3,129

 

Interest on federal funds sold and due from banks

 

106

 

 

125

 

 

42

 

Total interest income

 

30,476

 

 

31,245

 

 

23,832

 

Interest expense

 

 

 

Interest on interest-bearing transaction accounts

 

56

 

 

53

 

 

39

 

Interest on savings accounts

 

29

 

 

28

 

 

19

 

Interest on money market accounts

 

478

 

 

505

 

 

286

 

Interest on time accounts

 

14

 

 

25

 

 

96

 

Interest on borrowings and other obligations

 

1

 

 

1

 

 

 

Interest on subordinated debenture

 

 

 

 

 

1,361

 

Total interest expense

 

578

 

 

612

 

 

1,801

 

Net interest income

 

29,898

 

 

30,633

 

 

22,031

 

(Reversal of) provision for credit losses on loans

 

(485

)

 

600

 

 

(2,929

)

(Reversal of) provision for credit losses on unfunded loan commitments

 

(318

)

 

210

 

 

(590

)

Net interest income after (reversal of) provision for credit losses

 

30,701

 

 

29,823

 

 

25,550

 

Non-interest income

 

 

 

Wealth Management and Trust Services

 

600

 

 

607

 

 

488

 

Debit card interchange fees, net

 

505

 

 

544

 

 

366

 

Service charges on deposit accounts

 

488

 

 

531

 

 

281

 

Earnings on bank-owned life insurance, net

 

413

 

 

302

 

 

257

 

Dividends on Federal Home Loan Bank stock

 

259

 

 

255

 

 

149

 

Merchant interchange fees, net

 

140

 

 

175

 

 

57

 

Losses on sale of investment securities, net

 

 

 

(17

)

 

 

Other income

 

462

 

 

322

 

 

228

 

Total non-interest income

 

2,867

 

 

2,719

 

 

1,826

 

Non-interest expense

 

 

 

Salaries and related benefits

 

11,548

 

 

10,716

 

 

9,208

 

Occupancy and equipment

 

1,909

 

 

1,929

 

 

1,751

 

Data processing

 

1,277

 

 

1,887

 

 

819

 

Professional services

 

913

 

 

653

 

 

863

 

Information technology

 

478

 

 

445

 

 

313

 

Depreciation and amortization

 

452

 

 

461

 

 

459

 

Amortization of core deposit intangible

 

380

 

 

393

 

 

204

 

Directors’ expense

 

311

 

 

297

 

 

175

 

Federal Deposit Insurance Corporation insurance

 

290

 

 

292

 

 

179

 

Charitable contributions

 

45

 

 

90

 

 

31

 

Other expense

 

1,772

 

 

1,821

 

 

1,410

 

Total non-interest expense

 

19,375

 

 

18,984

 

 

15,412

 

Income before provision for income taxes

 

14,193

 

 

13,558

 

 

11,964

 

Provision for income taxes

 

3,728

 

 

3,844

 

 

3,017

 

Net income

$

10,465

 

$

9,714

 

$

8,947

 

Net income per common share:

 

 

 

Basic

$

0.66

 

$

0.61

 

$

0.67

 

Diluted

$

0.66

 

$

0.61

 

$

0.66

 

Weighted average shares:

 

 

 

Basic

 

15,876

 

 

15,948

 

 

13,363

 

Diluted

 

15,946

 

 

16,027

 

 

13,469

 

Comprehensive income (loss):

 

 

 

Net income

$

10,465

 

$

9,714

 

$

8,947

 

Other comprehensive income (loss):

 

 

 

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

 

(38,228

)

 

(12,723

)

 

(9,082

)

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

 

 

 

17

 

 

 

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

 

(14,847

)

 

 

 

 

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

 

144

 

 

108

 

 

143

 

Other comprehensive loss, before tax

 

(52,931

)

 

(12,598

)

 

(8,939

)

Deferred tax benefit

 

(15,648

)

 

(3,726

)

 

(2,644

)

Other comprehensive loss, net of tax

 

(37,283

)

 

(8,872

)

 

(6,295

)

Total comprehensive (loss) income

$

(26,818

)

$

842

 

$

2,652

 

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, 2022

December 31, 2021

March 31, 2021

 

 

Interest

 

 

Interest

 

 

Interest

 

 

Average

Income/

Yield/

Average

Income/

Yield/

Average

Income/

Yield/

(in thousands)

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate

Assets

 

 

 

 

 

 

 

 

 

Interest-earning deposits with banks 1

$

231,555

$

106

0.18

%

$

330,894

$

125

0.15

%

$

165,788

$

42

0.10

%

Investment securities 2, 3

 

1,626,537

 

6,871

1.69

%

 

1,410,383

 

5,801

1.65

%

 

540,970

 

3,282

2.43

%

Loans 1, 3, 4

 

2,227,495

 

23,881

4.29

%

 

2,269,785

 

25,711

4.43

%

 

2,099,847

 

20,836

3.97

%

Total interest-earning assets 1

 

4,085,587

 

30,858

3.02

%

 

4,011,062

 

31,637

3.09

%

 

2,806,605

 

24,160

3.44

%

Cash and non-interest-bearing due from banks

 

69,019

 

 

 

85,869

 

 

 

50,931

 

 

Bank premises and equipment, net

 

7,430

 

 

 

7,777

 

 

 

4,777

 

 

Interest receivable and other assets, net

 

183,222

 

 

 

194,058

 

 

 

133,693

 

 

Total assets

$

4,345,258

 

 

$

4,298,766

 

 

$

2,996,006

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

Interest-bearing transaction accounts

$

295,183

$

56

0.08

%

$

290,394

$

53

0.07

%

$

174,135

$

39

0.09

%

Savings accounts

 

343,327

 

29

0.03

%

 

336,715

 

28

0.03

%

 

214,049

 

19

0.04

%

Money market accounts

 

1,122,215

 

478

0.17

%

 

1,102,943

 

505

0.18

%

 

703,577

 

286

0.16

%

Time accounts including CDARS

 

147,707

 

14

0.04

%

 

144,993

 

25

0.07

%

 

96,349

 

96

0.40

%

Borrowings and other obligations 1

 

399

 

1

0.62

%

 

430

 

1

0.62

%

 

36

 

1.99

%

Subordinated debenture 1, 5

 

 

%

 

 

%

 

2,164

 

1,361

251.54

%

Total interest-bearing liabilities

 

1,908,831

 

578

0.12

%

 

1,875,475

 

612

0.13

%

 

1,190,310

 

1,801

0.61

%

Demand accounts

 

1,942,804

 

 

 

1,915,309

 

 

 

1,406,123

 

 

Interest payable and other liabilities

 

51,997

 

 

 

54,514

 

 

 

44,551

 

 

Stockholders’ equity

 

441,626

 

 

 

453,468

 

 

 

355,022

 

 

Total liabilities & stockholders’ equity

$

4,345,258

 

 

$

4,298,766

 

 

$

2,996,006

 

 

Tax-equivalent net interest income/margin 1

 

$

30,280

2.96

%

 

$

31,025

3.03

%

 

$

22,359

3.19

%

Reported net interest income/margin 1

 

$

29,898

2.93

%

 

$

30,633

2.99

%

 

$

22,031

3.14

%

Tax-equivalent net interest rate spread

 

 

2.90

%

 

 

2.96

%

 

 

2.83

%

 

 

 

 

 

 

 

 

 

 

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 2022 and 2021.

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.

5 2021 interest on subordinated debenture included $1.3 million in accelerated discount accretion from the early redemption of our last subordinated debenture on March 15, 2021.

 

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