NOVATO, Calif.--(BUSINESS WIRE)--
Bank of Marin Bancorp, "Bancorp" (NASDAQ: BMRC), parent company of Bank
of Marin, "Bank," announced record earnings of $9.7 million in the
fourth quarter of 2018, compared to $8.7 million in the third quarter of
2018 and $1.1 million in the fourth quarter of 2017. Diluted earnings
per share were $0.69 in the fourth quarter of 2018, compared to $0.62 in
the prior quarter and $0.08 in the same quarter a year ago. Annual
earnings were $32.6 million in 2018 compared to $16.0 million a year
ago. Diluted earnings per share were $2.33 for the year ended
December 31, 2018, compared to $1.27 per share for the year ended
December 31, 2017. 2017 periods were affected by a $3.0 million deferred
tax asset write-down associated with the Tax Cuts and Jobs Act of 2017.
Share and per share data has been adjusted throughout this document to
reflect the two-for-one stock split effective November 27, 2018.
“Balance was the key to our tremendous success in 2018,” said Russell A.
Colombo, President and Chief Executive Officer. “Our record-breaking
performance is a testament to our consistent execution of disciplined
fundamentals across all areas of the Bank. With a low cost and stable
deposit base, solid opportunities for loan growth, and our unwavering
commitment to relationship banking, we are well-positioned for continued
success in 2019."
Bancorp also provided the following highlights for the fourth quarter
and year ended December 31, 2018:
-
Pre-tax net income in the fourth quarter of 2018 was up $1.2 million
from the prior quarter and $6.5 million from the fourth quarter of
2017. Higher average balances and yields on both loans and investment
securities favorably impacted earnings in the current quarter. As
discussed below, a $956 thousand gain on the sale of Visa Inc. Class B
restricted common stock was mostly offset by a $916 thousand
accelerated purchase discount on the early redemption of a
subordinated debenture assumed in the 2013 NorCal Community Bancorp
acquisition.
-
The Bank achieved loan growth of $84.9 million in 2018, or 5.1% to
$1,763.9 million at December 31, 2018, from $1,679.0 million at
December 31, 2017. Loans increased $35.0 million in the fourth quarter
from $1,728.9 million at September 30, 2018.
-
In 2018, we expanded our footprint in the East Bay and strengthened
our team in Sonoma County. Wim-Kees van Hout was hired as Regional
Manager to open a new commercial banking office in Walnut Creek, and
David Casassa was named Commercial Banking Regional Manager for our
Santa Rosa market.
-
Strong credit quality remains a cornerstone of the Bank’s consistent
performance. Non-accrual loans represent 0.04% of the Bank's loan
portfolio as of December 31, 2018. There was no provision for loan
losses recorded in 2018 due to continuing high credit quality.
-
Deposits grew $26.1 million, to $2,174.8 million at December 31, 2018,
compared to $2,148.7 million at December 31, 2017. Non-interest
bearing deposits grew by $51.9 million in 2018 and made up 49% of
total deposits at year end. In 2018, cost of deposits remained low at
0.10% despite the higher interest rate environment, compared to 0.07%
in 2017.
-
The efficiency ratio decreased to 51.3% in the fourth quarter from
54.2% in the third quarter of 2018, and 68.3% in the fourth quarter
last year. The efficiency ratio was 57.3% for the full year, down from
64.7% in 2017.
-
For the quarter ended December 31, 2018, return on assets ("ROA") was
1.52% and return on equity ("ROE") was 12.37%, up from 1.38% and
11.20%, respectively, in the third quarter.
-
All capital ratios are well above regulatory requirements for a
well-capitalized institution. The total risk-based capital ratio for
Bancorp was 14.9% at both December 31, 2018 and December 31, 2017.
Tangible common equity to tangible assets increased to 11.3% at
December 31, 2018, from 10.7% at December 31, 2017 (refer to footnote
3 on page 6 for definition of this non-GAAP financial measure).
-
The Board of Directors declared a cash dividend of $0.19 per share on
January 25, 2019, a $0.015 increase from the prior quarter. This is
the 55th consecutive quarterly dividend paid by Bank of
Marin Bancorp. Since August 2005, Bancorp's average annual dividend
growth rate has been 10.2%. The cash dividend is payable on February
15, 2019 to shareholders of record at the close of business on
February 8, 2019.
-
On April 23, 2018, Bancorp announced that its Board of Directors
approved a Share Repurchase Program under which Bancorp may repurchase
up to $25.0 million of its outstanding common stock through May 1,
2019. During 2018, Bancorp repurchased 171,217 shares for a total
amount of $7.0 million.
Loans and Credit Quality
Loans grew $35.0 million in the fourth quarter of 2018 and totaled
$1,763.9 million at December 31, 2018. For the three months and year
ended December 31, 2018, new loan originations of $73.6 million and
$239.4 million, respectively, exceeded 2017 loan originations of $51.5
million and $173.1 million for the same periods. New loan originations
were partially offset by payoffs of $36.5 million in the fourth quarter
and $157.3 million for the full year ended December 31, 2018.
Non-accrual loans totaled $697 thousand, or 0.04%, of the Bank's loan
portfolio at December 31, 2018, an increase from $386 thousand, or
0.02%, at September 30, 2018 and $406 thousand, or 0.02%, a year ago.
Loans classified substandard totaled $12.6 million at December 31, 2018,
compared to $12.4 million at September 30, 2018 and $27.9 million at
December 31, 2017. There were no loans classified doubtful at December
31, 2018 or December 31, 2017. Accruing loans past due 30 to 89 days
totaled $1.1 million at December 31, 2018, compared to $301 thousand at
September 30, 2018 and $1.9 million a year ago.
There was no provision for loan losses recorded in the fourth quarter of
2018, compared to a $500 thousand provision for loan losses in the
fourth quarter a year ago. Net recoveries for both the fourth quarter of
2018 and the prior quarter totaled $4 thousand compared to $21 thousand
in the fourth quarter a year ago. Net recoveries totaled $54 thousand
for the year ended December 31, 2018, compared to net charge-offs of
$175 thousand in 2017. The ratio of loan loss reserve to loans,
including acquired loans, was 0.9% at December 31, 2018, September 30,
2018 and December 31, 2017.
Investments
The investment portfolio totaled $619.7 million at December 31, 2018, an
increase of $49.9 million from September 30, 2018 and $136.2 million
from December 31, 2017. Purchases of securities totaling $61.3 million
and $237.9 million were made during the fourth quarter and year ended
December 31, 2018, respectively. These purchases consisted primarily of
securities issued or guaranteed by the U.S. government to take advantage
of the higher interest rate environment. Purchases were partially offset
by principal paydowns, maturities, calls, and $17.1 million in
investments sold in 2018.
Deposits
Deposits totaled $2,174.8 million at December 31, 2018, compared to
$2,212.8 million at September 30, 2018 and $2,148.7 million at
December 31, 2017. While there was a $38.0 million decrease in deposits
from the prior quarter primarily due to the normal cash fluctuations of
our large business clients, total average deposits increased $34.2
million in the fourth quarter. The average cost of deposits increased
four basis points in the fourth quarter to 0.14%. The average cost of
deposits for the full year of 2018 was 0.10%, up three basis points from
2017.
Loan and investment growth in the fourth quarter was largely funded by
cash and one overnight FHLB borrowing of $7.0 million on the last day of
the year.
Earnings
“Our record results for 2018 were powered by a well-executed strategy
for growth combined with staying true to our rigorous lending
standards,” said Tani Girton, EVP and Chief Financial Officer. “With a
1.31% ROA, tax equivalent net interest margin of 3.9%, a 10.73% ROE and
efficiency ratio of 57.3%, we are excited to enter 2019 with great
momentum.”
Net interest income totaled $23.3 million in the fourth quarter of 2018
compared to $23.5 million in the prior quarter and $20.1 million in the
same quarter a year ago. The tax-equivalent net interest margin was
3.85%, 3.97% and 3.80% for those respective periods. The $200 thousand
net interest income decrease from the prior quarter relates to $916
thousand in accelerated discount accretion from the early redemption of
a high-rate subordinated debenture assumed in the NorCal Community
Bancorp acquisition and increases in certain deposit rates, partially
offset by higher yields and average balances on loans and investments
and accelerated accretion from the payoff of acquired loans. While the
accelerated accretion from the early redemption of the subordinated
debenture reduced net interest margin by 15 basis points for the current
quarter, the Bank's interest expense will be lower going forward as a
result of this transaction.
The $3.2 million net interest income increase from the same quarter last
year was primarily due to the acquisition of Bank of Napa earning
assets, organic loan growth, investment security growth, and higher
yields across all earning asset categories. The increase was partially
offset by the effect of the subordinated debenture redemption and an
increase in certain deposit rates.
Net interest income totaled $91.5 million and $74.9 million in 2018 and
2017, respectively. The increase of $16.6 million in 2018 was primarily
due to a $337.7 million increase in average earning assets.
Additionally, higher yields on loans, investment securities and
interest-bearing cash positively impacted interest income. The
tax-equivalent net interest margin increased to 3.90% in 2018 compared
to 3.80% in 2017 for the same reasons, despite the 0.04% negative impact
from the early redemption of the subordinated debenture.
Loans acquired through the acquisition of other banks are classified as
purchased credit impaired ("PCI") or non-PCI loans and are recorded at
fair value at acquisition date. For acquired loans not considered credit
impaired, the level of accretion varies due to maturities and early
payoffs. Accretion on PCI loans fluctuates based on changes in cash
flows expected to be collected. Gains on payoffs of PCI loans are
recorded as interest income when the payoff amounts exceed the recorded
investment. PCI loans totaled $2.1 million at December 31, 2018,
September 30, 2018, and December 31, 2017.
Accretion and gains on payoffs of purchased loans recorded to interest
income were as follows:
|
|
Three months ended
|
| | December 31, 2018 |
| September 30, 2018 |
| December 31, 2017 |
|
(dollars in thousands; unaudited)
|
|
Dollar
Amount
|
|
Basis point
impact to net
interest margin
|
|
Dollar
Amount
|
|
Basis point
impact to net
interest margin
|
|
Dollar
Amount
|
|
Basis point
impact to net
interest margin
|
|
Accretion on PCI loans 1 | |
$
|
62
| |
|
1 bps
| |
$
|
63
| |
|
1 bps
| |
$
|
85
| |
|
2 bps
|
|
Accretion on non-PCI loans 2 | |
$
|
214
| | |
3 bps
| |
$
|
41
| | |
1 bps
| |
$
|
110
| | |
2 bps
|
|
Gains on pay-offs of PCI loans
| |
$
|
—
|
| |
0 bps
|
|
$
|
6
|
| |
0 bps
|
|
$
|
100
|
| |
2 bps
|
|
|
|
Years ended
|
| | | December 31, 2018 |
| December 31, 2017 |
|
(dollars in thousands; unaudited)
|
|
|
Dollar
Amount
|
|
Basis point
impact to net
interest margin
|
|
Dollar
Amount
|
|
Basis point
impact to net
interest margin
|
|
Accretion on PCI loans 1 | | |
$
|
320
| |
|
1 bps
| |
$
|
331
| |
|
2 bps
|
|
Accretion on non-PCI loans 2 | | |
$
|
487
| | |
2 bps
| |
$
|
571
| | |
3 bps
|
|
Gains on pay-offs of PCI loans
| | |
$
|
135
| | |
1 bps
| |
$
|
184
| | |
1 bps
|
| 1 Accretable yield on PCI loans totaled $934 thousand,
$996 thousand and $1.3 million at December 31, 2018, September 30,
2018 and December 31, 2017, respectively.
|
| 2 Unaccreted purchase discounts on non-PCI loans totaled
$708 thousand, $922 thousand and $1.2 million at December 31, 2018,
September 30, 2018 and December 31, 2017, respectively.
|
Non-interest income in the fourth quarter of 2018 totaled $3.4 million,
compared to $2.2 million in the prior quarter and $2.0 million in the
same quarter a year ago. The increase compared to the prior quarter and
the same quarter a year ago primarily relates 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, a $180 thousandFederal Home Loan
Bank special dividend and an increase in deposit network income. The
Bank sold less than half of its Visa Inc. position to realize recent
appreciation in market prices and hedge against market volatility.
Additionally, there was a net loss of $195 thousand on the sale of
investment securities in the fourth quarter of 2017. Non-interest income
of $10.1 million in 2018 increased from $8.3 million in 2017 primarily
due to the same reasons mentioned above.
Non-interest expense totaled $13.7 million in the fourth quarter of
2018, compared to $14.0 million in the prior quarter and $15.1 million
in the same quarter a year ago. The decrease in the fourth quarter of
2018 compared to the same period a year ago was mainly due to Bank of
Napa acquisition-related expenses in 2017.
Non-interest expense of $58.3 million in 2018 increased from $53.8
million in 2017, primarily resulting from an increase of approximately
$3.4 million in salaries and benefits related to the addition of
full-time equivalent personnel (including Bank of Napa employees),
annual merit increases, higher employee insurance and stock based
compensation awards reaching retirement eligiblity. Additionally, $1.0
million in consulting expenses related to core processing contract
negotiations, higher core deposit intangible amortization and
acquisition-related rent contributed to the year-over-year increase.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into
law. The law reduced the federal statutory income tax rate to 21% for
tax years beginning on or after January 1, 2018. The effective tax rate
decreased from 44.6% in 2017 to 24.9% in 2018, 10.5 percentage points of
which was attributable to the write-down of the net deferred tax assets
in 2017.
Earnings Call and Webcast Information
Bank of Marin Bancorp will webcast its fourth quarter and year end 2018
earnings call on Monday, January 28, 2019 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 1989 and headquartered in Novato, Bank of Marin is the
wholly-owned subsidiary of Bank of Marin Bancorp (NASDAQ: BMRC). A
leading business and community bank in the San Francisco Bay Area, with
assets of $2.5 billion and 23 retail offices throughout San Francisco,
Marin, Napa, Sonoma and Alameda counties, Bank of Marin provides
business and personal banking, commercial lending, and wealth management
and trust services. Specializing in providing legendary service to its
customers and investing in its local communities, Bank of Marin has
consistently been ranked one of the “Top Corporate Philanthropists" by
the San Francisco Business Times and one of the “Best Places to Work” by
the North Bay Business Journal. Bank of Marin Bancorp is included in the
Russell 2000 Small-Cap Index and NASDAQ ABA Community Bank Index. For
more information, go to www.bankofmarin.com.
Forward-Looking Statements
This release may contain certain forward-looking statements that are
based on management's current expectations regarding economic,
legislative, and regulatory issues that may impact Bancorp's earnings in
future periods. Forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts. They
often include the words “believe,” “expect,” “intend,” “estimate” or
words of similar meaning, or future or conditional verbs such as “will,”
“would,” “should,” “could” or “may.” Factors that could cause future
results to vary materially from current management expectations include,
but are not limited to, general economic conditions, economic
uncertainty in the United States and abroad, changes in interest rates,
deposit flows, real estate values, costs or effects of acquisitions,
competition, changes in accounting principles, policies or guidelines,
legislation or regulation (including the Tax Cuts & Jobs Act of 2017),
and other economic, competitive, governmental, regulatory and
technological factors (including external fraud and cyber-security
threats) affecting Bancorp's operations, pricing, products and services.
These and other important factors are detailed in various securities law
filings made periodically by Bancorp, copies of which are available from
Bancorp without charge. Bancorp undertakes no obligation to release
publicly the result of any revisions to these forward-looking statements
that may be made to reflect events or circumstances after the date of
this press release or to reflect the occurrence of unanticipated events.
|
|
| BANK OF MARIN BANCORP |
| FINANCIAL HIGHLIGHTS |
| December 31, 2018 |
|
|
|
(dollars in thousands, except per share data; unaudited)
|
| December 31,
2018 | | September 30,
2018 | | December 31,
2017 |
Quarter-to-Date | | | | | | |
|
|
Net income
| |
$
|
9,662
| | |
$
|
8,680
| | |
$
|
1,110
| |
|
Diluted earnings per common share 4 | |
$
|
0.69
| | |
$
|
0.62
| | |
$
|
0.08
| |
|
Return on average assets
| |
1.52
|
%
| |
1.38
|
%
| |
0.19
|
%
|
|
Return on average equity
| |
12.37
|
%
| |
11.20
|
%
| |
1.63
|
%
|
|
Efficiency ratio
| |
51.34
|
%
| |
54.20
|
%
| |
68.25
|
%
|
|
Tax-equivalent net interest margin 1 | |
3.85
|
%
| |
3.97
|
%
| |
3.80
|
%
|
|
Net (recoveries) charge-offs
| |
$
|
(4
|
)
| |
$
|
(4
|
)
| |
$
|
(21
|
)
|
|
Net (recoveries) charge-offs to average loans
| |
—
|
%
|
—
|
%
|
—
|
%
|
Year-to-Date | | | | | | |
|
Net income
| |
$
|
32,622
| | | | |
$
|
15,976
| |
|
Diluted earnings per common share 4 | |
$
|
2.33
| | | | |
$
|
1.27
| |
|
Return on average assets
| |
1.31
|
%
| | | |
0.75
|
%
|
|
Return on average equity
| |
10.73
|
%
| | | |
6.49
|
%
|
|
Efficiency ratio
| |
57.30
|
%
| | | |
64.70
|
%
|
|
Tax-equivalent net interest margin 1 | |
3.90
|
%
| | | |
3.80
|
%
|
|
Net (recoveries) charge-offs
| |
$
|
(54
|
)
| | | |
$
|
175
| |
|
Net (recoveries) charge-offs to average loans
| |
—
|
%
| | |
0.01
|
%
|
At Period End | | | | | | |
|
Total assets
| |
$
|
2,520,892
| | |
$
|
2,545,715
| | |
$
|
2,468,154
| |
|
Loans:
| | | | | | |
|
Commercial and industrial
| |
$
|
230,739
| | |
$
|
238,771
| | |
$
|
235,835
| |
|
Real estate:
| | | | | | |
|
Commercial owner-occupied
| |
$
|
313,277
| | |
$
|
316,467
| | |
$
|
300,963
| |
|
Commercial investor-owned
| |
$
|
873,410
| | |
$
|
841,493
| | |
$
|
822,984
| |
|
Construction
| |
$
|
76,423
| | |
$
|
68,739
| | |
$
|
63,828
| |
|
Home Equity
| |
$
|
124,696
| | |
$
|
121,243
| | |
$
|
132,467
| |
|
Other residential
| |
$
|
117,847
| | |
$
|
113,383
| | |
$
|
95,526
| |
|
Installment and other consumer loans
| |
$
|
27,472
|
|
|
$
|
28,775
|
|
|
$
|
27,410
|
|
|
Total loans
| |
$
|
1,763,864
| | |
$
|
1,728,871
| | |
$
|
1,679,013
| |
| | | | | | |
|
|
Non-performing loans2:
| | | | | | |
|
Commercial and industrial
| |
$
|
319
| | |
$
|
—
| | |
$
|
—
| |
|
Home equity
| |
$
|
313
| | |
$
|
318
| | |
$
|
406
| |
|
Installment and other consumer loans
| |
$
|
65
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
Total non-accrual loans
| |
$
|
697
| | |
$
|
386
| | |
$
|
406
| |
| | | | | | |
|
|
Classified loans (graded substandard and doubtful)
| |
$
|
12,608
| | |
$
|
12,401
| | |
$
|
27,906
| |
|
Total accruing loans 30-89 days past due
| |
$
|
1,121
| | |
$
|
301
| | |
$
|
1,925
| |
|
Allowance for loan losses to total loans
| |
0.90
|
%
| |
0.91
|
%
| |
0.94
|
%
|
|
Allowance for loan losses to non-performing loans
| |
22.71
|
x
| |
41.00
|
x
| |
38.88
|
x
|
|
Non-accrual loans to total loans
| |
0.04
|
%
| |
0.02
|
%
| |
0.02
|
%
|
| | | | | | |
|
|
Total deposits
| |
$
|
2,174,840
| | |
$
|
2,212,846
| | |
$
|
2,148,670
| |
|
Loan-to-deposit ratio
| |
81.1
|
%
| |
78.1
|
%
| |
78.1
|
%
|
|
Stockholders' equity
| |
$
|
316,407
| | |
$
|
308,603
| | |
$
|
297,025
| |
|
Book value per share 4 | |
$
|
22.85
| | |
$
|
22.10
| | |
$
|
21.46
| |
|
Tangible common equity to tangible assets 3 | |
11.3
|
%
| |
10.9
|
%
| |
10.7
|
%
|
|
Total risk-based capital ratio - Bank
| |
14.0
|
%
| |
13.7
|
%
| |
14.7
|
%
|
|
Total risk-based capital ratio - Bancorp
| |
14.9
|
%
| |
15.3
|
%
| |
14.9
|
%
|
|
Full-time equivalent employees
| |
290
| | |
287
| | |
291
| |
|
|
| 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
$14.3 million, $15.1 million and $16.5 million at December 31, 2018,
September 30, 2018 and December 31, 2017, respectively. Excludes
purchased credit-impaired (PCI) loans with carrying values of $2.1
million that were accreting interest at December 31, 2018, September
30, 2018 and December 31, 2017. 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 $35.7
million, $35.9 million and $36.6 million at December 31, 2018,
September 30, 2018 and December 31, 2017, 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, 2018, September 30, 2018 and December 31, 2017 |
|
|
|
(in thousands, except share data; unaudited)
|
| December 31,
2018
|
| September 30,
2018
|
| December 31,
2017
|
| Assets |
| |
| |
| |
|
Cash and due from banks
| |
$
|
34,221
| | |
$
|
142,718
| | |
$
|
203,545
| |
|
Investment securities
| | | | | | |
|
Held-to-maturity, at amortized cost
| |
157,206
| | |
164,222
| | |
151,032
| |
|
Available-for-sale (at fair value; amortized cost of $465,910,
$416,732 and $334,285 at December 31, 2018, September 30, 2018 and
December 31, 2017, respectively)
|
|
462,464
|
|
|
405,571
|
|
|
332,467
|
|
|
Total investment securities
| |
619,670
| | |
569,793
| | |
483,499
| |
|
Loans, net of allowance for loan losses of $15,821, $15,817 and
$15,767 at December 31, 2018, September 30, 2018 and December 31,
2017, respectively
| |
1,748,043
| | |
1,713,054
| | |
1,663,246
| |
|
Bank premises and equipment, net
| |
7,376
| | |
7,602
| | |
8,612
| |
| Goodwill | |
30,140
| | |
30,140
| | |
30,140
| |
|
Core deposit intangible
| |
5,571
| | |
5,802
| | |
6,492
| |
|
Interest receivable and other assets
|
|
75,871
|
|
|
76,606
|
|
|
72,620
|
|
| Total assets |
|
$
|
2,520,892
|
|
|
$
|
2,545,715
|
|
|
$
|
2,468,154
|
|
| | | | | |
|
| Liabilities and Stockholders' Equity | | | | | | |
| Liabilities | | | | | | |
|
Deposits
| | | | | | |
|
Non-interest bearing
| |
$
|
1,066,051
| | |
$
|
1,109,909
| | |
$
|
1,014,103
| |
|
Interest bearing
| | | | | | |
|
Transaction accounts
| |
133,403
| | |
138,838
| | |
169,195
| |
|
Savings accounts
| |
178,429
| | |
178,171
| | |
178,473
| |
|
Money market accounts
| |
679,775
| | |
659,788
| | |
626,783
| |
|
Time accounts
|
|
117,182
|
|
|
126,140
|
|
|
160,116
|
|
|
Total deposits
| |
2,174,840
| | |
2,212,846
| | |
2,148,670
| |
| Federal Home Loan Bank borrowing
| |
7,000
| | |
—
| | |
—
| |
|
Subordinated debentures
| |
2,640
| | |
5,831
| | |
5,739
| |
|
Interest payable and other liabilities
|
|
20,005
|
|
|
18,435
|
|
|
16,720
|
|
|
Total liabilities
|
|
2,204,485
|
|
|
2,237,112
|
|
|
2,171,129
|
|
| 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-
13,844,353 , 13,964,358 and 13,843,084
at December 31, 2018, September 30,
2018 and December 31, 2017,
respectively
| |
140,565
| | |
145,498
| | |
143,967
| |
|
Retained earnings
| |
179,944
| | |
172,723
| | |
155,544
| |
|
Accumulated other comprehensive loss, net
|
|
(4,102
|
)
|
|
(9,618
|
)
|
|
(2,486
|
)
|
|
Total stockholders' equity
|
|
316,407
|
|
|
308,603
|
|
|
297,025
|
|
| Total liabilities and stockholders' equity |
|
$
|
2,520,892
|
|
|
$
|
2,545,715
|
|
|
$
|
2,468,154
|
|
|
|
| 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,
2018
|
| September 30,
2018
|
| December 31,
2017
| | December 31,
2018
|
| December 31,
2017
|
| Interest income | |
| |
| | | |
| |
|
Interest and fees on loans
|
$
|
20,732
| | |
$
|
20,284
| | |
$
|
17,789
| | |
$
|
79,527
| | |
$
|
66,799
| |
|
Interest on investment securities
|
3,912
| | |
3,524
| | |
2,489
| | |
14,092
| | |
8,802
| |
|
Interest on federal funds sold and due from banks
|
373
|
|
|
400
|
|
|
372
|
| |
1,461
|
|
|
995
|
|
|
Total interest income
|
25,017
| | |
24,208
| | |
20,650
| | |
95,080
| | |
76,596
| |
| Interest expense | | | | | | | | | |
|
Interest on interest-bearing transaction accounts
|
68
| | |
58
| | |
34
| | |
226
| | |
108
| |
|
Interest on savings accounts
|
18
| | |
18
| | |
18
| | |
72
| | |
66
| |
|
Interest on money market accounts
|
566
| | |
337
| | |
195
| | |
1,355
| | |
555
| |
|
Interest on time accounts
|
116
| | |
130
| | |
153
| | |
542
| | |
576
| |
|
Interest on FHLB and overnight borrowings
|
—
| | |
1
| | |
—
| | |
2
| | |
—
| |
|
Interest on subordinated debentures
|
977
|
|
|
125
|
|
|
111
|
|
|
1,339
|
|
|
439
|
|
|
Total interest expense
|
1,745
|
|
|
669
|
|
|
511
|
| |
3,536
|
|
|
1,744
|
|
|
Net interest income
|
23,272
| | |
23,539
| | |
20,139
| | |
91,544
| | |
74,852
| |
|
Provision for loan losses
|
—
|
|
|
—
|
|
|
500
|
| |
—
|
|
|
500
|
|
|
Net interest income after provision for loan losses
|
23,272
|
|
|
23,539
|
|
|
19,639
|
| |
91,544
|
|
|
74,352
|
|
| Non-interest income | | | | | | | | | |
|
Service charges on deposit accounts
|
484
| | |
475
| | |
447
| | |
1,891
| | |
1,784
| |
| Wealth Management and Trust Services |
426
| | |
490
| | |
544
| | |
1,919
| | |
2,090
| |
|
Debit card interchange fees, net
|
403
| | |
402
| | |
385
| | |
1,561
| | |
1,531
| |
|
Merchant interchange fees, net
|
81
| | |
99
| | |
102
| | |
378
| | |
398
| |
|
Earnings on bank-owned life Insurance
|
227
| | |
227
| | |
217
| | |
913
| | |
845
| |
|
Dividends on FHLB stock
|
377
| | |
194
| | |
181
| | |
959
| | |
766
| |
|
Gains (losses) on investment securities, net
|
956
| | |
(90
|
)
| |
(195
|
)
| |
876
| | |
(185
|
)
|
|
Other income
|
469
|
|
|
439
|
|
|
310
|
| |
1,642
|
|
|
1,039
|
|
|
Total non-interest income
|
3,423
|
|
|
2,236
|
|
|
1,991
|
| |
10,139
|
|
|
8,268
|
|
| Non-interest expense | | | | | | | | | |
|
Salaries and related benefits
|
7,933
| | |
8,069
| | |
7,852
| | |
33,335
| | |
29,958
| |
|
Occupancy and equipment
|
1,514
| | |
1,444
| | |
1,409
| | |
5,976
| | |
5,472
| |
|
Depreciation and amortization
|
518
| | |
532
| | |
508
| | |
2,143
| | |
1,941
| |
| Federal Deposit Insurance Corporation insurance
|
188
| | |
186
| | |
176
| | |
756
| | |
666
| |
|
Data processing
|
1,004
| | |
950
| | |
2,058
| | |
4,358
| | |
4,906
| |
|
Professional services
|
481
| | |
727
| | |
1,013
| | |
3,317
| | |
2,858
| |
|
Directors' expense
|
170
| | |
173
| | |
163
| | |
700
| | |
720
| |
|
Information technology
|
228
| | |
262
| | |
206
| | |
1,023
| | |
769
| |
|
Provision for losses on off-balance sheet commitments
|
—
| | |
—
| | |
—
| | |
—
| | |
57
| |
|
Other expense
|
1,669
|
|
|
1,628
|
|
|
1,719
|
| |
6,658
|
|
|
6,435
|
|
|
Total non-interest expense
|
13,705
|
|
|
13,971
|
|
|
15,104
|
| |
58,266
|
|
|
53,782
|
|
|
Income before provision for income taxes
|
12,990
| | |
11,804
| | |
6,526
| | |
43,417
| | |
28,838
| |
|
Provision for income taxes
|
3,328
|
|
|
3,124
|
|
|
5,416
|
| |
10,795
|
|
|
12,862
|
|
| Net income | $ | 9,662 |
|
| $ | 8,680 |
|
| $ | 1,110 |
| | $ | 32,622 |
|
| $ | 15,976 |
|
|
Net income per common share:1 | | | | | | | | | |
|
Basic
|
$
|
0.70
| | |
$
|
0.62
| | |
$
|
0.09
| | |
$
|
2.35
| | |
$
|
1.29
| |
|
Diluted
|
$
|
0.69
| | |
$
|
0.62
| | |
$
|
0.08
| | |
$
|
2.33
| | |
$
|
1.27
| |
|
Weighted average shares:1 | | | | | | | | | |
|
Basic
|
13,841
| | |
13,900
| | |
12,911
| | |
13,864
| | |
12,392
| |
|
Diluted
|
14,033
|
|
|
14,110
|
|
|
13,100
|
| |
14,029
|
|
|
12,545
|
|
| Comprehensive income: | | | | | | | | | |
|
Net income
|
$
|
9,662
| | |
$
|
8,680
| | |
$
|
1,110
| | |
$
|
32,622
| | |
$
|
15,976
| |
|
Other comprehensive (loss) income:
| | | | | | | | | |
|
Change in net unrealized gain or loss on available-for-sale
securities
|
7,714
| | |
(2,120
|
)
| |
(2,637
|
)
| |
(1,707
|
)
| |
3,671
| |
|
Reclassification adjustment for losses (gains) on available-for-sale
securities in net income
|
—
| | |
90
| | |
195
| | |
79
| | |
185
| |
|
Net unrealized loss on securities transferred from
available-for-sale to held-to-maturity
|
—
| | |
—
| | |
—
| | |
(278
|
)
| |
(3,036
|
)
|
|
Amortization of net unrealized losses on securities transferred from
available-for-sale to held-to-maturity
|
120
|
|
|
128
|
|
|
126
|
| |
516
|
|
|
426
|
|
|
Subtotal
|
7,834
| | |
(1,902
|
)
| |
(2,316
|
)
| |
(1,390
|
)
| |
1,246
| |
|
Deferred tax (benefit) expense
|
2,318
|
|
|
(562
|
)
|
|
(1,060
|
)
| |
(412
|
)
|
|
439
|
|
|
Other comprehensive income (loss), net of tax
|
5,516
|
|
|
(1,340
|
)
|
|
(1,256
|
)
| |
(978
|
)
|
|
807
|
|
| Comprehensive income (loss) |
$
|
15,178
|
|
|
$
|
7,340
|
|
|
$
|
(146
|
)
| |
$
|
31,644
|
|
|
$
|
16,783
|
|
| 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, 2018 | September 30, 2018 | December 31, 2017 |
| | |
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 |
$
|
65,961
| |
$
|
373
| |
2.21
|
%
|
$
|
79,674
| |
$
|
400
| |
1.96
|
%
|
$
|
108,255
| |
$
|
372
| |
1.34
|
%
|
|
Investment securities 2, 3 |
600,914
| |
4,000
| |
2.66
|
%
|
558,741
| |
3,624
| |
2.59
|
%
|
455,706
| |
2,722
| |
2.39
|
%
|
|
|
Loans 1, 3, 4 |
1,726,045
|
|
20,933
|
|
4.75
|
%
|
1,715,295
|
|
20,504
|
|
4.68
|
%
|
1,578,959
|
|
18,245
|
|
4.52
|
%
|
|
Total interest-earning assets 1 |
2,392,920
| |
25,306
| |
4.14
|
%
|
2,353,710
| |
24,528
| |
4.08
|
%
|
2,142,920
| |
21,339
| |
3.89
|
%
|
|
Cash and non-interest-bearing due from banks
|
38,943
| | | |
41,316
| | | |
40,548
| | | |
|
Bank premises and equipment, net
|
7,529
| | | |
7,866
| | | |
8,384
| | | |
|
|
Interest receivable and other assets, net
|
84,651
|
|
|
|
86,039
|
|
|
|
74,299
|
|
|
|
| Total assets | $ | 2,524,043 |
|
|
| $ | 2,488,931 |
|
|
| $ | 2,266,151 |
|
|
|
|
Liabilities and Stockholders' Equity
| | | | | | | | | |
|
Interest-bearing transaction accounts
|
$
|
130,546
| |
$
|
68
| |
0.21
|
%
|
$
|
134,293
| |
$
|
58
| |
0.17
|
%
|
$
|
129,538
| |
$
|
34
| |
0.10
|
%
|
|
Savings accounts
|
177,018
| |
18
| |
0.04
|
%
|
179,429
| |
18
| |
0.04
|
%
|
173,057
| |
18
| |
0.04
|
%
|
|
Money market accounts
|
643,459
| |
566
| |
0.35
|
%
|
609,821
| |
337
| |
0.22
|
%
|
551,591
| |
195
| |
0.14
|
%
|
|
Time accounts, including CDARS
|
121,838
| |
116
| |
0.38
|
%
|
132,588
| |
130
| |
0.39
|
%
|
150,552
| |
153
| |
0.40
|
%
|
|
FHLB and overnight borrowings 1 |
76
| |
—
| |
2.52
|
%
|
112
| |
1
| |
2.06
|
%
|
6
| |
—
| |
1.75
|
%
|
|
|
Subordinate debentures 1 |
2,770
|
|
977
|
|
138.09
|
%
|
5,815
|
|
125
|
|
8.43
|
%
|
5,720
|
|
111
|
|
7.63
|
%
|
|
Total interest-bearing liabilities
|
1,075,707
| |
1,745
| |
0.64
|
%
|
1,062,058
| |
669
| |
0.25
|
%
|
1,010,464
| |
511
| |
0.20
|
%
|
|
Demand accounts
|
1,118,785
| | | |
1,101,288
| | | |
971,381
| | | |
|
Interest payable and other liabilities
|
19,662
| | | |
18,022
| | | |
14,558
| | | |
|
|
Stockholders' equity
|
309,889
|
|
|
|
307,563
|
|
|
|
269,848
|
|
|
|
| Total liabilities & stockholders' equity | $ | 2,524,043 |
|
|
| $ | 2,488,931 |
|
|
| $ | 2,266,251 |
|
|
|
|
Tax-equivalent net interest income/margin 1 |
|
$
|
23,561
|
|
3.85
|
%
|
|
$
|
23,859
|
|
3.97
|
%
|
|
$
|
20,828
|
|
3.80
|
%
|
|
Reported net interest income/margin 1 |
|
$
|
23,272
|
|
3.81
|
%
|
|
$
|
23,539
|
|
3.91
|
%
|
|
$
|
20,139
|
|
3.68
|
%
|
|
Tax-equivalent net interest rate spread
|
|
|
3.49
|
%
|
|
|
3.83
|
%
|
|
|
3.69
|
%
|
| | | | | | | | | |
|
| |
Year ended
|
Year ended
| |
| | December 31, 2018 | December 31, 2017 | |
| | |
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 |
$
|
78,185
| |
$
|
1,461
| |
1.84
|
%
|
$
|
80,351
| |
$
|
995
| |
1.22
|
%
| | | |
|
Investment securities 2, 3 |
566,883
| |
14,512
| |
2.56
|
%
|
419,873
| |
9,732
| |
2.32
|
%
| | | |
|
|
Loans 1, 3, 4 |
1,704,390
|
|
80,406
|
|
4.65
|
%
|
1,511,503
|
|
68,562
|
|
4.47
|
%
| | | |
|
Total interest-earning assets 1 |
2,349,458
| |
96,379
| |
4.05
|
%
|
2,011,727
| |
79,289
| |
3.89
|
%
| | | |
|
Cash and non-interest-bearing due from banks
|
41,595
| | | |
42,511
| | | | | | |
|
Bank premises and equipment, net
|
8,021
| | | |
8,411
| | | | | | |
|
|
Interest receivable and other assets, net
|
86,709
|
|
|
|
63,301
|
|
|
| | | |
| Total assets | $ | 2,485,783 |
|
|
| $ | 2,125,950 |
|
|
| | | |
|
Liabilities and Stockholders' Equity
| | | | | | | | | |
|
Interest-bearing transaction accounts
|
$
|
143,706
| |
$
|
226
| |
0.16
|
%
|
$
|
105,544
| |
$
|
108
| |
0.10
|
%
| | | |
|
Savings accounts
|
178,907
| |
72
| |
0.04
|
%
|
167,190
| |
66
| |
0.04
|
%
| | | |
|
Money market accounts
|
612,372
| |
1,355
| |
0.22
|
%
|
542,592
| |
555
| |
0.10
|
%
| | | |
|
Time accounts, including CDARS
|
137,339
| |
542
| |
0.39
|
%
|
146,069
| |
576
| |
0.39
|
%
| | | |
|
FHLB and overnight borrowings 1 |
105
| |
2
| |
2.03
|
%
|
1
| |
—
| |
1.75
|
%
| | | |
|
|
Subordinated debentures 1 |
5,025
|
|
1,339
|
|
26.29
|
%
|
5,664
|
|
439
|
|
7.65
|
%
| | | |
|
Total interest-bearing liabilities
|
1,077,454
| |
3,536
| |
0.33
|
%
|
967,060
| |
1,744
| |
0.18
|
%
| | | |
|
Demand accounts
|
1,085,870
| | | |
899,289
| | | | | | |
|
Interest payable and other liabilities
|
18,514
| | | |
13,506
| | | | | | |
|
|
Stockholders' equity
|
303,945
|
|
|
|
246,095
|
|
|
| | | |
| Total liabilities & stockholders' equity | $ | 2,485,783 |
|
|
| $ | 2,125,950 |
|
|
| | | |
|
Tax-equivalent net interest income/margin 1 |
|
$
|
92,843
|
|
3.90
|
%
|
|
$
|
77,545
|
|
3.80
|
%
| | | |
|
Reported net interest income/margin 1 |
|
$
|
91,544
|
|
3.84
|
%
|
|
$
|
74,852
|
|
3.67
|
%
| | | |
|
Tax-equivalent net interest rate spread
|
|
|
3.72
|
%
|
|
|
3.71
|
%
| | | |
| | | |
|
| 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 2018 and 35 percent in 2017.
|
| 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/20190128005100/en/
Beth Drummey
Marketing & Community Relations Manager
415-763-4529
| bethdrummey@bankofmarin.com
Source: Bank of Marin Bancorp