Understanding Bank of Marin Bancorp’s (NASDAQ:BMRC) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Bank of Marin Bancorp is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. See our latest analysis for Bank of Marin Bancorp
How Well Did BMRC Perform?
I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique enables me to analyze different stocks in a uniform manner using the most relevant data points. For Bank of Marin Bancorp, its most recent earnings (trailing twelve month) is $20.6M, which, against the prior year’s figure, has dropped by -8.13%. Given that these figures are relatively myopic, I have created an annualized five-year figure for Bank of Marin Bancorp’s earnings, which stands at $18.0M. This means that while earnings growth was negative against the prior year, over a longer period of time, Bank of Marin Bancorp’s profits have been rising on average.
What’s enabled this growth? Let’s take a look at whether it is only a result of industry tailwinds, or if Bank of Marin Bancorp has experienced some company-specific growth. In the past couple of years, Bank of Marin Bancorp expanded its bottom line faster than revenue by effectively controlling its costs. This brought about a margin expansion and profitability over time. Scanning growth from a sector-level, the US banks industry has been growing, albeit, at a subdued single-digit rate of 9.28% over the prior twelve months, and 8.52% over the past couple of years. This suggests that any uplift the industry is deriving benefit from, Bank of Marin Bancorp has not been able to realize the gains unlike its industry peers.
What does this mean?
Bank of Marin Bancorp’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies are profitable, but have volatile earnings, can have many factors affecting its business. I suggest you continue to research Bank of Marin Bancorp to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for BMRC’s future growth? Take a look at our free research report of analyst consensus for BMRC’s outlook.
2. Financial Health: Is BMRC’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.