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Bank of Marin Bancorp Reports First Quarter Earnings of $8.9 Million

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Announces $0.23 Dividend

Bank of Marin Bancorp, "Bancorp" (Nasdaq: BMRC), parent company of Bank of Marin, "Bank," announced earnings of $8.9 million in the first quarter of 2021, compared to $8.1 million in the fourth quarter of 2020 and $7.2 million in the first quarter of 2020. Diluted earnings per share were $0.66 in the first quarter, $0.60 in the prior quarter, and $0.53 in the same quarter last year.

"Bank of Marin delivered steady, reliable results throughout 2020, reflecting our sound underwriting and commitment to relationship banking," said Russell A. Colombo, President and Chief Executive Officer. "Our first quarter results in 2021 reinforced that consistency. Our credit quality is strong, and we are poised to grow as the economy reopens and our markets gain momentum."

First quarter 2021 earnings included a $2.9 million reversal of the allowance for credit losses on loans and $590 thousand reversal of allowance for credit losses on unfunded loan commitments. Additionally, the early redemption of our last subordinated debenture generated $1.3 million in accelerated discount accretion in interest expense.

Bancorp provided the following highlights from the first quarter of 2021:

  • Loan balances of $2.122 billion at March 31, 2021 compared to $2.089 billion at December 31, 2020 and $1.844 billion at March 31, 2020. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans contributed to the increase and represented $365.0 million outstanding at March 31, 2021 versus $291.6 million at December 31, 2020. There were no PPP loans in the comparative year ago period. As of March 31, 2021, $55.9 million of our PPP loans had been forgiven and paid off by the SBA.

  • Credit quality remains strong, with non-accrual loans representing 0.43% of total loans as of March 31, 2021, compared to 0.44% at December 31, 2020, and 0.09% at March 31, 2020. Reversals of $2.9 million to the allowance for credit losses on loans and $590 thousand to the allowance for credit losses on unfunded loan commitments were driven primarily by an improvement in economic forecasts and a $40.2 million decrease in non-PPP loan balances.

  • Total deposits grew $152.0 million from $2.504 billion at December 31, 2020 to $2.656 billion at March 31, 2021. The increase was primarily due to increases in PPP borrower-related accounts and normal fluctuations in some of our large business accounts. Non-interest bearing deposits represented 54% of total deposits as of the end of the first quarter of 2021 and fourth quarter of 2020, versus 49% at the end of the first quarter a year ago. First quarter 2021 cost of average deposits was consistent with the prior quarter at 0.07%, compared to 0.21% in the first quarter of 2020.

  • Return on average assets ("ROA") and return on average equity ("ROE") were 1.21% and 10.22%, respectively, for the quarter ended March 31, 2021. These reflect meaningful increases as ROA was 1.09% in both the prior and year-ago quarters. ROE was 8.98% and 8.54%, respectively, for the fourth quarter and first quarter of 2020.

  • Our strong capital and liquidity position afforded us the opportunity to eliminate a high cost funding source. On March 15, 2021 we redeemed a $2.8 million subordinated debenture, which carried an effective rate of approximately 5.7%. While the redemption decreased our net interest margin by 18 basis points in the first quarter of 2021, it will serve to improve net interest margin in the future.

  • All capital ratios were above well-capitalized regulatory requirements. The total risk-based capital ratio for Bancorp was 15.7% at March 31, 2021, compared to 16.0% at December 31, 2020, and 15.3% at March 31, 2020. Bancorp's tangible common equity to tangible assets was 10.5% at March 31, 2021, compared to 11.3% at December 31, 2020 and 11.7% at March 31, 2020 (refer to footnote 5 on page 6 for a definition of this non-GAAP financial measure). The subordinated debt redemption contributed to the decline in total risk-based capital, and share repurchases were the primary driver of the declines in both total risk-based capital and tangible common equity. The total risk-based capital ratio for the Bank was 14.8% at March 31, 2021, compared to 15.8% at December 31, 2020, and 14.4% at March 31, 2020.

  • The Board of Directors declared a cash dividend of $0.23 per share on April 16, 2021. This represents the 64th consecutive quarterly dividend paid by Bank of Marin Bancorp. The dividend is payable on May 7, 2021, to shareholders of record at the close of business on April 30, 2021.

  • As previously announced, Secil Tabli Watson was appointed as a new director on the boards of both the Bancorp and Bank effective April 1, 2021.

Loans and Credit Quality

Loans increased by $33.2 million in the first quarter and totaled $2.122 billion at March 31, 2021, which was comprised of a $73.4 million net increase in PPP loans, and a $40.2 million decrease in non-PPP loans. Non-PPP-related loan originations were $25.3 million for the first quarter of 2021, compared to $29.8 million for the first quarter of 2020. Loan payoffs were $34.6 million in the first quarter of 2021, compared to $51.7 million for the first quarter of 2020. Loan payoffs in the first quarter consisted largely of consumer loans and loans whereby underlying assets were sold (including completed construction projects). Other negative variances included loans refinanced with other banks and decreased commitment line utilization.

As of March 31, 2021, there were 2,513 PPP loans outstanding totaling $365.0 million (net of $8.0 million in unrecognized fees and costs), which included 841 loans totaling $119.5 million funded during the first quarter of 2021 under the second round of the PPP stimulus plan. Of the total PPP loans funded as of March 31, 2021, 144 loans amounting to $55.9 million were forgiven and paid off by the SBA. We expect the forgiveness of the first round of PPP loans to accelerate during the second quarter of 2021. Of the loans remaining, 77% (1,940 loans) totaling $89.6 million are less than or equal to $150 thousand and have access to streamlined forgiveness processing.

As of April 15, 2021, 11 borrowing relationships with 17 loans totaling $59.2 million were benefiting from payment relief. We monitor the financial situation of these clients closely and expect the majority to resume payments as the economy reopens. The following table summarizes these loans by industry or collateral type.

Industry/Collateral Type (dollars in thousands)

Outstanding Loan Balance

Weighted Average LTV

Education

$

17,076

26

%

Health Clubs

16,427

45

%

Office and Mixed Use

13,794

42

%

Hospitality

7,135

48

%

Retail Related CRE

4,760

58

%

Payment Relief Totals

$

59,192

40

%

Non-accrual loans totaled $9.2 million, or 0.43% of the loan portfolio, at March 31, 2021, $9.2 million, or 0.44% at December 31, 2020, and $1.6 million, or 0.09% a year ago. Classified loans totaled $26.4 million at March 31, 2021, compared to $25.8 million at December 31, 2020 and $12.1 million at March 31, 2020. There were no loans classified doubtful at March 31, 2021, December 31, 2020, or March 31, 2020. Accruing loans past due 30 to 89 days totaled $1.0 million at March 31, 2021, compared to $1.8 million at December 31, 2020 and $1.3 million a year ago.

In the first quarter of 2021, we recorded a reversal of the provision for credit losses on loans of $2.9 million, compared to a reversal of $856 thousand in the prior quarter and an increase of $2.2 million in the first quarter of 2020. Both the current and previous quarters' allowances were calculated under the current expected credit loss methodology. The reversal of the provision in the first quarter of 2021 was primarily due to improvements in the forecasted California unemployment rates over the next four quarters and a $40.2 million decrease in non-PPP loans. The first quarter of 2020 included a $2.2 million provision for credit losses on loans, as determined under the incurred loss methodology, due to economic uncertainties of the COVID-19 pandemic. Net recoveries were $13 thousand in the first quarter of 2021 and fourth quarter of 2020, compared to $7 thousand in the first quarter a year ago. The ratio of allowance for credit losses to total loans was 0.94% at March 31, 2021, 1.10% at December 31, 2020, and 1.02% at March 31, 2020. Excluding acquired and SBA PPP loans, the allowance for credit losses represented 1.14% of total loans as of March 31, 2021, compared to 1.27% and 1.08% as of December 31, 2020 and March 31, 2020, respectively (refer to footnote 4 on page 6 for a definition of this non-GAAP financial measure).

Cash, Cash Equivalents and Restricted Cash

Total cash, cash equivalents and restricted cash were $142.8 million at March 31, 2021, compared to $200.3 million at December 31, 2020. The reduction was primarily due to growth in SBA PPP loans and investment securities, partially offset by increased deposits.

Investments

The investment securities portfolio increased to $670.5 million at March 31, 2021 from $501.4 million at December 31, 2020. The increase was primarily attributed to purchases of $203.4 million to deploy excess cash in a more favorable interest rate environment, partially offset by paydowns, calls and maturities of $24.7 million. The fair value of available-for-sale investment securities decreased $9.1 million, primarily due to the rise in interest rates in the first quarter of 2021.

Deposits

Total deposits were $2.656 billion at March 31, 2021, compared to $2.504 billion at December 31, 2020. PPP borrower-related deposits and normal fluctuations in some of our large business accounts drove the increase. Additionally, the bank maintained $180.8 million in off-balance sheet deposits with deposit networks at March 31, 2021. The average cost of deposits held steady at 0.07% in the first quarter of 2021.

On March 30, 2020, we implemented temporary fee waivers for all ATM fees, overdraft fees and early withdrawal penalties for time deposits to help ease the financial burden customers began experiencing due to the pandemic. After honoring the fee waivers for one year, we announced at the beginning of April those fees would no longer be automatically waived as of May 3, 2021, allowing our customers 30 days to adjust.

Earnings

"We continued our established tradition of carefully managing expenses in the first quarter, while taking advantage of market opportunities to invest excess cash and reduce high-cost debt," said Tani Girton, EVP and Chief Financial Officer. "With consistent profitability, excellent asset quality and low-cost funding, we are confident in our ability to grow alongside our clients and continue to develop value for our shareholders."

Net interest income totaled $22.0 million in the first quarter of 2021, compared to $23.6 million in the prior quarter and $24.1 million a year ago. The $1.6 million decrease from the prior quarter was mostly attributable to $1.3 million in accelerated discount accretion from the early redemption of a subordinated debenture. Additionally, interest income declined due to two fewer days in the quarter.

The $2.1 million decrease in net interest income from the comparative quarter a year ago was primarily caused by lower yields across interest-earning assets stemming from the low interest rate environment, early redemption of the subordinated debenture as mentioned above, and lower average commercial and home equity loan balances. These negative variances were partially offset by interest and fees on PPP loans and lower rates on interest-bearing liabilities.

The tax-equivalent net interest margin was 3.19% in the first quarter, 3.40% in the prior quarter, and 3.88% in the first quarter of 2020. The early redemption of our last subordinated debenture reduced first quarter 2021 tax-equivalent net interest margin by approximately 18 basis points, but will improve net interest margin going forward. The decrease from the same quarter a year ago was primarily attributed to the lower interest rate environment.

Non-interest income totaled $1.8 million in the first quarter of 2021 and the fourth quarter of 2020, compared to $3.1 million in the first quarter a year ago. The $1.3 million decrease from the first quarter of 2020 was mostly attributed to the absence of gains on sales of investment securities, lower service charges on deposit accounts, and lower fee income from one-way deposit sales to third-party deposit networks.

Non-interest expense decreased $358 thousand to $14.8 million in the first quarter of 2021 from $15.2 million in the prior quarter. The decrease was primarily due to a $590 thousand reversal of the allowance for credit losses on unfunded loan commitments versus a $960 thousand provision for credit losses on unfunded loan commitments in the prior quarter. This favorable variance was partially offset by $794 thousand in higher salaries and related benefits expenses, which included January resets of 401K matching, accelerated stock-based compensation for participants meeting retirement eligibility criteria. Professional services also increased due to some pandemic related delays in 2020 activities.

First quarter non-interest expense decreased $647 thousand from $15.5 million in the first quarter of 2020. The decrease was primarily attributed to the $590 thousand reversal of allowance for credit losses on unfunded loan commitments versus a $102 thousand provision a year ago. In addition, salaries and related benefits decreased $269 thousand (mostly attributed to $421 thousand additional deferred loan origination costs from funding the second round of SBA PPP loans) and charitable contributions $136 thousand. Increases included professional services as mentioned above and the discontinuation of Federal Deposit Insurance Corporation ("FDIC") insurance credits received in 2020.

The efficiency ratio was 62.13% in the first quarter of 2021, up from 59.70% in the prior quarter and 56.79% in the comparative period a year ago. Without the $1.3 million accelerated discount accretion from the early redemption of the subordinated debenture our efficiency ratio would have been 58.92%.

Share Repurchase Program

Bancorp repurchased 224,013 shares totaling $8.5 million in the first quarter of 2021 for a cumulative total of 393,584 shares amounting to $14.3 million under the $25.0 million share repurchase program that was approved by the Board of Directors on January 24, 2020, expiring February 28, 2022.

Earnings Call and Webcast Information

Bank of Marin Bancorp will present its first quarter earnings call via webcast on Monday, April 19, 2021 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 $3.1 billion as of March 31, 2021, Bank of Marin has 21 branches and 7 commercial banking offices located across 7 Bay Area counties. Bank of Marin provides commercial banking, personal banking, specialty 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, natural disasters (such as wildfires 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, 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 the Coronavirus Aid, Relief and Economic Security Act of 2020, as amended), 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

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

March 31,
2021

December 31,
2020

March 31,
2020

Quarter-to-Date

Net income

$

8,947

$

8,117

$

7,228

Diluted earnings per common share

$

0.66

$

0.60

$

0.53

Return on average assets

1.21

%

1.09

%

1.09

%

Return on average equity

10.22

%

8.98

%

8.54

%

Efficiency ratio

62.13

%

59.70

%

56.79

%

Tax-equivalent net interest margin 1

3.19

%

3.40

%

3.88

%

Cost of deposits

0.07

%

0.07

%

0.21

%

Net recoveries

$

(13

)

$

(13

)

$

(7

)

At Period End

Total assets

$

3,058,133

$

2,911,926

$

2,697,738

Loans:

Commercial and industrial 2

$

545,069

$

498,408

$

264,405

Real estate:

Commercial owner-occupied

308,266

304,963

306,371

Commercial investor-owned

955,021

961,208

930,479

Construction

71,066

73,046

63,425

Home equity

96,575

104,813

116,968

Other residential

124,383

123,395

135,929

Installment and other consumer loans

21,392

22,723

26,283

Total loans

$

2,121,772

$

2,088,556

$

1,843,860

Non-performing loans: 3

Real estate:

Commercial owner-occupied

$

7,147

$

7,147

$

Commercial investor-owned

1,603

$

1,610

$

942

Home equity

455

459

633

Installment and other consumer loans

17

57

Total non-accrual loans

$

9,205

$

9,233

$

1,632

Classified loans (graded substandard and doubtful)

$

26,423

$

25,829

$

12,056

Total accruing loans 30-89 days past due

$

1,047

$

1,827

$

1,315

Allowance for credit losses to total loans

0.94

%

1.10

%

1.02

%

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

1.14

%

1.27

%

1.08

%

Allowance for credit losses to non-performing loans

2.17x

2.48x

11.57x

Non-accrual loans to total loans

0.43

%

0.44

%

0.09

%

Total deposits

$

2,656,199

$

2,504,249

$

2,307,110

Loan-to-deposit ratio

79.9

%

83.4

%

79.9

%

Stockholders' equity

$

350,292

$

358,253

$

345,940

Book value per share

$

26.29

$

26.54

$

25.50

Tangible common equity to tangible assets 5

10.5

%

11.3

%

11.7

%

Total risk-based capital ratio - Bank

14.8

%

15.8

%

14.4

%

Total risk-based capital ratio - Bancorp

15.7

%

16.0

%

15.3

%

Full-time equivalent employees

282

289

296

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

2 Includes SBA PPP loans of $365.0 million and $291.6 million at March 31, 2021 and December 31, 2020, respectively. There were no SBA PPP loans as of March 31, 2020.

3 Excludes accruing troubled-debt restructured loans of $3.4 million, $5.1 million and $11.1 million at March 31, 2021, December 31, 2020 and March 31, 2020, 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. Due to the adoption of CECL on December 31, 2020, all loans previously considered "acquired" are now included in the calculation of the allowance for credit losses. Acquired loans that were not impaired at March 31, 2020 totaled $100.4 million. 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 $33.8 million, $34.0 million and $34.6 million at March 31, 2021, December 31, 2020, and March 31, 2020, respectively. Tangible assets exclude goodwill and intangible assets.

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF CONDITION

At March 31, 2021, December 31, 2020 and March 31, 2020

(in thousands, except share data; unaudited)

March 31,
2021

December 31,
2020

March 31,
2020

Assets

Cash, cash equivalents and restricted cash

$

142,819

$

200,320

$

156,274

Investment securities:

Held-to-maturity, at amortized cost (net of zero allowance for credit losses at March 31, 2021 and December 31, 2020 1)

151,970

109,036

131,140

Available-for-sale (at fair value; amortized cost $508,337, $373,038, and $431,519 at March 31, 2021, December 31, 2021, March 31, 2020, respectively; net of zero allowance for credit losses at March 31, 2021 and December 31, 20201)

518,568

392,351

448,868

Total investment securities

670,538

501,387

580,008

Loans, at amortized cost

2,121,772

2,088,556

1,843,860

Allowance for credit losses 1

(19,958

)

(22,874

)

(18,884

)

Loans, net of allowance for credit losses

2,101,814

2,065,682

1,824,976

Bank premises and equipment, net

4,604

4,919

5,708

Goodwill

30,140

30,140

30,140

Core deposit intangible

3,627

3,831

4,471

Operating lease right-of-use assets

24,559

25,612

22,225

Interest receivable and other assets

80,032

80,035

73,936

Total assets

$

3,058,133

$

2,911,926

$

2,697,738

Liabilities and Stockholders' Equity

Liabilities

Deposits

Non-interest bearing

$

1,445,282

$

1,354,650

$

1,130,460

Interest bearing

Transaction accounts

176,390

183,552

137,802

Savings accounts

224,748

201,507

167,210

Money market accounts

714,824

667,107

776,271

Time accounts

94,955

97,433

95,367

Total deposits

2,656,199

2,504,249

2,307,110

Borrowings and other obligations

30

58

185

Subordinated debenture

2,777

2,725

Operating lease liabilities

25,993

27,062

23,726

Interest payable and other liabilities

25,619

19,527

18,052

Total liabilities

2,707,841

2,553,673

2,351,798

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 - 13,326,509, 13,500,453 and 13,565,969 at March 31, 2021, December 31, 2020, and March 31, 2020, respectively

118,386

125,905

127,684

Retained earnings

225,600

219,747

207,328

Accumulated other comprehensive income, net of taxes

6,306

12,601

10,928

Total stockholders' equity

350,292

358,253

345,940

Total liabilities and stockholders' equity

$

3,058,133

$

2,911,926

$

2,697,738

1 The March 31, 2021 and December 31, 2020 allowances were under current expected credit loss methodology. Whereas, the March 31, 2020 allowance was under incurred loss methodology. Refer to Note 1, Summary of Accounting Policies, in our 2020 Form 10-K for further information on the adoption of ASU 2016-13.

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended

(in thousands, except per share amounts; unaudited)

March 31,
2021

December 31,
2020

March 31,
2020

Interest income

Interest and fees on loans

$

20,661

$

20,794

$

20,887

Interest on investment securities

3,129

3,254

4,165

Interest on federal funds sold and due from banks

42

40

332

Total interest income

23,832

24,088

25,384

Interest expense

Interest on interest-bearing transaction accounts

39

40

66

Interest on savings accounts

19

18

16

Interest on money market accounts

286

278

971

Interest on time accounts

96

118

Interest on borrowings and other obligations

1

2

Interest on subordinated debenture

1,361

34

49

Total interest expense

1,801

489

1,265

Net interest income

22,031

23,599

24,119

(Reversal of) provision for credit losses on loans

(2,929

)

(856

)

2,200

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

24,960

24,455

21,919

Non-interest income

Wealth Management and Trust Services

488

476

504

Debit card interchange fees

366

387

360

Service charges on deposit accounts

281

286

451

Earnings on bank-owned life insurance, net

257

232

275

Dividends on Federal Home Loan Bank stock

149

151

208

Merchant interchange fees

57

56

73

Gains on sale of investment securities, net

800

Other income

228

239

449

Total non-interest income

1,826

1,827

3,120

Non-interest expense

Salaries and related benefits

9,208

8,414

9,477

Occupancy and equipment

1,751

1,843

1,663

Professional services

863

432

544

Data processing

819

747

786

Depreciation and amortization

459

558

526

Information technology

313

292

250

Amortization of core deposit intangible

204

214

213

Federal Deposit Insurance Corporation insurance

179

175

2

Directors' expense

175

180

174

Charitable contributions

31

113

167

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

(590

)

960

102

Other expense

1,410

1,252

1,565

Total non-interest expense

14,822

15,180

15,469

Income before provision for income taxes

11,964

11,102

9,570

Provision for income taxes

3,017

2,985

2,342

Net income

$

8,947

$

8,117

$

7,228

Net income per common share:

Basic

$

0.67

$

0.60

$

0.53

Diluted

$

0.66

$

0.60

$

0.53

Weighted average shares:

Basic

13,363

13,523

13,525

Diluted

13,469

13,615

13,656

Comprehensive income (loss):

Net income

$

8,947

$

8,117

$

7,228

Other comprehensive (loss) income:

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

(9,082

)

286

9,812

Reclassification adjustment for (gains) on available-for-sale securities included in net income

(800

)

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

143

129

110

Other comprehensive (loss) income, before tax

(8,939

)

415

9,122

Deferred tax (benefit) expense

(2,644

)

124

2,697

Other comprehensive (loss) income, net of tax

(6,295

)

291

6,425

Total comprehensive income

$

2,652

$

8,408

$

13,653

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, 2021

December 31, 2020

March 31, 2020

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-earning deposits with banks 1

$

165,788

$

42

0.10

%

$

157,389

$

40

0.10

%

$

99,362

$

332

1.32

%

Investment securities 2, 3

540,970

3,282

2.43

%

498,730

3,395

2.72

%

556,897

4,266

3.06

%

Loans 1, 3, 4

2,099,847

20,836

3.97

%

2,096,908

20,975

3.91

%

1,833,180

21,066

4.55

%

Total interest-earning assets 1

2,806,605

24,160

3.44

%

2,753,027

24,410

3.47

%

2,489,439

25,664

4.08

%

Cash and non-interest-bearing due from banks

50,931

64,600

40,844

Bank premises and equipment, net

4,777

5,213

5,939

Interest receivable and other assets, net

133,693

135,520

118,909

Total assets

$

2,996,006

$

2,958,360

$

2,655,131

Liabilities and Stockholders' Equity

Interest-bearing transaction accounts

$

174,135

$

39

0.09

%

$

160,827

$

41

0.10

%

$

138,395

$

66

0.19

%

Savings accounts

214,049

19

0.04

%

198,616

18

0.04

%

163,439

16

0.04

%

Money market accounts

703,577

286

0.16

%

697,203

279

0.16

%

760,616

971

0.51

%

Time accounts including CDARS

96,349

96

0.40

%

97,512

118

0.48

%

96,157

161

0.67

%

Borrowings and other obligations 1

36

1.99

%

72

2.37

%

358

2

1.81

%

Subordinated debenture 1, 5

2,164

1,361

251.54

%

2,768

34

4.85

%

2,715

49

7.19

%

Total interest-bearing liabilities

1,190,310

1,801

0.61

%

1,156,998

490

0.17

%

1,161,680

1,265

0.44

%

Demand accounts

1,406,123

1,397,349

1,119,975

Interest payable and other liabilities

44,551

44,532

33,045

Stockholders' equity

355,022

359,481

340,431

Total liabilities & stockholders' equity

$

2,996,006

$

2,958,360

$

2,655,131

Tax-equivalent net interest income/margin 1

$

22,359

3.19

%

$

23,920

3.40

%

$

24,399

3.88

%

Reported net interest income/margin 1

$

22,031

3.14

%

$

23,599

3.35

%

$

24,119

3.83

%

Tax-equivalent net interest rate spread

2.83

%

3.30

%

3.64

%

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 2021 and 2020.

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 First quarter 2021 interest expense includes $1.3 million accelerated discount accretion from the early redemption of our last subordinated debenture on March 15, 2021.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210419005184/en/

Contacts

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