California
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20-8859754
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(State or other jurisdiction of incorporation)
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(IRS Employer Identification No.)
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504 Redwood Blvd., Suite 100, Novato, CA
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94947
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(Address of principal executive office)
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(Zip Code)
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Check the appropriate box below if the Form 8-K filing is to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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o Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o Pre-commencement communications pursuant to Rule 13e-4(c)) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Emerging growth company o
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
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Item 2.02
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Results of Operations and Financial Condition
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Item 8.01
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Other Events
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Item 9.01
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Financial Statements and Exhibits
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Exhibit No.
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Description
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Page Number
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|
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99.1
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1-9
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Dated: April 20, 2020
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BANK OF MARIN BANCORP
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|
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by:
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/s/ Tani Girton__________
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Tani Girton
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Executive Vice President and
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Chief Financial Officer
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FOR IMMEDIATE RELEASE
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MEDIA CONTACT:
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Beth Drummey
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Marketing & Corporate Communications Manager
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415-763-4529 | bethdrummey@bankofmarin.com
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•
|
Loans totaled $1,843.9 million at March 31, 2020, compared to $1,843.3 million at December 31, 2019, an increase of $574 thousand. Loan originations of $29.8 million and line utilization increases of $28.9 million were mostly offset by payoffs of $51.7 million.
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•
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Our loan portfolio exposure to industries most affected by the shelter-in-place order includes 10.4% retail properties and businesses, 4.6% wine-related businesses and 2.7% hospitality. Transportation, dental, recreation and entertainment combined represent less than 1.5% of the total portfolio. Loans to these customers are generally secured by real estate with low loan-to-value ratios and strong guarantors.
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•
|
As of April 14, 2020, the Bank had received approximately $322 million loan relief requests for conversion to interest only or payment deferral. Ninety-three percent of the total requests were secured by real estate with loan-to-value ratios averaging less than 45%, and $129 million were linked to industries most impacted by the shelter-in-place order.
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•
|
Prior to receiving approval to participate in the Payroll Protection Program, we put in place a system, team and process to begin accepting and reviewing applications. To date, we have received approximately 1,300 applications for an estimated total of $350 million. We were able to submit and receive SBA approval for a meaningful portion of those applications prior to SBA’s suspension of the program due to funds being fully allocated. We continue to internally process customer applications and remain poised to submit them for approval as soon as the program is restarted.
|
•
|
Total deposits decreased $29.4 million in the first quarter to $2,307.1 million. Non-interest bearing deposits represented 49% of total deposits in the first quarter and have been at or near this level since the beginning of 2018. The cost of average deposits decreased to 0.21% in the first quarter, compared to 0.23% in the fourth quarter of 2019. In addition to our stable deposit base, cash and investments of $736.3 million, which accounted for 27.3% of total assets, provide substantial liquidity.
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•
|
Strong credit quality remains a cornerstone of the Bank's consistent performance. Non-accrual loans represented only 0.09% of the Bank's loan portfolio at March 31, 2020. A $2.2 million provision for loan losses and $102 thousand provision for losses on off-balance sheet commitments were recorded in the first quarter of 2020 to take into account the impact of the COVID-19 pandemic.
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•
|
All capital ratios were above regulatory requirements. The total risk-based capital ratio for Bancorp was 15.3% at March 31, 2020, compared to 15.1% at December 31, 2019. Tangible common equity to tangible assets was 11.7% at March 31, 2020, compared to 11.3% at December 31, 2019 (refer to footnote 3 on page 6 for a definition of this non-GAAP financial measure).
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•
|
Because of our continued profitability, the Board of Directors declared a cash dividend of $0.23 per share on April 17, 2020. This represents the 60th consecutive quarterly dividend paid by Bank of Marin Bancorp. The dividend is payable on May 8, 2020, to shareholders of record at the close of business on May 1, 2020.
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BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF CONDITION
|
At March 31, 2020, December 31, 2020 and March 31, 2019
|
(in thousands, except share data; unaudited)
|
March 31, 2020
|
December 31, 2019
|
March 31, 2019
|
||||||
Assets
|
|
|
|
|
|||||
Cash, cash equivalents and restricted cash
|
$
|
156,274
|
|
$
|
183,388
|
|
$
|
51,639
|
|
Investment securities
|
|
|
|
|
|
||||
Held-to-maturity, at amortized cost
|
131,140
|
|
137,413
|
|
152,845
|
|
|||
Available-for-sale (at fair value; amortized cost $431,519, $423,923 and $442,386 at March 31, 2020, December 31, 2019 and March 31, 2019 respectively)
|
448,868
|
|
432,260
|
|
442,885
|
|
|||
Total investment securities
|
580,008
|
|
569,673
|
|
595,730
|
|
|||
Loans, net of allowance for loan losses of $18,884, $16,677 and $15,817 at March 31, 2020, December 31, 2019 and March 31, 2019 respectively
|
1,824,976
|
|
1,826,609
|
|
1,756,721
|
|
|||
Bank premises and equipment, net
|
5,708
|
|
6,070
|
|
7,237
|
|
|||
Goodwill
|
30,140
|
|
30,140
|
|
30,140
|
|
|||
Core deposit intangible
|
4,471
|
|
4,684
|
|
5,349
|
|
|||
Operating lease right-of-use assets
|
22,225
|
|
11,002
|
|
12,465
|
|
|||
Interest receivable and other assets
|
73,936
|
|
75,714
|
|
74,795
|
|
|||
Total assets
|
$
|
2,697,738
|
|
$
|
2,707,280
|
|
$
|
2,534,076
|
|
|
|
|
|
||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
||||
Deposits
|
|
|
|
|
|||||
Non-interest bearing
|
$
|
1,130,460
|
|
$
|
1,128,823
|
|
$
|
1,076,382
|
|
Interest bearing
|
|
|
|
|
|||||
Transaction accounts
|
137,802
|
|
142,329
|
|
130,001
|
|
|||
Savings accounts
|
167,210
|
|
162,817
|
|
180,758
|
|
|||
Money market accounts
|
776,271
|
|
804,710
|
|
680,806
|
|
|||
Time accounts
|
95,367
|
|
97,810
|
|
110,682
|
|
|||
Total deposits
|
2,307,110
|
|
2,336,489
|
|
2,178,629
|
|
|||
Borrowings and other obligations
|
185
|
|
212
|
|
309
|
|
|||
Subordinated debentures
|
2,725
|
|
2,708
|
|
2,657
|
|
|||
Operating lease liabilities
|
23,726
|
|
12,615
|
|
14,349
|
|
|||
Interest payable and other liabilities
|
18,052
|
|
18,468
|
|
17,468
|
|
|||
Total liabilities
|
2,351,798
|
|
2,370,492
|
|
2,213,412
|
|
|||
|
|
|
|
||||||
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 - 13,565,969, 13,577,008 and 13,786,808 at March 31 2020, December 31, 2019 and March 31, 2019, respectively |
127,684
|
|
129,058
|
|
137,125
|
|
|||
Retained earnings
|
207,328
|
|
203,227
|
|
184,793
|
|
|||
Accumulated other comprehensive income (loss), net of taxes
|
10,928
|
|
4,503
|
|
(1,254
|
)
|
|||
Total stockholders' equity
|
345,940
|
|
336,788
|
|
320,664
|
|
|||
Total liabilities and stockholders' equity
|
$
|
2,697,738
|
|
$
|
2,707,280
|
|
$
|
2,534,076
|
|
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|
Three months ended
|
||||||||
(in thousands, except per share amounts; unaudited)
|
March 31, 2020
|
December 31, 2019
|
March 31, 2019
|
||||||
Interest income
|
|
|
|
||||||
Interest and fees on loans
|
$
|
20,887
|
|
$
|
21,123
|
|
$
|
20,695
|
|
Interest on investment securities
|
4,165
|
|
3,543
|
|
4,097
|
|
|||
Interest on federal funds sold and due from banks
|
332
|
|
567
|
|
139
|
|
|||
Total interest income
|
25,384
|
|
25,233
|
|
24,931
|
|
|||
Interest expense
|
|
|
|
|
|
|
|||
Interest on interest-bearing transaction accounts
|
66
|
|
78
|
|
77
|
|
|||
Interest on savings accounts
|
16
|
|
18
|
|
18
|
|
|||
Interest on money market accounts
|
971
|
|
1,033
|
|
764
|
|
|||
Interest on time accounts
|
161
|
|
154
|
|
119
|
|
|||
Interest on borrowings and other obligations
|
2
|
|
2
|
|
47
|
|
|||
Interest on subordinated debentures
|
49
|
|
54
|
|
60
|
|
|||
Total interest expense
|
1,265
|
|
1,339
|
|
1,085
|
|
|||
Net interest income
|
24,119
|
|
23,894
|
|
23,846
|
|
|||
Provision for loan losses
|
2,200
|
|
500
|
|
—
|
|
|||
Net interest income after provision for loan losses
|
21,919
|
|
23,394
|
|
23,846
|
|
|||
Non-interest income
|
|
|
|
|
|
|
|||
Service charges on deposit accounts
|
451
|
|
462
|
|
479
|
|
|||
Wealth Management and Trust Services
|
504
|
|
501
|
|
438
|
|
|||
Debit card interchange fees, net
|
360
|
|
386
|
|
380
|
|
|||
Merchant interchange fees, net
|
73
|
|
78
|
|
87
|
|
|||
Earnings on (cost of) bank-owned life insurance
|
275
|
|
226
|
|
(60
|
)
|
|||
Dividends on FHLB stock
|
208
|
|
208
|
|
196
|
|
|||
Gains (losses) on sale of investment securities, net
|
800
|
|
—
|
|
(6
|
)
|
|||
Other income
|
449
|
|
457
|
|
257
|
|
|||
Total non-interest income
|
3,120
|
|
2,318
|
|
1,771
|
|
|||
Non-interest expense
|
|
|
|
|
|
|
|||
Salaries and related benefits
|
9,477
|
|
7,827
|
|
9,146
|
|
|||
Occupancy and equipment
|
1,663
|
|
1,527
|
|
1,531
|
|
|||
Depreciation and amortization
|
526
|
|
527
|
|
556
|
|
|||
Federal Deposit Insurance Corporation insurance
|
2
|
|
7
|
|
179
|
|
|||
Data processing
|
786
|
|
775
|
|
1,015
|
|
|||
Professional services
|
544
|
|
431
|
|
586
|
|
|||
Directors' expense
|
174
|
|
180
|
|
179
|
|
|||
Information technology
|
250
|
|
243
|
|
259
|
|
|||
Amortization of core deposit intangible
|
213
|
|
222
|
|
222
|
|
|||
Provision for losses on off-balance sheet commitments
|
102
|
|
—
|
|
129
|
|
|||
Other expense
|
1,732
|
|
1,587
|
|
1,726
|
|
|||
Total non-interest expense
|
15,469
|
|
13,326
|
|
15,528
|
|
|||
Income before provision for income taxes
|
9,570
|
|
12,386
|
|
10,089
|
|
|||
Provision for income taxes
|
2,342
|
|
3,307
|
|
2,610
|
|
|||
Net income
|
$
|
7,228
|
|
$
|
9,079
|
|
$
|
7,479
|
|
Net income per common share:
|
|
|
|
|
|
|
|||
Basic
|
$
|
0.53
|
|
$
|
0.67
|
|
$
|
0.54
|
|
Diluted
|
$
|
0.53
|
|
$
|
0.66
|
|
$
|
0.54
|
|
Weighted average shares:
|
|
|
|
|
|
||||
Basic
|
13,525
|
|
13,521
|
|
13,737
|
|
|||
Diluted
|
13,656
|
|
13,703
|
|
13,924
|
|
|||
Comprehensive income:
|
|
|
|
||||||
Net income
|
$
|
7,228
|
|
$
|
9,079
|
|
$
|
7,479
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
||||
Change in net unrealized gains or losses on available-for-sale securities included in net income
|
9,812
|
|
(2,018
|
)
|
3,939
|
|
|||
Reclassification adjustment for (gains) losses on available-for-sale securities in net income
|
(800
|
)
|
—
|
|
6
|
|
|||
Amortization of net unrealized losses on securities transferred from available-for-sale to held-to-maturity
|
110
|
|
117
|
|
101
|
|
|||
Subtotal
|
9,122
|
|
(1,901
|
)
|
4,046
|
|
|||
Deferred tax expense (benefit)
|
2,697
|
|
(558
|
)
|
1,198
|
|
|||
Other comprehensive income (loss), net of tax
|
6,425
|
|
(1,343
|
)
|
2,848
|
|
|||
Comprehensive income
|
$
|
13,653
|
|
$
|
7,736
|
|
$
|
10,327
|
|
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, 2020
|
December 31, 2019
|
March 31, 2019
|
|||||||||||||||||||||
|
|
|
Interest
|
|
|
Interest
|
|
|
Interest
|
|
|||||||||||||||
|
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
|||||||||||||||
(in thousands; unaudited)
|
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Interest-bearing due from banks 1
|
$
|
99,362
|
|
$
|
332
|
|
1.32
|
%
|
$
|
136,320
|
|
$
|
566
|
|
1.63
|
%
|
$
|
22,690
|
|
$
|
139
|
|
2.45
|
%
|
|
Investment securities 2, 3
|
556,897
|
|
4,266
|
|
3.06
|
%
|
530,596
|
|
3,625
|
|
2.73
|
%
|
619,562
|
|
4,191
|
|
2.71
|
%
|
||||||
|
Loans 1, 3, 4
|
1,833,180
|
|
21,066
|
|
4.55
|
%
|
1,804,667
|
|
21,276
|
|
4.61
|
%
|
1,756,316
|
|
20,887
|
|
4.76
|
%
|
||||||
|
Total interest-earning assets 1
|
2,489,439
|
|
25,664
|
|
4.08
|
%
|
2,471,583
|
|
25,467
|
|
4.03
|
%
|
2,398,568
|
|
25,217
|
|
4.21
|
%
|
||||||
|
Cash and non-interest-bearing due from banks
|
40,844
|
|
|
|
39,882
|
|
|
|
30,947
|
|
|
|
||||||||||||
|
Bank premises and equipment, net
|
5,939
|
|
|
|
6,326
|
|
|
|
7,512
|
|
|
|
||||||||||||
|
Interest receivable and other assets, net
|
118,909
|
|
|
|
112,895
|
|
|
|
104,685
|
|
|
|
||||||||||||
Total assets
|
$
|
2,655,131
|
|
|
|
$
|
2,630,686
|
|
|
|
$
|
2,541,712
|
|
|
|
||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Interest-bearing transaction accounts
|
$
|
138,395
|
|
$
|
66
|
|
0.19
|
%
|
$
|
145,237
|
|
$
|
79
|
|
0.22
|
%
|
$
|
127,733
|
|
$
|
77
|
|
0.24
|
%
|
|
Savings accounts
|
163,439
|
|
16
|
|
0.04
|
%
|
164,664
|
|
17
|
|
0.04
|
%
|
180,355
|
|
18
|
|
0.04
|
%
|
||||||
|
Money market accounts
|
760,616
|
|
971
|
|
0.51
|
%
|
725,192
|
|
1,033
|
|
0.57
|
%
|
673,137
|
|
764
|
|
0.46
|
%
|
||||||
|
Time accounts including CDARS
|
96,157
|
|
161
|
|
0.67
|
%
|
97,302
|
|
154
|
|
0.63
|
%
|
113,389
|
|
119
|
|
0.43
|
%
|
||||||
|
Borrowings and other obligations 1
|
358
|
|
2
|
|
1.81
|
%
|
226
|
|
2
|
|
2.80
|
%
|
7,414
|
|
47
|
|
2.55
|
%
|
||||||
|
Subordinated debentures 1
|
2,715
|
|
49
|
|
7.19
|
%
|
2,698
|
|
54
|
|
7.79
|
%
|
2,647
|
|
60
|
|
9.05
|
%
|
||||||
|
Total interest-bearing liabilities
|
1,161,680
|
|
1,265
|
|
0.44
|
%
|
1,135,319
|
|
1,339
|
|
0.47
|
%
|
1,104,675
|
|
1,085
|
|
0.40
|
%
|
||||||
|
Demand accounts
|
1,119,975
|
|
|
|
1,129,068
|
|
|
|
1,086,947
|
|
|
|
||||||||||||
|
Interest payable and other liabilities
|
33,045
|
|
|
|
31,270
|
|
|
|
32,163
|
|
|
|
||||||||||||
|
Stockholders' equity
|
340,431
|
|
|
|
335,029
|
|
|
|
317,927
|
|
|
|
||||||||||||
Total liabilities & stockholders' equity
|
$
|
2,655,131
|
|
|
|
$
|
2,630,686
|
|
|
|
$
|
2,541,712
|
|
|
|
||||||||||
Tax-equivalent net interest income/margin 1
|
|
$
|
24,399
|
|
3.88
|
%
|
|
$
|
24,128
|
|
3.82
|
%
|
|
$
|
24,132
|
|
4.02
|
%
|
|||||||
Reported net interest income/margin 1
|
|
$
|
24,119
|
|
3.83
|
%
|
|
$
|
23,894
|
|
3.78
|
%
|
|
$
|
23,846
|
|
3.98
|
%
|
|||||||
Tax-equivalent net interest rate spread
|
|
|
3.64
|
%
|
|
|
3.56
|
%
|
|
|
3.81
|
%
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
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 2020 and 2019.
|
|||||||||||||||||||||||||
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.
|