California
|
|
20-8859754
|
|||
(State or other jurisdiction of incorporation or organization)
|
|
(IRS Employer Identification No.)
|
|||
504 Redwood Blvd.
|
Suite 100
|
Novato
|
CA
|
|
94947
|
(Address of principal executive office)
|
|
(Zip Code)
|
Large accelerated filer
|
☐
|
|
Accelerated filer
|
☒
|
Non-accelerated filer
|
☐
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
|
|
|
|
PART I
|
||
|
|
|
ITEM 1.
|
||
|
|
|
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||
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||
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||
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||
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||
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ITEM 2.
|
||
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|
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ITEM 3.
|
||
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|
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ITEM 4.
|
||
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|
PART II
|
||
|
|
|
ITEM 1.
|
||
|
|
|
ITEM 1A.
|
||
|
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ITEM 2.
|
||
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ITEM 3.
|
||
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ITEM 4.
|
||
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ITEM 5.
|
||
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ITEM 6.
|
||
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|
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF CONDITION
March 31, 2020 and December 31, 2019
|
(in thousands, except share data; unaudited)
|
March 31, 2020
|
|
December 31, 2019
|
|
||
Assets
|
|
|
|
|||
Cash, cash equivalents and restricted cash
|
$
|
156,274
|
|
$
|
183,388
|
|
Investment securities
|
|
|
|
|||
Held-to-maturity, at amortized cost
|
131,140
|
|
137,413
|
|
||
Available-for-sale, at fair value
|
448,868
|
|
432,260
|
|
||
Total investment securities
|
580,008
|
|
569,673
|
|
||
Loans, net of allowance for loan losses of $18,884 and $16,677 at
March 31, 2020 and December 31, 2019, respectively |
1,824,976
|
|
1,826,609
|
|
||
Bank premises and equipment, net
|
5,708
|
|
6,070
|
|
||
Goodwill
|
30,140
|
|
30,140
|
|
||
Core deposit intangible
|
4,471
|
|
4,684
|
|
||
Operating lease right-of-use assets
|
22,225
|
|
11,002
|
|
||
Interest receivable and other assets
|
73,936
|
|
75,714
|
|
||
Total assets
|
$
|
2,697,738
|
|
$
|
2,707,280
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
||
Liabilities
|
|
|
|
|
||
Deposits
|
|
|
|
|
||
Non-interest bearing
|
$
|
1,130,460
|
|
$
|
1,128,823
|
|
Interest bearing
|
|
|
|
|||
Transaction accounts
|
137,802
|
|
142,329
|
|
||
Savings accounts
|
167,210
|
|
162,817
|
|
||
Money market accounts
|
776,271
|
|
804,710
|
|
||
Time accounts
|
95,367
|
|
97,810
|
|
||
Total deposits
|
2,307,110
|
|
2,336,489
|
|
||
Borrowings and other obligations
|
185
|
|
212
|
|
||
Subordinated debenture
|
2,725
|
|
2,708
|
|
||
Operating lease liabilities
|
23,726
|
|
12,615
|
|
||
Interest payable and other liabilities
|
18,052
|
|
18,468
|
|
||
Total liabilities
|
2,351,798
|
|
2,370,492
|
|
||
|
|
|
||||
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 and 13,577,008 at March 31, 2020 and December 31, 2019, respectively |
127,684
|
|
129,058
|
|
||
Retained earnings
|
207,328
|
|
203,227
|
|
||
Accumulated other comprehensive income, net of taxes
|
10,928
|
|
4,503
|
|
||
Total stockholders' equity
|
345,940
|
|
336,788
|
|
||
Total liabilities and stockholders' equity
|
$
|
2,697,738
|
|
$
|
2,707,280
|
|
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|
Three months ended
|
|||||
(in thousands, except per share amounts; unaudited)
|
March 31, 2020
|
March 31, 2019
|
||||
Interest income
|
|
|
|
|||
Interest and fees on loans
|
$
|
20,887
|
|
$
|
20,695
|
|
Interest on investment securities
|
4,165
|
|
4,097
|
|
||
Interest on federal funds sold and due from banks
|
332
|
|
139
|
|
||
Total interest income
|
25,384
|
|
24,931
|
|
||
Interest expense
|
|
|
|
|
||
Interest on interest-bearing transaction accounts
|
66
|
|
77
|
|
||
Interest on savings accounts
|
16
|
|
18
|
|
||
Interest on money market accounts
|
971
|
|
764
|
|
||
Interest on time accounts
|
161
|
|
119
|
|
||
Interest on borrowings and other obligations
|
2
|
|
47
|
|
||
Interest on subordinated debentures
|
49
|
|
60
|
|
||
Total interest expense
|
1,265
|
|
1,085
|
|
||
Net interest income
|
24,119
|
|
23,846
|
|
||
Provision for loan losses
|
2,200
|
|
—
|
|
||
Net interest income after provision for loan losses
|
21,919
|
|
23,846
|
|
||
Non-interest income
|
|
|
|
|||
Service charges on deposit accounts
|
451
|
|
479
|
|
||
Wealth Management and Trust Services
|
504
|
|
438
|
|
||
Debit card interchange fees, net
|
360
|
|
380
|
|
||
Merchant interchange fees, net
|
73
|
|
87
|
|
||
Earnings on (cost of) bank-owned life insurance
|
275
|
|
(60
|
)
|
||
Dividends on Federal Home Loan Bank stock
|
208
|
|
196
|
|
||
Gains (losses) on sale of investment securities, net
|
800
|
|
(6
|
)
|
||
Other income
|
449
|
|
257
|
|
||
Total non-interest income
|
3,120
|
|
1,771
|
|
||
Non-interest expense
|
|
|
|
|||
Salaries and related benefits
|
9,477
|
|
9,146
|
|
||
Occupancy and equipment
|
1,663
|
|
1,531
|
|
||
Depreciation and amortization
|
526
|
|
556
|
|
||
Federal Deposit Insurance Corporation insurance
|
2
|
|
179
|
|
||
Data processing
|
786
|
|
1,015
|
|
||
Professional services
|
544
|
|
586
|
|
||
Directors' expense
|
174
|
|
179
|
|
||
Information technology
|
250
|
|
259
|
|
||
Amortization of core deposit intangible
|
213
|
|
222
|
|
||
Provision for losses on off-balance sheet commitments
|
102
|
|
129
|
|
||
Other expense
|
1,732
|
|
1,726
|
|
||
Total non-interest expense
|
15,469
|
|
15,528
|
|
||
Income before provision for income taxes
|
9,570
|
|
10,089
|
|
||
Provision for income taxes
|
2,342
|
|
2,610
|
|
||
Net income
|
$
|
7,228
|
|
$
|
7,479
|
|
Net income per common share:
|
|
|
|
|||
Basic
|
$
|
0.53
|
|
$
|
0.54
|
|
Diluted
|
$
|
0.53
|
|
$
|
0.54
|
|
Weighted average shares:
|
|
|
|
|||
Basic
|
13,525
|
|
13,737
|
|
||
Diluted
|
13,656
|
|
13,924
|
|
||
Comprehensive income:
|
|
|
||||
Net income
|
$
|
7,228
|
|
$
|
7,479
|
|
Other comprehensive income
|
|
|
|
|
||
Change in net unrealized gains or losses on available-for-sale securities included in net income
|
9,812
|
|
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
|
|
101
|
|
||
Subtotal
|
9,122
|
|
4,046
|
|
||
Deferred tax expense
|
2,697
|
|
1,198
|
|
||
Other comprehensive income, net of tax
|
6,425
|
|
2,848
|
|
||
Comprehensive income
|
$
|
13,653
|
|
$
|
10,327
|
|
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
|
For the three months ended March 31, 2020 and 2019
|
(in thousands, except share data; unaudited)
|
Common Stock
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive Income (Loss),
Net of Taxes
|
|
Total
|
|
|||||||
Shares
|
|
Amount
|
|
|||||||||||
|
Three months ended March 31, 2020
|
|||||||||||||
Balance at January 1, 2020
|
13,577,008
|
|
$
|
129,058
|
|
$
|
203,227
|
|
$
|
4,503
|
|
$
|
336,788
|
|
Net income
|
—
|
|
—
|
|
7,228
|
|
—
|
|
7,228
|
|
||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
6,425
|
|
6,425
|
|
||||
Stock options exercised, net of shares surrendered for cashless exercises and tax withholdings
|
49,055
|
|
824
|
|
—
|
|
—
|
|
824
|
|
||||
Stock issued under employee stock purchase plan
|
547
|
|
16
|
|
—
|
|
—
|
|
16
|
|
||||
Stock issued under employee stock ownership plan
|
7,900
|
|
324
|
|
—
|
|
—
|
|
324
|
|
||||
Restricted stock granted
|
29,100
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Restricted stock surrendered for tax withholdings upon vesting
|
(2,200
|
)
|
(73
|
)
|
—
|
|
—
|
|
(73
|
)
|
||||
Restricted stock forfeited / cancelled
|
(5,787
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Stock-based compensation - stock options
|
—
|
|
169
|
|
—
|
|
—
|
|
169
|
|
||||
Stock-based compensation - restricted stock
|
—
|
|
461
|
|
—
|
|
—
|
|
461
|
|
||||
Cash dividends paid on common stock ($0.23 per share)
|
—
|
|
—
|
|
(3,127
|
)
|
—
|
|
(3,127
|
)
|
||||
Stock purchased by directors under director stock plan
|
400
|
|
18
|
|
—
|
|
—
|
|
18
|
|
||||
Stock issued in payment of director fees
|
2,610
|
|
117
|
|
—
|
|
—
|
|
117
|
|
||||
Stock repurchased, net of commissions
|
(92,664
|
)
|
(3,230
|
)
|
—
|
|
—
|
|
(3,230
|
)
|
||||
Balance at March 31, 2020
|
13,565,969
|
|
$
|
127,684
|
|
$
|
207,328
|
|
$
|
10,928
|
|
$
|
345,940
|
|
|
Three months ended March 31, 2019
|
|||||||||||||
Balance at January 1, 2019
|
13,844,353
|
|
$
|
140,565
|
|
$
|
179,944
|
|
$
|
(4,102
|
)
|
$
|
316,407
|
|
Net income
|
—
|
|
—
|
|
7,479
|
|
—
|
|
7,479
|
|
||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
2,848
|
|
2,848
|
|
||||
Stock options exercised, net of shares surrendered for cashless exercises and tax withholdings
|
28,142
|
|
259
|
|
—
|
|
—
|
|
259
|
|
||||
Stock issued under employee stock purchase plan
|
377
|
|
15
|
|
—
|
|
—
|
|
15
|
|
||||
Stock issued under employee stock ownership plan
|
8,000
|
|
313
|
|
—
|
|
—
|
|
313
|
|
||||
Restricted stock granted
|
29,110
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Restricted stock surrendered for tax withholdings upon vesting
|
(4,820
|
)
|
(202
|
)
|
—
|
|
—
|
|
(202
|
)
|
||||
Restricted stock forfeited / cancelled
|
(7,393
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Stock-based compensation - stock options
|
—
|
|
284
|
|
—
|
|
—
|
|
284
|
|
||||
Stock-based compensation - restricted stock
|
—
|
|
569
|
|
—
|
|
—
|
|
569
|
|
||||
Cash dividends paid on common stock ($0.19 per share)
|
—
|
|
—
|
|
(2,630
|
)
|
—
|
|
(2,630
|
)
|
||||
Stock purchased by directors under director stock plan
|
199
|
|
8
|
|
—
|
|
—
|
|
8
|
|
||||
Stock issued in payment of director fees
|
2,744
|
|
114
|
|
—
|
|
—
|
|
114
|
|
||||
Stock repurchased, net of commissions
|
(113,904
|
)
|
(4,800
|
)
|
—
|
|
—
|
|
(4,800
|
)
|
||||
Balance at March 31, 2019
|
13,786,808
|
|
$
|
137,125
|
|
$
|
184,793
|
|
$
|
(1,254
|
)
|
$
|
320,664
|
|
|
|
|
|
|
|
|
BANK OF MARIN BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
For the three months ended March 31, 2020 and 2019
|
(in thousands; unaudited)
|
March 31, 2020
|
|
March 31, 2019
|
||||
Cash Flows from Operating Activities:
|
|
|
|
||||
Net income
|
$
|
7,228
|
|
|
$
|
7,479
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Provision for loan losses
|
2,200
|
|
|
—
|
|
||
Provision for losses on off-balance sheet commitments
|
102
|
|
|
129
|
|
||
Noncash contribution expense to employee stock ownership plan
|
324
|
|
|
313
|
|
||
Noncash director compensation expense
|
75
|
|
|
75
|
|
||
Stock-based compensation expense
|
630
|
|
|
853
|
|
||
Amortization of core deposit intangible
|
213
|
|
|
222
|
|
||
Amortization of investment security (discounts) premiums, net
|
(93
|
)
|
|
485
|
|
||
Amortization of acquired loan premiums (discounts), net
|
11
|
|
|
(101
|
)
|
||
Accretion of discount on subordinated debenture
|
17
|
|
|
17
|
|
||
Net change in deferred loan origination costs/fees
|
(225
|
)
|
|
(49
|
)
|
||
(Gain) loss on sale of investment securities
|
(800
|
)
|
|
6
|
|
||
Depreciation and amortization
|
526
|
|
|
556
|
|
||
(Earnings on) cost of bank-owned life insurance policies
|
(275
|
)
|
|
60
|
|
||
Net change in operating assets and liabilities:
|
|
|
|
||||
Interest receivable and other assets
|
293
|
|
|
1,641
|
|
||
Interest payable and other liabilities
|
(701
|
)
|
|
(1,157
|
)
|
||
Total adjustments
|
2,297
|
|
|
3,050
|
|
||
Net cash provided by operating activities
|
9,525
|
|
|
10,529
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||
Purchase of available-for-sale securities
|
(54,902
|
)
|
|
(11,282
|
)
|
||
Proceeds from sale of available-for-sale securities
|
27,442
|
|
|
4,229
|
|
||
Proceeds from paydowns/maturities of held-to-maturity securities
|
6,217
|
|
|
4,276
|
|
||
Proceeds from paydowns/maturities of available-for-sale securities
|
20,924
|
|
|
30,271
|
|
||
Loans originated and principal collected, net
|
1,117
|
|
|
(8,166
|
)
|
||
Purchase of bank-owned life insurance policies
|
(941
|
)
|
|
(1,892
|
)
|
||
Purchase of premises and equipment
|
(146
|
)
|
|
(67
|
)
|
||
Cash paid for low income housing tax credit investment
|
(1,251
|
)
|
|
(38
|
)
|
||
Net cash (used in) provided by investing activities
|
(1,540
|
)
|
|
17,331
|
|
||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||
Net (decrease) increase in deposits
|
(29,379
|
)
|
|
3,789
|
|
||
Proceeds from stock options exercised
|
824
|
|
|
259
|
|
||
Payment of tax withholdings for stock options exercised and vesting of restricted stock
|
(73
|
)
|
|
(202
|
)
|
||
Proceeds from stock issued under employee and director stock purchase plans
|
34
|
|
|
23
|
|
||
Stock repurchased, net of commissions
|
(3,333
|
)
|
|
(4,640
|
)
|
||
Repayment of Federal Home Loan Bank borrowings
|
—
|
|
|
(7,000
|
)
|
||
Repayment of finance lease obligations
|
(45
|
)
|
|
(41
|
)
|
||
Cash dividends paid on common stock
|
(3,127
|
)
|
|
(2,630
|
)
|
||
Net cash used in financing activities
|
(35,099
|
)
|
|
(10,442
|
)
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(27,114
|
)
|
|
17,418
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
183,388
|
|
|
34,221
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
156,274
|
|
|
$
|
51,639
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid in interest
|
$
|
1,260
|
|
|
$
|
1,066
|
|
Supplemental disclosure of noncash investing and financing activities:
|
|
|
|
|
|
||
Change in net unrealized gain or loss on available-for-sale securities
|
$
|
9,812
|
|
|
$
|
3,939
|
|
Amortization of net unrealized loss on available-for-sale securities transferred to held-to-maturity
|
$
|
110
|
|
|
$
|
101
|
|
Stock issued to employee stock ownership plan
|
$
|
324
|
|
|
$
|
313
|
|
Stock issued in payment of director fees
|
$
|
117
|
|
|
$
|
114
|
|
Repurchase of stock not yet settled
|
$
|
—
|
|
|
$
|
160
|
|
Restricted cash:
|
|
|
|
||||
Federal Reserve Bank reserve requirements included in cash, cash equivalents and restricted cash1
|
$
|
—
|
|
|
$
|
10,932
|
|
|
Three months ended
|
|||||
(in thousands, except per share data)
|
March 31, 2020
|
March 31, 2019
|
||||
Weighted average basic shares outstanding
|
13,525
|
|
13,737
|
|
||
Potentially dilutive common shares related to:
|
|
|
||||
Stock options
|
106
|
|
155
|
|
||
Unvested restricted stock awards
|
25
|
|
32
|
|
||
Weighted average diluted shares outstanding
|
13,656
|
|
13,924
|
|
||
Net income
|
$
|
7,228
|
|
$
|
7,479
|
|
Basic EPS
|
$
|
0.53
|
|
$
|
0.54
|
|
Diluted EPS
|
$
|
0.53
|
|
$
|
0.54
|
|
Weighted average anti-dilutive shares not included in the calculation of diluted EPS
|
70
|
|
20
|
|
(in thousands)
Description of Financial Instruments
|
Carrying Value
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Measurement Categories: Changes in Fair Value Recorded In1
|
||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|||||
Securities available-for-sale:
|
|
|
|
|
|
||||||||
Mortgage-backed securities and collateralized mortgage obligations issued by U.S. government-sponsored agencies
|
$
|
267,959
|
|
$
|
—
|
|
$
|
267,959
|
|
$
|
—
|
|
OCI
|
SBA-backed securities
|
33,923
|
|
—
|
|
33,923
|
|
—
|
|
OCI
|
||||
Debentures of government sponsored agencies
|
42,609
|
|
—
|
|
42,609
|
|
—
|
|
OCI
|
||||
Obligations of state and political subdivisions
|
103,376
|
|
—
|
|
103,376
|
|
—
|
|
OCI
|
||||
Corporate bonds
|
1,001
|
|
—
|
|
1,001
|
|
—
|
|
OCI
|
||||
Derivative financial liabilities (interest rate contracts)
|
2,618
|
|
—
|
|
2,618
|
|
—
|
|
NI
|
||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|||||
Securities available-for-sale:
|
|
|
|
|
|
|
|
|
|||||
Mortgage-backed securities and collateralized mortgage obligations issued by U.S. government-sponsored agencies
|
$
|
278,144
|
|
$
|
—
|
|
$
|
278,144
|
|
$
|
—
|
|
OCI
|
SBA-backed securities
|
36,286
|
|
—
|
|
36,286
|
|
—
|
|
OCI
|
||||
Debentures of government sponsored agencies
|
49,046
|
|
—
|
|
49,046
|
|
—
|
|
OCI
|
||||
Obligations of state and political subdivisions
|
67,282
|
|
—
|
|
67,282
|
|
—
|
|
OCI
|
||||
Corporate bonds
|
1,502
|
|
—
|
|
1,502
|
|
—
|
|
OCI
|
||||
Derivative financial liabilities (interest rate contracts)
|
1,178
|
|
—
|
|
1,178
|
|
—
|
|
NI
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
(in thousands)
|
Carrying Amounts
|
|
Fair Value
|
|
Fair Value Hierarchy
|
|
Carrying Amounts
|
|
Fair Value
|
|
Fair Value Hierarchy
|
||||
Financial assets (recorded at amortized cost)
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents
|
$
|
156,274
|
|
$
|
156,274
|
|
Level 1
|
|
$
|
183,388
|
|
$
|
183,388
|
|
Level 1
|
Investment securities held-to-maturity
|
131,140
|
|
137,501
|
|
Level 2
|
|
137,413
|
|
139,642
|
|
Level 2
|
||||
Loans, net
|
1,824,976
|
|
1,816,190
|
|
Level 3
|
|
1,826,609
|
|
1,839,666
|
|
Level 3
|
||||
Interest receivable
|
7,802
|
|
7,802
|
|
Level 2
|
|
7,732
|
|
7,732
|
|
Level 2
|
||||
Financial liabilities (recorded at amortized cost)
|
|
|
|
|
|
|
|
|
|||||||
Time deposits
|
95,367
|
|
95,731
|
|
Level 2
|
|
97,810
|
|
97,859
|
|
Level 2
|
||||
Subordinated debenture
|
2,725
|
|
2,117
|
|
Level 3
|
|
2,708
|
|
3,182
|
|
Level 3
|
||||
Interest payable
|
122
|
|
122
|
|
Level 2
|
|
134
|
|
134
|
|
Level 2
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||||
|
Amortized
|
Fair
|
Gross Unrealized
|
|
Amortized
|
Fair
|
Gross Unrealized
|
||||||||||||||||||
(in thousands)
|
Cost
|
Value
|
Gains
|
(Losses)
|
|
Cost
|
Value
|
Gains
|
(Losses)
|
||||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Securities of U.S. government-sponsored enterprises:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
MBS pass-through securities issued by FHLMC and FNMA
|
$
|
77,682
|
|
$
|
81,590
|
|
$
|
3,908
|
|
$
|
—
|
|
|
$
|
80,451
|
|
$
|
81,325
|
|
$
|
1,018
|
|
$
|
(144
|
)
|
SBA-backed securities
|
7,031
|
|
7,434
|
|
403
|
|
—
|
|
|
7,999
|
|
8,264
|
|
265
|
|
—
|
|
||||||||
CMOs issued by FNMA
|
9,586
|
|
10,088
|
|
502
|
|
—
|
|
|
10,210
|
|
10,492
|
|
282
|
|
—
|
|
||||||||
CMOs issued by FHLMC
|
31,140
|
|
32,560
|
|
1,420
|
|
—
|
|
|
31,477
|
|
32,157
|
|
685
|
|
(5
|
)
|
||||||||
CMOs issued by GNMA
|
3,768
|
|
3,828
|
|
60
|
|
—
|
|
|
3,763
|
|
3,816
|
|
53
|
|
—
|
|
||||||||
Obligations of state and
political subdivisions
|
1,933
|
|
2,001
|
|
68
|
|
—
|
|
|
3,513
|
|
3,588
|
|
75
|
|
—
|
|
||||||||
Total held-to-maturity
|
131,140
|
|
137,501
|
|
6,361
|
|
—
|
|
|
137,413
|
|
139,642
|
|
2,378
|
|
(149
|
)
|
||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Securities of U.S. government-sponsored enterprises:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
MBS pass-through securities issued by FHLMC and FNMA
|
68,168
|
|
71,375
|
|
3,207
|
|
—
|
|
|
98,502
|
|
100,071
|
|
1,617
|
|
(48
|
)
|
||||||||
SBA-backed securities
|
32,709
|
|
33,923
|
|
1,270
|
|
(56
|
)
|
|
35,674
|
|
36,286
|
|
688
|
|
(76
|
)
|
||||||||
CMOs issued by FNMA
|
21,296
|
|
22,071
|
|
775
|
|
—
|
|
|
22,702
|
|
23,092
|
|
390
|
|
—
|
|
||||||||
CMOs issued by FHLMC
|
154,735
|
|
163,290
|
|
8,573
|
|
(18
|
)
|
|
139,398
|
|
143,226
|
|
3,892
|
|
(64
|
)
|
||||||||
CMOs issued by GNMA
|
10,759
|
|
11,223
|
|
464
|
|
—
|
|
|
11,719
|
|
11,755
|
|
42
|
|
(6
|
)
|
||||||||
Debentures of government- sponsored agencies
|
41,845
|
|
42,609
|
|
764
|
|
—
|
|
|
48,389
|
|
49,046
|
|
727
|
|
(70
|
)
|
||||||||
Obligations of state and
political subdivisions
|
101,008
|
|
103,376
|
|
2,396
|
|
(28
|
)
|
|
66,042
|
|
67,282
|
|
1,386
|
|
(146
|
)
|
||||||||
Corporate bonds
|
999
|
|
1,001
|
|
2
|
|
—
|
|
|
1,497
|
|
1,502
|
|
6
|
|
(1
|
)
|
||||||||
Total available-for-sale
|
431,519
|
|
448,868
|
|
17,451
|
|
(102
|
)
|
|
423,923
|
|
432,260
|
|
8,748
|
|
(411
|
)
|
||||||||
Total investment securities
|
$
|
562,659
|
|
$
|
586,369
|
|
$
|
23,812
|
|
$
|
(102
|
)
|
|
$
|
561,336
|
|
$
|
571,902
|
|
$
|
11,126
|
|
$
|
(560
|
)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||||||
|
Held-to-Maturity
|
|
Available-for-Sale
|
|
Held-to-Maturity
|
|
Available-for-Sale
|
||||||||||||||||||||
(in thousands)
|
Amortized Cost
|
Fair Value
|
|
Amortized Cost
|
Fair Value
|
|
Amortized Cost
|
Fair Value
|
|
Amortized Cost
|
Fair Value
|
||||||||||||||||
Within one year
|
$
|
1,342
|
|
$
|
1,388
|
|
|
$
|
16,847
|
|
$
|
16,935
|
|
|
$
|
1,807
|
|
$
|
1,811
|
|
|
$
|
6,699
|
|
$
|
6,706
|
|
After one but within five years
|
2,243
|
|
2,316
|
|
|
56,500
|
|
58,504
|
|
|
2,256
|
|
2,296
|
|
|
48,706
|
|
49,619
|
|
||||||||
After five years through ten years
|
54,483
|
|
57,447
|
|
|
186,662
|
|
196,730
|
|
|
56,221
|
|
57,544
|
|
|
208,806
|
|
214,277
|
|
||||||||
After ten years
|
73,072
|
|
76,350
|
|
|
171,510
|
|
176,699
|
|
|
77,129
|
|
77,991
|
|
|
159,712
|
|
161,658
|
|
||||||||
Total
|
$
|
131,140
|
|
$
|
137,501
|
|
|
$
|
431,519
|
|
$
|
448,868
|
|
|
$
|
137,413
|
|
$
|
139,642
|
|
|
$
|
423,923
|
|
$
|
432,260
|
|
|
Three months ended
|
|||||
(in thousands)
|
March 31, 2020
|
March 31, 2019
|
||||
Available-for-sale:
|
|
|
||||
Sales proceeds
|
$
|
27,442
|
|
$
|
4,229
|
|
Gross realized gains
|
800
|
|
3
|
|
||
Gross realized losses
|
—
|
|
(9
|
)
|
(in thousands)
|
March 31, 2020
|
December 31, 2019
|
||||
Pledged to the State of California:
|
|
|
||||
Secure public deposits in compliance with the Local Agency Security Program
|
$
|
121,330
|
|
$
|
126,598
|
|
Collateral for trust deposits
|
742
|
|
742
|
|
||
Total investment securities pledged to the State of California
|
122,072
|
|
127,340
|
|
||
Collateral for Wealth Management and Trust Services checking account
|
623
|
|
622
|
|
||
Total pledged investment securities
|
$
|
122,695
|
|
$
|
127,962
|
|
March 31, 2020
|
< 12 continuous months
|
|
≥ 12 continuous months
|
|
Total securities
in a loss position
|
|||||||||||||||
(in thousands)
|
Fair value
|
Unrealized loss
|
|
Fair value
|
Unrealized loss
|
|
Fair value
|
Unrealized loss
|
||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||||||
SBA-backed securities
|
$
|
—
|
|
$
|
—
|
|
|
$
|
2,209
|
|
$
|
(56
|
)
|
|
$
|
2,209
|
|
$
|
(56
|
)
|
CMOs issued by FHLMC
|
2,750
|
|
(17
|
)
|
|
1,600
|
|
(1
|
)
|
|
4,350
|
|
(18
|
)
|
||||||
Obligations of state and political subdivisions
|
11,439
|
|
(28
|
)
|
|
—
|
|
—
|
|
|
11,439
|
|
(28
|
)
|
||||||
Total available-for-sale
|
14,189
|
|
(45
|
)
|
|
3,809
|
|
(57
|
)
|
|
17,998
|
|
(102
|
)
|
||||||
Total temporarily impaired securities
|
$
|
14,189
|
|
$
|
(45
|
)
|
|
$
|
3,809
|
|
$
|
(57
|
)
|
|
$
|
17,998
|
|
$
|
(102
|
)
|
December 31, 2019
|
< 12 continuous months
|
|
≥ 12 continuous months
|
|
Total securities
in a loss position
|
|||||||||||||||
(in thousands)
|
Fair value
|
Unrealized loss
|
|
Fair value
|
Unrealized loss
|
|
Fair value
|
Unrealized loss
|
||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
||||||||||||
MBS pass-through securities issued by FHLMC and FNMA
|
$
|
14,203
|
|
$
|
(60
|
)
|
|
$
|
6,073
|
|
$
|
(84
|
)
|
|
$
|
20,276
|
|
$
|
(144
|
)
|
CMOs issued by FHLMC
|
—
|
|
—
|
|
|
1,725
|
|
(5
|
)
|
|
1,725
|
|
(5
|
)
|
||||||
Total held-to-maturity
|
14,203
|
|
(60
|
)
|
|
7,798
|
|
(89
|
)
|
|
22,001
|
|
(149
|
)
|
||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
MBS pass-through securities issued by FHLMC and FNMA
|
4,367
|
|
(34
|
)
|
|
4,464
|
|
(14
|
)
|
|
8,831
|
|
(48
|
)
|
||||||
SBA-backed securities
|
9,227
|
|
(14
|
)
|
|
2,448
|
|
(62
|
)
|
|
11,675
|
|
(76
|
)
|
||||||
CMOs issued by FHLMC
|
14,918
|
|
(58
|
)
|
|
2,981
|
|
(6
|
)
|
|
17,899
|
|
(64
|
)
|
||||||
CMOs issued by GNMA
|
7,139
|
|
(6
|
)
|
|
—
|
|
—
|
|
|
7,139
|
|
(6
|
)
|
||||||
Debentures of government- sponsored agencies
|
25,228
|
|
(70
|
)
|
|
—
|
|
—
|
|
|
25,228
|
|
(70
|
)
|
||||||
Obligations of state and political subdivisions
|
20,579
|
|
(145
|
)
|
|
659
|
|
(1
|
)
|
|
21,238
|
|
(146
|
)
|
||||||
Corporate Bonds
|
500
|
|
(1
|
)
|
|
—
|
|
—
|
|
|
500
|
|
(1
|
)
|
||||||
Total available-for-sale
|
81,958
|
|
(328
|
)
|
|
10,552
|
|
(83
|
)
|
|
92,510
|
|
(411
|
)
|
||||||
Total temporarily impaired securities
|
$
|
96,161
|
|
$
|
(388
|
)
|
|
$
|
18,350
|
|
$
|
(172
|
)
|
|
$
|
114,511
|
|
$
|
(560
|
)
|
Loan Aging Analysis by Class
|
||||||||||||||||||||||||
(in thousands)
|
Commercial and industrial
|
|
Commercial real estate, owner-occupied
|
|
Commercial real estate, investor-owned
|
|
Construction
|
|
Home equity
|
|
Other residential
|
|
Installment and other consumer
|
|
Total
|
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
30-59 days past due
|
$
|
129
|
|
$
|
—
|
|
$
|
1,406
|
|
$
|
—
|
|
$
|
97
|
|
$
|
453
|
|
$
|
61
|
|
$
|
2,146
|
|
60-89 days past due
|
—
|
|
—
|
|
—
|
|
—
|
|
488
|
|
—
|
|
—
|
|
488
|
|
||||||||
90 days or more past due
|
—
|
|
—
|
|
—
|
|
—
|
|
98
|
|
—
|
|
—
|
|
98
|
|
||||||||
Total past due
|
129
|
|
—
|
|
1,406
|
|
—
|
|
683
|
|
453
|
|
61
|
|
2,732
|
|
||||||||
Current
|
264,276
|
|
306,371
|
|
929,073
|
|
63,425
|
|
116,285
|
|
135,476
|
|
26,222
|
|
1,841,128
|
|
||||||||
Total loans 1
|
$
|
264,405
|
|
$
|
306,371
|
|
$
|
930,479
|
|
$
|
63,425
|
|
$
|
116,968
|
|
$
|
135,929
|
|
$
|
26,283
|
|
$
|
1,843,860
|
|
Non-accrual loans 2
|
$
|
—
|
|
$
|
—
|
|
$
|
942
|
|
$
|
—
|
|
$
|
633
|
|
$
|
—
|
|
$
|
57
|
|
$
|
1,632
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
30-59 days past due
|
$
|
1
|
|
$
|
—
|
|
$
|
1,001
|
|
$
|
—
|
|
$
|
279
|
|
$
|
—
|
|
$
|
7
|
|
$
|
1,288
|
|
60-89 days past due
|
—
|
|
—
|
|
—
|
|
—
|
|
98
|
|
—
|
|
95
|
|
193
|
|
||||||||
90 days or more past due
|
—
|
|
—
|
|
—
|
|
—
|
|
167
|
|
—
|
|
—
|
|
167
|
|
||||||||
Total past due
|
1
|
|
—
|
|
1,001
|
|
—
|
|
544
|
|
—
|
|
102
|
|
1,648
|
|
||||||||
Current
|
246,686
|
|
308,824
|
|
945,316
|
|
61,095
|
|
115,480
|
|
136,657
|
|
27,580
|
|
1,841,638
|
|
||||||||
Total loans 1
|
$
|
246,687
|
|
$
|
308,824
|
|
$
|
946,317
|
|
$
|
61,095
|
|
$
|
116,024
|
|
$
|
136,657
|
|
$
|
27,682
|
|
$
|
1,843,286
|
|
Non-accrual loans 2
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
168
|
|
$
|
—
|
|
$
|
58
|
|
$
|
226
|
|
Credit Risk Profile by Internally Assigned Risk Grade
|
||||||||||||||||||||||||
(in thousands)
|
Commercial and industrial
|
|
Commercial real estate, owner-occupied
|
|
Commercial real estate, investor-owned
|
|
Construction
|
|
Home equity
|
|
Other residential
|
|
Installment and other consumer
|
|
Total
|
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
||||||||||||||||
Pass
|
$
|
228,088
|
|
$
|
262,309
|
|
$
|
924,924
|
|
$
|
63,425
|
|
$
|
115,318
|
|
$
|
135,929
|
|
$
|
26,135
|
|
$
|
1,756,128
|
|
Special Mention
|
36,092
|
|
34,681
|
|
4,057
|
|
—
|
|
846
|
|
—
|
|
—
|
|
75,676
|
|
||||||||
Substandard
|
225
|
|
9,381
|
|
1,498
|
|
—
|
|
804
|
|
—
|
|
148
|
|
12,056
|
|
||||||||
Total loans
|
$
|
264,405
|
|
$
|
306,371
|
|
$
|
930,479
|
|
$
|
63,425
|
|
$
|
116,968
|
|
$
|
135,929
|
|
$
|
26,283
|
|
$
|
1,843,860
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pass
|
$
|
209,213
|
|
$
|
264,766
|
|
$
|
945,757
|
|
$
|
61,095
|
|
$
|
114,935
|
|
$
|
136,657
|
|
$
|
27,538
|
|
$
|
1,759,961
|
|
Special Mention
|
37,065
|
|
35,016
|
|
560
|
|
—
|
|
750
|
|
—
|
|
—
|
|
73,391
|
|
||||||||
Substandard
|
409
|
|
9,042
|
|
—
|
|
—
|
|
339
|
|
—
|
|
144
|
|
9,934
|
|
||||||||
Total loans
|
$
|
246,687
|
|
$
|
308,824
|
|
$
|
946,317
|
|
$
|
61,095
|
|
$
|
116,024
|
|
$
|
136,657
|
|
$
|
27,682
|
|
$
|
1,843,286
|
|
•
|
The loan is subsequently refinanced or restructured at current market interest rates and the new terms are consistent with the treatment of creditworthy borrowers under regular underwriting standards;
|
•
|
The borrower is no longer considered to be in financial difficulty;
|
•
|
Performance on the loan is reasonably assured; and
|
•
|
Existing loan did not have any forgiveness of principal or interest.
|
(dollars in thousands)
|
Number of Contracts Modified
|
|
Pre-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment
|
|
Post-Modification Outstanding Recorded Investment at Period End
|
|
|||
TDRs during the three months ended March 31, 2020:
|
|
|
|
|
|||||||
Commercial and industrial
|
1
|
|
$
|
170
|
|
$
|
162
|
|
$
|
144
|
|
Installment and other consumer
|
2
|
|
$
|
103
|
|
$
|
103
|
|
$
|
103
|
|
|
3
|
|
$
|
273
|
|
$
|
265
|
|
$
|
247
|
|
TDRs during the three months ended March 31, 2019:
|
|
|
|
|
|
|
|
|
|||
None
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
(in thousands)
|
Commercial and industrial
|
|
Commercial real estate, owner-occupied
|
|
Commercial real estate, investor-owned
|
|
Construction
|
|
Home equity
|
|
Other residential
|
|
Installment and other consumer
|
|
Total
|
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Recorded investment in impaired loans:
|
|
|
|
|
|
|
||||||||||||||||||
With no specific allowance recorded
|
$
|
830
|
|
$
|
—
|
|
$
|
942
|
|
$
|
—
|
|
$
|
633
|
|
$
|
449
|
|
$
|
95
|
|
$
|
2,949
|
|
With a specific allowance recorded
|
145
|
|
6,997
|
|
1,756
|
|
—
|
|
251
|
|
—
|
|
636
|
|
9,785
|
|
||||||||
Total recorded investment in impaired loans
|
$
|
975
|
|
$
|
6,997
|
|
$
|
2,698
|
|
$
|
—
|
|
$
|
884
|
|
$
|
449
|
|
$
|
731
|
|
$
|
12,734
|
|
Unpaid principal balance of impaired loans
|
$
|
968
|
|
$
|
6,993
|
|
$
|
2,693
|
|
$
|
—
|
|
$
|
902
|
|
$
|
448
|
|
$
|
729
|
|
$
|
12,733
|
|
Specific allowance
|
9
|
|
277
|
|
37
|
|
—
|
|
4
|
|
—
|
|
119
|
|
446
|
|
||||||||
Average recorded investment in impaired loans during the quarter ended March 31, 2020
|
1,099
|
|
6,997
|
|
2,234
|
|
—
|
|
651
|
|
451
|
|
685
|
|
12,117
|
|
||||||||
Interest income recognized on impaired loans during the quarter ended March 31, 20201
|
14
|
|
66
|
|
19
|
|
—
|
|
4
|
|
5
|
|
7
|
|
115
|
|
||||||||
Average recorded investment in impaired loans during the quarter ended
March 31, 2019 |
1,666
|
|
6,997
|
|
1,816
|
|
2,690
|
|
580
|
|
461
|
|
680
|
|
14,890
|
|
||||||||
Interest income recognized on impaired loans during the quarter ended
March 31, 20191 |
22
|
|
66
|
|
20
|
|
42
|
|
4
|
|
5
|
|
6
|
|
165
|
|
(in thousands)
|
Commercial and industrial
|
|
Commercial real estate, owner-occupied
|
|
Commercial real estate, investor-owned
|
|
Construction
|
|
Home equity
|
|
Other residential
|
|
Installment and other consumer
|
|
Total
|
|
||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Recorded investment in impaired loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
With no specific allowance recorded
|
$
|
349
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
167
|
|
$
|
452
|
|
$
|
98
|
|
$
|
1,066
|
|
With a specific allowance recorded
|
874
|
|
6,998
|
|
1,770
|
|
—
|
|
251
|
|
—
|
|
541
|
|
10,434
|
|
||||||||
Total recorded investment in impaired loans
|
$
|
1,223
|
|
$
|
6,998
|
|
$
|
1,770
|
|
$
|
—
|
|
$
|
418
|
|
$
|
452
|
|
$
|
639
|
|
$
|
11,500
|
|
Unpaid principal balance of impaired loans
|
$
|
1,209
|
|
$
|
6,992
|
|
$
|
1,764
|
|
$
|
—
|
|
$
|
417
|
|
$
|
451
|
|
$
|
638
|
|
$
|
11,471
|
|
Specific allowance
|
$
|
103
|
|
$
|
195
|
|
$
|
41
|
|
$
|
—
|
|
$
|
5
|
|
$
|
—
|
|
$
|
53
|
|
$
|
397
|
|
Allowance for Loan Losses Rollforward for the Period
|
|||||||||||||||||||||||||||
(in thousands)
|
Commercial and industrial
|
|
Commercial real estate, owner-occupied
|
|
Commercial real estate, investor-owned
|
|
Construction
|
|
Home equity
|
|
Other residential
|
|
Installment and other consumer
|
|
Unallocated
|
|
Total
|
|
|||||||||
Three months ended March 31, 2020
|
|
|
|
|
|
|
|
||||||||||||||||||||
Beginning balance
|
$
|
2,334
|
|
$
|
2,462
|
|
$
|
8,483
|
|
$
|
638
|
|
$
|
850
|
|
$
|
973
|
|
$
|
284
|
|
$
|
653
|
|
$
|
16,677
|
|
Provision (reversal)
|
446
|
|
335
|
|
742
|
|
86
|
|
132
|
|
125
|
|
79
|
|
255
|
|
2,200
|
|
|||||||||
Charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Recoveries
|
4
|
|
—
|
|
—
|
|
3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7
|
|
|||||||||
Ending balance
|
$
|
2,784
|
|
$
|
2,797
|
|
$
|
9,225
|
|
$
|
727
|
|
$
|
982
|
|
$
|
1,098
|
|
$
|
363
|
|
$
|
908
|
|
$
|
18,884
|
|
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
||||||||||||||||||||
Beginning balance
|
$
|
2,436
|
|
$
|
2,407
|
|
$
|
7,703
|
|
$
|
756
|
|
$
|
915
|
|
$
|
800
|
|
$
|
310
|
|
$
|
494
|
|
$
|
15,821
|
|
Provision (reversal)
|
180
|
|
(49
|
)
|
63
|
|
(52
|
)
|
8
|
|
—
|
|
30
|
|
(180
|
)
|
—
|
|
|||||||||
Charge-offs
|
(9
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(9
|
)
|
|||||||||
Recoveries
|
5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
|||||||||
Ending balance
|
$
|
2,612
|
|
$
|
2,358
|
|
$
|
7,766
|
|
$
|
704
|
|
$
|
923
|
|
$
|
800
|
|
$
|
340
|
|
$
|
314
|
|
$
|
15,817
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan Losses and Recorded Investment in Loans
|
|||||||||||||||||||||||||||
(dollars in thousands)
|
Commercial and industrial
|
|
Commercial real estate, owner-occupied
|
|
Commercial real estate, investor-owned
|
|
Construction
|
|
Home equity
|
|
Other residential
|
|
Installment and other consumer
|
|
Unallocated
|
|
Total
|
|
|||||||||
March 31, 2020
|
|||||||||||||||||||||||||||
Ending ALLL related to loans collectively evaluated for impairment
|
$
|
2,775
|
|
$
|
2,520
|
|
$
|
9,188
|
|
$
|
727
|
|
$
|
978
|
|
$
|
1,098
|
|
$
|
244
|
|
$
|
908
|
|
$
|
18,438
|
|
Ending ALLL related to loans individually evaluated for impairment
|
9
|
|
277
|
|
37
|
|
—
|
|
4
|
|
—
|
|
119
|
|
—
|
|
446
|
|
|||||||||
Ending balance
|
$
|
2,784
|
|
$
|
2,797
|
|
$
|
9,225
|
|
$
|
727
|
|
$
|
982
|
|
$
|
1,098
|
|
$
|
363
|
|
$
|
908
|
|
$
|
18,884
|
|
Recorded Investment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Collectively evaluated for impairment
|
$
|
263,430
|
|
$
|
299,374
|
|
$
|
927,781
|
|
$
|
63,425
|
|
$
|
116,084
|
|
$
|
135,480
|
|
$
|
25,552
|
|
$
|
—
|
|
$
|
1,831,126
|
|
Individually evaluated for impairment
|
975
|
|
6,997
|
|
2,698
|
|
—
|
|
884
|
|
449
|
|
731
|
|
—
|
|
12,734
|
|
|||||||||
Total
|
$
|
264,405
|
|
$
|
306,371
|
|
$
|
930,479
|
|
$
|
63,425
|
|
$
|
116,968
|
|
$
|
135,929
|
|
$
|
26,283
|
|
$
|
—
|
|
$
|
1,843,860
|
|
Ratio of allowance for loan losses to total loans
|
1.05
|
%
|
0.91
|
%
|
0.99
|
%
|
1.15
|
%
|
0.84
|
%
|
0.81
|
%
|
1.38
|
%
|
NM
|
|
1.02
|
%
|
|||||||||
Allowance for loan losses to non-accrual loans
|
NM
|
|
NM
|
|
979
|
%
|
NM
|
|
155
|
%
|
NM
|
|
637
|
%
|
NM
|
|
1,157
|
%
|
Allowance for Loan Losses and Recorded Investment in Loans
|
|||||||||||||||||||||||||||
(dollars in thousands)
|
Commercial and industrial
|
|
Commercial real estate, owner-occupied
|
|
Commercial real estate, investor-owned
|
|
Construction
|
|
Home equity
|
|
Other residential
|
|
Installment and other consumer
|
|
Unallocated
|
|
Total
|
|
|||||||||
December 31, 2019
|
|||||||||||||||||||||||||||
Ending ALLL related to loans collectively evaluated for impairment
|
$
|
2,231
|
|
$
|
2,267
|
|
$
|
8,442
|
|
$
|
638
|
|
$
|
845
|
|
$
|
973
|
|
$
|
231
|
|
$
|
653
|
|
$
|
16,280
|
|
Ending ALLL related to loans individually evaluated for impairment
|
103
|
|
195
|
|
41
|
|
—
|
|
5
|
|
—
|
|
53
|
|
—
|
|
397
|
|
|||||||||
Ending balance
|
$
|
2,334
|
|
$
|
2,462
|
|
$
|
8,483
|
|
$
|
638
|
|
$
|
850
|
|
$
|
973
|
|
$
|
284
|
|
$
|
653
|
|
$
|
16,677
|
|
Recorded Investment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Collectively evaluated for impairment
|
$
|
245,464
|
|
$
|
301,826
|
|
$
|
944,547
|
|
$
|
61,095
|
|
$
|
115,606
|
|
$
|
136,205
|
|
$
|
27,043
|
|
$
|
—
|
|
$
|
1,831,786
|
|
Individually evaluated for impairment
|
1,223
|
|
6,998
|
|
1,770
|
|
—
|
|
418
|
|
452
|
|
639
|
|
—
|
|
11,500
|
|
|||||||||
Total
|
$
|
246,687
|
|
$
|
308,824
|
|
$
|
946,317
|
|
$
|
61,095
|
|
$
|
116,024
|
|
$
|
136,657
|
|
$
|
27,682
|
|
$
|
—
|
|
$
|
1,843,286
|
|
Ratio of allowance for loan losses to total loans
|
0.95
|
%
|
0.80
|
%
|
0.90
|
%
|
1.04
|
%
|
0.73
|
%
|
0.71
|
%
|
1.03
|
%
|
NM
|
|
0.90
|
%
|
|||||||||
Allowance for loan losses to non-accrual loans
|
NM
|
|
NM
|
|
NM
|
|
NM
|
|
506
|
%
|
NM
|
|
490
|
%
|
NM
|
|
7,379
|
%
|
(in thousands)
|
March 31, 2020
|
|
December 31, 2019
|
|
||
Commercial lines of credit
|
$
|
259,151
|
|
$
|
287,533
|
|
Revolving home equity lines
|
185,715
|
|
189,035
|
|
||
Undisbursed construction loans
|
31,367
|
|
41,033
|
|
||
Personal and other lines of credit
|
10,730
|
|
9,567
|
|
||
Standby letters of credit
|
1,904
|
|
1,964
|
|
||
Total commitments and standby letters of credit
|
$
|
488,867
|
|
$
|
529,132
|
|
|
Three months ended
|
|||||
(in thousands)
|
March 31, 2020
|
March 31, 2019
|
||||
Right-of-use assets obtained in exchange for operating lease liabilities
|
$
|
12,178
|
|
$
|
266
|
|
Right-of-use assets obtained in exchange for finance lease liabilities
|
$
|
18
|
|
$
|
—
|
|
Reclassification of deferred rent and unamortized lease incentives from other liabilities to operating lease right-of-use assets upon adoption of ASC 842
|
$
|
—
|
|
$
|
1,967
|
|
(in thousands)
|
March 31, 2020
|
||||||
Year
|
Operating Leases
|
|
|
Finance Leases
|
|
||
2020
|
$
|
3,360
|
|
|
$
|
129
|
|
2021
|
3,546
|
|
|
42
|
|
||
2022
|
3,172
|
|
|
13
|
|
||
2023
|
2,716
|
|
|
4
|
|
||
2024
|
2,075
|
|
|
—
|
|
||
Thereafter
|
11,133
|
|
|
—
|
|
||
Total minimum lease payments
|
26,002
|
|
|
188
|
|
||
Amounts representing interest (present value discount)
|
(2,276
|
)
|
|
(3
|
)
|
||
Present value of net minimum lease payments (lease liability)
|
$
|
23,726
|
|
|
$
|
185
|
|
|
|
|
|
||||
Weighted average remaining term (in years)
|
8.7
|
|
|
1.4
|
|
||
Weighted average discount rate
|
2.19
|
%
|
|
2.69
|
%
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||
(in thousands)
|
March 31,
2020 |
December 31, 2019
|
|
March 31,
2020 |
December 31, 2019
|
||||||||
Fair value hedges:
|
|
|
|
|
|
||||||||
Interest rate contracts notional amount
|
$
|
—
|
|
$
|
—
|
|
|
$
|
16,711
|
|
$
|
16,956
|
|
Interest rate contracts fair value1
|
$
|
—
|
|
$
|
—
|
|
|
$
|
2,618
|
|
$
|
1,178
|
|
|
Carrying Amounts of Hedged Assets
|
|
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Loans
|
||||||||||
(in thousands)
|
March 31, 2020
|
December 31, 2019
|
|
March 31, 2020
|
December 31, 2019
|
||||||||
Loans
|
$
|
19,125
|
|
$
|
17,900
|
|
|
$
|
2,414
|
|
$
|
944
|
|
|
Three months ended
|
|||||
(in thousands)
|
March 31, 2020
|
March 31, 2019
|
||||
Interest and fees on loans 1
|
$
|
20,887
|
|
$
|
20,695
|
|
Decrease in value of designated interest rate swaps due to LIBOR interest rate movements
|
$
|
(1,440
|
)
|
$
|
(357
|
)
|
Payment on interest rate swaps
|
(67
|
)
|
(12
|
)
|
||
Increase in value of hedged loans
|
1,470
|
|
362
|
|
||
Decrease in value of yield maintenance agreement
|
(3
|
)
|
(4
|
)
|
||
Net losses on fair value hedging relationships recognized in interest income
|
$
|
(40
|
)
|
$
|
(11
|
)
|
Offsetting of Financial Assets and Derivative Assets
|
||||||||||||||||||
|
|
Gross Amounts
|
Net Amounts of
|
Gross Amounts Not Offset in
|
|
|||||||||||||
|
Gross Amounts
|
Offset in the
|
Assets Presented
|
the Statements of Condition
|
|
|||||||||||||
|
of Recognized
|
Statements of
|
in the Statements
|
Financial
|
Cash Collateral
|
|
||||||||||||
(in thousands)
|
Assets
|
Condition
|
of Condition
|
Instruments
|
Received
|
Net Amount
|
||||||||||||
March 31, 2020
|
|
|
|
|
|
|
||||||||||||
Derivatives by Counterparty:
|
|
|
|
|
|
|
||||||||||||
Counterparty A
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Total
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
December 31, 2019
|
|
|
|
|
|
|
||||||||||||
Derivatives by Counterparty:
|
|
|
|
|
|
|
||||||||||||
Counterparty A
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Total
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Offsetting of Financial Liabilities and Derivative Liabilities
|
||||||||||||||||||
|
|
Gross Amounts
|
Net Amounts of
|
Gross Amounts Not Offset in
|
|
|||||||||||||
|
Gross Amounts
|
Offset in the
|
Liabilities Presented
|
the Statements of Condition
|
|
|||||||||||||
|
of Recognized
|
Statements of
|
in the Statements
|
Financial
|
Cash Collateral
|
|
||||||||||||
(in thousands)
|
Liabilities1
|
Condition
|
of Condition1
|
Instruments
|
Pledged
|
Net Amount
|
||||||||||||
March 31, 2020
|
|
|
|
|
|
|
||||||||||||
Derivatives by Counterparty:
|
|
|
|
|
|
|
||||||||||||
Counterparty A
|
$
|
2,618
|
|
$
|
—
|
|
$
|
2,618
|
|
$
|
—
|
|
$
|
(2,260
|
)
|
$
|
358
|
|
Total
|
$
|
2,618
|
|
$
|
—
|
|
$
|
2,618
|
|
$
|
—
|
|
$
|
(2,260
|
)
|
$
|
358
|
|
December 31, 2019
|
|
|
|
|
|
|
||||||||||||
Derivatives by Counterparty:
|
|
|
|
|
|
|
||||||||||||
Counterparty A
|
$
|
1,178
|
|
$
|
—
|
|
$
|
1,178
|
|
$
|
—
|
|
$
|
(1,178
|
)
|
$
|
—
|
|
Total
|
$
|
1,178
|
|
$
|
—
|
|
$
|
1,178
|
|
$
|
—
|
|
$
|
(1,178
|
)
|
$
|
—
|
|
•
|
Loans totaled $1,843.9 million at March 31, 2020, compared to $1,843.3 million at December 31, 2019. New loan originations of $29.8 million and line utilization increases of $28.9 million were mostly offset by payoffs of $51.7 million, for an overall net increase of $574 thousand.
|
•
|
As of March 31, 2020 our loan portfolio exposure to industries most affected by the shelter-in-place order included 10.4% retail properties and businesses, 4.6% wine-related businesses and 2.7% hospitality. Transportation, dental, recreation and entertainment combined represented 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.
|
•
|
To provide immediate relief to our clients experiencing hardship, as of April 30, 2020, we approved 253 loans for principal and/or interest deferrals for up to 120 days on loan balances totaling $358 million. In addition, 96% of the total requests were secured by real estate with loan-to-value ratios averaging less than 46%, and $141 million was linked to industries most impacted by the stay at home order.
|
•
|
As of April 30, 2020, through two waves of SBA funding, we submitted and received approval for 1,452 applications for a total of $294 million, which will help 25,412 employees of local businesses and nonprofit organizations.
|
•
|
Strong credit quality remains a cornerstone of the Bank's consistent performance. Non-accrual loans totaled $1.6 million, or 0.09% of the loan portfolio at March 31, 2020, compared to $226 thousand, or 0.01% at December 31, 2019. Classified loans totaled $12.1 million at March 31, 2020, compared to $9.9 million at December 31, 2019. Accruing loans past due 30 to 89 days totaled $1.3 million at March 31, 2020, compared to $1.5 million at December 31, 2019. 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 based on information available as of March 31, 2020 to take into account the impact of the COVID-19 pandemic to the best of our ability. There was no provision for loan losses and a $129 thousand provision for losses on off-balance sheet commitments in the same period last year.
|
•
|
Total deposits increased $29.4 million in the first three months of 2020 to $2,307.1 million at March 31, 2020. The increase was primarily due to normal cash fluctuations in some of our large business accounts. Non-interest bearing deposits increased $1.6 million from December 31, 2019 and represented 49% of total deposits at March 31, 2020. The cost of average deposits was 0.21% in the first quarter of 2020, an increase of 3 basis points from the same quarter a year ago.
|
•
|
All capital ratios were above regulatory requirements to be considered well-capitalized. The total risk-based capital ratio for Bancorp was 15.3% at March 31, 2020, compared to 15.1% at December 31, 2019.
|
•
|
Return on assets was 1.09% for the quarter ended March 31, 2020, compared to 1.19% for the quarter ended March 31, 2019. Return on equity was 8.54% for the quarter ended March 31, 2020, compared to 9.54% for the quarter ended March 31, 2019.
|
•
|
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.
|
(dollars in thousands)
|
March 31, 2020
|
December 31, 2019
|
||||
Selected financial condition data:
|
|
|
||||
Total assets
|
$
|
2,697,738
|
|
$
|
2,707,280
|
|
Loans, net
|
1,824,976
|
|
1,826,609
|
|
||
Deposits
|
2,307,110
|
|
2,336,489
|
|
||
Borrowings and other obligations
|
2,910
|
|
2,920
|
|
||
Stockholders' equity
|
345,940
|
|
336,788
|
|
||
Asset quality ratios:
|
|
|
||||
Allowance for loan losses to total loans
|
1.02
|
%
|
0.90
|
%
|
||
Allowance for loan losses to non-accrual loans
|
11.57x
|
|
73.86x
|
|
||
Non-accrual loans to total loans
|
0.09
|
%
|
0.01
|
%
|
||
Capital ratios:
|
|
|
||||
Equity to total assets ratio
|
12.82
|
%
|
12.44
|
%
|
||
Tangible common equity to tangible assets 1
|
11.69
|
%
|
11.30
|
%
|
||
Total capital (to risk-weighted assets)
|
15.29
|
%
|
15.07
|
%
|
||
Tier 1 capital (to risk-weighted assets)
|
14.35
|
%
|
14.24
|
%
|
||
Tier 1 capital (to average assets)
|
11.66
|
%
|
11.66
|
%
|
||
Common equity Tier 1 capital (to risk weighted assets)
|
14.22
|
%
|
14.11
|
%
|
|
Three months ended
|
|||||
(dollars in thousands, except per share data)
|
March 31, 2020
|
March 31, 2019
|
||||
Selected operating data:
|
|
|
||||
Net interest income
|
$
|
24,119
|
|
$
|
23,846
|
|
Provision for loan losses
|
2,200
|
|
—
|
|
||
Non-interest income
|
3,120
|
|
1,771
|
|
||
Non-interest expense
|
15,469
|
|
15,528
|
|
||
Net income
|
7,228
|
|
7,479
|
|
||
Net income per common share:
|
|
|
||||
Basic
|
$
|
0.53
|
|
$
|
0.54
|
|
Diluted
|
$
|
0.53
|
|
$
|
0.54
|
|
Performance and other financial ratios:
|
|
|
||||
Return on average assets
|
1.09
|
%
|
1.19
|
%
|
||
Return on average equity
|
8.54
|
%
|
9.54
|
%
|
||
Tax-equivalent net interest margin 2
|
3.88
|
%
|
4.02
|
%
|
||
Cost of deposits
|
0.21
|
%
|
0.18
|
%
|
||
Efficiency ratio
|
56.79
|
%
|
60.62
|
%
|
||
Cash dividend payout ratio on common stock 3
|
43.40
|
%
|
35.19
|
%
|
|
|
Three months ended
|
|
Three months ended
|
||||||||||||||
|
|
March 31, 2020
|
|
March 31, 2019
|
||||||||||||||
|
|
|
Interest
|
|
|
|
Interest
|
|
||||||||||
|
|
Average
|
Income/
|
Yield/
|
|
Average
|
Income/
|
Yield/
|
||||||||||
(dollars in thousands)
|
Balance
|
Expense
|
Rate
|
|
Balance
|
Expense
|
Rate
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|||||||||||
|
Interest-bearing due from banks 1
|
$
|
99,362
|
|
$
|
332
|
|
1.32
|
%
|
|
$
|
22,690
|
|
$
|
139
|
|
2.45
|
%
|
|
Investment securities 2, 3
|
556,897
|
|
4,266
|
|
3.06
|
%
|
|
619,562
|
|
4,191
|
|
2.71
|
%
|
||||
|
Loans 1, 3, 4
|
1,833,180
|
|
21,066
|
|
4.55
|
%
|
|
1,756,316
|
|
20,887
|
|
4.76
|
%
|
||||
|
Total interest-earning assets 1
|
2,489,439
|
|
25,664
|
|
4.08
|
%
|
|
2,398,568
|
|
25,217
|
|
4.21
|
%
|
||||
|
Cash and non-interest-bearing due from banks
|
40,844
|
|
|
|
|
30,947
|
|
|
|
||||||||
|
Bank premises and equipment, net
|
5,939
|
|
|
|
|
7,512
|
|
|
|
||||||||
|
Interest receivable and other assets, net
|
118,909
|
|
|
|
|
104,685
|
|
|
|
||||||||
Total assets
|
$
|
2,655,131
|
|
|
|
|
$
|
2,541,712
|
|
|
|
|||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|||||||||||
|
Interest-bearing transaction accounts
|
$
|
138,395
|
|
$
|
66
|
|
0.19
|
%
|
|
$
|
127,733
|
|
$
|
77
|
|
0.24
|
%
|
|
Savings accounts
|
163,439
|
|
16
|
|
0.04
|
%
|
|
180,355
|
|
18
|
|
0.04
|
%
|
||||
|
Money market accounts
|
760,616
|
|
971
|
|
0.51
|
%
|
|
673,137
|
|
764
|
|
0.46
|
%
|
||||
|
Time accounts including CDARS
|
96,157
|
|
161
|
|
0.67
|
%
|
|
113,389
|
|
119
|
|
0.43
|
%
|
||||
|
Borrowings and other obligations 1
|
358
|
|
2
|
|
1.81
|
%
|
|
7,414
|
|
47
|
|
2.55
|
%
|
||||
|
Subordinated debenture 1
|
2,715
|
|
49
|
|
7.19
|
%
|
|
2,647
|
|
60
|
|
9.05
|
%
|
||||
|
Total interest-bearing liabilities
|
1,161,680
|
|
1,265
|
|
0.44
|
%
|
|
1,104,675
|
|
1,085
|
|
0.40
|
%
|
||||
|
Demand accounts
|
1,119,975
|
|
|
|
|
1,086,947
|
|
|
|
||||||||
|
Interest payable and other liabilities
|
33,045
|
|
|
|
|
32,163
|
|
|
|
||||||||
|
Stockholders' equity
|
340,431
|
|
|
|
|
317,927
|
|
|
|
||||||||
Total liabilities & stockholders' equity
|
$
|
2,655,131
|
|
|
|
|
$
|
2,541,712
|
|
|
|
|||||||
Tax-equivalent net interest income/margin 1
|
|
$
|
24,399
|
|
3.88
|
%
|
|
|
$
|
24,132
|
|
4.02
|
%
|
|||||
Reported net interest income/margin 1
|
|
$
|
24,119
|
|
3.83
|
%
|
|
|
$
|
23,846
|
|
3.98
|
%
|
|||||
Tax-equivalent net interest rate spread
|
|
|
3.64
|
%
|
|
|
|
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%.
|
||||||||
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.
|
|
Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2019
|
|||||||||||
(in thousands)
|
Volume
|
|
Yield/Rate
|
|
Mix
|
|
Total
|
|
||||
Interest-bearing due from banks
|
$
|
469
|
|
$
|
(64
|
)
|
$
|
(212
|
)
|
$
|
193
|
|
Investment securities 1
|
(424
|
)
|
555
|
|
(56
|
)
|
75
|
|
||||
Loans 1
|
914
|
|
(927
|
)
|
192
|
|
179
|
|
||||
Total interest-earning assets
|
959
|
|
(436
|
)
|
(76
|
)
|
447
|
|
||||
Interest-bearing transaction accounts
|
6
|
|
(16
|
)
|
(1
|
)
|
(11
|
)
|
||||
Savings accounts
|
(2
|
)
|
—
|
|
—
|
|
(2
|
)
|
||||
Money market accounts
|
99
|
|
85
|
|
23
|
|
207
|
|
||||
Time accounts, including CDARS
|
(18
|
)
|
68
|
|
(8
|
)
|
42
|
|
||||
Borrowings and other obligations
|
(45
|
)
|
(14
|
)
|
14
|
|
(45
|
)
|
||||
Subordinated debenture
|
2
|
|
(13
|
)
|
—
|
|
(11
|
)
|
||||
Total interest-bearing liabilities
|
42
|
|
110
|
|
28
|
|
180
|
|
||||
Changes in tax-equivalent net interest income
|
$
|
917
|
|
$
|
(546
|
)
|
$
|
(104
|
)
|
$
|
267
|
|
1 Yields and interest income on tax-exempt securities and loans are presented on a taxable-equivalent basis using the federal statutory rate of 21%.
|
|
Three months ended
|
|
Amount
|
|
Percent
|
||||||||
(dollars in thousands)
|
March 31, 2020
|
March 31, 2019
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
|||||||
Service charges on deposit accounts
|
$
|
451
|
|
$
|
479
|
|
|
$
|
(28
|
)
|
|
(5.8
|
)%
|
Wealth Management and Trust Services
|
504
|
|
438
|
|
|
66
|
|
|
15.1
|
%
|
|||
Debit card interchange fees, net
|
360
|
|
380
|
|
|
(20
|
)
|
|
(5.3
|
)%
|
|||
Merchant interchange fees, net
|
73
|
|
87
|
|
|
(14
|
)
|
|
(16.1
|
)%
|
|||
Earnings on (cost of) bank-owned life insurance
|
275
|
|
(60
|
)
|
|
335
|
|
|
(558.3
|
)%
|
|||
Dividends on FHLB stock
|
208
|
|
196
|
|
|
12
|
|
|
6.1
|
%
|
|||
Gains (losses) on sale of investment securities, net
|
800
|
|
(6
|
)
|
|
806
|
|
|
(13,433.3
|
)%
|
|||
Other income
|
449
|
|
257
|
|
|
192
|
|
|
74.7
|
%
|
|||
Total non-interest income
|
$
|
3,120
|
|
$
|
1,771
|
|
|
$
|
1,349
|
|
|
76.2
|
%
|
|
Three months ended
|
|
Amount
|
|
Percent
|
|||||||||
(dollars in thousands)
|
March 31, 2020
|
|
March 31, 2019
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
|||||||
Salaries and related benefits
|
$
|
9,477
|
|
|
$
|
9,146
|
|
|
$
|
331
|
|
|
3.6
|
%
|
Occupancy and equipment
|
1,663
|
|
|
1,531
|
|
|
132
|
|
|
8.6
|
%
|
|||
Depreciation and amortization
|
526
|
|
|
556
|
|
|
(30
|
)
|
|
(5.4
|
)%
|
|||
Federal Deposit Insurance Corporation insurance
|
2
|
|
|
179
|
|
|
(177
|
)
|
|
(98.9
|
)%
|
|||
Data processing
|
786
|
|
|
1,015
|
|
|
(229
|
)
|
|
(22.6
|
)%
|
|||
Professional services
|
544
|
|
|
586
|
|
|
(42
|
)
|
|
(7.2
|
)%
|
|||
Directors' expense
|
174
|
|
|
179
|
|
|
(5
|
)
|
|
(2.8
|
)%
|
|||
Information technology
|
250
|
|
|
259
|
|
|
(9
|
)
|
|
(3.5
|
)%
|
|||
Amortization of core deposit intangible
|
213
|
|
|
222
|
|
|
(9
|
)
|
|
(4.1
|
)%
|
|||
Provision for losses on off-balance sheet commitments
|
102
|
|
|
129
|
|
|
(27
|
)
|
|
(20.9
|
)%
|
|||
Other non-interest expense
|
|
|
|
|
|
|
|
|
||||||
Advertising
|
251
|
|
|
211
|
|
|
40
|
|
|
19.0
|
%
|
|||
Other expense
|
1,481
|
|
|
1,515
|
|
|
(34
|
)
|
|
(2.2
|
)%
|
|||
Total other non-interest expense
|
1,732
|
|
|
1,726
|
|
|
6
|
|
|
0.3
|
%
|
|||
Total non-interest expense
|
$
|
15,469
|
|
|
$
|
15,528
|
|
|
$
|
(59
|
)
|
|
(0.4
|
)%
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||
(dollars in thousands)
|
Amortized Cost
|
Fair Value
|
% of Total State and Political Subdivisions
|
|
Amortized Cost
|
Fair Value
|
% of Total State and Political Subdivisions
|
|||||||||||
Within California:
|
|
|
|
|
|
|
|
|||||||||||
|
General obligation bonds
|
$
|
4,591
|
|
$
|
4,814
|
|
4.4
|
%
|
|
$
|
4,597
|
|
$
|
4,813
|
|
6.6
|
%
|
|
Revenue bonds
|
2,882
|
|
2,947
|
|
2.8
|
|
|
2,928
|
|
2,977
|
|
4.2
|
|
||||
|
Tax allocation bonds
|
3,365
|
|
3,450
|
|
3.3
|
|
|
3,376
|
|
3,456
|
|
4.9
|
|
||||
Total within California
|
10,838
|
|
11,211
|
|
10.5
|
|
|
10,901
|
|
11,246
|
|
15.7
|
|
|||||
Outside California:
|
|
|
|
|
|
|
|
|||||||||||
|
General obligation bonds
|
61,640
|
|
63,103
|
|
59.9
|
|
|
45,974
|
|
46,976
|
|
66.1
|
|
||||
|
Revenue bonds
|
30,463
|
|
31,063
|
|
29.6
|
|
|
12,680
|
|
12,648
|
|
18.2
|
|
||||
Total outside California
|
92,103
|
|
94,166
|
|
89.5
|
|
|
58,654
|
|
59,624
|
|
84.3
|
|
|||||
Total obligations of state and political subdivisions
|
$
|
102,941
|
|
$
|
105,377
|
|
100.0
|
%
|
|
$
|
69,555
|
|
$
|
70,870
|
|
100.0
|
%
|
•
|
The soundness of a municipality’s budgetary position and stability of its tax revenues
|
•
|
Debt profile and level of unfunded liabilities, diversity of revenue sources, taxing authority of the issuer
|
•
|
Local demographics/economics including unemployment data, largest taxpayers and local employers, income indices and home values
|
•
|
For revenue bonds, the source and strength of revenue for municipal authorities including the obligor’s financial condition and reserve levels, annual debt service and debt coverage ratio, and credit enhancement (such as insurer’s strength and collateral in escrow accounts)
|
•
|
Credit ratings by major credit rating agencies
|
Capital Ratios for Bancorp
(dollars in thousands)
|
Actual Ratio
|
Adequately Capitalized Threshold1
|
Ratio to be a Well Capitalized Bank Holding Company
|
||||||||||||
March 31, 2020
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
|||
Total Capital (to risk-weighted assets)
|
$
|
324,520
|
|
15.29
|
%
|
≥ $
|
222,784
|
|
≥ 10.50
|
%
|
≥ $
|
212,175
|
|
≥ 10.00
|
%
|
Tier 1 Capital (to risk-weighted assets)
|
$
|
304,448
|
|
14.35
|
%
|
≥ $
|
180,349
|
|
≥ 8.50
|
%
|
≥ $
|
169,740
|
|
≥ 8.00
|
%
|
Tier 1 Capital (to average assets)
|
$
|
304,448
|
|
11.66
|
%
|
≥ $
|
104,422
|
|
≥ 4.00
|
%
|
≥ $
|
130,528
|
|
≥ 5.00
|
%
|
Common Equity Tier 1 (to risk-weighted assets)
|
$
|
301,723
|
|
14.22
|
%
|
≥ $
|
148,523
|
|
≥ 7.00
|
%
|
≥ $
|
137,914
|
|
≥ 6.50
|
%
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||
Total Capital (to risk-weighted assets)
|
$
|
319,317
|
|
15.07
|
%
|
≥ $
|
222,430
|
|
≥ 10.50
|
%
|
≥ $
|
211,838
|
|
≥ 10.00
|
%
|
Tier 1 Capital (to risk-weighted assets)
|
$
|
301,553
|
|
14.24
|
%
|
≥ $
|
180,063
|
|
≥ 8.50
|
%
|
≥ $
|
169,471
|
|
≥ 8.00
|
%
|
Tier 1 Capital (to average assets)
|
$
|
301,553
|
|
11.66
|
%
|
≥ $
|
103,489
|
|
≥ 4.00
|
%
|
≥ $
|
129,361
|
|
≥ 5.00
|
%
|
Common Equity Tier 1 (to risk-weighted assets)
|
$
|
298,845
|
|
14.11
|
%
|
≥ $
|
148,287
|
|
≥ 7.00
|
%
|
≥ $
|
137,695
|
|
≥ 6.50
|
%
|
Capital Ratios for the Bank
(dollars in thousands)
|
Actual Ratio
|
Adequately Capitalized Threshold1
|
Ratio to be Well Capitalized under Prompt Corrective Action Provisions
|
||||||||||||
March 31, 2020
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
|||
Total Capital (to risk-weighted assets)
|
$
|
305,573
|
|
14.40
|
%
|
≥ $
|
222,780
|
|
≥ 10.50
|
%
|
≥ $
|
212,172
|
|
≥ 10.00
|
%
|
Tier 1 Capital (to risk-weighted assets)
|
$
|
285,501
|
|
13.46
|
%
|
≥ $
|
180,346
|
|
≥ 8.50
|
%
|
≥ $
|
169,737
|
|
≥ 8.00
|
%
|
Tier 1 Capital (to average assets)
|
$
|
285,501
|
|
10.94
|
%
|
≥ $
|
104,421
|
|
≥ 4.00
|
%
|
≥ $
|
130,527
|
|
≥ 5.00
|
%
|
Common Equity Tier 1 (to risk-weighted assets)
|
$
|
285,501
|
|
13.46
|
%
|
≥ $
|
148,520
|
|
≥ 7.00
|
%
|
≥ $
|
137,912
|
|
≥ 6.50
|
%
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total Capital (to risk-weighted assets)
|
$
|
309,875
|
|
14.63
|
%
|
≥ $
|
222,437
|
|
≥ 10.50
|
%
|
≥ $
|
211,844
|
|
≥ 10.00
|
%
|
Tier 1 Capital (to risk-weighted assets)
|
$
|
292,111
|
|
13.79
|
%
|
≥ $
|
180,068
|
|
≥ 8.50
|
%
|
≥ $
|
169,476
|
|
≥ 8.00
|
%
|
Tier 1 Capital (to average assets)
|
$
|
292,111
|
|
11.29
|
%
|
≥ $
|
103,488
|
|
≥ 4.00
|
%
|
≥ $
|
129,360
|
|
≥ 5.00
|
%
|
Common Equity Tier 1 (to risk-weighted assets)
|
$
|
292,111
|
|
13.79
|
%
|
≥ $
|
148,291
|
|
≥ 7.00
|
%
|
≥ $
|
137,699
|
|
≥ 6.50
|
%
|
Immediate Changes in Interest Rates (in basis points)
|
Estimated Change in Net Interest Income in Year 1, as percent of Net Interest Income
|
|
Estimated Change in Net Interest Income in Year 2, as percent of Net Interest Income
|
|
up 400
|
(5.0
|
)%
|
7.1
|
%
|
up 300
|
(3.6
|
)%
|
6.3
|
%
|
up 200
|
(2.2
|
)%
|
5.3
|
%
|
up 100
|
(1.0
|
)%
|
3.5
|
%
|
down 100
|
(4.5
|
)%
|
(9.5
|
)%
|
•
|
The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets, and increased unemployment levels. This may lead to an increase in loan delinquencies, problem assets and foreclosures, which may increase loan losses, particularly if businesses remain closed, the impact on the global economy worsens, or more customers draw on their lines of credit or seek additional loans to help finance their businesses.
|
•
|
Collateral securing our loans may decline in value, which could increase credit losses in our loan portfolio and necessitate increases in the allowance for loan losses.
|
•
|
Demand for our products and services may decline, and deposit balances may decrease making it difficult to grow assets and income.
|
•
|
The decline in the target federal funds rate could decrease yields on our assets that exceed the decline in our cost of interest-bearing liabilities, which may reduce our net interest margin.
|
•
|
The adoption of the CECL standard, which is highly dependent on unemployment rate forecasts over the life of our loans, could significantly increase the allowance for credit losses and decrease net income.
|
•
|
The continued market turmoil could reduce our wealth management and trust services revenue.
|
•
|
Our business operations may be disrupted if significant portions of our workforce are unable to work effectively because of illness, quarantines, government actions, and other restrictions in connection with the pandemic.
|
(in thousands, except per share data)
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Programs
|
|
Approximate Dollar Value That May yet Be Purchased Under the Program
|
|
||
Period
|
||||||||||
January 1-31, 2020
|
13,283
|
|
$
|
44.42
|
|
13,283
|
|
$
|
2,376
|
|
February 1-29, 2020
|
20,855
|
|
42.17
|
|
20,855
|
|
1,495
|
|
||
March 1-31, 2020
|
58,526
|
|
30.00
|
|
58,526
|
|
23,241
|
|
||
Total
|
92,664
|
|
38.86
|
|
92,664
|
|
|
|
|
Incorporated by Reference
|
|
|||
Exhibit Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Herewith
|
3.01
|
10-Q
|
001-33572
|
3.01
|
November 7, 2007
|
|
|
3.02
|
10-Q
|
001-33572
|
3.02
|
May 9, 2011
|
|
|
3.02a
|
8-K
|
001-33572
|
3.03
|
July 6, 2015
|
|
|
4.01
|
8-A12B
|
001-33572
|
4.1
|
July 7, 2017
|
|
|
10.01
|
S-8
|
333-218274
|
4.1
|
May 26, 2017
|
|
|
10.02
|
S-8
|
333-221219
|
4.1
|
October 30, 2017
|
|
|
10.03
|
S-8
|
333-227840
|
4.1
|
October 15, 2018
|
|
|
10.04
|
S-8
|
333-167639
|
4.1
|
June 21, 2010
|
|
|
10.05
|
10-Q
|
001-33572
|
10.06
|
November 7, 2007
|
|
|
10.06
|
8-K
|
001-33572
|
10.1
|
January 26, 2009
|
|
|
10.07
|
8-K
|
001-33572
|
99.1
|
October 21, 2010
|
|
|
10.08
|
8-K
|
001-33572
|
10.1
|
January 6, 2011
|
|
|
10.09
|
8-K
|
001-33572
|
10.4
|
January 6, 2011
|
|
|
10.10
|
8-K
|
001-33572
|
10.2
|
November 4, 2014
|
|
|
10.11
|
8-K
|
001-33572
|
10.3
|
November 4, 2014
|
|
|
10.12
|
8-K
|
001-33572
|
10.4
|
June 2, 2015
|
|
|
10.13
|
8-K
|
001-33572
|
10.1
|
October 31, 2007
|
|
|
31.01
|
|
|
|
|
Filed
|
|
31.02
|
|
|
|
|
Filed
|
|
32.01
|
|
|
|
|
Filed
|
|
101.INS
|
Inline XBRL Instance Document
|
|
|
|
|
Filed
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
|
Filed
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
Filed
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
Filed
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
Filed
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
Filed
|
|
|
|
|
|
|
|
Bank of Marin Bancorp
|
|
|
|
(registrant)
|
|
|
|
|
|
|
|
|
|
May 8, 2020
|
|
/s/ Russell A. Colombo
|
|
Date
|
|
Russell A. Colombo
|
|
|
|
President &
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
May 8, 2020
|
|
/s/ Tani Girton
|
|
Date
|
|
Tani Girton
|
|
|
|
Executive Vice President &
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
May 8, 2020
|
|
/s/ David A. Merck
|
|
Date
|
|
David A. Merck
|
|
|
|
Vice President &
|
|
|
|
Financial Reporting Manager
|
|
|
|
(Principal Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Bank of Marin Bancorp (the Registrant);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
|
5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's Board of Directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls over financial reporting.
|
May 8, 2020
|
|
/s/ Russell A. Colombo
|
Date
|
|
Russell A. Colombo
|
|
|
President &
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Bank of Marin Bancorp (the Registrant);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
|
5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's Board of Directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls over financial reporting.
|
May 8, 2020
|
|
/s/ Tani Girton
|
Date
|
|
Tani Girton
|
|
|
Executive Vice President &
|
|
|
Chief Financial Officer
|
May 8, 2020
|
|
/s/ Russell A. Colombo
|
Date
|
|
Russell A. Colombo
|
|
|
President &
|
|
|
Chief Executive Officer
|
May 8, 2020
|
|
/s/ Tani Girton
|
Date
|
|
Tani Girton
|
|
|
Executive Vice President &
|
|
|
Chief Financial Officer
|