D.A. Davidson 26th Annual Financial Institutions Conference
M a y 8 - 1 0 , 2 0 2 4
Forward-Looking Statements
This discussion of financial results includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the "1933 Act") and Section 21E of the Securities Exchange Act of 1934, as amended, (the "1934 Act"). Those sections of the 1933 Act and 1934 Act provide a "safe harbor" for forward-looking statements to encourage companies to provide prospective information about their financial performance so long as they provide meaningful, cautionary statements identifying important factors that could cause actual results to differ significantly from projected results. Our forward-looking statements include descriptions of plans or objectives of management for future operations, products or services, and forecasts of revenues, earnings or other measures of economic performance. 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 preceded by "will," "would," "should," "could" or "may." Forward-looking statements are based on management's current expectations regarding economic, legislative, and regulatory issues that may affect our earnings in future periods. Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions and the economic uncertainty in the United States and abroad, including economic or other disruptions to financial markets caused by acts of terrorism, war or other conflicts, impacts from inflation, supply chain disruptions, changes in interest rates (including the actions taken by the Federal Reserve to control inflation), California's unemployment rate, deposit flows, real estate values, and expected future cash flows on loans and securities; the impact of adverse developments at other banks, including bank failures, that impact general sentiment regarding the stability and liquidity of banks; costs or effects of acquisitions; competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; natural disasters (such as wildfires and earthquakes in our area); adverse weather conditions; 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 our operations, pricing, products and services; and successful integration of acquisitions. Important factors that could cause results or performance to materially differ from those expressed in our prior forward-looking statements are detailed in ITEM 1A, Risk Factors sections of our December 31, 2023 Form 10-K and March 31, 2024 Form 10-Q as filed with the SEC, copies of which are available from us at no charge. Forward-looking statements speak only as of the date they are made. 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 that occur after the date of this press release or to reflect the occurrence of unanticipated events.
GAAP to Non-GAAP Financial Measures
This presentation includes some non-GAAP financial measures as shown in the Appendix of this presentation. Please refer to the reconciliation of GAAP to Non-GAAP financial measures included in our Form 8-K under Item 9 - Financial Statements and Exhibit 99.1 filed with the SEC on April 29, 2024.
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F r a n c h i s e H i g h l i g h t s
S E C T I O N 01
Bank of Marin Bancorp
BMRC AT A GLANCE
BMRC | Novato, CA |
NASDAQ | Headquarters |
$3.8 Billion | $273.1 Million |
Total Assets | Market Cap |
17.05% | 5.96% |
Total RBC | Dividend Yield |
Data as of March 31, 2024
27 Full-Service Branch Locations
- Commercial Banking Offices
Relationship Banking
Build strong, long-term customer relationships based on trust, integrity and expertise, inspiring loyalty though exceptional service.
Disciplined Fundamentals
Apply a disciplined business approach with sound banking practices, high quality products, and consistent fundamentals ensuring continued strong results.
Community Commitment
Give back to the communities that we serve through active employee volunteerism, nonprofit board leadership and financial contributions.
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261 Years of Combined Experience Through Various Economic Cycles
Tim Myers | Sathis Arasadi | David Bloom | |||||
President and Chief Executive Officer | EVP, Chief Information Officer | EVP, Head of Commercial Banking | |||||
• | 27 years of finance and | • | 32 years of engineering, | • | 30 years of commercial | ||
banking experience | technology, and fintech experience | banking experience | |||||
• | Joined Bank of Marin in 2007 | • | Joined Bank of Marin in 2023 | • | Joined Bank of Marin in 2023 |
Brandi Campbell
EVP, Head of Retail Banking
- 37 years of banking experience
- Joined Bank of Marin in 2019
Tani Girton | Bob Gotelli | |||
EVP, Chief Financial Officer | EVP, Human Resources Director | |||
• | 40 years of financial services | • | 31 years of human | |
experience | resources experience | |||
• | Joined Bank of Marin in 2013 | • | Joined Bank of Marin in 2000 |
Nikki Sloan | Misako Stewart | |||
EVP, Head of Growth and Strategy | EVP, Chief Credit Officer | |||
• | 30 years of banking experience | • | 34 years of banking experience | |
• | Joined Bank of Marin in 2021 | • | Joined Bank of Marin in 2013 |
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Long-TermA strategic and disciplined approach to delivering long-term value
Strategic Priorities
0 1
Drive high-qualityLOAN GROWTH
0 2 | Grow NON-INTEREST INCOME |
0 3 | Scale through EFFICIENCY GAINS |
and ACQUISITIONS |
0 4 Invest in TALENT and TECHNOLOGY
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First Quarter 2024 Highlights
Activities
Capital
Key Operating Trends
Deposits and Liquidity
Loans and Credit Quality
- Originated new loans at an average rate of 8.18%, 266 bps higher than Q1 payoff rates
- Reduced borrowings by $26.0 million costing 5.15%
- Maintained non-interest bearing deposit balances
- Made opportunistic new hires and implemented new compensation plans positively impacting loan pipeline
- Bancorp total risk-based capital of 17.1%
- Bancorp TCE / TA of 9.8%, 7.7% when adjusted for HTM securities 1
- Tax-equivalentyield on interest-earning assets of 3.75%, up 7 bps from 4Q23
- Tax-equivalentnet interest margin stabilized at 2.50% from 2.53% in 4Q23
- Cost of deposits up 23 bps in 1Q24
- Non-interestbearing deposits stay strong at 44% of total deposits
- Total cost of deposits was 1.38% (interest-bearing 2.46%) for Q1 and 1.41% (interest-bearing 2.50%) for the month of March.
- Total deposits decreased 0.2% from 4Q23
- Uninsured deposits estimated to represent 28% of total deposits
- Net available funding $1.9 billion
- Strong liquidity provides 208% coverage of estimated uninsured deposits
- No material formation of new problem credits. Previously identified problem credits continuing through the workout and resolution process.
- Non-accrualloans at 0.31% of total loans (from 0.39% at Q423), down 21% in balances due largely to payoffs and paydowns
- Classified loans of 2.67% of total loans (from 1.56% at Q423), evidencing diligent credit risk monitoring
- $350 thousand provision for credit losses
- Total portfolio loan balances decreased 0.9% from 4Q23
(1) See Reconciliation of Non-GAAP Financial Measures in the Appendix
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Focused on Building Long-Term Shareholder Value
Strong Core Deposit Franchise
Largest community bank in Marin County with 12.3% market share 1
44% non-interest bearing deposits with a 1.38% cost of deposits in Q1 2024
Robust Capital Levels & Liquidity
Regulatory capital ratios remain comfortably above "well-capitalized" thresholds $1.9 billion in available liquidity
Improving Margin Outlook
Improving asset yield due to:
- weighted average rates on loan originations were 266bps higher than Q1 payoffs
- $320 million in loans repricing over next 12 months
- signs of deceleration in funding costs late in Q1
Prudent Loan Growth
Markets with proven track record of organic growth
Key opportunistic relationship banking talent acquisitions due to market dislocation 63% loan-to-deposit ratio provides runway for additional growth
Seasoned Risk Management
Historically low non-performing loans through credit cycles
Low NOO CRE office exposure in the City of San Francisco at 3% of total loans (6% of total NOO-CRE) and a weighted average 70% LTV
Less than 2.5% of multi family CRE exposure
1Source: S&P Global Market Intelligence - FDIC deposit market share data as of June 30, 2023 | 8 |
Focused on delivering Long-Term, Consistent Growth
• Proven ability to grow both |
organically and through M&A |
• Consistent cash dividend provides |
Tangible Book Value Per Share and Cumulative Cash Dividends
$30.00
$25.45 $25.72 $25.51
$25.00 | $23.09 | $23.42 | |
$21.91 | |||
$20.57 | |||
$20.00 | $18.35 | $18.99 |
stable and reliable return for |
shareholders |
$15.00
$10.00
$15.89 $16.87
$14.51
$6.56 | $7.56 | $7.81 | ||||||||||||||
$5.58 | ||||||||||||||||
$4.64 | ||||||||||||||||
$5.00 | $3.72 | |||||||||||||||
$1.73 | $2.29 | $2.92 | ||||||||||||||
$1.22 | ||||||||||||||||
$0.37 | $0.77 | |||||||||||||||
$- | ||||||||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 1Q24 | |||||
Cumulative Cash Dividends | TBVPS | TBVPS (Excl AOCI) | ||||||||||||||
Note: Tangible book value per share (TBVPS) equals total shareholders' equity, less intangible assets including goodwill and core deposit intangibles, divided by outstanding common shares at period end. Accumulated other comprehensive income (AOCI) represents the unrealized gains (losses) on available-for-sale securities, net of tax. Components of these calculations were derived from our financial reports filed with the SEC for each respective period. Additional information for Q1 2024 can be found in the Reconciliation of Non-GAAP Financial Measures in the Appendix.
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Robust Capital Ratios
As of March 31, 2024
- We maintained high capital levels and are in a position of strength
- Total risk-based capital increased 16 basis points in 1Q24 to 17.1%
- Tangible common equity ratio improved 3 basis points in 1Q24 to 9.8%
- No repurchases in 1Q24, as we continue to build upon our strong capital
17.1%
16.0%16.0%
10.0% | 10.9% |
9.8% | |
8.0% | 7.7% |
6.5%
5.0%
Common Equity Tier- | Total Tier-One Risk- | Total Risk-Based Capital | Tier-One Leverage | Tangible Common | |||
One Risk-Based Capital | Based Capital | Equity | |||||
Well Capitalized Threshold | Bank of Marin Bancorp | Bancorp TCE adj. for HTM securities* | |||||
* See Reconciliation of Non-GAAP Financial Measures in the Appendix.
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Bank of Marin Bancorp published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 15:08:03 UTC.