Bank Of Marin Bancorp · NASDAQ:BMRC
Bank Of Marin Bancorp — 2024 Janney CEO Forum
31 slides from Bank Of Marin Bancorp's conference presentation, Jan 30, 2024
Slide 1: A strategic and disciplined approach to delivering long-term value
A strategic and disciplined approach to delivering long-term value 2024 Janney CEO Forum January 31 - February 1, 2024
Slide 2: Forward-Looking Statements
2 Nasdaq: BMRC 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
Slide 3: Bank of Marin Bancorp
3 Bank of Marin Bancorp Recent awards: FIVE STAR BANK BAUER Headquarters Novato, California Marin County, North of San Francisco Employees, full-time equivalent 329 Assets $3.8 billion Market Capitalization $355.8 million Ticker BMRC (Nasdaq Capital Markets) Founded 1989 First branch opened in 1990
Slide 4: Management team
Tim Myers President & Chief Executive Officer • 27 years of finance and banking experience • Joined Bank of Marin in 2007 Sathis Arasadi EVP, Chief Information Officer • 32 years of engineering, technology, and fintech experience • Joined Bank of Marin in 2023 Tani Girton EVP, Chief Financial Office
Slide 5: Delivering a Relationship and Community-focused Banking Model on a Regional Scale
5 • 27 retail branches and 8 commercial banking offices located across 10 Northern California counties. • Sound underwriting produces a high-quality loan portfolio with low credit costs and stable earnings through cycles. • Strong deposit base with competitively priced funding source for lending act
Slide 6: Long-term Strategic Priorities
Long-term Strategic Priorities A strategic and disciplined approach to delivering long-term value Drive high-quality LOAN GROWTH Grow NON-INTEREST INCOME Scale through EFFICIENCY GAINS and ACQUISITIONS Invest in TALENT and TECHNOLOGY 6 Nasdaq: BMRC
Slide 7: Fourth Quarter 2023 Repositioned the Balance Sheet
Fourth Quarter 2023 7 Nasdaq: BMRC Repositioned the Balance Sheet • Sold $131.9 million (net proceeds $126.0 million) AFS securities yielding 1.50%1 • Funded $53.8 million in loans at an average rate of 7.15%1 • Reduced borrowings by $94.0 million that was costing 5.15%1 • Retained an average cash b
Slide 8: Dependable Long-Term Earnings Support Dividend Growth
$1.52 $1.89 $1.27 $2.33 $2.48 $2.22 $2.30 $2.92 $1.24 $0.45 $0.51 $0.56 $0.64 $0.80 $0.92 $0.94 $0.98 $1.00 $18.4 $23.1 $16.0 $32.6 $34.2 $30.2 $33.2 $46.6 $19.9 Earnings per Share Dividends per Share Net Income 2015 2016 2017 2018 2019 2020 2021 2022 2023 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $
Slide 9: Strategic Balance Sheet Repositioning During the Quarter
(in thousands) Market Value AFS & HTM Securities T/E Book Yield Effective Duration Pre-Tax Unrealized Gains (Losses) Pre-Tax Realized Losses After-Tax Realized Losses1 AFS % of Total Investments Securities Portfolio as of 9/30/2023 $1,442,031 2.24% 4.9 $(248,149) N/A N/A 45% Q4 Securities Sales $125
Slide 10: Tax Equivalent Net Interest Margin
Tax Equivalent Net Interest Margin 10 Nasdaq: BMRC 1 Peer group includes major exchange-traded Western region banks with assets of $2 billion to $10 billion. Peer data as of September 30, 2023. 2 Includes one peer bank with a unique business model and a NIM of 7.1% in Q1, 7.6% in Q2 and in Q3. Exclu
Slide 11: Net Interest Margin Drivers
Net Interest Margin Drivers 11 Nasdaq: BMRC • Linked-quarter NIM increased 5 basis points, due primarily to reduction in borrowings and higher rates on loans and investments, partially offset by higher deposit rates • The cost of deposits increased to 123 basis points in the month of December compar
Slide 12: High-Quality Securities Portfolio Generates Cash Flow
HTM Securities Portfolio Agency MBS/CMO 74% GSEs 16% Municipal Bonds 7% Corporate Bonds 3% AFS Securities Portfolio Agency MBS/CMO 64% GSEs 12% Municipal Bonds 17% SBA 3% Corporate Bonds & Other 2% USTs 2% High-Quality Securities Portfolio Generates Cash Flow Data as of 12/31/23 12 Nasdaq: BMRC $552
Slide 13: Strong Liquidity: $2.0 Billion in Net Availability
Strong Liquidity: $2.0 Billion in Net Availability 13 Nasdaq: BMRC At December 31, 2023 ($ in millions) Total Available Amount Used Net Availability Internal Sources Unrestricted Cash 1 $ 13.5 N/A $ 13.5 Unencumbered Securities 501.7 N/A 501.7 External Sources FHLB line of credit 1,009.0 $ — 1,009.0
Slide 14: Strong Deposit Franchise
Strong Deposit Franchise 14 Nasdaq: BMRC • Deposit mix continues to favor a high percentage of non-interest bearing deposits • Total cost of deposits was 1.15% (interest-bearing 2.13%) for Q4 and 1.23% (interest-bearing 2.24%) for the month of December • Time deposit balances grew $18.9 million in Q
Slide 15: Granular Deposit Account Composition
15 • 29% of Q4 new accounts consisted of new relationships to the Bank • 45% of Q4 new accounts were interest-bearing by count • 80% of Q4 new accounts were interest-bearing in dollars at a weighted average rate of 2.79% • Reciprocal deposit network program (expanded FDIC insurance products) utiliza
Slide 16: Efficiency Ratio - Disciplined Expense Control with Significant Events
Efficiency Ratio - Disciplined Expense Control with Significant Events 16 Nasdaq: BMRC 1 Peer group includes major exchange-traded Western region banks with assets of $2 billion to $10 billion. Peer data as of September 30, 2023. 2 Efficiency ratios updated with non-GAAP adjustments excluding merger
Slide 17: Prudent, Sustainable Model for Loan Growth
Prudent, Sustainable Model for Loan Growth ($ billions) Five-year compound annual loan growth rate: 3.3%1 1 Compounded annual growth rate from December 31, 2018 to December 31, 2023 2 Includes ARB loan base acquired in Q3 2021 $1.764 $1.843 $2.089 $2.256 $2.093 $2.074 Non-PPP Loans SBA PPP Loans 201
Slide 18: History of Strong Asset Quality
History of Strong Asset Quality 18 Nasdaq: BMRC • Consistent, robust credit culture and underwriting principles support strong asset quality • Non-accrual loans continue to remain at low levels • Net charge-offs have consistently been negligible for the last five years, except that in Q4 2023 charge
Slide 19: Well-diversified Loan Portfolio
Well-diversified Loan Portfolio As of 12/31/23 - No material changes from Q3 2023 19 Nasdaq: BMRC • The loan portfolio is well-diversified across borrowers, industries, loan and property types within our geographic footprint — 86% of all loans and 93% of loans excluding nonprofit organizations are g
Slide 20: Non-owner Occupied Office Exposure
Non-owner Occupied Office Exposure As of 12/31/23 - No material changes from Q3 2023 20 Nasdaq: BMRC • $373 million in credit exposure spread across our lending footprint comprised of 153 loans • $2.4 million average loan balance – largest loan at $16.9 million • 59% weighted average loan-to-value a
Slide 21: NOO-CRE Portfolio Diversified Across Property Type & County
NOO-CRE Portfolio Diversified Across Property Type & County As of 12/31/23 - No material changes from Q3 2023 21 Nasdaq: BMRC Retail as of 4Q23 Warehouse & Industrial as of 4Q23 Multi-Family as of 3Q23 Marin, 17% Sonoma, 15% San Francisco, 3% Alameda, 6% Sacramento, 20% Napa, 16% Other Bay Area, 14%
Slide 22: Owner-Occupied CRE Portfolio
Owner-Occupied CRE Portfolio As of 12/31/23 - No material changes from Q3 2023 22 Nasdaq: BMRC Alameda, 15% Marin, 21% Napa, 17% Sacramento, 18% Sonoma, 10% Other, 19% OO CRE by Type as of 4Q23 OO CRE by County as of 4Q23 Office, 19% Industrial, 23% Retail, 7% School, 15% Wine, 11% Church, 6% Gas st
Slide 23: Construction Portfolio Concentrated in Lower-Risk Property Segments
Construction Portfolio Concentrated in Lower-Risk Property Segments As of 12/31/23 - No material changes from Q3 2023 23 Nasdaq: BMRC Marin, 5% Sonoma, 1% San Francisco, 44% Alameda, 33% Other Bay Area, 17% Construction by Type as of 4Q23 Construction by County as of 4Q23 Multi-family, 61% Self Stor
Slide 24: Low Refinance Risk in NOO CRE Portfolio through 2025
Low Refinance Risk in NOO CRE Portfolio through 2025 24 Nasdaq: BMRC # of loans Commitment Outstanding Balance Wtd. Avg. Rate Wtd. Avg. DSC 2024 14 $40.3MM $34.3MM 5.47% 1.69x 2025 27 $80.1MM $74.9MM 4.62% 1.52x TOTAL 41 $120.4MM $109.2MM # of loans Commitment Outstanding Balance Wtd. Avg. Rate Wtd.
Slide 25: Loans & Securities — Repricing & Maturity
Loans & Securities — Repricing & Maturity $ in millions, unless otherwise indicated 25 Nasdaq: BMRC Total Loans1 (1) Amounts represent amortized cost. Based on maturity date for fixed rate loans and variable rate loans at their floors and ceilings and next repricing date for all other variable rate
Slide 26: Robust Capital Ratios
6.5% 8.0% 10.0% 5.0% 15.9% 15.9% 16.9% 10.5% 9.7% 7.8% Well Capitalized Threshold Bank of Marin Bancorp Bancorp TCE adj. for HTM securities* Common Equity Tier-One Risk-Based Capital Total Tier-One Risk-Based Capital Total Risk-Based Capital Tier-One Leverage Tangible Common Equity *See Reconciliati
Slide 27: AOCI and Tangible Equity
AOCI and Tangible Equity M ill io ns $373.0 $378.7 $389.0 $398.4 $407.9 $414.6 $416.2 $418.4 $415.5 $371.0 $341.4 $331.0 $318.4 $334.2 $352.6 $346.8 $341.8 $362.5 $37.3 $58.0 $80.0 $73.7 $62.0 $69.4 $76.6 $53.0 35.0% 40.0% 42.0% 40.8% 42.8% 42.5% 42.0% 39.5% 38.8% 8.8% 8.0% 7.8% 7.5% 8.2% 8.7% 8.6%
Slide 28: Peer Comparisons
Peer Comparisons Performance Measures (dollars in thousands) BMRC Q3 2023 Peer Median Q3 2023 Percentile BMRC FY 2022 Peer Median FY 2022 Percentile Non-Interest Bearing/Total Deposits 47.69 % 30.90 % 100.0 % 51.47 % 36.44 % 100.0 % Gross Loan Growth Rate (year-over-year) (3.31) % 4.05 % 1.8 % (7.23
Slide 29: Appendix
Appendix /é. Bank of Marin Bancorp
Slide 30: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures 30 Nasdaq: BMRC (in thousands, unaudited) December 31, 2023 Tangible Common Equity - Bancorp Total stockholders' equity $ 439,062 Goodwill and core deposit intangible (76,520) Total TCE a 362,542 Unrealized losses on HTM securities, net of tax (7
Slide 31: Contact Us
Contact Us 31 Nasdaq: BMRC Tim Myers President & Chief Executive Officer (415) 763-4970 timmyers@bankofmarin.com Tani Girton EVP, Chief Financial Officer (415) 884-7781 tanigirton@bankofmarin.com Media Requests: Yahaira Garcia-Perea Marketing & Corporate Communications Manager (916) 231-6703 yahaira