Bank Of Marin Bancorp · NASDAQ:BMRC
Bank Of Marin Bancorp — Stephens 13th Annual Bank Forum 2023
28 slides from Bank Of Marin Bancorp's conference presentation, Sep 19, 2023
Slide 1: A strategic and disciplined approach to delivering long-term value
A strategic and disciplined approach to delivering long-term value Stephens 13th Annual Bank Forum September 19 - 20, 2023
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 317 Assets $4.1 billion Market Capitalization $303 million Ticker BMRC (Nasdaq Capital Markets) Founded 1989 First branch opened in 1990 Pi
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 • 30 years of engineering, technology, and fintech experience • Joined Bank of Marin in 2023 Tani Girton EVP, Chief Financial Office
Slide 5: 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 ac
Slide 6: Second Quarter 2023 Highlights
Second Quarter 2023 Highlights 6 Nasdaq: BMRC Earnings and Profitability • Net Income of $4.6 million • Diluted EPS of $0.28 • Return on Average Assets of 0.44% • Return on Average Equity of 4.25% Key Operating Trends Loans and Credit Quality Deposits and Liquidity Capital • Tax-equivalent NIM of 2.
Slide 7: Actions and Results Subsequent to Second Quarter through September 12th
Actions and Results Subsequent to Second Quarter through September 12th 7 Nasdaq: BMRC Deposits Borrowings and Liquidity Interest Rate Risk Investment Securities Loans and Credit Quality • Cash increased $88 million to $127 million • Borrowings down another $142 million to $150 million with excess c
Slide 8: Dependable Earnings and Dividend Growth
$2.33 $2.48 $2.22 $2.30 $2.92 $0.64 $0.80 $0.92 $0.94 $0.98 $32.6 $46.6 Earnings per Share Dividends per Share Net Income 2018 2019 2020 2021 2022 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 Dependable Earnings and Dividend Growth 8 Nasdaq: BMRC D o
Slide 9: Tax Equivalent Net Interest Margin
Tax Equivalent Net Interest Margin 9 Nasdaq: BMRC 1 Peer group includes major exchange-traded Western region banks with assets of $2 billion to $10 billion. Latest available peer data as of June 30, 2023. 2 Includes one peer bank with a unique business model and a NIM of 7.1% in Q1 and 7.6% in Q2. E
Slide 10: Net Interest Margin Drivers
Net Interest Margin Drivers 10 Nasdaq: BMRC • Linked-quarter NIM decreased 59 bps, due primarily to higher deposit costs and borrowing balances, partially offset by higher loan yields. • The cost of deposits increased to 82 bps in the month of June compared to 40 bps in March 2023. • Our increase in
Slide 11: Low Efficiency Ratio Demonstrates Disciplined Expense Control
Low Efficiency Ratio Demonstrates Disciplined Expense Control 11 Nasdaq BMRC 1 Peer group includes major exchange-traded Western region banks with assets of $2 billion to $10 billion. Latest available peer data as of June 30, 2023. 1 57.3% 55.2% 55.6% 63.1% 54.4% 60.2% 76.9% 62.0% 62.5% 59.4% 61.7%
Slide 12: Strong Deposit Franchise
Strong Deposit Franchise 12 Nasdaq: BMRC • Total deposits increased $74.6 million, or 2.3%, compared to March 31, 2023 • Deposit mix continues to favor a high percentage of non-interest bearing deposits • Total cost of deposits of 0.69% (interest-bearing 1.37%) for the quarter and 0.82% (interest-be
Slide 13: New Account Activity and Deposit Outreach
13 • Proactive outreach and relationship management continues to make us the Bank of choice with 1432 new accounts opened in the quarter (excludes new reciprocal accounts), bringing the YTD total to over 2400 new accounts. The Q2 portion is comprised 87% of interest-bearing accounts at a weighted av
Slide 14: Strong Liquidity: $2.0 Billion in Net Availability
Strong Liquidity: $2.0 Billion in Net Availability 14 Nasdaq: BMRC At June 30, 2023 ($ in millions) Total Available Amount Used Net Availability Internal Sources Unrestricted Cash $ 16.7 $ — $ 16.7 Unencumbered Securities 761.5 — 761.5 External Sources FHLB 1,033.8 (292.2) 741.6 FRB 337.0 — 337.0 Co
Slide 15: High-Quality Securities Portfolio Generates Cash Flow
HTM Securities Portfolio Agency MBS/CMO 75% GSEs 15% Municipal Bonds 7% Corporate Bonds 3% AFS Securities Portfolio Agency MBS/CMO 59%GSEs 18% Municipal Bonds 13% SBA 5% Corporate Bonds & Other 4% USTs 1% High-Quality Securities Portfolio Generates Cash Flow Data as of 6/30/23 15 Nasdaq: BMRC $770.9
Slide 16: 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 $371.0 $341.4 $331.0 $318.4 $334.2 $352.6 $346.8 $37.3 $58.0 $80.0 $73.7 $62.0 $69.4 35.0% 40.0% 42.0% 40.8% 42.8% 42.5% 42.0% 8.8% 8.0% 7.8% 7.5% 8.2% 8.7% 8.6% Tangible Equity (net AOCL Impact) Accumulated Other
Slide 17: Prudent, Sustainable Model for Loan Growth
Prudent, Sustainable Model for Loan Growth ($ billions) Five-year compound annual loan growth rate: 4.1% 1 1 Compounded annual growth rate from June 30, 2018 to June 30, 2023. 2 Includes ARB loan base acquired in Q3 2021. $1.76 $1.84 $2.09 $2.26 $2.09 $2.11 $2.10 Non-PPP Loans SBA PPP Loans 2018 201
Slide 18: Well-diversified Loan Portfolio
Well-diversified Loan Portfolio As of 6/30/23 - No material changes to Q1 2023 18 Nasdaq: BMRC • The loan portfolio is well-diversified across borrowers, industries, loan and property types within our geographic footprint — 93% of loans are guaranteed by borrower guarantors • Non-owner occupied comm
Slide 19: Non-owner Occupied Office Exposure
Non-owner Occupied Office Exposure As of 6/30/23 - No material changes to Q1 2023 19 Nasdaq: BMRC • $366 million in exposure spread across our 10-county footprint comprised of 142 loans • $2.6 million average loan balance – largest loan at $17.1 million • 55% average loan-to-value and 1.67x average
Slide 20: NOO-CRE Portfolio Diversified Across Property Types & Geographies
NOO-CRE Portfolio Diversified Across Property Types & Geographies As of 6/30/23 - No material changes to Q1 2023 20 Nasdaq: BMRC Retail as of 2Q23 Warehouse & Industrial as of 2Q23 Multi-Family as of 2Q23 Marin, 18% Sonoma, 16% San Francisco, 3% Alameda, 8% Sacramento, 14% Napa, 18% Other Bay Area,
Slide 21: Construction Portfolio Concentrated in Lower-Risk Property Segments
Construction Portfolio Concentrated in Lower-Risk Property Segments As of 6/30/23 - No material changes to Q1 2023 21 Nasdaq: BMRC Marin, 8% Sonoma, 1% San Francisco, 49% Alameda, 27% Other Bay Area, 15% Construction by Type as of 1Q23 Construction Portfolio by County as of 1Q23 Multi-family, 66% Se
Slide 22: History of Excellent Asset Quality
History of Excellent Asset Quality 22 Nasdaq: BMRC • Consistent, robust credit culture and underwriting principles have supported excellent asset quality • Non-accrual loans continue to remain at historically low levels • Net charge-offs have consistently been negligible for the last five years. • A
Slide 23: Peer Comparisons
Peer Comparisons Performance Measures (dollars in thousands) BMRC Q2 2023 Peer Median Q2 2023 Percentile BMRC FY 2022 Peer Median FY 2022 Percentile Non-Interest Bearing/Total Deposits 47.78 % 30.93 % 100.0 % 51.47 % 36.44 % 100.0 % Gross Loan Growth Rate (year-over-year) (2.77) % 7.08 % 1.3 % (7.23
Slide 24: Robust Capital Ratios as of 6/30/23
Robust Capital Ratios as of 6/30/23 6.5% 8.0% 10.0% 5.0% 15.5% 15.5% 16.4% 10.1% 8.6% 6.7% 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 Tang
Slide 25: 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 25 Nasdaq: BMRC
Slide 26: Appendix
Appendix /é. Bank of Marin Bancorp
Slide 27: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures 27 Nasdaq: BMRC (in thousands, unaudited) June 30, 2023 Tangible Common Equity - Bancorp Total stockholders' equity $ 423,941 Goodwill and core deposit intangible (77,185) Total TCE a 346,756 Unrealized losses on HTM securities, net of tax (85,04
Slide 28: Contact Us
Contact Us 28 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
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