Bank Of Marin Bancorp · NASDAQ:BMRC
Bank Of Marin Bancorp — KBW Virtual West Coast Bank Field Trip 2023
30 slides from Bank Of Marin Bancorp's conference presentation, Nov 3, 2023
Slide 1: A strategic and disciplined approach to delivering long-term value
A strategic and disciplined approach to delivering long-term value KBW Virtual West Coast Bank Field Trip November 7, 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 334 Assets $4.0 billion Market Capitalization $271 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: 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: Third Quarter 2023 Highlights
Third Quarter 2023 Highlights 7 Nasdaq: BMRC Earnings and Profitability • Net Income of $5.3 million • Diluted EPS of $0.33 • Return on Average Assets of 0.52% • Return on Average Equity of 4.94% Key Operating Trends Loans and Credit Quality Deposits and Liquidity Capital • Tax-equivalent NIM of 2.4
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. 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. Exclud
Slide 10: Net Interest Margin Drivers
Net Interest Margin Drivers 10 Nasdaq: BMRC • Linked-quarter NIM increased 3 bps, due primarily to security sales proceeds maintained in higher interest-bearing cash balances • The cost of deposits increased to 100 bps in the month of September compared to 82 bps in June 2023. • The current cycle be
Slide 11: Loans & Securities — Repricing & Maturity
Loans & Securities — Repricing & Maturity $ in millions, unless otherwise indicated 11 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 12: Low Efficiency Ratio Demonstrates Disciplined Expense Control
Low Efficiency Ratio Demonstrates Disciplined Expense Control 12 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. 1 57.3% 55.2% 55.6% 63.1% 54.4% 60.2% 76.9% 73.0% 62.0% 62.5% 59.4% 61.7% 57.0%
Slide 13: Strong Deposit Franchise
Strong Deposit Franchise 13 Nasdaq: BMRC • Total deposits increased $118.5 million, or 3.6%, compared to June 30, 2023 • Deposit mix continues to favor a high percentage of non-interest bearing deposits • Total cost of deposits of 0.94% (interest-bearing 1.81%) for the quarter and 1.00% (interest-be
Slide 14: Granular Deposit Account Composition
14 • YTD new accounts total over 3,600. • Q3 new accounts 50% interest-bearing by count • Q3 new accounts 83% interest-bearing in dollars at a weighted rate of 3.42% • Reciprocal deposit network program (expanded FDIC insurance products) utilization grew by $62.3 million in Q3. Granular Deposit Acco
Slide 15: Strong Liquidity: $2.1 Billion in Net Availability
Strong Liquidity: $2.1 Billion in Net Availability 15 Nasdaq: BMRC At September 30, 2023 ($ in millions) Total Available Amount Used Net Availability Internal Sources Unrestricted Cash $ 102.6 N/A $ 102.6 Unencumbered Securities 613.7 N/A 613.7 External Sources FHLB 1,023.2 $ — 1,023.2 FRB 331.9 (12
Slide 16: 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 59%GSEs 18% Municipal Bonds 13% SBA 4% Corporate Bonds & Other 5% USTs 1% High-Quality Securities Portfolio Generates Cash Flow Data as of 9/30/23 16 Nasdaq: BMRC $658.8
Slide 17: 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 $371.0 $341.4 $331.0 $318.4 $334.2 $352.6 $346.8 $341.8 $37.3 $58.0 $80.0 $73.7 $62.0 $69.4 $76.6 35.0% 40.0% 42.0% 40.8% 42.8% 42.5% 42.0% 39.5% 8.8% 8.0% 7.8% 7.5% 8.2% 8.7% 8.6% 8.6% Tangible Equity (net
Slide 18: Prudent, Sustainable Model for Loan Growth
Prudent, Sustainable Model for Loan Growth ($ billions) Five-year compound annual loan growth rate: 3.8% 1 1 Compounded annual growth rate from September 30, 2018 to September 30, 2023 2 Includes ARB loan base acquired in Q3 2021 $1.764 $1.843 $2.087$2.089 $2.256 $2.093 $2.112 $2.103 Non-PPP Loans S
Slide 19: Well-diversified Loan Portfolio
Well-diversified Loan Portfolio As of 9/30/23 - No material changes to Q2 2023 19 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 20: Non-owner Occupied Office Exposure
Non-owner Occupied Office Exposure As of 9/30/23 - No material changes to Q2 2023 20 Nasdaq: BMRC • $364 million in exposure spread across our lending footprint comprised of 142 loans • $2.6 million average loan balance – largest loan at $17.0 million • 56% weighted average loan-to-value and 1.68x w
Slide 21: NOO-CRE Portfolio Diversified Across Property Types & Geographies
NOO-CRE Portfolio Diversified Across Property Types & Geographies As of 9/30/23 - No material changes to Q2 2023 21 Nasdaq: BMRC Retail as of 3Q23 Warehouse & Industrial as of 3Q23 Multi-Family as of 3Q23 Marin, 18% Sonoma, 17% San Francisco, 3% Alameda, 6% Sacramento, 14% Napa, 18% Other Bay Area,
Slide 22: Owner-Occupied CRE Portfolio
Owner-Occupied CRE Portfolio As of 9/30/23 22 Nasdaq: BMRC Alameda, 14% Marin, 23% Napa, 17% Sacramento, 12% Sonoma, 10% Other, 24% OO CRE by Type as of 3Q23 OO CRE by County as of 3Q23 Office, 18% Industrial, 23% Retail, 7% School, 15% Wine, 10% Church, 7% Gas station/auto, 8% Heath club, 4% Mixed
Slide 23: Construction Portfolio Concentrated in Lower-Risk Property Segments
Construction Portfolio Concentrated in Lower-Risk Property Segments As of 9/30/23 - No material changes to Q2 2023 23 Nasdaq: BMRC Marin, 8% Sonoma, 1% San Francisco, 47% Alameda, 29% Other Bay Area, 15% Construction by Type as of 3Q23 Construction Portfolio by County as of 3Q23 Multi-family, 65% Se
Slide 24: Low Refinance Risk in NOO CRE Portfolio through 2024
Low Refinance Risk in NOO CRE Portfolio through 2024 24 Nasdaq: BMRC # of loans Commitment Outstanding Balance Wtd. Avg. Rate Wtd. Avg. DSC Q4 2023 4 $12.6MM $11.6MM 3.80% 1.28x 2024 15 $43.0MM $36.9MM 4.73% 1.66x TOTAL 19 $55.6MM $48.5MM # of loans Commitment Outstanding Balance W.A. Rate Wtd. Avg.
Slide 25: History of Excellent Asset Quality
History of Excellent Asset Quality 25 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 26: 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 27: Robust Capital Ratios
6.5% 8.0% 10.0% 5.0% 15.6% 15.6% 16.6% 10.2% 8.6% 6.1% 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 28: Appendix
Appendix /é. Bank of Marin Bancorp
Slide 29: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures 29 Nasdaq: BMRC (in thousands, unaudited) June 30, 2023 Tangible Common Equity - Bancorp Total stockholders' equity $ 418,618 Goodwill and core deposit intangible (76,850) Total TCE a 341,768 Unrealized losses on HTM securities, net of tax (107,0
Slide 30: Contact Us
Contact Us 30 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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