Bank of Marin 3Q earnings jump 54%

Bank of Marin Bancorp (Nasdaq: BMRC) on Monday reported third-quarter earnings of $8.7 million, another record period for the Novato-based community bank and a 54.9 percent increase from a year before and comes amid expansion into Sonoma County and the East Bay.

Diluted Earnings per share for the quarter, ended Sept. 30, were $1.23, up 48 percent. And earnings over three quarters this year, at $23.0 million, also were 54 percent ahead of the pace for 2017 and up 35.6 percent per share.

“It is balanced growth and performance across our business,” said Jim Kimball, chief operating officer.

Bank of Marin continues its expansion north and east, appointing new leaders for those markets. On Friday, the institution promoted David Casassa to senior vice president and regional manager for Santa Rosa. His 20-year banking career includes commercial banking manager at the Novato headquarters.

Also on Friday, the bank hired Berkeley resident Wim-Kees van Hout as regional manager for Walnut Creek.

“Those are significant moves for the bank,” Colombo said.

After acquiring Bank of Alameda, Bank of Marin has operated a commercial banking office in Oakland plans to open a Walnut Creek office as soon as space is secured, according to Russ Colombo, president and CEO.

Though the East Bay market is bigger than the North Bay, markets such as Walnut Creek are well-suited to community banks, Colombo said.

“The business community is much like Marin, with essential services and a lot of commercial services,” Colombo said.

Along with the report on its third-quarter results, Bank of Marin continued its four-and-a-half-year trend of rewarding investors and also took further steps, officials said, to boost liquidity and cut costs, the institution announced Monday.

The bancorp board of directors declared a cash dividend of 35 cents per share, a 3 cent increase from the second quarter. It's the institution's 54th consecutive quarterly dividend. The dividend is payable on Nov. 8 to shareholders of record as of Nov. 1.

“Performance has been good, so we're rewarding our shareholders,” Colombo said.

To increase liquidity and attract more investors, the board approved a 2-to-1 stock split payable on Nov. 27 to shareholders as of Nov. 9. The stock price was $78.51 a share at the close of trading Monday, down less than a percentage point from the $79.47 at the beginning of the session.

Bank of Marin said that on Oct. 5 it redeemed early one of the two subordinated debentures assumed as part of the 2013 acquisition of NorCal Community Bancorp, with the goal of reducing funding costs. The unaccreted purchase discount of $916,000 has been accelerated. Bank of Marin said that will have a one-time impact on fourth-quarter net interest income but won't have a material impact on its capital ratios.

The total risk-based capital ratio for the bancorp was reported to be 15.3 percent at the end of the third quarter, relatively unchanged from 15.2 percent at mid-year.

Recent moves by the Federal Reserve to move up short-term interest rates aren't as much of a concern for Bank of Marin on the cost of deposits, because of the bank's customer base, according to Tani Girton, chief financial officer. Accounts that don't accrue interest amount to over half of deposits.

“It means that when interest rates increase, the cost of our expense base does not increase as fast as for other banks,” she said.

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