Bank of Marin Bancorp(BMRC) - 2024 Q2 - Quarterly Results

Financial Performance - Bank of Marin Bancorp reported a net loss of $21.9 million for Q2 2024, compared to a net income of $2.9 million in Q1 2024, resulting in a diluted loss per share of $(1.36) for the quarter[2]. - Net loss income (GAAP) for the three months ended June 30, 2024, was $(21.902) million compared to a net income of $13.991 million for the same period in 2023[56]. - Comparable net income (non-GAAP) for the three months ended June 30, 2024, was $1.020 million, down from $13.991 million in the same period last year[56]. - The net loss for the three months ended June 30, 2024, was $21,902 thousand, compared to a net income of $2,922 thousand in the previous quarter[65]. - The company reported a basic net loss per common share of $1.36 for the three months ended June 30, 2024, compared to earnings of $0.18 in the previous quarter[65]. - Return on average assets decreased to (2.35)% from 0.31% year-over-year[69]. Credit Losses and Loan Performance - The provision for credit losses on loans increased to $5.2 million in Q2 2024, up from $350 thousand in the previous quarter, raising the allowance for credit losses to 1.47% of total loans[7]. - Non-accrual loans rose to 1.62% of total loans at the end of Q2 2024, up from 0.31% at the end of Q1 2024, primarily due to one commercial real estate loan totaling $16.7 million[8]. - Total loans increased by $27.4 million in Q2 2024, reaching a balance of $2.082 billion, with loan originations of $64.1 million for the quarter[10]. - The allowance for credit losses on loans rose to $30,675 as of June 30, 2024, from $25,172 at December 31, 2023[70]. - Non-accrual loans to total loans ratio rose to 1.62% from 0.31% in the previous year[69]. Deposits and Funding - Total deposits decreased by $70.3 million to $3.214 billion as of June 30, 2024, with non-interest bearing deposits comprising 44.1% of total deposits[11]. - Total deposits decreased to $3,213,777 thousand from $3,290,075 thousand, a decline of approximately 2.3% year-over-year[64]. - Deposits totaled $3.214 billion at June 30, 2024, a decrease from $3.284 billion at March 31, 2024, with non-interest bearing deposits comprising 44.1% of total deposits[36]. Interest Income and Margin - The tax-equivalent net interest margin improved to 2.52% from 2.50% in Q1 2024, with 69% of loan fundings occurring in June, indicating potential for expanded net interest income[13]. - Net interest income for the second quarter of 2024 was $22.5 million, a slight decrease from $22.7 million in the prior quarter, primarily due to a $356 thousand increase in interest expense on deposits[44]. - The tax-equivalent net interest margin was 2.52% for the second quarter of 2024, compared to 2.50% for the prior quarter, with higher loan yields contributing positively[46]. - The average yield on loans for the six months ended June 30, 2024, was 4.83%, up from 4.62% for the same period in 2023[73]. Capital and Equity - The bank's total risk-based capital ratios were 16.46% for Bancorp and 15.54% for the Bank as of June 30, 2024, indicating strong capital levels[16]. - The total risk-based capital ratio for Bancorp was 16.46% at June 30, 2024, down from 17.05% at March 31, 2024, due to losses realized on securities sales[41]. - Bancorp's tangible common equity to tangible assets ratio was 9.92% at June 30, 2024, slightly up from 9.76% at March 31, 2024, due to a decrease in tangible risk-weighted assets[42]. - Total stockholders' equity decreased to $434.943 million as of June 30, 2024, from $439.062 million on December 31, 2023[56]. - The company’s total risk-based capital ratio was 15.54%, down from 16.62% a year earlier[69]. Operational Efficiency - The efficiency ratio for Q2 2024 was (300.37)%, compared to 83.18% for the prior quarter, with a significant impact from the loss on security sales[15]. - The efficiency ratio (non-GAAP) improved to 86.70% for the three months ended June 30, 2024, compared to 67.74% for the same period in 2023[56]. - Non-interest expense increased to $21.9 million for the second quarter of 2024, up from $21.2 million in the prior quarter, driven by higher charitable contributions and salaries[50]. Investment and Securities - The investment securities portfolio decreased to $1.158 billion at June 30, 2024, down $293.9 million from March 31, 2024, due to the sale of $325.2 million in available-for-sale securities, resulting in a pre-tax loss of $32.5 million[35]. - Total interest-earning assets were $3,557,998 for the three months ended June 30, 2024, compared to $3,620,855 for the previous quarter[73]. - Investment securities totaled $1,157,527 as of June 30, 2024, down from $1,477,226 at the end of 2023[70]. Shareholder Returns and Programs - A cash dividend of $0.25 per share was declared, marking the 77th consecutive quarterly dividend paid by Bancorp[19]. - The Board of Directors approved a share repurchase program for up to $25.0 million, expiring on July 31, 2025[57]. Market Position and Outlook - The company is included in the Russell 2000 Small-Cap Index and Nasdaq ABA Community Bank Index, reflecting its market position[60]. - Forward-looking statements indicate potential impacts from economic conditions, regulatory changes, and competition on future earnings[61].