Bank of Marin Bancorp(BMRC) - 2020 Q3 - Quarterly Report

Financial Performance - Net income for Q3 2020 was $7.5 million, down from $9.4 million in Q3 2019, with diluted earnings per share at $0.55 compared to $0.69 a year ago[158] - Net income for the three months ended September 30, 2020, was $7,491,000, down from $9,448,000 in the same quarter of 2019[168] - Basic net income per common share decreased to $0.55 from $0.70 year-over-year[168] - Return on average assets was 0.98% for the quarter, down from 1.49% in the same period last year[168] - Return on average equity decreased to 8.37% from 11.34% year-over-year[168] Loan and Deposit Growth - Total loans increased by $264.7 million to $2,108.0 million as of September 30, 2020, primarily due to $301.7 million in SBA PPP loans, representing 14% of loan balances[161] - Total deposits rose by $232.8 million to $2,569.3 million at September 30, 2020, with non-interest bearing deposits increasing to 54% of total deposits from 48% at December 31, 2019[161] - Non-interest bearing deposits rose to $1,383.7 million, representing 53.9% of total deposits as of September 30, 2020[218] - Loans increased by $264.7 million to $2,108.0 million, driven mainly by $308.2 million in SBA PPP loans[217] Provision for Loan Losses - The provision for loan losses for the first nine months of 2020 was $5.45 million, significantly higher than $400 thousand for the same period in 2019, reflecting the economic impact of the pandemic[159] - Provision for loan losses increased to $1,250,000 for the quarter, compared to $400,000 in the prior year[168] - The ratio of allowance for loan losses to total loans was 1.05% at September 30, 2020, compared to 0.90% at December 31, 2019[190] - The provision for loan losses was $5.45 million for the nine months ended September 30, 2020, compared to $400 thousand for the same period in the prior year, reflecting the economic uncertainties from the COVID-19 pandemic[189] Non-Interest Income and Expenses - Non-interest income decreased by $931 thousand in Q3 2020 to $1.8 million, compared to $2.7 million in Q3 2019, primarily due to lower service charges and benefits from BOLI policies[196] - Total non-interest income for the first nine months of 2020 was $6.7 million, a slight decrease from $6.8 million in the same period in 2019, with higher gains on sales of investment securities partially offsetting declines in other categories[197] - Non-interest expense increased by $1.0 million to $15.2 million in Q3 2020, compared to $14.2 million in Q3 2019, primarily due to higher charitable contributions and provisions for losses on off-balance sheet commitments[202] - Total non-interest expense for the first nine months of 2020 was $44.8 million, a slight increase of $204 thousand from $44.6 million in the same period of 2019[203] Capital and Liquidity - The total risk-based capital ratio was 15.5% at September 30, 2020, up from 14.6% at December 31, 2019, indicating strong capital position[161] - The Bank's total capital to risk-weighted assets ratio was 16.05% as of September 30, 2020, exceeding the well-capitalized threshold of 10.00%[225] - Tier 1 capital to risk-weighted assets ratio was 14.92% as of September 30, 2020, above the required minimum of 8.50%[225] - Management anticipates that the current strong liquidity position will provide adequate liquidity to fund operations going forward[230] Tax and Regulatory Matters - The effective tax rate for Q3 2020 was 24.1%, compared to 23.0% in Q3 2019, reflecting a decrease in pre-tax income[205] - The provision for income taxes for the first nine months of 2020 was $7.4 million at an effective tax rate of 25.0%, compared to $8.3 million at 24.9% in the same period of 2019[206] - The Bank had no accruals for interest or penalties related to unrecognized tax benefits as of September 30, 2020[209] Charitable Contributions - The company made $360 thousand in charitable contributions during Q3 2020 to support remote learning resources for underserved students[160] - Charitable contributions increased by $370 thousand in Q3 2020, reflecting a 333.3% increase compared to the same period last year[202]