Bank of Marin Bancorp Posts Q1 Earnings of $6.4 Million
Bank of Marin Bancorp reported earnings of $6.4 million in the first quarter of 2018, compared to $1.1 million in the fourth quarter of 2017 and $4.5 million in the first quarter of 2017.
In a release on April 23, the Company noted diluted earnings per share were $0.91 in the first quarter of 2018, compared to $0.17 in the prior quarter and $0.74 in the same quarter last year. Earnings in the fourth quarter of 2017 were adversely impacted by $4.1 million ($0.63 per diluted share) related to a one-time deferred tax asset write-down and Bank of Napa acquisition-related expenses. Earnings in the first quarter of 2018 were favorably impacted by the new tax law and a full quarter of combined earning assets post-acquisition.
"We delivered another quarter of excellent financial results and strong loan originations," said Russell A. Colombo, President and Chief Executive Officer. "Our relationship banking model continues to provide a stable, low-cost deposit base that has allowed us to expand our net interest margin. That strong deposit base, especially in a rising interest rate environment, helps distinguish Bank of Marin from many other banks."
Bancorp also announced the commencement of a program to repurchase up to $25 million of Bancorp common stock through May 1, 2019. In addition, the Board of Directors declared a cash dividend of $0.31 per share on April 20, a $0.02 increase from the prior quarter. This represents the 52nd consecutive quarterly dividend paid by Bank of Marin Bancorp. The dividend is payable on May 11, to shareholders of record at the close of business on May 4.
"Creating value for our shareholders remains a top priority. Our Board of Directors has determined that the repurchase of our common stock is an attractive investment given its belief in the positive long-term outlook for the growth of our franchise. In combination with organic growth and strategic acquisitions, the stock repurchase program and increased dividend create a well-balanced approach to capital utilization. We believe these actions are in the best interests of our shareholders," said Colombo.
Bancorp also provided the following highlights in the first quarter of 2018:
-Pre-tax net income was up $1.5 million from the fourth quarter of 2017. Reported net interest margin increased 11 basis points (tax equivalent net interest margin increased five basis points) as the result of higher loan and investment yields and increased earning assets from the Bank of Napa acquisition.
-Total deposits increased $37.9 million in the first quarter to $2,186.6 million. Non-interest bearing deposits represented 48.7 percent of total deposits and the cost of total deposits for both the current quarter and last quarter was 0.08 percent, up one basis point from first quarter of last year.
-Loans totaled $1,671.7 million at March 31, compared to $1,679.0 million at December 31, 2017. New loan volume of $37.4 million in the first quarter of 2018 was partially offset by payoffs of $31.5 million, and combined with changes in lines of credit utilization and amortization on existing loans, resulted in the net decrease of $7.3 million.
-Strong credit quality remains a cornerstone of the Bank's consistent performance. Non-accrual loans represented 0.02 percent of the Bank's loan portfolio as of March 31. There were no provisions for loan losses or off-balance sheet commitments recorded in the first quarter of 2018.
-All capital ratios are well above regulatory requirements for a well-capitalized institution. The total risk-based capital ratio for Bancorp was 15.1 percent at March 31, compared to 14.9 percent at December 31, 2017. Tangible common equity to tangible assets was 10.6 percent at March 31, compared to 10.7 percent at December 31, 2017.
Loans and Credit Quality
The Company noted, loan originations totaled $37.4 million in the first quarter of 2018, compared to $51.5 million last quarter and $23.9 million in the same quarter last year. Loan payoffs for the quarter were $31.5 million, compared to $26.4 million in the fourth quarter of 2017 and $32.7 million in the same quarter last year. The largest portion of payoffs in the current quarter came from the successful completion of construction projects and the sale of assets underlying other loans.
Non-accrual loans totaled $392 thousand, or 0.02 percent of the loan portfolio at March 31, down from $406 thousand, or 0.02 percent at December 31, 2017, and $1.2 million, or 0.08 percent a year ago. Classified loans totaled $27.8 million at March 31, compared to $27.9 million at December 31, 2017 and $30.2 million at March 31, 2017. There were no loans classified doubtful at March 31, or December 31, 2017. Accruing loans past due 30 to 89 days totaled $388 thousand at March 31, compared to $1.9 million at December 31, 2017 and $834 thousand a year ago.
There was no provision for loan losses recorded in either the first quarter of 2018 or 2017 as the level of reserves was deemed appropriate for the portfolio. A $500 thousand provision for loan losses was recorded in the fourth quarter of 2017, which was consistent with our organic loan growth and changing risk factors. Net recoveries were $4 thousand in the first quarter of 2018, compared to net recoveries of $21 thousand in the prior quarter and net charge-offs of $223 thousand in the same quarter a year ago. The ratio of loan loss reserves to loans was 0.94 percent at both March 31, and December 31, 2017, compared to 1.03 percent at March 31, 2017. Based on the Bank of Marin legacy portfolio only, the ratio of loan loss reserve to loans was 1.06 percent at both March 31, and December 31, 2017.
The investment portfolio totaled $572.9 million at March 31, compared to $483.5 million at December 31, 2017 and $414.0 million at March 31, 2017. The increase of $89.4 million in the first quarter was primarily due to purchases of $111.7 million in agency securities to deploy existing cash balances and in anticipation of upcoming portfolio maturities.
Total deposits increased to $2,186.6 million at March 31, compared to $2,148.7 million at December 31, 2017 and $1,779.3 million at March 31, 2017. The average cost of deposits in the first quarter of 2018 increased one basis point from the first quarter of 2017 to 0.08 percent.
"Our strong earnings of $0.91 per diluted share and return on assets of 1.05 percent reflect net interest margin expansion and the first full quarter of consolidated results with Bank of Napa," said Tani Girton, Executive Vice President and Chief Financial Officer. "The conversion of the Bank of Napa systems to Bank of Marin is now complete, and the combined team has begun leveraging their broad expertise to uncover new opportunities in Napa."
Net interest income totaled $21.9 million in the first quarter of 2018, compared to $20.1 million in the prior quarter. The $1.8 million increase in net interest income from the prior quarter reflects $170.0 million growth in average earning assets.
Net interest income increased by $4.3 million from $17.6 million for the same quarter last year, primarily due to the $390.5 million increase in earning assets from both the Bank of Napa acquisition and organic growth. Higher yields on investment securities and interest-bearing cash, and upward repricing of variable rate loans also positively impacted interest income for the current quarter.
The tax-equivalent net interest margin was 3.85 percent in the first quarter of 2018, compared to 3.80 percent in the prior quarter and 3.79 percent in the same quarter a year ago. The five basis point increase in the first quarter of 2018 compared to the prior quarter was primarily due to higher yields on interest-earning assets. The six basis point increase compared to the first quarter of 2017 is also related to higher yields on earning assets, partially offset by an increase of lower yielding cash and securities as a percentage of total earning assets.
Loans obtained through the acquisition of other banks are classified as either purchased credit impaired (PCI) or non-PCI loans and are recorded at fair value at acquisition date. For acquired loans not considered credit impaired, the level of accretion varies due to maturities and early payoffs. Accretion on PCI loans fluctuates based on changes in cash flows expected to be collected. Gains on payoffs of PCI loans are recorded as interest income when the payoff amounts exceed the recorded investment.
Non-interest income totaled $2.2 million in the first quarter of 2018, compared to $2.0 million in the prior quarter and $2.1 million in the same quarter of last year. The increase in 2018 primarily relates to $195 thousand loss on the sale of investment securities in the fourth quarter of 2017.
Non-interest expense totaled $16.1 million in the first quarter of 2018, $15.1 million in the prior quarter, and $13.0 million in the same quarter a year ago. The increase from the prior quarter was primarily due to higher salaries and benefits related to the addition of Bank of Napa employees, $340 thousand in stock-based compensation related to certain participants meeting retirement eligibility requirements, and the 2018 reset of 401(k) employer match and payroll taxes. Professional services increased as a result of $750 thousand consulting expenses related to core processing contract negotiations, which we expect to result in future technology cost savings. The increases were partially offset by a decrease of $1.1 million in Bank of Napa acquisition expenses to $615 thousand in the first quarter of 2018. We expect additional acquisition expenses of approximately $325 thousand in 2018.
The increase in non-interest expense from the same quarter a year ago was primarily due to higher salaries and benefits related to the addition of Bank of Napa employees, stock-based compensation, merit increases and filling open positions. In addition, professional fees and acquisition-related expenses mentioned above also increased non-interest expense.
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into law. The law reduces the federal corporate income tax rate to 21 percent for tax years beginning on or after January 1. Due to the passage of the Tax Cuts and Jobs Act of 2017, the Bank has valued all of its deferred tax assets and liabilities at the 21 percent rate. The adjustment to the net deferred tax assets valuation as of December 22, 2017 was $3.0 million as recorded in provision for income taxes in the fourth quarter of 2017. Bancorp's effective tax rate in the first quarter of 2018 was 20.7 percent and positively impacted diluted earnings per share by $0.09.
Share Repurchase Program
Bancorp's Board of Directors has approved the repurchase of up to $25 million of the Bancorp's common stock through May 1, 2019.
Under the stock repurchase program, Bancorp may purchase shares of its common stock through various means such as open market transactions, including block purchases, and privately negotiated transactions. The number of shares repurchased and the timing, manner, price and amount of any repurchases will be determined at the Company's discretion. Factors include, but are not limited to, stock price, trading volume and general market conditions, along with Bancorp's general business conditions. The program may be suspended or discontinued at any time and does not obligate the company to acquire any specific number of shares of its common stock.
As part of the stock repurchase program, Bancorp is entering into a trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The 10b5-1 trading plan would permit common stock to be repurchased at a time that Bancorp might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions. The 10b5-1 trading plan is administered by an independent broker and is subject to price, market volume and timing restrictions.
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THE DAILY VIEW
Gilt and Sarah Jessica Parker Unveil SJP by Sarah Jessica Parker Bridal Collection for Spring
Sarah Jessica Parker, in partnership with Gilt, kicked off the exclusive launch of SJP by Sarah Jessica Parker Bridal, Gilt’s first foray into bridal ready-to-wear that would have Carrie Bradshaw swooning.
The collection includes dresses, skirts, bodysuits and other pieces, ranging in price from $295 to $2,395 and from sizes 0 to 14.
"Collaborating with Gilt on my first bridal ready-to-wear collection was an opportunity I couldn't pass up," said Sarah Jessica Parker. "The team there is brilliant and allowed me to be imaginative and take risks as I was designing for the non-traditional bride. It has been quite fun to play around with colors, fabrics and details to create unique pieces for all kinds of brides." The collection, comprised of ten styles, is inspired by Parker's vision of a modern, non-traditional bride, and is designed to dress a woman for a variety of wedding milestone moments; from her bridal shower through her wedding reception. Styles offered are a unique mix of classic dresses and gowns, modern bodysuits, full skirts, and a jumpsuit. The color palette includes traditional bridal white, sleek black, plus pops of blush, poppy, light gray and blue.
Designed in collaboration with Gilt, the collection was produced in New York City utilizing fabrics like cashmere and stretch crepe sourced from Spain, Italy and France.
The pieces all feature carefully curated details like elegant bows, sophisticated cutouts, feathers, intricate embroidery and beautiful hand-stitched beading.
The actress and style icon is no stranger to chic bridal wear. Carrie Badshaw, famously played by Parker, took part in an elaborate bridal photo shoot in Sex and the City: The Movie. The shoot featured gowns from designers like Christian Lacroix and Lanvin. Parker famously wore a black wedding gown for her own wedding to Matthew Broderick in 1997.
"Not only is Sarah Jessica Parker's style known around the world, her point of view is one-of-a-kind," says Tom Ott, Chief Merchant of Gilt. "Sarah Jessica brings her impeccable taste and fashion sensibility to life in this collection. We think our customers will be delighted with the offering which is stylish and well-priced in the bridal category."
As part of the bridal launch, Gilt will also offer 15 exclusive styles from the SJP by Sarah Jessica Parker footwear line, each of which are complementary to the bridal collection.
To correspond with the bridal collection launch, Gilt City will present offers from some of Sarah Jessica Parker's favorite places in New York City.
The offers were each chosen as a way to help brides plan for and celebrate the big day with highlights including, Leather Spa, Lars Nord Studio Tailoring, Mah-Ze-Dahr Bakery, among others.
Tea Forté Introduces ‘Matcha’ Collection
Convenience meets tradition in Tea Forté’s new Ceremonial Matcha Bowl Set and the Matcha Single Steeps.
The company said its spring harvested, shade grown, stone ground, organic matcha tea is best served in a centuries-old Japanese tea ceremony called chanoyu: a preparation technique known for its centering meditative qualities.
"The launch of Tea Forté's Matcha collection represents our continued commitment to wellness and cultivating all the potential mental and physical health benefits of tea," says Tea Forté CEO Michael Gebrael. "In addition to our high quality Pure Matcha, we've also blended four distinct flavored Matcha varieties. Prepackaged in pouches measured out for a single serving, our Single Steeps Matcha is ideal for the office, travel, or to keep with you for a boost anytime."
Tea Forté noted its handcrafted ceremonial tea bowl, handmade bamboo whisk and measuring ladle “encourages serene enjoyment of our premium Kosher, gluten-free and vegan matcha blends.” These include: Pure Matcha, Chocolate Matcha, Coconut Matcha, Ginger Matcha, and Chai Matcha.
According to a release, in addition to its distinctive taste, matcha is prized for its health benefits. Steeped green tea contains only the antioxidants that can be extracted in water, while with matcha, the whole leaf is consumed.
Available now in select stores and online at teaforte.com.
Expedia.com has released a year-end look at U.S. traveler behavior and trends for 2017, analyzing data to identify the most in-demand destinations, hotels, activities and more.
Among other insights, the roundup revealed:
- Labor Day was the busiest weekend for car rental
- Disney Theme Parks topped the list of things to do
- The average hotel stay was two nights
- Top destinations based on 2017 air travel included major global cities like New York, London and Bangkok
- Popular tourist destinations included Orlando, Cancun and Las Vegas