Bank of Marin Bancorp: Copy that
Its name is redundant and so is Bank of Marin Bancorp's (Nasdaq:BMRC) performance. That's just fine, for the Bay Area bank is proving over and over that it can weather bad times and good, growing consistently in beautiful northern California.
Like the words "Strong Loan Growth?" "Excellent Credit Quality?" And "Squeaky Clean Quarter?" All were used by Don Worthington, analyst at Howe Barnes Hoefer and Arnett, in a July report to describe Bank of Marin's second quarter.
The Novato, Calif.-bank earned $0.65 per share in the second quarter through June, up 20.4% from the year-ago quarter. Earnings were boosted by strong net interest margins of 5.52%, up from 5.07%. Second-quarter loans rose a sharp 22.3% to $799.5 million, with only $236,000, or 0.03%, considered non-performing; the allowance for loan losses as a percentage of loans was 1.07% on June 30, compared with 1.08% a year ago.
In reporting quarterly results, Bank of Marin said it has not participated in subprime lending nor holds securities backed by subprime loans. It also held no stock in Fannie Mae or Freddie Mac.
The quarter boosted investor confidence. The average earnings estimate for 2008 from two analysts is $2.62 per share, up 13% from $2.31 in 2007; earnings are expected to grow to $2.83 in 2009. Revenues are seen at $53 million this year, up 9.4% from 2007 and are expected at $56.6 million in 2009. Talk about monotonous: sales have grown in each of the past five years.
The second quarter sent shares soaring, up from a four-year low of $24 each on June 30 to a 52-week high at $33.29 last week. The company closed Wednesday at $32.50. Market valuation is $167 million.
Bank of Marin Bancorp operates 11 branches, eight in Marin County and three in southern Sonoma County, as well as a loan production office in San Francisco. The bank faces stiff competition: in Marin County, its market share was near 9.5% in 2007; the four leaders were Bank of America (NYSE:BAC), Wells Fargo Bank (NYSE:WFC), Washington Mutual (NYSE:WM) and Westamerica Bank.
Dropping real estate values are the key risk. Bank of Marin does not offer traditional first mortgages, but 84% of the Bank's loans were secured by real estate at the end of 2007, so the value of the bank's real estate collateral would be hurt by a steep decline in the real estate market. Most of the properties that secure loans are located within Marin and Sonoma counties.
There has been money for just about everybody in Marin County, whose wealth has fairly insulated the county from the real estate market's fallout in other parts of California and elsewhere. But lately, values have taken a hit: iIn August, the median value of a single-family home in Marin County fell to $881,500 from $1.5 million,050,000 in August a year ago.
Still, prologue is predictive and, in the Bank of Marin Bancorp's case, that may be worth repeating.
Like the words "Strong Loan Growth?" "Excellent Credit Quality?" And "Squeaky Clean Quarter?" All were used by Don Worthington, analyst at Howe Barnes Hoefer and Arnett, in a July report to describe Bank of Marin's second quarter.
The Novato, Calif.-bank earned $0.65 per share in the second quarter through June, up 20.4% from the year-ago quarter. Earnings were boosted by strong net interest margins of 5.52%, up from 5.07%. Second-quarter loans rose a sharp 22.3% to $799.5 million, with only $236,000, or 0.03%, considered non-performing; the allowance for loan losses as a percentage of loans was 1.07% on June 30, compared with 1.08% a year ago.
In reporting quarterly results, Bank of Marin said it has not participated in subprime lending nor holds securities backed by subprime loans. It also held no stock in Fannie Mae or Freddie Mac.
The quarter boosted investor confidence. The average earnings estimate for 2008 from two analysts is $2.62 per share, up 13% from $2.31 in 2007; earnings are expected to grow to $2.83 in 2009. Revenues are seen at $53 million this year, up 9.4% from 2007 and are expected at $56.6 million in 2009. Talk about monotonous: sales have grown in each of the past five years.
The second quarter sent shares soaring, up from a four-year low of $24 each on June 30 to a 52-week high at $33.29 last week. The company closed Wednesday at $32.50. Market valuation is $167 million.
Bank of Marin Bancorp operates 11 branches, eight in Marin County and three in southern Sonoma County, as well as a loan production office in San Francisco. The bank faces stiff competition: in Marin County, its market share was near 9.5% in 2007; the four leaders were Bank of America (NYSE:BAC), Wells Fargo Bank (NYSE:WFC), Washington Mutual (NYSE:WM) and Westamerica Bank.
Dropping real estate values are the key risk. Bank of Marin does not offer traditional first mortgages, but 84% of the Bank's loans were secured by real estate at the end of 2007, so the value of the bank's real estate collateral would be hurt by a steep decline in the real estate market. Most of the properties that secure loans are located within Marin and Sonoma counties.
There has been money for just about everybody in Marin County, whose wealth has fairly insulated the county from the real estate market's fallout in other parts of California and elsewhere. But lately, values have taken a hit: iIn August, the median value of a single-family home in Marin County fell to $881,500 from $1.5 million,050,000 in August a year ago.
Still, prologue is predictive and, in the Bank of Marin Bancorp's case, that may be worth repeating.
About the Author
Contributing author Jennifer Allen has two decades of experience as a writer and editor, mainly as a financial wire service correspondent.
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