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Item 5. Market for Registrant’s Common Equity

2022-03-15 compared with 2021-03-15 · 19 added, 80 removed, 36 unchanged (73% of the section changed)

ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information and Holders

Bancorp's common stock trades on the Nasdaq Capital Market under the symbol BMRC.

At February 28, 2021, 13,359,479 shares of Bancorp's common stock, no par value, were outstanding and held by approxi mately 2,400 holders of record and beneficial owners.

On October 22, 2018, Bancorp announced a two-for-one stock split, which occurred on November 27, 2018.

All 2018 share and per share data have been adjusted to reflect the stock split.

At February 28, 2022, 15,939,659 shares of Bancorp's common stock, no par value, were outstanding and held by approxi mate ly 2,900 holders of record and beneficial owners.

Five-Year Stock Price Performance Graph

The following graph, compiled by S&P Global Market Intelligence of New York, New York, shows a comparison of cumulative total shareholder return on our common stock during the five fiscal years ended December 31, 2020 compared to the Russell 2000 Stock index and the SNL Bank $1B - $5B Index.

The following graph, compiled by S&P Global Market Intelligence of New York, New York, shows a comparison of cumulative total shareholder return on our common stock during the five fiscal years ended December 31, 2021 compared to the Russell 2000 Stock index and the S&P Regional Banks Select Industry Index.

The comparison assumes the investment of $100 in our common stock on December 31, 2016 and the reinvestment of all dividends.

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Russell 2000 Index 100.00 114.65 102.02 128.06 153.62 176.39

SNL Bank $1B - $5B Index 1

S&P Regional Banks Select Industry Index 1

100.00 107.95 87.69 111.92 103.98 145.47

S&P Global Market Intelligence

1 Includes all major exchange (NYSE, NYSE MKT, and Nasdaq) banks in S&P Global's coverage universe with $1 billion to $5 billion in assets as of the most recent available financial data.

1 The index comprises stocks in the S&P Total Market Index that are classified in the Global Industry Classification Standard regional banks sub-industry.

Shareholder Rights Agreement

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1 Represents shares of common stock issuable upon exercise of outstanding options under the Bank of Marin Bancorp 2017 Equity Plan and 2007 Equity Plan.

2 Represents remaining shares of common stock available for future grants under the 2017 Equity Plan and the 2020 Director Stock Plan, excluding 371,584 shares to be issued upon exercise of outstanding options and 380,123 shares available to be issued under the Employee Stock Purchase Plan.

2 Represents remaining shares of common stock availab le for future grants under the 2017 Equity Plan and the 2020 Director Stock Plan, excluding 315,744 shares to be issued upon exercise of outstanding options and 377,475 shares available to be issued under the Employee Stock Purchase Plan.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

1 unchanged sentence

Bancorp's Board of Directors subsequently extended the Share Repurchase Program through February 28, 2020.

A new Share Repurchase Program was approved by the Board of Directors on January 24, 2020, which began on March 1, 2020 and allows Bancorp to repurchase up to $25.0 million of its outstanding common stock through February 28, 2022.

The new Share Repurchase Program was temporarily suspended on March 20, 2020 in response to the COVID-19 pandemic and reactivated on October 23, 2020.

A new Share Repurchase Program was approved by the Board of Directors on January 24, 2020, which began on March 1, 2020 and allowed Bancorp to repurchase up to $25.0 million of its outstanding common stock and ended May 2021.

On July 16, 2021, Bancorp Board of Directors approved a share repurchase program under which Bancorp could repurchase up to $25.0 million of its outstanding common stock through July 31, 2023.

On October 22, 2021, Bancorp's Board of Directors approved an amendment to the current share repurchase program, which increased the total authorization from $25.0 million to $57.0 million and left the expiration date unchanged.

Shares repurchased pursuant to our common stock share repurchase programs during 2021, 2020 and 2019, were as follows.

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The following table reflects purchases under the Share Repurchase Program for the months presented in 2021.

For further information, see Note 8 to the Consolidated Financial Statements, under the heading “Share Repurchase Program” in ITEM 8 of this report.

(in thousands, except per share data) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Approximate Dollar Value That May yet Be Purchased Under the Program 1

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March 1-31, 2021 59,234 39.32 59,234 10,753

April 1-30, 2021 130,680 36.63 130,680 5,959

May 1-31, 2021 167,255 35.58 167,255 —

June 1-30, 2021 — — — —

July 1-31, 2021 37,182 32.99 37,182 23,772

August 1-31, 2021 159,360 35.98 159,360 18,031

September 1-30, 2021 249,193 35.81 249,193 9,098

October 1-31, 2021 54,705 37.83 54,705 39,026

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Total 1,117,666 $ 36.39 1,117,666

1 On February 28, 2020, the 2018 Share Repurchase Program expired with approximately $1.5 million remaining from the $25.0 million authorized for repurchases.

The new $25.0 million Share Repurchase Program began March 1, 2020.

ITEM 6 SELECTED FINANCIAL DATA

The following data has been derived from the audited consolidated financial statements of Bank of Marin Bancorp.

For additional information, refer to ITEM 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, and ITEM 8, Financial Statements and Supplementary Data.

At or for the Years Ended December 31,

(dollars in thousands, except per share data) 2020 2019 2018 2017 2016

Selected financial condition data:

Total assets $ 2,911,926 $ 2,707,280 $ 2,520,892 $ 2,468,154 $ 2,023,493

Loans, net allowance for credit losses 1

2,065,682 1,826,609 1,748,043 1,663,246 1,471,174

Deposits 2,504,249 2,336,489 2,174,840 2,148,670 1,772,700

Borrowings and other obligations 2,835 2,920 9,640 5,739 5,586

Stockholders' equity 358,253 336,788 316,407 297,025 230,563

Selected operating data:

Net interest income $ 96,659 $ 95,680 $ 91,544 $ 74,852 $ 73,161

Provision for (reversal of) credit losses 4,594 900 — 500 (1,850)

Non-interest income 8,550 9,084 10,139 8,268 9,161

Non-interest expense 2

60,028 57,970 58,266 53,782 47,692

30,242 34,241 32,622 15,976 23,134

Net income per common share:

Basic $ 2.24 $ 2.51 $ 2.35 $ 1.29 $ 1.90

Diluted $ 2.22 $ 2.48 $ 2.33 $ 1.27 $ 1.89

Performance and other financial ratios:

Return on average assets 1.04 % 1.34 % 1.31 % 0.75 % 1.15 %

Return on average equity 8.60 % 10.49 % 10.73 % 6.49 % 10.23 %

Tax-equivalent net interest margin 4

3.55 % 3.98 % 3.90 % 3.80 % 3.91 %

Cost of deposits 0.11 % 0.20 % 0.10 % 0.07 % 0.08 %

Efficiency ratio 57.06 % 55.33 % 57.30 % 64.70 % 57.93 %

Loan-to-deposit ratio 83.40 % 78.89 % 81.10 % 78.14 % 83.86 %

Cash dividend payout ratio on common stock 5

41.07 % 31.87 % 27.23 % 43.41 % 26.84 %

Cash dividends per common share 3

$ 0.92 $ 0.80 $ 0.64 $ 0.56 $ 0.51

Asset quality ratios:

Allowance for credit losses to total loans 1.10 % 0.90 % 0.90 % 0.94 % 1.04 %

Allowance for credit losses to total loans, excluding acquired and SBA PPP loans 6

1.27 % 0.96 % 0.98 % 1.06 % 1.10 %

Allowance for credit losses to non-performing loans 7

2.48x 73.86x 22.71x 38.88x 106.50x

Non-performing loans to total loans 7

0.44 % 0.01 % 0.04 % 0.02 % 0.01 %

Capital ratios:

Equity to total assets ratio 12.30 % 12.44 % 12.55 % 12.03 % 11.39 %

Tangible common equity to tangible assets 8

11.27 % 11.30 % 11.29 % 10.71 % 11.00 %

Total capital (to risk-weighted assets) 16.03 % 15.07 % 14.93 % 14.91 % 14.32 %

Tier 1 capital (to risk-weighted assets) 14.82 % 14.24 % 14.10 % 14.04 % 13.37 %

Tier 1 capital (to average assets) 10.80 % 11.66 % 11.54 % 12.13 % 11.39 %

Common equity Tier 1 capital (to risk-weighted assets) 14.69 % 14.11 % 13.98 % 13.75 % 13.07 %

Number of branches 22 22 23 23 20

Full time equivalent employees 289 290 290 291 262

1 Includes SBA PPP loans of $291.6 million at December 31, 2020.

There were no SBA PPP loans prior to 2020.

2 2018 and 2017 included $962 thousand and $2.2 million, respectively, in merger-related expenses.

3 Share and per share data have been adjusted to reflect the two-for-one stock split effective November 27, 2018.

4 Tax-equivalent net interest margin is computed by dividing taxable equivalent net interest income, which is adjusted for taxable equivalent income on tax-exempt loans and securities based on federal statutory rate of 21% in 2020, 2019 and 2018 and 35% in years prior to 2018, by total average interest-earning assets.

5 Calculated as dividends on common shares divided by basic net income per common share.

6 The allowance for credit losses to total loans, excluding non-impaired acquired loans and guaranteed SBA PPP loans, is considered a meaningful non-GAAP financial measure, as it represents only those loans that were considered in the calculation of the allowance for credit losses.

Due to the adoption of CECL on December 31, 2020, all loans previously considered "acquired" are now included in the calculation of the allowance for credit losses.

Acquired loans that were not impaired totaled $108.8 million, $151.8 million, $196.5 million, and $86.4 million, at December 31, 2019, 2018, 2017, and 2016, respectively.

Refer to footnote 1 above for SBA PPP loan totals.

7 Non-performing loans include loans on non-accrual status.

There were no loans past due 90 days or more and still accruing interest as of the end of any of the years presented.

8 Tangible common equity to tangible assets is considered to be a meaningful non-GAAP financial measure of capital adequacy and is useful for investors to assess Bancorp's ability to absorb potential losses.

Tangible common equity of $324 million, $302 million, $281 million, $260 million, and $222 million at December 31, 2020, 2019, 2018, 2017, and 2016, respectively, includes common stock, retained earnings and unrealized gains (losses) on available-for sale securities, net of tax, less goodwill and intangible assets of $34 million, $35 million, $36 million, $37 million, and $9 million at December 31, 2020, 2019, 2018, 2017, and 2016, respectively.

Tangible assets excludes goodwill and core deposit intangible assets.

1 In May 2021, the 2020 Share Repurchase Program ended.

The new $25.0 million Share Repurchase Program began July 16, 2021.

On October 22, 2021, the total authorization increased from $25.0 million to $57.0 million.

For further information, see Note 8 to the Consolidated Financial Statements, under the heading “Share Repurchase Program” in ITEM 8 of this report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity