Bank of Marin reports Q2 EPS 6c, consensus 17c

As previously announced, the Bank sold 56% of its available-for-sale securities portfolio at an after-tax loss of $22.9 M . Redeployment of the $292.6M net proceeds is expected to provide a 30 basis point increase in annualized net interest margin and 46c per share estimated annualized earnings accretion beginning in the third quarter, assuming an average reinvestment yield of 5.75%. The sale is part of our strategy to improve future earnings and increase return on equity. Excluding the loss on security sales, net income and diluted earnings per share for the second quarter would have been $1M and 6c, all other factors unchanged. A $5.2M provision for credit losses on loans in the second quarter, compared to a provision of $350 thousand for the previous quarter, brought the allowance for credit losses to 1.47% of total loans, compared to 1.24% as of March 31, 2024. The provision was largely due to an increased individual reserve for one non-owner occupied commercial real estate loan totaling $16.7 million that, although current, has experienced a deteriorating financial condition and a material increase in its loan-to-value ratio associated with a recent valuation of the underlying collateral.