Bank of Marin sells $293M in AFS in strategy to ‘improve future earnings’

Bank of Marin announced that it sold $293M in available-for-sale securities, AFS, as part of a strategy designed to improve future earnings, drive earnings per share,EPS, growth, and increase its return on equity. “Our robust capital levels allow us to proactively reposition our balance sheet, which will create additional value for the Bank and our shareholders through increased earnings and improved net interest margin,” said Tim Myers, Bank of Marin president and CEO. “We have already redeployed some of the proceeds and expect to reinvest the remainder into higher yielding loans and short-duration securities.” The securities sold represented 56% of the AFS portfolio and had an average yield of 1.94%. The sale will result in an estimated after-tax loss of approximately $23M that will be recorded in the second quarter of 2024. Assuming a 5.75% average yield on reinvestment, the securities repositioning is expected to have an approximate 3-year capital earn back and contribute approximately 30 basis points to annualized net interest margin beginning third quarter, resulting in 46c estimated earnings per share accretion over the next four quarters. Management believes that the execution of this strategy positions Bank of Marin well for future profitable growth and will further enhance the value of the franchise…