Bank of Marin Bancorp

BMRC Details

Bank of Marin Bancorp (NASDAQ: BMRC) is a holding company that owns and operates the Bank of Marin, a California state-chartered commercial bank. The BMRC offers commercial and retail deposit and lending programs, personal and business checking and savings accounts, asset management and trust services to professionals, small and middle-market companies, and individuals.

Latest News:

• Transition in Management: Russell A. Colombo, Chief Executive Officer (CEO) of Bank of Marin and BMRC, announced his resignation on September 24, 2021, with an effective date of October 31, 2021. Tim Myers, 51, the current President and Chief Operating Officer (COO), has been selected as his successor by the Board of Directors. Accordingly, on November 01, 2021, Tim Myers will take over as CEO.

9MFY21 Results:

• Slight Progress in TII: BMRC reported a slight increase of 2.06% in total interest income (TII) to USD 77.11 million during 9MFY21 (ended September 30, 2021) from USD 75.55 million during 9MFY20, owing to an increase in interest income from loans.
• Rise in Bottomline: The company witnessed a slight increase in net income to USD 23.51 million during 9MFY21 vs. USD 22.13 million reported during 9MFY20.
• Growth in Deposits: As of September 30, 2021, the company's total deposit stood at USD 3.73 billion compared to USD 2.50 billion as of FY20 end.

Key Risks:

• Geographic Concentration Risk: As of December 31, 2020, 77% of BMRC's loans were secured by real estate, mainly in California. Any economic issues such as unemployment and interest rates can cause real estate valuations to shift substantially in a short period, hurting the company's financial strength.
• Product Concentration Risk: Small and medium-sized businesses have lower market shares, more variable operating results, and are more sensitive to economic downturns. Hence, BMRC's business style is targeted toward them. As a result, economic factors affecting real estate and these small to medium-sized businesses may negatively influence its finances.

Valuation Methodology: Price/Book Value Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

BMRC Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

BMRC stock has surged 12.65% in the past six months and is currently leaning towards the mid-band of the 52-week range of USD 30.69 to USD 42.19. The stock is currently trading between its 50 and 200 DMA levels, and its RSI Index is at 47.89. We have valued the stock using the Price/Book Value-based relative valuation methodology and arrived at a target price of USD 34.01.

Considering the uptick in the stock price and current valuation, we believe the decent business fundamentals are adequately reflected at current trading levels. Hence, we recommend a "Sell" rating on the stock at the current price of USD 36.25, up 1.12%, as of December 13, 2021, 12:07 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.