Bank of Marin Bancorp

Good morning, and thank you for joining Bank of Marin Bancorp's earnings call for the fourth quarter and year-ended December 31, 2020. I am Andrea Henderson, Director of Marketing for Bank of Marin. During the presentation, all participants will be in a listen-only mode. After the call, we will conduct a question-and-answer session. At that time, if you have questions, please press 1 followed by 4 on your telephone. If at any time during the conference call you need to reach an operator, please press star zero. This conference call is being recorded on January 25, 2021. Joining us on the call today are Russ Colombo, President and CEO, Tim Myers, Executive Vice President and Chief Operating Officer, and Tawny Gerton, Executive Vice President and Chief Financial Officer. Our earnings press release, which we issued this morning, can be found on our website at bankofmorin.com, where this call is also being webcast. Before we get started, I want to emphasize that the discussion on this call is based on information we know as of Friday, January 22, 2021, and may contain forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, please review the forward-looking statements disclosure in our earnings press release as well as our SEC filings. Following our prepared remarks, Russ, Tim, and Tani, along with Chief Credit Officer Beth Reisman, will be available to answer your questions. And now, I'd like to turn the call over to Russ Colombo.

Thank you, Andrea. Good morning. Good morning. and welcome to the call. Bank of Lynn generated strong results for the full year despite the pandemic-related shutdown of large sections of the economy in 2020. We adapted quickly and provided loan relief, payment relief, to borrowers who needed breathing room to assess the pandemic's fallout. We also actively participated in the Small Business Administration's Paycheck Protection Program, helping almost 2,000 local businesses secure PPP funding, and providing them with guidance and access to apply for forgiveness. Our credit quality held firm throughout the year and was solid as we moved into 2021. We continue to work with clients affected by what we hope are the latter stages of this public health crisis. Most of our commercial clients are in a position to manage through these final months, and many have found new ways to deliver their services and move their businesses forward with strong capital and liquidity positions and a team ready to fire on all cylinders. We believe we enter 2021 well-positioned to take on the year ahead. Our 2020 results demonstrate this. Let's start with the highlights. Net income for the full year was $30.2 million. which represented a return on assets of 1.04 percent and a return on equity of 8.6 percent. Diluted earnings per share were $2.22. Loans increased $245 million in 2020, or 13 percent, to $2.1 billion at 12-31-2020, up from $1.8 billion at December 31, 2019. Deposits grew $168 million, or 7%, to $2.5 billion at 12-31-2020, compared to $2.3 billion at 12-31-2019. Land interest-bearing deposits increased $226 million in 2020 and made up 54% of total deposits at year-end. Cost of deposits remained low at 11 basis points for the full year of 2020, down from 20 basis points in 2019. Non-accrual loans represented only 0.44% of the bank's loan portfolio as of 12-31-2020. Given the bank's capital position and solid 2020 results, our Board of Directors declared a cash dividend of 23 cents per share on January 22, 2021. This represents the 63rd consecutive quarterly dividend paid by Bank of Maryland Bancorp. In October 2020, the Board reactivated the $25 million share repurchase program that was suspended in March. Repurchases for the full year 2020 under our current and prior repurchase programs were 203,709 shares, totaling $7.2 million. In December, we announced the retirement of Jim Burke, Executive Vice President and Chief Information Officer, and named Rich Lewis to succeed him. Jim was an invaluable member of our management team for almost 10 years. I have the utmost confidence that Rich, with his extensive knowledge of information security and technology and deep local banking experience, will continue to keep Bank of Maine competitive in this constantly changing digital world. Tim will now provide an update on our loan modification program and PPP.

Thank you, Russ. Bank of Marin provided payment relief for 269 loans totaling $403 million since the onset of the pandemic, most of which have resumed normal payments or have been paid off. As of December 31, 2020, 14 borrowing relationships with 29 loans totaling $71 million had requested additional payment relief. Nearly all of these loans are secured by real estate with an average loan to value of only 40%. Almost one half of these loans are in the education and health club industries. The remainder are largely loans on office buildings with COVID-19 impacted tenants, hotels and hospitality, and commercial properties with retail tenants. During 2020, as Russ noted, the bank successfully helped almost 2,000 companies obtain funding through the SBA Paycheck Protection Program. All are now able to apply for forgiveness through a secure online portal, and our expert team of bankers is available for ongoing support and training. The bank has opened its application portal for the second round of PPP loan funding, and we are now accepting loan requests from our Round 1 borrowers as well as existing customers that now need funding support. Due to the success of the first round of the program, the ingenuity of our small business customers to adapt during the pandemic, and an overall recovery in economic momentum, We expect demand for PPP loans in 2021 to be lighter than in 2020. However, we are prepared to assist any of our customers who would benefit from participating in the program this time around. We remain optimistic about new growth opportunities in our San Mateo and Walnut Creek offices and continue to make key hires to position ourselves for ongoing growth in our other markets. Remaining true to our commitment to relationship banking in 2020 allowed us to adapt business as usual to new realities while we continued to develop strategic opportunities to expand and grow our businesses. With that, I will turn it over to Tani for additional insight into our financial results.