July 22, 2022

Dear Marine Shareholders:

I am pleased to announce that Marine Bancorp of Florida continues to achieve strong asset growth, good earnings, and profitability in 2022. As a result of our continued positive financial performance, Marine Bank is rated 4-Stars, Excellent by Bauer Financial, a premier bank-rating organization.

Second Quarter (Q2) 2022 Financial Summary:

million $

2nd Quarter 2022

2nd Quarter


% Change

Net Income




Total Assets




million $

Total Loans




Total Deposits




Total Checking + NOW





Marine Bancorp Tangible Book Value Per Common Share




Actual Q2 Earnings Per Share




Return on Shareholders’ Equity




thousand $

Non-Performing Assets




Financial Results

Net income for the second quarter of 2022 was $2.458 million, down from $2.567 million in the second quarter of 2021 for a 4% year-over-year decline. The earnings decline was due to $961,000 of non-recurring SBA Paycheck Protection Program forgiveness income recognized in Q2 2021. PPP loan forgiveness and the corresponding fee income were completed in 2021.

Your Company has experienced strong year-over-year asset growth with $591 million in total assets as of June 30, 2022, compared to $488 million as of June 30, 2021, an increase of $103 million or 21%.

Loans outstanding as of June 30, 2022, were $371 million compared to $331 million on June 30, 2021, an increase of $40 million or 12%. We are achieving good loan growth as the local economy remains strong and borrowers prefer to deal with knowledgeable bankers at their local bank.

In the first half of 2022, Marine Bank originated 292 loans, totaling $140,876,810 as follows:

  • 115 Business and Commercial Real Estate Loans    $56,186,397
  • 143 Home Loans                                                      $74,481,913
  • 34 Home Equity Credit Lines                                   $10,208,500

This is a 46% increase in new loan production over the same period last year. Our total assets and loans did not increase at the same rate due to loan amortizations and repayments.

While these are nice numbers and statistics for our financial report, each loan is a real person that had a choice where to borrow, and each loan means a life-improving event like a new home or an expanded business with new employees. We may be a small bank, but we have a big responsibility to fuel the American dream and drive the local economy.  We take pride in the local impact our actions make.

Total deposits as of June 30, 2022, were $559 million compared to $453 million the same time last year, an increase of $106 million or 23%. Our non-interest and interest-bearing checking accounts, the key to customer relationships, grew to $292 million as of June 30, 2022, compared to $212 million as of June 30, 2021, an increase of $80 million or 38%.

The continued growth in checking accounts is remarkable. This is the most coveted bank service and the hardest to get people to move. Our success speaks loudly to the quality of our Bankers delivering a high level of personalized service and offering checking accounts and treasury services that rival the big banks in technology quality.

For Q2 2022, our Return on Shareholders’ Equity (ROE) was 11.02% as compared to 18.28% for Q2 2021. By measuring the Bank’s income relative to our shareholders’ equity, ROE signals how effectively we are using your investment to generate increased profits. The decrease in ROE was expected as earnings declined due to the elimination of the non-recurring PPP loan income and the increase in equity resulting from the new $11.6 million in capital that was raised in 2021.

For Q2 2022, earnings per share was $1.35, versus $1.86 for the same period in 2021, a decrease of $0.51 per share or 27%. This decline was due to the reduction in earnings as noted above and the increased number of new shares outstanding from the capital raise.

The common stock tangible book value of your company decreased to $15.40 per share as of June 30, 2022, from $20.68 in Q2 2021, a decrease of $5.28 per share, or 26%. As mentioned in last quarter’s Shareholder letter, rising interest rates have caused book value reductions in the Bank’s investment portfolio. These unrealized losses are reflected as a reduction in equity, resulting in the decreased tangible book value calculations.

An explanation is in order. With the deposit inflow exceeding the new loan production, we use the excess funds to invest in high quality bonds of various maturities. When interest rates increase, as we have recently witnessed, the market value of those existing bonds decrease because new investors can obtain higher rates elsewhere. These bonds are still high quality and produce ongoing income, well in excess of the very short-term investment options available. The accounting guidelines require us to mark the value of the bond portfolio to its current market, or liquidation value, despite the fact that we have no intent to sell these in the short term and we fully expect them to pay off at maturity, as scheduled.

The good news is interest rates are increasing and despite the negative impact noted above, this is good for our loan pricing, and with 50%+ funding from non-interest-bearing checking accounts, this improves our net interest margin. So, in summary the higher interest rates are good for our profitability but create a temporary reduction in the shareholder’s equity account.

Credit Quality

Credit quality continues to be very strong. We have one loan on non-accrual status with a balance of $1.5 million. Despite being more than 90 days past due, we expect no loss on this loan There are no other non-performing loans or assets.

A New Banking Center!

Our Ft. Pierce Banking Center opened July 8, 2022. Led by Banking Office Manager Melissa Montanez, we are excited to bring our highly personalized banking services to St. Lucie County. Recently Ft. Pierce did not have a local bank and we are excited to begin serving this community. Please stop by and visit us at 600 North US Highway One, Suite 604B, Ft Pierce, FL 34950 or call us at 772-494-1624.

25 Years Serving the Treasure & Space Coast

On July 1, 1997, Marine Bank opened for business in Vero Beach bringing a new banking option to local residents. I’m proud to say we still have some of the original customers, shareholders and two original employees. Mary Cone and Karen Clothier were here on opening day and continue to serve our customers with caring enthusiasm. So much has changed in the banking world. In fact, if you have a 1997 Yellow Pages and look under Banks, Marine Bank is the only bank listed then that has the same name now! All the others have changed names or merged with others. Our customers appreciate our consistency and our continued delivery of a high-quality banking experience.

Chairman of the Florida Bankers Association

In June 2022, I assumed the role of Chairman of the Florida Bankers Association, one of Florida's oldest trade associations with a membership of 200 financial institutions whose deposits make up 98% of the total deposits in Florida.  This is quite an honor to be recognized by your peers in this capacity. The banking industry always

has outside challenges to our way of doing business and providing the capital that fuels the free enterprise system and homeownership. I’m pleased to be leading our Florida Bankers in protecting our industry and our ability to serve our customers and communities. This chairmanship role also gives us a first look at legislation and rulemaking that may influence our industry and your investment. I’m grateful to our Board of Directors and Marine Bankers for supporting me in this endeavor.

Interest Rates and the Economy

There is never a dull moment in the world of economics and the challenge of how it will impact Marine Bank.

We have very successfully managed through the challenging years of the pandemic, and we now enter the new world of labor and supply shortages, inflation and increasing interest rates.

The national economy may be weakening, yet our state, and local markets are still performing consistently; however, the risks seem to increase daily. Florida does seem poised to perform better economically in the event of a slowdown or recession. Interest rates are increasing, which is expected to benefit our net interest margin, but I am concerned that it may slow our loan volume. We have seen a significant reduction in secondary market saleable residential home loans. However, our adjustable-rate portfolio and construction loan volumes are increasing. Flexibility and maintaining our strong credit quality is the successful recipe to navigate these uncertain times. Our seat belts are fastened for a bumpy ride.

Wealth Management

Through our partnership with Warren Capital Management, led by Sue Tompkins, a local and highly skilled investment advisor, Marine Bank’s customers have access to financial planning, investment management, trust, and estate services.  If you have not already done so, please contact us at (772) 231-6611 to set up an appointment to review your portfolio and investment goals.

Marine Stock Trading

Your Marine Bancorp of Florida stock is listed on the OTC market under the ticker symbol of MBOF. If you have any questions or inquiries regarding buying, selling or your current ownership in Marine Bank & Trust, please contact Michael Acampora of D.A. Davidson, a banking industry specialist in providing market making services at (904) 456-6153 or macampora@dadco.com.  Your broker may also be able to assist you in purchases or sales of Marine stock.

What You Can Do

We know our customers have options. That’s why we hope you will take pride in knowing that over the last five years, more than 99% of the respondents to our customer service survey said they would recommend Marine

Bank to others. Therefore, we trust you will feel confident referring your friends, family and colleagues to us knowing that our goal is to exceed their expectations with our exceptional service and high-tech convenience.

Be sure to follow Marine Bank’s Facebook and LinkedIn pages. Our social media content provides value-added banking and financial related information and news about your Bank. Your “likes” and “shares” are critical in helping us spread the word. 

Thank you for your continued support.

Sincerely yours,

Bill Penney Signature                                                                                                               

William J. Penney
President, CEO & Chairman