October 19, 2023                                           

Dear Marine Shareholders:

I am pleased to announce that Marine Bank continues to be the bank of choice in the communities we serve. Our Team of outstanding Bankers work diligently to offer products and services tailored to the needs of local businesses and individuals. This has created loyal clients, even through these challenging times.

This effort has been recognized in our financial performance by Bauer Financial, the premier bank-rating organization, by rating Marine Bank 4-Stars, Excellent. The financial results below are for Marine Bank’s parent, Marine Bancorp of Florida, Inc.

First Nine Months of 2023 Financial Summary:

million $

Nine Months Ended 9/30/2023

Nine Months Ended 9/30/2022

% change

Net Income




Total Assets




million $

Total Loans




Total Deposits




Total Checking + NOW



- 4%


Marine Bancorp Tangible Book Value Per Common Share




Earnings Per Share




Return on Shareholders’ Equity, pre-AOCI adjustment




Return on Shareholders’ Equity, w/o AOCI




million $

Non-Performing Assets




Quarter Over Quarter 2023 Financial Summary:

million $

Quarter Ended 9/30/2023

Quarter Ended 6/30/2023

Quarter Ended 3/31/2023

Quarterly Net Income




Total Assets




million $

Total Loans




Total Deposits




Total Checking + NOW





Year-to-Date Earnings Per Share




Financial Results

Net income for the first nine months of 2023 was $3.625 million, down slightly from $3.906 million for the first nine months of 2022, for a 7% year-over-year decrease. The decrease in earnings is due largely to the rising rate environment. The $119 thousand increase in net interest income was offset primarily by a decrease in secondary mortgage loan sale income due to the increasing mortgage interest rates and resulting deceleration of home sales.

The net income of the third quarter of 2023 is slightly off from the net income of the second quarter of 2023 due to slowing loan growth, reduced secondary mortgage loan sale income and the increasing cost of funds and increasing expenses.

Asset and Loan Growth

Total Assets increased $16 million, or 3%, from September 2022 to September 2023. Total Loans grew $41 million or 10% during the same period.

This growth rate slowed in the third quarter of 2023 compared to the second quarter of 2023 as Total Assets decreased $17 million and Total Loans remained flat quarter over quarter.

Deposit Growth

Total deposits as of September 30, 2023, were $578 million compared to $551 million the same time last year, an increase of $27 million or 5%. The deposit mix is changing as customers seek a higher return on their deposits. We have seen a reduction in money market accounts and substantial growth in higher rate certificates of deposit.

We continue to attract customers to our popular business and personal checking accounts due to our outstanding personal service and technological conveniences. We have added 642 new checking accounts so far in 2023. However, checking account balances, at $285 million, declined 4% from September 30, 2022, to September 30, 2023. While the lack of balance growth is disappointing, this is a success given the trend of movement of those deposits to higher interest rate accounts.

Continued core deposit growth and controlling our cost of funds remains our primary challenge in 2023. This is where our deposit base of 49% in checking accounts benefits our shareholders.

Our clients are more conscious than ever about FDIC insurance and our Marine Bank Team is expert in helping them structure their deposits to gain the maximum possible insurance coverage. Additionally, we offer a reciprocal deposit service that helps our clients obtain FDIC insurance into the millions of dollars. If you have any questions, please let us know how we can help you.

Credit Quality

Credit quality continues to be very strong. As of September 30, 2023, we had one loan on non-accrual with a balance of $1.4 million and no loss expected. We continue to add to our reserve for loan losses and it is a healthy 1.44% of gross loans.


For the quarter ending September 30, 2023, Return on Shareholders’ Equity (ROE), prior to the AOCI adjustment, was 9.37% as compared to 11.29% for the same quarter ended September 30, 2022.

For the nine-months ending September 30, 2023, the earnings per share was $1.98, versus $2.15 for the same period in 2022, a decrease of $0.17 per share or 8%.

Profitability was off in the third quarter of 2023 versus the second quarter of 2023 due to slowing earning asset growth and increasing cost of funds, as noted above.

Common Stock Book Value

The common stock tangible book value increased to $15.55 per share on September 30, 2023, from $13.10 in the same period last year, an increase of 19%. As the previous shareholder letter mentioned, rising interest rates have caused book value reductions in the Bank’s investment portfolio. These unrealized losses, also referred to as AOCI, are reflected as a reduction in equity, resulting in changes to the tangible book value calculation.

The inclusion of the AOCI losses (or mark-to-market value) on one segment of the balance sheet is a GAAP accounting requirement. This requirement excludes loans, which is our biggest income source, any appreciated real estate and the entire liability and funding side of the balance sheet. If deposits were included, Marine’s deposit book of 49% checking accounts would significantly increase in value as rates rise, given that they are a zero-rate cost funding source. We, of course, follow the accounting rules, but I hope this puts the decline in value per share into perspective.

The Current Economic Environment

This year continues to be challenging. The economy constantly sends mixed signals, e.g., low unemployment with reducing but still high inflation and reducing home sales volume but fairly stable prices. The
Federal Reserve continues to raise interest rates to reduce economic growth and inflation but from our lens consumers are suffering an affordability shock that will ultimately curtail spending. Can the Fed achieve the desired soft landing, or do they overshoot and create a recession? We are managing the Bank to prepare for either outcome.

Meanwhile, the Florida economy chugs along, seemingly ignoring the national trends. As the only community bank headquartered in the growing Central East Coast Florida market, we believe that Marine Bank is in a strong position to benefit from the growth in these communities.

Marine Stock Trading

Your Marine Bancorp of Florida stock is listed on the OTC exchange under the ticker symbol of MBOF. Mike Acampora of DA Davidson is our market maker. If you have an interest in buying or selling Marine stock, please contact Mike at 904-456-6153 or macampora@dadco.com.

Wealth Management

Through our partnership with Warren Capital Management, Marine Bank customers can manage their financial needs in one convenient location – Marine Bank. Led by partner and Senior Financial Advisor Sue Tompkins, Warren Capital Management provides our customers with financial planning, investment management, trust, and estate services. Please contact us at (772) 231-6611 to schedule an appointment to review your portfolio and investment goals.

What You Can Do

Now more than ever, your referrals are important. Please refer your friends, family members, business associates or someone you think will be a good customer of your Bank. Over the last three years, more than 99% of the respondents to our service survey said they would recommend Marine Bank to others, so you can be assured we will exceed their expectations.

Please check our social media pages on Facebook and LinkedIn. They provide value-added banking and financial related information and news about your Bank. Your “likes” and “shares” are important, so please follow us!

Sincerely yours, 

Bill Penney Signature                                                                                                               

William J. Penney
President, CEO & Chairman