February 2, 2023

Dear Marine Shareholders:

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

Year Ended 2022 Financial Summary compared to 2021:

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% Change

Net Income




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Total Loans




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Total Checking + NOW





Marine Bancorp Tangible Book Value Per Common Share




Marine Bancorp

Book Value w/o AOCI

Per Common Share




Earnings Per Share




Return on Shareholders’ Equity




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Non-Performing Assets





Quarterly 2022 Financial Summary:

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Qtr Ended 12/31/2022

Qtr Ended 09/30/2022

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Quarterly Net Income





Total Assets





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Total Loans





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Total Checking + NOW






Earnings Per Share





Financial Results

Net income for the year ending December 31, 2022, was $5.381 million, up from $4.827 million for the year ending December 31, 2021, for an 11% year-over-year increase. The increase in earnings is due largely to a banner year in new loan production and growth in the Bank’s investment portfolio, along with controlling the increase in our cost of funds in the rising interest rate environment.

Asset Growth

Your Bank has experienced year-over-year asset growth of 16% with $636 million in total assets as of December 31, 2022, compared to $547 million on December 31, 2021, an increase of $89 million.

Loan Growth

Loans outstanding as of December 31, 2022, were $424 million as compared to $330 million on December 31, 2021, an increase of $94 million or 28%.  We saw strong new loan production in 2022 along with declining loan payoffs due to rising interest rates.

New loans included:

  • Residential mortgage = 310 loans totaling $140 million (this includes HELOC’s and lot loans)
  • Business and commercial real estate = 214 loans totaling $99 million
  • Consumer loans = 6 loans totaling $521,000

While these are good numbers for a financial report, we must never forget that behind every loan is a person or family, a business owner or investor that is buying a new house, a new building, expanding their business (and creating jobs) or making a new investment. That is what makes the banking business so personally rewarding beyond the financial returns.

Deposit Growth

Total deposits as of December 31, 2022, were $577 million compared to $500 million the same time last year, an increase of $77 million or 15%. 

Our non-interest and interest-bearing checking accounts, the key to customer relationships, grew to $295 million as of December 31, 2022, compared to $252 million on December 31, 2021, an increase of $43 million or 17%.

As you can see in the quarterly financial summary chart, core deposit growth slowed during the year. The Federal Reserve has increased short term interest rates faster than any time going back to the early 1980’s. Some Bank customers have moved their excess money into higher yielding accounts, and we have responded accordingly by raising our deposit rates. Continued deposit growth and controlling our cost of funds is the primary challenge in 2023. This is where our deposit base of 50%+ in checking accounts benefits the shareholders.


For the year ending December 31, 2022, Return on Shareholders’ Equity (ROE) was 11.92% as compared to 16.37% for the year ended December 31, 2021. By measuring the Bank’s income earned on our shareholders’ equity, ROE signals how effectively we are using your investment to generate profits. The decrease in

ROE was expected as earnings were no longer supplemented by the non-recurring PPP loan income and the increase in equity resulting from the $11.6 million in new capital that was raised in 2021.

For the year ending December 31, 2022, earnings per share was $2.96, versus $2.67 for the same period in 2021, an increase of $0.29 per share or 11%. This increase was due to the improved earnings as noted above and despite the increased number of new shares outstanding from the 2021 capital raise.

Common Stock Book Value

The common stock tangible book value decreased to $15.33 per share on December 31, 2022, from $23.31 in the same period last year, a decrease of $7.98 per share, or 34%. 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, also referred to as AOCI, are reflected as a reduction in equity, resulting in the decreased tangible book value calculations.

The common stock book value excluding the unrealized losses in the investment portfolio, increased to $26.37 per share as of December 31, 2022, from $23.40 on December 31, 2021, an increase of $2.97 per share, or 13%.

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, our 50%+ of checking accounts would have a significant increase in value as rates rise, given 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.

Credit Quality

Credit quality continues to be very strong. At year’s end we had one loan with a balance of $1.5 million in non-accrual with no loss expected. In January we moved another $1.5 million loan into non-performing status. The profile on both of these loans is quite similar; the two loans are fully secured by high-end residential houses in very desirable neighborhoods with estimated loan to values less than 40%. No loss is anticipated on either loan, but it does take time to work through the legal process to effect repayment.

At this time there are no other non-performing loans or assets.

Interest Rates and the Economy

As mentioned earlier in this letter, our challenge in 2023, is to grow deposits and pay a fair return to depositors and shareholders. The other issue we face is the unknown of a potential looming recession. The national economic news continues to be discouraging, except the strong unemployment numbers.

The local and state economies continue to be doing relatively well. In discussions with local business owners, they say they can now get sufficient materials, but labor is still a problem. The good news is sales are stable as demand for their products and services remain steady. Of course, inflation is a significant issue for all. The considerable increase in the cost of workforce housing is problematic for our employees and all workers in our communities. We will continue to operate the Bank to recognize and manage these risks, while still capitalizing on our local opportunities.

Wealth Management

Through our partnership with Warren Capital Management, Marine Bank customers can handle 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.  If you have not already done so, I encourage you to take this opportunity to benefit from Sue’s decades of experience and contact us at (772) 231-6611 to set up an appointment to review your portfolio and investment goals.

Marine Stock Trading

With more than 35 years of experience working with Florida-based community banks and their shareholders, Michael Acampora of D.A. Davidson, is available to answer your questions regarding buying, selling, or maintaining your current ownership in Marine Bank. You may reach him at (904) 456-6153 or macampora@dadco.com.  Your Marine Bancorp of Florida stock is listed on the OTC exchange under the ticker symbol of MBOF.

What You Can Do

First, if your primary banking relationship is not with Marine Bank, why not? You are an owner, and we need all owners to bank with us and refer their friends to Marine Bank. How can we make your banking life better? Please call us today.

Over the last six years, more than 99% of the respondents to our customer service survey said they would recommend Marine Bank to others, so you can be assured we will exceed your expectations.

Please follow us on social media on our Marine Bank Facebook and LinkedIn pages.  They provide value-added banking and financial related information and news about your Bank.  Your “likes” and “shares” are important so please follow us! On our website you will find a new series of interviews with local leaders in business and the non-profit world. Please check out this series entitled Fiercely Local Conversations with Marine Bank.

Remember to refer your friends, family members, business associates or someone you think will be a good customer of your Bank.

Here’s to good health, happiness, and strong bank performance in 2023!

Bill Penney Signature                                                                                                               

William J. Penney
President, CEO & Chairman