August 9, 2023  

Dear Marine Shareholders:

I am pleased to announce that due to our outstanding bankers & loyal clients, Marine Bank continues to be the bank of choice in our community. We work diligently to offer products and services tailored to the needs of local businesses and individuals. 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 Six Months of 2023 Financial Summary:

million $

Six Months Ended 6/30/2023

Six Months Ended 6/30/2022

% change

Net Income




Total Assets




million $

Total Loans




Total Deposits




Total Checking + Now 




Marine Bancorp Tangible Book Value Per Common Share 




Earnings Per Share




Return on Shareholders’ Equity 




million $

Non-Performing Assets 




Quarter Over Quarter 2023 Financial Summary:

million $

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 six months of 2023 was $2.596 million, up from $2.458 million for the first six months of 2022, for a 6% year-over-year increase. The increase in earnings is due largely to the rising rate environment, resulting in a $975 thousand increase in net interest income. This increase was offset primarily by a decrease in secondary mortgage loan sale income due to the rising rate environment and deceleration of home sales.

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

Asset and Loan Growth

Total Assets grew $65 million, or 11%, from June 2022 to June 2023. Total Loans grew $71 million or 19% during the same period.

This growth rate slowed in the second quarter of 2023 compared to the first quarter of 2023 as Total Assets increased $3 million and Total Loans increased $5 million quarter over quarter.

Deposit Growth

Total deposits as of June 30, 2023, were $583 million compared to $559 million the same time last year, an increase of $24 million or 4%. 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 added 642 new checking accounts so far in 2023. However, checking account balances, at $292 million, were flat from June 30, 2022, to June 30, 2023. While the lack of balance growth is disappointing, this is a victory given the trend of movement of those deposits to higher interest rate accounts.

Continued core deposit growth and controlling our cost of funds is our primary challenge in 2023. This is where our deposit base of 50% in checking accounts benefits our shareholders.

Credit Quality 

Credit quality continues to be very strong. As of June 30, 2023, we had one loan with a balance of $1.4 million in non-accrual with no loss expected.


For the quarter ending June 30, 2023, Return on Shareholders’ Equity (ROE) was 10.28% as compared to 11.02% for the quarter ended June 30, 2022.

For the six-month ending June 30, 2023, the earnings per share was $1.42, versus $1.35 for the same period in 2022, an increase of $0.07 per share or 5%.

Profitability was off in the second quarter of 2023 versus the first 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 $17.12 per share on June 30, 2023, from $15.40 in the same period last year, an increase of 11%. 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, 50% of 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 Banking Situation and Deposit Flows 

Last quarter I wrote about the failures of two regional banks and how this understandably created a flight to safety for our depositors. Add one more failed bank to the mix in April. Please let me clarify that these banks all had higher than normal risk profiles without higher risk mitigation plans in place. They were subsequently closed, but no depositor lost a dime. In all three cases, the FDIC arranged for a suitor bank to come in and assume the customer deposit business. The system worked as expected, and I repeat, no customer lost a dime of their deposits.

Nevertheless, this created anxiety among the general public. We seized on this as an opportunity to calmly educate our customers about their various options to ensure that all their deposits are guaranteed. I am very proud of our Marine Bankers for how they were the voice of reason and confidence during these anxious times.

For customers desiring maximum FDIC insurance coverage, our Bankers are trained on how to title various accounts to increase coverage, and we utilize 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.

Going forward, we expect slower deposit growth as the Federal Reserve raises short-term interest rates and shrinks the money supply. We expect this to result in a higher cost of deposits and reduced loan production as there is less money in the financial system to lend out and reduced demand due to higher rates. Unfortunately, we also expect this to result in slightly lower income for 2023 as compared with the historic high net income enjoyed over the past few years.

This should correct itself as interest rates stabilize. 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

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 set up 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