Bank of Marin Bancorp Reports Fourth Quarter and Full Year 2025 Financial Results

NOVATO, Calif.--( BUSINESS WIRE)--Bank of Marin Bancorp, "Bancorp" (Nasdaq: BMRC), parent company of Bank of Marin, "Bank," today announced that during the fourth quarter, near-record loan originations drove improved loan growth, asset quality strengthened, and net interest margin expanded due to both deposit cost reductions and our recent balance sheet repositioning. While the repositioning is expected to drive further margin expansion in 2026, as previously disclosed and as part of the repositioning, the Company incurred losses on the sale of securities during the fourth quarter, which resulted in a quarterly loss of $39.5 million. This compared to net income of $7.5 million for the third quarter of 2025. Diluted loss per share was $2.49 for the fourth quarter of 2025, compared to earnings per share of $0.47 for the prior quarter. The fourth quarter pre-tax losses on the sale of securities were $69.5 million.

Net loss for the year ended December 31, 2025 totaled $35.7 million compared to a net loss of $8.4 million for the year ended December 31, 2024. Results for the years ended December 31, 2025 and 2024 include pre-tax losses on the sale of securities of $88.2 million and $32.5 million, respectively.

On a non-GAAP basis, excluding the losses on sale of securities noted above, net income was $9.4 million for the fourth quarter, a 25% increase, and diluted earnings per share was $0.59, a 26% increase compared to the prior quarter. Non-GAAP net income for the year was $26.5 million, compared to net income of $14.5 million in the prior year, an 82% increase.

Comparable (non-GAAP) Excluding Loss on Sale of Securities

Three months ended

Year ended

(in thousands, except per share amounts; unaudited)

December 31, 2025

September 30, 2025

% Chg

December 31, 2025

December 31, 2024

% Chg

Pre-tax, pre-provision net (loss) income

Pre-tax, pre-provision net (loss) income (GAAP)

(56,890

)

9,610

(692

(51,923

)

(8,518

)

510

Comparable pre-tax, pre-provision net income (non-GAAP)

12,576

9,610

36,279

24,023

Net (loss) income

Net (loss) income (GAAP)

(39,541

)

7,526

(625

(35,675

)

(8,409

)

324

Comparable net income (non-GAAP)

9,391

7,526

26,454

14,513

Diluted (loss) earnings per share

Diluted (loss) earnings per share (GAAP)

(2.49

)

0.47

(630

(2.24

)

(0.52

)

331

Comparable diluted earnings per share (non-GAAP)

0.59

0.47

1.66

0.90

See complete Reconciliation of GAAP and Non-GAAP Financial Measures below

Related non-GAAP tax benefit calculated using blended statutory rate of 29.5636%

Concurrent with this release, Bancorp issued presentation slides providing supplemental information, some of which will be discussed during the fourth quarter 2025 earnings call. The earnings release and presentation slides are intended to be reviewed together and can be found online on Bank of Marin’s website at www.bankofmarin.com. under “Investor Relations.”

“We are excited to announce another quarter of positive trends in loan originations, deposit balances and pricing, net interest margin, and credit quality,” said Tim Myers, President and Chief Executive Officer. “Quarterly loan production excluding PPP loans was the highest since 4Q 2015, resulting in record annual volume of $273 million. We executed on a balance sheet repositioning in Q4 that contributed to NIM improvement of 0.24% for the quarter and non-GAAP net income for 2025 that was 82% higher than the prior year.

"Our proactive approach to risk management resulted in continued improvement in classified loans, non-accruals, and delinquencies. Given the timing of loan originations in Q4 and further benefits from the balance sheet repositioning, we anticipate the positive earnings trends will continue into subsequent quarters."

Bancorp also provided the following highlights for the fourth quarter ended December 31, 2025:

Comparable (non-GAAP) Excluding Loss on Sale of Securities

Three months ended

Year ended

(in thousands, except per share amounts; unaudited)

December 31, 2025

September 30, 2025

December 31, 2024

December 31, 2025

December 31, 2024

Return on average assets

Average assets

3,926,118

3,828,876

3,769,599

3,805,821

3,773,882

Return on average assets (GAAP)

(4.00

0.78

0.63

(0.94

(0.22

Comparable return on average assets (non-GAAP)

0.95

0.78

0.63

0.70

0.38

Return on average equity

Average stockholders' equity

435,660

439,950

435,070

435,660

435,070

Return on average equity (GAAP)

(36.54

6.79

5.48

(8.19

(1.93

Comparable return on average equity (non-GAAP)

8.74

6.79

5.48

6.07

3.34

Efficiency ratio

Efficiency ratio (GAAP)

(60.40

68.94

65.53

254.62

112.62

Comparable efficiency ratio (non-GAAP)

63.01

68.94

65.53

70.21

77.30

See complete Reconciliation of GAAP and Non-GAAP Financial Measures below

Related non-GAAP tax benefit calculated using blended statutory rate of 29.5636%

“The investment grade ratings we received from Kroll Bond Rating Agency and the related successful issuance of $45 million in subordinated notes to support our balance sheet repositioning demonstrate the strength of our financial position and reinforce our positive growth outlook,” said Chief Financial Officer Dave Bonaccorso. “We look forward to utilizing some of the incremental profitability to invest in hiring, technology, and other efficiency initiatives to continue driving earnings growth and shareholder value."

Loans and Credit Quality

Loans increased by $30.5 million for the fourth quarter and totaled $2.121 billion as of December 31, 2025 compared to $2.090 billion as of September 30, 2025. Fourth quarter new fundings of $106.5 million were the highest since 2015, excluding PPP loans.

Loans increased by $37.6 million from $2.083 billion as of December 31, 2024, and was mainly due to a $92.7 million increase in commercial non-owner occupied real estate loans, offset by a decrease of $32.6 million in residential real estate loans.

As indicated in the loan roll forward table below, newly funded loans for the fourth quarter of 2025 increased by 54% quarter over quarter and by 79% year over year.

Three months ended

Year ended

(in millions; unaudited)

December 31, 2025

September 30, 2025

December 31, 2024

December 31, 2025

December 31, 2024

Gross loans beginning balance

2,090.4

2,073.6

2,090.1

2,083.3

2,073.7

Newly funded

106.5

69.0

47.1

273.5

152.6

New total commitments 1

141.0

100.0

69.4

373.5

268.8

Purchased

—

34.9

Net increase (decrease) in line of credit utilization

1.3

2.5

3.2

(2.8

)

29.1

Pay-downs, maturities and charge offs

(49.8

)

(33.9

)

(36.7

)

(145.7

)

(120.6

)

Amortization

(27.5

)

(20.8

)

(20.4

)

(87.4

)

(86.4

)

Gross loans ending balance

2,120.9

2,090.4

2,083.3

2,120.9

2,083.3

1 New total commitments includes both newly funded loans and new unfunded commitments

Non-accrual loans totaled $26.9 million, or 1.27% of the loan portfolio, at December 31, 2025, compared to $31.5 million, or 1.51%, at September 30, 2025. The $4.6 million decrease resulted from a $3.6 million payoff on a commercial relationship which included fees and interest recovery of $667 thousand. Additionally, there was a $500 thousand decrease due to risk rating improvements and a $500 thousand decrease due to net paydowns during the fourth quarter of 2025. Of the total non-accrual loans as of December 31, 2025, approximately 68% were paying as agreed, 97% were real estate secured, and all are being closely managed and monitored.

We continue to closely monitor our portfolio for signs of potential weakness to ensure proactive risk management and actively work towards a resolution on our classified loans. Classified loans decreased by $17.3 million to $32.1 million as of December 31, 2025, compared to $49.4 million as of September 30, 2025. The decrease was largely due to upgrades of $12.8 million and payoffs of $4.4 million during the fourth quarter. Downgrades to classified during the quarter were nominal consisting of six small loans totaling approximately $578 thousand.

Accruing loans past due 30 to 89 days totaled $2.8 million at December 31, 2025, down from $11.0 million at September 30, 2025.

Loans designated special mention, which are not considered adversely classified, increased by $29.5 million to $118.0 million as of December 31, 2025, from $88.5 million as of September 30, 2025. The increase was largely due to the downgrade of $34.5 million to special mention from pass/watch and the upgrade of $12.8 million from classified. This was offset by upgrades to pass/watch of $7.0 million, payoffs of $6.0 million and paydowns of $4.8 million. All loans in this category continue to pay as agreed.

Net charge-offs for the fourth quarter of 2025 totaled $64 thousand, compared to none in the prior quarter.

There was a provision of $300 thousand for credit losses on loans in the fourth quarter due primarily to loan growth and modest deterioration in the economic forecast, compared to no provision in the prior quarter. The ratio of allowance for credit losses to total loans was 1.42% at December 31, 2025, compared to 1.43% at September 30, 2025.

There was a provision for credit losses on unfunded loan commitments of $185 thousand in the fourth quarter of 2025 due to growth in loan commitments of $20.8 million primarily from new originations. There was no provision for credit losses on unfunded loan commitments in the third quarter of 2025.

Cash, Cash Equivalents and Restricted Cash

Total cash, cash equivalents and restricted cash were $225.3 million at December 31, 2025, compared to $219.3 million at September 30, 2025. The $6.0 million increase was mainly a result of the growth in deposits and the receipt of the $43.8 million in subordinated notes, net of issuance costs, partially offset by the increase in loans and investment purchases.

Investments

The investment securities portfolio totaled $1.328 billion at December 31, 2025, a decrease of $27.5 million from September 30, 2025. On November 3, 2025, the Bank reclassified its HTM portfolio into AFS and sold securities with a book value of $593.2 million at a pre-tax loss of $69.5 million. Also reducing the total balance were principal repayments and maturities totaling $52.6 million and $20.1 million, respectively, and an $18.4 million increase in unrealized losses on available-for-sale securities, $11.7 million of which was related to reclassifying the HTM securities to AFS. These were offset by purchases of $647.0 million in AFS securities and $9.8 million in net accretion/amortization of discounts/premiums. Our portfolio is eligible for pledging to FHLB or the Federal Reserve as collateral for borrowing. The portfolio is comprised of high credit quality investments with an average effective duration of 2.95. The portfolio generates cash flows monthly from interest, principal amortization and payoffs, which further supports the Bank's liquidity. Those cash flows totaled $84.2 million and $42.3 million in the fourth and third quarters of 2025, respectively.

Deposits

Deposits totaled $3.416 billion at December 31, 2025, compared to $3.383 billion at September 30, 2025. The increase in deposits was mostly due to a mixture of new relationships and growth within existing ones. Non-interest bearing deposits made up 43.7% of total deposits as of December 31, 2025, compared to 43.1% as of September 30, 2025. The Bank's competitive and balanced approach to relationship management including focused outreach and business development generated almost 1,000 new accounts during the fourth quarter, 45% of which were new relationships (excluding new reciprocal accounts). Balances in the reciprocal deposit network program increased $11.9 million during the quarter to $509.1 million, and estimated uninsured deposits consisted of 31% of total deposits as of December 31, 2025.

Borrowing and Liquidity

At December 31, 2025, the Bank had no outstanding borrowings, consistent with September 30, 2025. Net available funding sources, including unrestricted cash, unencumbered available-for-sale securities, and total available borrowing capacity, were $2.148 billion, or 63% of total deposits and 204% of estimated uninsured and/or uncollateralized deposits as of December 31, 2025.

The following table details the components of our contingent liquidity sources as of December 31, 2025.

(in millions)

Total Available

Amount Used

Net Availability

Internal Sources

Unrestricted cash 1

206.6

N/A

206.6

Unencumbered securities at market value

489.6

N/A

489.6

External Sources

FHLB line of credit

967.2

—

967.2

FRB line of credit

344.7

—

344.7

Lines of credit at correspondent banks

140.0

—

140.0

Total Liquidity

2,148.1

—

2,148.1

1 Excludes cash items in transit as of December 31, 2025.

Note: Off-balance sheet one-way deposits totaling $51.2 million available through third-party networks are not included above.

Subordinated Notes

During the fourth quarter, Bancorp issued Fixed-to-Floating Subordinated Notes of $45.0 million with a final maturity date of December 1, 2035, to certain investors in a private placement to strengthen capital ratios as part of the balance sheet repositioning. The interest rate of the Bank’s subordinated notes is 6.75%, payable semi-annually in arrears on June 1 and December 1 of each year, commencing on June 1, 2026. After December 1, 2030, the interest rate will be variable and equal Three-Month Term SOFR plus 335 basis points, resetting quarterly.

Capital Resources

The total risk-based capital ratio for Bancorp was 15.25% at December 31, 2025, compared to 16.13% at September 30, 2025. The total risk-based capital ratio for the Bank was 13.90% at December 31, 2025, compared to 15.11% at September 30, 2025.

Bancorp's tangible common equity to tangible assets was 8.35% at December 31, 2025, compared to 9.72% at September 30, 2025. The TCE ratio decreased quarter over quarter mostly due to the increase in unrealized losses attributed to the HTM securities reclassification and the subsequent loss from sale of securities. The Bank's capital plan and point-in-time capital stress tests indicate that capital ratios will remain above well-capitalized regulatory and internal policy minimums throughout the five-year forecast horizon and across various stress scenarios such as additional unrealized losses on the investment portfolio, additional deposit growth or decline, loan credit quality deterioration, and potential share repurchases.

Earnings

Net Interest Income

Net interest income totaled $31.2 million for the fourth quarter of 2025, compared to $28.2 million for the prior quarter. The $3.0 million increase from the prior quarter was primarily related to an increase of $2.1 million in interest income on investment securities due to the balance sheet repositioning. Also contributing to the variance was an increase of $874 thousand in interest income on loans due to growth at higher rates and the $667 thousand in recovered interest on the non-accrual payoff in the quarter noted above, as well as the reduction of $598 thousand in interest expense on deposits due to strategic rate decreases. These were partially offset by the increase in interest expense on the new subordinated notes of $368 thousand and the decrease in interest income on cash balances of $202 thousand mostly due to a decline in the rate paid on balances at the Federal Reserve Bank.

Net interest income totaled $110.2 million for the year ended December 31, 2025, compared to $94.7 million in 2024. The $15.6 million increase from the prior year was primarily due to an increase of $5.4 million in interest income on investment securities due to the repositionings. Also contributing to the variance was the reduction of $4.6 million in interest expense on deposits due to strategic rate decreases. Interest income on loans and cash balances also increased significantly by $2.9 million and $2.8 million, respectively. These were partially offset by the increase in interest expense on the new subordinated notes of $368 thousand.

The tax-equivalent net interest margin was 3.32% for the fourth quarter of 2025, compared to 3.08% for the prior quarter. The increase from the prior quarter was primarily due to the increase in yield on the investment securities due to the repositioning and the reduction in cost of deposits, contributing 19 and 9 basis points, respectively. Increases in loans at higher rates in the quarter added 3 basis points, as well. These were partially offset by the addition of subordinated notes in the quarter and the reduction in earnings on due from banks resulting from both lower average balances and lower rates given the Federal Funds rate cuts, reducing the margin by 4 and 3 basis points, respectively.

The tax-equivalent net interest margin was 3.06% for 2025, compared to 2.63% for 2024. Higher yields on investment securities and loans increased the margin by 15 and 8 basis points, respectively. Higher deposit balances at significantly reduced deposit costs contributed to a 13 basis point improvement. In addition, the significant interest-bearing cash balance added 7 basis points, despite rate reductions later in 2025.

Non-Interest Income

Non-interest income showed a loss of $66.6 million for the fourth quarter of 2025, compared to income of $2.7 million for the third quarter of 2025. The $69.4 million decrease from the prior quarter was primarily attributed to the $69.5 million loss taken on the sale of securities mentioned above. There were no other notable variances in the quarter. Non-interest income excluding the loss on sale was $2.8 million.

Non-interest income showed a loss of $76.7 million for 2025, a $55.3 million decrease from a loss of $21.4 million for 2024. The decrease in 2025 was primarily due to the $55.7 million change in net loss on sale of available-for-sale investment securities in 2025 and 2024 related to our balance sheet repositionings previously discussed. Excluding losses on sale of securities in both years, non-interest income increased by $371 thousand, which included a $306 thousand year-over-year increase in earnings on bank-owned life insurance death benefits.

Non-Interest Expense

Non-interest expenses totaled $21.4 million for the fourth quarter of 2025, compared to $21.3 million for the prior quarter, an increase of $95 thousand. Deposit network fees increased by $369 thousand due to rising volume and rate and professional services increased by $226 thousand mainly due to increased performance of annual audit work in the quarter. Salaries and related benefits decreased by $645 thousand largely due to incentive bonus and profit sharing accrual adjustments.

Non-interest expenses increased $3.7 million to $85.5 million in 2025 from $81.8 million in 2024. Significant fluctuations were as follows:

Statement Regarding Use of Non-GAAP Financial Measures

Financial results are presented in accordance with GAAP and with reference to certain non-GAAP financial measures. Management believes that, given industry turmoil that largely began in the first quarter of 2023, the presentation of Bancorp's non-GAAP TCE ratio reflecting the after tax impact of unrealized losses on held-to-maturity securities provides useful supplemental information to investors because it reflects the level of capital remaining after a hypothetical liquidation of the entire securities portfolio. In addition, management believes that providing selected financial measures excluding the loss on sale of securities discussed above is useful to investors as the strategic short-term loss taken for expected long-term profitability makes the operational performance difficult to compare to other periods. Because there are limits to the usefulness of this or any other non-GAAP measure to investors, Bancorp encourages readers to consider its annual and quarterly consolidated financial statements and notes related thereto for their entirety, as filed with the Securities and Exchange Commission, and not to rely on any single financial measure. A reconciliation of the GAAP financial measures to comparable non-GAAP financial measures is presented below.

Reconciliation of GAAP and Non-GAAP Financial Measures

(in thousands, unaudited)

December 31, 2025

September 30, 2025

December 31, 2024

Tangible Common Equity - Bancorp

Total stockholders' equity

394,654

443,818

435,407

Goodwill and core deposit intangible

(74,670

)

(74,882

)

(75,546

)

Total TCE

319,984

368,936

359,861

Unrealized losses on HTM securities, net of tax 1

—

(68,192

)

(89,171

)

Unrealized losses on HTM securities included in AOCI, net of tax 2

—

6,952

7,701

TCE, net of unrealized losses on HTM securities (non-GAAP)

319,984

307,696

278,391

Total assets

3,904,778

3,869,021

3,701,335

Goodwill and core deposit intangible

(74,670

)

(74,882

)

(75,546

)

Total tangible assets

3,830,108

3,794,139

3,625,789

Unrealized losses on HTM securities, net of tax 1

—

(68,192

)

(89,171

)

Unrealized losses on HTM securities included in AOCI, net of tax 2

—

6,952

7,701

Total tangible assets, net of unrealized losses on HTM securities (non-GAAP)

3,830,108

3,732,899

3,544,319

Bancorp TCE ratio

a / c

8.4

9.7

9.9

Bancorp TCE ratio, net of unrealized losses on HTM securities (non-GAAP)

b / d

8.4

8.2

7.9

Tangible Book Value Per Share

Common shares outstanding

16,103

16,095

16,089

Book value per share

24.51

27.57

27.06

Tangible book value per share

a / e

19.87

22.92

22.37

1 Unrealized losses on held-to-maturity securities as of December 31, 2025 were zero as all were transferred to available-for-sale in the fourth quarter. Unrealized losses on held-to-maturity securities as of September 30, 2025 and December 31, 2024 were $96.8 million and $126.6 million, respectively, including the unrealized losses that resulted from the transfer of securities from AFS to HTM, net of an estimated $28.6 million and $37.4 million, respectively, in deferred tax benefits based on a blended state and federal statutory tax rate of 29.56%.

2 The remaining unrealized losses that resulted from the transfer of securities from AFS to HTM, as of September 30, 2025 and December 31, 2024, net of an estimated $2.9 million and $3.2 million, respectively, in deferred tax benefits based on a blended state and federal statutory tax rate of 29.56% are added back as they are already included in AOCI.

(in thousands, except per share amounts; unaudited)

Three months ended

Year ended

Pre-tax, pre-provision net (loss) income

December 31, 2025

September 30, 2025

December 31, 2024

December 31, 2025

December 31, 2024

(Loss) income before (benefit from) provision for income taxes

(57,375

)

9,610

9,645

(52,483

)

(13,835

)

Provision for credit losses on loans

300

—

375

5,550

Provision for (reversal of) credit losses on unfunded loan commitments

185

—

185

(233

)

Pre-tax, pre-provision net (loss) income (GAAP)

(56,890

)

9,610

9,645

(51,923

)

(8,518

)

Adjustments:

Losses on sale of investment securities from portfolio repositioning

69,466

—

88,202

32,541

Comparable pre-tax, pre-provision net income (non-GAAP)

12,576

9,610

9,645

36,279

24,023

Net (loss) income

Net (loss) income (GAAP)

(39,541

)

7,526

6,001

(35,675

)

(8,409

)

Adjustments:

Losses (gains) on sale of investment securities from portfolio repositioning

69,466

—

88,202

32,541

Related income tax benefit 1

(20,534

)

—

(26,073

)

(9,619

)

Adjustments, net of taxes

48,932

—

62,129

22,922

Comparable net income (non-GAAP)

9,391

7,526

6,001

26,454

14,513

Diluted (loss) earnings per share

Weighted average diluted shares

15,898

15,934

15,967

15,942

16,042

Diluted (loss) earnings per share (GAAP)

(2.49

)

0.47

0.38

(2.24

)

(0.52

)

Comparable diluted earnings per share (non-GAAP)

0.59

0.47

0.38

1.66

0.90

Return on average assets

Average assets

3,926,118

3,828,876

3,769,599

3,805,821

3,773,882

Return on average assets (GAAP)

(4.00

0.78

0.63

(0.94

(0.22

Comparable return on average assets (non-GAAP)

0.95

0.78

0.63

0.70

0.38

Return on average equity

Average stockholders' equity

435,660

439,950

435,070

435,660

435,070

Return on average equity (GAAP)

(36.54

6.79

5.48

(8.19

(1.93

Comparable return on average equity (non-GAAP)

8.74

6.79

5.48

6.07

3.34

Efficiency ratio

Non-interest expense

21,423

21,328

18,338

85,505

81,818

Net interest income

31,181

28,193

25,230

110,232

94,660

Non-interest income (GAAP)

(66,648

)

2,745

2,753

(76,650

)

(21,360

)

Losses (gains) on sale of investment securities from portfolio repositioning

69,466

—

88,202

32,541

Non-interest income (non-GAAP)

2,818

2,745

2,753

11,552

11,181

Efficiency ratio (GAAP)

(60.40

68.94

65.53

254.62

112.62

Comparable efficiency ratio (non-GAAP)

63.01

68.94

65.53

70.21

77.30

Share Repurchase Program

On July 24, 2025, the Board of Directors approved the adoption of Bancorp's share repurchase program for up to $25.0 million, that became effective July 24, 2025 and expires on July 31, 2027. There were no share repurchases in the fourth quarter of 2025.

Earnings Call and Webcast Information

Bank of Marin Bancorp (Nasdaq: BMRC) will present its fourth quarter and year-end 2025 earnings call on Monday, January 26, 2026 at 8:30 a.m. PT/11:30 a.m. ET. Investors can listen to the webcast online through Bank of Marin’s website at www.bankofmarin.com under “Investor Relations.” To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available at the same website location shortly after the call. Closed captioning will be available during the live webcast, as well as on the webcast replay.

About Bank of Marin Bancorp

Founded in 1990 and headquartered in Novato, Bank of Marin is the wholly owned subsidiary of Bank of Marin Bancorp (Nasdaq: BMRC). A leading business and community bank with assets of $3.9 billion, Bank of Marin provides commercial and personal banking, specialty lending, and wealth management and trust services throughout its network of 27 branches and eight commercial banking offices serving Northern California. Bank of Marin was ranked the #1 west coast deposit franchise and #4 nationwide in 2025, by S&P Global Market Intelligence, for best deposit franchise among banks with total assets between $3 billion and $10 billion. Specializing in providing legendary service to its clients and investing in its local communities, Bank of Marin has consistently been ranked one of the “Top Corporate Philanthropists" by San Francisco Business Times since 2003, was inducted into NorthBay Biz’s “Best of” Hall of Fame in 2024, ranked top 13 in Sacramento Business Journal’s 2025 Corporate Direct Giving List, ranked top 15 in Sacramento Business Journal’s 2025 Multifamily Mortgage Lenders List and voted “Best Places to Work” in 2025 by the North Bay Business Journal. Bank of Marin Bancorp is included in the Russell 2000 Small-Cap Index and Nasdaq ABA Community Bank Index. For more information, visit www.bankofmarin.com.

Forward-Looking Statements

This release may contain certain forward-looking statements that are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact Bancorp's earnings in future periods. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “intend,” “estimate” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions and the economic uncertainty in the United States and abroad, including economic or other disruptions to financial markets caused by the Trump administration's approach to tariffs and trade, acts of terrorism, war or other conflicts, impacts from inflation, supply chain disruptions, changes in interest rates (including the actions taken by the Federal Reserve to control inflation), California's unemployment rate, deposit flows, real estate values, and expected future cash flows on loans and securities; the impact of adverse developments at other banks, including bank failures, that impact general sentiment regarding the stability and liquidity of banks; costs or effects of acquisitions; competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; natural disasters (such as wildfires and earthquakes in our area); adverse weather conditions; interruptions of utility service in our markets for sustained periods; and other economic, competitive, governmental, regulatory and technological factors (including external fraud and cybersecurity threats) affecting our operations, pricing, products and services; and successful integration of acquisitions. These and other important factors are detailed in various securities law filings made periodically by Bancorp, copies of which are available from Bancorp without charge. Bancorp undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

BANK OF MARIN BANCORP FINANCIAL HIGHLIGHTS

Three months ended

Years ended

(in thousands, except per share amounts; unaudited)

December 31, 2025

September 30, 2025

December 31, 2025

December 31, 2024

Selected operating data and performance ratios:

Net (loss) income

(39,541

)

7,526

(35,675

)

(8,409

)

Diluted (loss) earnings per common share

(2.49

)

0.47

(2.24

)

(0.52

)

Return on average assets

(4.00

0.78

(0.94

(0.22

Return on average equity

(36.79

6.79

(8.19

(1.93

Efficiency ratio

(60.40

68.94

254.62

112.62

Tax-equivalent net interest margin

3.32

3.08

3.06

2.63

Cost of deposits

1.19

1.29

1.26

1.41

Cost of funds

1.22

1.29

1.27

1.42

Net charge-offs

—

941

Net charge-offs to average loans

0.05

(in thousands; unaudited)

December 31, 2025

September 30, 2025

December 31, 2024

Selected financial condition data:

Total assets

3,904,778

3,869,021

3,701,335

Loans:

Commercial and industrial

159,898

154,303

152,263

Real estate:

Commercial owner-occupied

310,219

313,996

321,962

Commercial non--owner occupied

1,366,251

1,324,263

1,273,596

Construction

15,101

15,869

36,970

Home equity

99,222

95,872

88,325

Other residential

110,614

122,924

143,207

Installment and other consumer loans

59,548

63,127

66,933

Total loans

2,120,853

2,090,354

2,083,256

Non-accrual loans: 1

Commercial and industrial

524

3,488

2,845

Real estate:

Commercial owner-occupied

315

1,488

1,537

Commercial non-owner occupied

25,387

25,701

28,525

Home equity

401

553

752

Other residential

—

Installment and other consumer loans

204

185

222

Total non-accrual loans

26,903

31,489

33,881

Classified loans (graded substandard and doubtful)

32,111

49,379

45,104

Classified loans as a percentage of total loans

1.51

2.36

2.17

Total accruing loans 30-89 days past due

2,843

10,983

2,231

Total loans 90 days or more past due and accruing interest 1

—

290

—

Allowance for credit losses to total loans

1.42

1.43

1.47

Allowance for credit losses to non-accrual loans

1.12x

0.95x

0.90x

Non-accrual loans to total loans

1.27

1.51

1.63

Total deposits

3,415,542

3,382,576

3,220,015

Loan-to-deposit ratio

62.09

61.80

64.70

Stockholders' equity

394,654

443,818

435,407

Book value per share

24.51

27.58

27.06

Tangible book value per share

19.87

22.92

22.37

Tangible common equity to tangible assets- Bank

8.59

9.04

9.64

Tangible common equity to tangible assets- Bancorp

8.35

9.72

9.93

Total risk-based capital ratio - Bank

13.90

15.11

16.13

Total risk-based capital ratio - Bancorp

15.25

16.13

16.54

Full-time equivalent employees

312

304

285

1 There were no non-performing loans over 90 days past due and accruing interest as of December 31, 2025, September 30, 2025 and December 31, 2024.

NM - Not meaningful.

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF CONDITION

As of December 31, 2025, September 30, 2025 and December 31, 2024

(in thousands, except share data; unaudited)

December 31, 2025

September 30, 2025

December 31, 2024

Assets

Cash, cash equivalents and restricted cash

225,303

219,333

137,304

Investment securities:

Held-to-maturity (at amortized cost, net of zero allowance for credit losses at December 31, 2025, September 30, 2025 and December 31, 2024 )

—

811,751

879,199

Available-for-sale (at fair value; amortized cost of $1,353,961, $551,311 and $419,292 at December 31, 2025, September 30, 2025 and December 31, 2024, respectively; net of zero allowance for credit losses at December 31, 2025, September 30, 2025 and December 31, 2024)

1,327,812

543,605

387,534

Total investment securities

1,327,812

1,355,356

1,266,733

Loans, at amortized cost

2,120,853

2,090,354

2,083,256

Allowance for credit losses on loans

(30,089

)

(29,853

)

(30,656

)

Loans, net of allowance for credit losses on loans

2,090,764

2,060,501

2,052,600

Goodwill

72,754

Bank-owned life insurance

71,306

70,866

71,026

Operating lease right-of-use assets

22,499

17,188

19,025

Bank premises and equipment, net

8,059

7,581

6,832

Core deposit intangible, net

1,916

2,128

2,792

Interest receivable and other assets

84,365

63,314

72,269

Total assets

3,904,778

3,869,021

3,701,335

Liabilities and Stockholders' Equity

Liabilities

Deposits:

Non-interest bearing

1,492,249

1,458,230

1,399,900

Interest bearing:

Transaction accounts

179,649

185,485

198,301

Savings accounts

232,109

224,642

225,691

Money market accounts

1,305,849

1,297,703

1,153,746

Time accounts

205,686

216,516

242,377

Total deposits

3,415,542

3,382,576

3,220,015

Borrowings and other obligations

709

154

Subordinated notes, net

43,857

—

Operating lease liabilities

24,747

19,528

21,509

Interest payable and other liabilities

25,269

23,042

24,250

Total liabilities

3,510,124

3,425,203

3,265,928

Stockholders' Equity

Preferred stock, no par value; authorized - 5,000,000 shares, none issued

—

Common stock, no par value; authorized - 30,000,000 shares; issued and outstanding - 16,102,687, 16,094,686 and 16,089,454 at December 31, 2025, September 30, 2025 and December 31, 2024, respectively

214,909

214,467

215,511

Retained earnings

198,163

241,727

249,964

Accumulated other comprehensive loss, net of tax

(18,418

)

(12,376

)

(30,068

)

Total stockholders' equity

394,654

443,818

435,407

Total liabilities and stockholders' equity

3,904,778

3,869,021

3,701,335

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

Three months ended

Years ended

(in thousands, except per share amounts; unaudited)

December 31, 2025

September 30, 2025

December 31, 2024

December 31, 2025

December 31, 2024

Interest income

Interest and fees on loans

27,128

26,254

25,872

104,426

101,484

Interest on investment securities

11,937

9,846

8,377

38,467

33,075

Interest on federal funds sold and due from banks

2,767

2,969

2,227

9,535

6,714

Total interest income

41,832

39,069

36,476

152,428

141,273

Interest expense

Interest on interest-bearing transaction accounts

191

328

327

1,213

1,201

Interest on savings accounts

609

600

556

2,329

2,003

Interest on money market accounts

7,961

8,376

8,110

31,841

33,914

Interest on time accounts

1,516

1,571

2,252

6,436

9,254

Interest on borrowings and other obligations

241

Interest on subordinated notes

368

—

368

—

Total interest expense

10,651

10,876

11,246

42,196

46,613

Net interest income

31,181

28,193

25,230

110,232

94,660

Provision for credit losses on loans

300

—

375

5,550

Provision for (reversal of) credit losses on unfunded loan commitments

185

—

185

(233

)

Net interest income after provision for (reversal of) credit losses

30,696

28,193

25,230

109,672

89,343

Non-interest income

Wealth management and trust services

573

564

576

2,312

2,420

Service charges on deposit accounts

543

547

551

2,188

2,164

Earnings on bank-owned life insurance, net

440

434

432

1,779

1,714

Debit card interchange fees, net

401

405

426

1,612

1,701

Dividends on Federal Home Loan Bank stock

372

366

370

1,475

1,478

Merchant interchange fees, net

104

377

324

Earnings on bank-owned life insurance death benefits

—

306

—

(Losses) gains on sales of investment securities, net

(69,466

)

—

(88,202

)

(32,541

)

Other income

385

342

318

1,503

1,380

Total non-interest income

(66,648

)

2,745

2,753

(76,650

)

(21,360

)

Non-interest expense

Salaries and employee benefits

11,359

12,004

9,413

47,458

44,683

Occupancy and equipment

2,098

2,079

2,127

8,509

8,242

Deposit network fees

1,527

1,158

838

4,671

3,526

Professional services

1,341

1,115

1,129

4,301

5,129

Data processing

1,033

1,116

1,096

4,326

4,222

Federal Deposit Insurance Corporation insurance

539

459

420

1,807

1,863

Information technology

532

538

432

2,046

1,686

Depreciation and amortization

331

291

341

1,264

1,466

Directors' expense

283

249

297

1,115

1,213

Amortization of core deposit intangible

211

217

237

875

975

Charitable contributions

657

677

Other expense

2,087

2,046

1,978

8,476

8,136

Total non-interest expense

21,423

21,328

18,338

85,505

81,818

(Loss) income before provision for income taxes

(57,375

)

9,610

9,645

(52,483

)

(13,835

)

(Benefit from) provision for income taxes

(17,834

)

2,084

3,644

(16,808

)

(5,426

)

Net (loss) income

(39,541

)

7,526

6,001

(35,675

)

(8,409

)

Net (loss) income per common share:

Basic

(2.49

)

0.47

0.38

(2.24

)

(0.52

)

Diluted

(2.49

)

0.47

0.38

(2.24

)

(0.52

)

Weighted average common shares:

Basic

15,898

15,907

15,941

15,942

16,042

Diluted

15,898

15,934

15,967

15,942

16,042

Comprehensive (loss) income:

Net (loss) income

(39,541

)

7,526

6,001

(35,675

)

(8,409

)

Other comprehensive (loss) income:

Change in net unrealized losses on available-for-sale securities

4,933

2,514

(6,880

)

10,250

(2,848

)

Reclassification adjustment for losses on available-for-sale securities included in net income

69,466

—

88,202

32,541

Reclassification adjustment for losses for fair value hedges

—

1,444

—

1,359

Net unrealized losses on securities transferred from held-to-maturity to available-for-sale

(92,842

)

—

(92,842

)

—

Amortization of net unrealized losses on securities transferred from available-for-sale to held-to-maturity

9,867

360

355

10,932

1,504

Other comprehensive (loss) income, before tax

(8,576

)

2,874

(5,081

)

16,542

32,556

Deferred tax (benefit) expense

(2,533

)

850

(1,501

)

4,893

9,618

Other comprehensive (loss) income, net of tax

(6,043

)

2,024

(3,580

)

11,649

22,938

Total comprehensive (loss) income

(45,584

)

9,550

2,421

(24,026

)

14,529

BANK OF MARIN BANCORP

AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME

Three months ended

December 31, 2025

September 30, 2025

December 31, 2024

Interest

Average

Income/

Yield/

Average

Income/

Yield/

Average

Income/

Yield/

(dollars in thousands; unaudited)

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate

Assets

Interest-earning deposits with banks 1

278,508

2,767

3.89

266,559

2,969

4.36

183,597

2,227

4.75

Investment securities 2, 3

1,332,104

11,988

3.60

1,261,275

9,898

3.14

1,281,545

8,443

2.64

Loans 1, 3, 4, 5

2,080,328

27,252

5.13

2,071,049

26,361

4.98

2,081,781

25,979

4.88

Total interest-earning assets 1

3,690,940

42,007

4.45

3,598,883

39,228

4.27

3,546,923

36,649

4.04

Cash and non-interest-bearing due from banks

39,133

34,856

36,762

Bank premises and equipment, net

8,192

7,599

6,936

Interest receivable and other assets, net

187,853

187,538

178,978

Total assets

3,926,118

3,828,876

3,769,599

Liabilities and Stockholders' Equity

Interest-bearing transaction accounts

177,223

191

0.43

189,371

328

0.69

183,640

327

0.71

Savings accounts

226,349

609

1.07

221,781

600

1.07

223,978

556

0.99

Money market accounts

1,311,542

7,961

2.41

1,294,479

8,376

2.57

1,167,242

8,110

2.76

Time accounts, including CDARS

210,310

1,516

2.86

220,242

1,571

2.83

257,096

2,252

3.49

Borrowings and other obligations 1

726

3.62

4.08

168

2.52

Subordinate notes

20,588

368

7.16

—

Total interest-bearing liabilities

1,946,738

10,651

2.17

1,925,935

10,876

2.24

1,832,124

11,246

2.44

Demand accounts

1,506,847

1,419,872

1,452,966

Interest payable and other liabilities

46,139

43,119

48,547

Stockholders' equity

426,394

439,950

435,962

Total liabilities & stockholders' equity

3,926,118

3,828,876

3,769,599

Tax-equivalent net interest income/margin 1,3

31,356

3.32

28,352

3.08

25,403

2.80

Reported net interest income/margin 1

31,181

3.31

28,192

3.07

25,229

2.78

Tax-equivalent net interest rate spread

2.28

2.02

1.60

Year ended

December 31, 2025

December 31, 2024

Interest

Average

Income/

Yield/

Average

Income/

Yield/

(dollars in thousands; unaudited)

Balance

Expense

Rate

Balance

Expense

Rate

Assets

Interest-earning deposits with banks 1

222,747

9,535

4.22

128,752

6,714

5.13

Investment securities 2, 3

1,283,380

38,710

3.02

1,361,859

33,349

2.45

Loans 1, 3, 4, 5

2,074,565

104,870

4.99

2,074,971

101,912

4.83

Total interest-earning assets 1

3,580,692

153,115

4.22

3,565,582

141,975

3.92

Cash and non-interest-bearing due from banks

37,299

36,692

Bank premises and equipment, net

7,474

7,310

Interest receivable and other assets, net

180,356

164,298

Total assets

3,805,821

3,773,882

Liabilities and Stockholders' Equity

Interest-bearing transaction accounts

186,216

1,213

0.65

193,456

1,201

0.62

Savings accounts

224,428

2,329

1.04

227,061

2,003

0.88

Money market accounts

1,257,049

31,841

2.53

1,155,016

33,914

2.94

Time accounts, including CDARS

219,135

6,436

2.94

262,482

9,254

3.53

Borrowings and other obligations 1

253

3.53

4,628

241

5.13

Subordinated notes

5,189

368

7.10

—

Total interest-bearing liabilities

1,892,270

42,196

2.23

1,842,643

46,613

2.53

Demand accounts

1,433,223

1,448,346

Interest payable and other liabilities

44,668

47,823

Stockholders' equity

435,660

435,070

Total liabilities & stockholders' equity

3,805,821

3,773,882

Tax-equivalent net interest income/margin 1,3

110,919

3.06

95,362

2.63

Reported net interest income/margin 1

110,232

3.04

94,660

2.61

Tax-equivalent net interest rate spread

1.99

1.39

1 Interest income/expense is divided by actual number of days in the period times 360 days to correspond to stated interest rate terms, where applicable.

2 Yields on available-for-sale securities are calculated based on amortized cost balances rather than fair value, as changes in fair value are reflected as a component of stockholders' equity. Investment security interest is earned on 30/360 day basis monthly.

3 Yields and interest income on tax-exempt securities and loans are presented on a taxable-equivalent basis using the Federal statutory rate of 21 percent in 2025 and 2024.

4 Average balances on loans outstanding include non-performing loans. The amortized portion of net loan origination fees is included in interest income on loans, representing an adjustment to the yield.

5 Net loan origination (costs) fees included in interest income totaled $(1.7) million, $(1.6) million, and $(1.3) million in 2025, 2024, and 2023, respectively.