Bank of Marin Bancorp Reports Third Quarter Financial Results

NOVATO, Calif.--( BUSINESS WIRE)--Bank of Marin Bancorp, "Bancorp" (Nasdaq: BMRC), parent company of Bank of Marin, "Bank," announced net income of $7.5 million for the third quarter of 2025, compared to a net loss of $8.5 million (net income of $4.7 million, non-GAAP) for the second quarter of 2025, a 61.4% increase on a non-GAAP net income basis. Diluted income per share was $0.47 for the third quarter, compared to diluted loss per share of $(0.53) (diluted earnings per share of $0.29, non-GAAP) for the prior quarter. Net income for the first nine months of 2025 totaled $3.9 million ($17.1 million, non-GAAP), compared to a net loss of $14.4 million (net income of $8.5 million, non-GAAP) for the same period last year. Results for year-to-date 2025 and 2024 include pre-tax losses on the sale of securities of $18.7 million and $32.5 million, respectively, incurred to improve the bank's future earnings.

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

Three months ended

Nine months ended

(in thousands, except per share amounts; unaudited)

September 30, 2025

June 30, 2025

September 30, 2025

September 30, 2024

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

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

9,610

(11,199

)

4,892

(23,480

)

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

9,610

7,537

23,703

14,612

Net income (loss)

Net income (loss) (GAAP)

7,526

(8,536

)

3,866

(14,410

)

Comparable net income (non-GAAP)

7,526

4,662

17,064

8,512

Diluted earnings (loss) per share

Diluted earnings (loss) per share (GAAP)

0.47

(0.53

)

0.24

(0.90

)

Comparable diluted earnings per share (non-GAAP)

0.47

0.29

1.07

0.53

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 third 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.”

“The Bank’s financial performance continues to improve with 68% growth in quarterly earnings per share and a 38 basis point advance in net interest margin compared to the third quarter of 2024,” said Tim Myers, President and Chief Executive Officer. “We generated an accelerated amount of loan growth while maintaining our disciplined underwriting criteria and with a healthy pipeline, we expect to see continued loan growth over the remainder of the year.

“Our longstanding culture of prudent credit risk management drove a substantial reduction in classified loans and a smaller decline in non-accrual loans. We had a meaningful payoff in a non-accrual relationship already in the fourth quarter and expect further credit quality improvements by year end. We had strong deposit growth during the third quarter reflecting typical seasonal trends, the deepening of existing relationships, and the growth of new relationships.”

Bancorp also provided the following highlights for the third quarter of 2025:

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

Three months ended

Nine months ended

(in thousands, except per share amounts; unaudited)

September 30,

2025

June 30,

2025

September 30,

2024

September 30,

2025

September 30,

2024

Return on average assets

Average assets

3,828,876

3,737,794

3,763,660

3,765,281

3,775,320

Return on average assets (GAAP)

0.78

(0.92

0.48

0.14

(0.51

Comparable return on average assets (non-GAAP)

0.78

0.50

0.48

0.61

0.30

Return on average equity

Average stockholders' equity

439,950

439,187

435,645

438,781

434,773

Return on average equity (GAAP)

6.79

(7.80

4.17

1.18

(4.43

Comparable return on average equity (non-GAAP)

6.79

4.26

4.17

5.20

2.62

Efficiency ratio

Efficiency ratio (GAAP)

68.94

208.81

75.18

92.81

140.08

Comparable efficiency ratio (non-GAAP)

68.94

74.03

75.18

73.00

81.53

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 Bank’s 28% improvement in sequential quarter pre-tax pre-provision net income reflects benefits from organic growth as well as the expected impacts of our balance sheet repositioning activities,” said Chief Financial Officer Dave Bonaccorso. “We will continue to explore additional repositioning activities that could improve earnings and allow for investments in the long-term growth of the Bank."

Refer to the discussion and reconciliation of this non-GAAP financial measure in the section below entitled Statement Regarding Use of Non-GAAP Financial Measures.

Tangible book value per share is a non-GAAP financial measure used by Bancorp, as well as investors and analysts, in assessing Bancorp’s use of equity. Refer to the reconciliation of common equity to tangible common equity and resulting calculation of tangible book value per share in the section below entitled Statement Regarding Use of Non-GAAP Financial Measures.

Loans and Credit Quality

Loans totaled $2.090 billion as of September 30, 2025, a net increase of $16.7 million from June 30, 2025. Loan originations for the third quarter were $100.7 million ($69.0 million funded) including $85.3 million ($65.4 million funded) in commercial loans, which includes commercial and industrial, commercial real estate, and construction loans. In the prior quarter, loan originations were $68.8 million ($50.6 million funded) including $49.1 million ($41.6 million funded) in commercial loans. The third quarter of the prior year included total originations of $79.4 million ($63.9 million funded) including $28.2 million ($19.8 million funded) in commercial loans. Third quarter 2024 originations also included $35.7 million in purchased residential real estate loans.

For the third quarter of 2025, loan payoffs were $33.9 million, loan amortization from scheduled repayments was $20.8 million and the net increase in credit line utilization was $2.5 million. This compares to the prior quarter with loan payoffs of $36.5 million, amortization of $18.6 million, and a net increase in credit line utilization of $4.7 million. For the third quarter of prior year, loan payoffs were $30.9 million, amortization was $26.0 million, and the net decrease in credit line utilization was $2.7 million.

Accruing loans past due 30 to 89 days totaled $11.0 million as of September 30, 2025, compared to $2.7 million as of June 30, 2025. Contributing to the increase were four commercial real estate loans totaling $10.0 million and a number of smaller loans across various loan types, primarily past due fewer than 60 days, many of which are in the process of extension.

Non-accrual loans declined to $31.5 million, or 1.51% of the loan portfolio, at September 30, 2025, compared to $32.5 million, or 1.57% at June 30, 2025. The reduction included $1.1 million in payoffs in the quarter. Of the total non-accrual loans as of September 30, 2025, approximately 61% were paying as agreed, 88% were real estate secured, and all are being closely managed and monitored. Subsequent to quarter end, an additional $3.6 million in non-accrual loans were paid off in full including interest and fees.

In response to current market conditions, 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 $11.7 million to $49.4 million as of September 30, 2025, from $61.1 million as of June 30, 2025. The decrease was largely due to upgrades of two commercial real estate loans totaling $9.1 million.

Loans designated special mention, which are not considered adversely classified, decreased by $3.0 million to $88.5 million as of September 30, 2025, from $91.5 million as of June 30, 2025.

There were no net charge-offs for the third quarter of 2025. This compared to net charge-offs of $52 thousand for the second quarter of 2025.

There was no provision for credit losses on loans in the third quarter of 2025 or the prior quarter. The ratio of allowance for credit losses to total loans was 1.43% at September 30, 2025, compared to 1.44% at June 30, 2025.

Cash, Cash Equivalents and Restricted Cash

Total cash, cash equivalents and restricted cash were $219.3 million at September 30, 2025, a decrease of $9.5 million compared to $228.9 million at June 30, 2025 largely due to the purchase of investment securities and funding of loans, partially offset by the $137.5 million increase in deposits.

Investments

The investment securities portfolio totaled $1.355 billion at September 30, 2025, an increase of $140.1 million from June 30, 2025. The increase was primarily the result of the purchase of $169.1 million in available-for-sale securities along with the reduction of the unrealized loss of $2.5 million in the available-for-sale portfolio, partially offset by principal repayments of $31.8 million. Both the available-for-sale and held-to-maturity portfolios are eligible for pledging to FHLB or the Federal Reserve as collateral for borrowing. The portfolios are comprised of high credit quality investments with average effective durations of 2.43 on available-for-sale securities and 5.18 on held-to-maturity securities. Both portfolios generate cash flows monthly from interest, principal amortization and payoffs, which supports the Bank's liquidity. Those cash flows totaled $42.3 million and $85.4 million in the third and second quarters of 2025, respectively.

Deposits

Deposits increased $137.5 million (4.2%) to $3.383 billion at September 30, 2025, compared to $3.245 billion at June 30, 2025 primarily due to inflows from existing relationships as well as new relationships. This was the largest quarterly increase since the acquisition of American River Bank in the third quarter of 2021. The majority of this increase was $78.4 million in non-interest bearing deposits, largely due to seasonal inflows. A $51.7 million increase in money market accounts drove the increase in interest-bearing deposits. Non-interest bearing deposits continued to make up a strong 43.1% of total deposits at September 30, 2025, compared to 42.5% at June 30, 2025. The Bank's competitive and balanced approach to relationship management and focused outreach to customers seeking alternative options for banking solutions generated over 1,000 new accounts during the third quarter, 43% of which were new relationships.

Borrowings and Liquidity

At September 30, 2025, the Bank had no outstanding borrowings, consistent with June 30, 2025. While available as a liquidity source, we have not utilized brokered deposits. Net available funding sources, including unrestricted cash, unencumbered available-for-sale securities and total available borrowing capacity totaled $2.026 billion, or 60% of total deposits and 202% of estimated uninsured and/or uncollateralized deposits as of September 30, 2025. Additionally, as part of our liquidity management, the Bank maintained $30.4 million in deposits off-balance sheet with deposit networks at September 30, 2025, compared to zero at June 30, 2025.

The following table details the components of our contingent liquidity sources as of September 30, 2025.

(in millions)

Total Available

Amount Used

Net Availability

Internal Sources

Unrestricted cash 1

201.4

—

201.4

Unencumbered securities at market value

442.2

—

442.2

External Sources

FHLB line of credit

931.4

—

931.4

FRB line of credit

326.3

—

326.3

Lines of credit at correspondent banks

125.0

—

125.0

Total Liquidity

2,026.3

—

2,026.3

1 Excludes cash items in transit as of September 30, 2025.

Note: Off-balance sheet one-way and brokered deposits available through third-party networks are not included above.

Capital Resources

The total risk-based capital ratio for Bancorp was 16.13% at September 30, 2025, compared to 16.25% at June 30, 2025. The decrease was largely due to an increase in risk weighted assets, impacted by increased loans and investment security purchases in the quarter. The total risk-based capital ratio for the Bank was 15.11% at September 30, 2025, compared to 15.00% at June 30, 2025.

Bancorp's tangible common equity to tangible assets ("TCE ratio") was 9.72% at September 30, 2025, compared to 9.95% at June 30, 2025 due to our balance sheet growth. Our capital plan and point-in-time capital stress tests indicate that Bank of Marin and Bancorp capital ratios will remain above regulatory well-capitalized and internal policy minimums throughout a five-year forecast horizon and across 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 $28.2 million for the third quarter of 2025, a $2.3 million increase from the prior quarter. This was driven by an increase of $78.7 million in average earning assets including a $1.4 million increase in investment security interest income due to the second quarter repositioning.

The tax-equivalent net interest margin increased to 3.08% for the third quarter of 2025, compared to 2.93% for the prior quarter. The repositioning of securities added 13 basis points to the margin and the higher average interest-earning deposit balances at the Federal Reserve Bank increased the margin by 10 basis points, partially offset by lower average loan balances during the quarter and the slight increase in cost of deposits.

Non-Interest Income (Loss)

Non-interest income was $2.7 million for the third quarter of 2025, compared to a net non-interest loss of $15.6 million for the prior quarter. The increase of $18.4 million from the prior quarter was primarily attributable to a loss of $18.7 million on the sale of available-for-sale investment securities during the prior quarter. Excluding the loss on sale, prior quarter non-interest income was $3.1 million. The $370 thousand decline in the third quarter was primarily attributed to the $238 thousand death benefit received on bank owned life insurance in the second quarter, not repeated in the third quarter.

Non-Interest Expense

Non-interest expense totaled $21.3 million for the third quarter of 2025, compared to $21.5 million for the prior quarter, a decrease of $162 thousand.

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 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, except per share amounts; unaudited)

September 30, 2025

June 30, 2025

December 31, 2024

Tangible Common Equity - Bancorp

Total stockholders' equity

443,818

438,538

435,407

Goodwill and core deposit intangible

(74,882

)

(75,098

)

(75,546

)

Total TCE

368,936

363,440

359,861

Unrealized losses on HTM securities, net of tax 1

(68,192

)

(74,625

)

(89,171

)

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

6,952

7,205

7,701

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

307,696

296,020

278,391

Total assets

3,869,021

3,726,193

3,701,335

Goodwill and core deposit intangible

(74,882

)

(75,098

)

(75,546

)

Total tangible assets

3,794,139

3,651,095

3,625,789

Unrealized losses on HTM securities, net of tax 1

(68,192

)

(74,625

)

(89,171

)

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

6,952

7,205

7,701

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

3,732,899

3,583,675

3,544,319

Bancorp TCE ratio

a / c

9.7

10.0

9.9

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

b / d

8.2

8.3

7.9

Tangible Book Value Per Share

Common shares outstanding

16,095

16,116

16,089

Book value per share

27.57

27.21

27.06

Tangible book value per share

a / e

22.92

22.55

22.37

1 Unrealized losses on held-to-maturity securities as of September 30, 2025, June 30, 2025 and December 31, 2024 of $96.8 million, $105.9 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, $31.3 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, June 30, 2025 and December 31, 2024, net of an estimated $2.9 million, $3.0 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.

Reconciliation of GAAP and Non-GAAP Financial Measures (continued)

(in thousands, except per share amounts; unaudited)

Three months ended

Nine months ended

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

September 30, 2025

June 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Income (loss) before provision for (benefit from) income taxes

9,610

(11,199

)

6,973

4,892

(23,480

)

Provision for credit losses on loans

—

5,550

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

9,610

(11,199

)

6,973

4,967

(17,930

)

Adjustments:

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

—

18,736

)

18,736

32,542

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

9,610

7,537

6,972

23,703

14,612

Net (loss) income

Net income (loss) (GAAP)

7,526

(8,536

)

4,570

3,866

(14,410

)

Adjustments:

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

—

18,736

)

18,736

32,542

Related income tax benefit 1

—

(5,538

)

—

(5,538

)

(9,620

)

Adjustments, net of taxes

—

13,198

)

13,198

22,922

Comparable net income (non-GAAP)

7,526

4,662

4,569

17,064

8,512

Diluted earnings (loss) per share

Weighted average diluted shares

15,934

15,989

16,066

15,979

16,076

Diluted earnings (loss) per share (GAAP)

0.47

(0.53

)

0.28

0.24

(0.90

)

Comparable diluted earnings per share (non-GAAP)

0.47

0.29

0.28

1.07

0.53

Return on average assets

Average assets

3,828,876

3,737,794

3,763,660

3,765,281

3,775,320

Return on average assets (GAAP)

0.78

(0.92

0.48

0.14

(0.51

Comparable return on average assets (non-GAAP)

0.78

0.50

0.48

0.61

0.30

Return on average equity

Average stockholders' equity

439,950

439,187

435,645

438,781

434,773

Return on average equity (GAAP)

6.79

(7.80

4.17

1.18

(4.43

Comparable return on average equity (non-GAAP)

6.79

4.26

4.17

5.20

2.62

Efficiency ratio

Non-interest expense

21,328

21,490

20,417

64,082

63,480

Net interest income

28,193

25,912

24,269

79,051

69,430

Non-interest income (GAAP)

2,745

(15,621

)

2,888

(10,002

)

(24,113

)

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

—

18,736

)

18,736

32,542

Non-interest income (non-GAAP)

2,745

3,115

2,887

8,734

8,429

Efficiency ratio (GAAP)

68.94

208.81

75.18

92.81

140.08

Comparable efficiency ratio (non-GAAP)

68.94

74.03

75.18

73.00

81.53

1 Related tax benefit calculated using blended statutory rate of 29.5636%

Share Repurchase Program

Bancorp repurchased 50,000 shares totaling $1.1 million at an average price of $22.33 per share, which was below tangible book value, during the third quarter of 2025. The repurchase was pursuant to the $25.0 million repurchase authorization that became effective July 24, 2025 and expires on July 31, 2027.

Earnings Call and Webcast Information

Bank of Marin Bancorp (Nasdaq: BMRC) will present its third quarter financial results call via webcast on Monday, October 27, 2025 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 #1 on the West Coast 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, and ranked top 13 in Sacramento Business Journal’s 2025 Corporate Direct Giving List. 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

Nine months ended

(in thousands, except per share amounts; unaudited)

September 30,

2025

June 30,

2025

September 30,

2024

September 30,

2025

September 30,

2024

Selected operating data and performance ratios:

Net income (loss)

7,526

(8,536

)

4,570

3,866

(14,410

)

Diluted earnings (loss) per common share

0.47

(0.53

)

0.28

0.24

(0.90

)

Return on average assets

0.78

(0.92

0.48

0.14

(0.51

Return on average equity

6.79

(7.80

4.17

1.18

(4.43

Efficiency ratio

68.94

208.81

75.18

92.81

140.08

Tax-equivalent net interest margin

3.08

2.93

2.70

2.96

2.57

Cost of deposits

1.29

1.28

1.46

1.28

1.43

Cost of funds

1.29

1.28

1.46

1.28

1.43

Net charge-offs (recoveries)

—

877

Net charge-offs to average loans

0.04

(in thousands; unaudited)

September 30, 2025

June 30, 2025

December 31, 2024

Selected financial condition data:

Total assets

3,869,021

3,726,193

3,701,335

Loans:

Commercial and industrial

154,303

154,576

152,263

Real estate:

Commercial owner-occupied

313,996

320,439

321,962

Commercial non-owner occupied

1,324,263

1,285,803

1,273,596

Construction

15,869

25,018

36,970

Home equity

95,872

95,242

88,325

Other residential

122,924

127,946

143,207

Installment and other consumer loans

63,127

64,614

66,933

Total loans

2,090,354

2,073,638

2,083,256

Non-accrual loans: 1

Commercial and industrial

3,488

2,793

2,845

Real estate:

Commercial owner-occupied

1,488

1,554

1,537

Commercial non-owner occupied

25,701

26,012

28,525

Home equity

553

1,456

752

Other residential

282

—

Installment and other consumer loans

185

375

222

Total non-accrual loans

31,489

32,472

33,881

Non-accrual loans to total loans

1.51

1.57

1.63

Classified loans (graded substandard and doubtful)

49,379

61,090

45,104

Classified loans as a percentage of total loans

2.36

2.95

2.17

Total accruing loans 30-89 days past due

10,983

2,702

2,231

Total accruing loans 90+ days past due 1

290

—

Allowance for credit losses to total loans

1.43

1.44

1.47

Allowance for credit losses to non-accrual loans

0.95x

0.92x

0.90x

Total deposits

3,382,576

3,245,048

3,220,015

Loan-to-deposit ratio

61.80

63.90

64.70

Stockholders' equity

443,818

438,538

435,407

Book value per share

27.58

27.21

27.06

Tangible book value per share

22.92

22.55

22.37

Tangible common equity to tangible assets - Bank

9.04

9.09

9.64

Tangible common equity to tangible assets - Bancorp

9.72

9.95

9.93

Total risk-based capital ratio - Bank

15.11

15.00

16.13

Total risk-based capital ratio - Bancorp

16.13

16.25

16.54

Full-time equivalent employees

304

302

285

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

NM - Not meaningful

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF CONDITION

(in thousands, except share data; unaudited)

September 30, 2025

June 30, 2025

December 31, 2024

Assets

Cash, cash equivalents and restricted cash

219,333

228,863

137,304

Investment securities:

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

811,751

823,314

879,199

Available-for-sale (at fair value; amortized cost of $551,311, $402,205 and $419,292 at September 30, 2025, June 30, 2025 and December 31, 2024, respectively; net of zero allowance for credit losses at September 30, 2025, June 30, 2025 and December 31, 2024)

543,605

391,985

387,534

Total investment securities

1,355,356

1,215,299

1,266,733

Loans, at amortized cost

2,090,354

2,073,638

2,083,256

Allowance for credit losses on loans

(29,853

)

(29,854

)

(30,656

)

Loans, net of allowance for credit losses on loans

2,060,501

2,043,784

2,052,600

Goodwill

72,754

Bank-owned life insurance

70,866

70,432

71,026

Operating lease right-of-use assets

17,188

18,316

19,025

Bank premises and equipment, net

7,581

7,472

6,832

Core deposit intangible, net

2,128

2,344

2,792

Interest receivable and other assets

63,314

66,929

72,269

Total assets

3,869,021

3,726,193

3,701,335

Liabilities and Stockholders' Equity

Liabilities

Deposits:

Non-interest bearing

1,458,230

1,379,814

1,399,900

Interest bearing:

Transaction accounts

185,485

180,444

198,301

Savings accounts

224,642

221,172

225,691

Money market accounts

1,297,703

1,246,013

1,153,746

Time accounts

216,516

217,605

242,377

Total deposits

3,382,576

3,245,048

3,220,015

Borrowings and other obligations

154

Operating lease liabilities

19,528

20,668

21,509

Interest payable and other liabilities

23,042

21,862

24,250

Total liabilities

3,425,203

3,287,655

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 - 16,094,686, 16,116,470 and 16,089,454 at September 30, 2025, June 30, 2025 and December 31, 2024, respectively

214,467

214,713

215,511

Retained earnings

241,727

238,225

249,964

Accumulated other comprehensive loss, net of taxes

(12,376

)

(14,400

)

(30,068

)

Total stockholders' equity

443,818

438,538

435,407

Total liabilities and stockholders' equity

3,869,021

3,726,193

3,701,335

BANK OF MARIN BANCORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended

Nine months ended

(in thousands, except per share amounts; unaudited)

September 30,

2025

June 30,

2025

September 30,

2025

September 30,

2024

Interest income

Interest and fees on loans

26,254

25,861

77,298

75,612

Interest on investment securities

9,846

8,423

26,530

24,698

Interest on due from banks

2,969

2,004

6,768

4,487

Total interest income

39,069

36,288

110,596

104,797

Interest expense

Interest on interest-bearing transaction accounts

328

351

1,022

874

Interest on savings accounts

600

587

1,720

1,447

Interest on money market accounts

8,376

7,878

23,880

25,804

Interest on time accounts

1,571

1,559

4,920

7,002

Interest on borrowings and other obligations

240

Total interest expense

10,876

10,376

31,545

35,367

Net interest income

28,193

25,912

79,051

69,430

Provision for credit losses on loans

—

5,550

Net interest income after provision for credit losses

28,193

25,912

78,976

64,113

Non-interest income

Wealth management and trust services

564

612

1,739

1,844

Service charges on deposit accounts

547

550

1,645

1,613

Earnings on bank-owned life insurance, net

434

429

1,339

1,282

Debit card interchange fees, net

405

410

1,211

1,275

Dividends on Federal Home Loan Bank stock

366

362

1,103

1,108

Merchant interchange fees, net

273

244

Earnings on bank-owned life insurance death benefits

—

238

306

—

Losses on sale of investment securities

—

(18,736

)

(18,736

)

(32,541

)

Other income

342

424

1,118

1,062

Total non-interest income

2,745

(15,621

)

(10,002

)

(24,113

)

Non-interest expense

Salaries and related benefits

12,004

12,045

36,099

35,270

Occupancy and equipment

2,079

2,226

6,411

6,115

Deposit network fees

1,158

1,054

3,144

2,688

Data processing

1,116

1,041

3,293

3,126

Professional services

1,115

908

2,960

4,000

Information technology

538

563

1,514

1,254

Federal Deposit Insurance Corporation insurance

459

421

1,268

1,443

Depreciation and amortization

291

320

933

1,125

Directors' expense

249

279

832

916

Amortization of core deposit intangible

217

220

664

738

Charitable contributions

116

575

647

Other expense

2,046

2,297

6,389

6,158

Total non-interest expense

21,328

21,490

64,082

63,480

Income (loss) before provision for (benefit from) income taxes

9,610

(11,199

)

4,892

(23,480

)

Provision for (benefit from) income taxes

2,084

(2,663

)

1,026

(9,070

)

Net income (loss)

7,526

(8,536

)

3,866

(14,410

)

Net income (loss) per common share

Basic

0.47

(0.53

)

0.24

(0.90

)

Diluted

0.47

(0.53

)

0.24

(0.90

)

Weighted average shares:

Basic

15,907

15,989

15,957

16,076

Diluted

15,934

15,989

15,979

16,076

Comprehensive income:

Net income (loss)

7,526

(8,536

)

3,866

(14,410

)

Other comprehensive income:

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

2,514

(486

)

5,317

4,032

Reclassification adjustment for realized losses on available-for-sale securities in net loss

—

18,736

32,541

Reclassification adjustment for gains or losses on fair value hedges

—

(85

)

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

359

365

1,064

1,149

Other comprehensive income, before tax

2,873

18,615

25,117

37,637

Deferred tax expense

850

5,503

7,426

11,119

Other comprehensive income, net of tax

2,023

13,112

17,691

26,518

Total comprehensive income

9,549

4,576

21,557

12,108

AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME

Three months ended

September 30, 2025

June 30, 2025

Interest

Average

Income/

Yield/

Average

Income/

Yield/

(in thousands)

Balance

Expense

Rate

Balance

Expense

Rate

Assets

Interest-earning deposits with banks 1

266,559

2,969

4.36

180,730

2,004

4.39

Investment securities 2, 3

1,261,275

9,898

3.14

1,266,317

8,495

2.68

Loans 1, 3, 4, 5

2,071,049

26,361

4.98

2,073,110

25,965

4.95

Total interest-earning assets 1

3,598,883

39,228

4.27

3,520,157

36,464

4.10

Cash and non-interest-bearing due from banks

34,856

37,721

Bank premises and equipment, net

7,599

7,259

Interest receivable and other assets, net

187,538

172,657

Total assets

3,828,876

3,737,794

Liabilities and Stockholders' Equity

Interest-bearing transaction accounts

189,371

328

0.69

187,297

351

0.75

Savings accounts

221,781

600

1.07

222,524

587

1.06

Money market accounts

1,294,479

8,376

2.57

1,227,506

7,878

2.57

Time accounts including CDARS

220,242

1,571

2.83

218,150

1,559

2.87

Borrowings and other obligations 1

4.08

3.39

Total interest-bearing liabilities

1,925,935

10,876

2.24

1,855,568

10,376

2.24

Demand accounts

1,419,872

1,398,570

Interest payable and other liabilities

43,119

44,469

Stockholders' equity

439,950

439,187

Total liabilities & stockholders' equity

3,828,876

3,737,794

Tax-equivalent net interest income/margin 1

28,352

3.08

26,088

2.93

Reported net interest income/margin 1

28,192

3.07

25,912

2.91

Tax-equivalent net interest rate spread

2.02

1.86

Nine months ended

September 30, 2025

September 30, 2024

Interest

Average

Income/

Yield/

Average

Income/

Yield/

(in thousands)

Balance

Expense

Rate

Balance

Expense

Rate

Assets

Interest-earning deposits with banks 1

203,956

6,768

4.38

110,337

4,487

5.34

Investment securities 2, 3

1,266,960

26,720

2.81

1,388,825

24,907

2.39

Loans 1, 3, 4, 5

2,072,623

77,614

4.94

2,072,684

75,934

4.81

Total interest-earning assets 1

3,543,539

111,102

4.13

3,571,846

105,328

3.87

Cash and non-interest-bearing due from banks

36,680

36,669

Bank premises and equipment, net

7,232

7,436

Interest receivable and other assets, net

177,830

159,369

Total assets

3,765,281

3,775,320

Liabilities and Stockholders' Equity

Interest-bearing transaction accounts

189,246

1,022

0.72

196,752

874

0.59

Savings accounts

223,781

1,720

1.03

228,096

1,447

0.85

Money market accounts

1,238,686

23,881

2.58

1,150,911

25,804

2.99

Time accounts including CDARS

222,108

4,921

2.96

264,290

7,002

3.54

Borrowings and other obligations 1

3.30

6,125

240

5.15

Total interest-bearing liabilities

1,873,915

31,546

2.25

1,846,174

35,367

2.56

Demand accounts

1,408,412

1,446,795

Interest payable and other liabilities

44,173

47,578

Stockholders' equity

438,781

434,773

Total liabilities & stockholders' equity

3,765,281

3,775,320

Tax-equivalent net interest income/margin 1

79,556

2.96

69,961

2.57

Reported net interest income/margin 1

79,051

2.94

69,430

2.55

Tax-equivalent net interest rate spread

1.88

1.31

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.

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 in interest income totaled $439 thousand and $399 thousand for the three months ended September 30, 2025 and June 30, 2025, and totaled $1.2 million and $1.2 million for the nine months ended September 30, 2025 and 2024, respectively.