Bank of Marin Bancorp Reports First Quarter Financial Results

Press Release Company Release - 4/27/2026 8:30 AM ET Further Improvements in Net Interest Margin and Asset Quality Bank of Marin Bancorp, "Bancorp" (Nasdaq: BMRC), parent company of Bank of Marin, "Bank," announced net income of $8.5 million for the first quarter of 2026, compared to a net loss of $39.5 million due to the impact of its balance sheet restructuring (net income of $9.4 million, non-GAAP) for the fourth quarter of 2025. Largely as a result of continued net interest margin expansion, net income increased 75% year over year from $4.9 million for the same period in the prior year. Notably, the Bank showed continued seasonal improvement in loan originations and demonstrated significant improvement in credit quality as evidenced by a substantial decline in its non-accrual and classified loans, while deposit balances increased with flat cost of deposits. Diluted income per share was $0.53 for the first quarter, compared to diluted loss per share of $2.49 (diluted earnings per share of $0.59, non-GAAP) for the prior quarter. Results for the prior quarter include pre-tax losses on the sale of securities of $69.5 million, incurred as part of the repositioning to improve the bank's future earnings. Comparable (non-GAAP) Excluding Loss on Sale of Securities Three months ended Year to date (in thousands, except per share amounts; unaudited) March 31, 2026 December 31, 2025 % Change March 31, 2026 March 31, 2025 % Change Pre-tax, pre-provision net income (loss) Pre-tax, pre-provision net income (loss) (GAAP) $ 11,597 $ (56,890 ) (120.4 )% $ 11,597 $ 6,556 76.9 % Comparable pre-tax, pre-provision net income (non-GAAP) 11,597 12,576 (7.8 )% 11,597 6,556 76.9 % Net income (loss) Net income (loss) (GAAP) 8,510 (39,541 ) (121.5 )% 8,510 4,876 74.5 % Comparable net income (non-GAAP) 8,510 9,391 (9.4 )% 8,510 4,876 74.5 % Diluted earnings (loss) per share Diluted earnings (loss) per share (GAAP) 0.53 (2.49 ) (121.3 )% 0.53 0.30 76.7 % Comparable diluted earnings per share (non-GAAP) 0.53 0.59 (10.2 )% 0.53 0.30 76.7 % 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 first quarter 2026 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.” "During the first quarter, we remained focused on continued improvement in core banking fundamentals. We followed a strong fourth quarter with a seasonally high level of new loan originations and grew our deposits without increasing their total cost," said President and CEO Tim Myers. "At the same time, we sold our largest non-performing assets with no further impact to net income and showed notable improvement across key credit risk metrics." Bancorp also provided the following highlights for the first quarter of 2026: The first quarter tax-equivalent net interest margin improved 6 basis points over the preceding quarter to 3.24% from 3.18%, largely due to the effects of the securities repositioning in the fourth quarter of 2025, which provided a 21 basis point increase in annualized net interest margin for the first quarter over the prior quarter. The tax-equivalent net interest margin for the three months ended March 31, 2026 improved 47 basis points over the same period of the prior year due to the increase in deposits at a decreased average cost, higher average loan balances and rates, and the favorable impact of the securities repositioned in the second and fourth quarters of 2025, which resulted in higher yielding assets during the three months ended March 31, 2026.During the quarter, we worked diligently to improve our credit quality. We sold our longest tenured classified and non-accrual loans totaling $16.3 million, which were downgraded to substandard in 2021, and moved to non-accrual in 2024. At that time, we recorded specific reserves of $7.3 million based on property valuations. The note sales proceeds validated our reserve assumptions, with the charge-offs equaling the specific amounts reserved in our allowance for credit losses. While other workouts were offset by new downgrades, the impact of the note sales on credit metrics was substantial: Non-accrual loans declined from 1.27% of assets to 0.41%, and the ratio of classified to total loans decreased from 1.51% to 0.85%. Notably, following the note sales virtually all remaining non-accrual balances are comprised of one non-owner occupied commercial real estate loan that has no loss expectations based on underlying valuation and cash flow.There was no provision for credit losses on loans in the first quarter of 2026 compared to a provision of $300 thousand in the prior quarter. The allowance for credit losses was 1.08% and 1.42% of total loans at March 31, 2026 and December 31, 2025, respectively due to the $7.2 million of charge-offs taken against the specific reserves on the two loans sold, noted above. The charge-offs were fully offset by specific reserves already in place.Return on average assets ("ROA") and return on average equity ("ROE") increased on a GAAP basis from the prior quarter, as shown below, primarily due to the increased net income compared to the prior quarter which included losses from the sale of securities from the balance sheet repositioning. ROA and ROE on a non-GAAP basis both decreased from the prior quarter mainly due to decreased non-GAAP income quarter over quarter. Income was impacted by a lower day count, quarter over quarter, as well as an interest recovery on a loan in the fourth quarter of $667 thousand that was not repeated in the first quarter. The efficiency ratio on a non-GAAP basis also worsened from last quarter. Both the efficiency ratio and the returns on average assets and equity were affected by increased non-interest expense in the first quarter, mainly within salaries and related benefits and due to the annual charitable contributions made in the first quarter of 2026. Non-GAAP ratios for the prior quarter exclude the loss on security sales in the prior quarter, all other factors unchanged, and with adjustments made based on our blended statutory tax rate of 29.56%. See Reconciliation of GAAP and Non-GAAP Financial Measures below. Comparable (non-GAAP) Excluding Loss on Sale of Securities Three months ended (in thousands, except per share amounts; unaudited) March 31, 2026 December 31, 2025 March 31, 2025 Return on average assets Average assets $ 3,989,253 $ 3,926.118 $ 3,728,066 Return on average assets (GAAP) 0.87 % (4.00 )% 0.53 % Comparable return on average assets (non-GAAP) 0.87 % 0.95 % 0.53 % Return on average equity Average stockholders' equity 398,017 426,394 437,176 Return on average equity (GAAP) 8.67 % (36.79 )% 4.52 % Comparable return on average equity (non-GAAP) 8.67 % 8.74 % 4.52 % Efficiency ratio Efficiency ratio (GAAP) 66.03 % (54.31 )% 75.72 % Comparable efficiency ratio (non-GAAP) 66.03 % 61.42 % 75.72 % See complete Reconciliation of GAAP and Non-GAAP Financial Measures below Related non-GAAP tax benefit calculated using blended statutory rate of 29.5636% Despite a reduction in the average cost of interest bearing deposits from 2.16% to 2.10% in the first quarter of 2026 compared to the prior quarter, the average cost of total deposits remained flat at 1.35% due to a reduction in non-interest bearing deposits. Non-interest bearing deposits continued to make up a strong portion of total deposits at 35.9% as of March 31, 2026, compared to 36.7% last quarter.Total deposits increased 0.37% to $3.428 billion as of March 31, 2026 compared to $3.416 billion as of December 31, 2025 due largely to inflows from existing customers as well as new relationships to the Bank in the quarter.Capital was above well-capitalized regulatory thresholds. Total risk-based capital was 15.26% as of March 31, 2026 for Bancorp compared to 15.25% as of December 31, 2025. Bancorp's tangible common equity to tangible assets ("TCE ratio") was 8.33% as of March 31, 2026.The Board of Directors declared a cash dividend of $0.25 per share on April 23, 2026, which was the 84th consecutive quarterly dividend paid by Bancorp. The dividend is payable on May 14, 2026 to shareholders of record at the close of business on May 7, 2026. “Our fourth quarter balance sheet repositioning drove a reported 6 basis point expansion of net income during the quarter, or 14 basis points when adjusting for the fourth quarter recovery of non-accrual loan interest and fees,” said Chief Financial Officer Dave Bonaccorso. “While our cost of deposits was unchanged this quarter at 1.35% due to some changes in mix, our spot cost of deposits improved to 1.31% as of March 31st and we continue to believe that deposit and loan repricing benefits will allow us to further expand net interest margin during the remainder of 2026." Loans and Credit Quality Loans decreased by $5.1 million for the first quarter and totaled $2.116 billion as of March 31, 2026 compared to $2.121 billion as of December 31, 2025. First quarter 2026 new fundings were $60.8 million compared to $47.4 million in the first quarter of 2025. Three months ended (in millions; unaudited) March 31, 2026 December 31, 2025 March 31, 2025 Gross loans beginning balance $ 2,120.9 $ 2,090.4 $ 2,083.3 Newly funded 60.8 106.5 47.4 New total commitments1 80.5 141.0 63.6 Purchased — — — Net increase (decrease) in line of credit utilization 0.6 1.3 (11.2 ) Pay-downs and maturities (30.6 ) (49.7 ) (23.4 ) Charge-offs (7.3 ) (0.1 ) (0.8 ) Note sales (9.1 ) — (1.3 ) Amortization (19.6 ) (27.5 ) (20.5 ) Gross loans ending balance $ 2,115.7 $ 2,120.9 $ 2,073.5 1 New total commitments includes both newly funded loans and new unfunded commitments As discussed above, our continued discipline in credit management led to significant improvements in our credit quality this quarter including non-accrual balances, classified loan balances and past due loan balances. Non-accrual loans declined by $18.3 million during the quarter to $8.6 million, or 0.41% of total loans, compared to $26.9 million, or 1.27%, at December 31, 2025. The reduction was driven primarily by the sale of the two non-owner occupied commercial real estate loans totaling $16.3 million discussed above. The remaining $8.6 million of non-accrual loans consists primarily of one $8.2 million non-owner occupied commercial real estate relationship which continues to exhibit conforming loan-to-value and debt service coverage metrics but remains on non-accrual due to an ongoing dispute related to extension terms following its late 2023 maturity. Classified loans declined by $14.2 million during the first quarter to $17.9 million, down from $32.1 million at December 31, 2025. The improvement was driven primarily by the sale of the two non-owner occupied commercial real estate loans previously discussed, along with payoffs totaling $2.4 million on two additional loans. These positive trends were partially offset by the downgrade of two non-owner occupied commercial real estate loans totaling $5.7 million into the classified category. Overall, asset quality metrics improved during the quarter, and we remain disciplined and proactive in our credit management approach with close monitoring and active resolution efforts across the portfolio. Accruing loans past due 30 to 89 days totaled $683 thousand at March 31, 2026, down from $2.8 million at December 31, 2025. Loans designated as special mention, which are not considered adversely classified, remained relatively stable at $119.4 million at March 31, 2026 compared to $118.0 million at December 31, 2025. Net charge-offs totaled $7.3 million in the first quarter of 2026 compared to $64 thousand in the prior quarter. Approximately $7.2 million of the charge-offs were related to the two non-accrual loans that were sold, as previously discussed. These charge-offs were fully offset by specific reserves that were already in place for the two loans. There was no provision for credit losses on loans recorded in the first quarter of 2026 compared to a provision of $300 thousand in the prior quarter. The ratio of allowance for credit losses to total loans declined to 1.08% at March 31, 2026 from 1.42% at December 31, 2025 due to the charge-offs taken and the related decrease in specific reserves required. There was no provision for credit losses on unfunded loan commitments in the first quarter of 2026 compared to a provision of $185 thousand in the prior quarter. Cash, Cash Equivalents and Restricted Cash Total cash, cash equivalents and restricted cash were $236.6 million at March 31, 2026, an increase of $11.3 million compared to $225.3 million at December 31, 2025 largely due to a $12.6 million increase in deposits. Investments The investment securities portfolio totaled $1.326 billion at March 31, 2026, a decrease of $1.6 million from December 31, 2025. The decrease in the portfolio was primarily due to principal repayments and calls/maturities totaling $54.5 million and $4.7 million, respectively, and an increase of $7.6 million in unrealized losses on available-for-sale ("AFS") securities, partially offset by purchases of AFS securities of $65.2 million. The portfolio is eligible for pledging to FHLB or the Federal Reserve as collateral for borrowing, and is comprised of high credit quality investments with an average effective duration of 2.90. The portfolio generates cash flows monthly from interest, principal amortization and payoffs, which supports the Bank's liquidity. Those cash flows totaled $73.4 million and $84.2 million in the first quarter of 2026 and the fourth quarter of 2025, respectively. Deposits Deposits increased $12.6 million, or 0.4%, to $3.428 billion at March 31, 2026, compared to $3.416 billion at December 31, 2025 primarily due to inflows from existing relationships as well as new relationships. The majority of this increase was due to an increase of $58.3 million in interest bearing transaction accounts, partially offset by a decrease of $22.2 million in non-interest bearing deposits and a decrease of $25.6 million in time accounts. This growth excludes the additional $27.3 million in deposits the Bank maintains off balance sheet as one-way sales. As of March 31, 2026, total one-way sales increased from $51.2 million to $78.5 million. The majority of the decrease in non-interest bearing deposits aligns with one anticipated client event while the decrease in time accounts reflects prudent management of the Bank's cost of deposits. Non-interest bearing deposits continued to make up a strong 35.9% of total deposits at March 31, 2026, compared to 36.7% at December 31, 2025. The Bank's competitive and balanced approach to relationship management and focused outreach to customers seeking alternative options for banking solutions generated nearly 1,000 new accounts during the first quarter, 42% of which were new relationships. Borrowings and Liquidity At March 31, 2026, the Bank had no outstanding short-term borrowings, consistent with December 31, 2025. Net available funding sources, including unrestricted cash, unencumbered available-for-sale securities and total available borrowing capacity totaled $2.185 billion, or 64% of total deposits and 221% of estimated uninsured and/or uncollateralized deposits as of March 31, 2026. Additionally, as part of our active balance sheet management, the Bank maintained $78.5 million in deposits off-balance sheet with deposit networks at March 31, 2026, compared to $51.2 million at December 31, 2025. The following table details the components of our contingent liquidity sources as of March 31, 2026. (in millions) Total Available Amount Used Net Availability Internal Sources Unrestricted cash1 $ 215.8 $ — $ 215.8 Unencumbered securities at market value 527.7 — 527.7 External Sources FHLB line of credit 976.1 — 976.1 FRB line of credit 325.4 — 325.4 Lines of credit at correspondent banks 140.0 — 140.0 Total Liquidity $ 2,185.0 $ — $ 2,185.0 1 Excludes cash items in transit as of March 31, 2026. Note: Off-balance sheet one-way sell deposits totaling $78.5 million not included above. Subordinated Notes During the fourth quarter of 2025, 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. Subordinated notes outstanding were $43.9 million, net of issuance costs, at March 31, 2026. Capital Resources Our capital ratios are summarized in the table below. Capital Ratios March 31, 2026 December 31, 2025 March 31, 2025 (dollars in thousands) Bancorp Bank Bancorp Bank Bancorp Bank Common Equity Tier 1 to RWA 12.61 % 13.17 % 12.34 % 12.69 % 16.69 % 16.54 % Total Tier I to RWA 12.61 % 13.17 % 12.34 % 12.69 % 15.49 % 15.32 % Total Capital to RWA 15.26 % 14.09 % 15.25 % 13.90 % 10.62 % 10.46 % Tier I Leverage Ratio to Avg Assets 8.23 % 8.59 % 8.26 % 8.49 % 15.49 % 15.32 % Tangible Common Equity to TA 8.33 % 8.70 % 8.35 % 8.59 % 8.35 % 8.59 % Bancorp's tangible common equity to tangible assets ("TCE ratio") was 8.33% at March 31, 2026, compared to 8.35% at December 31, 2025. The Bank's capital plan and point-in-time capital stress tests indicate that 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 $30.3 million for the first quarter of 2026, a $521 thousand increase from the prior quarter. This was driven by an increase of $63.4 million in average earning assets including a $42.5 million increase in average investment securities, combined with a 45 basis point increase in average yield on investment securities, resulting in a $1.9 million increase in investment securities interest income. The tax-equivalent net interest margin increased 6 basis points to 3.24% for the first quarter of 2026, compared to 3.18% for the prior quarter. The repositioning of securities added 21 basis points to the margin during the first quarter. This was partially offset by lower average interest-earning deposit balances at the Federal Reserve Bank and lower rates due to Federal Reserve rate cuts of 25 basis points in both October and December of 2025, that decreased the margin by 4 basis points, lower average loan yields during the quarter impacted by an interest recovery in the fourth quarter of $667 thousand and by approximately $195 million in loans tied to prime or SOFR whose rates declined quarter over quarter that decreased the margin by 5 basis points, and average subordinated note costs for the full quarter that decreased the margin by 5 basis points. Non-Interest Income (Loss) Non-interest income was $3.8 million for the first quarter of 2026, compared to a net non-interest loss of $66.6 million for the prior quarter. The increase of $70.5 million from the prior quarter was primarily attributable to a loss of $69.5 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 $2.8 million. The $1.0 million increase in the first quarter of 2026 on a non-GAAP basis was primarily attributed to an increase of $484 thousand in dividend income on FHLB stock which included a $479 thousand special dividend and a $479 thousand death benefit on bank owned life insurance. Non-Interest Expense Non-interest expense totaled $22.5 million for the first quarter of 2026, compared to $20.0 million for the prior quarter, an increase of $2.5 million, primarily driven by an increase of $2.0 million in salaries and related benefits expense in the first quarter of 2026. Consistent with annual adjustments and our compensation cycle, expense increases included updated incentive bonus accruals, 401(k) contribution matching, profit sharing accruals, payroll taxes, and stock-based compensation grants, in addition to lower deferred loan origination costs in the quarter. Additionally, the bank completed the bulk of its anticipated 2026 charitable giving during the first quarter resulting in $437 thousand in expense. 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 providing selected financial measures that exclude the loss on sale of securities 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) Three months ended Pre-tax, pre-provision net income (loss) March 31, 2026 December 31, 2025 March 31, 2025 Income (loss) before provision for (benefit from) income taxes $ 11,597 $ (57,375 ) $ 6,481 Provision for credit losses on loans — 485 75 Pre-tax, pre-provision net income (loss) (GAAP) 11,597 (56,890 ) 6,556 Adjustments: Losses (gains) on sale of investment securities from portfolio repositioning — 69,466 — Comparable pre-tax, pre-provision net income (non-GAAP) $ 11,597 $ 12,576 $ 6,556 Net (loss) income Net income (loss) (GAAP) $ 8,510 $ (39,541 ) $ 4,876 Adjustments: Losses (gains) on sale of investment securities from portfolio repositioning — 69,466 — Related income tax benefit1 — (20,534 ) — Adjustments, net of taxes — 48,932 — Comparable net income (non-GAAP) $ 8,510 $ 9,391 $ 4,876 Diluted earnings (loss) per share Weighted average diluted shares 15,973 15,898 16,002 Diluted earnings (loss) per share (GAAP) $ 0.53 $ (2.49 ) $ 0.30 Comparable diluted earnings per share (non-GAAP) $ 0.53 $ 0.59 $ 0.30 Return on average assets Average assets $ 3,989,253 $ 3,926,118 $ 3,728,066 Return on average assets (GAAP) 0.87 % (4.00 )% 0.53 % Comparable return on average assets (non-GAAP) 0.87 % 0.95 % 0.53 % Return on average equity Average stockholders' equity 398,017 426,394 437,176 Return on average equity (GAAP) 8.67 % (36.54 )% 4.52 % Comparable return on average equity (non-GAAP) 8.67 % 8.74 % 4.52 % Return on average tangible common equity Average goodwill and intangibles 74,591 74,789 75,443 Average tangible common equity 323,426 351,605 361,733 Return on average tangible common equity (GAAP) 10.67 % (44.62 )% 5.47 % Comparable return on average tangible common equity (non-GAAP) 10.67 % 10.60 % 5.47 % Efficiency ratio Non-interest expense $ 22,539 $ 20,023 $ 20,446 Net interest income $ 30,302 $ 29,781 $ 24,128 Non-interest income (GAAP) $ 3,834 $ (66,648 ) $ 2,874 Losses (gains) on sale of investment securities from portfolio repositioning — 69,466 — Non-interest income (non-GAAP) $ 3,834 $ 2,818 $ 2,874 Efficiency ratio (GAAP) 66.03 % (54.31 )% 75.72 % Comparable efficiency ratio (non-GAAP) 66.03 % 61.42 % 75.72 % 1Related tax benefit calculated using blended statutory rate of 29.5636% Share Repurchase Program On July 24, 2025, the Board of Directors authorized the repurchase of up to $25.0 million of its common stock effective July 24, 2025 through July 31, 2027. There were no repurchases in the first quarter of 2026 or in the fourth quarter of 2025. Earnings Call and Webcast Information Bank of Marin Bancorp (Nasdaq: BMRC) will present its first quarter financial results call via webcast on Monday, April 27, 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. 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 and ranked top 13 in Sacramento Business Journal’s 2025 Corporate Direct Giving List. Additional honors include being recognized as one of North Bay Business Journal’s “Best Places to Work” in 2025 and induction into North Bay Biz’s “Best of” Hall of Fame in 2024. 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 and the military action in Iran, 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 (in thousands, except per share amounts; unaudited) March 31, 2026 December 31, 2025 March 31, 2025 Selected operating data and performance ratios: Net income (loss) $ 8,510 $ (39,541 ) $ 4,876 Diluted earnings (loss) per common share $ 0.53 $ (2.49 ) $ 0.30 Return on average assets 0.87 % (4.00 )% 0.53 % Return on average equity 8.67 % (36.79 )% 4.52 % Return on tangible common equity 10.67 % (44.62 )% 5.47 % Efficiency ratio 66.03 % (54.31 )% 75.18 % Tax-equivalent net interest margin 3.24 % 3.18 % 2.70 % Cost of deposits 1.35 % 1.35 % 1.46 % Cost of funds 1.43 % 1.38 % 1.46 % Net charge-offs (recoveries) $ 7,266 $ 64 $ — Net charge-offs to average loans 0.34 % NM NM (in thousands; unaudited) March 31, 2026 December 31, 2025 Selected financial condition data: Total assets $ 3,914,117 $ 3,904,778 Loans: Commercial and industrial $ 159,028 $ 159,898 Real estate: Commercial owner-occupied 308,905 310,219 Commercial non-owner occupied 1,373,332 1,366,251 Construction 14,215 15,101 Home equity 98,445 99,222 Other residential 105,502 110,614 Installment and other consumer loans 56,292 59,548 Total loans $ 2,115,719 $ 2,120,853 Non-accrual loans: 1 Commercial and industrial $ 29 $ 524 Real estate: Commercial owner-occupied — 315 Commercial non-owner occupied 8,118 25,387 Home equity 223 401 Other residential 70 72 Installment and other consumer loans 204 204 Total non-accrual loans $ 8,644 $ 26,903 Non-accrual loans to total loans 0.41 % 1.27 % Classified loans (graded substandard and doubtful) $ 17,939 $ 32,111 Classified loans as a percentage of total loans 0.85 % 1.51 % Total accruing loans 30-89 days past due $ 683 $ 2,843 Total accruing loans 90+ days past due 1 $ — $ — Allowance for credit losses to total loans 1.08 % 1.42 % Allowance for credit losses to non-accrual loans 2.64x 1.12x Total deposits $ 3,428,126 $ 3,415,542 Loan-to-deposit ratio 61.72 % 62.09 % Stockholders' equity $ 394,492 $ 394,654 Book value per share $ 24.37 $ 24.51 Tangible book value per share $ 19.77 $ 19.87 Tangible common equity to tangible assets - Bank 8.70 % 8.59 % Tangible common equity to tangible assets - Bancorp 8.33 % 8.35 % Total risk-based capital ratio - Bank 14.09 % 13.90 % Total risk-based capital ratio - Bancorp 15.26 % 15.25 % Full-time equivalent employees 309 311 1 There were no non-performing loans over 90 days past due and accruing interest as of March 31, 2026 and December 31, 2025. BANK OF MARIN BANCORP CONSOLIDATED STATEMENTS OF CONDITION (in thousands, except share data; unaudited) March 31, 2026 December 31, 2025 Assets Cash, cash equivalents and restricted cash $ 236,644 $ 225,303 Investment securities: Available-for-sale (net of zero allowance for credit losses at March 31, 2026 and December 31, 2025, respectively) 1,326,191 1,327,812 Total investment securities 1,326,191 1,327,812 Loans, at amortized cost 2,115,719 2,120,853 Allowance for credit losses on loans (22,823 ) (30,089 ) Loans, net of allowance for credit losses on loans 2,092,896 2,090,764 Goodwill 72,754 72,754 Bank-owned life insurance 71,095 71,306 Operating lease right-of-use assets 22,173 22,499 Bank premises and equipment, net 7,960 8,059 Core deposit intangible, net 1,716 1,916 Interest receivable and other assets 82,688 84,365 Total assets $ 3,914,117 $ 3,904,778 Liabilities and Stockholders' Equity Liabilities Deposits: Non-interest bearing $ 1,232,228 $ 1,254,416 Interest bearing: Transaction accounts 475,817 417,482 Savings accounts 226,680 232,109 Money market accounts 1,313,266 1,305,849 Time accounts 180,135 205,686 Total deposits 3,428,126 3,415,542 Borrowings and other obligations 668 709 Subordinated notes, net 43,905 43,857 Operating lease liabilities 24,553 24,747 Interest payable and other liabilities 22,373 25,269 Total liabilities 3,519,625 3,510,124 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 - 16,189,707, 16,102,687 and 16,102,687 at March 31, 2026, December 31, 2025 and December 31, 2025, respectively 215,648 214,910 Retained earnings 202,645 198,163 Accumulated other comprehensive loss, net of taxes (23,801 ) (18,419 ) Total stockholders' equity 394,492 394,654 Total liabilities and stockholders' equity $ 3,914,117 $ 3,904,778 BANK OF MARIN BANCORP CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Three months ended (in thousands, except per share amounts; unaudited) March 31, 2026 December 31, 2025 March 31, 2025 Interest income Interest and fees on loans $ 26,534 $ 27,128 $ 25,183 Interest on investment securities 13,869 11,937 8,261 Interest on due from banks 2,392 2,767 1,795 Total interest income 42,795 41,832 35,239 Interest expense Interest on interest-bearing transaction accounts 2,039 1,591 1,161 Interest on savings accounts 577 609 533 Interest on money market accounts 7,821 7,961 7,626 Interest on time accounts 1,242 1,516 1,790 Interest on borrowings and other obligations 6 6 1 Interest on subordinated notes 808 368 — Total interest expense 12,493 12,051 11,111 Net interest income 30,302 29,781 24,128 Provision for credit losses on loans — 300 75 Provision for credit losses on unfunded loan commitments — 185 — Net interest income after provision for credit losses 30,302 29,296 24,053 Non-interest income Dividends on Federal Home Loan Bank stock 855 372 375 Wealth management and trust services 596 573 563 Service charges on deposit accounts 563 543 548 Earnings on bank-owned life insurance, net 488 440 476 Earnings on bank-owned life insurance death benefits 479 — 68 Debit card interchange fees, net 362 401 396 Merchant interchange fees, net 118 104 96 Losses on sale of investment securities — (69,466 ) — Other income 373 385 352 Total non-interest income 3,834 (66,648 ) 2,874 Non-interest expense Salaries and related benefits 13,394 11,359 12,050 Occupancy and equipment 2,099 2,098 2,106 Data processing 1,228 1,033 1,136 Professional services 1,093 1,341 937 Federal Deposit Insurance Corporation insurance 730 539 388 Information technology 515 532 413 Charitable contributions 437 82 403 Directors' expense 285 283 304 Depreciation and amortization 263 331 322 Amortization of core deposit intangible 201 211 227 Deposit network fees 149 127 114 Other expense 2,145 2,087 2,046 Total non-interest expense 22,539 20,023 20,446 Income (loss) before provision for (benefit from) income taxes 11,597 (57,375 ) 6,481 Provision for (benefit from) income taxes 3,087 (17,834 ) 1,605 Net income (loss) $ 8,510 $ (39,541 ) $ 4,876 Net income (loss) per common share Basic $ 0.53 $ (2.49 ) $ 0.31 Diluted $ 0.53 $ (2.49 ) $ 0.30 Weighted average shares: Basic 15,925 15,898 15,977 Diluted 15,973 15,898 16,002 Comprehensive income (loss): Net income (loss) $ 8,510 $ (39,541 ) $ 4,876 Other comprehensive (loss) income: Change in net unrealized (losses) gains on available-for-sale securities (7,642 ) 4,933 3,289 Reclassification adjustment for losses realized on the sale of available-for-sale securities in net loss — 69,466 — Net unrealized losses on securities transferred from available-for-sale to held-to-maturity — (92,842 ) — Amortization of net unrealized losses on securities transferred from available-for-sale to held-to-maturity — 9,867 340 Other comprehensive (loss) income, before tax (7,642 ) (8,576 ) 3,629 Deferred tax (benefit) expense (2,260 ) (2,533 ) 1,073 Other comprehensive (loss) income, net of tax (5,382 ) (6,043 ) 2,556 Total comprehensive income (loss) $ 3,128 $ (45,584 ) $ 7,432 BANK OF MARIN BANCORP AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME Three months ended Three months ended Three months ended March 31, 2026 December 31, 2025 March 31, 2025 Interest Interest Interest Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ (in thousands) Balance Expense Rate Balance Expense Rate Balance Expense Rate Assets Interest-earning deposits with banks 1 $ 265,720 $ 2,392 3.60 % $ 278,508 $ 2,767 3.89 % $ 163,446 $ 1,795 4.39 % Investment securities 2, 3 1,374,555 13,906 4.05 % 1,332,104 11,988 3.60 % 1,273,422 8,330 2.62 % Loans1, 3, 4, 5 2,114,052 26,646 5.04 % 2,080,328 27,252 5.13 % 2,073,739 25,289 4.88 % Total interest-earning assets 1 3,754,327 42,944 4.58 % 3,690,940 42,007 4.45 % 3,510,607 35,414 4.04 % Cash and non-interest-bearing due from banks 32,496 39,133 37,493 Bank premises and equipment, net 8,007 8,192 6,831 Interest receivable and other assets, net 194,423 187,853 173,135 Total assets $ 3,989,253 $ 3,926,118 $ 3,728,066 Liabilities and Stockholders' Equity Interest-bearing transaction accounts $ 464,323 $ 2,039 1.78 % $ 398,492 $ 1,591 1.58 % $ 337,255 $ 1,161 1.40 % Savings accounts 228,635 577 1.02 % 226,349 609 1.07 % 227,097 533 0.95 % Money market accounts 1,367,142 7,821 2.32 % 1,311,542 7,961 2.41 % 1,192,956 7,626 2.59 % Time accounts including CDARS 192,553 1,242 2.62 % 210,310 1,516 2.86 % 228,018 1,790 3.18 % Borrowings and other obligations1 683 6 3.66 % 726 6 3.62 % 130 1 2.86 % Subordinated notes, net 43,873 808 7.36 % 20,588 368 7.16 % — — — % Total interest-bearing liabilities 2,297,209 12,493 2.21 % 2,168,007 12,051 2.21 % 1,985,456 11,111 2.27 % Demand accounts 1,244,595 1,285,578 1,260,482 Interest payable and other liabilities 49,432 46,139 44,952 Stockholders' equity 398,017 426,394 437,176 Total liabilities & stockholders' equity $ 3,989,253 $ 3,926,118 $ 3,728,066 Tax-equivalent net interest income/margin1 $ 30,451 3.24 % $ 29,956 3.18 % $ 24.304 2.77 % Reported net interest income/margin1 $ 30,302 3.23 % $ 29,781 3.16 % $ 24,128 2.75 % Tax-equivalent net interest rate spread 2.37 % 2.23 % 1.77 % 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 $398 thousand, $452 thousand, and $364 thousand for the three months ended March 31, 2026, December 31, 2025, and March 31, 2025, respectively. Source: Bank of Marin Bancorp