Bank of Marin Bancorp Reports Third Quarter Financial Results

Press Release Company Release - 10/27/2025 8:30 AM ET Balance Sheet Growth and Improvements in Asset Quality 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: The third quarter tax-equivalent net interest margin improved 15 basis points over the preceding quarter to 3.08% from 2.93%, largely due to the effects of the securities repositioning in the second quarter, which provided a 13 basis point increase in annualized net interest margin for the third quarter. The tax-equivalent net interest margin for the nine months ended September 30, 2025 improved 39 basis points over the same period of the prior year due to the increase in deposits at a decreased average cost, higher average loan rates, and the favorable impact of the securities repositioned in the second quarter of 2025, which resulted in higher yielding assets during the nine months ended September 30, 2025.Return on average assets ("ROA") and return on average equity ("ROE") increased on a GAAP and non-GAAP basis from the prior quarter, as shown below, primarily due to the increased net income. The efficiency ratio improved from last quarter, as well, due to the increased net interest income. Non-GAAP ratios exclude the loss on security sales, all other factors unchanged, and with adjustments made based on the Company's 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 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 average cost of total deposits and interest-bearing deposits increased one basis point to 1.29% and 2.24%, respectively, in the third quarter of 2025, compared to the prior quarter. Non-interest bearing deposits continued to make up a strong portion of total deposits at 43.1% as of September 30, 2025, compared to 42.5% last quarter.There was no provision for credit losses on loans in the third quarter of 2025 or in the prior quarter. The allowance for credit losses was 1.43% and 1.44% of total loans at September 30, 2025 and June 30, 2025, respectively.Classified loans were 2.36% of total loans compared to 2.95% last quarter largely due to upgrades to special mention of two commercial real estate relationships during the quarter totaling $9.0 million.Non-accrual loans were 1.51% of total loans at quarter-end, down from 1.57% at June 30, 2025 largely due to $1.1 million in payoffs in the quarter. Subsequent to quarter end, an additional $3.6 million in non-accrual loans were paid off in full including interest and fees.Total deposits increased 4.2% to $3.383 billion as of September 30, 2025 compared to $3.245 billion as of June 30, 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 16.13% as of September 30, 2025 for Bancorp compared to 16.25% as of June 30, 2025. Bancorp's tangible common equity to tangible assets ("TCE ratio") was 9.72% as of September 30, 2025. Bancorp's TCE ratio net of after-tax unrealized losses on held-to-maturity securities as if the losses were realized 1 was 8.24% as of September 30, 2025.Bancorp repurchased 50,000 in shares for $1.1 million at an average price of $22.33 per share, which was below tangible book value, during the third quarter of 2025. This contributed to an increase in the book value per share to $27.57 at September 30, 2025 compared to $27.21 at June 30, 2025, and the tangible book value per share 2 to $22.92 at September 30, 2025 compared to $22.55 at June 30, 2025.The Board of Directors declared a cash dividend of $0.25 per share on October 23, 2025, which represents the 82 nd consecutive quarterly dividend paid by Bancorp. The dividend is payable on November 13, 2025, to shareholders of record at the close of business on November 6, 2025. “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." ____________________ 1 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. 2 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 cash1 $ 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 a 368,936 363,440 359,861 Unrealized losses on HTM securities, net of tax1 (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) b $ 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 c 3,794,139 3,651,095 3,625,789 Unrealized losses on HTM securities, net of tax1 (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) d $ 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 e 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 — — — 75 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 (1 ) 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 (1 ) 18,736 32,542 Related income tax benefit1 — (5,538 ) — (5,538 ) (9,620 ) Adjustments, net of taxes — 13,198 (1 ) 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 (1 ) 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) $ — $ 52 $ — $ 877 $ 47 Net charge-offs to average loans NM NM NM 0.04 % NM (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 74 282 — 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 72,754 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 57 77 154 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 1 1 3 240 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 — — 75 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 87 90 273 244 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 56 116 575 647 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 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 BANK OF MARIN BANCORP AVERAGE STATEMENTS OF CONDITION AND ANALYSIS OF NET INTEREST INCOME Three months ended Three months ended September 30, 2025 June 30, 2025 Interest 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 % Loans1, 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 obligations1 62 1 4.08 % 91 1 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/margin1 $ 28,352 3.08 % $ 26,088 2.93 % Reported net interest income/margin1 $ 28,192 3.07 % $ 25,912 2.91 % Tax-equivalent net interest rate spread 2.02 % 1.86 % Nine months ended Nine months ended September 30, 2025 September 30, 2024 Interest Interest Average Income/ Yield/ Average Income/ Yield/ (in thousands) Balance Expense Rate Balance Expense Rate Assets Interest-earning deposits with banks1 $ 203,956 $ 6,768 4.38 % $ 110,337 $ 4,487 5.34 % Investment securities2, 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 assets1 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 obligations1 94 2 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/margin1 $ 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. Source: Bank of Marin Bancorp