Bank of Marin Bancorp — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported net income of $9.9 million for the third quarter of 2026, an increase from $9.2 million in the second quarter of 2026 and $7.5 million in the third quarter of 2025.
• Diluted earnings per share (EPS) reached $0.62 for the quarter, up from $0.58 in the prior quarter and $0.47 year-over-year, representing a 32% year-over-year increase.
• Pre-tax, pre-provision net income (GAAP) was $14.5 million for the quarter, a 17.4% increase from the prior quarter and a 50.9% increase from the prior year period.
• Net interest income totaled $31.4 million, up $619 thousand sequentially, driven by an $834 thousand increase in loan interest income.
• Tax-equivalent net interest margin expanded 10 basis points to 3.48% from 3.38% in the prior quarter.
• Non-interest income grew 15.8% to $3.7 million, primarily due to a $251 thousand increase in service charges on business deposit accounts and a $199 thousand increase in dividend income from FHLB stock.
• Non-interest expense decreased $1.0 million to $20.6 million, driven by a $465 thousand reduction in salaries and benefits and a $239 thousand reduction in FDIC insurance expense.
• The efficiency ratio improved to 58.65% from 63.62% in the prior quarter and 67.86% in the prior year period.
• Return on average assets (ROA) was 1.05%, return on average equity (ROE) was 9.96%, and return on average tangible common equity (ROTCE) was 12.26% for the quarter.
• Net charge-offs were $21 thousand for the quarter compared to $39 thousand in the prior quarter.

Guidance and Future Outlook:

• Management expects modest net interest margin expansion over time, supported by continued legacy loan repricing and new loan originations at higher rates.
• The company anticipates a relatively low rising-rate deposit beta due to its strong liquidity position, high percentage of noninterest-bearing deposits, and customer service focus.
• Capital ratios are projected to remain above regulatory well-capitalized and internal policy minimums throughout a five-year forecast horizon across various stress scenarios.

Business Segments and Product Lines:

• Total loans increased $43.4 million (2.07%) to $2.144 billion, fueled by $63.6 million in new fundings and a $31.1 million purchase of a California residential mortgage pool.
• Total deposits increased $25.3 million (0.75%) to $3.395 billion, with noninterest-bearing deposits rising $45.0 million to represent 37.8% of total deposits.
• The average cost of interest-bearing deposits decreased to 2.03% from 2.04%, and the average cost of total deposits fell to 1.24% from 1.28%.
• Year-to-date new fundings increased 12% and total commitments increased 21% compared to 2025.
• The investment securities portfolio totaled $1.215 billion, with an average effective duration of 3.11 years.

Market and Competitive Landscape:

• Bank of Marin Bancorp is ranked the nation's No. 2 community bank deposit franchise by S&P Global Market Intelligence.
• The bank serves Northern California through a network of 27 branches and eight commercial banking offices.
• The bank was ranked seventh on the Sacramento Business Journal's 2026 Corporate Direct Giving List and named one of North Bay Business Journal's Best Places to Work for the 17th consecutive time.

Risks and Challenges:

• Classified loans increased $15.2 million to $35.0 million (1.63% of total loans), primarily due to the downgrade of a $14.1 million owner-occupied commercial real estate relationship facing a borrower-specific challenge; however, the borrower is paying as agreed with no expected loss potential.
• Non-accrual loans increased $1.2 million to $9.7 million (0.45% of total loans).
• Accumulated other comprehensive loss worsened by $24.8 million in the quarter due to higher market interest rates impacting the available-for-sale securities portfolio.
• Book value per share and tangible book value per share declined slightly to $23.37 and $18.81, respectively.
• The tangible common equity to tangible assets ratio declined 47 basis points to 8.05%.

Management Commentary and Tone:

• President & CEO Tim Myers stated that active management of deposit costs, fee income growth, and expense discipline drove a 17% sequential increase in pre-tax pre-provision net income.
• CFO Dave Bonaccorso highlighted that the quarterly growth in deposit service charge income annualized to $1 million, exemplifying strategic fee income initiatives to diversify revenue streams.
• Management expressed confidence in the bank's "legendary customer service" and strong liquidity position supporting future performance.

Other Key Points:

• The Board of Directors declared a cash dividend of $0.25 per share, marking the 86th consecutive quarterly dividend; it is payable on November 12, 2026, to shareholders of record on November 5, 2026.
• The share repurchase program authorized on July 24, 2025, for up to $25.0 million has $23.9 million remaining available as of September 30, 2026; no repurchases were made in the third quarter of 2026.
• Bancorp issued $45.0 million in Fixed-to-Floating Subordinated Notes in the fourth quarter of 2025 with a final maturity of December 1, 2035; $44.0 million remains outstanding net of issuance costs.
• The bank recorded a provision for credit losses on loans of $500 thousand and on unfunded commitments of $325 thousand for the quarter.
• The allowance for credit losses remained stable at 1.07% of total loans.
• Total liquidity sources, including unrestricted cash, unencumbered securities, and borrowing capacity, totaled $2.162 billion, representing 63.67% of total deposits.