President’s Corner

Commitment to Guiding Principles Result in Deposit Stability & Strong Credit

Bank of Marin’s continued emphasis on risk management, as well as our guiding principles of relationship banking, disciplined fundamentals, and commitment to the community, combined with our strong liquidity and capital, have continued to serve our customers and shareholders well.

We reported third quarter earnings of $5.3 million, compared with our earnings of $4.6 million for the second quarter. Our improved third quarter results were driven by our strategic efforts to reposition the balance sheet out of borrowings and securities and into deposits and cash to expand our net interest margin, increase our liquidity diversification, add a 16% increase in linked quarter earnings per share, and improve our interest rate risk position.

Below are key items shared with our investor community during our third quarter earnings call:

• Since September 30th, the Bank has funded or approved for funding loan amounts exceeding third quarter total originations.
• We are on an accelerated trajectory that, we believe, will lead to overall portfolio growth that could further support our margin and earnings in the coming quarter.
• We have strong capital levels and ample liquidity, and further strengthened our core deposit franchise during the quarter by attracting new customers and deepening ties with existing clients.
• Nearly half of our deposits are in non-interest bearing accounts, giving Bank of Marin one of the lowest cost deposit bases among our peers and a robust base from which to fund loan growth.
• The level of uninsured deposits remained flat in the third quarter at 29%. We continue to maintain a high level of liquidity that covers all of our uninsured deposits by more than 200%.
• Our credit quality is solid. Third quarter non-accrual loans represented 0.27% of total loans, up from 0.10% the previous All of our non-accrual loans are collateralized by real estate with no expected credit loss as of quarter-end.

Bank of Marin is committed to fostering a culture of excellence, effort, and engagement as our teams work together on the execution of our strategies to increase operational efficiencies. We are intently focused on balance sheet strength as we grow alongside our customers and pursue improved profitability and reliable returns on behalf of our shareholders.