Basis of Presentation

9 Months Ended

Sep. 30, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The consolidated financial statements include the accounts of Bancorp, a bank holding company, and its wholly-owned bank subsidiary, Bank of Marin, a California state-chartered commercial bank. References to “we,” “our,” “us” and "the Company" mean Bancorp and the Bank that are consolidated for financial reporting purposes. The accompanying unaudited consolidated interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to those rules and regulations.

Although we believe that the disclosures are adequate and the information presented is not misleading, we suggest that these interim financial statements be read in conjunction with the annual financial statements and the notes thereto included in our 2024 Annual Report on Form 10-K. In the opinion of management, the unaudited consolidated financial statements reflect all adjustments, which are necessary for a fair presentation of the consolidated financial position, the results of operations, changes in comprehensive income, changes in stockholders’ equity, and cash flows for the periods presented. All material intercompany transactions have been eliminated. The results of these interim periods may not be indicative of the results for the full year or for any other period.

Segment Reporting: Our Chief Operating Decision Maker ("CODM") is our Chief Executive Officer, who reviews our financial information on a consolidated basis for purposes of evaluating financial performance and allocating resources. We have one operating and reportable segment, community banking, and our other operating segment, wealth management services, does not meet the quantitative threshold for separate reporting. Our CODM reviews consolidated net income (loss) before provision for income taxes as our primary measure of profitability alongside significant expense information consistent with the expense captions presented in our Consolidated Statements of Comprehensive Income. These metrics are used by our CODM to monitor actual results and to benchmark to our peers. Segment assets are equal to consolidated total assets in our Consolidated Statements of Condition and all segment non-cash items are equal to those disclosed in our Consolidated Statements of Cash Flows. We derive materially all of our income or loss from activities within the United States, and materially all of our long lived assets are physically located within the United States. No single customer or client relationship accounts for ten percent or more of our income or loss.


Segment revenue, profit or loss, significant segment expenses and other segment items	Three months ended				Nine months ended
(in thousands)	September 30, 2025		September 30, 2024			September 30, 2025		September 30, 2024
Community banking segment:
Interest income	39,069		36,319			110,596		104,797
Non-interest income	2,181		2,182			(11,741)		(25,957)

Reconciliation of income
All other income1	564		706			1,739		1,844
Total consolidated income	41,814		39,207			100,594		80,684

Less:2
Total interest expense	10,876		12,050			31,545		35,367
Provision for credit losses on loans	—		—			75		5,550
Provision for credit losses on unfunded loan commitments	—		(233)			—		(233)
Non-interest expense
Salaries and related benefits	11,794		10,822			35,483		34,559
Occupancy and equipment	2,079		1,871			6,410		6,113
Data processing	1,042		892			3,129		2,564
Deposit network fees	1,158		1,879			3,144		4,000
Information technology	538		1,051			1,514		3,126
Charitable contributions	56		358			575		1,125
Federal Deposit Insurance Corporation insurance	459		404			1,268		1,254
Professional services	960		103			2,501		332
Depreciation and amortization	291		582			933		1,443
Directors' expense	249		293			832		916
Amortization of core deposit intangible	217		30			664		647

Other expense	2,035		1,711			6,349		6,103
Segment income (loss)	10,060		7,394			6,172		(22,182)

Reconciliation of segment income
All other income1	450		421			1,280		1,298

Income (loss) before income taxes	$	9,610	$	6,973		$	4,892	$	(23,480)
1Other income and loss from segment below the quantitative thresholds are attributable to one operating segment of the Bank, the Wealth Management and Trust Services, which does not meet the quantitative thresholds for presenting reportable segments. Expenses of Wealth Management and Trust Services are comprised of salary and employee benefits, professional services, data processing, occupancy and equipment and other expenses totaling $450 thousand, and $421 thousand for the three months ended September 30, 2025 and 2024, respectively, and $1.3 million and $1.3 million for the nine month periods ended September 30, 2025 and 2024, respectively.
2The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.

Earnings Per Share: The following table shows: 1) weighted average basic shares, 2) potentially dilutive weighted average common shares related to stock options and unvested restricted stock awards, and 3) weighted average diluted shares. Basic earnings (loss) per share (“EPS”) are calculated by dividing net income (loss) by the weighted average number of common shares outstanding during each period, excluding unvested restricted stock awards. Diluted EPS are calculated using the weighted average number of potentially dilutive common shares. The number of potentially dilutive common shares included in the quarterly diluted EPS is computed using the average market prices during the three months included in the reporting period under the treasury stock method. The number of potentially dilutive common shares included in year-to-date diluted EPS is a year-to-date weighted average of potentially dilutive common shares included in each quarterly diluted EPS computation. In computing diluted EPS, we exclude anti-dilutive shares such as options whose exercise prices exceed the current common stock price, as they would not reduce EPS under the treasury stock method. We have two forms of outstanding common stock: common stock and unvested restricted stock awards. Holders of unvested restricted stock awards receive non-forfeitable dividends at the same rate as common shareholders and they both share equally in undistributed earnings. Under the two-class method, the difference in EPS is nominal for these participating securities.


	Three months ended				Nine months ended
(in thousands, except per share data)	September 30, 2025		September 30, 2024		September 30, 2025		September 30, 2024
Weighted average basic common shares outstanding	15,907		16,038		15,957		16,076
Potentially dilutive common shares related to:
Stock options	—		—		—		—
Unvested restricted stock awards	27		28		22		—
Weighted average diluted common shares outstanding	15,934		16,066		15,979		16,076
Net income ( loss)	$	7,526	$	4,570	$	3,866	$	(14,410)
Basic income (loss) per common share	$	0.47	$	0.28	$	0.24	$	(0.90)
Diluted income (loss) per common share 1	$	0.47	$	0.28	$	0.24	$	(0.90)
Weighted average anti-dilutive common shares and unvested restricted shares not included in the calculation of diluted EPS	220		296		256		392
1 Because Bancorp was in a net loss position for the nine months ended September 30, 2024, diluted net loss per share is the same as basic net loss per share, as the inclusion of potentially dilutive common shares would have been anti-dilutive.