Bank of Marin Bancorp Q3 2026 net income rises to $9.9 million

Bank of Marin Bancorp reported third-quarter 2026 net income of $9.9 million, a 32% year-over-year increase driven by expanded net interest margins and loan growth. The Novato, California-based company, parent to Bank of Marin, posted diluted earnings per share of $0.62 for the quarter, up from $0.47 in the same period last year.

President and CEO Tim Myers attributed the 17% sequential rise in pre-tax pre-provision net income to active management of deposit costs, fee income growth, and expense discipline. Myers noted that organic originations fueled loan growth, supplemented by a California residential loan pool purchase that utilized excess liquidity. The bank described the pool as diversifying earning assets and expected to provide attractive risk-adjusted returns.

The tax-equivalent net interest margin improved by 10 basis points to 3.48% in the third quarter, up from 3.38% in the second quarter. This expansion was largely due to an 11-basis-point increase in average loan yields. Total loans rose by $43.4 million to $2.144 billion, supported by $63.6 million in healthy fundings and the $31.1 million residential mortgage pool purchase.

Total deposits increased by $25.3 million to $3.395 billion as of September 30, 2026. Noninterest-bearing accounts drove this growth, adding $45.0 million and representing 37.8% of total deposits, compared to 36.7% in the prior quarter. The average cost of total deposits decreased from 1.28% to 1.24%, while the average cost of interest-bearing deposits fell from 2.04% to 2.03%.

Non-interest income grew 15.8% in the quarter, including a $251,000 increase in service charges on business deposit accounts following a pricing strategy update effective July 1. Credit quality metrics showed mixed results: special mention loans decreased to $65.1 million from $100.9 million, while classified loans increased by $15.2 million to $35.0 million. This rise was primarily due to the downgrade of a single $14.1 million owner-occupied commercial real estate relationship facing a borrower-specific challenge, though the borrower is paying as agreed with no expected loss potential.

The bank recorded a provision for credit losses on loans of $500,000 and on unfunded commitments of $325,000 for the third quarter of 2026.