Bank of Marin Bancorp : 2024 D.A. Davidson 26th Annual Financial Institutions Conference

D.A. Davidson 26th Annual Financial Institutions Conference

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Forward-Looking Statements

This discussion of financial results includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the "1933 Act") and Section 21E of the Securities Exchange Act of 1934, as amended, (the "1934 Act"). Those sections of the 1933 Act and 1934 Act provide a "safe harbor" for forward-looking statements to encourage companies to provide prospective information about their financial performance so long as they provide meaningful, cautionary statements identifying important factors that could cause actual results to differ significantly from projected results. Our forward-looking statements include descriptions of plans or objectives of management for future operations, products or services, and forecasts of revenues, earnings or other measures of economic performance. 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 preceded by "will," "would," "should," "could" or "may." Forward-looking statements are based on management's current expectations regarding economic, legislative, and regulatory issues that may affect our earnings in future periods. 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 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. Important factors that could cause results or performance to materially differ from those expressed in our prior forward-looking statements are detailed in ITEM 1A, Risk Factors sections of our December 31, 2023 Form 10-K and March 31, 2024 Form 10-Q as filed with the SEC, copies of which are available from us at no charge. Forward-looking statements speak only as of the date they are made. 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 that occur after the date of this press release or to reflect the occurrence of unanticipated events.

GAAP to Non-GAAP Financial Measures

This presentation includes some non-GAAP financial measures as shown in the Appendix of this presentation. Please refer to the reconciliation of GAAP to Non-GAAP financial measures included in our Form 8-K under Item 9 - Financial Statements and Exhibit 99.1 filed with the SEC on April 29, 2024.

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F r a n c h i s e H i g h l i g h t s

S E C T I O N 01

Bank of Marin Bancorp

BMRC AT A GLANCE

BMRC	Novato, CA
NASDAQ	Headquarters

$3.8 Billion	$273.1 Million
Total Assets	Market Cap

17.05%	5.96%
Total RBC	Dividend Yield

Data as of March 31, 2024

27 Full-Service Branch Locations

• Commercial Banking Offices

Relationship Banking

Build strong, long-term customer relationships based on trust, integrity and expertise, inspiring loyalty though exceptional service.

Disciplined Fundamentals

Apply a disciplined business approach with sound banking practices, high quality products, and consistent fundamentals ensuring continued strong results.

Community Commitment

Give back to the communities that we serve through active employee volunteerism, nonprofit board leadership and financial contributions.

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261 Years of Combined Experience Through Various Economic Cycles

Tim Myers		Sathis Arasadi		David Bloom
President and Chief Executive Officer		EVP, Chief Information Officer		EVP, Head of Commercial Banking
•	27 years of finance and		•	32 years of engineering,		•	30 years of commercial
	banking experience			technology, and fintech experience			banking experience
•	Joined Bank of Marin in 2007		•	Joined Bank of Marin in 2023		•	Joined Bank of Marin in 2023

Brandi Campbell

EVP, Head of Retail Banking

• 37 years of banking experience
• Joined Bank of Marin in 2019

Tani Girton		Bob Gotelli
EVP, Chief Financial Officer		EVP, Human Resources Director
•	40 years of financial services		•	31 years of human
	experience			resources experience
•	Joined Bank of Marin in 2013		•	Joined Bank of Marin in 2000

Nikki Sloan		Misako Stewart
EVP, Head of Growth and Strategy		EVP, Chief Credit Officer
•	30 years of banking experience		•	34 years of banking experience
•	Joined Bank of Marin in 2021		•	Joined Bank of Marin in 2013

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Long-TermA strategic and disciplined approach to delivering long-term value

Strategic Priorities

0 1

Drive high-qualityLOAN GROWTH

0 2	Grow NON-INTEREST INCOME

0 3	Scale through EFFICIENCY GAINS
	and ACQUISITIONS

0 4 Invest in TALENT and TECHNOLOGY

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First Quarter 2024 Highlights

Activities

Capital

Key Operating Trends

Deposits and Liquidity

Loans and Credit Quality

• Originated new loans at an average rate of 8.18%, 266 bps higher than Q1 payoff rates
• Reduced borrowings by $26.0 million costing 5.15%
• Maintained non-interest bearing deposit balances
• Made opportunistic new hires and implemented new compensation plans positively impacting loan pipeline
• Bancorp total risk-based capital of 17.1%
• Bancorp TCE / TA of 9.8%, 7.7% when adjusted for HTM securities 1
• Tax-equivalentyield on interest-earning assets of 3.75%, up 7 bps from 4Q23
• Tax-equivalentnet interest margin stabilized at 2.50% from 2.53% in 4Q23
• Cost of deposits up 23 bps in 1Q24
• Non-interestbearing deposits stay strong at 44% of total deposits
• Total cost of deposits was 1.38% (interest-bearing 2.46%) for Q1 and 1.41% (interest-bearing 2.50%) for the month of March.
• Total deposits decreased 0.2% from 4Q23
• Uninsured deposits estimated to represent 28% of total deposits
• Net available funding $1.9 billion
• Strong liquidity provides 208% coverage of estimated uninsured deposits
• No material formation of new problem credits. Previously identified problem credits continuing through the workout and resolution process.
• Non-accrualloans at 0.31% of total loans (from 0.39% at Q423), down 21% in balances due largely to payoffs and paydowns
• Classified loans of 2.67% of total loans (from 1.56% at Q423), evidencing diligent credit risk monitoring
• $350 thousand provision for credit losses
• Total portfolio loan balances decreased 0.9% from 4Q23

(1) See Reconciliation of Non-GAAP Financial Measures in the Appendix

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Focused on Building Long-Term Shareholder Value

Strong Core Deposit Franchise

Largest community bank in Marin County with 12.3% market share 1

44% non-interest bearing deposits with a 1.38% cost of deposits in Q1 2024

Robust Capital Levels & Liquidity

Regulatory capital ratios remain comfortably above "well-capitalized" thresholds $1.9 billion in available liquidity

Improving Margin Outlook

Improving asset yield due to:

• weighted average rates on loan originations were 266bps higher than Q1 payoffs
• $320 million in loans repricing over next 12 months
• signs of deceleration in funding costs late in Q1

Prudent Loan Growth

Markets with proven track record of organic growth

Key opportunistic relationship banking talent acquisitions due to market dislocation 63% loan-to-deposit ratio provides runway for additional growth

Seasoned Risk Management

Historically low non-performing loans through credit cycles

Low NOO CRE office exposure in the City of San Francisco at 3% of total loans (6% of total NOO-CRE) and a weighted average 70% LTV

Less than 2.5% of multi family CRE exposure

1Source: S&P Global Market Intelligence - FDIC deposit market share data as of June 30, 2023

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Focused on delivering Long-Term, Consistent Growth

• Proven ability to grow both

organically and through M&A

• Consistent cash dividend provides

Tangible Book Value Per Share and Cumulative Cash Dividends

$30.00

$25.45 $25.72 $25.51

$25.00		$23.09	$23.42
		$21.91
		$20.57
$20.00	$18.35	$18.99

stable and reliable return for

shareholders

$15.00

$10.00

$15.89 $16.87

$14.51

														$6.56	$7.56	$7.81
													$5.58
											$4.64
$5.00										$3.72
				$1.73	$2.29	$2.92
			$1.22
$0.37	$0.77
$-
2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	1Q24
				Cumulative Cash Dividends				TBVPS		TBVPS (Excl AOCI)

Note: Tangible book value per share (TBVPS) equals total shareholders' equity, less intangible assets including goodwill and core deposit intangibles, divided by outstanding common shares at period end. Accumulated other comprehensive income (AOCI) represents the unrealized gains (losses) on available-for-sale securities, net of tax. Components of these calculations were derived from our financial reports filed with the SEC for each respective period. Additional information for Q1 2024 can be found in the Reconciliation of Non-GAAP Financial Measures in the Appendix.

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Robust Capital Ratios

As of March 31, 2024

• We maintained high capital levels and are in a position of strength
• Total risk-based capital increased 16 basis points in 1Q24 to 17.1%
• Tangible common equity ratio improved 3 basis points in 1Q24 to 9.8%
• No repurchases in 1Q24, as we continue to build upon our strong capital

17.1%

16.0%16.0%

10.0%	10.9%
9.8%
8.0%	7.7%

6.5%

5.0%

Common Equity Tier-	Total Tier-One Risk-	Total Risk-Based Capital		Tier-One Leverage	Tangible Common
One Risk-Based Capital	Based Capital				Equity
		Well Capitalized Threshold			Bank of Marin Bancorp		Bancorp TCE adj. for HTM securities*

* See Reconciliation of Non-GAAP Financial Measures in the Appendix.

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