Marin Bank Raises Net Income to $9.9 Million in Third Quarter of 2026
Key Facts
Marin Bancorp reported net income of $9.9 million in the third quarter of 2026, compared with $9.2 million in the prior quarter and $7.5 million a year earlier. Diluted earnings per share were $0.62, versus $0.58 in the second quarter and $0.47 in the same period of 2025, an annual increase of 31.9%. The bank said pretax, pre-provision net revenue rose 17.4% quarter over quarter to $14.499 million from $12.353 million. Chief Executive Tim Myers attributed the improvement in this measure to deposit cost management, growth in fee income and expense discipline. The results show that higher income came alongside an improved net interest margin, despite increases in some measures of nonperforming or classified loans.
Net interest margin, on a tax-equivalent basis, rose to 3.48% in the third quarter from 3.38% in the prior quarter, an increase of 10 basis points. The bank attributed the improvement mainly to an 11-basis-point rise in the average yield on loans and a 4-basis-point decline in deposit costs. Net interest income was $31.4 million, up $619,000 from the prior quarter. Loan interest income rose $834,000, while deposit interest expense fell $527,000. These movements are consistent with the bank's explanation for the margin improvement: higher loan yields and lower deposit costs during the period.
Total loans increased $43.4 million, or 2.07%, to $2.144 billion at the end of September. Quarterly activity included $63.6 million in loan originations, as well as the purchase of a $31.1 million residential mortgage portfolio. Deposits rose $25.3 million to $3.395 billion on September 30, from $3.370 billion on June 30. Meanwhile, noninterest-bearing deposits increased $45 million, accounting for 37.8% of total deposits. Deposit growth alongside loan expansion offers a picture of the bank's funding and credit activity during the quarter, while the increase in noninterest-bearing deposits points to a shift in its funding mix.
Some credit quality measures weakened during the quarter, as classified loans rose $15.2 million to $35 million, equivalent to 1.63% of total loans, compared with $19.9 million and 0.95% at the end of June. The bank said one commercial real estate relationship, valued at $14.1 million, was the main driver of the increase. It added that the borrower was paying as agreed and that it did not expect a loss on the relationship. Nonperforming loans also rose to $9.7 million, or 0.45% of total loans on September 30, from $8.5 million and 0.40% on June 30. The figures put the increase in classified and nonperforming loans among the quarter's developments, alongside the bank's stated expectations for the real estate relationship that affected the classification.
The tangible common equity to tangible assets ratio was 8.05% on September 30, down 47 basis points from the prior quarter. The bank attributed the decline to higher market interest rates, which negatively affected accumulated other comprehensive income. On distributions, the board declared a cash dividend of $0.25 per share on October 22, the 86th consecutive quarterly dividend. It will be paid on November 12 to shareholders of record at the close of business on November 5. The bank had scheduled its third-quarter earnings call for October 26 at 8:30 a.m. Pacific time, or 11:30 a.m. Eastern time.
The bank's stock, listed under the ticker BMRC, closed at $27.11 on October 23. It had closed at $27.34 on October 22, $26.64 on October 21, $26.93 on October 20 and $26.07 on October 19. These closing prices provide context for the stock's movement in the days before the earnings announcement; the cited price record does not include the high or low during the October 23 session.