Bank of Marin Bancorp 10-K

ITEM 9A. CONTROLS AND PROCEDURES (A) Evaluation of Disclosure Controls and Procedures Bank of Marin Bancorp and its subsidiary (the "Company") conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934 (the “Act”)) as of the end of the period covered by this report. The term disclosure controls and procedures means controls and other procedures that are designed to ensure that information we are required to disclose in the reports that we file or submit under the Act (15 U.S.C. 78a et seq .) is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in the reports that we file or submit under the Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective due to the material weakness in internal control over financial reporting discussed below. This material weakness resulted material misstatements to our previously issued annual consolidated financial statements for the years ended December 31, 2024 and 2023, and the quarters ended September 30, 2025, June 30, 2025, March 31, 2025, September 30, 2024, June 30, 2024, and March 31, 2024, which are being restated and revised in this Annual Report on Form 10-K. (B) Management's Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining effective internal control over financial reporting (as defined in Rules 13a-15(f) promulgated under the 1934 Act). The internal control process has been designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America. Management conducted an assessment of the effectiveness of internal control over financial reporting as of December 31, 2025, utilizing the framework established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2025, as discussed below. Material Weakness We have identified the following material weakness which exists as of December 31, 2025: Management did not design and implement adequate control activities related to the accounting for and classification of certain reciprocal deposits and transactions. The ineffective controls over the accounting for and classification of reciprocal network deposits resulted in (1) a material misclassification of deposits within the Consolidated Statements of Condition between interest bearing deposits and non-interest bearing deposits and (2) an immaterial misclassification of expenses within the Consolidated Statements of Comprehensive (Loss) Income, between interest expense and non-interest expense, with no impact to net (loss) income. Accordingly, we have restated our annual consolidated financial statements for the years ended December 31, 2024 and 2023, and our unaudited interim condensed consolidated financial statements for the quarters ended September 30, 2025, June 30, 2025, March 31, 2025, September 30, 2024, June 30, 2024, and March 31, 2024. While only the statement of condition misclassification was significant enough to result in the material misstatement, management 116 chose to revise the statement of comprehensive (loss) income as well for the affected periods in order to provide a more complete picture. Remediation Plan for the Material Weakness In response to the identified material weakness noted above, management has begun a remediation plan to enhance its internal control over financial reporting to: • Enhance risk assessment procedures over reciprocal deposit networks to identify whether additional control activities are needed to conform to our accounting policies; • Increase involvement of technical accounting resources for complex areas at initial onboarding and for periodic review; and • Require formal documentation of technical conclusion and evidence of supervisory oversight for third party reciprocal deposit networks. While we expect that the implementation of these controls will address this material weakness, management continues to evaluate and work to improve its internal control over financial reporting, and may determine to take additional measures or determine to modify the remediation plan described above. Notwithstanding the identified material weakness, management, including our chief executive officer and chief financial officer have determined, based on the procedures performed, that the consolidated financial statements included in this Annual Report on Form 10-K fairly represent in all material respects the financial condition, results of operations and cash flows of the Company for the periods presented in accordance with U.S. generally accepted accounting principles. The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by Baker Tilly US, LLP, the Company’s independent registered public accounting firm, as stated in their report, which report expresses and adverse opinion due to a material weakness, dated March 13, 2026 below. (C) Audit Report of the Registered Public Accounting Firm The Company's independent registered public accounting firm, Baker Tilly US, LLP, has audited the effectiveness of internal control over financial reporting as of December 31, 2025 as stated in their audit report, which report expresses an adverse opinion due to a material weakness, and is incorporated herein by reference. (D) Changes in Internal Control over Financial Reporting During the quarter ended December 31, 2025, except as noted above, there were no significant changes that materially affected, or are reasonably likely to affect, our internal control over financial reporting identified in connection with the evaluation mentioned in (B) above. The term internal control over financial reporting, as defined by Rule 15d-15(f) of the Act, is a process designed by, or under the supervision of, the issuer's principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. ITEM 9B. OTHER INFORMATION Not applicable. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. 117 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information required to be reported under ITEM 10 is incorporated by reference to our Proxy Statement for the 2026 Annual Meeting of Shareholders. Bancorp and the Bank have adopted a Code of Ethics that applies to all staff, including the Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer. A copy of the Code of Ethical Conduct, which is also included on our website, will be provided to any person, without charge, upon written request to the Corporate Secretary, Bank of Marin Bancorp, 504 Redwood Boulevard, Suite 100, Novato, CA 94947. During 2025, there were no changes in the procedures for the election or nomination of directors. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item is incorporated by reference to our Proxy Statement for the 2026 Annual Meeting of Shareholders. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item is incorporated by reference to ITEM 5 above, Note 8 to our audited consolidated financial statements and to our Proxy Statement for the 2026 Annual Meeting of Shareholders. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item is incorporated by reference to our Proxy Statement for the 2026 Annual Meeting of Shareholders. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The Company’s inde pendent registered public accounting firm is Baker Tilly US, LLP , Issuing Office: Portland, OR , PCAOB ID: 23 . The information required by this Item is incorporated by reference to our Proxy Statement for the 2026 Annual Meeting of Shareholders. 118 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (A) Documents Filed as Part of this Report: 1. Financial Statements The financial statements and supplementary data listed below are filed as part of this report under ITEM 8, captioned Financial Statements and Supplementary Data. Report of Independent Registered Public Accounting Firm Management's Report on Internal Control over Financial Reporting Consolidated Statements of Condition as of December 31, 2025 and 2024 Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2025, 2024 and 2023 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2025, 2024 and 2023 Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 Notes to Consolidated Financial Statements 2. Financial Statement Schedules All financial statement schedules have been omitted, as they are inapplicable or the required information is included in the financial statements or notes thereto. (B) Exhibits Filed: The following exhibits are filed as part of this report or hereby incorporated by references to filings previously made with the SEC. 119 Incorporated by Reference Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Herewith 3.01 Articles of Incorporation, as amended S-4 333-257025 3.01 June 11, 2021 3.02 Bylaws, as amended S-4 333-257025 3.02 June 11, 2021 4.1 6.750% Fixed -to- Floating Rate Subordinated Note due December 1, 2035 8-K 001-33572 4.1 November 19, 2025 4.01 Description of Capital Stock 10-K 001-33572 4.01 March 16, 2023 10.1 S ubordinated Note Purchase Agreement , dated as of November 19, 2025 8-K 01-33572 10.1 November 19, 2025 10.01 Employee Stock Ownership Plan S-8 333-218274 4.1 May 26, 2017 10.02 2017 Employee Stock Purchase Plan S-8 333-221219 4.1 October 30, 2017 10.03 2017 Equity Plan, as amended S-8 333-227840 4.1 October 15, 2018 10.04 2020 Director Stock Plan S-8 333-239555 4.1 June 30, 2020 10.05 Form of Indemnification Agreement for Directors and Executive Officers, dated August 9, 2007 10-Q 001-33572 10.06 November 7, 2007 10.06 2010 Annual Individual Incentive Compensation Plan, revised 2019 10-K 001-33572 10.07 March 15, 2021 10.07 Salary Continuation Agreement for executive officer Tani Girton, Chief Financial Officer, dated October 18, 2013 8-K 001-33572 10.2 November 4, 2014 10.08 2007 Form of Change in Control Agreement 8-K 001-33572 10.1 October 31, 2007 10.09 Director Deferred Fee Plan, dated December 17, 2020 10-K 001-33572 10.13 March 15, 2021 10.10 Employment Agreement with Timothy Myers, dated September 23, 2021 8-K 001-33572 10.1 September 24, 2021 10.11 Salary Continuation Agreement, as amended for executive officer Timothy Myers, Chief Executive Officer, dated January 1, 2022 8-K 001-33572 10.1 December 21, 2022 10.13 Salary Continuation Agreement for executive officer Misako Stewart, Chief Credit Officer, dated January 1, 2022 8-K 001-33572 10.3 December 21, 2022 10.14 Salary Continuation Agreement for executive officer Brandi Campbell, Head of Retail Banking, dated July 1, 2022 8-K 001-33572 10.4 December 21, 2022 10.15 Salary Continuation Agreement by and between Bank of Marin and Dave Bonaccorso, dated January 2, 2025 8-K 001-33572 10.10 January 2, 2025 14.01 Code of Ethical Conduct, dated September 25 , 202 5 Filed 19.01 Insider Trading Policy Filed 21.01 List of Subsidiaries Filed 23.01 Consent of Baker Tilly US, LLP Filed 31.01 Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed 31.02 Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed 32.01 Certification pursuant to 18 U.S.C. §1350 as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002 Filed 97.1 Incentive Compensation Recovery Policy, dated October 22 , 202 5 Filed 101.INS Inline XBRL Instance Document Filed 101.SCH Inline XBRL Taxonomy Extension Schema Document Filed 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document Filed 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document Filed 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document Filed 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document Filed Copies of any exhibit to our Annual Report on Form 10-K listed in the index above will be furnished to shareholders as of the record date without charge upon written request by such shareholder addressed as follows: Corporate Secretary, Bank of Marin Bancorp, 504 Redwood Boulevard, Suite 100, Novato, CA 94947. 120 ITEM 16. Form 10-K Summary None. 121 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Bank of Marin Bancorp (registrant) March 13, 2026 /s/ David Bonaccorso Date David Bonaccorso Executive Vice President & Chief Financial Officer (Principal Financial Officer) (Principal Accounting Officer) 122 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Dated: March 13, 2026 /s/ Timothy D. Myers Timothy D. Myers President & Chief Executive Officer, Director (Principal Executive Officer) Dated: March 13, 2026 /s/ David Bonaccorso David Bonaccorso Executive Vice President & Chief Financial Officer (Principal Financial Officer) (Principal Accounting Officer) Members of Bank of Marin Bancorp's Board of Directors Dated: March 13, 2026 /s/ James C. Hale James C. Hale Chairman of the Board Dated: March 13, 2026 /s/ Nicolas C. Anderson Nicolas C. Anderson Dated: March 13, 2026 /s/ Russell A. Colombo Russell A. Colombo Dated: March 13, 2026 /s/ Charles D. Fite Charles D. Fite Dated: March 13, 2026 /s/ Cigdem Gencer Cigdem Gencer Dated: March 13, 2026 /s/ Kevin R. Kennedy Kevin R. Kennedy Dated: March 13, 2026 /s/ Joel Sklar Joel Sklar, M.D. Dated: March 13, 2026 /s/ Brian M. Sobel Brian M. Sobel Dated: March 13, 2026 /s/ Secil Tabli Watson Secil Tabli Watson 123