Proxy Statement (Form DEF 14A)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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SCHEDULE 14A

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Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No. )

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Payment of Filing Fee (Check the appropriate box):

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2025

Proxy

Statement

Wednesday, May 21, 2025

Bank of Marin Corporate Headquarters

504 Redwood Boulevard, Suite 100

Novato, California

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Dear Fellow Shareholders,

During 2024, Bank of Marin was able to successfully navigate the challenging operating environment created by the economic uncertainty and interest rate movements. Given the strength of our balance sheet and high levels of capital and liquidity, we were able to execute on a balance sheet repositioning strategy that resulted in a higher net interest margin and level of profitability in the second half of the year. Furthermore, we believe we are well positioned to capitalize on any improvement we see in economic conditions and future loan demand.

At the same time, we continued to tightly manage expenses including taking actions that reduced operating expenses, while continuing to make prudent investments in banking talent and technology. The talent we have added to our banking team has resulted in a higher level of loan production that meets our disciplined underwriting and pricing criteria, which we believe will continue in 2025.

The positive trends we are seeing in our net interest margin combined with our prudent expense management should result in meaningful revenue growth and a greater degree of operating leverage.

Our relationship-oriented banking model, which focuses on high-touch and exceptional level of service, continues to serve us well in a competitive deposit pricing market; noninterest-bearing deposits remained at a very high level, accounting for 43% of our total deposits at year end.

In summary, we believe that we are very well positioned to increase our market share, add attractive new client relationships, generate profitable growth, and further enhance the value of our franchise in 2025 and the coming years.

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Sincerely,

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Notice of Annual Meeting of Shareholders

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To Our Shareholders:

Notice is hereby given of the Annual Meeting of Shareholders of Bank of Marin Bancorp. The meeting will be held at 4:00 p.m. Pacific Time on Wednesday, May 21, 2025 at the Bank of Marin Corporate Headquarters, 504 Redwood Boulevard, Suite 100, Novato, California. A reception at the Bank of Marin Corporate Headquarters will immediately follow the Annual Meeting.

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You are urged to read the accompanying Proxy Statement carefully. It contains a detailed explanation of all matters on which you will be asked to vote.

Only shareholders of record as of the close of business on April 2, 2025 are entitled to receive notice of and to vote at this meeting.

Your vote is important to us. Whether or not you expect to attend the Annual Meeting, please submit a proxy as soon as possible to instruct how your shares are to be voted at the Annual Meeting. If you participate in and vote your shares at the Annual Meeting, your proxy will not be used.

If you would like to attend the Annual Meeting, you must pre-register at www.bankofmarin.com/annual meeting by May 14, 2025. For questions, email events@bankofmarin.com.

Our bylaws provide that nominations for election to the board of directors of the Company may be made by the board of directors or by any shareholder of the Company's stock entitled to vote for the election of directors. Nominations, other than those made by or on behalf of the existing management of the Company, must be made in writing and delivered or mailed to the Chairman of the Board or the Chief Executive Officer not less than 14 days nor more than 50 days prior to any meeting of shareholders called for the election of directors. The notification of nomination should contain the following information to the extent known by the notifying shareholder: (a) name and address of the proposed nominee(s); (b) principal occupation of the proposed nominee(s); (c) total number of shares that will be voted for the proposed nominee(s); (d) name and residence address of the notifying shareholder; and (e) number of shares owned by the notifying shareholder. Nominations not made in accordance with this section may be disregarded by the Chairman of the meeting, and upon instruction, the Inspector of Election shall disregard all votes cast for each such nominee.

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One copy of the Annual Report on Form 10-K and Proxy Statement is being delivered to multiple shareholders sharing an address unless the Company has received contrary instructions from one or more of the shareholders. The Company will deliver promptly upon written or oral request a separate copy of the Annual Report and Proxy Statement to a shareholder at a shared address to which a single copy of the document was delivered. If a shareholder wishes to receive a separate copy or has received multiple copies at one address and would like to receive a single copy in the future, please contact Computershare Trust Company, N.A. by phone at (800) 368-5948 or by written request to Bank of Marin Bancorp c/o Computershare Trust Company, N.A., P.O. Box 43006, Providence, RI 02940-3006. Overnight correspondence should be mailed to Bank of Marin Bancorp c/o Computershare, 150 Royall St., Suite 101, Canton MA 02021. The shareholder website is www.computershare.com/investor.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON MAY 21, 2025

Copies of the Annual Meeting Proxy Material, including the Proxy Statement and the Annual Report on Form 10- K, are also available at: www.edocumentview.com/BMRC.

By order of the Board of Directors,

Krissy Meyer

Corporate Secretary

April 16, 2025

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PROXY SUMMARY

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The matters to be considered and voted upon at the meeting will be:

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Meeting:

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Voting:

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These proxy materials are furnished in connection with the solicitation by the Board of Directors of Bank of Marin Bancorp (the "Company"), of proxies for use at the Annual Meeting of Shareholders of the Company to be held on Wednesday, May 21, 2025, at 4:00 p.m. Pacific Time at the Bank of Marin Corporate Headquarters, Novato, California and at any adjournment thereof. These proxy materials were first sent to shareholders on or about April 16, 2025.

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Proxy Summary

Overview of Director Nominees

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CH = Chair l = Member

Committees: C = Compensation A = Audit NG = Nominating and Governance

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The persons named below are nominated by the Board of Directors and, unless the shareholder marks the proxy to withhold the vote, the enclosed proxy, if returned and not subsequently revoked, will be voted in favor of their election as directors. If for any reason any such nominee becomes unavailable for election, the proxy holders will vote for such substitute nominee as may be designated by the Board of Directors. The proxy holders reserve the right to cumulate votes for the election of directors and to cast all of such votes for any one or more of the nominees, to the exclusion of the others, and in such order of preference as the proxy holders may determine in their discretion if cumulative voting is involved as described above under "Voting Rights."

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Proposal Number 1: Election of Directors

The following table sets forth the names of the persons nominated by the Board of Directors for election as directors and certain additional information as of April 2, 2025, including biographical information, qualifications, business experience and directorships with other public companies of each nominee covering at least the last five years.

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Proposal Number 1: Election of Directors

Arrangements or Understandings Regarding Service as a Director

On May 10, 2021, the Company entered into an agreement (the "Kelly Trust Agreement") with the Jon S. Kelly Administrative Trust and certain beneficiaries of the Kelly Trust (collectively, the "Kelly Trust Parties"), pursuant to which the Kelly Trust Parties agreed to withdraw their nomination notice, and the Company agreed to increase the size of the Board to twelve members and to appoint one new independent director (the "Kelly Trust Nominee") effective May 10, 2021. It was further agreed that the Kelly Trust Nominee would be Sanjiv Sanghvi, and the Company appointed him as a director effective May 10, 2021. Mr. Sanghvi was also added as a member of the Nominating and Governance Committee and the Compensation Committee. The Company reviewed Mr. Sanghvi through its customary director candidate review process, and determined he was qualified. The Company also nominated Mr. Sanghvi for election at the Annual Meeting.

Following three extensions of the Kelly Trust Agreement, the agreement has now terminated. On February 19, 2025, Mr. Sanghvi notified the Company that he will serve out his current term for Director until the Company's 2025 Annual Meeting of Shareholders, but will not stand for re-election at such meeting.

None of our other directors and no nominees have any agreements or arrangements with any other person or entity in connection with the director's or nominee's candidacy or service on our Board.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS

A VOTE "FOR" EACH OF THE DIRECTORS NOMINATED FOR RE-ELECTION

IN PROPOSAL ONE.

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Director Compensation

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The following table sets forth certain information regarding the compensation earned by or awarded to each non-employee director who served on the Board of Directors in 2024.

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CORPORATE GOVERNANCE

Director Independence

As of the Record Date (April 2, 2025), each of the persons nominated for election as a director, except for Timothy D. Myers (the CEO of the Company) was "independent" within the meaning of Nasdaq's listing rules.

Board Meetings and Committees

There were six (6) regular meetings of the Board of Directors of the Company during 2024. Each director standing for re-election to the Board attended at least 75% of the aggregate number of meetings of the Board of Directors and meetings held by all committees of the Board on which he/she served.

The Board of Directors is responsible for the overall affairs of the Company. To assist it in carrying out this responsibility, the Board has delegated certain authority to several Company committees, the duties of which and membership at April 2, 2025, were as follows:

●= Committee Member

(C) = Chair

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(C) = Chair

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(C) = Chair

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The Compensation, Audit, and Nominating and Governance Committee charters are available on the Company's website at www.bankofmarin.com under the "Investor Relations" tab.

Each current and nominated Board member is encouraged to attend the Annual Meeting of Shareholders. All members of the Board attended the 2024 Annual Meeting, with the exception of Ms.Watson.

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Corporate Governance

Indebtedness and Other Transactions with Directors and Executive Officers

In accordance with the Nominating and Governance Committee Charter, the Nominating and Governance Committee is responsible for reviewing and acting upon all related party transactions required to be disclosed by Item 404 of Regulation S-K for potential conflicts of interest. Additionally, the Company's Code of Ethical Conduct provides rules that restrict transactions with affiliated persons.

Prior to engaging in any related party transaction, a completed questionnaire describing the nature and structure of the transaction, along with any necessary supporting documentation, is submitted to the Nominating and Governance Committee. In determining whether to approve a related party transaction, the Nominating and Governance Committee will consider, among other things, the following:

The Company will only enter into a related party transaction if the Nominating and Governance Committee determines that any interested director has abstained from voting on the matter and that the transaction is beneficial to the Company, and the terms of the transaction are fair to the Company.

The Company is not currently engaged in any related party transactions.

The Company's subsidiary, Bank of Marin, has had and expects to have banking transactions in the ordinary course of business with some of the directors and executive officers of the Bank (and their associates), on substantially the same terms (including interest rates, collateral and repayment terms) as those prevailing at the time for comparable loans with persons not related to the Company. During 2023 no loan to any director or executive officer of the Company (or their associates) has involved more than normal risk of collectability or presented other unfavorable features. All loans to directors or executive officers would be subject to the limitations prescribed by California Financial Code Section 1360, et seq. and applicable federal law and regulations.

Board Leadership Structure

It is the role of the Nominating and Governance Committee to annually review, and when appropriate make recommendations to the Board of Directors concerning board composition, structure, and functions. The Board has deemed it appropriate to have two separate individuals serve as Chairman of the Board and Chief Executive Officer. According to the Company's bylaws, the Chairman of the Board shall preside at meetings of the Board of Directors and shareholders and exercise and perform such other powers and duties as may be from time to time assigned to him/her by the Board of Directors. The bylaws further provide that the President of the Company shall, subject to the control of the Board of Directors, have general supervision, direction, and control of the business and the officers of the Company. As the oversight responsibilities of the Board of Directors grows, the Board believes it is beneficial to have an independent Chairman with the sole job of leading the Board, while allowing the President to focus his efforts on the day-to-day management of the Company and the Bank. The Board does believe that it is important to have the President as a director. The Company aims to foster an appropriate level of separation between these two distinct levels of leadership of the Company. In addition to the Chairman, leadership is also provided through the respective chairs of the Board's various committees.

Board's Role in Risk Oversight

It is a fundamental part of the Board's responsibility to understand the risks the Company faces and what steps management is taking to manage those risks. It is also important that the Board understands what level of risk

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is appropriate for the Company. The Board fulfills its oversight responsibility with respect to compliance and operational risk, by working with the Company's Compliance Manager to understand regulatory and legislative issues and the Company's projects and systems. While the Board of Directors has the ultimate oversight responsibility for the risk management process, various committees of the Board also have responsibility for risk management. In particular, the Audit Committee focuses on risk assessment and risk management as they relate to financial reporting, including appropriate guidelines and policies to govern the process, as well as the Company's major financial reporting risks and the steps management has taken to monitor and control them, and the Committee receives an annual risk assessment report from the Company's independent auditor In setting compensation, the Compensation Committee strives to create incentives that do not encourage excessive risk-taking beyond the Company's ability to effectively identify and manage risk. The Bank's Asse/Liability Committee functions as a directors' loan committee, oversees the Bank's balance sheet, liquidity and capital management, as well as the management of credit, interest rate, and market risk within the context of the risk tolerance established by the Board of Directors, and receives monthly reports from the Chief Credit Officer and Chief Financial Officer. Additionally, on a quarterly basis, the Board of Directors and various committees (Compensation Committee, the Bank's Wealth Management and Trust Services Committee and the Bank's Asset Liability Management Committee) receive and review reports from the Company's consolidated enterprise risk management program. In general, that program is designed to ensure the adequacy of policies, procedures, tolerance levels, risk measurement systems, monitoring processes, management information systems and internal controls. Board and committee review of quarterly reporting is an important component of the overall enterprise risk management system. The Board of Directors is also provided physical and information security risk assessments by management on an annual basis.

Insider Trading Policies and Procedures

The Company has adopted an insider trading policy (the "Insider Trading Policy") that applies to all (i) directors, (ii) executive officers, and (iii) employees who are exposed to insider information (together, the "Covered Persons"). The Insider Trading Policy prohibits the use of material non-public information obtained by Covered Persons through their involvement with the Company when making decisions to purchase, sell, give away, or otherwise trade in the Company's securities or to provide such information to others outside the organization. Further, we have established black-out periods to which all Covered Persons are subject, including quarterly black-out periods which commence 21 days before the end of the quarter and continue until the close of the second trading day after quarterly earnings results are disclosed on Form 8-K. The Company may impose black-out periods from time to time as other types of material non-public information occur or when material non-public events or disclosures are pending. If the Company imposes a special black-out period, the Company will notify Covered Persons accordingly.

Stock Option Grant Timing Policy

The Company has not granted stock options since 2022. Accordingly, the Company has not adopted policies and practices on the timing of awards of stock options in relation to the disclosure of material non-public information of the Company, as contemplated by Item 402(x)(2) of Regulation S-K.

Environmental, Social and Governance

Our Commitment to Environmental, Social and Governance Opportunities

At Bank of Marin Bancorp, we believe banking is about more than just conducting financial transactions. It is about relationships. To quote our founder, William P. Murray, Jr., we pledge to "do well by doing good."

We aspire to have positive and meaningful impacts that benefit our employees, customers, shareholders, the environment and the communities we serve.

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Environmental Responsibility

Being good stewards of the environment is a responsibility we take seriously. Following are efforts in which we engage that support environmental stewardship in our branches and offices:

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Our Team

At Bank of Marin Bancorp, our employees are our most important asset. We are committed to maintaining an open and transparent culture that encourages collaboration and recognizes employees at all levels.

Employee Experience and Workplace Culture

Bank of Marin offers a welcoming, friendly work environment and a caring attitude toward its employees. The Bank places great value on its employees, realizing its success is largely due to an extraordinary staff. Each employee brings his or her own unique capabilities and characteristics to his or her work. We believe that having a diverse workforce reflecting our customers and communities enables us to better meet customer and community needs and drive a strong company performance.

Strengthening Our Communities

At Bank of Marin Bancorp, we place great value on community service. We have been honored by The San Francisco Business Times as a "Top Corporate Philanthropist in the Bay Area" each year since 2003. In 2024, Bank of Marin was named a "Top Corporate Giver" by Sacramento Business Journal. Each year, Bank of Marin donates at least one percent of pre-tax profit to positively support local communities. In 2024, Bank of Marin Bancorp and its employees donated nearly $1 million to 349 nonprofits through grants, community sponsorships, and employee giving. Additionally, the Bank offers 16 hours of paid employee volunteer time annually, and in 2024, our employees logged over 8,900 volunteer hours supporting causes most important to them.

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Corporate Governance

Governance

At Bank of Marin Bancorp, we are dedicated to maintaining a high standard of corporate governance. We know strong corporate governance practices built on integrity, ethics and transparency strengthen accountability at all levels of our company and serve as the foundation that upholds public trust in our company.

Our Board members bring in-depth knowledge developed from experience in professional areas such as financial services, private equity, real estate, health care, fintech, construction, media, hospitality, and government relations. As of April 2, 2025, our Board had twelve members, eleven of whom were independent Directors and eleven of whom were non-executive. There are currently two female Directors on our Board. Our objective is to continue to encourage female leaders to join our Board.

Our Board understands that addressing Environmental, Social and Governance ("ESG") factors can support long-term value creation, foster risk resilience and unlock opportunities for growth. It also recognizes that strong corporate governance is essential for delivering strong performance for our shareholders.

In 2020 the Nominating and Governance Committee developed, and the Board approved, a Board Diversity Policy with the aim of improving board member diversity. The policy sets out the approach to diversity of members of the Board of Directors of the Company and its subsidiaries and requires annual establishment of measurable objectives for improving diversity on the Board. For 2024, the goal was to ensure that at least two Board members are female and at least two Board members are ethnically or racially diverse and that this is maintained going forward. Additionally, the Board will continue to consider gender diversity when filling Board vacancies caused by the retirement of current Board members.

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EXECUTIVE COMPENSATION

Executive Officers

The Board has designated the following officers as executive officers of the Company and/or Bank of Marin: President and Chief Executive Officer, Chief Financial Officer, Chief Credit Officer, Chief Information Officer, Head of Commercial Banking, Head of Retail Banking and Director of Human Resources. At April 2, 2025, the incumbents to those offices were: Timothy D. Myers, David Bonaccorso, Misako Stewart, Sathis Arasadi, David Bloom, Brandi Campbell and Robert Gotelli, respectively. Following is information regarding the executive officers excluding Mr. Myers, who is a director nominee and whose information has been previously presented.

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Compensation Discussion and Analysis

This section addresses the compensation programs, philosophy and objectives, of the Bank of Marin Bancorp and its banking subsidiary, Bank of Marin (collectively in this section, the "Company"), including the process for making compensation decisions, the roles of the Board of Directors, the Compensation Committee (in this section, the "Committee"), and management in the design of such programs, and its 2024 executive compensation components. This section also addresses the factors most relevant to understanding the Company's compensation programs and what they are designed to reward, including the essential elements of compensation, the reasons for determining payment of each element of compensation, and how each compensation element fits into the Company's overall compensation objectives and affects decisions regarding other compensation elements.

Executive Summary

The Committee of the Board of Directors establishes and administers the compensation and benefit programs for Named Executive Officers, the persons identified in the Summary Compensation Table which follows. In addition, the Committee is responsible for administering other company-wide compensation and benefits plans for all employees. The Committee consists entirely of independent directors. The Committee carefully considers the components of the executive compensation programs to attract and retain high quality Named Executive Officers and to incent the behavior of Named Executive Officers to create shareholder value and accomplish the Company's strategic goals. The Committee engages independent consultants from time to time and considers the compensation programs of peer financial institutions to ensure that the Company's compensation programs are competitive with market practices.

The Committee's philosophy, practices and policies have been developed over a number of years and have not historically been subject to sweeping, material changes. At the 2024 annual meeting of shareholders, the Company included an advisory vote to approve executive compensation, providing shareholders with an opportunity to communicate their views on the Company's executive compensation program. The Company's executive compensation was approved by approximately 86% of the shares voted. The Committee considered the results of this vote in setting executive compensation for 2025 and concluded that the support of the Company's compensation program indicates that shareholders generally concur with the Company's alignment of compensation and performance. At the 2023 Annual Meeting of Shareholders, the shareholders held, by majority vote, for a one-year frequency of the non-binding, advisory vote on executive compensation. While the frequency vote was non-binding, the Board of Directors has made the decision to continue to include the advisory vote to approve executive compensation annually.

Shareholder outreach and feedback is a critical component of our investor relations philosophy, and, in 2024, we continued to maintain a regular dialogue with our shareholders. Throughout the year, we engaged in conversations and meetings, including sell-side conferences, non-deal road shows and in-person or telephonic one-on-one meetings with our shareholder base.

Philosophy

The Company's executive compensation programs are designed to attract and retain high quality officers that are critical to its long-term success. The Company's Board of Directors and management believe that the most effective executive compensation program is one that is designed to reward the achievement of specific annual, long-term and strategic goals, which aligns Named Executive Officers' interests with those of the shareholders by rewarding performance above established goals, with the ultimate goal of improving shareholder value without rewarding undue short-term risk-taking. This is achieved by utilizing a combination of short-term cash incentives, paid annually, and long-term equity incentives, which vest over a three-year period and include performance-based vesting metrics. The Committee engages independent national human resources consulting firms to periodically conduct a review of the Company's total compensation programs. During these periodic reviews, each component of total compensation is compared against a regional peer group that is similar to the Company in asset size, geography and performance. (For details, see "Compensation Consultants" and "Peer Group Review" herein.) In 2022, the Committee adopted a new peer group to be used in 2022, 2023, and 2024. The 2022 peer group was made up of major exchange publicly traded banks in the Western states, including Hawaii, with total assets between $2 billion and $10 billion.

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Executive Compensation

The Committee's compensation philosophy is to target base salaries at or near the median (50^th percentile) and to pay total compensation (including annual cash incentives, long-term equity incentives, and benefits) at the 50^th percentile of the regional peer group, with variation based on individual experience and individual and Company performance. The Company believes paying total compensation between the 50^th and 75^th percentile for above-average performance is critical for attracting and retaining the qualified executives it needs to achieve its business objectives. Overall, compensation paid to Company executives is believed to be competitive with market practices.

Base compensation levels for Named Executive Officers are established based on market data and are adjusted based on individual performance and experience. Annual incentives, including performance-based bonuses and long-term equity awards, are based on both Company and/or individual performance objectives, which include asset and revenue growth targets, deposit growth targets, profitability targets, credit quality metrics, identification and execution of strategic opportunities, and core earnings performance. It is the Committee's desire to remove as much discretion as possible from the incentive-based compensation in favor of a metrics-based program.

Business Highlights

Results for 2024 were significantly impacted by the Company's strategic balance sheet repositioning which included the sale of $325.2 million in low yielding investment securities at a $32.5 million pre-tax loss, the payoff of high-cost borrowings and the purchase and origination of higher yielding loans and securities. In addition, the Company took actions to reduce operating expenses in 2024, which positively impacted its results later in the year. The Company believes the strength of its balance sheet, and positive trends in its net interest margin and operating leverage are key factors that improved results in the second half of the year and should improve the financial performance in the year ahead.

Adjusting for the loss on the sale of securities in the second quarter, the Bank's financial performance improved during the second half of 2024 due to the benefits from the securities repositioning as well as reductions in the cost of deposits. These actions led to an improvement in the tax-equivalent net interest margin from 2.52% in the second quarter to 2.80% in the fourth quarter of 2024. As a result, securities loss-adjusted metrics including pre-tax pre-provision net income, net income, and return on assets improved during the second half of 2024.

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Loan originations totaled $152.6 million for the year ended December 31, 2024, compared to $144.1 million for the prior year, increasing by 67% in the fourth quarter. Loans increased $9.5 million during the year ended December 31, 2024, to $2.083 billion, compared to $2.074 billion at December 31, 2023.

Non-interest bearing deposits continued to remain strong compared to peers and made up 43.5% of total deposits as of December 31, 2024.

Deposit rates were reduced in the fourth quarter, dropping the average cost of interest-bearing deposits 19 basis points.

Non-accrual loans decreased to 1.63% of total loans from 1.91% in the fourth quarter.

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Executive Compensation

Process for Making Compensation Decisions

Role of the Chief Executive Officer

Shortly following the conclusion of each calendar year, the Company's Chief Executive Officer (the "CEO"), assisted by the Director of Human Resources, conducts an annual performance evaluation process for all Named Executive Officers, other than for himself, as well as for other members of senior management who are not Named Executive Officers. As part of each annual performance evaluation, the CEO considers, among other key factors, i) the executive's performance of job responsibilities and achievement of individual and/or departmental objectives and ii) management and leadership skills, such as effective communication, problem solving, business development and community involvement. In addition, the executive's contributions to the Company's overall financial goals are indirectly considered. Based on this evaluation, the CEO determines, for each of the Named Executive Officers (other than himself), recommendations for salary adjustments, including merit increases, and annual performance-based bonus amounts to be made to the Committee for its approval. The Named Executive Officer's performance-based bonus is determined by the Company's financial performance relative to that year's financial performance goals and individual performance goals.

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In addition, recommendations by the CEO and the Director of Human Resources for the grant of equity awards to Named Executive Officers under the Company's equity compensation plan are submitted to the Committee for approval and are based on Named Executives Incentive Equity opportunity and the Company's financial performance relative to that year's financial performance goals.

Role of the Compensation Committee

The Committee periodically reviews the compensation levels of the Board of Directors. In its review, the Committee looks to ensure that the compensation is fair, reasonably competitive and commensurate to the responsibilities of both the individual directors as well as the Board in the aggregate. Additionally, the Committee specifically takes into consideration the Directors' adherence to the Company's Director Stock Ownership Guidelines when reviewing compensation.

The Committee has responsibility for establishing, implementing and continually monitoring adherence with the Company's compensation philosophy. The Committee ensures that the total compensation paid to Named Executive Officers is fair, reasonable and competitive and that the types of compensation and benefits provided to the Named Executive Officers are similar to comparable executives within an established peer group. The Committee is also responsible for the review and approval of Company goals and objectives relevant to the compensation, including the incentive awards, of the Company's CEO, to evaluate the performance of the CEO in light of the goals and objectives and to determine and approve the CEO's compensation levels based on this evaluation. The Committee reviews compensation levels for the other Named Executive Officers, including the CEO's recommendations on annual bonus and salary increases for Named Executive Officers and makes final determinations and approvals. Additionally, the Committee reviews and approves the grant of equity awards to assure that the Committee considers all elements of proposed compensation.

To achieve these goals and objectives, the Committee expects to maintain compensation plans that create an executive compensation program that is set at competitive levels of comparable public financial services institutions with comparable performance. The Committee has followed certain fundamental objectives to ensure the effectiveness of the Company's compensation strategy. These objectives include the following:

Internal and external fairness. The Committee recognizes the importance of perceived fairness both internally and externally of compensation practices. The Committee has evaluated the overall economic impact of the Company's compensation practices and, when deemed necessary, has consulted with independent outside advisors in the evaluation of contractual obligations and compensation levels.

Performance-based incentives. The Company has established financial incentives for executives who meet certain objectives, which thereby assist the Company in meeting its long-term growth and financial goals.

Shareholder value and long-term incentives. The Committee believes that the long-term success of the Company and its ability to consistently increase shareholder value is dependent on its ability to attract and retain skilled executives. The Company's compensation strategy encourages equity-based compensation to align the interests of management and shareholders.

Full disclosure. The Committee seeks to provide full disclosure to the members of the Board of Directors of the Company of the compensation practices and issues to ensure that all directors understand the implications of the Committee's decisions.

The Committee has reviewed the compensation practices of peers and considered management's individual efforts for the benefit of the Company and has reviewed various subjective measures in determining the adequacy and appropriateness of the compensation of Named Executive Officers. The Committee takes into account the performance of the Named Executive Officers and recognizes that the competition among financial institutions for attracting and retaining executives has become more intense in the past few years. The Committee takes such market considerations into account to ensure that the Company is providing appropriate long-term equity incentives to enable it to continue to attract new executives and to retain the ones it already employs. General economic conditions and the past practice of the Company are also factors that are considered by the Committee. Further, the Committee specifically takes into consideration:

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Executive Compensation

The Committee has established various processes to assist in ensuring that the Company's compensation program is achieving its objectives. Among these are:

Assessment of Company Performance. In establishing total compensation ranges, the Committee uses company performance measures, including net income, asset growth, earnings per share, return on assets, asset quality, and efficiency ratio in two ways: to gauge generally the overall Company performance relative to peer companies and to gauge generally the overall Company performance against the Company's own strategic objectives. These specific performance targets provide guidance for a view of general Company performance, which is then utilized as one element in determining overall compensation ranges.

Assessment of Individual Performance. Individual performance has a strong impact on the compensation of all employees, including the CEO and the other Named Executive Officers. For the Named Executive Officers, the Committee receives a performance assessment and compensation recommendation from the CEO, other than for himself, and also exercises its judgment based on the Board's interactions with its Named Executive Officers. As with the CEO, the performance evaluation of these Named Executive Officers is based on his or her contribution to the Company's performance, and other leadership accomplishments.

Total Compensation Review. The Committee reviews each Named Executive Officer's base pay, bonus, and equity award compensation annually. In addition to these primary compensation elements, the Committee reviews the perquisites and other compensation and payments that would be required under various severance and change-in-control scenarios. Following the 2024 review, the Committee determined that these elements of compensation were reasonable in the aggregate.

Compensation Consultants

Pearl Meyer & Partners ("Pearl Meyer"), a large independent compensation consulting firm, has been engaged by the Committee as its independent advisor on compensation matters. After the Committee's review of applicable rules for independence, the Committee determined that there are no known conflicts of interest between Pearl Meyer and its affiliates and the Company and its affiliates. Pearl Meyer reports directly to the Committee and does not provide services to, or on behalf of, any other part of the Company's business.

The major services provided by Pearl Meyer include: 1) review of the Company's then current peer group, 2) recommendations to the Committee to refine the peer group based on the Company's and peers' size, 3) comprehensive review of the Company's executive compensation programs, 4) comprehensive review of the Company's non-employee director compensation program, and 5) review of the Company's 2022 target total direct compensation levels provided to the Company's Named Executive Officers and non-employee directors, as well as the Company's financial performance relative to the selected peer group to make recommendations to the Committee. The analysis and review performed by Pearl Meyer in 2022 were used in 2024 in setting executive compensation programs.

During 2024, Pearl Meyer provided minor, additional consulting activities, including reviewing the Company's performance relative to peers, incentive metrics and executive retirement plan options.

Peer Group Review and Market Study

When reviewing each compensation component for the Named Executive Officers, the Committee considers the compensation practices of specific peer companies whose asset size, geography and performance are comparable to the Company. In 2022, the Committee adopted an updated peer group to be used for informing compensation decisions in 2023 and 2024. The 2022 peer group was made up of major exchange publicly traded banks in the Western states, including Hawaii, with total assets between $2 billion and $10 billion.

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Following is the specific peer group of nineteen publicly traded financial institutions approved by the Committee (the "2022 Peer Banks"):

The median assets at 2024 fiscal year end for the peer group was $4.12 billion as compared to Bank of Marin's $3.70 billion. Comparisons to the Peer Banks in this discussion are based on the 2022 Peer Banks.

The Committee evaluated executive compensation to like positions in the 2022 Peer Banks in setting 2024 compensation. Based on this evaluation and Pearl Meyer's analysis of the Company's compensation programs relative to the peer group, the Committee approved the following executive compensation structure:

Executive Compensation Components

For the fiscal year ended December 31, 2024, the principal components of compensation for Named Executive Officers were i) base salary, ii) performance-based bonuses, iii) equity awards and iv) perquisites and other plans and benefits. The Company's policies and practices for each of the principal compensation components are explained in the following paragraphs.

Base Salary

Base salary is established based on market data and is adjusted based on individual performance and experience.

Performance-Based Incentives

The Company provides annual cash incentive award opportunities for eligible employees, through the use of the Annual Individual Incentive Compensation Plan (the "Incentive Plan"). The Incentive Plan allows for performance-based bonuses for Named Executive Officers that are based on the overall performance of the Company and on goals specific to the executive's area of responsibility. The following table shows the bonus potential expressed as a percentage of base salary that may be earned in the Incentive Plan under three scenarios: Threshold Performance, Target Performance and Maximum Performance, and then shows the relative split between Bankwide performance goals versus individual performance metrics by Named Executive Officer that must be met under the Incentive Plan.

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Named Executive Officers Cash Incentive Opportunity:

Overall Company performance comprises at least 75% of the CEO's and at least 50% of the other Named Executive Officers' cash incentive potential, with the remaining percentage based on achievement of individual goals.

Based on the annual operating plan, the Committee approved five Bankwide metrics for each of the NEOs and each NEO was given a specific weighting for the five goals. The Committee approved the use of Core Return on Assets, Annual Loan Growth, Annual Deposit Growth, Core Pre-tax, Pre-provision Net Income, and Core Non-Interest Expense. The plan also provides that for the Incentive Plan to be funded and "activated" for a Plan Year, the Company must achieve a threshold performance level calculated as a percentage of the Company's budgeted net income.

Individual Named Executive Officer goals are either independent from the five Company metrics or may be used to give greater weighting to one of the five Company goals within the executive's specific area of responsibility. The allocation between company goals and individual goals varies from year to year. For 2024 the weights of each metric as a percent of the total incentive compensation opportunity for the Named Executive Officers were:

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The Committee also approved specific individual metrics which were either one of the five core metrics used to give greater weighting to one of the five Company goals within the executive's specific area of responsibility, or independent from the five Company metrics.

The specific corporate goal for 2024 included the following:

2024 Performance Outcomes and Cash Bonuses Performance Based Incentives

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The resulting corporate objectives impact on the annual incentives was as follows:

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In 2024 the Company sold $325 million in available-for-sale securities (AFS) as part of a strategy designed to improve future earnings, drive earnings per share (EPS) growth, and increase its return on assets and equity. The sale resulted in an estimated after-tax loss of approximately $23 million. The one-time expense related to this sale was excluded from the bank results for purposes of determining NEO short term incentive payouts. Please see the table below for the reconciliation of GAAP and Non-GAAP results.

The Committee also reviewed the individual performance objectives and achievement and determined the payout as a percentage of the individual component of the annual incentive for the NEOs averaged 61.50%.

In addition to the bonuses earned from the plan by each NEO, the Committee awarded discretionary bonuses to Ms. Stewart, Mr. Bloom and Ms. Campbell for exceptional work that was not fully reflected in the performance metrics. Specifically, Ms. Stewart significantly contributed to the implementation of the Bank's new loan origination system and directly impacted the overall improvement of the underlying credit risk in the bank's loan portfolio, particularly with the portfolio of non-performing assets. Mr. Bloom contributed to the successful adoption of the Bank's new loan origination system and made significant strides toward positioning the Bank's lending teams for growth through hiring, training, and creating an environment of growth. Ms. Campbell significantly contributed to margin and profit expansion through proactive new deposit gathering and rate management, and a reduction in facility costs.

After determining the payouts under the annual incentive, including the discretionary amounts, the average total payout for the NEOs was 64.75% of the target annual incentive awards. The Committee also approved an exception to the incentive plan gate.

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Clawback Provision for Performance-Based Incentives

The clawback provision provides that if financial results are significantly restated due to negligence, fraud or intentional misconduct, there may be recoupment of the amounts paid in excess of amounts otherwise earned.

Equity Awards

The purposes of equity awards are to allow executives to share in the growth and prosperity of the Company, to retain executives over the long term and to maintain competitive levels of total compensation.

For 2024, the Committee determined to grant a blend of 50% performance-based restricted stock (Performance Shares) and 50% time-vested restricted stock (Restricted Shares). This reflects the Committee's commitment to focusing on pay for performance, incentivizing executives to achieve superior financial results and create shareholder value, while also providing sufficient retention incentives.

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Named Executive Target Equity Opportunity:

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For the 2024 performance equity award, all of the metrics are based on a comparison of relative performance to peers, based on the ending percentile ranking of the Company. For 2024, each measure required at or above median performance to earn the target number of shares. Achievement at maximum performance results in 200% of target shares earned for each metric after application of the metric weighting, and achievement at threshold performance results in 50% of target shares earned for each metric.

March 2024 Performance Share Metrics (three-year performance period 2024 through 2026, vesting in 2027):

For the 2021 performance equity award, all of the metrics were based on a comparison of relative performance to peers, based on the ending percentile ranking of the Company.

The 2021 performance equity award vested in 2024 at 43.84% of target.

The 2021 - 2023 performance period metrics were: