This release may contain certain forward-looking statements that are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact the Bank's earnings in future periods. 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 such as "will," "would," "should," "could" or "may." Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, real estate values, and competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; and other economic, competitive, governmental, regulatory and technological factors affecting the Bank's operations, pricing, products and services. These and other important factors are detailed in various Federal Deposit Insurance Corporation filings made periodically by the Bank, copies of which are available from the Bank without charge. The Bank 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 after the date of this press release or to reflect the occurrence of unanticipated events.

SOURCE: Bank of Marin Bancorp

for Bank of Marin Bancorp 
Stephanie Clark, 415-381-8198 
steph@hamiltoninkpr.com

Loans totaled $839 million at September 30, 2008, an increase of 22.3% over September 30, 2007. The mix of loans is relatively unchanged from June 30, 2008 and December 31, 2007.

The increases in the loan loss reserve reflect strong loan growth, an increased allocation for economic uncertainty, and increases to the specific reserve where needed. Charge-offs in the third quarter of 2008 totaling $969 thousand and the first nine months of 2008 totaling $1.1 million primarily relate to the charge-off of one commercial term loan collateralized by a residence where the Bank holds the second deed of trust and the charge-off of one unsecured commercial line of credit.

"While we have seen that some of our clients have been affected by the current economic environment, we believe that our solid underwriting standards, early identification of issues and quick response will minimize our losses," said Colombo.

The allowance for loan losses as a percentage of loans totaled 1.11% at September 30, 2008 compared to 1.05% a year ago. In addition, our allowance for loan losses is 11.3 times our non-performing loans at September 30, 2008. At September 30, 2008, non-performing loans totaled $823 thousand, or 0.1%, of total loans. "Although our market area has been more resilient than most other parts of the country, we are not immune to the economic downturn that began in early 2008," said Christina Cook, Chief Financial Officer. "We exercise sound judgment in our approach to our loan loss provision."

"The Bank has maintained its conservative investment and underwriting standards through these changing times. It has not participated in subprime lending nor does it hold investment securities backed by subprime loans. The Bank does not hold common or preferred stock of either the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac)," said Cook.

Deposits totaled $849 million at September 30, 2008, compared to $809 million a year ago, an increase of 4.9%. Demand deposits, which provide a low cost of funding, increased $13.4 million, or 6.6% from September 30, 2007 to September 30, 2008. Late in the first quarter of 2008, the Bank began to offer a new deposit product, CDARS(R), short for Certificate of Deposit Account Registry Service, a network through which the Bank offers Federal Deposit Insurance Corporation insurance coverage in excess of the regulatory maximum by placing deposits in multiple banks participating in the network. CDARS(R) reciprocal deposits totaled $16.8 million at September 30, 2008. "Our deposit growth demonstrates that Bank of Marin is highly regarded in its serving area and is acknowledged as a safe place to bank," said Colombo.

Net interest income in the first nine months of 2008 increased $4.2 million, or 13.6% from the first nine months of last year. Net interest income in the third quarter of 2008 increased by $1.5 million, or 14.1%, from the same quarter a year ago. These increases reflect growth in earning assets and a decline in the cost of funds, partially offset by lower loan yields in a declining interest-rate environment.

The tax-equivalent net interest margin expanded to 5.43% in the first nine months of 2008 compared to 5.00% in the same period in 2007. The tax-equivalent net interest margin totaled 5.35% in the third quarter of 2008 compared to 4.94% in the third quarter of 2007. Decreases in the cost of funds were partially offset by declines in loan yields.

Non-interest income totaled $4.2 million in the first nine months of 2008. Excluding a $457 thousand pre-tax non-recurring gain on the sale of Visa Inc. shares in the first half of 2008, a $387 thousand pre-tax non-recurring gain on the 2007 sale of the Visa portfolio and a $710 thousand pre-tax non-recurring gain recorded in the first half of 2007 related to the sale of the indirect auto portfolio, this represents an increase of $328 thousand, or 9.7% over the first nine months of 2007. The increase reflects an increase in fees from the Bank's business analysis accounts, an increase in fees the Bank charges for checks drawn against insufficient funds and an increase in Wealth Management fees. Non-interest income totaled $1.2 million in the third quarter of 2008. Excluding the $387 thousand pre-tax non-recurring gain recorded in the third quarter of 2007 related to the sale of the $1.5 million Visa card portfolio, non-interest income is essentially unchanged from the third quarter of 2007.

Non-interest expense totaled $21.6 million in the first nine months of 2008. Excluding a first quarter 2008 reversal of the $242 thousand Visa Inc. litigation accrual initially recorded in the fourth quarter of 2007, this represents an increase of $1.2 million, or 5.7%, from the same period a year ago. The increase includes higher personnel costs associated with expansion, higher FDIC premiums related to increased deposits, and increases in premises rent, including rent on a new downtown Mill Valley office, partially offset by decreases in professional fees associated with the 2007 formation of a holding company. Non-interest expense totaled $7.4 million in the third quarter of 2008, an increase of $516 thousand, or 7.5% over the same period a year ago.

In November 2007, Bancorp initiated a stock repurchase plan to buy back up to $5 million of its common stock. Bancorp purchased 88,316 shares during the first nine months of 2008 for $2.5 million, bringing the total amount purchased under this program to $4.1 million. Bancorp repurchased 29,707 shares for $824 thousand during the third quarter of 2008. In September 2008, Bancorp discontinued purchases under the program to conservatively preserve capital during a time of extreme economic turbulence. Bancorp maintains a strong capital position, with a total risk-based capital ratio of 11.6% at September 30, 2008.

Bank of Marin has twelve branch offices with locations in downtown Mill Valley, Strawberry, Corte Madera, downtown San Rafael, Andersen Drive and Northgate in San Rafael, Ignacio, downtown Novato, Sausalito and three offices in Petaluma. The Bank has a commercial loan production office in San Francisco. The Bank's administrative offices are located in Novato, and its Wealth Management Services are located in Corte Madera, Novato and Petaluma.

The financial information for periods presented subsequent to July 1, 2007 relates to Bank of Marin Bancorp, which was formed on July 1, 2007, while information pertaining to prior periods relates to the Bank of Marin. This information is comparable between periods as the only subsidiary of Bank of Marin Bancorp is Bank of Marin.

This release may contain certain forward-looking statements that are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact Bancorp's earnings in future periods. 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 such as "will," "would," "should," "could" or "may." Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, the current financial turmoil in the United States and abroad, changes in interest rates, deposit flows, real estate values, and competition; changes in accounting principles, policies or guidelines; changes in legislation or regulation; and other economic, competitive, governmental, regulatory and technological factors affecting Bancorp's operations, pricing, products and services. These and other important factors are detailed in various securities law filings made periodically by Bancorp or the Bank, copies of which are available from Bancorp without charge. 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 after the date of this press release or to reflect the occurrence of unanticipated events.

BANK OF MARIN BANCORP
FINANCIAL HIGHLIGHTS
Year To Year Comparison
September 30, 2008
THIRD QUARTER                                   QTR 2008           QTR 2007           CHANGE            % CHANGE
NET INCOME                                      $2,695,000         $3,189,000         ($494,000)        (15.5%)
DILUTED EARNINGS PER SHARE                      $0.52              $0.60              ($0.08)           (13.3%)
RETURN ON ASSETS (ROA)                          1.10%              1.38%              (0.28%)           (20.3%)
RETURN ON EQUITY (ROE)                          11.37%             14.83%             (3.46%)           (23.3%)
EFFICIENCY RATIO                                55.11%             55.97%             (0.86%)           (1.5%)
NET INTEREST MARGIN                             5.35%              4.94%              0.41%             8.3%
YEAR TO DATE                                    YTD 2008           YTD 2007           CHANGE            % CHANGE
NET INCOME                                      $9,357,000         $9,066,000         $291,000          3.2%
DILUTED EARNINGS PER SHARE                      $1.79              $1.70              $0.09             5.3%
RETURN ON ASSETS (ROA)                          1.35%              1.36%              ($0.01)           (0.7%)
RETURN ON EQUITY (ROE)                          13.55%             14.37%             (0.82%)           (5.7%)
EFFICIENCY RATIO                                54.39%             57.75%             (3.4%)            (5.8%)
NET INTEREST MARGIN                             5.43%              5.00%              0.43%             8.6%
AT PERIOD END                                   Sep 30 2008        Sep 30 2007        CHANGE            % CHANGE
TOTAL ASSETS                                    $984,739,000       $924,044,000       60,695,000        6.6%
TOTAL DEPOSITS                                  $849,228,000       $809,414,000       39,814,000        4.9%
TOTAL LOANS                                     $839,007,000       $685,975,000       153,032,000       22.3%
TOTAL NONPERFORMING LOANS                       $823,000           $150,000           673,000           448.7%
LOAN LOSS RESERVE TO LOANS                      1.11%              1.05%              0.06%             5.7%
LOAN LOSS RESERVE TO NON-PERFORMING LOANS
                                                11.3x              48.2x              (36.9x)           (76.6%)
STOCKHOLDERS' EQUITY                            $94,673,000        $86,575,000        $8,098,000        9.4%
BOOK VALUE PER SHARE                            $18.43             $16.73             $1.70             10.2%
TOTAL CAPITAL TO ASSETS                         9.61%              9.37%              0.24%             2.6%
TOTAL RISK BASED CAPITAL RATIO-BANK(1)          11.4%              12.2%              (0.8%)            (6.6%)
TOTAL RISK BASED CAPITAL RATIO-BANCORP(1)       11.6%              12.4%              (0.8%)            (6.5%)
(1) Current period estimated

BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF CONDITION
at September 30, 2008, June 30, 2008 and September 30, 2007
(in thousands, except share amounts - unaudited)                          September 30, 2008             June 30, 2008              September 30, 2007
Assets
Cash and due from banks                                                   $       20,464                 $     30,355               $       25,245
Federal funds sold                                                                ---                          800                          70,200
Cash and cash equivalents                                                         20,464                       31,155                       95,445
Investment securities
Held to maturity, at amortized cost                                               20,542                       19,476                       13,544
Available for sale (at fair market value, amortized cost $73,405                  73,348                       72,999                       100,076
at 6/30/08, $73,577 at 6/30/08 and $100,591 at 9/30/07)
Total investment securities                                                       93,890                       92,475                       113,620
Loans, net of allowance for losses of $9,271 at 9/30/08, $8,555 at                829,736                      790,955                      678,748
6/30/08 and $7,227 at 9/30/07
Bank premises and equipment, net                                                  8,558                        8,635                        8,019
Interest receivable and other assets                                              32,091                       29,319                       28,212
Total assets                                                              $       984,739                $     952,539              $       924,044
Liabilities and Stockholders' Equity
Liabilities
Deposits
Non-interest bearing                                                      $       215,307                $     219,684              $       201,896
Interest bearing
Transaction accounts                                                              80,723                       76,839                       78,782
Savings and money market                                                          449,303                      422,834                      446,865
CDARS® reciprocal time                                                            16,776                       1,352                        ---
Other time                                                                        87,119                       80,511                       81,871
Total deposits                                                                    849,228                      801,220                      809,414
Federal funds purchased and Federal Home Loan Bank borrowings                     28,600                       46,800                       15,300
Subordinated debenture                                                            5,000                        5,000                        5,000
Interest payable and other liabilities                                            7,238                        6,972                        7,755
Total liabilities                                                                 890,066                      859,992                      837,469
Stockholders' Equity
Common stock, no par value
Authorized - 15,000,000 shares Issued and outstanding - 5,136,266                 50,527                       50,679                       52,476
at 9/30/08, 5,140,351 at 6/30/08 and 5,174,147 at 9/30/07
Retained earnings                                                                 44,179                       42,203                       34,397
Accumulated other comprehensive loss, net                                         (33      )                   (335     )                   (298     )
Total stockholders' equity                                                        94,673                       92,547                       86,575
Total liabilities and stockholders' equity                                $       984,739                $     952,539              $       924,044

BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF OPERATIONS
for the three months ended September 30, 2008, June 30, 2008 and
September 30, 2007
(in thousands, except per share amounts - unaudited                    September 30, 2008            June 30, 2008           September 30, 2007
Interest income
Interest and fees on loans held in portfolio                           $          13,833             $       13,400          $          13,283
Interest on investment securities
Securities of U.S. Government agencies                                            892                        882                        1,063
Obligations of state and political subdivisions (tax exempt)                      187                        183                        129
Corporate debt securities and other                                               91                         78                         115
Interest on Federal funds sold                                                    25                         1                          1,240
Total interest income                                                             15,028                     14,544                     15,830
Interest expense
Interest on interest bearing transaction accounts                                 93                         96                         74
Interest on savings and money market deposits                                     1,833                      1,583                      3,882
Interest on CDARS® reciprocal time                                                50                         4                          ---
deposits
Interest on other time deposits                                                   562                        650                        877
Interest on borrowed funds                                                        179                        302                        209
Total interest expense                                                            2,717                      2,635                      5,042
Net interest income                                                               12,311                     11,909                     10,788
Provision for loan losses                                                         1,685                      510                        200
Net interest income after provision for loan losses                               10,626                     11,399                     10,588
Non-interest income
Service charges on deposit accounts                                               417                        430                        325
Wealth Management Services                                                        330                        310                        331
Net gain on Visa portfolio                                                        ---                        ---                        387
Other income                                                                      447                        539                        543
Total non-interest income                                                         1,194                      1,279                      1,586
Non-interest expense
Salaries and related benefits                                                     4,179                      4,035                      3,938
Occupancy and equipment                                                           802                        793                        716
Depreciation and amortization                                                     351                        327                        318
Data processing                                                                   480                        430                        411
Professional services                                                             336                        419                        536
Other expense                                                                     1,294                      1,136                      1,007
Total non-interest expense                                                        7,442                      7,140                      6,926
Income before provision for income taxes                                          4,378                      5,538                      5,248
Provision for income taxes                                                        1,683                      2,152                      2,059
Net income                                                             $          2,695              $       3,386           $          3,189
Net income per common share:
Basic                                                                  $          0.53               $       0.66            $          0.62
Diluted                                                                $          0.52               $       0.65            $          0.60
Weighted average shares used to compute net income per common
share:
Basic                                                                             5,130                      5,139                      5,172
Diluted                                                                           5,209                      5,226                      5,301
Dividends declared per common share                                    $          0.14               $       0.14            $          0.13

BANK OF MARIN BANCORP
CONSOLIDATED STATEMENT OF OPERATIONS
for the nine months ended September 30, 2008 and September 30,
2007
(in thousands, except per share amounts - unaudited)                     September 30, 2008              September 30, 2007
Interest income
Interest and fees on loans held in portfolio                             $          40,545               $          39,006
Interest on auto loans held for sale                                                ---                             2,062
Interest on investment securities
U.S. Treasury securities                                                            ---                             8
Securities of U.S. Government agencies                                              2,641                           2,714
Obligations of state and political subdivisions (tax exempt)                        531                             358
Corporate debt securities and other                                                 258                             336
Interest on Federal funds sold                                                      138                             1,657
Total interest income                                                               44,113                          46,141
Interest expense
Interest on interest bearing transaction accounts                                   277                             225
Interest on savings and money market deposits                                       5,607                           11,052
Interest on CDARS® reciprocal time                                                  55                              ---
deposits
Interest on other time deposits                                                     1,962                           2,628
Interest on borrowed funds                                                          702                             973
Total interest expense                                                              8,603                           14,878
Net interest income                                                                 35,510                          31,263
Provision for loan losses                                                           2,810                           340
Net interest income after provision for loan losses                                 32,700                          30,923
Non-interest income
Service charges on deposit accounts                                                 1,253                           894
Wealth Management Services                                                          976                             904
Net gain on indirect auto and Visa portfolios                                       ---                             1,097
Net gain on redemption of shares in Visa, Inc.                                      457                             ---
Other income                                                                        1,489                           1,592
Total non-interest income                                                           4,175                           4,487
Non-interest expense
Salaries and related benefits                                                       12,372                          12,064
Occupancy and equipment                                                             2,363                           2,155
Depreciation and amortization                                                       996                             929
Data processing                                                                     1,355                           1,254
Professional services                                                               1,161                           1,239
Other expense                                                                       3,336                           3,004
Total non-interest expense                                                          21,583                          20,645
Income before provision for income taxes                                            15,292                          14,765
Provision for income taxes                                                          5,935                           5,699
Net income                                                               $          9,357                $          9,066
Net income per common share:
Basic                                                                    $          1.82                 $          1.74
Diluted                                                                  $          1.79                 $          1.70
Weighted average shares used to compute net income per common
share:
Basic                                                                               5,135                           5,197
Diluted                                                                             5,224                           5,347
Dividends declared per common share                                      $          0.42                 $          0.38

SOURCE: Bank of Marin Bancorp

for Bank of Marin Bancorp 
Stephanie Clarke, 415-381-8198 
steph@hamiltoninkpr.com