Bank of Marin Bancorp BMRC FHLB, special cash dividend percentage

As a member of the FHLB, we are required to maintain a minimum investment in FHLB capital stock as determined by the Board of Directors of the FHLB. The minimum investment requirements can increase in the event we increase our total asset size or borrowings with the FHLB. Shares cannot be purchased or sold except between the FHLB and its members at the $100 per share par value. We held $16.7 million of FHLB stock included in other assets on the consolidated statements of condition at both December 31, 2025 and 2024. The carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks and do not have a readily determinable market value. Based on our analysis of FHLB’s financial condition and certain qualitative factors, we determined that the FHLB stock was not impaired at December 31, 2025 or 2024. On February 12, 2026, FHLB announced a cash dividend for the fourth quarter of 2025 at an annualized dividend rate of 8.75% to be distributed in mid-March 2026. In addition, FHLB announced a special cash dividend on the average capital stock outstanding during the fourth quarter of 2025 at an annualized rate of 11.36% which was distributed on February 25, 2026. Cash dividends paid on FHLB capital stock are recorded as non-interest income.