NOVATO, NAPA -- Bank of Marin Bancorp (Nasdaq: BMRC) announced today that through its subsidiary, Bank of Marin, it has acquired certain assets and assumed certain liabilities of Napa-based Charter Oak Bank.
This transaction has been completed under a modified whole-bank purchase and assumption agreement with the Federal Deposit Insurance Corp. without loss share. The acquisition follows a decision by the California Department of Financial Institutions to close Charter Oak Bank and appoint the FDIC as receiver.
An earlier announced deal in which Bay Commercial Bank was to purchase Charter Oak was not completed.
"We are deeply committed to the communities in which we operate," said Bank of Marin President and Chief Executive Officer Russell Colombo. "We share many of the same values as Charter Oak, focusing on personalized customer service and community involvement. In the 21 years we’ve been in business, we’ve established one of the healthiest banks in California. We are excited for the opportunity to leverage our financial strength to expand into Napa."
Bank of Marin Bancorp recently reported record annual earnings of $13.6 million in 2010 and a total risk-based capital ratio of 13.3 percent at Dec. 31, 2010, significantly exceeding the designated capital guideline of 10 percent for well-capitalized banks. No capital has been raised to complete this transaction, as Bank of Marin Bancorp has grown capital through the retention of earnings in order to take advantage of such acquisition opportunities.
At Dec. 31, 2010, Charter Oak Bank reported gross loans totaling $107.0 million and deposits totaling $105.3 million.The purchase price reflects an asset discount of $19.8 million and no deposit premium.
Fifty-six loans with book values totaling approximately $28.5 million as of the bid valuation date (Oct. 18, 2010), which represents approximately 25 percent of Charter Oak’s loans, were retained by the FDIC. The excluded loans mainly represent loans delinquent more than 60 days or more as of the bid valuation date and certain types of land and construction loans. Balances are subject to change based on activities between the bid valuation date and the purchase date. The assets acquired and liabilities assumed are subject to internal adjustment under generally accepted accounting principles.
Charter Oak Bank has two full-service branches at 600 Trancas St. in Napa and 1050 Adams St. in St. Helena. These branches will reopen as Bank of Marin branches on Tuesday, Feb. 22, 2011. Depositors have automatically become depositors of Bank of Marin.
To help customers with the transition, Bank of Marin representatives, along with the former Charter Oak staff will be on site at both branches to address customer needs. Since deposits will continue to be insured by the FDIC, there is no need for customers to change their banking relationship to retain their deposit insurance coverage.
Customers can access their money by writing checks, using ATM or debit cards, or visiting both branches during business hours. Checks drawn on Charter Oak Bank will continue to be processed, and loan customers should continue making their payments as usual. Charter Oak customers should continue to use their existing branch as Bank of Marin integrates the systems of the two organizations.
Charter Oak Bank’s customers and shareholders who have questions about today’s transaction can call the FDIC’s customer service center at 877-367-2717. The phone number will be operational this evening until 9 p.m., on Saturday from 9 a.m. to 6 p.m., on Sunday noon to 6 p.m. and Monday 8 a.m. to 8 p.m. PST. Thereafter, hours will be adjusted by the FDIC based on call volume.