NOVATO -- Bank of Marin Bancorp (NASDAQ: BMRC), parent company of Bank of Marin, on Monday said it entered a definitive agreement to acquire the parent company of Alameda-based Bank of Alameda.

The move, which extends Bank of Marin's footprint into the East Bay, is expected to be complete around December of this year, according to Bank of Marin President and CEO Russell Colombo.

"It has been part of our strategic plan to get into the East Bay," he said.

Norcal Community Bancorp (OTC: NCLC) , the parent company, had assets of $264.7 million as of March 31, along with $228.7 million in deposits and $170.6 million in loans. The bank has four branches -- two retail branches in Alameda, and a commercial banking office in both Oakland and Emeryville.

After completing the acquisition, Bank of Marin will have approximately $1.7 billion in assets and operate 21 branches in five counties.

The transaction is currently valued at $32.7 million, or $3.07 per share of NorCal stock.

[caption id="attachment_43854" align="alignleft" width="176"] Russell Colombo[/caption]

Bank of Marin has been eying a physical expansion into the East Bay in recent years, having already made commercial customers in the region. The region is expected to offer new options for growth in new industries for the bank, Mr. Colombo said.

It is the first acquisition for the bank since February 2011, when the Federal Deposit Insurance Corp-assisted acquisition of Napa's Charter Oak Bank gave Bank of Marin a physical footprint in Napa Valley.

"Charter Oak is absorbed," Mr. Colombo said. "A few years have passed. Now we're ready to pursue our next objectives."

Bank of Marin will pay approximately 51 percent in common stock, and approximately 49 percent in cash. Current NorCal shareholders will be given the option to elect for Bank of Marin stock, cash or a combination. Assuming its stock price remains between $35.11 and $42.91, bank of Marin will exchange its stock at a ratio of 0.07716 shares per share of Norcal.

Kevin Kennedy, a director of Norcal Community Bancorp, would join Bank of Marin's board of directors. Both governing boards unanimously approved the acquisition, according to the announcement.

Advising the transaction for Bank of Marin was Keefe, Bruyette & Woods as financial adviser and Stuart Moore as legal counsel. Norcal received financial advising from Sandler O'Neill + Partners, LP, and legal counsel from Bingham McCutchen, LLP.