Bank of Marin acquiring American River Bank in $134M deal; would expand Northern California reach

Bank of Marin’s parent company, Novato-based Bank of Marin Bancorp, (Nasdaq: BMRC) catapulted out of a pandemic year with an announcement Monday that it’s buying American River Bank, based in Rancho Cordova in the Sacramento area.

Upon completion of the deal in the third quarter, Bank of Marin will have $4 billion in assets, operating 31 branches in 10 counties. The two banks have branch overlap in Santa Rosa and Healdsburg. American River Bank, which was founded in 1983, currently operates 10 branches in Amador, Sonoma, Placer and Sacramento counties.

The expansion into the Central Valley served as a key component to the attractiveness of the merger transaction valued at $134.5 million, or $22.46 per share of American River Bank common stock. Bancorp closing stock price was $39.06 on Friday.

“We’re very excited about this acquisition,” President and CEO Russell Colombo told investors on a conference call Monday morning.

Colombo cited the migration of San Francisco Bay Area residents to the Sacramento region as a means to capitalize on expanding into an area of growth.

For example, the population in the Sacramento-Roseville-Folsom region is expected to grow 3.6% in the next five years, in comparison to 2.6% statewide and 2.9% nationwide, according to a U.S. Bureau of Labor Statistics report. The Greater Sacramento Economic Council indicated Sacramento’s downtown and Midtown neighborhoods have been boosted by a $6 billion investment renaissance surrounding the opening of the Golden 1 Center in 2016.

“There’s been a surge in the market coming from the Bay Area,” Colombo told attendees on the investor relations call.

In particular, trends have shown a push for millennials to gravitate toward open space up the Interstate 80 and U.S. Highway 50 corridors into the Lake Tahoe region where the housing market is exploding. Some of these people on the migration path represent first-time homebuyers.

“Younger adults are moving to that market,” he said. “From a strategy standpoint, (the merger) makes all the sense in the world.”

Integration of the two banks will present ideal synergies and challenges at the same time.

“There are opportunities for consolidation,” Colombo told the Business Journal, referring to the integration as one aspect of providing ways to have “cost savings.”

Bank of Marin expects to absorb employees leaving positions where there’s overlap into other roles. While frontline staffers may be given priority versus more administrative types, Chief Operating Officer Tim Myers assured the Business Journal the Marin County-based bank plans to be “aggressive” in finding spots for employees.

Whatever the case, these decisions will be made down the road, along with a melding of the American River Bank name into the Bank of Marin brand.

After all, the river doesn’t meander into the western Bay Area county, as Colombo joked.

“But really, it’s not about the name. It’s about what we do,” he said.

Certainly, the $3 billion business-oriented bank as of the end of the 2021 first quarter has been here before. It has taken in the Bank of Alameda and Bank of Napa in the last decade. The former occurred in 2013; and the latter came four years later.

This merger strategy centers on two financial institutions who operate in similar ways in terms of credit discipline, culture and community commitment, Bank of Marin CFO Tani Girton pointed out. For one thing, the types of customers held in their loans and deposit accounts are “well-aligned,” as Girton described it.

American River Bank holds $916 million in total assets; $475 million in loans; and $789 million in deposits, according to a summary report provided by Bancorp.

“We are excited for the opportunity to join one of the strongest banks in the region. We believe our clients, shareholders and employees will benefit from Bank of Marin’s history of profitable growth and expertise in successfully executing acquisitions,” American River Bank CEO and President David E. Ritchie said in a statement.

If anything, the merger seen as beneficial to both banks offers yet another reason for Colombo to delay retirement for the time being.

“I made a commitment to stay on through the pandemic to ensure leadership consistency. That is still the case. I also am committed to leading the bank through the deal closing,” he said.

Susan Wood covers law, cannabis, production, energy, transportation, agriculture as well as banking and finance. For 25 years, Susan has worked for a variety of publications including the North County Times, now a part of the Union Tribune in San Diego County, along with the Tahoe Daily Tribune and Lake Tahoe News. She graduated from Fullerton College. Reach her at 530-545-8662 or susan.wood@busjrnl.com