A look at the Bank of Marin-American River merger

Let's take a look at some of the behind-the-scenes action for Bank of Marin Bancorp's pending purchase of American River Bankshares in Sacramento, Calif.

First, a review of the deal's terms:

Bank of Marin, a $3.1 billion-asset company in Novato, Calif., agreed to buy the $916 million-asset American River on April 19 for $134.5 million in stock. The deal, which is expected to close in the third quarter, priced American River at 175% of its tangible book value.

The transaction is expected to be 14.2% accretive to Bank of Marin's 2022 earnings, and it should take less than four years for the company to earn back a projected 3.9% dilution to its tangible book value.

Bank of Marin plans to cut 35% of American River's annual noninterest expenses, or roughly $6.1 million. The company expects to incur $9.5 million of merger-related expenses. Two American River directors will join Bank of Marin's board.

Now a look at how the deal came to be:

• Russ Columbo, Bank of Marin's CEO, called David Ritchie Jr., his counterpart at American River, on Dec. 18 to express an interest in a deal. American River's M&A committee agreed that the executives should meet.
• The companies agreed to a mutual confidentiality agreement on Jan. 22.
• Bank of Marin submitted an indication of interest on Feb. 11 that valued American River at $121.1 million.
• Bank of Marin revised its letter of intent on Feb. 26, increasing its offer to $129.9 million, while removing a requirement that certain American River shareholders, other than directors, agreed to vote for the deal. The LOI includes a 45-day exclusivity period.
• The initial draft of the merger agreement was sent to American River on March 26.
• Each board unanimously approved the deal on April 16. It was announced three days later.