Novato, Calif.-based Bank of Marin Bancorp agreed to acquire Napa, Calif.-based Bank of Napa NA in a transaction valued at $51.0 million, or $20.25 per Bank of Napa share, based on the buyer's July 28 closing stock price of $65.95.
The total transaction value includes the value of Bank of Napa options assumed by Bank of Marin Bancorp.
Bank of Napa shareholders will receive a fixed exchange ratio of 0.3070 of a share of Bank of Marin Bancorp common stock for each Bank of Napa outstanding common share.
On an aggregate basis, SNL calculates that the deal value is 186.9% of book and tangible book, and 25.3x earnings. The price is 23.35% of deposits and 20.66% of assets.
The transaction, which is subject to regulatory and Bank of Napa shareholder approvals, is anticipated to close in the fourth quarter and expected to be immediately accretive to Bank of Marin Bancorp's earnings.
Bank of Napa directors and executive officers have agreed to vote their shares in favor of the transaction, the completion of which will see one Bank of Napa director joining Bank of Marin Bancorp's board.
Upon deal completion, Bank of Marin Bancorp unit Bank of Marin will have assets of roughly $2.4 billion, according to the merger release. It was also noted in the release that Bank of Napa has two branch offices serving Napa County, and had assets of $246.1 million, total deposits of $217.7 million, and total loans of $139.3 million as of June 30. Bank of Marin Bancorp will expand in this county to be ranked sixth with a 6.95% share of approximately $3.71 billion in total market deposits.
SNL valuations for bank and thrift targets in the West region between July 31, 2016, and July 31, 2017, averaged 167.54% of book and 181.11% of tangible book and had a median of 24.65x last-12-month earnings, on an aggregate basis.
The deal has a one-day premium of 49.98%, based on Bank of Napa's July 28 closing price of $13.50, and a one-month premium of 51.66%, based on Bank of Napa's June 3 closing price of $13.35.
Bank of Marin had $2.10 billion in assets as of June 30, per SNL data.
Bank of Marin Bancorp received financial advisory services and a fairness opinion from Keefe Bruyette & Woods, and Stuart Moore Staub served as legal counsel. Bank of Napa received financial advisory services and a fairness opinion from Sandler O'Neill & Partners LP, and Manatt Phelps & Phillips LLP served as legal counsel.