AMRB Stock: Over 25% Increase Pre-Market Explanation

By Amit Chowdhry ● April 19, 2021
  • The stock price of American River Bankshares (NASDAQ: AMRB) increased by over 25% pre-market. This is why it happened.

The stock price of American River Bankshares (NASDAQ: AMRB) increased by over 25% pre-market. Investors are responding positively to Bank of Marin Bancorp, (Nasdaq: BMRC), parent company of Bank of Marin and American River Bankshares (Nasdaq: AMRB), parent company of American River Bank, announced the signing of a merger agreement. And American River Bankshares has 10 branches across the Greater Sacramento, Amador and Sonoma County regions, assets of $916.1 million, total deposits of $788.6 million, and total loans of $475.4 million as of March 31, 2021.

The deal will be immediately accretive to BMRC’s earnings, adding to shareholder value. And AMRB shareholders will receive a fixed exchange ratio of 0.575 shares of BMRC common stock for each share of AMRB common stock outstanding. Based on BMRC’s closing stock price of $39.06 on April 16, 2021, the deal is valued at $134.5 million, or $22.46 per share of AMRB common stock. Such value will fluctuate with changes in the stock price of BMRC. The total deal includes the value of AMRB options being paid in cash by BMRC.

The deal is expected to close in the third quarter of 2021. And upon closing Bank of Marin will have approximately $4 billion in assets and operate thirty-one branches in ten counties, including Alameda, Amador, Contra Costa, Marin, Napa, Placer, Sacramento, San Francisco, San Mateo, and Sonoma. Upon closing of the deal, BMRC will add 2 board members from AMRB to its board. BMRC’s and AMRB’s boards of directors have unanimously approved the acquisition agreement. Plus the directors of AMRB and BMRC have entered into agreements whereby they have committed to vote their shares in favor of the transaction. The closing of the deal is subject to satisfaction of customary closing conditions, including regulatory approvals and approval of BMRC and AMRB shareholders.

Bank of Marin Bancorp had received financial advisory services and a fairness opinion from Keefe, Bruyette & Woods, A Stifel Company, and Stuart Moore Staub served as legal counsel. And American River Bankshares received financial advisory services and a fairness opinion from Piper Sandler & Co., and Manatt, Phelps & Phillips LLP served as legal counsel.

KEY QUOTES:

“This merger brings together two exceptional institutions that share complementary values and disciplined fundamentals. Bank of Marin will be able to expand its franchise by delivering the same legendary service that is the hallmark of a community bank on a regional scale.”

— Russell A. Colombo, President and Chief Executive Officer of Bank of Marin Bancorp and Bank of Marin

“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. We believe their community banking model, culture and commitment to high-quality client service make Bank of Marin an excellent partner for American River Bank.”

— David E. Ritchie, Jr., President and Chief Executive Officer of American River Bankshares

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.