SEC Form DEFM14A filed by American River Bankshares

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant x    Filed by a Party other than the Registrant o

Check the appropriate box:

American River Bankshares

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

JOINT PROXY STATEMENT/PROSPECTUS

Proxy Statement of American River Bankshares		Prospectus of Bank of Marin Bancorp Proxy Statement of Bank of Marin Bancorp

MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT

To the Shareholders of American River Bankshares (“AMRB”) and Bank of Marin Bancorp (“BMRC”):

AMRB will hold its special meeting of shareholders on July 28, 2021, at 3:00 p.m. (local time), at the Homewood Suites by Hilton, 10700 White Rock Road, Rancho Cordova, CA 95670. At the special meeting, you will be asked to consider and to vote upon the following matters:

BMRC will hold its special meeting of shareholders on July 28, 2021, at 10:00 a.m. (local time), at the BMRC headquarters at 504 Redwood Blvd., Suite 100, Novato, CA 94947. At the special meeting, you will be asked to consider and to vote upon the following matters:

On April 16, 2021, AMRB entered into an Agreement to Merge and Plan of Reorganization (the “merger agreement”) with BMRC. If approved by AMRB and BMRC shareholders, under the merger agreement AMRB will merge with and into BMRC (the “merger”), followed immediately thereafter by the merger of AMRB’s wholly owned subsidiary American River Bank with and into BMRC’s wholly owned subsidiary Bank of Marin, with Bank of Marin surviving (the “bank merger”).

If the merger is approved and consummated, holders of AMRB common stock will, subject to receiving cash in lieu of fractional shares, be entitled to receive, in exchange for each share of AMRB common stock, 0.575 shares of BMRC common stock.

The value of BMRC common stock to be received by an AMRB shareholder will fluctuate with the market price of BMRC common stock and will not be known at the time AMRB and BMRC shareholders vote on the merger. Based on the $32.43 per share closing price of BMRC’s common stock on The Nasdaq Stock Market (“Nasdaq”) on June 15, 2021, the last practicable date before the date of this joint proxy statement/prospectus, the value of the per share merger consideration payable to holders of AMRB common stock was approximately $18.65. We urge you to obtain current market quotations for BMRC common stock (Nasdaq trading symbol “BMRC”) because the value of the BMRC common stock AMRB shareholders will receive as a result of the merger will fluctuate.

As of June 9 and June 11, 2021 the record dates for the special meetings of AMRB and BMRC shareholders respectively, there were 5,980,323 shares of AMRB common stock outstanding and entitled to vote and there were 13,051,274 shares of BMRC common stock outstanding and entitled to vote.

Based on the 6,001,423 shares of AMRB common stock outstanding (and assuming holders of outstanding vested options to purchase AMRB common stock exercise their options prior to consummation of the merger), BMRC will issue a maximum of 3,450,818 shares of common stock to holders of AMRB common stock before taking into account any fractional shares; provided, however, holders of AMRB common stock entitled to receive fractional interests of BMRC common stock will be paid cash, without interest, determined by multiplying such fractional interest by the fifteen (15) day volume weighted average price of BMRC common stock calculated prior to closing of the merger as provided in the merger agreement.

This document, which serves as a proxy statement for AMRB’s and BMRC’s special meetings of shareholders and as a prospectus with respect to the offering and issuance of the BMRC common stock to be issued in the merger to the holders of AMRB common stock, describes the AMRB and BMRC special meetings and includes important information about the proposed merger, the companies participating in the merger, and the merger agreement pursuant to which the merger will be consummated, if approved. We encourage you to read the entire document carefully, including the “Risk Factors” section beginning on page 17, for a discussion of the risks related to the proposed merger.

AMRB’s board of directors has determined that the merger agreement and the transactions contemplated thereby, including the merger, are in the best interests of AMRB and its shareholders, has unanimously approved the merger agreement and the transactions contemplated thereby, and recommends that AMRB shareholders vote “FOR” the proposals described in this joint proxy statement/prospectus.

Similarly, BMRC’s board of directors has determined that the merger agreement and the transactions contemplated thereby, including the merger, are in the best interests of BMRC and its shareholders, has unanimously approved the merger agreement and the transactions contemplated thereby, and recommends that BMRC shareholders vote “FOR” the proposals described in this joint proxy statement/prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of these materials. Any representation to the contrary is a criminal offense. Shares of common stock of BMRC are not savings accounts, deposits or other obligations of any bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

The date of these materials is June 21, 2021, and they are expected to be first mailed to shareholders on or about June 25, 2021.

AMERICAN RIVER BANKSHARES
3100 Zinfandel Drive, Suite 450
Rancho Cordova, CA 95670

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on July 28, 2021

TO THE SHAREHOLDERS OF AMERICAN RIVER BANKSHARES:

The special meeting of shareholders of American River Bankshares (“AMRB”) will be held on July 28, 2021, at 3:00 p.m. (local time), at the Homewood Suites by Hilton, 10700 White Rock Road, Rancho Cordova, CA 95670, for the following purposes:

No other business may be conducted at the special meeting.

This joint proxy statement/prospectus describes the proposals listed above in more detail. Please refer to the following materials, including the merger agreement and all other appendices, and any documents incorporated by reference, for further information with respect to the business to be transacted at the special meeting. You are encouraged to read this entire document carefully before voting. In particular, see the section entitled “Risk Factors” beginning on page 17.

The board of directors has fixed the close of business on June 9, 2021, as the record date for determination of shareholders entitled to notice of, and the right to vote at the special meeting. Therefore, if you were a shareholder of record at the close of business on June 9, 2021, you may vote at the special meeting.

The board of directors has determined that the merger is advisable and in the best interests of AMRB shareholders based upon its analysis, investigation and deliberation, and unanimously recommends that its shareholders vote “FOR” approval of the merger and merger agreement.

The board of directors also recommends that shareholders vote to approve the NEO Compensation proposal and to approve the proposal to adjourn the special meeting to a later date or dates, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the merger and merger agreement.

YOUR VOTE IS VERY IMPORTANT.   The enclosed proxy card is solicited by the board of directors. Whether or not you plan to attend the special meeting, we urge you to promptly complete, sign and date the enclosed proxy card and return it in the postage-paid envelope provided for that purpose or submit your proxy by telephone or through the Internet. You may revoke your proxy at any time before it is voted at the special meeting by giving written notice of revocation to the Corporate Secretary of AMRB, by submitting a properly executed proxy bearing a later date, or by being present at the special meeting and electing to vote in person by advising the Chairman of the special meeting of your election.

Please indicate on the proxy card whether or not you expect to attend the special meeting so that arrangements for adequate accommodations can be made.

If you would like to attend the special meeting and your shares are held by a broker, bank or other nominee, you must bring to the special meeting a recent brokerage statement or a letter from the nominee confirming your beneficial ownership of the shares. You must also bring a form of personal identification. In order to vote your shares at the special meeting, you must also obtain a proxy issued in your name from that nominee.

	BY ORDER OF THE BOARD OF DIRECTORS
	Kimberly A. Box
	Corporate Secretary

June 25, 2021
Rancho Cordova, California

BANK OF MARIN BANCORP
504 Redwood Blvd., Suite 100
Novato, CA 94947

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on July 28, 2021

TO THE SHAREHOLDERS OF BANK OF MARIN BANCORP:

The special meeting of shareholders of Bank of Marin Bancorp (“BMRC”) will be held on July 28, 2021, at 10:00 a.m. (local time), at the BMRC headquarters at 504 Redwood Blvd., Suite 100, Novato, CA 94947, for the following purposes:

No other business may be conducted at the special meeting.

This joint proxy statement/prospectus describes the proposals listed above in more detail. Please refer to the following materials, including the merger agreement and all other appendices, and any documents incorporated by reference, for further information with respect to the business to be transacted at the special meeting. You are encouraged to read this entire document carefully before voting. In particular, see the section entitled “Risk Factors” beginning on page 17.

The board of directors has fixed the close of business on June 11, 2021, as the record date for determination of shareholders entitled to notice of, and the right to vote at the special meeting. Therefore, if you were a shareholder of record at the close of business on June 11, 2021, you may vote at the special meeting.

The board of directors has determined that the merger is advisable and in the best interests of BMRC shareholders based upon its analysis, investigation and deliberation, and unanimously recommends that its shareholders vote “FOR” approval of the merger and merger agreement.

The board of directors also recommends that shareholders vote to approve the proposal to adjourn the special meeting to a later date or dates, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the merger and merger agreement.

YOUR VOTE IS VERY IMPORTANT.   The enclosed proxy card is solicited by the board of directors. Whether or not you plan to attend the special meeting, we urge you to promptly complete, sign and date the enclosed proxy card and return it in the postage-paid envelope provided for that purpose or submit your proxy by telephone or through the Internet. You may revoke your proxy at any time before it is voted at the special meeting by giving written notice of revocation to the Corporate Secretary of BMRC, by submitting a properly executed proxy bearing a later date, or by being present at the special meeting and electing to vote in person by advising the Chairman of the special meeting of your election.

Please indicate on the proxy card whether or not you expect to attend the special meeting so that arrangements for adequate accommodations can be made.

If you would like to attend the special meeting and your shares are held by a broker, bank or other nominee, you must bring to the special meeting a recent brokerage statement or a letter from the nominee confirming your beneficial ownership of the shares. You must also bring a form of personal identification. In order to vote your shares at the special meeting, you must also obtain a proxy issued in your name from that nominee.

	BY ORDER OF THE BOARD OF DIRECTORS
	Nancy Rinaldi Boatright
	Corporate Secretary

June 25, 2021
Novato, California

REFERENCES TO ADDITIONAL INFORMATION

This joint proxy statement/prospectus incorporates important business and financial information about BMRC from documents that are not included in or delivered with this document. BMRC and AMRB shareholders can obtain these documents through the website of the Securities and Exchange Commission (“Commission”), at http://www.sec.gov, or by requesting them in writing or by telephone from BMRC as follows:

Bank of Marin Bancorp
504 Redwood Blvd., Suite 100
Novato, California 94947
(415) 763-4523
Attention: Nancy Rinaldi Boatright

If any BMRC shareholder would like to request documents, please do so by July 21, 2021 in order to receive them before the BMRC special meeting.

Or, in the case of information relating to AMRB, from AMRB as follows:

American River Bankshares
3100 Zinfandel Drive, Suite 450
Rancho Cordova, CA 95670
(916) 851-0123
Attention: Kimberly A. Box

If any AMRB shareholder would like to request documents, please do so by July 21, 2021 in order to receive them before the AMRB special meeting.

AMRB SHAREHOLDERS

If you are an AMRB shareholder and have questions about the merger, the merger agreement or the AMRB special meeting, need additional copies of this joint proxy statement/prospectus or need to obtain proxy cards or other information related to the AMRB proxy solicitation, you may contact Mr. David E. Ritchie, Jr., AMRB’s President and Chief Executive Officer, at the following address:

American River Bankshares
3100 Zinfandel Drive, Suite 450
Rancho Cordova, CA 95670

or at the following telephone number:

(916) 851-0123

You may also call AMRB’s proxy solicitor, Georgeson, toll-free at (888) 219-8320.

BMRC SHAREHOLDERS

If you are a BMRC shareholder and have questions about the merger, the merger agreement or the BMRC special meeting, need additional copies of this joint proxy statement/prospectus or need to obtain proxy cards or other information related to the BMRC proxy solicitation, you may contact Mr. Russell A. Colombo, BMRC’s Chief Executive Officer, at the following address:

Bank of Marin Bancorp
504 Redwood Blvd., Suite 100
Novato, California 94947

or at the following telephone number:

(415) 763-4520

You may also call BMRC’s proxy solicitor, Morrow Sodali, toll-free at (800) 662-5200 or by written request to [email protected].

For additional information, please see “Where You Can Find More Information” beginning on page 101.

TABLE OF CONTENTS

LIST OF APPENDICES

QUESTIONS AND ANSWERS
ABOUT THE MERGER AND THE SPECIAL MEETINGS

The following are some questions that you may have regarding the merger, the merger agreement and the other matters being considered at the special meetings and the answers to those questions. BMRC and AMRB urge you to read carefully the remainder of this document because the information in this section does not provide all the information that might be important to you with respect to the merger and the other matters being considered at the special meeting. Additional important information is also contained in the appendices to this joint proxy statement/prospectus and in the documents incorporated herein by reference.

Questions and Answers about the Special Meetings

A:   BMRC and AMRB are sending these materials to their respective shareholders to help them decide how to vote their shares of common stock with respect to the proposed merger at the special meetings.

This document constitutes both a proxy statement of BMRC and AMRB and a prospectus of BMRC. It is a proxy statement because the BMRC and AMRB boards of directors are soliciting proxies from their shareholders. It is a prospectus of BMRC because BMRC will use it in connection with the issuance of shares of BMRC common stock in exchange for shares of AMRB common stock in connection with the merger.

In order to complete the merger, the shareholders of each of BMRC and AMRB must both vote to approve the merger and merger agreement (which sets forth the terms of the merger). The enclosed proxy card and voting materials allow you to vote your shares without actually attending the special meeting.

A:   The AMRB special meeting will be held at the Homewood Suites by Hilton, 10700 White Rock Road, Rancho Cordova, CA 95670, on July 28, 2021, at 3:00 p.m. (local time).

A:   The BMRC special meeting will be held at BMRC’s headquarters at 504 Redwood Blvd., Suite 100, Novato, CA 94947, on July 28, 2021, at 10:00 a.m. (local time).

A:   AMRB shareholders of record as of the close of business on June 9, 2021 (referred to as the “AMRB record date”) and BMRC shareholders of record as of the close of business on June 11, 2021 (referred to as the “BMRC record date”) will be entitled to vote at the special meetings.

A:   If you hold shares of AMRB or BMRC common stock as of the AMRB or BMRC record date for the special meeting you are being asked to vote to:

In addition, if you are a shareholder of AMRB you are being asked to approve, on an advisory basis, the compensation of the AMRB NEO’s in connection with the merger.

A:   The proposal to approve the merger and merger agreement requires the affirmative votes of the holders of a majority of the issued and outstanding shares of AMRB and BMRC common stock based upon the number of shares issued and outstanding as of the AMRB or BMRC record date. There were 5,980,323 shares of AMRB common stock issued and outstanding on the AMRB record date. Therefore, the AMRB approval of the merger and merger agreement will require the favorable vote of at least 2,990,163 shares. There were 13,051,274 shares of BMRC common stock issued and outstanding on the BMRC record date. Therefore, the BMRC approval of the merger and merger agreement will require the favorable vote of at least 6,525,638 shares.

The proposal of AMRB to approve (on an advisory basis) the compensation of the AMRB NEO’s in connection with the merger and the proposal of each of AMRB and BMRC to adjourn the special meeting, if necessary, requires the affirmative vote of at least a majority of the shares of common stock present in person or represented by proxy and voting at the special meeting at which a quorum is present (which shares voting affirmatively constitute at least a majority of the required quorum).

All of AMRB’s and BMRC’s directors at the date of the merger agreement agreed, in writing, to vote their shares “FOR” the merger and merger agreement. See “Joint Proposal 1 — The Merger — Shareholder Agreements” beginning on page 79 for more information. AMRB’s directors collectively hold, as of the AMRB record date for the AMRB special meeting: 484,731 shares of AMRB common stock, representing 8.1% of AMRB’s issued and outstanding shares of common stock. BMRC’s directors collectively hold, as of the BMRC record date for the BMRC special meeting: 372,656 shares of BMRC common stock, representing 2.9% of BMRC’s issued and outstanding shares of common stock.

A:   The AMRB board of directors unanimously recommends that you vote as follows:

A:   The BMRC board of directors unanimously recommends that you vote as follows:

A:   You may vote “FOR,” “AGAINST” or “ABSTAIN” with respect to any of the proposals presented at the special meeting. You are entitled to one vote for each share that you owned as of the record date for the special meeting. See “The Special Meetings — Number of Votes” beginning on page 23 for a discussion of voting with respect to the proposals at the special meetings.

If you are a shareholder of record, you may vote in person at the special meeting, or you may vote by proxy using the enclosed proxy card or by phone or internet using the instructions on the proxy card.

Whether or not you plan to attend the special meeting, you are urged to vote by proxy to ensure your vote is counted. You may still attend the special meeting and vote in person if you have already voted by proxy.

To vote using the proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided or follow the instructions to vote via the Internet or by telephone indicated on the proxy card. If you return your signed proxy card before the special meeting or vote as indicated via the Internet or by telephone, your shares will be voted as you direct.

If you do not want to vote by proxy and prefer to vote in person, simply attend the special meeting and you will be given a ballot when you arrive.

A:   Under the California General Corporation Law, AMRB shareholders are not entitled to dissenters’ rights.

A:   If you are a beneficial owner of shares registered in the name of your broker or other nominee, you should have received a proxy card and voting instructions with these proxy materials directly from that organization. Your broker or nominee cannot vote your shares in favor of the merger agreement and merger unless you provide instructions on how to vote them. If you fail to provide such instructions, your broker will lodge a broker non-vote, which has the same effect as a vote against the merger and merger agreement. To vote your shares, follow the voting instructions your broker or nominee provides when forwarding these proxy materials to you and complete and mail the proxy card to ensure that your vote is counted. Alternatively, you may vote by telephone or over the Internet as instructed by your broker or nominee. To vote in person at the special meeting, you must obtain a valid proxy from your broker or nominee. If you do not provide voting instructions to your broker, bank or agent, this will have the same effect as a vote “AGAINST” the merger and merger agreement. Your failure to provide voting instructions will have no effect on the outcome of, in the case of AMRB shareholders, the proposal to approve on an advisory basis the compensation of the NEO’s relating to the merger, or, in the case of both AMRB and BMRC shareholders, the proposal to adjourn their respective shareholder meeting to solicit additional votes on the merger agreement (unless the votes FOR such proposals do not constitute at least a majority of the required quorum), if any. See “The Special Meetings — Abstentions and Broker Non-Votes” beginning on page 24.

A:   Proxies marked as abstaining on any matter to be acted upon by shareholders will be treated as present at the meeting for purposes of determining a quorum but will not be counted as votes cast “FOR” or “AGAINST” any proposal. However, because the proposal to approve the merger and merger agreement requires the affirmative vote of a majority of the issued and outstanding shares of common stock, an abstention will have the same effect as a vote “AGAINST” the proposal.

A:   Yes. If you hold shares in certificate form or book-entry, you may revoke or change your proxy at any time before the time your proxy is voted at the special meeting by: (i) filing with the respective Corporate Secretary at the applicable address listed below an instrument revoking it or a duly executed proxy bearing a later date; or (ii) appearing and voting in person at the special meeting.

Your attendance alone at the special meeting will not revoke your proxy. If you wish to revoke your vote by providing written notice, such notice must be sent so that notice is received before the vote is taken at the special meeting and should be addressed as follows:

If you have instructed a broker or other nominee to vote your shares, you must follow directions received from your broker or other nominee in order to change those instructions.

A:   If you fail to execute and return your proxy card or otherwise do not vote in person at the special meeting, it will have the same effect as voting “AGAINST” the merger and merger agreement. The failure to execute and return your proxy card or the failure to vote in person will have no effect on the other proposals to which you are entitled to vote at the special meeting (unless the votes in favor of such proposal(s) do not constitute at least a majority of the required quorum).

A:   If you sign and return your proxy card without indicating how to vote on any particular proposal, the proxy holder designated in your proxy card will vote your proxy as recommended by the respective company’s board of directors, including voting “FOR” approval of the merger and merger agreement.

A:   A quorum of shareholders is necessary to hold a valid meeting. A majority of the shares of common stock issued and outstanding and voting on the record date must be represented in person or by proxy at the special meeting in order for a quorum to be present for purposes of transacting business. Proxies marked as abstaining on any matter to be acted upon by shareholders will be treated as present at the meeting for purposes of determining a quorum but will not be counted as votes cast on such matters. If there is no quorum, a majority of the votes present at that special meeting may adjourn the meeting to another date.

Questions and Answers Specific to the Merger and Merger Agreement

Q:   What will happen if the AMRB and BMRC shareholders approve the merger and merger agreement, and what will I receive if the merger is completed?

A:   Subject to the satisfaction or waiver of all other conditions in the merger agreement, including regulatory approvals, if the AMRB and BMRC shareholders approve the merger and merger agreement: (i) BMRC will acquire AMRB by merging AMRB with and into BMRC, with BMRC surviving, followed immediately thereafter by the merger of American River Bank with and into Bank of Marin, with Bank of Marin surviving and continuing commercial bank operations of the combined bank following the merger; and (ii) BMRC will issue shares of its common stock in exchange for shares of AMRB common stock pursuant to the terms of the merger agreement.

Please read the sections entitled “Joint Proposal 1 — The Merger — Structure of the Merger” and “Joint Proposal 1 — The Merger — The Merger Consideration” beginning on pages 29 and 56, respectively, for additional information.

Q:   Is the exchange ratio subject to adjustment based on changes in the price of BMRC common stock or AMRB common stock?

A:   No. The exchange ratio of 0.575 shares of BMRC common stock for each share of AMRB common stock is fixed and no adjustments to the exchange ratio will be made based upon changes in the price of either BMRC common stock or AMRB common stock prior to the completion of the merger. As a result of any such changes in stock price, the aggregate market value of the shares of BMRC common stock that an AMRB shareholder is entitled to receive at the time that the merger is completed could vary significantly higher and lower from the value of such shares on the date of this joint proxy statement/prospectus, the date of the special meetings or the date on which such AMRB shareholder actually receives shares of BMRC common stock in the merger.

A:   The board of directors of AMRB believe the merger with BMRC is in the best interests of AMRB and the AMRB shareholders. Please read the section entitled “Joint Proposal 1 — The Merger — Background of the Merger and AMRB’s Reasons for the Merger and Recommendation of the AMRB Board of Directors and Opinion of AMRB’s Financial Advisor” beginning on page 29.

A:   The board of directors of BMRC believes the merger with AMRB is in the best interests of BMRC and the BMRC shareholders. Please read the section entitled “Joint Proposal 1 — The Merger — Background of the Merger and BMRC’s Reasons for the Merger and Recommendation of the BMRC Board of Directors and Opinion of BMRC’s Financial Advisor” beginning on page 29.

A:   AMRB and BMRC are working to complete the merger as soon as possible and expect to complete the merger in the third quarter of 2021. However, the merger is subject to various conditions, including shareholder and regulatory approvals. Subject to the various conditions and due to possible factors outside AMRB’s and BMRC’s control, it is possible that the merger will not be completed until a later time, or not at all. Therefore, there may be a substantial amount of time between the date of the special meeting and the completion of the merger.

A:   Crowe LLP has issued a tax opinion to BMRC, and Manatt, Phillips & Phelps LLP has issued a tax opinion to AMRB, that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”) and that BMRC and AMRB each will be a party to that reorganization within the meaning of Section 368(b) of the Code. As a “reorganization,” AMRB shareholders receiving BMRC common stock will not recognize gain or loss on the exchange of their AMRB common stock for BMRC common stock for U.S. federal income tax purposes, except with respect to any cash received in exchange for fractional shares. See “Joint Proposal 1 — Material U.S. Federal Income Tax Consequences — Tax Consequences of the Merger” beginning on page 77.

A:   If you transfer your shares after the record date for the special meeting but before the date of the special meeting, you will retain your right to vote at the special meeting. However, if you are an AMRB shareholder you will not have the right to receive any shares of BMRC common stock in exchange for your former shares of AMRB common stock if and when the merger is completed. In order to receive shares of BMRC common stock in exchange for your shares of AMRB common stock, you must hold your AMRB common stock through the completion of the merger.

A:   No. You should NOT send in your AMRB stock certificates in the envelope provided for use in returning your proxy card. You will be sent written instructions for exchanging your stock certificates only if the merger and merger agreement and the transactions contemplated therein are approved and completed.

A:   You should do two things now:

First, after reading this joint proxy statement/prospectus, you should vote on the proposals. Simply indicate on your proxy card how you want to vote, then sign and mail your proxy card in the enclosed return envelope in time to be represented at the special meeting. Alternatively, you may vote by phone or Internet by following the instructions on your proxy card. If you hold your shares in street name, you should follow your broker’s instructions to vote your shares.

Second, if you are an AMRB shareholder and do not own your shares through a brokerage firm which holds your shares in street name, you should immediately locate and make sure you have possession of the certificates evidencing your AMRB common stock, if any.

As soon as reasonably practicable after the effective time of the merger, the exchange agent for the merger, Computershare, Inc. (“Computershare”), will mail to each holder of record of an AMRB common stock certificate a letter of transmittal and instructions for the surrender of the certificate(s) in exchange for BMRC common stock. If you hold your AMRB shares in book entry, your AMRB shares will be exchanged for BMRC common stock without further action on your part.

A:   IF YOUR CERTIFICATE(S) FOR AMRB COMMON STOCK IS/ARE LOST, STOLEN, OR DESTROYED, YOU ARE URGED TO IMMEDIATELY NOTIFY COMPUTERSHARE, AMRB’S TRANSFER AGENT AT (800) 962-4284, SO THAT A “STOP TRANSFER” INSTRUCTION CAN BE PLACED ON YOUR LOST CERTIFICATE(S) TO PREVENT TRANSFER OF OWNERSHIP TO ANOTHER PERSON. COMPUTERSHARE WILL SEND YOU THE FORMS TO PERMIT THE ISSUANCE OF A REPLACEMENT CERTIFICATE(S).

A:   If you are an AMRB shareholder and have any additional questions about the merger or the merger agreement you may direct your questions to Mr. David E. Ritchie, Jr., President and Chief Executive Officer, American River Bankshares, 3100 Zinfandel Drive, Suite 450, Rancho Cordova, CA 95670; phone: (916) 851-0123. AMRB shareholders may also call AMRB’s proxy solicitor, Georgeson, toll-free at (888) 219-8320.

If you are a BMRC shareholder and have any additional questions about the merger or the merger agreement you may direct your questions to Mr. Russell A. Colombo, Chief Executive Officer, Bank of Marin Bancorp, 504 Redwood Blvd., Suite 100 Novato, CA 94947; phone: (415) 763-4520. BMRC shareholders may also call BMRC’s proxy solicitor, Morrow Sodali, toll-free at (800) 662-5200 or by written request to [email protected].

RISK FACTORS

In addition to the other information included and incorporated by reference into this joint proxy statement/prospectus, including the matters addressed in the section entitled “Cautionary Statement Concerning Forward-Looking Statements,” you should be aware of and carefully consider the following risks and uncertainties that are applicable to the merger agreement, the merger, BMRC and AMRB before deciding whether to vote for the approval of the merger and merger agreement and the other transactions contemplated by the merger and the approval of the adjournment of the special meetings, if necessary, to solicit additional proxies in favor of the proposal to approve the merger and merger agreement and the other transactions contemplated by the merger agreement. You should also consider the risks relating to the businesses of BMRC and ownership of BMRC common stock contained in Part I, Item 1A of BMRC’s Annual Report on Form 10-K for the year ended December 31, 2020 that has been filed with the Commission, as well as any subsequent documents filed by BMRC with the Commission, which are incorporated into this joint proxy statement/prospectus by reference. See “Where You Can Find More Information.”

Risk Factors Related to the Merger

Because the market price of BMRC common stock may fluctuate, AMRB shareholders cannot be sure of the market value of the BMRC common stock that they will receive in the merger.

Under the terms of the merger agreement, the exchange ratio for the merger consideration to be issued by BMRC to AMRB shareholders is fixed at 0.575 shares of BMRC common stock for each share of AMRB common stock. The closing price of BMRC’s common stock as quoted on Nasdaq was $39.06 on April 16, 2021, the trading date immediately preceding the day on which the merger was publicly announced. As of June 15, 2021, the closing price of BMRC common stock as reported on Nasdaq was $32.43. The market price of BMRC common stock will vary from these prices, and will also vary from the price on the date that this document is mailed to AMRB shareholders or on the date of AMRB’s special meeting of shareholders. The market price of BMRC common stock changes as a result of a variety of factors, including general market and economic conditions, changes in its business, operations and prospects, and regulatory considerations. Many of these factors are beyond the control of BMRC. As a result of the fixed 0.575 exchange ratio, the market value of shares of BMRC common stock that an AMRB shareholder receives in the merger will both increase and decline correspondingly with increases and declines in the market price of BMRC common stock. Because the date that the merger will be completed will be later than the date of the AMRB special meeting, at the time of the AMRB special meeting you will not know the exact market value of the BMRC common stock that AMRB shareholders will receive for shares of AMRB common stock upon completion of the merger.

Directors and officers of AMRB have interests in the merger that are in addition to or different than the interests of AMRB shareholders.

AMRB directors and officers have interests in the merger as individuals that are in addition to, or different from, their interests as shareholders of AMRB, which include, but are not limited to:

You should consider these interests in conjunction with the recommendation of the board of directors of AMRB with respect to approval of the merger. For a more detailed discussion of these interests, see the section entitled “Joint Proposal 1 — The Merger — Interests of Certain AMRB Officers and Directors in the Merger.”

The termination fee and the restrictions on solicitation contained in the merger agreement may discourage other companies from trying to acquire AMRB.

Until the closing of the merger, with some limited exceptions, AMRB is prohibited from soliciting, initiating, encouraging or participating in any discussion of, or otherwise considering any inquiries or proposals that may lead to, an acquisition proposal, such as a merger or other business combination transaction, with any person other than BMRC. In addition, AMRB has agreed to pay a termination fee of $5.38 million to BMRC in specified circumstances. See “Joint Proposal 1 — The Merger — Termination Fee.” These provisions could discourage other companies from trying to acquire AMRB even though those other companies might be willing to offer greater value to AMRB shareholders than BMRC has offered in the merger. The payment of the termination fee could also have a material adverse effect on AMRB’s financial condition.

BMRC may fail to realize the anticipated benefits of the merger.

The success of the merger will depend on, among other things, BMRC’s ability to realize the anticipated revenue enhancements and efficiencies and to combine the businesses of Bank of Marin and American River Bank in a manner that does not materially disrupt the existing customer relationships of American River Bank or result in decreased revenues resulting from any loss of customers and that permits growth opportunities to occur. If BMRC is not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.

Bank of Marin and American River Bank have operated and, until the completion of the merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect Bank of Marin’s ability to maintain relationships with clients, customers, depositors and employees or for BMRC to achieve the anticipated benefits of the merger. Integration efforts between the Bank of Marin and American River Bank could also divert management attention and resources. These integration matters could have an adverse effect on each of Bank of Marin and American River Bank during the transition period and on the combined company following completion of the merger.

The market price of BMRC common stock after the merger may be affected by factors different from those affecting the shares of AMRB or BMRC currently.

Upon completion of the merger, holders of AMRB common stock will become holders of BMRC common stock. BMRC’s business differs from that of AMRB, and, accordingly, the financial condition and results of operations of the combined company and the market price of BMRC common stock after the completion of the merger may be affected by factors different from those currently affecting the financial condition and results of operations of AMRB.

Sales of substantial amounts of BMRC’s common stock in the open market by former AMRB shareholders could depress BMRC’s stock price.

Shares of BMRC common stock that are issued to AMRB shareholders in the merger will be freely tradable without restrictions or further registration under the Securities Act. As of the close of business on the BMRC record date, BMRC had approximately 13,051,274 shares of common stock issued and outstanding and 297,437 shares of BMRC common stock were reserved for issuance under BMRC’s equity incentive plans. Based on the number of AMRB common stock currently issued and outstanding and assuming holders of all outstanding AMRB stock options exercise their options prior to closing, BMRC currently expects to issue approximately 3,450,818 shares of its common stock in connection with the merger.

Because of the significantly enhanced liquidity of BMRC common stock as compared to AMRB common stock due to the greater public float and trading volume of BMRC common stock relative to AMRB common stock, if the merger is completed, AMRB’s former shareholders may sell substantial amounts of BMRC common stock in the public market following completion of the merger. Any such sales may cause the market price of BMRC common stock to decrease. These sales might also make it more difficult for BMRC to sell equity or equity-related securities at a time and price that it otherwise would deem appropriate.

The fairness opinion received by AMRB’s board of directors from Piper Sandler, and by BMRC’s board of directors from KBW, will not reflect any changes since the date of such opinions.

Changes in the operations and prospects of BMRC or AMRB, general market and economic conditions and other factors that may be beyond the control of BMRC and AMRB, may alter the value of BMRC or AMRB or the market price for shares of BMRC common stock or AMRB common stock by the time the merger is completed. The fairness opinions delivered by Piper Sandler to the AMRB board of directors, and by KBW to the BMRC board of directors, do not speak as of any date other than the date of such opinions, which was April 16, 2021. The merger agreement does not require the fairness opinions to be updated as a condition to the completion of the merger, and neither AMRB nor BMRC intend to request that the fairness opinions be updated. KBW’s fairness opinion is attached as Appendix B to this joint proxy statement/prospectus and Piper Sandler’s fairness opinion is attached as Appendix C to this joint proxy statement/prospectus. For a description of Piper Sandler’s opinion, see “Joint Proposal 1 — The Merger — Opinion of AMRB’s Financial Advisor.” For a description of the other factors considered by BMRC’s board of directors in determining to approve the merger, see “Joint Proposal 1 — The Merger — AMRB’s Reasons for the Merger and Recommendation of the BMRC Board of Directors.” For a description of the other factors considered by AMRB’s board of directors in determining to approve the merger, see “Joint Proposal 1 — The Merger — AMRB’s Reasons for the Merger and Recommendation of the AMRB Board of Directors.”

The merger is subject to the receipt of approvals or waivers from regulatory authorities that may impose conditions that could have an adverse effect on BMRC.

Before the merger can be completed, various approvals or waivers must be obtained from bank regulatory authorities. These authorities may impose conditions on the completion of the merger or require changes to the terms of the merger. Although BMRC and AMRB do not currently expect that any such conditions or changes will be imposed, there can be no assurance that they will not be, and such conditions or changes could have the effect of delaying completion of the merger, imposing additional costs on, or limiting the revenues of BMRC following the merger or causing the merger transaction between BMRC and AMRB to terminate. See “Joint Proposal 1 — The Merger — Bank Regulatory Approvals” and “Joint Proposal 1 — The Merger — Conditions to the Merger.”

The merger is subject to certain closing conditions that, if not satisfied or waived, will result in the merger not being completed, which may cause the prices of BMRC common stock and AMRB common stock to decline.

Consummation of the merger is subject to customary conditions to closing in addition to the receipt of the required regulatory approvals and approval of the AMRB and BMRC shareholders of the merger. If any condition to the merger is not satisfied or waived, to the extent permitted by law, the merger will not be completed. In addition, BMRC and AMRB may terminate the merger agreement under certain circumstances even if the merger agreement is approved by AMRB and BMRC shareholders, including if the merger has not been completed on or before December 31, 2021. If the merger is not completed, the respective trading prices of BMRC and AMRB common stock on the Nasdaq market may decline to the extent that the current prices reflect a market assumption that the merger will be completed. In addition, neither company would realize any of the expected benefits of having completed the merger. Additionally, AMRB would have incurred significant expense which could significantly and materially impact its financial condition and results of operations. For more information on closing conditions to the merger agreement, see “Joint Proposal 1 — The Merger — Conditions to the Merger.”

BMRC expects to incur substantial expenses related to the merger.

BMRC expects to incur substantial expenses in connection with consummation of the merger and integrating the business, operations, networks, systems, technologies, policies and procedures of AMRB into that of BMRC. Although BMRC and AMRB have assumed that a certain level of transaction and combination expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their combination expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. As a result of these expenses, both BMRC and AMRB expect to take charges against their earnings before completion of the merger and BMRC expects to take charges against its earnings after completion of the merger. The charges taken in connection with the merger are expected to be significant, although the aggregate amount and timing of such charges are uncertain at present.

The merger may distract management of AMRB and BMRC from their other responsibilities.

The merger could cause the management of AMRB and BMRC to focus their time and energies on matters related to the merger that otherwise would be directed to their respective businesses and operations. Any such distraction on the part of management, if significant, could affect the ability of BMRC and AMRB to service existing business and develop new business and may adversely affect their businesses and earnings.

The shares of BMRC common stock to be received by AMRB shareholders as a result of the merger will have different rights than shares of the AMRB’s common stock.

Upon completion of the merger, AMRB’s shareholders will become BMRC shareholders and their rights as shareholders will be governed by the BMRC articles of incorporation and bylaws. The rights associated with AMRB common stock are different from the rights associated with BMRC common stock. See “Comparison of the Rights of Shareholders” beginning on page 94.

Holders of AMRB common stock will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

Holders of AMRB common stock currently have the right to vote in the election of the board of directors and on other matters affecting AMRB. Upon the completion of the merger, each AMRB shareholder who receives shares of BMRC common stock will become a shareholder of BMRC with a percentage ownership of BMRC that is smaller than the shareholder’s percentage ownership of AMRB. In the aggregate, AMRB’s current shareholders are expected to own approximately 20.5% of the issued and outstanding shares of BMRC common stock when the merger is completed. Because of this, AMRB shareholders may have less influence on the management and policies of the combined company than they now have on the management and policies of AMRB.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This joint proxy statement/prospectus contains or incorporates by reference a number of forward-looking statements regarding the financial condition, results of operations, earnings outlook and business prospects of BMRC and AMRB and the potential combined company and may include statements for the periods following the completion of the merger. Shareholders of AMRB can find many of these statements by looking for words such as “expects,” “projects,” “anticipates,” “believes,” “intends,” “estimates,” “strategy,” “plan,” “potential,” “possible” and other similar expressions. Statements about the expected timing, completion and effects of the merger and all other statements in this joint proxy statement/prospectus or in the documents incorporated by reference in this joint proxy statement/prospectus other than historical facts constitute forward-looking statements. Forward-looking statements involve certain risks and uncertainties that are subject to change based on factors which are, in many instances, beyond BMRC’s or AMRB’s control. The ability of BMRC or AMRB to predict results or actual effects of its plans and strategies, or those of the combined company, is inherently uncertain. Accordingly, actual results may differ materially from those expressed in, or implied by, the forward-looking statements. Some of the factors that may cause actual results or earnings to differ materially from those contemplated by the forward-looking statements include, but are not limited to, those discussed under “Risk Factors” and those discussed in the filings of BMRC that are incorporated into this joint proxy statement/prospectus by reference, including the following:

Because these forward-looking statements are subject to assumptions and uncertainties, BMRC’s and AMRB’s actual results may differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are predicated on the beliefs and assumptions of the management of each of BMRC and AMRB based on information known to them as of the date of this joint proxy statement/prospectus. AMRB and BMRC shareholders are cautioned not to place undue reliance on these statements, which speak only as of the date of this joint proxy statement/prospectus or the date of any document incorporated by reference in this joint proxy statement/prospectus.

All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this joint proxy statement/prospectus and attributable to BMRC or AMRB or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. BMRC and AMRB undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this joint proxy statement/prospectus or to reflect the occurrence of unanticipated events, unless obligated to do so under the federal securities laws.

GENERAL INFORMATION

This document constitutes a proxy statement for, and is being furnished to all record holders of, AMRB in connection with the solicitation of proxies by the board of directors of AMRB to be used at a special meeting of shareholders of AMRB to be held on July 28, 2021 and any adjournment or postponement of the AMRB special meeting. The purposes of the AMRB special meeting are to consider and vote upon a proposal to approve the merger and the merger agreement, a proposal to approve, on an advisory basis, the compensation of the AMRB NEO’s in connection with the merger, and a proposal to adjourn the AMRB special meeting to the extent necessary to solicit additional votes on the merger and the merger agreement.

This document also constitutes a proxy statement for, and is being furnished to all record holders of, BMRC in connection with the solicitation of proxies by the board of directors of BMRC to be used at a special meeting of shareholders of BMRC to be held on July 28, 2021 and any adjournment or postponement of the BMRC special meeting. The purposes of the BMRC special meeting are to consider and vote upon a proposal to approve the merger and merger agreement, and a proposal to adjourn the BMRC special meeting to the extent necessary to solicit additional votes on the merger and the merger agreement.

This document also constitutes a prospectus of BMRC relating to the BMRC common stock to be issued upon completion of the merger to holders of AMRB common stock as the merger consideration. See “The Merger — The Merger Consideration” beginning on page 56. Based on 6,001,423 shares of AMRB common stock issued and outstanding (and assuming holders of all outstanding AMRB stock options exercise their options prior to closing) on June 9, 2021 and an exchange ratio of 0.575, approximately 3,450,818 shares of BMRC common stock will be issuable to shareholders of AMRB upon completion of the merger.

BMRC has supplied all of the information contained or incorporated by reference herein relating to BMRC and Bank of Marin, and AMRB has supplied all of the information contained herein relating to AMRB and American River Bank.

THE BMRC SPECIAL MEETING

General

This joint proxy statement/prospectus is being provided to BMRC shareholders as part of a solicitation of proxies by the board of directors for use at the special meeting and at any adjournments or postponements of the special meeting. This joint proxy statement/prospectus provides BMRC shareholders with important information about the special meeting and should be read carefully in its entirety.

Date, Time and Place of the BMRC Special Meeting

The BMRC special meeting will be held at 504 Redwood Blvd., Suite 100, Novato, CA 94947, on July 28, 2021, at 10:00 a.m. (local time).

Record Date for the BMRC Special Meeting; Shares Entitled to Vote

Only holders of record of BMRC common stock at the close of business on June 11, 2021 which is the record date for the special meeting (referred to as the “BMRC record date”), are entitled to receive notice of and to vote at the meeting. On the record date, BMRC had 13,051,274 shares of its common stock issued, outstanding and eligible to vote at the special meeting.

Quorum

A majority of the shares of BMRC common stock issued and outstanding and voting on the record date must be represented in person or by proxy at the special meeting in order for a quorum to be present for purposes of transacting business. Proxies marked as abstaining (including proxies containing broker non-votes) on any matter to be acted upon by shareholders will be treated as present at the meeting for purposes of determining a quorum but will not be counted as votes cast on such matters. If there is no quorum at the special meeting, the affirmative vote of at least a majority of the votes present in person or represented by proxy and voting at the special meeting may adjourn the special meeting to another date.

Purposes of the BMRC Special Meeting

The BMRC special meeting is being held for the following purposes:

Recommendation of the BMRC Board of Directors

The board of directors of BMRC unanimously recommends that the BMRC shareholders vote:

“FOR” approval of the merger and merger agreement; and

“FOR” the approval of any adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes in favor of the merger and merger agreement.

The board of directors unanimously approved the merger agreement and the merger and determined that the merger is in the best interests of BMRC and its shareholders. See “Joint Proposal 1 — The Merger”

Number of Votes; Voting

Each holder of BMRC common stock is entitled to cast one vote, in person or by proxy, for each share held in that shareholder’s name on the books of BMRC as of the BMRC record date on all matters to be submitted to the vote of the shareholders. You may vote on-line, by phone, by mail or in person. If you wish to vote by mail, simply cast your vote on the proxy card that you will receive and sign and return it in the accompanying Business Reply Envelope. If you wish to vote in person at the special meeting, simply check the box on the proxy card indicating that you plan to attend the special meeting. To vote on-line or by phone, you will need your “shareholder control number,” which is located in the bottom right-hand corner of the proxy card and the web address and toll-free phone number, both of which are included on the proxy card. No other personal information will be required in order to vote in this manner.

Votes Required; Voting Agreements

The votes required for each proposal are as follows:

Approval of merger and merger agreement.    The affirmative votes of the holders of at least a majority of the issued and outstanding shares of BMRC common stock are required to approve this proposal. There are 13,051,274 shares of common stock issued and outstanding and entitled to vote at the special meeting. Therefore, the approval of the merger and merger agreement will require the affirmative vote of at least 6,525,638 shares.

Adjournment.    The affirmative vote of at least a majority of the shares of BMRC common stock present in person or represented by proxy and voting at the special meeting (which shares voting affirmatively also constitute at least a majority of the required quorum) is required to approve this proposal.

As of the BMRC record date, BMRC’s directors owned 372,656 shares of BMRC common stock, representing 2.9% of BMRC’s issued and outstanding shares of common stock. Pursuant to voting agreements more fully described under the section “Joint Proposal 1 — The Merger — Shareholder Agreements,” each of BMRC’s directors as of the date of the merger agreement has agreed to vote his or her shares of BMRC common stock “FOR” approval of the merger and merger agreement. A copy of the form of voting agreement is attached as Exhibit A-2 to the merger agreement which is attached to this joint proxy statement/prospectus as Appendix A and is incorporated herein by this reference.

Voting of Proxies

Submitting Proxies

Whether or not you plan to attend the special meeting, we urge you to complete, sign and date the enclosed proxy card and to return it promptly in the envelope provided. Returning the proxy card will not affect your right to attend the special meeting and vote. Instructions for all voting can be found on the proxy card included with this joint proxy statement/prospectus.

BMRC shareholders who hold their shares in “street name” (that is, through a broker or other nominee) must vote their shares through the broker or other nominee. You should receive a form from your broker or other nominee asking how you want to vote your shares. Follow the instructions on that form to give voting instructions to your broker or other nominee. You may also vote over the Internet or by telephone if your shares are held in street name and your broker or other nominee has made provisions for such voting.

If you properly fill in your proxy card and send it to us in time to vote, your “proxy holders” (the individuals named on your proxy card) will vote your shares as you have directed. If you sign the proxy card but do not make specific choices, your proxy holders will vote your shares as recommended by the board of directors as follows:

“FOR” the approval of the merger and merger agreement; and

“FOR” the approval of any adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes in favor of the merger and merger agreement or for any other legally permissible purpose.

No other matter may be presented at the special meeting.

Revoking Proxies

BMRC shareholders who hold their shares in certificate form may revoke their proxies at any time before the time their proxies are voted at the special meeting by: (i) filing with the Corporate Secretary of BMRC an instrument revoking it or a duly executed proxy bearing a later date; or (ii) appearing and voting in person at the special meeting. Subject to such revocation, shares represented by a properly executed proxy received in time for the special meeting will be voted by the proxy holders in accordance with the instructions on the proxy. IF NO INSTRUCTION IS SPECIFIED WITH RESPECT TO A MATTER TO BE ACTED UPON, THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS LISTED ON THE PROXY. IF ANY OTHER BUSINESS IS PROPERLY PRESENTED AT THE SPECIAL MEETING, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF BMRC’S BOARD OF DIRECTORS.

Written notices of proxy revocations must be sent so that they will be received before the taking of the vote at the special meeting as follows:

Bank of Marin Bancorp
504 Redwood Blvd., Suite 100
Novato, California 94947
Attention: Nancy Rinaldi Boatright, Corporate Secretary

A shareholder who has instructed a broker or other nominee to vote his or her shares must follow directions received from his or her broker or other nominee in order to change those instructions.

Abstentions and Broker Non-Votes

Proxies marked as abstaining on any matter to be acted upon by shareholders will be treated as present at the meeting for purposes of determining a quorum but will not be counted as votes cast “FOR” or “AGAINST” any proposal. However, because the proposal to approve the merger and merger agreement requires the affirmative vote of a majority of BMRC’s issued and outstanding shares of common stock, an abstention will have the same effect as a vote “AGAINST” the proposal.

Under the rules that govern brokers who are voting with respect to shares held in street name, brokers or other nominees have the discretion to vote such shares on routine matters, but not on non-routine matters. At the special meeting, the proposal to approve the merger and merger agreement and the proposal to adjourn or postpone the meeting to solicit additional votes in favor of the merger agreement are non-routine matters. Consequently, failure to provide instructions to your bank, broker or other nominee on how to vote will result in your shares not being counted as represented for purposes of establishing a quorum at the BMRC special meeting. THEREFORE, IF A SHAREHOLDER FAILS TO INSTRUCT HIS OR HER BROKER OR NOMINEE AS TO HOW TO VOTE HIS OR HER SHARES OF BMRC STOCK, THE BROKER OR OTHER NOMINEE MAY NOT VOTE THE SHARES “FOR” APPROVAL OF THE MERGER AND MERGER AGREEMENT OR “FOR” THE PROPOSAL TO ADJOURN THE SPECIAL MEETING TO SOLICIT ADDITIONAL VOTES WITHOUT THE SHAREHOLDER’S SPECIFIC DIRECTION. A “broker non-vote” occurs when the broker does not vote on a particular proposal because the broker does not receive instructions from the beneficial owner and does not have discretionary authority. Because the proposal to approve the merger and merger agreement requires the affirmative vote of a majority of BMRC’s issued and outstanding shares of common stock, a broker non-vote will have the same effect as a vote “AGAINST” the proposal to approve the merger and merger agreement. The adjournment proposal requires a vote that satisfies two criteria: (i) the affirmative vote of a majority of the shares represented and voting at a duly held meeting at which a quorum is present, and (ii) the shares voting affirmatively must also constitute at least a majority of the required quorum. Your bank, broker or other nominee does not have discretionary authority to vote your shares on the special meeting proposals without your instructions. Consequently, failure to provide instructions to your bank, broker or other nominee on how to vote will result in your shares not being represented at the special meeting. Accordingly, for purposes of the adjournment proposal, failure to provide instructions to vote your shares will not affect the outcome under clause (i), which recognizes only actual votes cast. However, failure to provide instructions to vote your shares will affect the outcome under clause (ii) if the number of shares voting affirmatively at the special meeting, though a majority of the shares represented and voted, does not constitute a majority of the required quorum. Therefore, it is VERY IMPORTANT that you return voting instructions to your broker or nominee. If you wish to be represented you must vote by completing the information which is sent to you by your broker or nominee.

Other Matters

Under California law, no other business may be conducted at the special meeting.

Solicitation of Proxies

The Board of Directors is soliciting the proxies for the special meeting. BMRC will pay for the cost of solicitation of proxies. In addition to solicitation by mail, BMRC’s directors, officers and employees may also solicit proxies from shareholders by telephone, email, facsimile, or in person. BMRC will not pay any additional compensation to these directors, officers or employees for these activities, but may reimburse them for reasonable out-of-pocket expenses. BMRC has engaged Morrow Sodali to assist in the solicitation of proxies for the special meeting. BMRC estimates that it will pay Morrow Sodali a fee of approximately $30,000, will reimburse Morrow Sodali for reasonable out-of-pocket expenses and will indemnify Morrow Sodali and its affiliates against certain claims, liabilities, losses, damages and expenses.

Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries to send the proxy materials to beneficial owners. BMRC will, upon request, reimburse those brokerage houses and custodians for their reasonable expenses in so doing.

THE AMRB SPECIAL MEETING

General

This joint proxy statement/prospectus is being provided to AMRB shareholders as part of a solicitation of proxies by the board of directors for use at the special meeting and at any adjournments or postponements of the special meeting. This joint proxy statement/prospectus provides AMRB shareholders with important information about the special meeting and should be read carefully in its entirety.

Date, Time and Place of the AMRB Special Meeting

The AMRB special meeting will be held at the Homewood Suites by Hilton, 10700 White Rock Road, Rancho Cordova, CA 95670, on July 28, 2021, at 3:00 p.m. (local time).

Record Date for the AMRB Special Meeting; Shares Entitled to Vote

Only holders of record of AMRB common stock at the close of business on June 9, 2021 which is the record date for the special meeting (referred to as the “AMRB record date”), are entitled to receive notice of and to vote at the meeting. On the record date, AMRB had 5,980,323 shares of its common stock issued, outstanding and eligible to vote at the special meeting.

Quorum

A majority of the shares of AMRB common stock issued and outstanding and voting on the record date must be represented in person or by proxy at the special meeting in order for a quorum to be present for purposes of transacting business. Proxies marked as abstaining on any matter to be acted upon by shareholders will be treated as present at the meeting for purposes of determining a quorum but will not be counted as votes cast on such matters. If there is no quorum at the special meeting, the affirmative vote of at least a majority of the votes present in person or represented by proxy at the special meeting may adjourn the special meeting to another date.

Purposes of the AMRB Special Meeting

The AMRB special meeting is being held for the following purposes:

Recommendation of the AMRB Board of Directors

The board of directors of AMRB unanimously recommends that the AMRB shareholders vote:

“FOR” the approval of the merger and merger agreement;

“FOR” the approval of any adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes in favor of the merger and merger agreement or for any other legally permissible purpose; and

“FOR” approval, on an advisory (non-binding) basis, of the compensation to be paid to the NEO’s of AMRB in connection with the merger.

The board of directors unanimously approved the merger agreement and the merger and determined that the merger is in the best interests of AMRB and its shareholders. See “Joint Proposal 1 — The Merger — Background of the Transaction and AMRB’s Reasons for the Merger” and “Recommendation of the AMRB Board of Directors.”

In considering the recommendation of the board of directors with respect to the merger, AMRB shareholders should be aware that some of AMRB’s directors and executive officers have interests that are different from, or in addition to, the interests of AMRB shareholders more generally. See “Joint Proposal 1 — The Merger — Interests of Certain AMRB Officers and Directors in the Merger.”

Number of Votes; Voting

Each holder of AMRB common stock is entitled to cast one vote, in person or by proxy, for each share held in that shareholder’s name on the books of AMRB as of the AMRB record date on all matters to be submitted to the vote of the shareholders. You may vote on-line, by phone, by mail or in person. If you wish to vote by mail, simply cast your vote on the proxy card that you will receive and sign and return it in the accompanying Business Reply Envelope. If you wish to vote in person at the special meeting, simply check the box on the proxy card indicating that you plan to attend the special meeting. To vote on-line or by phone, you will need your “shareholder control number,” which is located in the bottom right-hand corner of the proxy card and the web address and toll-free phone number, both of which are included on the proxy card. No other personal information will be required in order to vote in this manner.

Votes Required; Voting Agreements

The votes required for each proposal are as follows:

Approval of merger and merger agreement.    The affirmative votes of the holders of at least a majority of the issued and outstanding shares of AMRB common stock are required to approve this proposal. There are 5,980,323 shares of common stock issued and outstanding and entitled to vote at the special meeting. Therefore, the approval of the merger and merger agreement will require the affirmative vote of at least 2,990,163 shares.

Adjournment.    The affirmative vote of at least a majority of the shares of AMRB common stock present in person or represented by proxy and voting (which shares voting affirmatively also constitute at least a majority of the required quorum) at the special meeting is required to approve this proposal.

Advisory compensation vote.    The affirmative vote of at least a majority of the shares of AMRB common stock present in person or represented by proxy and voting at the special meeting (which shares voting affirmatively also constitute at least a majority of the required quorum) is required to approve this proposal.

As of the AMRB record date, AMRB’s directors owned 484,731 shares of AMRB common stock, representing 8.1% of AMRB’s issued and outstanding shares of common stock. Pursuant to voting agreements more fully described under the section “Joint Proposal 1 — The Merger — Shareholder Agreements,” each of AMRB’s directors has agreed to vote his or her shares of AMRB common stock “FOR” approval of the merger and merger agreement. A copy of the form of voting agreement is attached as Exhibit A-1 to the merger agreement which is attached to this joint proxy statement/prospectus as Appendix A and is incorporated herein by this reference.

Voting of Proxies

Submitting Proxies

Whether or not you plan to attend the special meeting, we urge you to complete, sign and date the enclosed proxy card and to return it promptly in the envelope provided. Returning the proxy card will not affect your right to attend the special meeting and vote. Instructions for all voting can be found on the proxy card included with this joint proxy statement/prospectus.

AMRB shareholders who hold their shares in “street name” (that is, through a broker or other nominee) must vote their shares through the broker or other nominee. You should receive a form from your broker or other nominee asking how you want to vote your shares. Follow the instructions on that form to give voting instructions to your broker or other nominee. You may also vote over the Internet or by telephone if your shares are held in street name and your broker or other nominee has made provisions for such voting.

If you properly fill in your proxy card and send it to us in time to vote, your “proxy holders” (the individuals named on your proxy card) will vote your shares as you have directed. If you sign the proxy card but do not make specific choices, your proxy holders will vote your shares as recommended by the board of directors as follows:

“FOR” the approval of the merger and merger agreement;

“FOR” the approval of any adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes in favor of the merger and merger agreement or for any other legally permissible purpose; and

“FOR” approval on an advisory basis of the compensation to be paid to the AMRB NEO’s in connection with the merger.

No other matter may be presented at the special meeting.

If any other matter is presented, the proxy holders will vote in accordance with the recommendation of the board of directors. At the time this joint proxy statement/prospectus went to press, AMRB did not know of any other matters which needed to be acted on at the special meeting, other than those discussed in this joint proxy statement/prospectus.

Revoking Proxies

AMRB shareholders who hold their shares in certificate form may revoke their proxies at any time before the time their proxies are voted at the special meeting by: (i) filing with the Corporate Secretary of AMRB an instrument revoking it or a duly executed proxy bearing a later date; or (ii) appearing and voting in person at the special meeting. Subject to such revocation, shares represented by a properly executed proxy received in time for the special meeting will be voted by the proxy holders in accordance with the instructions on the proxy. IF NO INSTRUCTION IS SPECIFIED WITH RESPECT TO A MATTER TO BE ACTED UPON, THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS LISTED ON THE PROXY. IF ANY OTHER BUSINESS IS PROPERLY PRESENTED AT THE SPECIAL MEETING, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF AMRB’S BOARD OF DIRECTORS.

Written notices of proxy revocations must be sent so that they will be received before the taking of the vote at the special meeting as follows:

American River Bankshares
3100 Zinfandel Drive, Suite 450
Rancho Cordova, CA 95670
Attention: Kimberly A. Box, Corporate Secretary

A shareholder who has instructed a broker or other nominee to vote his or her shares must follow directions received from his or her broker or other nominee in order to change those instructions.

Abstentions and Broker Non-Votes

Proxies marked as abstaining on any matter to be acted upon by shareholders will be treated as present at the meeting for purposes of determining a quorum but will not be counted as votes cast “FOR” or “AGAINST” any proposal. However, because the proposal to approve the merger and merger agreement requires the affirmative vote of a majority of AMRB’s issued and outstanding shares of common stock, an abstention will have the same effect as a vote “AGAINST” the proposal.

Under the rules that govern brokers who are voting with respect to shares held in street name, brokers have the discretion to vote such shares on routine matters, but not on non-routine matters. At the special meeting, the proposal to approve the merger and merger agreement, the advisory vote on AMRB NEO compensation and the proposal to adjourn the meeting to solicit additional proxies in favor of the merger is considered a non-routine matter. THEREFORE, IF A SHAREHOLDER FAILS TO INSTRUCT HIS OR HER BROKER OR NOMINEE AS TO HOW TO VOTE HIS OR HER SHARES OF AMRB STOCK, THE BROKER OR OTHER NOMINEE MAY NOT VOTE THE SHARES (i) “FOR” APPROVAL OF THE MERGER AND MERGER AGREEMENT, (ii) “FOR” THE PROPOSAL TO ADJOURN THE MEETING TO SOLICIT ADDITIONAL VOTES IN FAVOR OF THE MERGER OR (III) “FOR” THE ADVISORY VOTE ON AMRB NEO COMPENSATION WITHOUT THE SHAREHOLDER’S SPECIFIC DIRECTION. A “broker non-vote” occurs when the broker does not vote on a particular proposal because the broker does not receive instructions from the beneficial owner and does not have discretionary authority. Because the proposal to approve the merger and merger agreement requires the affirmative vote of a majority of AMRB’s issued and outstanding shares of common stock, a broker non-vote will have the same effect as a vote “AGAINST” the proposal to approve the merger and merger agreement. Therefore, it is VERY IMPORTANT that you return voting instructions to your broker or nominee.

If you wish to be represented you must vote by completing the information which is sent to you by your broker or nominee. The adjournment proposal and the advisory vote on AMRB NEO compensation requires a vote that satisfies two criteria: (i) the affirmative vote of a majority of the shares represented and voting at a duly held meeting at which a quorum is present, and (ii) the shares voting affirmatively must also constitute at least a majority of the required quorum. Your bank, broker or other nominee does not have discretionary authority to vote your shares on the special meeting proposals without your instructions. Consequently, failure to provide instructions to your bank, broker or other nominee on how to vote will result in your shares not being represented at the special meeting. Accordingly, for purposes of the adjournment proposal and the advisory vote on AMRB NEO compensation, failure to provide instructions to vote your shares will not affect the outcome under clause (i), which recognizes only actual votes cast. However, failure to provide instructions to vote your shares will affect the outcome under clause (ii) if the number of shares voting affirmatively at the special meeting, though a majority of the shares represented and voted, does not constitute a majority of the required quorum. Therefore, it is VERY IMPORTANT that you return voting instructions to your broker or nominee. If you wish to be represented you must vote by completing the information which is sent to you by your broker or nominee.

Dissenters’ Rights

In connection with the merger, under the CGCL, AMRB shareholders are not entitled to exercise dissenters’ rights.

Other Matters

AMRB management is not aware of any other business that will be conducted at the special meeting.

Solicitation of Proxies

The Board of Directors is soliciting the proxies for the special meeting. AMRB will pay for the cost of solicitation of proxies. In addition to solicitation by mail, AMRB’s directors, officers and employees may also solicit proxies from shareholders by telephone, email, facsimile, or in person. AMRB will not pay any additional compensation to these directors, officers or employees for these activities, but may reimburse them for reasonable out-of-pocket expenses. AMRB has engaged Georgeson to assist in the solicitation of proxies for the special meeting. AMRB estimates that it will pay Georgeson a fee of approximately $14,000, will reimburse Georgeson for reasonable out-of-pocket expenses and will indemnify Georgeson and its affiliates against certain claims, liabilities, losses, damages and expenses.

Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries to send the proxy materials to beneficial owners. AMRB will, upon request, reimburse those brokerage houses and custodians for their reasonable expenses in so doing.

JOINT PROPOSAL 1 — THE MERGER

The following information describes the material aspects of the merger and merger agreement. This description does not purport to be complete and is qualified in its entirety by reference to the appendices to this joint proxy statement/prospectus, including the merger agreement which is attached as Appendix A. Shareholders of BMRC and AMRB should carefully read the appendices in their entirety. The use of the term “joint proposal” in this proxy statement/prospective refers to the respective proposals by each of AMRB and BMRC on the merger agreement and the adjournment postponement of the respective meetings to solicit additional votes on the merger agreement, but for avoidance of doubt each of the company’s shareholders are voting separately and not together, and each of the company’s shareholders must separately approve the proposals in order for the proposals to be approved at the respective special meetings.

Structure of the Merger

Pursuant to the terms and conditions set forth in the merger agreement, AMRB will be acquired by BMRC in a transaction in which AMRB will merge with and into BMRC, with BMRC as the surviving corporation, which is referred to as the merger. Immediately following consummation of the merger, American River Bank will be merged with and into Bank of Marin, with Bank of Marin as the surviving institution, which is referred to as the bank merger. Following consummation of the bank merger, Bank of Marin intends to continue to operate all of the branches acquired from American River Bank.

Following the consummation of the merger, BMRC’s articles of incorporation and bylaws as amended and as in effect immediately prior to the merger will continue as the governing corporate documents of BMRC. The directors and executive officers of BMRC immediately prior to the merger will continue as the directors and executive officers of BMRC after the merger, in each case, until their respective successors are duly elected or appointed and qualified. In addition, two current member of AMRB’s board of directors will be added to the boards of directors of BMRC and Bank of Marin at the time of the merger.

Background of the Merger

Over the last several years, AMRB’s board of directors and executive management have reviewed and assessed various strategic opportunities potentially available to AMRB. These discussions have focused on, among other things, various options with the goal of enhancing long-term value for all AMRB’s shareholders. As part of this ongoing process, AMRB’s board of directors and management, together with its financial advisor, have reviewed a stand-alone strategy, the costs and benefits associated with a strategic transaction, the business and regulatory environment facing financial institutions generally and AMRB in particular, as well as conditions and ongoing consolidation in the financial services industry, including the challenges posed to banks of AMRB’s size operating principally in Northern California. Furthermore, AMRB has on occasion been approached by various financial institutions to discuss the potential of combining organizations and AMRB has approached other entities about acquiring them.

BMRC’s management and board of directors also regularly reviews its business strategies and opportunities. Over the last several years, BMRC has sought to augment its organic growth through targeted acquisitions and completed three prior mergers. A combined strategy of organic growth and selective acquisitions is intended to enhance long-term franchise value for BMRC and thereby also increase shareholder value for BMRC shareholders.

On December 18, 2020, Mr. David E. Ritchie, Jr., Chief Executive Officer of AMRB, received a call from Russ Colombo, Chief Executive Officer of BMRC expressing a general interest in potentially acquiring AMRB.

On January 8, 2021, Mr. Ritchie and Mr. Chet Fite, Chairman of AMRB, discussed mergers and acquisitions activity generally and BMRC’s interest in particular. Mr. Ritchie and Mr. Fite called a meeting of AMRB’s mergers and acquisitions committee to discuss the climate for a merger and BMRC’s interest (“M&A Committee”).

On January 13, 2021, Mr. Ritchie reached out to a representative of Piper Sandler (“Piper Sandler” or “Piper”) about the upcoming M&A Committee Meeting on January 14th and to invite Piper Sandler to attend. On January 14, 2021, a meeting of the M&A Committee was held with a representative of Piper Sandler to discuss whether to pursue additional conversations with BMRC. The M&A Committee decided that Mr. Ritchie and Mr. Fite should further engage with Mr. Colombo so the two could learn more about their respective institutions.

On January 22, 2021, Mr. Fite, Mr. Ritchie and Mr. Colombo discussed over the phone their respective banks and decided to enter into a mutual confidentiality agreement to permit further discussions between the two institutions and to arrange for a call among each institutions’ respective Chairmen and CEOs. On January 22, 2021, AMRB and BMRC executed a mutual confidentiality agreement and AMRB began to provide initial due diligence materials to BMRC.

On January 28, 2021, Mr. Ritchie and Mr. Colombo spoke about the agenda for the February 5th call with their respective Chairmen.

On February 5, 2021, a call was held with Messrs. Fite, Ritchie, Colombo and Brian Sobel, Chairman of BMRC. The parties discussed the possibility of a strategic combination between the two institutions and concluded that BMRC should deliver an Indication of Interest letter by February 12th if it wished to pursue a potential strategic transaction.

On February 8, 2021, members of BMRC’s M&A Committee met to discuss a potential offer to AMRB. Representatives of KBW, financial advisor to BMRC, presented background materials on AMRB and financial analysis that would aid in a discussion of a potential offer. Following a robust discussion, the M&A Committee recommended that a potential offer should be considered by the whole board, which met on February 11, 2021. After receiving some additional information from Piper Sandler, KBW updated its financial analysis for the Board’s consideration.

On February 11, 2021, BMRC addressed a written indication of interest to the Board of Directors, c/o Piper Sandler, AMRB’s financial advisor (the “Original LOI”), offering to acquire all of the outstanding shares of AMRB through a merger with BMRC followed immediately thereafter by a merger of their respective subsidiary banks. BMRC offered 0.5546 shares of BMRC common stock in exchange for each share of AMRB’s common stock, representing an implied transaction value of $20.25 per share of AMRB’s common stock based on BMRC’s closing price on February 11, 2021, or $121.1 million in the aggregate. The Original LOI also proposed various conditions to closing, including voting agreements from directors and certain shareholders and the receipt of consents from landlords for AMRB’s leased branches.

On February 12, 2021, a conference call was held with AMRB’s M&A Committee and the representative of Piper to review the Original LOI. The AMRB M&A Committee scheduled another meeting for February 16, 2021 to further discuss the Original LOI.

On February 16, 2021, representatives of Piper and Manatt, Phelps & Phillips, LLP (“Manatt”), AMRB’s legal advisor, met with the AMRB M&A committee to review the Original LOI. In addition, Piper provided a presentation to the M&A committee reviewing the principal terms of the Original LOI, financial aspects of the proposal, and alternative strategic options including remaining independent and other potential transaction partners who could acquire AMRB. The M&A committee resolved to review the Original LOI with AMRB’s Board of Directors.

On February 17, 2021, AMRB’s Board of Directors met with representatives of Piper and Manatt to review the Original LOI. Manatt provided the Board of Directors with an overview of its fiduciary duties and engaged in a discussion with members of the Board. In addition, Piper provided a presentation to the Board regarding the principal terms of the Original LOI, financial aspects of the proposal, and alternative strategic options including remaining independent and other potential transaction partners who could acquire AMRB. The Board determined to move ahead and continue to negotiate the Original LOI with BMRC with an objective of improving certain terms including the exchange ratio. The Board also elected to create a strategic committee consisting of the same board members as the M&A Committee, other than Mr. Ritchie, to continue to assist in evaluating the strategic transaction with BMRC.

Between February 18, 2021 and February 25, 2021, representatives of AMRB and Piper continued to engage with representatives of BMRC and KBW, to discuss the respective companies and the terms of the Original LOI, including improving the exchange ratio proposed by BMRC to a level that was acceptable to AMRB.

On February 24, 2021, BMRC held a special board meeting to consider revising its offer to AMRB. Representatives of KBW and Stuart | Moore | Staub, counsel to BMRC, were present. KBW representatives discussed some of the changes in transaction assumptions and discussed conversations they had with representatives from Piper Sandler in regard to AMRB pricing expectations. With guidance from the Board, representatives of KBW continued to have pricing discussions with Piper Sandler on February 24th and 25th and continued to compare assumptions driving pricing. After receiving additional information from Piper Sandler, representatives of KBW discussed with management of BMRC updates to assumptions including transaction expenses, cost savings and real estate valuation and other purchase accounting marks. On February 26, 2021, BMRC held a special board meeting and the directors authorized its Chairman and CEO to submit a revised LOI (the “Revised LOI”), which was delivered to AMRB that afternoon, proposing a higher exchange ratio of 0.575 shares of BMRC common stock for each share of Company stock, representing an implied transaction value of $21.72 per share based on the closing price of BMRC common stock on February 25, 2021, or $129.9 million in the aggregate. In addition, BMRC removed the requirements that certain shareholders (other than the directors) agree to vote in favor of the transaction and that landlords consent to the transaction.

On March 1, 2021, representatives of Piper and Manatt met with AMRB’s strategic committee together with AMRB management to review the Revised LOI. Piper and Manatt reviewed with the strategic committee a summary of the Revised LOI, including the principal changes from the Original LOI, including the higher exchange ratio per share offered to AMRB’s shareholders and the resulting implied value based on a range of BMRC stock prices. Piper further reviewed with the strategic committee financial aspects of the Revised LOI and the acquisition history of BMRC. The strategic committee engaged in a discussion with Piper and Manatt regarding the Revised LOI. Following discussion, the strategic committee unanimously recommended that the Board of AMRB approve the Revised LOI and authorize negotiations of the definitive terms of the merger.

On March 1, 2021, the Board of Directors of AMRB held a special meeting together with AMRB management and representatives of Piper and Manatt to review the Revised LOI. Representatives of Piper and Manatt reviewed the Revised LOI with the Board, including the higher per share exchange ratio offered as compared to the Original LOI and the resulting merger consideration. In addition, representatives of Piper again reviewed financial aspects of the Revised LOI. Following a discussion with the Board, the Board authorized the execution of the Revised LOI with BMRC and authorized management and the strategic committee to negotiate the definitive terms of the merger for presentation to the Board. The Revised LOI included an exclusivity term of 45 calendar days subject to extension by BMRC of an additional 30 calendar days subject to BMRC’s completion of due diligence and no proposed material change in the exchange ratio.

Between March 1, 2021 and April 16, 2021, representatives of Piper, KBW, BMRC and AMRB exchanged due diligence requests (including reverse diligence requests) and began populating data rooms with requested information. In addition, on March 24th and 25th, 2021, representatives of AMRB met directly with representatives of BMRC to review various aspects of AMRB’s business, including its retail, information technology, credit administration and loan portfolio business as well as its accounting, compliance and human resources functions.

On March 17, 2021, a regular meeting of the AMRB Board was held. Mr. Ritchie provided an update on the status of the merger transaction, including the due diligence process and the projected timeline.

On March 18, 2021 and March 19, 2021, regular meetings of the BMRC Board were held at which Mr. Colombo provided updates on the status of the merger transaction, including the due diligence process and the projected timeline to the BMRC Board.

On March 26, 2021, representatives of Stuart | Moore | Staub delivered the initial draft of the Merger Agreement to Manatt. Between March 26, 2021 and April 15, 2021, representatives of the institutions exchanged comments and drafts of the Agreement and various ancillary agreements, including voting agreements for AMRB’s directors and forms of noncompetition/nonsolicitation agreements with AMRB’s directors and executive officers.

Ongoing discussions were held with the respective management teams of BMRC and AMRB. In addition, on April 13, 2021, representatives of AMRB and Piper met with representatives of BMRC and KBW to review additional aspects of BMRC’s business as part of a reverse due diligence session, including an update on performance of BMRC for the first quarter of 2021. BMRC also made available additional reverse due diligence materials which were reviewed by AMRB and its representatives.

On April 16, 2021, BMRC held a special meeting of its board of directors via video teleconference to evaluate the merger and consider whether to approve the merger agreement. Representatives of KBW reviewed with the BMRC board of directors the financial aspects of the proposed transaction, including the financial analyses it had conducted in connection with preparation of its opinion, and delivered its written opinion, dated April 16, 2021, to the BMRC board of directors to the effect that, as of the date of the opinion and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in such opinion, the exchange ratio in the proposed transaction was fair, from a financial point of view, to BMRC. BMRC’s legal counsel, Stuart | Moore | Staub, presented a detailed summary of the merger agreement and discussed the resolutions that the directors would be asked to vote on at the meeting and briefed the BMRC board of directors on its fiduciary duties. After discussion, the BMRC board of directors voted unanimously to approve and adopt the merger agreement and to present the merger and merger agreement to the BMRC shareholders with the BMRC board of directors’ unanimous recommendation for approval.

On the morning of April 16, 2021, a special meeting of the strategic committee was held together with AMRB management. Representatives of Manatt and Piper provided an overview of the Agreement, the various discussions held with management and representatives from BMRC and reviewed and summarized the principal terms of the merger agreement and other key ancillary documents, including the non-competition, non-solicitation and voting agreements. The presentation included a summary and discussion regarding, among other provisions, the merger structure, the parties’ representations and warranties under the merger agreement, the no solicitation provisions and other covenants in the merger agreement, including those covenants designed to preserve the existing form of AMRB’s business relationships pending the closing of the merger, the key conditions to the closing, the parties’ termination rights and the circumstances under which the termination fee (which was negotiated down by AMRB to 4% of aggregate deal value as of the execution date of the Agreement) is payable by AMRB to BMRC under the merger agreement in connection with AMRB’s ability to accept a proposal superior to that offered by BMRC, and shareholder voting agreements from BMRC directors. Representatives of Manatt and Piper as well as AMRB’s management then answered questions from the strategic committee members regarding the merger transaction documents.

In addition, representatives of Piper presented a financial presentation and indicated that it was prepared to provide AMRB’s board with its opinion that the exchange ratio was fair to AMRB’s shareholders from a financial point of view. Following the presentations and further discussions, the strategic committee unanimously recommended that the Board of Directors of AMRB approve the merger agreement in substantially the form and on the terms presented to the strategic committee.

On the afternoon of April 16, 2021 a special joint meeting of AMRB and AMRB Bank’s board of directors was held. Representatives of Manatt and Piper provided an overview of the Agreement, the various discussions held with management and representatives from BMRC and reviewed with the Boards the principal terms of the Agreement and other ancillary documents, including the non-competition, non-solicitation and the voting agreements. The presentation included a summary and discussion regarding, among other provisions, the merger structure, the treatment of continuing and departing employees, the parties’ representations and warranties under the merger agreement, the no solicitation provisions and other covenants in the merger agreement, including those designed to preserve AMRB’s franchise pending the closing of the merger, the key conditions to the closing, the parties’ termination rights and the circumstances under which the termination fee (which was negotiated down by AMRB to 4% of aggregate deal value as of the execution date of the Agreement), is payable by AMRB to BMRC under the merger agreement in connection with AMRB’s ability to accept a proposal superior to that offered by BMRC, and the receipt of shareholder voting agreements from BMRC directors. Representatives of Manatt and Piper as well as AMRB’s CEO then answered questions from the Board regarding the merger transaction documents. In addition, representatives of Piper presented a financial presentation and rendered Piper’s oral fairness opinion (which was subsequently confirmed in writing on April 16, 2021), to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Piper as set forth in such opinion, that the exchange ratio was fair to holders of AMRB common stock from a financial point of view.

Following the presentations and further discussions, the Board of Directors of AMRB and AMRB Bank unanimously approved the merger agreement and the transactions contemplated thereby. On the afternoon of April 16, 2021, AMRB and BMRC executed the merger agreement.

BMRC’s Reasons for the Merger and Recommendation of the BMRC Board of Directors

In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the BMRC board of directors evaluated the merger agreement in consultation with BMRC senior management, as well as BMRC’s legal counsel and financial advisor, and considered a number of factors, including the following:

The BMRC board of directors also considered the potential adverse consequences of, and risks associated with, the proposed merger, including:

The foregoing discussion of the information and factors considered by the BMRC board of directors is not intended to be exhaustive, but includes the material factors considered by the BMRC board of directors. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the BMRC board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The BMRC board of directors considered all these factors as a whole, including discussions with, and questioning of, BMRC’s senior management and BMRC’s advisors, and overall considered the factors to be favorable to, and to support its determination to approve entering into the merger agreement.

This explanation of BMRC’s reasons for the merger and other information presented in this section is forward-looking in nature and should be read in light of the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

BMRC’s board of directors realized that there can be no assurance about future results, including results expected or considered in the factors listed above, such as assumptions regarding enhanced business prospects, anticipated cost savings and earnings accretion/dilution. The BMRC board of directors concluded, however, that the potential positive factors outweighed the potential risks of completing the transaction.

For the reasons set forth above, the BMRC board of directors determined that the merger, the merger agreement and the transaction contemplated thereby are advisable and fair to and in the best interests of BMRC and its shareholders, and has approved the merger. The BMRC board of directors recommends that BMRC shareholders vote “FOR” Joint Proposal 1 — the merger agreement and merger, and “FOR” Joint Proposal 2 — the adjournment proposal.

AMRB’s Reasons for the Merger; Recommendation of the Merger by AMRB’s Board of Directors

AMRB’s board of directors has determined that the Merger is fair to and in the best interests of AMRB and its shareholders and, by the unanimous vote of all of the directors of AMRB, approved and adopted the merger agreement and the merger. ACCORDINGLY, THE AMRB BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ALL HOLDERS OF AMRB COMMON SHARES VOTE “FOR” THE MERGER PROPOSAL.

In reaching its decision to approve the merger agreement and the transactions contemplated thereby, AMRB’s board of directors evaluated the merger and the merger agreement in consultation with AMRB’s management and legal and financial advisors and determined that the merger was the best option reasonably available for its shareholders. AMRB’s board of directors also consulted with its legal counsel regarding its fiduciary duties.

In reaching its decision to approve the merger agreement and the merger, AMRB’s board of directors also considered a number of factors, including the following:

In addition, AMRB’s Board considered potential risks and potentially negative factors associated with the transactions contemplated by the merger, including the following:

This description of the information and factors considered by AMRB’s board of directors is not intended to be exhaustive, but is believed to include all material factors AMRB’s board of directors considered. In determining whether to approve and recommend the Agreement, AMRB’s board of directors did not assign any relative or specific weights to any of the foregoing factors, and individual directors may have weighed factors differently. After deliberating with respect to the merger and the merger agreement, considering, among other things, the reasons discussed above, AMRB’s board of directors approved the merger agreement and the merger as being in the best interests of AMRB and its shareholders, based on the total mix of information available to AMRB’s board of directors.

This explanation of AMRB’s reasons for the merger and other information presented in this section is forward-looking in nature and should be read in light of the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”

Based on the reasons stated, AMRB’s board of directors believes that the Merger is in the best interest of AMRB’s shareholders. The AMRB board of directors has unanimously approved the merger agreement and recommends that AMRB’s shareholders vote “FOR” approval of the merger agreement.

In addition, all of the members of AMRB’s board of directors have agreed to vote the shares of AMRB’s common stock over which they have voting authority in favor of the merger agreement.

Opinion of BMRC’s Financial Advisor

BMRC engaged KBW to render financial advisory and investment banking services to BMRC, including an opinion to the BMRC board as to the fairness, from a financial point of view, to BMRC of the exchange ratio in the proposed merger. BMRC selected KBW because KBW is a nationally recognized investment banking firm with substantial experience in transactions similar to the merger. As part of its investment banking business, KBW is continually engaged in the valuation of financial services businesses and their securities in connection with mergers and acquisitions.

As part of its engagement, representatives of KBW attended the meeting of the BMRC board held on April 16, 2021 at which the BMRC board evaluated the proposed merger. At this meeting, representatives of KBW reviewed the financial aspects of the proposed merger and rendered an opinion to the BMRC board of directors to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW as set forth in such opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to BMRC. The BMRC board approved the merger agreement at this meeting.

The description of the opinion set forth herein is qualified in its entirety by reference to the full text of the opinion, which is attached as Appendix B to this document and is incorporated herein by reference, and describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by KBW in preparing the opinion. For purposes of KBW’s opinion, the term “exchange ratio” referred to the ratio of 0.575 of a share of BMRC common stock for one share of AMRB common stock.

KBW’s opinion speaks only as of the date of the opinion. The opinion was for the information of, and was directed to, the BMRC board (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion addressed only the fairness, from a financial point of view, of the exchange ratio in the merger to BMRC. It did not address the underlying business decision of BMRC to engage in the merger or enter into the merger agreement or constitute a recommendation to the BMRC board in connection with the merger, and it does not constitute a recommendation to any holder of BMRC common stock or any shareholder of any other entity as to how to vote in connection with the merger or any other matter, nor does it constitute a recommendation as to how any such shareholder should vote with respect to the merger.

KBW’s opinion was reviewed and approved by KBW’s Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.

In connection with the opinion, KBW reviewed, analyzed and relied upon material bearing upon the financial and operating condition of BMRC and AMRB and bearing upon the merger, including, among other things:

KBW’s consideration of financial information and other factors that it deemed appropriate under the circumstances or relevant to its analyses included, among others, the following:

KBW also performed such other studies and analyses as it considered appropriate and took into account its assessment of general economic, market and financial conditions and its experience in other transactions, as well as its experience in securities valuation and knowledge of the banking industry generally. KBW also participated in discussions that were held by the managements of BMRC and AMRB regarding the past and current business operations, regulatory relations, financial condition and future prospects of their respective companies and such other matters as KBW deemed relevant to its inquiry.

In conducting its review and arriving at its opinion, KBW relied upon and assumed the accuracy and completeness of all of the financial and other information that was provided to it or that was publicly available and KBW did not independently verify the accuracy or completeness of any such information or assume any responsibility or liability for such verification, accuracy or completeness. KBW relied, with the consent of BMRC, upon the management of AMRB as to the reasonableness and achievability of the publicly available consensus “street estimates” of AMRB and the assumed AMRB long-term growth rates referred to above (and the assumptions and bases therefor), and KBW assumed that such information was reasonably prepared and represented, or in the case of the AMRB “street estimates” referred to above that such estimates are consistent with, the best currently available estimates and judgments of AMRB management and that the forecasts, projections and estimates reflected in such information would be realized in the amounts and in the time periods estimated. KBW further relied upon BMRC management as to the reasonableness and achievability of the publicly available consensus “street estimates” of BMRC, the assumed BMRC long-term growth rates, and the estimates regarding certain pro forma financial effects of the merger on BMRC (including, without limitation, the cost savings and related expenses expected to result or be derived from the merger), all as referred to above (and the assumptions and bases for all such information), and KBW assumed that all such information was reasonably prepared and represented, or in the case of the BMRC “street estimates” referred to above that such estimates are consistent with, the best currently available estimates and judgments of BMRC management and that such forecasts, projections and estimates reflected in such information would be realized in the amounts and in the time periods estimated.

It is understood that the portion of the foregoing financial information of BMRC and AMRB that was provided to and discussed with KBW was not prepared with the expectation of public disclosure and that all of the foregoing financial information, including the publicly available consensus “street estimates” of AMRB and BMRC, were based on numerous variables and assumptions that are inherently uncertain (including, without limitation, factors related to general economic and competitive conditions and, in particular, assumptions regarding the ongoing COVID-19 pandemic) and, accordingly, actual results could vary significantly from those set forth in such information. KBW assumed, based on discussions with the respective managements of BMRC and AMRB and with the consent of the BMRC board, that all such information provided a reasonable basis upon which KBW could form its opinion and KBW expressed no view as to any such information or the assumptions or bases therefor. Among other things, such information assumed that the ongoing COVID-19 pandemic could have an adverse impact on BMRC and AMRB. KBW relied on all such information without independent verification or analysis and did not in any respect assume any responsibility or liability for the accuracy or completeness thereof.

KBW also assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of either BMRC or AMRB since the date of the last financial statements of each such entity that were made available to KBW. KBW is not an expert in the independent verification of the adequacy of allowances for loan and lease losses and KBW assumed, without independent verification and with BMRC’s consent, that the aggregate allowances for loan and lease losses for BMRC and AMRB were adequate to cover such losses. In rendering its opinion, KBW did not make or obtain any evaluations or appraisals or physical inspection of the property, assets or liabilities (contingent or otherwise) of BMRC or AMRB, the collateral securing any of such assets or liabilities, or the collectability of any such assets, nor did KBW examine any individual loan or credit files, nor did KBW evaluate the solvency, financial capability or fair value of BMRC or AMRB under any state or federal laws, including those relating to bankruptcy, insolvency or other matters. Estimates of values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies or assets may actually be sold. Such estimates are inherently subject to uncertainty and should not be taken as KBW’s view of the actual value of any companies or assets.

KBW assumed, in all respects material to its analyses:

KBW assumed that the merger would be consummated in a manner that complies with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable federal and state statutes, rules and regulations. KBW was further advised by representatives of BMRC that BMRC relied upon advice from its advisors (other than KBW) or other appropriate sources as to all legal, financial reporting, tax, accounting and regulatory matters with respect to BMRC, AMRB, the merger and any related transaction (including the bank merger), and the merger agreement. KBW did not provide advice with respect to any such matters.

KBW’s opinion addressed only the fairness, from a financial point of view, as of the date of such opinion, of the exchange ratio in the merger to BMRC. KBW expressed no view or opinion as to any other terms or aspects of the merger or any term or aspect of any related transaction (including the bank merger), including without limitation, the form or structure of the merger or any such related transaction, any consequences of the merger or any related transaction to BMRC, its shareholders, creditors or otherwise, or any terms, aspects, merits or implications of any employment, consulting, voting, support, shareholder or other agreements, arrangements or understandings contemplated or entered into in connection with the merger, any such related transaction, or otherwise. KBW’s opinion was necessarily based upon conditions as they existed and would be evaluated on the date of the opinion and the information made available to KBW through the date of the opinion. There has been widespread disruption, extraordinary uncertainty and unusual volatility arising from the effects of the COVID-19 pandemic, including the effect of evolving governmental interventions and non-interventions. It is understood that subsequent developments may affect the conclusion reached in KBW’s opinion and that KBW did not and does not have an obligation to update, revise or reaffirm its opinion. KBW’s opinion did not address, and KBW expressed no view or opinion with respect to:

In performing its analyses, KBW made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, which are beyond the control of KBW, BMRC and AMRB. Any estimates contained in the analyses performed by KBW are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by these analyses. Additionally, estimates of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which such businesses or securities might actually be sold. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. In addition, KBW’s opinion was among several factors taken into consideration by the BMRC board in making its determination to approve the merger agreement and the merger. Consequently, the analyses described below should not be viewed as determinative of the decision of the BMRC board with respect to the fairness of the exchange ratio. The type and amount of consideration payable in the merger were determined through negotiation between BMRC and AMRB and the decision of BMRC to enter into the merger agreement was solely that of the BMRC board.

The following is a summary of the material financial analyses provided by KBW to the BMRC board in connection with its opinion. The summary is not a complete description of the financial analyses underlying the opinion or the presentation materials provided by KBW to the BMRC board, but summarizes the material analyses performed and provided in connection with such opinion. The financial analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex analytic process involving various determinations as to appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, KBW did not attribute any particular weight to any analysis or factor that it considered, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, KBW believes that its analyses and the summary of its analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the process underlying its analyses and opinion.

Implied Transaction Multiples.   For purposes of the financial analyses described below, KBW utilized an implied transaction value for the merger of $22.40 per outstanding share of AMRB common stock, or $134.1 million in the aggregate (inclusive of the implied value of AMRB stock options), based on the 0.575x exchange ratio in the proposed merger and the closing price of BMRC common stock on April 13, 2021. In addition to the financial analyses described below, KBW reviewed with the BMRC board for informational purposes, among other things, the following implied transaction multiples for the proposed merger (based on the implied transaction value for the merger of $22.40 per outstanding share of AMRB common stock) of 15.9x AMRB’s estimated calendar year 2021 earnings per share (“EPS”) and 17.1x AMRB’s estimated calendar year 2022 EPS taken from publicly available consensus “street estimates” for AMRB.

BMRC Selected Companies Analysis.   Using publicly available information, KBW compared the financial performance, financial condition and market performance of BMRC to 15 major exchange-traded banks headquartered in the Western United States (defined as Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming) with total assets between $1.0 billion and $5.0 billion. Merger targets, ethnic-focused banks, savings banks and thrifts were excluded from the selected companies.

The selected companies were as follows:

Heritage Commerce Corp
Altabancorp
Sierra Bancorp
BayCom Corp
Northrim BanCorp, Inc.
Central Valley Community Bancorp
First Western Financial, Inc.
California BanCorp
Coastal Financial Corporation
Bank of Commerce Holdings
Oak Valley Bancorp
First Financial Northwest, Inc.
Eagle Bancorp Montana, Inc.
Plumas Bancorp
United Security Bancshares

To perform this analysis, KBW used profitability and other financial information for the last 12 months (“LTM”) or the most recent completed fiscal quarter (“MRQ”) (or, in the case of dividend yield, most recent completed fiscal quarter annualized) ended December 31, 2020 or as of the end of such period and market price information as of April 13, 2021. KBW also used 2021 and 2022 EPS estimates taken from publicly available consensus “street estimates” for BMRC and the selected companies to the extent publicly available (consensus “street” estimates were not publicly available for three of the selected companies). Where consolidated holding company level financial data for BMRC and the selected companies was unreported, subsidiary bank level data was utilized to calculate ratios (subsidiary bank level data necessary to calculate Total Capital Ratio was also unreported for three of the selected companies). Certain financial data prepared by KBW, and as referenced in the tables presented below, may not correspond to the data presented in BMRC’s historical financial statements, or the data prepared by Piper Sandler presented under the section “Opinion of AMRB’s Financial Advisor” as a result of the different periods, assumptions and methods used by KBW to compute the financial data presented.

KBW’s analysis showed the following concerning the financial performance of BMRC and the selected companies:

KBW’s analysis showed the following concerning the financial condition of BMRC and the selected companies:

In addition, KBW’s analysis showed the following concerning the market performance of BMRC and the selected companies (excluding the impact of the LTM EPS multiple for one of the selected companies, which multiple was considered to be not meaningful because it was greater than 30.0x):

No company used as a comparison in the above selected companies analysis is identical to BMRC. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

AMRB Selected Companies Analysis.   Using publicly available information, KBW compared the financial performance, financial condition and market performance of AMRB to 12 major exchange-traded banks headquartered in the Western United States (defined as Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming) with total assets less than $2.0 billion. Merger targets, ethnic-focused banks, savings banks and thrifts were excluded from the selected companies.

The selected companies were as follows:

First Western Financial, Inc.
California BanCorp
Coastal Financial Corporation
Bank of Commerce Holdings
Oak Valley Bancorp
First Financial Northwest, Inc.
Eagle Bancorp Montana, Inc.
Plumas Bancorp
United Security Bancshares
Community West Bancshares
Summit State Bank
Sound Financial Bancorp, Inc.

To perform this analysis, KBW used profitability and other financial information for the LTM or MRQ (or, in the case of dividend yield, most recent completed fiscal quarter annualized) ended December 31, 2020 or as of the end of such period and market price information as of April 13, 2021. KBW also used 2021 and 2022 EPS estimates taken from publicly available consensus “street estimates” for AMRB and the selected companies to the extent publicly available (consensus “street” estimates were not publicly available for six of the selected companies). Where consolidated holding company level financial data for AMRB and the selected companies was unreported, subsidiary bank level data was utilized to calculate ratios (subsidiary bank level data necessary to calculate Total Capital Ratio was also unreported for three of the selected companies). Certain financial data prepared by KBW, and as referenced in the tables presented below, may not correspond to the data presented in AMRB’s historical financial statements, or the data prepared by Piper Sandler presented under the section “Opinion of AMRB’s Financial Advisor” as a result of the different periods, assumptions and methods used by KBW to compute the financial data presented.

KBW’s analysis showed the following concerning the financial performance of AMRB and the selected companies:

KBW’s analysis showed the following concerning the financial condition of AMRB and the selected companies:

In addition, KBW’s analysis showed the following concerning the market performance of AMRB and the selected companies (excluding the impact of the LTM EPS multiple for one of the selected companies, which multiple was considered to be not meaningful because it was greater than 30.0x):

No company used as a comparison in the above selected companies analysis is identical to AMRB. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Selected Transactions Analysis.   KBW reviewed publicly available information related to 14 U.S. bank transactions announced since January 1, 2020 with announced deal values between $75 million and $200 million.

The selected transactions were as follows:

For each selected transaction, KBW derived the following implied transaction statistics, in each case based on the transaction consideration value paid for the acquired company and using financial data based on the acquired company’s then latest publicly available financial statements prior to the announcement of the respective transaction:

KBW also reviewed the price per common share paid for the acquired company for the eight selected transactions involving publicly traded acquired companies as a premium/(discount) to the closing stock price of the acquired company one day prior to the announcement of the acquisition (expressed as a percentage and referred to as the one day market premium). The resulting transaction statistics for the selected transactions were compared with the corresponding transaction statistics for the proposed merger based on the implied transaction value for the merger of $22.40 per outstanding share of AMRB common stock and using historical financial information for AMRB as of or for the 12 months ended March 31, 2021 and the closing price of AMRB common stock on April 13, 2021.

The results of the analysis are set forth in the following table:

No company or transaction used as a comparison in the above selected transaction analysis is identical to AMRB or the proposed merger. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Relative Contribution Analysis.   KBW analyzed the relative standalone contribution of BMRC and AMRB to various pro forma balance sheet and income statement items and the combined market capitalization of the combined entity. This analysis did not include purchase accounting adjustments or cost savings. To perform this analysis, KBW used (i) balance sheet and income statement data for BMRC and AMRB for the quarter ended March 31, 2021, (ii) publicly available consensus “street estimates” for BMRC and AMRB, and (iii) market price information as of April 13, 2021. The results of KBW’s analysis are set forth in the following table, which also compares the results of KBW’s analysis with the implied pro forma ownership percentages of BMRC stockholders and AMRB shareholders in the combined company based on the 0.575x exchange ratio provided for in the merger agreement:

Financial Impact Analysis.   KBW performed a pro forma financial impact analysis that combined projected income statement and balance sheet information of BMRC and AMRB. Using (i) closing balance sheet estimates as of September 30, 2021 for BMRC and AMRB taken from publicly available consensus “street estimates”, (ii) publicly available quarterly consensus “street estimates” for 2021 Q2 to 2021 Q4 for BMRC and AMRB, (ii) publicly available calendar year 2022 EPS consensus “street estimates” for BMRC and AMRB, and (iv) pro forma assumptions (including, without limitation, the cost savings and related expenses expected to result from the merger and certain purchase accounting and other merger-related adjustments and restructuring charges assumed with respect thereto) provided by BMRC management, KBW analyzed the potential financial impact of the merger on certain projected financial results of BMRC. This analysis indicated the merger could be accretive to BMRC’s estimated 2022 EPS and dilutive to BMRC’s estimated tangible book value per share at closing as of September 30, 2021. Furthermore, the analysis indicated that, pro forma for the merger, each of BMRC’s tangible common equity to tangible assets ratio, Common Equity Tier 1 Ratio, Leverage Ratio, Tier 1 Capital Ratio, and Total Risk-Based Capital Ratio at closing as of September 30, 2021 could be lower. For all of the above analysis, the actual results achieved by BMRC following the merger may vary from the projected results, and the variations may be material.

BMRC Dividend Discount Model Analysis.   KBW performed a dividend discount model analysis of BMRC to estimate a range for the implied equity value of BMRC. In this analysis, KBW used publicly available consensus “street estimates” for BMRC and assumed long-term growth rates for BMRC provided by BMRC management, and assumed discount rates ranging from 10.0% to 14.0% based on KBW’s professional judgment. The range of values was derived by adding (i) the present value of implied future excess capital available for dividends that BMRC could generate over the period from March 31, 2021 through December 31, 2025 as a standalone company, and (ii) the present value of BMRC’s implied terminal value at the end of such period. KBW assumed that BMRC would maintain a tangible common equity to tangible assets ratio of 8.00% and would retain sufficient earnings to maintain that level. In calculating implied terminal values for BMRC, KBW applied a range of 13.0x to 19.0x BMRC’s estimated 2026 earnings based on KBW’s professional judgment. This dividend discount model analysis resulted in a range of implied values per share of BMRC common stock of $29.64 to $42.25.

The dividend discount model analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including asset and earnings growth rates, terminal values and discount rates. The foregoing dividend discount model analysis did not purport to be indicative of the actual values or expected values of BMRC.

AMRB Dividend Discount Model Analysis.   KBW performed a dividend discount model analysis of AMRB to estimate a range for the implied equity value of AMRB. In this analysis, KBW used publicly available consensus “street estimates” for AMRB and assumed long-term growth rates for AMRB provided by AMRB management, and assumed discount rates ranging from 10.0% to 14.0% based on KBW’s professional judgment. The range of values was derived by adding (i) the present value of implied future excess capital available for dividends that AMRB could generate over the period from March 31, 2021 through December 31, 2025 as a standalone company, and (ii) the present value of AMRB’s implied terminal value at the end of such period. KBW assumed that AMRB would maintain a tangible common equity to tangible assets ratio of 8.00% and would retain sufficient earnings to maintain that level. In calculating implied terminal values for AMRB, KBW applied a range of 11.0x to 15.0x AMRB’s estimated 2026 earnings based on KBW’s professional judgment. This dividend discount model analysis resulted in a range of implied values per share of AMRB common stock of $19.08 to $28.23.

The dividend discount model analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including asset and earnings growth rates, terminal values and discount rates. The foregoing dividend discount model analysis did not purport to be indicative of the actual values or expected values of AMRB or the pro forma combined entity.

Miscellaneous.   KBW acted as financial advisor to BMRC in connection with the proposed merger and did not act as an advisor to or agent of any other person. As part of its investment banking business, KBW is continually engaged in the valuation of bank and bank holding company securities in connection with acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for various other purposes. As specialists in the securities of banking companies, KBW has experience in, and knowledge of, the valuation of banking enterprises. KBW and its affiliates, in the ordinary course of its and their broker-dealer businesses (and further to existing sales and trading relationships between (i) BMRC and each of KBW and a KBW broker-dealer affiliate and (ii) AMRB and a KBW broker-dealer affiliate) may from time to time purchase securities from, and sell securities to, BMRC and AMRB. In addition, as a market maker in securities, KBW and its affiliates may from time to time have a long or short position in, and buy or sell, debt or equity securities of BMRC or AMRB for its and their own respective accounts and for the accounts of its and their respective customers and clients.

Pursuant to the KBW engagement agreement, BMRC agreed to pay a cash fee of $250,000 to KBW with the rendering of KBW’s opinion. In addition, BMRC will pay to KBW a cash fee of $1,000,000 upon the closing of the merger. BMRC also agreed to reimburse KBW for reasonable out-of-pocket expenses and disbursements incurred in connection with its retention and to indemnify KBW against certain liabilities relating to or arising out of KBW’s engagement or KBW’s role in connection therewith. Other than in connection with the present engagement, KBW has not provided investment banking or financial advisory services to BMRC during the past two years. In the past two years, KBW has not provided investment banking or financial advisory services to AMRB. KBW may in the future provide investment banking and financial advisory services to BMRC or AMRB and receive compensation for such services.

Opinion of AMRB’s Financial Advisor

AMRB retained Piper Sandler to act as financial advisor to AMRB’s board of directors in connection with AMRB’s consideration of a possible business combination. AMRB selected Piper Sandler to act as its financial advisor because Piper Sandler is a nationally recognized investment banking firm whose principal business specialty is financial institutions. In the ordinary course of its investment banking business, Piper Sandler is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

Piper Sandler acted as an independent financial advisor to AMRB’s board of directors in connection with the proposed merger and participated in certain of the negotiations leading to the execution of the merger agreement. At the April 16, 2021 meeting at which AMRB’s board of directors considered the merger, Piper Sandler delivered to the board of directors its oral opinion, which was subsequently confirmed in writing on April 16, 2021, to the effect that, as of such date, the exchange ratio was fair to the holders of AMRB’s common stock from a financial point of view. The full text of Piper Sandler’s opinion is attached as Appendix C to this joint proxy statement/prospectus. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Piper Sandler in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the full text of the opinion. Holders of AMRB common stock are urged to read the entire opinion carefully in connection with their consideration of the proposed merger.

Piper Sandler’s opinion was directed to the board of directors of AMRB in connection with its consideration of the merger and the merger agreement and does not constitute a recommendation to any shareholder of AMRB as to how any such shareholder should vote at any meeting of shareholders called to consider and vote upon the approval of the merger or the agreement and plan of reorganization. Piper Sandler’s opinion was directed only to the fairness, from a financial point of view, of the exchange ratio to the holders of AMRB common stock and did not address the underlying business decision of AMRB to engage in the merger, the form or structure of the merger or any other transactions contemplated in the agreement and plan of reorganization, the relative merits of the merger as compared to any other alternative transactions or business strategies that might exist for AMRB or the effect of any other transaction in which AMRB might engage. Piper Sandler also did not express any opinion as to the fairness of the amount or nature of the compensation to be received in the merger by any officer, director or employee of AMRB, or class of such persons, if any, relative to the amount of compensation to be received in the merger by any other shareholder. Piper Sandler’s opinion was approved by Piper Sandler’s fairness opinion committee.

In connection with its opinion, Piper Sandler reviewed and considered, among other things:

Piper Sandler also discussed with certain members of the senior management of AMRB and its representatives the business, financial condition, results of operations and prospects of AMRB and held similar discussions with certain members of the senior management of BMRC and its representatives regarding the business, financial condition, results of operations and prospects of BMRC.

In performing its review, Piper Sandler relied upon the accuracy and completeness of all of the financial and other information that was available to and reviewed by Piper Sandler from public sources, that was provided to Piper Sandler by AMRB or BMRC or their respective representatives, or that was otherwise reviewed by Piper Sandler, and Piper Sandler assumed such accuracy and completeness for purposes of rendering its opinion without any independent verification or investigation. Piper Sandler relied on the assurances of the respective senior managements of AMRB and BMRC that they were not aware of any facts or circumstances that would have made any of such information inaccurate or misleading in any respect material to its analyses. Piper Sandler was not asked to and did not undertake an independent verification of any of such information and Piper Sandler did not assume any responsibility or liability for the accuracy or completeness thereof. Piper Sandler did not make an independent evaluation or perform an appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of AMRB or BMRC. Piper Sandler rendered no opinion on or evaluation of the collectability of any assets or the future performance of any loans of AMRB or BMRC. Piper Sandler did not make an independent evaluation of the adequacy of the allowance for loan losses of AMRB or BMRC, or of the combined entity after the merger, and Piper Sandler did not review any individual credit files relating to AMRB or BMRC. Piper Sandler assumed, with AMRB’s consent, that the respective allowances for loan losses for both AMRB and BMRC were adequate to cover such losses and would be adequate on a pro forma basis for the combined entity.

In preparing its analyses, Piper Sandler used publicly available mean analyst earnings per share estimates for AMRB for the quarters ending June 30, 2021, September 30, 2021 and December 31, 2021 as well as the year ending December 31, 2022, and estimated annual asset and earnings per share growth rates for the years ending December 31, 2023 through December 31, 2025, as directed by the senior management of AMRB. In addition, Piper Sandler used publicly available mean analyst earnings per share estimates for BMRC for the quarters ending June 30, 2021, September 30, 2021 and December 31, 2021 as well as the year ending December 31, 2022, and estimated annual asset and earnings per share growth rates for the years ending December 31, 2023 through December 31, 2025, as directed by the senior management of BMRC. Piper Sandler also received and used in its pro forma analyses certain assumptions relating to transaction expenses, purchase accounting adjustments and cost savings, as provided by the senior management of BMRC. With respect to the foregoing information, the respective senior managements of AMRB and BMRC confirmed to Piper Sandler that such information reflected (or, in the case of the publicly available analyst estimates referred to above, were consistent with) the best currently available estimates and judgments of those respective senior managements as to the future financial performance of AMRB and BMRC, respectively, and Piper Sandler assumed that the financial results reflected in such information would be achieved. Piper Sandler expressed no opinion as to such estimates or judgments, or the assumptions on which they were based. Piper Sandler also assumed that there had been no material change in the respective assets, financial condition, results of operations, business or prospects of AMRB or BMRC since the date of the most recent financial statements made available to Piper Sandler. Piper Sandler assumed in all respects material to its analyses that AMRB and BMRC would remain as going concerns for all periods relevant to its analyses.

Piper Sandler also assumed, with AMRB’s consent, that (i) each of the parties to the merger agreement would comply in all material respects with all material terms and conditions of the merger agreement and all related agreements required to effect the merger, that all of the representations and warranties contained in such agreements were true and correct in all material respects, that each of the parties to such agreements would perform in all material respects all of the covenants and other obligations required to be performed by such party under such agreements and that the conditions precedent in such agreements were not and would not be waived, (ii) in the course of obtaining the necessary regulatory or third party approvals, consents and releases with respect to the merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on AMRB, BMRC, the merger or any related transactions, and (iii) the merger and any related transactions would be consummated in accordance with the terms of the merger agreement without any waiver, modification or amendment of any material term, condition or agreement thereof and in compliance with all applicable laws and other requirements. Finally, with AMRB’s consent, Piper Sandler relied upon the advice that AMRB received from its legal, accounting and tax advisors as to all legal, accounting and tax matters relating to the merger and the other transactions contemplated by the merger agreement. Piper Sandler expressed no opinion as to any such matters.

Piper Sandler’s opinion was necessarily based on financial, regulatory, economic, market and other conditions as in effect on, and the information made available to Piper Sandler as of, the date thereof. Events occurring after the date thereof could materially affect Piper Sandler’s opinion. Piper Sandler has not undertaken to update, revise, reaffirm or withdraw its opinion or otherwise comment upon events occurring after the date thereof. Piper Sandler expressed no opinion as to the trading value of AMRB common stock or BMRC common stock at any time or what the value of BMRC common stock would be once it is actually received by the holders of AMRB common stock.

In rendering its opinion, Piper Sandler performed a variety of financial analyses. The summary below is not a complete description of all the analyses underlying Piper Sandler’s opinion or the presentation made by Piper Sandler to AMRB’s board of directors, but is a summary of the material analyses performed and presented by Piper Sandler. The summary includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Piper Sandler believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses to be considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Piper Sandler’s comparative analyses described below is identical to AMRB or BMRC and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or transaction values, as the case may be, of AMRB and BMRC and the companies to which they were compared. In arriving at its opinion, Piper Sandler did not attribute any particular weight to any analysis or factor that it considered. Rather, Piper Sandler made qualitative judgments as to the significance and relevance of each analysis and factor. Piper Sandler did not form an opinion as to whether any individual analysis or factor (positive or negative) considered in isolation supported or failed to support its opinion, rather, Piper Sandler made its determination as to the fairness of the exchange ratio, from a financial point of view, to the holders of AMRB common stock on the basis of its experience and professional judgment after considering the results of all its analyses taken as a whole.

In performing its analyses, Piper Sandler also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of AMRB, BMRC, and Piper Sandler. The analyses performed by Piper Sandler are not necessarily indicative of actual values or future results, both of which may be significantly more or less favorable than suggested by such analyses. Piper Sandler prepared its analyses solely for purposes of rendering its opinion and provided such analyses to AMRB’s board of directors at its April 16, 2021 meeting. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Piper Sandler’s analyses do not necessarily reflect the actual value of AMRB common stock or BMRC common stock or the prices at which BMRC or BMRC common stock may be sold at any time. The analyses of Piper Sandler and its opinion were among a number of factors taken into consideration by AMRB’s board of directors in making its determination to approve the merger and entry into the agreement and plan of reorganization and the analyses described below should not be viewed as determinative of the decision of AMRB’s board of directors with respect to the fairness of the exchange ratio.

Summary of Proposed Merger Consideration and Implied Transaction Metrics.

Piper Sandler reviewed the financial terms of the proposed merger. Pursuant to the terms of the agreement and plan of reorganization, at the effective time of the merger, each share of AMRB common stock issued and outstanding immediately prior to the effective time of the merger, except for certain shares as set forth in the agreement and plan of merger and reorganization, shall be converted into the right to receive 0.575 of a share of common stock of BMRC. Piper Sandler calculated an aggregate implied transaction value of approximately $134.891 million and an implied purchase price per share of $22.52 consisting of the implied value of 5,972,312 shares of AMRB common stock, inclusive of 65,605 restricted shares, 27,782 AMRB options outstanding with a weighted average strike price of $8.93, and 10,000 additional AMRB restricted shares expected to be issued in the second quarter of 2021 (as directed by AMRB management), and based on the closing price of BMRC common stock on April 15, 2021. Based upon financial information for AMRB as of or for the last twelve months (“LTM”) ended December 31, 2020, publicly available mean analyst earnings per share estimates for AMRB for the quarters ending June 30, 2021, September 30, 2021 and December 31, 2021 and the closing price of AMRB’s common stock on April 15, 2021, Piper Sandler calculated the following implied transaction metrics:

Stock Trading History.

Piper Sandler reviewed the publicly available historical reported trading prices of AMRB common stock and BMRC common stock for the one-year and three-year periods ended April 15, 2021. Piper Sandler then compared the relationship between the movements in the price of AMRB common stock and BMRC common stock, respectively, to movements in their respective peer groups (as described below) as well as certain stock indices.

AMRB’s One-Year Stock Performance

AMRB’s Three-Year Stock Performance⁽¹⁾

BMRC’s One-Year Stock Performance

BMRC’s Three-Year Stock Performance

Comparable Company Analyses.

Piper Sandler used publicly available information to compare selected financial information for AMRB with a group of financial institutions selected by Piper Sandler. The AMRB peer group included banks headquartered in California whose securities are publicly traded with total assets between $0.60 billion and $1.25 billion, but excluded targets of announced merger transactions (the “AMRB Peer Group”). The AMRB Peer Group consisted of the following companies:

The analysis compared publicly available financial information for AMRB with corresponding data for the AMRB Peer Group as of or for the period ended December 31, 2020 with market pricing data as of April 15, 2021. The table below sets forth the data for AMRB and the median, mean, low and high data for the AMRB Peer Group.

AMRB Comparable Company Analysis

Piper Sandler used publicly available information to perform a similar analysis for BMRC by comparing selected financial information for BMRC with a group of financial institutions selected by Piper Sandler. The BMRC peer group included banks headquartered in the Western Region of the United States whose securities are publicly traded on a major exchange with total assets between $2.0 billion and $8.0 billion, most recent quarter cost of funds less than 0.25%, and noninterest-bearing deposits/total deposits greater than 30%, but excluded targets of announced merger transactions (the “BMRC Peer Group”). The BMRC Peer Group consisted of the following companies:

The analysis compared publicly available financial information for BMRC with corresponding data for the BMRC Peer Group as of or for the period ended December 31, 2020 (unless otherwise noted) with pricing data as of April 15, 2021. The table below sets forth the data for BMRC and the median, mean, low and high data for the BMRC Peer Group.

BMRC Comparable Company Analysis

Analysis of Precedent Transactions.

Piper Sandler reviewed a group of recent bank merger and acquisition transactions. The group consisted of U.S. bank transactions announced between March 1, 2020 and April 15, 2021 involving targets with assets between $0.60 billion and $1.25 billion at the time of announcement (the “Precedent Transactions”).

The Precedent Transactions group was composed of the following transactions:

Using the latest publicly available information prior to the announcement of the relevant transaction, Piper Sandler reviewed the following transaction metrics: transaction price to last-twelve-months earnings per share, transaction price to tangible book value per share, core deposit premium, and 1-day market premium. Piper Sandler compared the indicated transaction metrics for the merger to the median, mean, low and high metrics of the Nationwide Precedent Transactions group.

Net Present Value Analyses.

Piper Sandler performed an analysis that estimated the net present value of a share of AMRB common stock assuming AMRB performed in accordance with publicly available mean analyst earnings per share estimates for AMRB for the quarters ending June 30, 2021, September 30, 2021 and December 31, 2021 as well as the year ending December 31, 2022, and estimated annual asset and earnings per share growth rates for the years ending December 31, 2023 through December 31, 2025, as directed by the senior management of AMRB. To approximate the terminal value of a share of AMRB common stock at December 31, 2025, Piper Sandler applied price to 2025 earnings multiples ranging from 10.0x to 17.5x and multiples of 2025 tangible book value ranging 100% to 150%. The terminal value and assumed dividends from June 30, 2021 through to December 31, 2025 (assumed to be maintained at the most recent quarterly amount) were then discounted to present values using different discount rates ranging from 9.0% to 15.0%, which were chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of AMRB common stock. As illustrated in the following tables, the analysis indicated imputed ranges of values per share of AMRB common stock of $8.71 to $18.67 when applying multiples of earnings and $10.24 to $19.10 when applying multiples of tangible book value.

Earnings Per Share Multiples

Tangible Book Value Per Share Multiples