On May 6th, with shares trading at $13.25, we wrote the article “Bank of Napa is Ripe for a Takeover“.
On August 1st, Bank of Marin (NASDAQ: BMRC) announced they were buying Bank of Napa (OTCBB: BNNP) in a $51 million stock swap, which works out to $20.25 per share of BNNP.
The match seems like a perfect fit. Bank of Marin is a $2+ billion bank with a small presence in Napa County, and a stronger presence in Marin, San Francisco, Alameda, and Sonoma Counties. Bank of Napa has approximately $220 million in deposits and 2 branches in Napa County. It started as a de novo bank about in 2006, and while it achieved some level of success and a 5 star rating from Bauer Financial, it did not achieve the scale necessary to become a $1+ billion standalone bank. Selling to BMRC was a smart move, and at the same time a smart acquisition for BMRC.
Bank of Napa benefitted from being located in a thriving and wealthy area of a wealthy state (Napa County, California) with very few community banking options due to the outsized market share of banks like Bank of America and Wells Fargo. Compared to banks started around the same time, Bank of Napa’s 0.78% return on assets was strong. Bank of Napa was named a 7 time winner of the Best Places to Work by the North Bay Business Journal. Bank of Marin was able to put together a management-friendly deal that retained employees and management and at the same time, made sense for both sets of shareholders.