DEFM14A 1 amrb_defm14a.htm DEFM14A
 

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:

 

o Preliminary Proxy Statement
   
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
   
x Definitive Proxy Statement
   
o Definitive Additional Materials
   
o Soliciting Material Pursuant to §240.14a-12

 

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):

 

x No fee required.
   
o Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

 

  (1)  Title of each class of securities to which transaction applies:
     
  (2)  Aggregate number of securities to which transaction applies:
     
  (3)  Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
     
  (4)  Proposed maximum aggregate value of transaction:
     
  (5)  Total fee paid:
     

 

o Fee paid previously with preliminary materials.
   
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

  (1)  Amount Previously Paid:
     
  (2)  Form, Schedule or Registration Statement No.:
     
  (3)  Filing Party:
     
  (4)  Date Filed:
     
 
 

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:

·The approval of the merger of, and merger agreement providing for, the merger of AMRB with and into BMRC, as described in more detail herein;
·A proposal to adjourn or postpone the special meeting, if necessary or appropriate, including to solicit additional proxies to approve the merger and merger agreement; and
·The approval, on an advisory (non-binding) basis, of the compensation to be paid to the named executive officers (NEO’s) of AMRB in connection with the merger.

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:

·The approval of the merger of, and merger agreement providing for, the merger of AMRB with and into BMRC, as described in more detail herein; and
·A proposal to adjourn or postpone the special meeting, if necessary or appropriate, including to solicit additional proxies to approve the merger and merger agreement.

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:

1.Approval of Merger and Merger Agreement.   To consider and vote on a merger, and the Agreement to Merge and Plan of Reorganization dated as of April 16, 2021(the “merger agreement”) with Bank of Marin Bancorp (“BMRC”), under which AMRB will merge with and into BMRC, with BMRC surviving (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”), as more particularly described in the following materials;
2.Adjournment.   To approve the adjournment or postponement of the special meeting, if necessary or appropriate, including to solicit additional proxies to approve the merger and merger agreement; and
3.Named Executive Officer (NEO) Compensation Proposal.   To approve, on an advisory (non-binding) basis, the compensation to be paid to the named executive officers (“NEOs”) of AMRB in connection with the merger.

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:

1.Approval of Merger and Merger Agreement.   To consider and vote on a merger, and the Agreement to Merge and Plan of Reorganization dated as of April 16, 2021 (the “merger agreement”) with American River Bankshares (“AMRB”), under which AMRB will merge with and into BMRC, with BMRC surviving (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”), as more particularly described in the following materials; and
2.Adjournment.   To approve the adjournment or postponement of the special meeting, if necessary or appropriate, including to solicit additional proxies to approve the merger and merger agreement.

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 bmrc@investor.morrowsodali.com.

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

 
 

TABLE OF CONTENTS

 

REFERENCES TO ADDITIONAL INFORMATION  
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS 1
SUMMARY 7
UNAUDITED COMPARABLE PER SHARE DATA 15
RISK FACTORS 17
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS 20
GENERAL INFORMATION 21
THE BMRC SPECIAL MEETING 22
General 22
Date, Time and Place of the BMRC Special Meeting 22
Record Date for the BMRC Special Meeting; Shares Entitled to Vote 22
Quorum 22
Purposes of the BMRC Special Meeting 22
Recommendation of the BMRC Board of Directors 22
Number of Votes; Voting 23
Votes Required; Voting Agreements 23
Voting of Proxies 23
Abstentions and Broker Non-Votes 24
Other Matters 25
Solicitation of Proxies 25
THE AMRB SPECIAL MEETING 25
General 25
Date, Time and Place of the AMRB Special Meeting 25
Record Date for the AMRB Special Meeting; Shares Entitled to Vote 25
Quorum 25
Purposes of the AMRB Special Meeting 25
Recommendation of the AMRB Board of Directors 26
Number of Votes; Voting 26
Votes Required; Voting Agreements 26
Voting of Proxies 27
Abstentions and Broker Non-Votes 28
Dissenters’ Rights 28
Other Matters 28
Solicitation of Proxies 28
JOINT PROPOSAL 1 — THE MERGER 29
Structure of the Merger 29
Background of the Merger 29
BMRC’s Reasons for the Merger and Recommendation of the BMRC Board of Directors 33
AMRB’s Reasons for the Merger and Recommendation of the AMRB Board of Directors 34
Opinion of BMRC’s Financial Advisor 36
Opinion of AMRB’s Financial Advisor 46
The Merger Consideration 56

i
 

Procedures for Exchanging AMRB Common Stock Certificates 57
Conditions to the Merger 58
Bank Regulatory Approvals 60
Business Pending the Merger 61
Additional Covenants 63
AMRB Board of Directors’ Covenant to Recommend the Merger and Merger Agreement 65
No Solicitation 65
Representations and Warranties of the Parties 66
Effective Time of the Merger 67
Waiver and Amendment of the Merger Agreement 67
Termination of the Merger Agreement 67
Termination Fee 68
Certain Employee Matters 69
Interests of Certain AMRB Officers and Directors in the Merger 70
Material U.S. Federal Income Tax Consequences 76
Accounting Treatment of the Merger 79
Expenses of the Merger 79
Resale of BMRC Common Stock 79
Shareholder Agreements 79
Non-Compete/Non-Solicitation Agreements 80
INFORMATION ABOUT BMRC 80
INFORMATION ABOUT AMRB 81
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 82
DESCRIPTION OF BMRC CAPITAL STOCK 91
Common Stock 91
Preferred Stock 92
Dividends 92
Shareholder Rights Plan 92
Anti-takeover Provisions 92
Restrictions on Ownership 93
COMPARISON OF THE RIGHTS OF SHAREHOLDERS 94
Authorized Capital Stock 94
Number of Directors 94
Election of Directors — Cumulative Voting 94
Classification of Board of Directors 94
Removal of Directors 94
Nomination of Director Candidates by Shareholders 95
Shareholder Action Without a Meeting 95
Special Meetings of Shareholders 95
Indemnification of Directors and Officers 95
Amendments to Articles of Incorporation and Bylaws 96

ii
 

Tax Treatment 96
Dividends 96
Liquidation Preferences 96
Redemption 97
Shareholders’ Rights Plan 97
CERTAIN BENEFICIAL OWNERSHIP OF BMRC COMMON STOCK 97
CERTAIN BENEFICIAL OWNERSHIP OF AMRB COMMON STOCK 98
JOINT PROPOSAL 2 — ADJOURNMENT OR POSTPONEMENT OF THE MEETING 99
General 99
Vote Required 100
Board Recommendation 100
AMRB PROPOSAL 3 — ADVISORY VOTE ON AMRB NAMED EXECUTIVE OFFICER COMPENSATION 100
OTHER MATTERS 101
EXPERTS 101
LEGAL MATTERS 101
WHERE YOU CAN FIND MORE INFORMATION 101
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 102
BMRC ANNUAL MEETING SHAREHOLDER PROPOSALS 103
AMRB ANNUAL MEETING SHAREHOLDER PROPOSALS 103

LIST OF APPENDICES

Agreement to Merge and Plan of Reorganization APPENDIX A
Opinion of Keefe, Bruyette & Woods, Inc. APPENDIX B
Opinion of Piper Sandler & Co. APPENDIX C
iii
 

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

Q:Why have I received these materials?

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.

Q:When and where will the AMRB special meeting be held?

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).

Q:When and where will the BMRC special meeting be held?

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).

Q:Who is entitled to vote at the special meetings?

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.

Q:What are the shareholders being asked to vote on?

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:

·approve the merger and merger agreement; and
·approve 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.

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.

1
 

Q:What vote is required to approve each proposal?

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.

Q:How does the AMRB board of directors recommend that I vote on each proposal?

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

·“FOR” the merger and merger agreement;
·“FOR” the 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; and
·“FOR” the advisory vote on the NEO compensation relating to the merger.
Q:How does the BMRC board of directors recommend that I vote on each proposal?

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

·“FOR” the merger and merger agreement; and
·“FOR” the 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.
Q:How many votes do I have and how do I vote at the special meeting?

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.

2
 

Q:Are AMRB shareholders entitled to dissenters’ rights?

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

Q:What if my shares are held in street name by my broker or other nominee?

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.

Q:What is the effect of an abstention?

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.

Q:May I revoke or change my vote after I have provided proxy instructions?

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:

For AMRB Shareholders: For BMRC Shareholders:
American River Bankshares Bank of Marin Bancorp
3100 Zinfandel Drive, Suite 450 504 Redwood Blvd., Suite 100
Rancho Cordova, CA 95670 Novato, California 94947
Attention: Kimberly A. Box Attention: Nancy Rinaldi Boatright

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.

Q:What will happen if I do not return my proxy card or otherwise vote?

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).

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Q:What will happen if I sign and return my proxy card without indicating how I wish to vote?

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.

Q:What constitutes a quorum for purposes of the special meetings?

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.

Q:Why has AMRB’s Board of Directors approved 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.

Q:Why has BMRC’s Board of Directors approved the merger?

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.

Q:When do you expect the merger to be completed?

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.

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Q:What are the U.S. federal income tax consequences 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.

Q:What happens if I sell my shares after the record date for the special meeting, but before the special meeting?

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.

Q:Should I send in my AMRB certificates now?

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.

Q:What should I do now?

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.

Q:What if I lost my share certificates?

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).

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Q:Who can help answer my other questions?

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 BMRC@investor.morrowsodali.com.

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SUMMARY

This summary highlights selected information from this joint proxy statement/prospectus and may not contain all of the information that is important to the shareholders of Bank of Marin Bancorp or American River Bankshares. To more fully understand the merger and for a more complete description of the legal terms of the merger, you should read carefully this entire joint proxy statement/prospectus, including the merger agreement and the other documents included with this joint proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 101. Page references are included in this summary to direct the reader to a more complete description of the topics.

Throughout this joint proxy statement/prospectus, “BMRC” refers to Bank of Marin Bancorp,” and “AMRB” refers to American River Bankshares. Also, throughout this joint proxy statement/prospectus, the Agreement to Merge and Plan of Reorganization, dated as of April 16, 2021 by and between BMRC and AMRB, is referred to as the “merger agreement.” The merger of AMRB with and into BMRC is referred to as the “merger” and the merger of American River Bank with and into Bank of Marin is referred to as the “bank merger”.

Parties to the Proposed Merger (Pages 80 and 81)

Bank of Marin Bancorp and Bank of Marin

Bank of Marin Bancorp, is a Northern California-based bank holding company for Bank of Marin. Bank of Marin is a California chartered non-member bank. Bank of Marin has 21 full service branches and 7 commercial banking offices serving the counties of Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, and Sonoma, and has a strong focus on supporting these local communities. Bank of Marin’s customer base is made up of business and personal banking relationships from the communities near its branch office locations. Its business banking focus is on small to medium-sized businesses, professionals and not-for-profit organizations. Bank of Marin offers a broad range of commercial and retail deposit and lending programs designed to meet the needs of its target markets. Loan products include commercial real estate loans, commercial and industrial loans and lines of credit, construction financing, consumer loans, and home equity lines of credit. Specializing in providing service to its customers and investing in its local communities, Bank of Marin has consistently been ranked one of the “Top Corporate Philanthropists” by the San Francisco Business Times and one of the “Best Places to Work” by the North Bay Business Journal.

Bank of Marin commenced operations in January 1990 as a California state chartered bank with its deposits insured by the Federal Deposit Insurance Corporation (“FDIC”), up to the applicable limits. Bank of Marin is subject to primary supervision, examination and regulation by the California Department of Financial Protection and Innovation, Division of Financial Institutions (“DFPI”), and the FDIC.

On July 1, 2007, a bank holding company reorganization was completed whereby BMRC became the parent holding company for Bank of Marin. On such date, each outstanding share of Bank of Marin common stock was converted into one share of BMRC common stock. Upon its formation, BMRC became subject to regulation by the Board of Governors of the Federal Reserve System (“Federal Reserve”) under the Bank Holding Company Act of 1956, as amended, including reporting and examinations.

In February 2011, Bank of Marin expanded its community banking footprint to Napa County through an FDIC-assisted acquisition of $107.8 million of assets and assumption of $107.7 million of liabilities of the former Charter Oak Bank. No new capital was raised to complete this transaction which was supported through BMRC’s accumulation of earnings.

On November 29, 2013, BMRC completed its acquisition of Alameda-based NorCal Community Bancorp and its four-branch Bank of Alameda subsidiary. The transaction added approximately $241.0 million in deposits and $173.8 million in loans to Bank of Marin, and increased Bank of Marin’s assets to over $1.7 billion.

On November 21, 2017, BMRC completed its acquisition of Bank of Napa. The transaction added approximately $249.9 million in deposits and $134.7 million in loans to Bank of Marin and increased BMRC’s assets to over $2.4 billion.

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At March 31, 2021, BMRC had total assets of $3.0 billion, total deposits of $2.7 billion and stockholders’ equity of $350.3 million.

BMRC’s common stock trades on Nasdaq under the symbol “BMRC.”

Additional information about BMRC, including consolidated financial statements and management’s discussion and analysis thereof, are included in its Form 10-K for the year ended December 31, 2020, in its Form 10-Q for the quarter ended March 31, 2021 and other reports filed by BMRC with the Securities and Exchange Commission since December 31, 2020. These reports are incorporated by reference into this joint proxy statement/prospectus. If you want to obtain copies of these documents or other information concerning BMRC, please see “Where You Can Find More Information” on page 101.

BMRC’s principal executive offices are located at 504 Redwood Blvd., Suite 100, Novato, California 94947 and its telephone number is (415) 763-4520. Its website, which is not part of this joint proxy statement/prospectus, is located at www.bankofmarin.com

American River Bankshares and American River Bank

American River Bank was incorporated and commenced business in Fair Oaks, California, in 1983 and thereafter moved its headquarters to Sacramento, California in 1985. American River Bank operates four full service offices in Sacramento County including the main office located at 1545 River Park Drive, Suite 107, Sacramento and branch offices in Sacramento and Gold River; one full service office in Placer County, located in Roseville; two full service offices in Sonoma County in Healdsburg and Santa Rosa; and three full service offices in Amador County in Jackson, Pioneer, and Ione. American River Bank’s primary business is serving the commercial banking needs of small to mid-sized businesses within those counties listed above. American River Bank accepts checking and savings deposits, offers money market deposit accounts and certificates of deposit, makes secured and unsecured commercial, secured real estate, and other installment and term loans and offers other customary banking services.

AMRB became the holding company for American River Bank in 1995. American River Bank is subject to primary supervision, examination and regulation by the DFPI and the FDIC.

AMRB’s principal office is located at 3100 Zinfandel Drive, Suite 450, Rancho Cordova, California 95670 and its telephone number is (916) 851-0123. Its website, which is not part of this joint proxy statement/prospectus, is located at www.americanriverbank.com.

At March 31, 2021, AMRB had total assets of $916.1 million, total deposits of $788.6 million and stockholders’ equity of $92.9 million.

AMRB’s common stock trades on Nasdaq under the symbol “AMRB”.

Additional information about AMRB, including consolidated financial statements and management’s discussion and analysis thereof, are included in its Form 10-K for the year ended December 31, 2020, in its Form 10-Q for the quarter ended March 31, 2021 and other reports filed by AMRB with the Securities and Exchange Commission since December 31, 2021. These reports are incorporated by reference into this joint proxy statement/prospectus. If you want to obtain copies of these documents or other information concerning AMRB, please see “Where You Can Find More Information” on page 101.

Date, Time and Location of the BMRC Special Meeting (Page 22)

The BMRC special meeting 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, California. At the special meeting, BMRC shareholders will be asked to:

·consider and vote on a merger, and the merger agreement with AMRB, under which AMRB will merge with and into BMRC, with BMRC surviving, 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; and
·approve the adjournment or postponement of the special meeting, if necessary or appropriate, including to solicit additional proxies to approve the merger and merger agreement.
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Record Date and Voting Rights for the BMRC Special Meeting (Page 22)

Each BMRC common shareholder is entitled to vote at the special meeting if he or she owned shares of BMRC common stock as of the close of business on June 11, 2021, the record date for the BMRC special meeting. Each BMRC common shareholder will have one vote at the special meeting for each share of BMRC common stock that he or she owned on that date.

BMRC shareholders of record may vote by internet, phone, mail or by attending the BMRC special meeting and voting in person. Each proxy returned to BMRC by a holder of BMRC common stock, which is not revoked, will be voted in accordance with the instructions indicated thereon. If no instructions are indicated on a signed BMRC proxy that is returned, such proxy will be voted “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.

Date, Time and Location of the AMRB Special Meeting (Page 25)

The AMRB special meeting will be held on July 28, 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, AMRB shareholders will be asked to:

·consider and vote on a merger, and the merger agreement with BMRC, under which AMRB will merge with and into BMRC, with BMRC surviving, 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;
·approve the adjournment or postponement of the special meeting, if necessary or appropriate, including to solicit additional proxies to approve the merger and merger agreement; and
·approve, on an advisory (non-binding) basis, the compensation to be paid to the named executive officers (NEO’s) of AMRB in connection with the merger.

Record Date and Voting Rights for the AMRB Special Meeting (Page 25)

Each AMRB common shareholder is entitled to vote at the special meeting if he or she owned shares of AMRB common stock as of the close of business on June 9, 2021, the record date for the AMRB special meeting. Each AMRB common shareholder will have one vote at the special meeting for each share of AMRB common stock that he or she owned on that date.

AMRB shareholders of record may vote by internet, phone, mail or by attending the AMRB special meeting and voting in person. Each proxy returned to AMRB by a holder of AMRB common stock, which is not revoked, will be voted in accordance with the instructions indicated thereon. If no instructions are indicated on a signed AMRB proxy that is returned, such proxy will be voted “FOR” the approval of the merger and merger agreement, “FOR” approval on an advisory basis of the compensation of the AMRB named executive officers in connection with the merger, 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.

The Merger (Page 29)

The merger agreement is attached to this joint proxy statement/prospectus as Appendix A, which is incorporated by reference herein. Please read the entire merger agreement. It is the legal document that governs 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 institution, and immediately thereafter American River Bank will merge with and into Bank of Marin, with Bank of Marin as the surviving institution. The parties expect to complete the merger in the third quarter of 2021. BMRC believes the transaction will be immediately accretive to BMRC’s earnings (excluding one-time transaction costs and expenses), and upon closing BMRC will have approximately $4.0 billion in assets and operate thirty-one branches in ten (10) counties, including Alameda, Amador, Contra Costa, Marin, Napa, Placer, Sacramento, San Francisco, San Mateo, and Sonoma.

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BMRC’s Reasons for Merger and Factors Considered by BMRC’s Board of Directors (Page 33)

Based on BMRC’s reasons for the merger described in this joint proxy statement/prospectus, the BMRC board of directors believes that the exchange ratio in the merger is fair to BMRC from a financial point of view and the merger is in the best interests of BMRC shareholders, and unanimously recommends that BMRC shareholders vote “FOR” approval of the merger and merger agreement. For a discussion of the circumstances surrounding the merger and the factors considered by BMRC’s board of directors in approving the merger agreement, see “Joint Proposal 1 — The Merger — BMRC’s Reasons for the Merger and Recommendation of the BMRC Board of Directors” beginning on page 33.

AMRB’s Reasons for Merger and Factors Considered by AMRB’s Board of Directors (Page 34)

Based on AMRB’s reasons for the merger described in this joint proxy statement/prospectus, the AMRB board of directors believes that the exchange ratio is fair to AMRB shareholders from a financial point of view and in their best interests, and unanimously recommends that AMRB shareholders vote “FOR” approval of the merger and merger agreement. For a discussion of the circumstances surrounding the merger and the factors considered by AMRB’s board of directors in approving the merger agreement, see “Joint Proposal 1 — The Merger — AMRB’s Reasons for the Merger and Recommendation of the AMRB Board of Directors” beginning on page 34.

Opinion of BMRC’s Financial Advisor (Page 36 and Appendix B)

Keefe, Bruyette & Woods, Inc. (“KBW”) delivered its written opinion to BMRC’s board of directors on April 16, 2021, to the effect that, as of the date of the opinion and based upon and subject to the assumptions made, procedures followed, matters considered and limitations and qualification on the review undertaken by KBW as set forth in its opinion, the exchange ratio in the merger was fair, from a financial point of view, to BMRC.

The full text of the written opinion of KBW, dated April 16, 2021, which sets forth the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken is attached as Appendix B to this joint proxy statement/prospectus. BMRC’s shareholders should read the opinion carefully in its entirety.

KBW’s opinion speaks only as of the date of the opinion. KBW provided its opinion for the information and assistance of BMRC’s board of directors in connection with its consideration of the transaction and is directed only to the fairness, from a financial point of view, of the exchange ratio in the merger to BMRC. KBW’s opinion does not constitute a recommendation as to how any holder of BMRC common stock should vote on matters to be considered at the BMRC special meeting. KBW’s opinion does not address the underlying business decision of BMRC to engage in the merger or enter into the merger agreement, the form or structure of the merger or any such related transaction, the relative merits of the merger as compared to any strategic alternatives that are, have been or may be available to or contemplated by BMRC or the BMRC board.

Opinion of AMRB’s Financial Advisor (Page 46 and Appendix C)

Piper Sandler & Co. (“Piper Sandler”) delivered its written opinion to AMRB’s board of directors on April 16, 2021, to the effect that, as of the date of the opinion and based upon and subject to the assumptions made, procedures followed, matters considered and limitations and qualification on the review undertaken by Piper Sandler as set forth in its opinion, the exchange ratio provided for in the merger agreement was fair, from a financial point of view, to the holders of AMRB common stock.

The full text of the written opinion of Piper Sandler, dated April 16, 2021, which sets forth the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken is attached as Appendix C to this joint proxy statement/prospectus. AMRB’s shareholders should read the opinion carefully in its entirety.

Piper Sandler’s opinion speaks only as of the date of the opinion. Piper Sandler provided its opinion for the information and assistance of AMRB’s board of directors in connection with its consideration of the transaction and is directed only to the fairness, from a financial point of view, of the exchange ratio to the holders of AMRB common stock. Piper Sandler’s opinion does not constitute a recommendation as to how any holder of AMRB common stock should vote on matters to be considered at the AMRB special meeting. Piper Sandler’s opinion does not address the underlying business decision of AMRB to proceed with the merger, the form or structure of the merger, the relative merits of the merger as compared to any other alternative business strategies that might exist for AMRB or the effect of any other transaction in which AMRB might engage.

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Risk Factors (Page 17)

An investment in BMRC’s common stock by shareholders of AMRB includes substantial risks. See the section entitled “Risk Factors” beginning on page 17 for a discussion of risks associated with the merger and an investment in BMRC’s common stock. Other risk factors are discussed in BMRC’s filings with the SEC which are incorporated herein by reference.

AMRB Common Shareholders Will Receive Shares of BMRC Common Stock for Each Share of AMRB Common Stock Exchanged in the Merger, except to the Extent that Cash Is Received in lieu of Fractional Shares (Page 56)

At the effective time of the merger, each issued and outstanding share of AMRB common stock (subject to certain exceptions) will, by virtue of the merger and without any action on the part of an AMRB shareholder, be converted into the right to receive 0.575 shares of BMRC common stock. Cash will be paid in lieu of any fractional share interest.

Exchange Ratio

The common stock exchange ratio is a fixed exchange ratio of 0.575 shares of BMRC common stock for each share of AMRB common stock, as described below under “Joint Proposal 1 — The Merger — The Merger Consideration” at page 56. The value of the stock to be received in the merger by the AMRB shareholders will not be known at the time the AMRB common shareholders vote on the merger and merger agreement.

Fractional Shares

No fractional shares of BMRC common stock will be issued and, in lieu thereof, each holder of BMRC common stock who would otherwise be entitled to a fractional share interest will receive an amount in 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, as described below under “Joint Proposal 1 — The Merger — The Merger Consideration” at page 56.

Procedures for Exchanging AMRB Common Stock Certificates (Page 57)

Within three business days of the closing of the merger, BMRC’s transfer agent, Computershare, will send to common shareholders of AMRB an approved form of transmittal materials. These materials will contain detailed instructions on how to exchange a shareholder’s AMRB shares along with materials to be completed and signed. After BMRC’s transfer agent receives a completed transmittal letter and corresponding stock certificate(s) from an AMRB shareholder, BMRC’s transfer agent will issue to the former AMRB shareholder the BMRC common stock and cash in lieu of fractional shares to which he or she is entitled. If an AMRB shareholder holds shares in street name, he or she will instead receive information from his or her bank, broker or other nominee advising such AMRB shareholder of the process for receiving the BMRC common stock and cash in lieu of fractional shares to which he or she is entitled.

Each AMRB shareholder will need to surrender his or her AMRB common stock certificates to receive the shares of BMRC common stock and cash in lieu of fractional shares to which they are entitled. However, AMRB shareholders should not send any certificates now.

Material U.S. Federal Income Tax Consequences of the Merger (Page 76)

The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which is referred to in this joint proxy statement/prospectus as the Code, and it is a condition to completion of the merger that BMRC and AMRB each receive an opinion to that effect.

Assuming the merger qualifies as a reorganization, subject to the limitations and more detailed discussion set forth in “Joint Proposal 1 — The Merger — Material U.S. Federal Income Tax Consequences” of this joint proxy statement/prospectus, an AMRB common shareholder that is a U.S. holder generally will not recognize gain or loss on such exchange, other than with respect to cash received in lieu of fractional shares of BMRC common stock, the tax consequences of which are discussed at the portion of this joint proxy statement/prospectus referenced above.

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Tax matters are complicated, and the tax consequences of the merger to a particular AMRB shareholder will depend in part on such shareholder’s individual circumstances. Accordingly, each AMRB shareholder is urged to consult his or her own tax advisor for a full understanding of the tax consequences of the merger to such shareholder, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws.

Differences in Rights as a Shareholder (Page 94)

As an AMRB shareholder, your rights are currently governed by AMRB’s articles of incorporation and bylaws. If you receive BMRC common stock in exchange for your AMRB common stock, you will become a shareholder of BMRC and your rights will be governed by its articles of incorporation and bylaws. You can review the provisions of BMRC common stock and comparison in the rights of shareholders between the two companies starting on page 94.

Approval of the Merger and Merger Agreement Requires the Affirmative Vote of Holders of a Majority of the Issued and Outstanding Shares of BMRC and AMRB Common Stock (Pages 25 and 29)

The affirmative vote of the holders of a majority of the issued and outstanding shares of each of BMRC and AMRB common stock is necessary to approve the merger and merger agreement on behalf of BMRC and AMRB, respectively. At the close of business on the BMRC record date, there were 13,051,274 shares of BMRC common stock issued and outstanding held by 843 holders of record, and on the AMRB record date, there were 5,980,323 shares of AMRB common stock issued and outstanding held by 1,804 holders of record. If a BMRC or AMRB shareholder does not vote, it will have the same effect as a vote “AGAINST” the merger and merger agreement.

The Board of Directors of BMRC Owns Shares Which May Be Voted at the BMRC Special Meeting (Page 80)

As of the BMRC record date, the directors of BMRC, as a group, held 372,656 shares of BMRC common stock, or approximately 2.9% of the issued and outstanding BMRC common stock. These directors have each entered into shareholder agreements with AMRB pursuant to which they have agreed, among other things, in their capacity as shareholders of BMRC, to vote their shares of BMRC common stock in favor of the merger and merger agreement. The form of shareholder agreement is attached as Exhibit A-2 to the merger agreement, which is attached as Appendix A to this joint proxy statement/prospectus.

The Board of Directors of AMRB Owns Shares Which May Be Voted at the AMRB Special Meeting (Page 79)

As of the AMRB record date, the directors of AMRB, as a group, held 484,731 shares of AMRB common stock, or approximately 8.1% of the issued and outstanding AMRB common stock. These directors have each entered into shareholder agreements with BMRC pursuant to which they have agreed, among other things, in their capacity as shareholders of AMRB, to vote their shares of AMRB common stock in favor of the merger and merger agreement. The form of shareholder agreement is attached as Exhibit A-1 to the merger agreement, which is attached as Appendix A to this joint proxy statement/prospectus.

AMRB is Prohibited from Soliciting Other Offers (Page 65)

AMRB has agreed that, while the merger is pending, it will not solicit, initiate, encourage or, subject to some limited exceptions, engage in discussions with any third party other than BMRC regarding extraordinary transactions such as a merger, business combination or sale of a material amount of its assets or capital stock.

BMRC and AMRB Must Meet Several Conditions to Complete the Merger (Page 58)

Completion of the merger depends on meeting a number of conditions, including the following:

·a majority of the common shareholders of each of BMRC and AMRB must approve the merger and merger agreement;
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·BMRC, Bank of Marin, AMRB and American River Bank must receive all required regulatory approvals for the merger, no such approval may contain any condition that would reasonably be likely to have a material adverse effect on BMRC and its subsidiaries taken as a whole after giving effect to the merger;
·there must be no law, injunction or order enacted or issued preventing completion of the merger;
·the representations and warranties of each of BMRC and AMRB in the merger agreement must be true and correct, subject to the materiality standards provided in the merger agreement;
·BMRC and AMRB must have complied in all material respects with their respective obligations in the merger agreement;
·neither BMRC nor AMRB must have suffered any event which has had or could reasonably be expected to result in a material adverse effect;
·BMRC shall have received shareholder agreements executed and delivered by each of the AMRB directors and (which BMRC received on the date that the merger agreement was signed) each of the directors who signed the shareholder agreements shall have performed in all material respects all obligations under such agreements. The form of the shareholder agreement is attached as Exhibit A-1 to the merger agreement, which is attached as Appendix A to this joint proxy statement/prospectus;
·as of the last business day of the month prior to the closing of the merger, AMRB’s adjusted stockholders’ equity shall not be less than $93.1 million, subject to certain adjustments;
·BMRC and AMRB each shall have received a tax opinion that the merger will be treated as a “reorganization” within the meaning of Section 368(a) of 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;
·BMRC shall have received executed non-solicitation agreements from each of the directors of AMRB and from AMRB’s senior executive offices (which BMRC received on the date that the merger agreement was signed), each of which shall remain in full force and effect;
·AMRB shall have paid all transaction expenses incurred in connection with the merger prior to the closing of the merger and shall have provided BMRC with written evidence thereof; provided, BMRC shall have been given an opportunity to review all invoices, bills and estimates relating to AMRB’s professional fees related to the merger; and
·BMRC shall have received the written resignation of each director of AMRB.

Unless prohibited by law, the party benefitted by a condition could elect to waive such condition that has not been satisfied and complete the merger. The parties cannot be certain whether or when any of the conditions to the merger will be satisfied, or waived where permissible, or that the merger will be completed.

BMRC, Bank of Marin, AMRB and American River Bank Have Filed Regulatory Applications to Seek Regulatory Approvals to Complete the Merger (Page 60)

To complete the merger, the parties need the prior approval from (i) the Federal Reserve, (ii) the FDIC, and (iii) the DFPI. The U.S. Department of Justice is also able to provide input into the approval process of federal banking agencies and will have between fifteen (15) and thirty (30) days following any approval of a federal banking agency to challenge the approval on antitrust grounds. BMRC, Bank of Marin, AMRB and American River Bank have filed all necessary applications with the FDIC and the DFPI and have filed a request with the Federal Reserve for confirmation that no application is necessary in accordance with its regulations. The Federal Reserve confirmed no application was necessary by letter dated June 11, 2021. BMRC and AMRB cannot predict whether the required regulatory approvals will be obtained or whether any such approvals will have conditions which would be detrimental to BMRC following completion of the merger.

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Termination of the Merger Agreement (Page 67)

The merger agreement may be terminated prior to the effective time of the merger for a variety of reasons, including that:

·BMRC and AMRB can mutually agree at any time to terminate the merger agreement before completing the merger, even if shareholders of BMRC or AMRB have already voted to approve it;
·by any party if the merger is not consummated by December 31, 2021, except to the extent that the failure to consummate the merger by that date is due to (i) the terminating party’s failure to perform or observe its covenants and agreements in the merger agreement, or (ii) the failure of any of the AMRB shareholders (if AMRB is the party seeking to terminate) to perform or observe their respective covenants under the relevant shareholder agreement;
·by any party if any required governmental approval of the merger has been denied by final non-appealable action or an application for approval of the merger has been permanently withdrawn at the request of a governmental authority;
·by any party if the AMRB shareholders or the BMRC shareholders do not approve the merger;
·by BMRC, on the one hand, or by AMRB, on the other, if the other party or parties breach any of its or their representations, warranties, covenants or agreements under the merger agreement that (i) cannot be or has not been cured within thirty (30) days of the giving of written notice to the breaching party or parties and (ii) would entitle the non-breaching party or parties not to consummate the merger, or if the shareholders of BMRC or AMRB do not approve the merger and merger agreement; or
·by AMRB, subject to certain conditions, in the event that it enters into a “superior” acquisition proposal with a third party, in which case AMRB would become obligated to pay a termination fee to BMRC.

In addition, BMRC may terminate the merger agreement at any time prior to the AMRB shareholders approving the merger if the board of directors of AMRB withdraws or modifies its recommendation to the AMRB shareholders that the merger and merger agreement be approved in any way which is adverse to BMRC, or breaches its covenants prohibiting the solicitation of other offers, or AMRB fails to reaffirm its approval or recommendation of the merger and merger agreement after receipt of an acquisition proposal. BMRC also may terminate the merger agreement if a third party commences a tender offer or exchange offer for the issued and outstanding AMRB common stock and the board of directors of AMRB recommends that AMRB shareholders tender their shares in the offer or otherwise fails to recommend that they reject the offer within a specified period. If the merger agreement is terminated for any of these reasons, AMRB would become obligated to pay a termination fee to BMRC.

Termination Fee (Page 68)

AMRB is obligated to make a $5.38 million cash payment to BMRC in the event the merger agreement is terminated for certain reasons.

BMRC and AMRB May Amend the Merger Agreement (Page 67)

The parties may amend or supplement the merger agreement by written agreement at any time before the merger actually takes place; provided, however, no amendment may be made after the AMRB special meeting which would reduce the aggregate value of the consideration to be received by the AMRB shareholders, or which by applicable law would require further approval by the AMRB shareholders without obtaining such approval.

AMRB’s Directors and Officers Have Some Interests in the Merger that Are in Addition to or Different than the Interests of AMRB Shareholders (Page 69)

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:

·the agreement of BMRC to honor indemnification obligations of AMRB, as well as to purchase liability insurance for AMRB’s directors and officers for six (6) years following the merger, subject to the terms of the merger agreement;
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·AMRB executive officers David E. Ritchie, Jr., Kevin B. Bender, Mitchell A. Derenzo and Dan C. McGregor each have employment agreements with change in control provisions which would be triggered by this transaction following such officer’s termination for total aggregate consideration of approximately $2.3 million, under the merger agreement by BMRC;
·Nicolas C. Anderson and Charles D. Fite, each of whom is a director of AMRB, will be appointed to the board of directors of BMRC and Bank of Marin following the merger;
·certain of the senior executive officers of AMRB may continue their employment for some period of time with BMRC to assist with post-merger integration; and
·the merger agreement provides that all unvested restricted stock, including restricted stock held by directors and officers, shall accelerate on the merger and BMRC shall cash out all AMRB stock options, which will include cash payments to certain AMRB officers who hold outstanding AMRB stock options at closing.

These and other interests of AMRB directors and officers are described in more detail in the section entitled “Joint Proposal I — The Merger — Interests of Certain AMRB Officers and Directors in the Merger.” The boards of directors of BMRC and AMRB were aware of the foregoing interests and considered them, among other matters, in approving the merger agreement and the merger.

Accounting Treatment of the Merger (Page 79)

The merger will be accounted for under the acquisition method of accounting under U.S. generally accepted accounting principles (“GAAP”).

UNAUDITED COMPARABLE PER SHARE DATA

The following table sets forth the book value per share, cash dividends per share, and basic and diluted earnings per common share data for each of BMRC and AMRB on a historical basis, for BMRC on a pro forma combined basis, and on a pro forma combined basis per AMRB equivalent share.

The unaudited pro forma data gives effect to: (i) the acquisition by BMRC of AMRB through the merger of AMRB into BMRC; and (ii) the issuance of a number of shares of BMRC common stock to the shareholders of AMRB in connection with the merger. For purposes of presenting pro forma basic and diluted earnings per share, cash dividends per share, and book value per share, the comparative pro forma data assumes that the AMRB acquisition and the merger of AMRB with and into BMRC were effective on January 1, 2020 or March 31, 2021, as applicable. The data in the column “Pro Forma Equivalent Per AMRB Share” shows the effect of the merger from the perspective of an owner of AMRB common stock, and was obtained by multiplying the Combined Pro Forma Amounts for BMRC by the exchange ratio of 0.575. The unaudited pro forma financial information in the table below is provided for illustrative purposes, does not include any projected cost savings, revenue enhancements, or other possible financial benefits of the merger to the combined company, and does not attempt to suggest or predict future results.

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This information does not purport to reflect what the historical results of the combined company would have been had BMRC and AMRB been combined during these periods.

   BMRC
Historical
   AMRB
Historical
   Combined
Pro Forma
Amounts for
BMRC(1)
   Pro
Forma
Equivalent
Per
AMRB
Share(2)
 
Book value per share:                    
at March 31, 2021  $26.29   $15.58   $27.29   $15.69 
at December 31, 2020  $26.54   $15.68   $N/A   $N/A 
Cash dividends per share(3):                    
Three months ended March 31, 2021  $0.23   $0.07   $0.23   $0.13 
Year ended December 31, 2020  $0.92   $0.28   $0.92   $0.53 
Basic earnings per share:                    
Three months ended March 31, 2021  $0.67   $0.45   $0.67   $0.39 
Year ended December 31, 2020  $2.24   $1.20   $1.54   $0.89 
Diluted earnings per share:                    
Three months ended March 31, 2021  $0.66   $0.45   $0.66   $0.38 
Year ended December 31, 2020  $2.22   $1.20   $1.53   $0.88 

 

 
(1)Pro forma adjustment assumes BMRC stock price of $33.99 as of June 4, 2021. For purposes of presenting pro forma basic and diluted earnings per share and cash dividends per share, the combined pro forma data assumes that the AMRB acquisition and the merger of AMRB with and into BMRC were effective January 1, 2020. The combined pro forma book value per share data assumes that the AMRB acquisition and the merger of AMRB with and into BMRC were effective on March 31, 2021.
(2)Pro forma equivalents per AMRB share were calculated by multiplying the combined pro forma amounts by the fixed exchange ratio of 0.575 shares.
(3)Pro forma combined cash dividends are based on BMRC’s historical amounts.
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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:

·the agreement of BMRC to honor indemnification obligations of AMRB, as well as to purchase liability insurance for AMRB’s directors and officers for six (6) years following the merger, subject to the terms of the merger agreement;
·AMRB executive officers David E. Ritchie, Jr., Kevin B. Bender, Mitchell A. Derenzo and Dan C. McGregor each have change in control provisions in their employment agreements which would be triggered by this transaction and are to be paid, for total aggregate consideration of approximately $2.3 million, if they are terminated in connection with the merger;
·Nicolas C. Anderson and Charles D. Fite, who are currently directors of AMRB, will be appointed to the Board of Directors of BMRC and Bank of Marin following the merger;
·certain of the senior executive officers of AMRB may continue their employment for some period of time with BMRC to assist with post-merger integration; and
·the merger agreement provides that all unvested restricted stock, including restricted stock held by directors and officers, shall accelerate on the merger and that BMRC shall cash out all AMRB stock options (all of which are currently vested), which will include cash payments to certain AMRB officers who hold outstanding AMRB stock options at closing.
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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.

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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.

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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:

·estimated revenue enhancements, costs savings and financial benefits from the merger may not be fully realized within the expected time frames or at all;
·deposit attrition, customer loss or revenue loss following the merger may occur or be greater than expected;
·required regulatory, shareholder or other approvals may not be obtained or other closing conditions are not satisfied in a timely manner or at all;
·reputational risks and the reaction of the companies’ respective customers to the merger;
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·diversion of management time on merger-related issues;
·competitive pressure among depository and other financial institutions may increase significantly;
·costs or difficulties related to the integration of the businesses of Bank of Marin and American River Bank may be greater than expected;
·changes in the interest rate environment may reduce interest margins;
·the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve;
·general economic or business conditions either nationally, in the San Francisco Bay Area or the Greater Sacramento Area;
·legislation or changes in regulatory requirements may adversely affect the businesses in which BMRC and AMRB are engaged;
·the effects of any litigation or other legal or governmental proceedings relating to the merger, including costs associated with such matters or proceedings;
·recurrence of drought conditions, wildfires, and other natural disasters in BMRC’s and AMRB’s service areas;
·adverse changes may occur in the securities markets; and
·competitors of BMRC may have greater financial resources and develop products and technology that enable those competitors to compete more successfully than BMRC.

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.

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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:

1.Approval of Merger and Merger Agreement.   To consider and vote upon a proposal to approve the merger and the merger agreement; and
2.Adjournment.    To approve the adjournment or postponement of the special meeting, if necessary or appropriate, including to solicit additional proxies to approve the merger and merger agreement.

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.

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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.

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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.

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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:

1.Approval of Merger and Merger Agreement.    To consider and vote on the merger and merger agreement pursuant to which AMRB will merge with and into BMRC, with BMRC surviving, 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, as more particularly described herein;
2.Adjournment.    To approve the adjournment or postponement of the special meeting, if necessary or appropriate, including to solicit additional proxies to approve the merger and merger agreement; and
3.Named Executive Officer Compensation.    The approval, on an advisory (non-binding) basis, of the compensation to be paid to the named executive officers of AMRB in connection with the merger.
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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.

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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.

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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.

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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”).

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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.

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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.

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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.

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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:

·each of BMRC’s, AMRB’s and the combined company’s business, operations, financial condition, asset quality, earnings and prospects;
·the opportunity to enter the greater Sacramento area market and complement BMRC’s existing franchise by adding AMRB’s commercially-focused client base and banking business;
·the growth in greater Sacramento area market recently, and demographic trends in the Central Valley of California;
·conservative and achievable cost savings available in the proposed transaction, as well as the potential for revenue enhancement, which create the opportunity for BMRC to have greater future earnings and prospects compared to BMRC’s earnings and prospects on a stand-alone basis;
·the expected pro forma financial impact of the transaction, taking into account anticipated cost savings and other factors, is expected to be accretive to the combined company in terms of earnings per share immediately, and augment the combined company’s recurring interest and noninterest income;
·the complementary business models and compatible management cultures with a shared focus on relationship-based business banking;
·compatible management teams with a shared focus on conservative underwriting, including two AMRB directors who will be joining the BMRC board and key AMRB management supporting BMRC in ensuring a successful integration;
·its review and discussions with BMRC’s management and advisors concerning the due diligence examination of AMRB;
·management’s expectation that BMRC will continue to have a strong capital position upon completion of the transaction;
·its review with BMRC’s legal advisor, Stuart | Moore | Staub, of the merger agreement and other agreements, including the provisions of the merger agreement designed to enhance the probability that the transaction will be completed;
·the financial presentation, dated April 16, 2021, of KBW to the BMRC board of directors and the written opinion, dated April 16, 2021, of KBW to the BMRC board of directors, as to the fairness, from a financial point of view and as of the date of the opinion, to BMRC of the exchange ratio in the merger, as more fully described below under “— Opinion of BMRC’s Financial Advisor.”

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

·the potential risks associated with successfully integrating AMRB’s business, operations and workforce with those of BMRC;
·the interests of BMRC’s officers and directors with respect to the merger apart from their interests as holders of BMRC common stock, the risk that these interests might influence their decision with respect to the merger;
·the potential risk of diverting management attention and resources from the operation of BMRC’s business and towards the completion of the merger and the integration of AMRB;
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·the regulatory and other approvals required in connection with the merger and the possibility that such approvals may not be received in a timely manner and may include the imposition of burdensome conditions;
·the transaction costs and expenses that will be incurred in connection with the merger, including the costs of integrating the businesses of BMRC and AMRB;
·the possibility of litigation challenging the merger agreement or the transactions contemplated thereby; and
·the other risks described under “Risk Factors” beginning on page 17.

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:

·AMRB’s and BMRC’s business, earnings, operations, financial condition, prospects and synergies (on a separate and combined basis);
·the knowledge of the current financial services environment, including national, regional and local economic conditions, the interest rate environment, consolidation in the financial services industry, increased operating costs resulting from future initiatives and compliance requirements, increasing competition and the environment for banks;
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·the opportunities afforded from combining with BMRC, the branch footprint of a combined organization and knowledge of the local economies to be served with a combined organization;
·the liquidity and greater market capitalization afforded by combining with BMRC;
·the dividend history and prospects of BMRC, including the growth potential of a combined organization;
·the growth and financial prospects for BMRC and its shareholders in a business combination with BMRC versus remaining a separate entity;
·the benefits to AMRB’s employees and customers from a strategic combination, including with respect to products, services and resources;
·the ability of a combined organization to respond to changes in the economy and industry developments;
·the terms of the merger agreement, including the representations, warranties, covenants and conditions set forth therein;
·the recommendation of the strategic committee;
·the tax treatment of the merger;
·financial information regarding BMRC;
·Piper’s financial presentation, dated April 16, 2021 and fairness opinion that the exchange ratio was fair to holders of AMRB common stock from a financial point of view; and
·the strategic value afforded by a combination with BMRC.

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

·the required regulatory and shareholder approvals necessary to consummate the Merger;
·the effect of the merger on customers and employees, including potential attrition;
·the costs associated with the merger, including the impact on management and other internal resources from the merger;
·the limitation on conduct imposed in the merger agreement, including on affirmatively soliciting acquisition proposals after execution of the merger agreement and the obligation to pay a termination fee if the merger agreement is terminated under certain circumstances, all of which may discourage other parties potentially interested in a strategic transaction with AMRB from pursuing such a transaction; and
·the interests various officers and directors of AMRB may have in the merger including, but not limited to, the interests of officers and directors in a change-of-control transaction and the appointment of two AMRB directors to BMRC’s (and its bank subsidiary’s) Board of Directors.

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.”

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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:

·a draft of the merger agreement, dated April 13, 2021 (the most recent draft made available to KBW);
·the audited financial statements and the Annual Reports on Form 10-K for the three fiscal years ended December 31, 2020 of BMRC;
·the unaudited quarterly financial statements and Quarterly Report for the fiscal quarter ended March 31, 2021 of BMRC;
·the audited financial statements and Annual Reports on Form 10-K for the three fiscal years ended December 31, 2020 of AMRB;
·the unaudited quarterly financial statements and Quarterly Report for the fiscal quarter ended March 31, 2021 of AMRB;
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·certain regulatory filings of BMRC and AMRB and their respective subsidiaries, including the quarterly reports on Form FRY-9C and quarterly call reports filed with respect to each quarter during the three year period ended December 31, 2020;
·certain other interim reports and other communications of BMRC and AMRB to their respective shareholders; and
·other financial information concerning the respective businesses and operations of BMRC and AMRB furnished to KBW by BMRC and AMRB or which KBW was otherwise directed to use for purposes of KBW’s analysis.

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:

·the historical and current financial position and results of operations of BMRC and AMRB;
·the assets and liabilities of BMRC and AMRB;
·the nature and terms of certain other merger transactions and business combinations in the banking industry;
·a comparison of certain financial and stock market information of BMRC and AMRB with similar information for certain other companies, the securities of which are publicly traded;
·publicly available consensus “street estimates” of AMRB, as well as assumed long-term AMRB growth rates provided to KBW by AMRB management, all of which information was discussed with KBW by BMRC management and used and relied upon by KBW at the direction of such management and with the consent of the BMRC board;
·publicly available consensus “street estimates” of BMRC, as well as assumed long-term BMRC growth rates provided to KBW by BMRC management, all of which information was discussed with KBW by BMRC management and used and relied upon by KBW at the direction of such management and with the consent of the BMRC board; and
·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) that were prepared by BMRC management, provided to and discussed with KBW by such management, and used and relied upon by KBW at the direction of such management and with the consent of the BMRC board.

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.

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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:

·that the merger and any related transactions (including, without limitation, the bank merger) would be completed substantially in accordance with the terms set forth in the merger agreement (the final terms of which KBW assumed would not differ in any respect material to KBW’s analyses from the draft reviewed by KBW and referred to above), with no adjustments to the exchange ratio and with no other consideration or payments in respect of AMRB common stock;
·that the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement were true and correct;
·that each party to the merger agreement and all related documents would perform all of the covenants and agreements required to be performed by such party under such documents;
·that there were no factors that would delay or subject to any adverse conditions, any necessary regulatory or governmental approval for the merger or any related transactions and that all conditions to the completion of the merger and any related transactions would be satisfied without any waivers or modifications to the merger agreement or any of the related documents; and
·that in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the merger and any related transactions, no restrictions, including any divestiture requirements, termination or other payments or amendments or modifications, would be imposed that would have a material adverse effect on the future results of operations or financial condition of BMRC, AMRB or the pro forma entity, or the contemplated benefits of the merger, including without limitation the cost savings and related expenses expected to result or be derived from the merger.
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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:

·the underlying business decision of BMRC to engage in the merger or enter into the merger agreement;
·the relative merits of the merger as compared to any strategic alternatives that are, have been or may be available to or contemplated by BMRC or the BMRC board;
·the fairness of the amount or nature of any compensation to any of BMRC’s officers, directors or employees, or any class of such persons, relative to any compensation to the holders of BMRC common stock or relative to the exchange ratio;
·the effect of the merger or any related transaction on, or the fairness of the consideration to be received by, holders of any class of securities of BMRC, AMRB or any other party to any transaction contemplated by the merger agreement;
·the actual value of BMRC common stock to be issued in connection with the merger;
·the prices, trading range or volume at which BMRC common stock or AMRB common stock will trade following the public announcement of the merger or the prices, trading range or volume at which BMRC common stock will trade following the consummation of the merger;
·any advice or opinions provided by any other advisor to any of the parties to the merger or any other transaction contemplated by the merger agreement; or
·any legal, regulatory, accounting, tax or similar matters relating to BMRC, AMRB, any of their respective shareholders, or relating to or arising out of or as a consequence of the merger or any other related transaction (including the bank merger), including whether or not the merger would qualify as a tax-free reorganization for United States federal income tax purposes.

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.

39
 

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

40
 

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:

       Selected Companies 
   BMRC   25th
Percentile
   Median   Average   75th
Percentile
 
MRQ Core Return on Average Assets(1)   1.12%   0.96%   1.15%   1.16%   1.35%
MRQ Core Return on Average Tangible Common Equity(1)   10.19%   10.70%   13.43%   12.90%   15.64%
MRQ Net Interest Margin   3.40%   3.17%   3.46%   3.49%   3.90%
MRQ Fee Income / Revenue Ratio(2)   7.2%   8.0%   13.4%   18.7%   18.9%
MRQ Noninterest Expense / Average Assets   1.92%   2.54%   2.36%   2.64%   2.10%
MRQ Efficiency Ratio   54.4%   65.1%   61.9%   60.9%   55.8%

 

 
(1)Core net income after taxes and before extraordinary items, excluding gain on the sale of available for sale securities, amortization of intangibles, goodwill and nonrecurring items as defined by S&P Global.
(2)Excluded gain on sale of securities.

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

       Selected Companies 
   BMRC   25th
Percentile
   Median   Average   75th
Percentile
 
Tangible Common Equity / Tangible Assets   11.27%   8.59%   9.56%   9.20%   10.03%
Total Capital Ratio   16.03%   13.51%   15.58%   15.58%   16.67%
Loans HFI / Deposits   83.4%   91.6%   79.1%   81.1%   70.8%
Loan Loss Reserves / Gross Loans   1.10%   1.09%   1.30%   1.29%   1.38%
Nonperforming Assets / Loans + OREO   0.68%   0.94%   0.58%   0.68%   0.28%
MRQ Net Charge-offs / Average Loans   (0.00%)   0.05%   0.01%   0.05%   (0.00%)

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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):

       Selected Companies 
   BMRC   25th
Percentile
   Median   Average   75th
Percentile
 
One-Year Stock Price Change   19.5%   42.5%   51.4%   58.8%   75.0%
Year-To-Date Stock Price Change   13.4%   10.7%   21.5%   22.3%   30.8%
Price / Tangible Book Value per Share   1.62x   1.12x   1.29x   1.41x   1.54x
Price / LTM EPS   17.5x   9.9x   13.3x   13.6x   15.7x
Price / 2021 EPS Estimate   19.1x   10.3x   11.7x   13.3x   17.2x
Price / 2022 EPS Estimate   19.2x   10.5x   13.3x   13.1x   14.2x
Dividend Yield   2.4%   0.7%   1.8%   2.1%   3.2%
LTM Dividend Payout Ratio   41.4%   6.2%   24.5%   26.5%   30.8%

 

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.

42
 

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

       Selected Companies 
   American
River
   25th
Percentile
   Median   Average   75th
Percentile
 
MRQ Core Return on Average Assets(1)   0.96%   0.98%   1.16%   1.15%   1.42%
MRQ Core Return on Average Tangible Common Equity(1)   11.16%   10.82%   14.50%   13.20%   16.74%
MRQ Net Interest Margin   3.46%   3.26%   3.48%   3.56%   3.93%
MRQ Fee Income / Revenue Ratio(2)   5.0%   6.7%   10.0%   17.4%   20.3%
MRQ Noninterest Expense / Average Assets   1.99%   2.74%   2.32%   2.62%   2.16%
MRQ Efficiency Ratio   58.7%   66.3%   60.4%   60.5%   54.2%

 

 
(1)Core net income after taxes and before extraordinary items, excluding gain on the sale of available for sale securities, amortization of intangibles, goodwill and nonrecurring items as defined by S&P Global.
(2)Excluded gain on sale of securities.

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

       Selected Companies 
   American
River
   25th
Percentile
   Median   Average   75th 
Percentile
 
Tangible Common Equity / Tangible Assets   9.00%   8.08%   8.97%   8.92%   9.98%
Total Capital Ratio   16.21%   12.80%   13.22%   14.03%   15.57%
Loans HFI / Deposits   64.3%   102.5%   85.7%   88.3%   73.9%
Loan Loss Reserves / Gross Loans   1.39%   1.10%   1.22%   1.19%   1.32%
Nonperforming Assets / Loans + OREO   1.39%   0.92%   0.56%   0.68%   0.20%
MRQ Net Charge-offs / Average Loans   0.02%   0.04%   0.00%   0.05%   (0.01)%

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):

       Selected Companies 
   American
River
   25th
Percentile
   Median   Average   75th
Percentile
 
One-Year Stock Price Change   57.0%   41.4%   68.6%   66.1%   96.8%
Year-To-Date Stock Price Change   21.6%   10.1%   22.9%   21.6%   30.4%
Price / Tangible Book Value per Share   1.24x   1.14x   1.25x   1.34x   1.46x
Price / LTM EPS   13.3x   9.7x   11.9x   12.6x   15.1x
Price / 2021 EPS Estimate   12.1x   9.6x   13.5x   13.2x   16.7x
Price / 2022 EPS Estimate   12.2x   10.2x   13.3x   12.3x   13.4x
Dividend Yield   1.8%   1.2%   1.8%   1.9%   2.2%
LTM Dividend Payout Ratio   23.3%   9.3%   18.4%   22.2%   25.9%

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.

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The selected transactions were as follows:

Acquiror   Acquired Company   Announcement Date
VyStar Credit Union   Heritage Southeast Bancorporation, Inc.   03/31/2021
Seacoast Banking Corporation of Florida   Legacy Bank of Florida   03/23/2021
Shore Bancshares, Inc.   Severn Bancorp, Inc.   03/03/2021
Stock Yards Bancorp, Inc.   Kentucky Bancshares, Inc.   01/27/2021
First Busey Corporation   Cummins-American Corp.   01/19/2021
BancorpSouth Bank   FNS Bancshares, Inc.   01/13/2021
BancorpSouth Bank   National United Bancshares, Inc.   12/02/2020
First Mid Bancshares, Inc.   LINCO Bancshares, Inc.   09/28/2020
Dollar Mutual Bancorp   Standard AVB Financial Corp.   09/25/2020
Enterprise Financial Services Corp   Seacoast Commerce Banc Holdings   08/20/2020
Blue Ridge Bankshares, Inc.   Bay Banks of Virginia, Inc.   08/13/2020
United Community Banks, Inc.   Three Shores Bancorporation,   03/09/2020
LendingClub Corporation   Radius Bancorp, Inc.   02/18/2020
Norwood Financial Corp. Inc.   UpState New York Bancorp, Inc.   01/09/2020

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:

·Price per common share to tangible book value per share of the acquired company (in the case of six selected transactions involving a private acquired company, this transaction statistic was calculated as total transaction consideration divided by total tangible common equity);
·Price per common share to LTM EPS of the acquired company (in the case of six selected transactions involving a private acquired company, this transaction statistic was calculated as total transaction consideration divided by LTM total net income); and
·Tangible equity premium to core deposits (total deposits less time deposits greater than $100,000) of the acquired company, referred to as core deposit premium

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:

       Selected Transactions 
   BMRC /
AMRB
   25th
Percentile
   Median   Average   75th
Percentile
 
Price / Tangible Book Value per Share   1.74x   1.16x   1.53x   1.44x   1.76x
Price / LTM EPS   15.9x   16.1x   17.3x   17.8x   21.3x
Core Deposit Premium   7.9%   4.7%   6.6%   7.0%   8.9%
One-Day Market Premium   40.0%   28.7%   37.3%   42.0%   70.6%

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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:

   BMRC
% of Total
   AMRB
% of Total
 
Ownership at 0.575x merger exchange ratio:   ~80%   ~20%
Market Information:          
Pre-Transaction Market Capitalization    84%   16%
Balance Sheet:          
Total Assets    77%   23%
Gross Loans Held for Investment    82%   18%
Total Deposits    77%   23%
Tangible Common Equity    81%   19%
Income Statement:          
2021 Estimated Earnings    78%   22%
2022 Estimated Earnings    78%   22%

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.

45
 

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.

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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:

·an execution copy of the merger agreement;
·certain publicly available financial statements and other historical financial information of AMRB that Piper Sandler deemed relevant;
·certain publicly available financial statements and other historical financial information of BMRC that Piper Sandler deemed relevant;
·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;
·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;
·the pro forma financial impact of the merger on BMRC based on certain assumptions relating to transaction expenses, purchase accounting adjustments and cost savings, as provided by the senior management of BMRC;
·the publicly reported historical price and trading activity for AMRB common stock and BMRC common stock, including a comparison of certain stock trading information for AMRB common stock and BMRC common stock and certain stock indices, as well as similar publicly available information for certain other companies, the securities of which are publicly traded;
·a comparison of certain financial and market information for AMRB and BMRC with similar financial institutions for which information is publicly available;
·the financial terms of certain recent business combinations in the banking industry (on a nationwide basis), to the extent publicly available;
·the current market environment generally and the banking environment in particular; and
·such other information, financial studies, analyses and investigations and financial, economic and market criteria as Piper Sandler considered relevant.
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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.

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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.

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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:

Transaction Price / Tangible Book Value per Share   174%
Transaction Price / LTM Earnings per Share   18.8x
Transaction Price / 2021E Mean Consensus EPS   17.2x
Tangible Book Premium / Core Deposits (CDs > $250K)(1)    8.3%
Premium to AMRB Market Price   39.5%

 

 
(1)Core deposits equal total deposits less time deposits greater than $250,000

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

   Beginning Value
April 15, 2020
   Ending Value
April 15, 2021
 
AMRB   100%   158.6%
AMRB Peer Group   100%   157.8%
S&P 500 Index   100%   149.8%
NASDAQ Bank Index   100%   193.8%

AMRB’s Three-Year Stock Performance(1)

   Beginning Value
April 15, 2018
   Ending Value
April 15, 2021
 
AMRB   100%   105.4%
AMRB Peer Group   100%   107.4%
S&P 500 Index   100%   157.0%
NASDAQ Bank Index   100%   112.7%

 

 
(1)Excludes Bank of San Francisco (OTCQK: BSFO) which became publicly traded during the measurement period
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BMRC’s One-Year Stock Performance

   Beginning Value
April 15, 2020
   Ending Value
April 15, 2021
 
BMRC   100%   127.8%
BMRC Peer Group   100%   160.3%
S&P 500 Index   100%   149.8%
NASDAQ Bank Index   100%   193.8%

 

BMRC’s Three-Year Stock Performance

   Beginning Value
April 15, 2018
   Ending Value
April 15, 2021
 
BMRC   100%   111.8%
BMRC Peer Group   100%   96.4%
S&P 500 Index   100%   157.0%
NASDAQ Bank Index   100%   112.7%

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:

1st Capital Bancorp Pinnacle Bank
American Riviera Bank Plumas Bancorp
Bank of San Francisco Summit State Bank
Bay Community Bancorp Suncrest Bank
Communities First Financial Corporation United Security Bancshares
Community West Bancshares US Metro Bank
Pacific Enterprise Bancorp Valley Republic Bancorp

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

   AMRB   AMRB
Peer Group
Median
   AMRB
Peer Group
Mean
   AMRB
Peer Group
Low
   AMRB
Peer Group
High
 
Total assets ($mm)   869    869    893    604    1,246 
Market value ($mm)   95    97    97    51    155 
Price/Tangible book value (%)   125    119    122    88    181 
Price/ LTM Earnings per share (x)   13.5    12.4    13.0    9.3    18.9 
Current Dividend Yield (%)   1.7    0.0    0.9    0.0    5.6 
One Year Price Change (%)   58.6    57.8    62.7    21.8    117.6 
LTM Efficiency ratio (%)   59    57    58    45    73 
LTM Net interest margin (%)   3.52    3.77    3.71    3.13    4.10 
LTM Return on average assets (%)   0.86    0.85    0.96    0.51    1.60 
LTM Return on average equity (%)   7.9    8.8    10.3    5.2    19.3 
Tangible common equity/Tangible assets (%)   9.0    8.9    8.9    6.8    11.4 
Loans / Deposits (%)   64    87    90    69    118 
Non-performing assets / Total assets (%)   0.77    0.31    0.36    0.00    1.56 

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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:

Central Pacific Financial Corp. Sierra Bancorp
Central Valley Community Bancorp TriCo Bancshares
Heritage Commerce Corp Westamerica Bancorporation
Heritage Financial Corporation  

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

   BMRC   BMRC
Peer Group
Median
   BMRC
Peer Group
Mean
   BMRC
Peer Group
Low
   BMRC
Peer Group
High
 
Total assets ($mm)   2,912    6,595    5,351    2,004    7,640 
Market value ($mm)   523    771    896    244    1,715 
Price/Tangible book value (%)   163    179    172    128    238 
Price/ LTM Earnings per share (x)   17.6    20.6    18.4    11.6    21.9 
Price/ 2021E Mean Analyst Earnings per share (x)   18.8    15.8    15.9    10.5    21.9 
Current Dividend Yield (%)   2.3    2.8    2.9    2.1    4.3 
One Year Price Change (%)   27.8    60.3    57.6    8.6    88.9 
LTM Efficiency ratio (%)   55    57    58    47    64 
LTM Net interest margin (%)   3.61    3.60    3.58    2.91    3.96 
LTM Return on average assets (%)   1.04    0.91    0.95    0.58    1.30 
LTM Return on average equity (%)   8.6    7.2    8.1    5.8    11.3 
Tangible common equity/Tangible assets (%)   11.3    9.3    9.4    8.3    10.9 
Loans / Deposits (%)   83    73    69    22    94 
MRQ Cost of Funds (%)   0.08    0.13    0.12    0.03    0.19 
Noninterest-bearing deposits/ Total deposits (%)   54    40    40    31    48 
Non-performing assets / Total assets (%)   0.49    0.44    0.51    0.11    1.46 

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”).

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The Precedent Transactions group was composed of the following transactions:

Acquiror   Target
Stock Yards Bancorp, Inc.   Kentucky Bancshares, Inc.
BancorpSouth Bank   FNS Bancshares, Inc.
BancorpSouth Bank   National United Bancshares, Inc.
Virginia National Bankshares Corporation   Fauquier Bankshares, Inc.
First Mid Bancshares, Inc.   LINCO Bancshares, Inc.
Blue Ridge Bankshares, Inc.   Bay Banks of Virginia, Inc.

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.

       Nationwide Precedent Transactions 
   BMRC/
AMRB
   Median   Mean   Low   High 
Transaction Price / LTM Earnings Per Share (x)   18.8    17.1    16.7    10.1    21.0 
Transaction Price / Tangible Book Value Per Share (%)   174    130    126    81    171 
Tangible Book Value Premium to Core Deposits (%)   8.3    4.0    3.3    (-2.8)   9.5 
1-Day Market Premium (%)   39.5    28.2    33.3    8.1    68.8 

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

Discount
Rate
   10.0x  11.5x  13.0x  14.5x  16.0x  17.5x
9.0%  $11.12   $12.63   $14.14   $15.65   $17.16   $18.67 
10.0%   10.66    12.11    13.56    15.00    16.45    17.90 
11.0%   10.23    11.62    13.00    14.39    15.78    17.16 
12.0%   9.82    11.15    12.48    13.81    15.14    16.46 
13.0%   9.44    10.71    11.98    13.25    14.53    15.80 
14.0%   9.07    10.29    11.51    12.73    13.95    15.17 
15.0%   8.71    9.89    11.06    12.23    13.40    14.57 

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Tangible Book Value Per Share Multiples

Discount
Rate
   100%  110%  120%  130%  140%  150%
9.0%  $13.08   $14.29   $15.49   $16.69   $17.90   $19.10 
10.0%   12.55    13.70    14.85    16.00    17.16    18.31 
11.0%   12.04    13.14    14.24    15.35    16.45    17.56 
12.0%   11.55    12.61    13.67    14.73    15.78    16.84 
13.0%   11.09    12.11    13.12    14.14    15.15    16.16 
14.0%   10.66    11.63    12.60    13.57    14.55    15.52 
15.0%   10.24    11.17    12.11    13.04    13.97    14.91 

Piper Sandler also considered and discussed with the AMRB’s board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to earnings. To illustrate this impact, Piper Sandler performed a similar analysis, assuming AMRB’s earnings varied from 15.0% above estimates to 15.0% below estimates. This analysis resulted in the following range of per share values for AMRB’s common stock, applying the price to 2025 earnings multiples range of 10.0x to 17.5x referred to above and a discount rate of 13.16%.

Earnings Per Share Multiples

Annual
Estimate
Variance
   10.0x  11.5x  13.0x  14.5x  16.0x  17.5x
(15.0)%  $8.11   $9.19   $10.26   $11.34   $12.41   $13.48 
(10.0)%   8.53    9.67    10.81    11.95    13.08    14.22 
(5.0)%   8.95    10.15    11.36    12.56    13.76    14.96 
0.0%   9.38    10.64    11.90    13.17    14.43    15.70 
5.0%   9.80    11.12    12.45    13.78    15.11    16.44 
10.0%   10.22    11.61    13.00    14.39    15.78    17.17 
15.0%   10.64    12.09    13.55    15.00    16.46    17.91 

Piper Sandler also performed an analysis that estimated the net present value per share of BMRC common stock, assuming BMRC performed in accordance with 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, 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, and tangible common equity / tangible assets maintained at 9.3% by distributing excess capital as cash dividends. To approximate the terminal value of a share of BMRC common stock at December 31, 2025, Piper Sandler applied price to 2025 earnings multiples ranging from 12.0x to 22.0x and multiples of 2025 tangible book value ranging from 125% to 225%. The terminal value and assumed dividends from June 30, 2021 through December 31, 2025 were then discounted to present values using different discount rates ranging from 8.0% to 14.0%, which were chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of BMRC common stock. As illustrated in the following tables, the analysis indicated imputed ranges of values per share of BMRC common stock of $22.51 to $43.99 when applying multiples of earnings and $24.07 to $46.91 when applying multiples of tangible book value.

Earnings Per Share Multiples

Discount
Rate
   12.0x  14.0x  16.0x  18.0x  20.0x  22.0x
8.0%   $27.70   $30.95   $34.21   $37.47   $40.73   $43.99 
9.0%   26.72    29.84    32.96    36.08    39.19    42.31 
10.0 %   25.79    28.78    31.77    34.75    37.74    40.72 
11.0%   24.91    27.77    30.63    33.49    36.35    39.21 
12.0%   24.07    26.81    29.55    32.29    35.04    37.78 
13.0%   23.27    25.90    28.53    31.15    33.78    36.41 
14.0%   22.51    25.03    27.55    30.07    32.59    35.11 
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Tangible Book Value Per Share Multiples

Discount
Rate
   125%  145%  165%  185%  205%  225%
8.0%  $29.71   $33.15   $36.59   $40.03   $43.47   $46.91 
9.0%   28.65    31.94    35.24    38.53    41.82    45.11 
10.0%   27.64    30.79    33.95    37.10    40.25    43.41 
11.0%   26.68    29.70    32.72    35.74    38.76    41.79 
12.0%   25.77    28.66    31.56    34.45    37.35    40.24 
13.0%   24.90    27.68    30.45    33.23    36.00    38.78 
14.0%    24.07    26.74    29.40    32.06    34.72    37.38 

Piper Sandler also considered and discussed with the AMRB’s board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to earnings. To illustrate this impact, Piper Sandler performed a similar analysis assuming BMRC’s earnings varied from 15.0% above estimates to 15.0% below estimates. This analysis resulted in the following range of per share values for BMRC common stock, applying the price to 2025 earnings multiples range of 12.0x to 22.0x referred to above and a discount rate 11.14%.

Earnings Per Share Multiples

Annual
Estimate
Variance
   12.0x  14.0x  16.0x  18.0x  20.0x  22.0x
(15.0)%  $22.23   $24.65   $27.06   $29.48   $31.90   $34.31 
(10.0)%   23.08    25.64    28.20    30.76    33.32    35.88 
(5.0)%   23.94    26.64    29.34    32.04    34.74    37.44 
0.0 %   24.79    27.63    30.47    33.32    36.16    39.00 
5.0%   25.64    28.63    31.61    34.60    37.58    40.57 
10.0%   26.49    29.62    32.75    35.88    39.00    42.13 
15.0%   27.35    30.62    33.89    37.15    40.42    43.69 

Piper Sandler noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.

Pro Forma Transaction Analysis.

Piper Sandler analyzed certain potential pro forma effects of the merger on BMRC assuming the transaction closes on September 30, 2021. Piper Sandler also utilized the following information and assumptions: (a) 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, (b) 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, and (c) certain assumptions relating to purchase accounting adjustments and cost savings, as provided by the senior management of BMRC. The analysis indicated that the merger could be accretive to BMRC’s estimated earnings per share (excluding one-time transaction costs and expenses) in the years ending December 31, 2022 through December 31, 2025, dilutive to BMRC’s estimated tangible book value per share at close, December 31, 2022 and December 31, 2023, approximately neutral to BMRC’s estimated tangible book value per share at December 31, 2024 and accretive BMRC’s estimated tangible book value per share at December 31, 2025.

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In connection with this analysis, Piper Sandler considered and discussed with the AMRB’s board of directors how the analysis would be affected by changes in the underlying assumptions, including the impact of final purchase accounting adjustments determined at the closing of the transaction, and noted that the actual results achieved by the combined company may vary from projected results and the variations may be material.

Piper Sandler’s Relationship.

Piper Sandler is acting as AMRB’s financial advisor in connection with the merger and will receive a fee for such services in an amount equal to 1.56% of the aggregate purchase price, which fee is contingent upon the closing of the merger. At the time of announcement of the merger, Piper Sandler’s fee was approximately $2.1 million. Piper Sandler also received a $175,000 fee from AMRB upon rendering its opinion, which opinion fee will be credited in full towards any advisory fee that may become due and payable to Piper Sandler upon closing of the merger. AMRB has also agreed to indemnify Piper Sandler against certain claims and liabilities arising out of Piper Sandler’s engagement and to reimburse Piper Sandler for certain of its out-of-pocket expenses incurred in connection with Piper Sandler’s engagement. Piper Sandler did not provide any other investment banking services to AMRB in the two years preceding the date of its opinion, nor did Piper Sandler provide any investment banking services to BMRC in the two years preceding the date thereof. In the ordinary course of Piper Sandler’s business as a broker-dealer, Piper Sandler may purchase securities from and sell securities to AMRB and BMRC. Piper Sandler may also actively trade the equity and debt securities of AMRB and BMRC for its own account and for the accounts of its customers.

The Merger Consideration

At the effective time of the merger, each share of AMRB common stock issued and outstanding immediately before the effective time of the merger, except as provided below, will, by virtue of the merger and without any action on the part of the AMRB shareholder, be converted into the right to receive whole shares of common stock of BMRC at a rate of 0.575 shares of BMRC common stock for each share of AMRB common stock. Cash will be paid in lieu of fractional shares of BMRC common stock. You are urged to read carefully the information set forth below under “— Material U.S. Federal Income Tax Consequences of the Merger” to better understand the U.S. federal income tax effects of your receipt of BMRC common stock and cash in lieu of fractional shares in exchange for your AMRB common stock.

Common Stock

Upon consummation of the merger and except for cash paid in lieu of fractional shares, each share of AMRB common stock issued and outstanding immediately prior to the effective time of the merger will be canceled and converted into the right to receive 0.575 shares of BMRC common stock, which is referred to as the exchange ratio.

The value of the BMRC common stock to be issued to the common shareholders of AMRB would amount to approximately $114,989,651 million, based on the 15-day daily volume weighted average price of BMRC common stock as of June 15, 2021. This estimation is based solely on the number of AMRB common shares issued and outstanding on the date of this joint proxy statement/prospectus multiplied by the exchange ratio, with the result then multiplied by said 15-day daily volume weighted average price of BMRC common stock.

Upon completion of the merger, and based on 5,980,323 shares of AMRB common stock issued and outstanding as of the date of this joint proxy statement/prospectus (and assuming holders of all outstanding AMRB stock options exercise their options prior to closing), AMRB shareholders are expected to receive approximately 3,450,818 shares of BMRC common stock. Following the completion of the merger and based on 13,051,274 shares of BMRC common stock issued and outstanding as of June 11, 2021, the former AMRB shareholders will own approximately 20.9% of the issued and outstanding shares of BMRC common stock and the current shareholders of BMRC will own the remaining approximately 79.1% of the issued and outstanding shares of BMRC common stock.

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The following table sets forth the closing sale prices of (i) BMRC common stock as quoted on Nasdaq on April 16, 2021, and (ii) AMRB common stock as quoted on Nasdaq on April 16, 2021, the last trading-day before BMRC announced the merger, and on June 15, 2021, the last practicable trading-day before the distribution of this joint proxy statement/prospectus. To illustrate the market value of the per share merger consideration to be received by AMRB’s shareholders, the following table also presents the equivalent market value per share of AMRB common stock as of April 16, 2021, and June 15, 2021, which were determined by multiplying the closing price for the BMRC common stock on those dates by the exchange ratio of 0.575 of a share of BMRC common stock for each share of AMRB common stock.

   BMRC
Common Stock
   AMRB
Common Stock
   Equivalent Market
Value Per Share of
AMRB
 
At April 16, 2021  $39.06   $16.35   $22.46 
At June 15, 2021  $32.43   $18.20   $18.65 

The market price of BMRC common stock and AMRB common stock will fluctuate prior to the date of AMRB’s special meeting and the date an AMRB shareholder receives their shares of BMRC common stock. Therefore, the value of the stock to be received in the merger by the AMRB shareholders will not be known at the time the AMRB shareholders vote on the merger and merger agreement. AMRB shareholders should obtain a current price quotation for the shares of BMRC common stock to update the implied value for a share of AMRB common stock.

Fractional Shares

No fractional shares of BMRC common stock will be issued and, in lieu thereof, each holder of AMRB common stock who would otherwise be entitled to a fractional share interest will receive an amount in cash, without interest, determined by multiplying such fractional interest by the volume weighted average price of the BMRC common stock as quoted on Nasdaq for the fifteen (15) trading days ending on the day which is the second trading day before the anticipated closing date of the merger, whether or not trades occurred on those days. No such holder shall be entitled to dividends, voting rights or any other rights in respect of any fractional share of BMRC common stock.

Procedures for Exchanging AMRB Common Stock Certificates

Promptly following the closing of the merger, Computershare, BMRC’s transfer agent and the exchange agent for the merger, will mail to each holder of record of AMRB common stock a notice and form of transmittal letter advising such holder of the effectiveness of the merger and the procedure for surrendering to the exchange agent certificates representing shares of AMRB common stock in exchange for the merger consideration allocated to them. Upon surrender of a stock certificate of AMRB common stock for exchange and cancellation to the exchange agent (or appropriate certifications with respect to book-entry shares), together with a duly executed transmittal letter, the holder of such certificate will be entitled to receive the merger consideration allocated to them and the certificate for AMRB common stock so surrendered will be canceled. No interest will be paid or accrued on any cash paid in lieu of fractional shares of BMRC common stock.

AMRB shareholders who surrender their stock certificates and complete the transmittal materials, or who have taken other steps to surrender the evidence of their stock interest in AMRB in accordance with the instructions accompanying the transmittal letter, will, upon the exchange agent’s acceptance of such stock certificates and transmittal materials or stock interest, be entitled to receive the shares of BMRC common stock and cash in lieu of fractional shares to which they are entitled.

An AMRB shareholder will receive dividends on BMRC common stock or other distributions declared after the completion of the merger only if he or she has surrendered his or her AMRB stock certificates. Only then will the AMRB shareholder be entitled to receive all previously withheld dividends and distributions, without interest.

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After completion of the merger, no transfers of AMRB common stock issued and outstanding immediately prior to the completion of the merger will be allowed. AMRB stock certificates (or book entry shares) that are presented for transfer after the completion of the merger will be canceled and exchanged for the appropriate merger consideration.

BMRC will only issue a BMRC stock certificate in a name other than the name in which a surrendered AMRB stock certificate is registered if an AMRB shareholder presents the exchange agent with all documents required to show and effect the unrecorded transfer of ownership of the shares of AMRB common stock formerly represented by such AMRB stock certificate and that the AMRB shareholder has paid any applicable stock transfer taxes.

If an AMRB shareholder has lost his or her AMRB stock certificate, or the AMRB stock certificate has been stolen or destroyed, the AMRB shareholder may be required to deliver an affidavit and a lost certificate bond as a condition to receiving any merger consideration to which he or she may be entitled.

Conditions to the Merger

Completion of the merger is subject to the satisfaction of certain conditions set forth in the merger agreement, or the waiver of such conditions by the party entitled to do so, at or before the closing date of the merger. Each of the parties’ obligation to consummate the merger under the merger agreement is subject to the following conditions:

·the holders of a majority of the issued and outstanding common shares of each of AMRB and BMRC must approve the merger and merger agreement;
·BMRC and AMRB must receive all required regulatory approvals for the merger, no such approval may contain any condition that would reasonably be likely to have a material adverse effect on BMRC and its subsidiaries taken as whole after giving effect to the merger; and
·no statute, rule, regulation, judgment, decree, injunction or other order shall have been enacted, issued, promulgated, enforced or entered which prohibits the consummation of the merger.

In addition to the foregoing conditions, the obligation of BMRC to consummate the merger under the merger agreement is subject to the following conditions, which may be waived by BMRC:

·the representations and warranties of AMRB in the merger agreement must be true and correct as of the date of the merger agreement and as of the effective time of the merger, except as to any representation or warranty which specifically relates to an earlier date and other than, in most cases, those failures to be true and correct that have not had or are reasonably likely not to have a material adverse effect (as defined below) on AMRB, and BMRC shall have received a certificate signed by the chief executive officer and chief financial officer of AMRB to that effect;
·AMRB must have performed in all material respects all obligations required to be performed by it at or prior to consummation of the merger, and BMRC shall have received a certificate signed by the chief executive officer and chief financial officer of AMRB to that effect;
·BMRC shall have received shareholder agreements executed and delivered by each of the AMRB directors (which BMRC has received) and each of the directors who signed the shareholder agreements shall have performed in all material respects all obligations under such agreements. The form of the shareholder agreement is attached as Exhibit A-1 to the merger agreement, which is attached as Appendix A to this joint proxy statement/prospectus;
·as of the last business day of the month prior to the closing of the merger, AMRB’s adjusted stockholders’ equity must not be less than $93.1 million; for purposes of this condition, AMRB’s adjusted stockholders’ equity means AMRB’s stockholders’ equity excluding the effect or accrual of (i) certain employee payments in accordance with the merger agreement, (ii) any change in the accumulated other comprehensive income of the securities portfolio from the amount reported as of December 31, 2020, (iii) any purchase accounting marks, (iv) any goodwill impairment recognized since December 31, 2020, (v) all amounts paid or accrued in connection with any actions taken pursuant to Sections 6.07 and 6.18 of the merger agreement to the extent that such actions were not necessary to bring AMRB into conformity with GAAP or any applicable law of any governmental authority, (vi) all fees and expenses of all attorneys, accountants, investment bankers and other advisors and agents for AMRB for services rendered solely in connection with the transactions contemplated by the merger agreement paid by AMRB prior to closing of the transaction, (vii) all amounts paid or accrued in connection with any litigation related to the transactions contemplated in the merger agreement, including any amounts paid in settlement thereof, and (viii) all amounts paid or accrued for the change in control agreements in accordance with the merger agreement; provided, however, that to the extent that the amounts of the items in (vi), (vii) and (viii) exceed certain thresholds set forth in the merger agreement, such excess shall reduce the adjusted stockholders’ equity on an after tax basis pursuant to the terms of the merger agreement;
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·BMRC shall have received a tax opinion from Crowe LLP that the merger will be treated as a “reorganization” within the meaning of Section 368(a) of 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;
·BMRC shall have received executed non-compete/non-solicitation agreements from each of the directors of AMRB and from any AMRB officer with a title of EVP or above (which BMRC has received) each of which shall remain in full force and effect;
·AMRB shall have paid all transaction expenses incurred in connection with the merger prior to the closing and shall have provided BMRC with written evidence thereof; provided, BMRC shall have been given an opportunity to review all invoices, bills and estimates relating to professional fees; and
·BMRC shall have received the written resignation of each director of AMRB.

In addition to the other conditions set forth above, the obligation of AMRB to consummate the merger under the merger agreement is subject to the following conditions, which may be waived by AMRB:

·the representations and warranties of BMRC in the merger agreement must be true and correct as of the date of the merger agreement and as of the effective time of the merger, except as to any representation or warranty which specifically relates to an earlier date and other than those failures to be true and correct that have not had or are reasonably likely not to have a material adverse effect (as defined below) on BMRC, and AMRB shall have received a certificate signed by the chief executive officer and chief financial officer of BMRC to that effect; and
·BMRC must have performed in all material respects all obligations required to be performed by it at or prior to consummation of the merger, and AMRB shall have received a certificate signed by the chief executive officer and chief financial officer of BMRC to that effect;
·AMRB shall have received shareholder agreements executed and delivered by each of the BMRC directors (which AMRB has received) and each of the directors who signed the shareholder agreements shall have performed in all material respects all obligations under such agreements. The form of the shareholder agreement is attached as Exhibit A-2 to the merger agreement, which is attached as Appendix A to this joint proxy statement/prospectus;
·AMRB shall have received a tax opinion from Manatt, Phelps & Phillips LLP that the merger will be treated as a “reorganization” within the meaning of Section 368(a) of 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; and
·The shares of BMRC common stock to be issued in the merger shall be approved for quotation on Nasdaq subject to official notice of issuance, prior to closing.

Additionally, each party’s obligations are conditioned upon no event having occurred or circumstance arisen that, individually or taken together with all other facts, circumstances or events, has had or could reasonably be expected to have a material adverse effect on the other. Under the terms of the merger agreement, a material adverse effect on either BMRC or AMRB is defined to mean any effect that is material and adverse to the business, assets or deposit liabilities, properties, operations, results of operations, or financial condition of either BMRC or AMRB, as the case may be, or the merger. However, under the terms of the merger agreement, the following effects, circumstances, occurrences, or changes shall not be considered when determining if a material adverse effect has occurred:

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·any change in law, rule or regulation or generally accepted accounting principles or interpretations of them by governmental authorities that apply to all parties;
·any action taken by one party with the express written consent of the other party or as otherwise required by the merger agreement;
·any failure, in and of itself, by either party to meet internal or other estimates, predictions, projections or forecasts of revenue, net income or any other measure of financial performance; provided, however, that the facts or circumstances giving rise or contributing to failure to meet estimates or projections may be deemed to constitute, or be taken into account in determining whether there has been, a material adverse effect unless such facts or circumstances are themselves specifically excepted from the definition of material adverse effect;
·changes in economic conditions affecting commercial banks generally, except to the extent such changes disproportionately affect one of the parties;
·changes in global, national or regional political conditions (including any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism), or in economic or market (including equity, credit and debt markets, as well as changes in interest rates) conditions affecting the commercial banking industry generally (including any such changes arising out of the Covid-19 pandemic or governmental responses thereto);
·changes resulting from earthquakes, floods, wildfires or other natural disasters or form any outbreak of any diseases or other public health event (including the COVID-19 pandemic); or
·any litigation instituted seeking to enjoin the consummation of the merger or asserting that the merger consideration is unfair, the directors or officers breached their fiduciary duties or the requirement to act in good faith as a result of their actions in connection with the approval of or efforts to consummate the merger, or that the registration statement or this joint proxy statement/prospectus contained any misstatements of material fact relating to the transactions contemplated by the merger agreement, or omitted to state a material fact that was necessary to make the statements therein relating to the transactions contemplated by the merger agreement not misleading.

Bank Regulatory Approvals

The merger cannot be completed unless the parties receive prior approvals or waivers from the FDIC, DFPI and Federal Reserve.

Bank holding companies, such as BMRC and AMRB, and their respective banking subsidiaries, American River Bank and Bank of Marin, are heavily regulated institutions with numerous federal and state laws and regulations governing their activities. Among these laws and regulations are requirements of prior approval by applicable government regulatory authorities in connection with acquisition and merger transactions such as the merger. In addition, these institutions are subject to ongoing supervision, regulation and periodic examination by various federal and state financial institution regulatory agencies.

Applications for regulatory review and approval of the merger and the related transactions have been filed with the DFPI and the FDIC. The Federal Reserve has confirmed to BMRC no application is necessary by letter dated June 11, 2021. There can be no assurance that the DFPI or the FDIC will approve or take other required action with respect to the merger and the related transactions or as to the date of such approvals or action nor that such approvals will not impose conditions, restrictions or requirements which would reasonably be likely to have a material adverse effect on AMRB, restrict BMRC or Bank of Marin after the merger in a manner that would have a material adverse effect on AMRB’s business, or would require the sale by AMRB or Bank of Marin of any material portion of their respective assets. If any such condition or requirement is imposed, BMRC may elect not to consummate the merger. See “— Conditions to the Merger.” The approval of any application or notice merely implies satisfaction of regulatory criteria for approval, and does not include review of the merger from the standpoint of the adequacy of the merger consideration to be received by, or fairness to, AMRB shareholders. Regulatory approval does not constitute an endorsement or recommendation of the proposed merger.

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Neither BMRC nor AMRB is aware of any other regulatory approvals that would be required for completion of the merger except as described above. Should any other approvals be required, it is presently contemplated that such approvals would be sought. There can be no assurance, however, that any other approvals, if required, will be obtained.

Business Pending the Merger

The merger agreement contains certain covenants of the parties regarding the conduct of their respective businesses pending consummation of the merger. These covenants, which are contained in Article IV of the merger agreement included as Appendix A to this joint proxy statement/prospectus, are briefly described below.

Pending consummation of the merger, AMRB may not, among other things, take the following actions without the prior written consent of BMRC (which consent will not be unreasonably withheld, conditioned or delayed):

·conduct its business other than in the ordinary and usual course or fail to use reasonable best efforts to preserve its business organization and assets intact, take any action that would be reasonably expected to impede, delay or adversely affect AMRB’s ability to complete the transaction, take any action that would be reasonably expected to diminish the value of AMRB or its goodwill to BMRC or Bank of Marin or disparage BMRC or Bank of Marin and any of their officers, employees, or directors;
·issue, sell, pledge, dispose of, encumber, or otherwise permit to become outstanding, or authorize the creation of any additional shares of capital stock, or permit any additional shares of stock to become subject to grants of employee or director stock options or other rights, except as previously disclosed to BMRC;
·except for the payment of quarterly cash dividends in the amount of $0.07 per share in the usual and ordinary course, make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares on its capital stock, or directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire any shares of its capital stock;
·enter into, renew, make any new grants of awards under, terminate, amend or otherwise modify any employment, consulting, transition, termination, severance or similar agreements or arrangements with any director, officer, employee or consultant of AMRB or grant any salary or wage increase, bonus or increase any employee benefit (including incentive or bonus payments); except, (i) for normal individual increases in compensation to employees in the ordinary and usual course of business consistent with past practice, provided that no such increase shall result in an annual adjustment of more than five percent (5%); (ii) incentive payments accrued and paid prior to the closing in the usual and ordinary course; or (iii) for other changes that are required contractually or by applicable law. Without limiting the generality of the foregoing, except as provided in the merger agreement AMRB shall not grant or approve the grant of any AMRB stock options, AMRB restricted stock or AMRB awards under the AMRB stock option plan. AMRB shall also not make any severance payments except in accordance with the merger agreement;
·hire any person as an employee of AMRB or promote any employee, except persons hired to fill a vacancy arising after the date of the merger agreement, provided that the person’s employment is terminable at the will of AMRB;
·enter into, terminate, establish, adopt, or amend (except (i) as may be required by applicable law or (ii) as otherwise provided in the merger agreement), any employee benefit plan, or take any action to change the vesting or exercisability of stock options, restricted stock or other compensation or benefits payable thereunder;
·sell, transfer, mortgage, encumber or otherwise dispose of or discontinue any of its material assets, deposits, business or properties, except with respect to other real estate owned and sales in the ordinary and usual course of business consistent with past practice and in a transaction that, together with all the other transactions, is not material to AMRB;
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·acquire (other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary and usual course of business consistent with past practice and in a transaction that, together with all other such transactions is not material to AMRB), all or any portion of the assets, business, securities, deposits or properties of any other entity;
·make any capital expenditures, other than capital expenditures in the ordinary and usual course of business consistent with past practice in amounts not exceeding $25,000 individually or $100,000 in the aggregate;
·amend the articles of incorporation or bylaws of AMRB;
·implement or adopt any change in AMRB’s book or tax accounting principles, practices or methods, other than as may be required by GAAP, and as concurred in by AMRB’s independent public accountants, or as otherwise required in the merger agreement;
·except as otherwise permitted under the merger agreement, enter into, cancel, fail to renew, or terminate any material contract or amend or modify in any material respect any of its existing material contracts that call for aggregate annual payments of $25,000 or more and which are not terminable at will or with 30 days or less notice without payment of a premium or penalty, other than loans or other transactions made in the ordinary course of the banking business;
·enter into any settlement or similar agreement with respect to any claims if the settlement, agreement, or action involves payment by AMRB of an amount that exceeds $25,000 individually or $50,000 in the aggregate and/or would impose any material restriction on the business of AMRB or create precedent for claims that reasonably are likely to be material to AMRB;
·take any action or omit to take any action that would reasonably be likely to result in any of AMRB’s representations or warranties set forth in the merger agreement being or becoming untrue in any material respect, or a condition to the merger not being satisfied, or a material violation of any provision of the merger agreement, except as may be required by applicable law;
·except as required by law or regulation, implement or adopt any material change to interest rate or other risk management policies, fail to follow AMRB’s existing policies with respect to managing exposure to interest rate and other risk, or fail to use commercially reasonable efforts to avoid any material increase in its aggregate exposure to interest rate risk;
·incur any indebtedness for borrowed money or other liability (other than deposits, federal funds borrowings and borrowings from the Federal Home Loan Bank of San Francisco or liabilities with a duration of 90 days or less incurred in the ordinary and usual course of business) or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, other than with respect to the collection of checks and other negotiable instruments in the ordinary and usual course of business consistent with past practices;
·make any loan, loan commitment, renewal or extension to any person or any affiliate or immediate family member of such person exceeding $750,000, individually, make an aggregate of loans or loan commitments to any person or affiliate in excess of $750,000, renew or extend any loan or loan commitment to any person in excess of $1,000,000 or any loan or loan commitment that is below a “pass” grade, or any loan proposed to be made with one or more exceptions to AMRB’s loan policy in accordance with the merger agreement;
·other than purchases of direct obligations of the United States of America with a remaining maturity at the time of purchase of one year or less, purchase or acquire securities of any type and other than sales of overnight federal funds or as provided above, make any investment either by contributions to capital, property transfers or purchase of any property or asset of any person;
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·commence or settle any litigation or proceeding with respect to any liability for taxes, make any material tax election, file any amended tax return, or take any action which is reasonably likely to have a material adverse effect on the tax position of AMRB, or of BMRC after the merger; or change any of its methods of reporting income or deductions for tax purposes or take any other action with respect to taxes that is outside the ordinary and usual course of business or inconsistent with past practice; or
·agree or commit to do, any of the foregoing.

The merger agreement also provides that pending consummation of the merger, BMRC may not, and will cause each of its subsidiaries not to, take the following actions without the prior written consent of AMRB:

·conduct its business other than in the ordinary and usual course or fail to use its reasonable best efforts to preserve its business organization and assets intact and maintain its rights, franchises and existing relations and goodwill with customers, suppliers, creditors, lessors, lessees, employees and business associates, or knowingly take any action that would reasonably be expected to materially impede, delay or adversely affect the ability of BMRC to consummate the merger and other transactions contemplated in the merger agreement;
·take any action or omit to take any action that would result in: any of BMRC’s representations or warranties set forth in the merger agreement being or becoming untrue in any material respect, a condition to the merger not being satisfied, or a material violation of any provision of the merger agreement, except as may be required by applicable law;
·amend the its articles or bylaws in a manner that would materially and adversely affect the holders of AMRB common stock, or adversely affect the holders of AMRB common stock relative to other holders of BMRC common stock;
·adjust, split, combine or reclassify any capital stock of BMRC or make, declare or pay any extraordinary dividend on any capital stock of BMRC; or
·agree to take, make any commitment to take, or adopt any resolutions of its board of directors or similar governing body in support of, any of the actions prohibited above.

Additional Covenants

AMRB and BMRC have also agreed to:

·cooperate and use their reasonable best efforts in good faith to take all actions necessary to consummate, as promptly as practicable, the merger, and the other transactions contemplated by the merger agreement;
·jointly prepare this joint proxy statement/prospectus and BMRC will prepare and file with the Commission a registration statement on Form S-4;
·consult and obtain consent from the other before issuing any press releases with respect to the merger or the merger agreement, such consent not to be unreasonably withheld or delayed;
·afford the other party access to certain information and personnel and keep any information so obtained confidential;
·use reasonable best efforts to obtain all governmental consents necessary to consummate the transactions contemplated in the merger agreement;
·notify each other of any circumstance known to it that is reasonably likely, individually or taken together with all other facts known to it, to result in a material adverse effect on them or would cause a material breach of their respective obligations under the merger agreement; and
·refrain from taking any action that would disqualify or reasonably be expected to disqualify the merger as a “reorganization” under section 368(a) of the Internal Revenue Code.

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AMRB has further agreed to:

·convene a shareholders’ meeting as soon as practicable to consider and vote upon adoption of the merger agreement and recommend to its shareholders that they approve the merger;
·refrain from taking certain action with respect to an alternative acquisition proposal as described under “— No Solicitation” below;
·refrain from causing or permitting AMRB to enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, or merger agreement or other agreement (other than a confidentiality agreement in accordance with the merger agreement) relating to an acquisition proposal, except under certain circumstances relating to a superior proposal pursuant to which AMRB pays a termination fee, as described in “— Termination of the Merger Agreement” below;
·modify its accounting and certain other policies and practices to match those of BMRC and make such accounting entries and adjustments as BMRC shall direct, subject to certain exceptions;
·provide BMRC with evidence that the AMRB 401(k) Profit Sharing Plan is in the process of being terminated;
·make or cause to be made a severance payment to each employee who is identified by BMRC as not being a continuing employee;
·consult in good faith with BMRC regarding the content of any formal presentation of the transactions contemplated by the merger agreement to employees of AMRB as a group and will include a representative of BMRC in any such presentation and provide BMRC with a copy of the intended communication;
·use reasonable best efforts to obtain any required consents or waivers from third-parties in connection with the merger and the other transactions contemplated by the merger agreement to ensure a smooth transition at or after the effective time;
·take action necessary so that immediately prior to the effective time, each AMRB option remaining outstanding will be cancelled and will entitle the option holder only to a cash payment equal to the product of (x) the total number of shares of AMRB common stock subject to the option times (y) the excess, if any, of (i) the product of (a) the volume weighted average price of BMRC common stock for the fifteen (15) trading days ending on the day which is the second trading day preceding the effective time of the merger and (b) 0.575 over (ii) the exercise price of such option less applicable taxes required to be withheld;
·update the disclosure schedules to the merger agreement to the second business day prior to the closing of the merger and deliver such a draft of the updated disclosure schedules to BMRC no later than 72 hours prior to the closing of the merger; and
·at least five business days prior to the effective time of the merger, provide BMRC with AMRB’s updated consolidated financial statements as of the month end immediately prior to the effective time of the merger, and certified closing financial statements updated as of closing;
·have paid all professional fees in full prior to the closing of the merger and BMRC shall have received written evidence of this prior to closing of the merger; provided, BMRC shall have been given an opportunity to review all invoices, bills and estimates relating to such professional fees.

BMRC has further agreed to:

·convene a shareholders’ meeting as soon as practicable to consider and vote upon adoption of the merger agreement and recommend to its shareholders that they approve the merger;
·following the effective time of the merger, indemnify present and former directors and officers of AMRB in connection with any claim arising out of actions or omissions occurring at or prior to the effective time to the fullest extent that AMRB is permitted to indemnify its directors and officers;
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·provide, for six years from the effective time, the portion of directors and officers liability insurance that serves to reimburse the present and former directors and officers of AMRB on terms and conditions comparable to those provided by AMRB;
·provide former employees of AMRB who continue as employees of Bank of Marin with employee benefit plans on substantially the same terms and conditions to those provided to similarly situated employees of Bank of Marin;
·appoint two mutually acceptable AMRB directors as directors of BMRC and Bank of Marin;
·use its reasonable best efforts to list on Nasdaq shares of its common stock to be issued in the merger; and
·assume the AMRB salary continuation agreements and deferred compensation plan and pay the obligations required under any change in control provisions of any employment agreement.

AMRB Board of Directors’ Covenant to Recommend the Merger and Merger Agreement

Pursuant to the merger agreement, the AMRB board of directors is required to recommend that AMRB shareholders approve the merger and merger agreement at all times prior to and during the AMRB special meeting at which the merger and merger agreement is to be considered by them. The AMRB board of directors may not withhold, withdraw, qualify or modify in any manner adverse to BMRC such recommendation or take any other action or make any other public statement in connection with the AMRB special meeting inconsistent with such recommendation, except as described below.

The AMRB board of directors is permitted to change its recommendation if AMRB has complied with the merger agreement and the AMRB board of directors, based on the advice of its outside counsel, has determined in good faith that failure to do so would result in a violation of the board of directors’ fiduciary duties under applicable law. If the AMRB board of directors intends to change its recommendation following an acquisition proposal, as described in “— No Solicitation,” it must have first concluded in good faith, after giving effect to all of the adjustments to the terms and conditions of the merger agreement that may be offered by BMRC, that another acquisition proposal constitutes a superior proposal, as defined in “— No Solicitation” below. AMRB also must notify BMRC at least five business days in advance of its intention to change its recommendation in response to the superior proposal, including the identity of the party making the acquisition proposal, and furnish to BMRC the material terms and conditions of any proposal or offer and keep BMRC informed, on a current basis, of the status and terms of any such proposals or offers and the status of any such discussions or negotiations.

No Solicitation

Under the terms of the merger agreement, AMRB has agreed that neither it nor any of its officers, directors and employees shall, and that it shall direct and use its reasonable best efforts to cause its agents and representatives not to, directly or indirectly:

·initiate, solicit, encourage or otherwise facilitate any inquiries or the making of any proposal or offer with respect to any acquisition proposal; or
·engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with, any person relating to an acquisition proposal, or otherwise facilitate any effort or attempt to make or implement an acquisition proposal.

For purposes of the merger agreement, “acquisition proposal” means:

·any proposal or offer with respect to a merger, joint venture, partnership, consolidation, dissolution, liquidation, tender offer, recapitalization, reorganization, share exchange, business combination or similar transaction involving AMRB or any of its subsidiaries; and
·any proposal or offer to acquire in any manner, directly or indirectly, 10% or more of the total voting power or of any class of equity securities of AMRB or those of any of its subsidiaries or 10% or more of the total assets of AMRB.
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However, the above restriction would not prevent AMRB or its board of directors from:

·complying with disclosure obligations under federal or state law;
·at any time prior, but not after the merger and merger agreement is approved by the requisite vote by the AMRB shareholders, providing information in response to a request therefor by a person who has made an unsolicited bona fide written acquisition proposal if the board of directors of AMRB receives from the person so requesting such information an executed confidentiality agreement on terms not less restrictive to the other party than those contained in the confidentiality agreement between the parties to the merger agreement;
·engaging in any negotiations or discussions with any person who has made an unsolicited bona fide written acquisition proposal; or
·recommending such an acquisition proposal to the shareholders of AMRB;
·only if, however, in the cases referred to in the second, third and fourth bullet points above, the board of directors of AMRB determines in good faith (after consultation with outside legal counsel) that such action is, in the absence of the foregoing proscriptions, legally required in order for its directors to comply with their fiduciary duties under applicable laws; and in the cases referred to in the third and fourth bullet points above, the board of directors of AMRB determines in good faith (after consultation with its financial advisor) that such acquisition proposal is a superior proposal.

For purposes of the merger agreement, “superior proposal” means an unsolicited bona fide acquisition proposal involving more than 50% of the assets or total voting power of the equity securities of AMRB that its board of directors has determined in its good faith judgment is reasonably likely to be consummated in accordance with its terms, taking into account all legal, financial and regulatory aspects of the proposal and the person making the proposal, and if consummated, would result in a transaction more favorable to AMRB’s shareholders from a financial point of view than the transaction contemplated by the merger agreement (after taking into account any revisions to the terms of the transaction offered by BMRC and the time likely to be required to consummate such acquisition proposal).

AMRB agreed that it would immediately cease and cause to be terminated any existing activities, discussions or negotiations with any parties conducted heretofore with respect to any acquisition proposals. AMRB has agreed that it will notify BMRC promptly, but in no event later than the next succeeding business day, if any such inquiries, proposals or offers are received by, any such information is requested from, or any such discussions or negotiations are sought to be initiated or continued with, any of its representatives, indicating, in connection with such notice, the name of such person and the material terms and conditions of any proposal or offer and thereafter shall keep BMRC informed, on a current basis, of the status and terms of any such proposals or offers and the status of any such discussions or negotiations.

Representations and Warranties of the Parties

Pursuant to the merger agreement, BMRC and AMRB made certain customary representations and warranties relating to their respective companies, subsidiaries, businesses and matters related to the merger. For detailed information concerning these representations and warranties, reference is made to Article V of the merger agreement included as Appendix A to this joint proxy statement/prospectus. Such representations and warranties generally must remain accurate through the completion of the merger, unless the fact or facts that caused a breach of a representation and warranty has not had or is not reasonably likely to have a material adverse effect on the party making the representation and warranty. See “— Conditions to the Merger.”

The merger agreement contains representations and warranties that BMRC and AMRB made to and solely for the benefit of each other. These representations and warranties are subject to materiality standards which may differ from what may be viewed as material by investors and shareholders, and, in certain cases, were used for the purpose of allocating risk among the parties rather than establishing matters as facts. The assertions embodied in those representations and warranties also are qualified by information in confidential disclosure schedules that the parties have exchanged in connection with signing the merger agreement. Although neither BMRC nor AMRB believes that the disclosure schedules contain information that the federal securities laws require to be publicly disclosed, the disclosure schedules do contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the merger agreement.

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Accordingly, shareholders of AMRB should not rely on the representations and warranties as characterizations of the actual state of facts, since they were only made as of the date of the merger agreement and are modified in important part by the underlying disclosure schedules. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the merger agreement, which subsequent information may or may not be fully reflected in BMRC’s or AMRB’s public disclosures.

Effective Time 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 corporation, 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 the surviving institution. The merger will become effective upon the acceptance of a certificate of merger by the DFPI following its filing with the Secretary of State of California in accordance with the provisions of applicable California law. The merger is expected to become effective during the third quarter of 2021.

Waiver and Amendment of the Merger Agreement

At any time prior to the closing of the merger, BMRC and AMRB, by action taken or authorized by their respective boards of directors, may, if legally allowed:

·amend or modify the agreement in writing; and
·waive any provision in the merger agreement that benefited them.

However, after any approval of the transactions contemplated by the merger agreement by the shareholders of AMRB, there may not be, without further approval of those shareholders, any amendment to the merger agreement which would reduce the aggregate value of the consideration to be received by the AMRB shareholders under the merger agreement, other than as contemplated by the merger agreement.

Termination of the Merger Agreement

The merger agreement may be terminated:

·by the mutual written consent of BMRC and AMRB;
·by BMRC or AMRB, in the event that the merger is not consummated by December 31, 2021, except to the extent that the failure to consummate the merger by December 31, 2021 is due to (i) the failure of the party seeking to terminate to perform or observe its covenants and agreements set forth in the merger agreement, or (ii) the failure of any of the directors or executive officers of the party seeking to terminate to perform or observe their respective covenants under the merger agreement, or in the case of directors of AMRB or BMRC, their respective shareholder agreements with BMRC and AMRB;
·by BMRC or AMRB, in the event the approval of any governmental authority required for consummation of the merger and the other transactions contemplated by the merger agreement have been denied by final non-appealable action of the governmental authority or an application for approval has been permanently withdrawn at the invitation, request or suggestion of a governmental authority, or if approval of the merger agreement by AMRB or BMRC shareholders has not been obtained by reason of the failure to obtain the required vote at the AMRB or BMRC special meeting;
·by AMRB, if AMRB is not in material breach of any terms of the merger agreement, the board of directors of AMRB authorizes the company to enter into an alternative acquisition agreement with respect to a superior proposal, BMRC does not make within 5 business days of receipt of notice of AMRB’s intentions to enter into the alternative acquisition agreement, an offer that the AMRB board of directors determines in good faith after consultation with its financial advisors, is at least as favorable, from a financial point of view, to the shareholders as the superior proposal and AMRB pays the termination fee described below;
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·by AMRB, if BMRC breaches any of its representations or warranties, or fails to perform any of its agreements or covenants, which breach is incapable of being cured by BMRC within 30 days after written notice is given to BMRC;
·by AMRB, if a director of BMRC materially breaches his or her shareholder agreement, including a breach of the obligation to vote his or her shares of BMRC common stock in favor of adoption of the merger and merger agreement, if such breach has resulted in the failure of the merger and merger agreement to be adopted by the shareholders of BMRC as required under the merger agreement, and such breach cannot be cured within 30 days of giving notice to the breaching director;
·by BMRC, if AMRB breaches any of its representations or warranties, or fails to perform any of its obligations required to be performed under the merger agreement, which breach is incapable of being cured by AMRB within 30 days after written notice is given to AMRB;
·by BMRC, if a director of AMRB materially breaches his or her shareholder agreement, including a breach of the obligation to vote his or her shares of AMRB common stock in favor of adoption of the merger and merger agreement, if such breach has resulted in the failure of the merger and merger agreement to be adopted by the shareholders of AMRB as required under the merger agreement, and such breach cannot be cured within 30 days of giving notice to the breaching director;
·by BMRC, if AMRB breaches its obligations relating to acquisition proposals described in “— No Solicitation” above, the board of directors of AMRB withdraws or changes its recommendation of the merger, fails to reaffirm its approval or recommendation of the merger as promptly as practicable after receipt of any written request to do so from BMRC, or recommends that its shareholders tender their shares in an offer not commenced by BMRC or an affiliate of BMRC or fails to recommend unequivocally against such an offer.

Termination Fee

The merger agreement provides that AMRB must pay BMRC a $5.38 million termination fee under the circumstances and in the manner described below:

·an acquisition proposal shall have been made to AMRB or its shareholders generally or any person shall have publicly announced an intention (whether or not conditional) to make an acquisition proposal, BMRC and AMRB fail to consummate the merger by December 31, 2021 as a result of AMRB’s knowing action or inaction or failure to obtain required approval of its shareholders; and any acquisition proposal is consummated within 12 months of the termination of the merger agreement;
·AMRB terminates the merger agreement in conjunction with entering into a superior proposal pursuant to the terms of the merger agreement and BMRC does not make, within five business days of receipt of notice of a superior proposal, an offer that AMRB’s board of directors determines is at least as favorable from a financial point of view, to the shareholders of AMRB as the superior proposal;
·Prior to AMRB obtaining shareholder approval of the merger agreement, AMRB breaches its obligations relating to acquisition proposals described in “— No Solicitation” above; the board of directors of AMRB withdraws or changes its recommendation of the merger or fails to reaffirm its approval or recommendation promptly after receipt of a competing acquisition proposal and BMRC terminates the merger agreement.

Any termination fee that becomes payable pursuant to the merger agreement shall be paid by wire transfer of immediately available funds to BMRC no later than two business days following the termination of the merger agreement.

If AMRB fails to timely pay the termination fee to BMRC when triggered, AMRB will be obligated to pay all costs and expenses (including attorneys’ fees) incurred by BMRC from the date such termination fee was required to be paid, including costs of suit and collection, together with interest.

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Except as set forth above, there is no liability or further obligation of any kind on the part of either AMRB or BMRC in connection with termination of the agreement, provided no termination shall relieve any party of any liability or damages resulting from a willful breach of the merger agreement.

Certain Employee Matters

The merger agreement contains certain agreements of the parties with respect to various employee matters, which are described below.

After the effective time of the merger, continuing employees of AMRB will be entitled to participate in the BMRC and Bank of Marin employee benefit plans of general applicability to the same extent as similarly-situated employees of Bank of Marin. For purposes of determining eligibility to participate in, the vesting of benefits and for all other purposes, other than for accrual of pension benefits under, the Bank of Marin employee benefit plans, BMRC will recognize years of service with AMRB to the same extent as such service was credited for such purpose by Bank of Marin, except where such recognition would result in duplication of benefits. Nothing contained in the merger agreement shall limit the ability of BMRC to amend or terminate any AMRB benefit plan in accordance with their terms at any time.

At the time the continuing employees of AMRB become eligible to participate in a medical, dental or health plan of Bank of Marin, BMRC will use commercially reasonable efforts to cause each such plan to:

·waive any preexisting condition limitations to the extent such conditions were covered under the applicable medical, health or dental plans of AMRB;
·provide full credit under such plans for any deductibles, co-payment and out-of-pocket expenses incurred by the employees and their beneficiaries during the portion of the calendar year prior to such participation; and
·waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to such employee on or after the effective time of the merger to the extent such employee had satisfied any similar limitation or requirement under a corresponding AMRB plan prior to the effective time of the merger.

Those employees of AMRB and its subsidiaries who are not offered employment by Bank of Marin following the merger, who are not a party to an employment agreement or otherwise entitled to an existing severance package, will be entitled to receive a single lump sum payment of severance from AMRB in an amount equal to two weeks of his or her current salary for each full year of service worked by such employee for AMRB, with a minimum of four weeks and a maximum of 52 weeks salary. However, none of these severance payments may be paid to an employee that has a change in control agreement, who receives an offer of full time employment with Bank of Marin at a salary commensurate with their current salary and declines such offer of employment, who declines an offer of short term employment or quits prior to the agreed separation date, who accepts a position with Bank of Marin regardless of position or salary, or who is terminated by Bank of Marin for cause. With respect to short term employees who transition to employment with Bank of Marin and as defined in the merger agreement, AMRB shall make no severance payment, but rather Bank of Marin will make such payments but not until the separation date indicated in the offer of short term employment; provided, however, an employee who declines such offer of short term employment or voluntarily terminates with Bank of Marin prior to the separation date indicated in the offer of short term employment will receive no severance payment.

No later than the day immediately preceding the effective time of the merger, AMRB shall provide BMRC with evidence that its 401(k) profit sharing plan is in the process of being terminated or that AMRB is exiting such plan pursuant to resolutions of the AMRB board that are effective as of no later than the day immediately preceding the effective time of the merger, provided, however, that the effectiveness of such termination may be conditioned on the consummation of the merger. The form and substance of such resolutions shall be subject to the review and reasonable and timely approval of BMRC. AMRB will also take such other actions in furtherance of terminating its 401(k) profit sharing plan as BMRC may reasonably require; provided, however, that the effectiveness of any such actions may be conditioned on the consummation of the merger. BMRC will, and will cause its affiliates to, designate a tax-qualified defined contribution plan of BMRC or one of its affiliates that either (i) currently provides for the receipt from employees of “eligible rollover distributions” (as such term is defined under Section 402 of the Code) or (ii) shall be amended as soon as practicable following the effective date of the merger to provide for the receipt from the continuing AMRB employees of eligible rollover distributions. Each continuing AMRB employee who is a participant in an AMRB 401(k) profit sharing plan shall be given the opportunity to receive a distribution of his or her account balance and shall be given the opportunity to elect to “roll over” such account balance to a Bank of Marin plan, subject to and in accordance with the provisions of such plan(s) and applicable law.

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Interests of Certain AMRB Officers and Directors in the Merger

When AMRB shareholders are considering the recommendation of the AMRB board with respect to approving the merger proposal at the AMRB special meeting, AMRB shareholders should be aware that AMRB directors and officers have interests in the merger as individuals that are in addition to, or different from, the interests of shareholders of AMRB generally. The AMRB board was aware of these factors and considered them, among other matters, in approving the merger agreement and the merger, and in recommending to shareholders that they vote for approval of the merger proposal. These interests are described below. For purposes of this disclosure, the named executive officers of AMRB are David E. Ritchie, Jr., President and Chief Executive Officer, Mitchell A. Derenzo, Executive Vice President and Chief Financial Officer, Kevin B. Bender, Executive Vice President and Chief Operating Officer, and Dan C. McGregor, Executive Vice President and Chief Credit Officer. The amounts in the tables below do not attempt to forecast any additional equity grants, option exercises, vesting or forfeiture that may occur prior to the closing of the merger. As a result of the foregoing assumptions, the actual amounts to be received by the AMRB executive officers and directors may materially differ from the amounts discussed above and in the disclosure under “ — Golden Parachute Compensation.”

Stock Ownership.

The directors and executive officers of AMRB, as a group, beneficially owned and had the power to vote as of the AMRB record date, a total of 618,725 shares of AMRB common stock, representing approximately 10.3% of the issued and outstanding shares of AMRB common stock as of that date. All of the shares of AMRB common stock beneficially owned by the directors and executive officers of AMRB are expected to be voted in favor of the merger agreement, and all of the directors of AMRB entered into shareholder agreements with BMRC agreeing to vote their shares in favor of the merger. See “The Merger — AMRB Shareholder Agreements” beginning on page 79. Each of these persons will receive the same merger consideration for their shares of AMRB common stock as the other AMRB shareholders.

Treatment of AMRB Equity Awards.

AMRB Options.

Immediately prior to the effective time of the merger, each AMRB option that is outstanding and unexercised immediately prior to the effective time, all of which already have vested, will be canceled in exchange for the right to receive from AMRB a single lump sum cash payment equal to the product of (i) the number of shares of AMRB common stock subject to such AMRB option immediately prior to the effective time, and (ii) the excess, if any, of (A) the BMRC average share price (which is the volume-weighted average closing price per share of BMRC common stock, as reported on Nasdaq, for the fifteen (15) trading days ending on the second trading day prior to the closing date of the merger) multiplied by the exchange ratio (0.575), over (B) the exercise price per share of such AMRB option, less any applicable taxes required to be withheld with respect to such payment (such payment, the “Option Cancellation Payment”). For AMRB options that are exercised before the closing, the underlying shares of AMRB common stock received upon exercise will be exchanged for the merger consideration in accordance with the exchange ratio in the same manner as all other outstanding shares as of the closing date.

AMRB Restricted Stock

Each outstanding award of AMRB restricted stock will become fully vested immediately prior to the effective time of the merger. Upon the effective time of the merger, the shares of AMRB common stock deliverable upon the vesting of such awards, after reduction for tax withholdings if applicable, will be canceled in exchange for the right to receive a number of shares of BMRC common stock equal to the number of shares of AMRB common stock so deliverable upon the vesting of such awards immediately prior to the effective time of the merger multiplied by the exchange ratio (0.575), plus cash in lieu of any fractional share interest.

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For an estimate of the amounts that would be realized by each of AMRB’s named executive officers in respect of the vesting of his AMRB restricted stock awards immediately prior to the effective time, see below “— Golden Parachute Compensation.” The estimated aggregate amount that would be realized by AMRB’s non-employee directors in respect of their unvested AMRB equity awards if the merger were to be completed on August 1, 2021 is set forth below. None of the AMRB directors holds any stock options.

Name  Restricted
Shares (#)
   Value ($) 
Non-Employee Directors(1)          
Nicolas C. Anderson   3,266   $64,308 
Kimberly A. Box   3,266   $64,308 
Charles D. Fite   3,711   $73,070 
Jeffery Owensby   3,266   $64,308 
Julie A. Raney   1,661   $32,705 
William A. Robotham   3,266   $64,308 
Philip A. Wright   3,266   $64,308 

 

 
(1)Up to 13,667 unvested AMRB restricted shares held by the non-employee directors are vesting on June 17, 2021. Therefore, if the date on which the closing of the merger occurs is after June 17, 2021, these AMRB restricted shares will have vested pursuant to their terms, without regard to the merger. The remaining 8,035 shares were awarded on May 20, 2021 (for services rendered in 2020) with a vesting date of May 20, 2022. These 8,035 shares will immediately vest upon completion of the merger. The amounts in this paragraph are based on equity award holdings as of the record date and were calculated based on a price per share of AMRB common stock equal to $19.69 (which is equal to the average closing market price of AMRB common stock over the first five business days following the public announcement of the merger on April 16, 2021).

Appointment of the AMRB Nominees to the Boards of Directors of BMRC and Bank of Marin.

Pursuant to the terms of the merger agreement, BMRC is required to take all actions necessary to appoint or elect, effective as of the effective time of the merger, two existing AMRB directors, each of whom must be mutually agreeable to BMRC and AMRB, as directors of BMRC and Bank of Marin and nominate them for election at the first annual meeting of shareholders BMRC. BMRC and AMRB determined in June, 2021 that the two existing directors of the AMRB board who will be appointed or elected to the BMRC board effective as of the effective time of the merger will be Nicolas C. Anderson and Charles D. Fite.

During 2020, each non-employee member of the board of BMRC received an aggregate director fee of $66,950; paid approximately $33,475 in BMRC stock and/or non-qualified stock options to purchase BMRC stock, and approximately $33,475 in cash. Compensation for service for incumbent directors is paid semi-annually in arrears in July and January. The equity component of the annual compensation is paid, at the election of the director, in 100% common stock, 100% non-qualified stock options to purchase common stock, or in a combination of 50% common stock and 50% non-qualified stock options. If a director retires from the board of BMRC before earned director compensation is paid, that individual receives payment in cash rather than in stock. A director Deferred Fee Plan, which allows members of the board of BMRC to defer the cash portion of their director compensation, went into effect on January 1, 2021, and the first deferral of their fees will be in July 2021. Additionally, effective January 2021, in an effort to bring director compensation in line with its peers, the board of BMRC approved a catch-up plan to increase base compensation to $81,950 over the next three years.

Director Emeritus Program

AMRB previously adopted a Director Emeritus Program which provides for retiring directors who have served for at least ten (10) years to receive payments totaling that director’s compensation for the previous two full calendar years to be paid in monthly installments for the subsequent 24 months after retirement, subject to such director continuing to support AMRB and being available for consultation and additional ongoing services. Effective July 1, 2012, benefit accruals were suspended under such plan, but the benefits that had been previously earned continued in effect. Directors Fite, Robotham and Wright are currently eligible under such emeritus program for continued payments following consummation of the merger. In addition, one former director and the estate of another former director of AMRB are currently receiving such payments. With respect to Directors Fite, Robotham and Wright, assuming consummation of the merger on August 1, 2021, such directors will receive approximately $107,000, $73,000 and $71,000 in the aggregate payable in equal installments over a twenty-four month period following their retirement from the Board. These amounts have already vested.

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Severance Arrangements.

Employment Agreements

In October 2017, AMRB entered into an employment agreement with Mr. Ritchie, which provided for an initial term of two years subject to automatic one-year extensions thereafter unless terminated in accordance with the terms of the agreement.

Mr. Ritchie’s employment agreement provides that in the event of a “change in control” as defined therein and within twelve (12) months following consummation of such change in control (i) his employment is terminated without cause or Mr. Ritchie terminates employment for good reason, then Mr. Ritchie will be entitled to receive (in addition to salary, incentive compensation or other payments, if any due to him), a lump sum severance compensation payment in an amount equal to (i) twenty-four (24) months of his annual base salary plus (ii) two (2) times the average of his three year’s previous annual incentive compensation amounts, such payment, less applicable withholding taxes, to be made within thirty (30) days following termination of employment. Upon such a termination of employment following a change in control, Mr. Ritchie also will be entitled to be reimbursed for COBRA premiums for himself and eligible dependents for the same level of health and dental coverage as he maintains as of the date of his employment termination, through the end of the COBRA period (18 months), or until such time as he qualifies for health insurance benefits through a new company, whichever occurs first. In order to receive such severance compensation and benefits, Mr. Ritchie must provide AMRB a general release of claims.

In September 2006, AMRB entered into employment agreements with Messrs. Derenzo and Bender, which subsequently were amended in February, 2021. The agreements have no stated term and employment can be terminated at any time by AMRB or by the employee, with or without cause. The agreements provide that in the event of a “change in control” as defined therein and within a period of two years following consummation of such change in control (i) their employment is terminated; or (ii) any adverse change occurs in the nature and scope of their salary or benefits; or (iii) any event occurs which reasonably constitutes a constructive termination of employment, by resignation or otherwise, then they each would be entitled to receive severance compensation in an amount equal to eighteen (18) months of his annual base salary, less applicable withholding deductions (in addition to salary, incentive compensation, or other payments, if any, due the employee). Any such severance compensation is to be paid in a single lump sum payment within the 90 — day period beginning six months following termination of employment.

In May 2018, AMRB entered into an employment agreement with Mr. McGregor, which was subsequently amended in February, 2021. The agreement has no stated term and, Mr. McGregor’s employment can be terminated at any time by AMRB or Mr. McGregor, with or without cause. The agreement provides that in the event of a “change in control” as defined therein and within a period of two years following consummation of such change in control (i) his employment is terminated; or (ii) any adverse change occurs in the nature and scope of his salary or benefits; or (iii) any event occurs which reasonably constitutes a constructive termination of his employment, by resignation or otherwise, then he will be entitled to receive severance compensation in an amount equal to eighteen (18) months of his annual base salary, less applicable withholding deductions (in addition to salary, incentive compensation, or other payments, if any, due to him). Any such severance compensation is to be paid in a single lump sum payment within the 90-day period beginning six months following termination of employment.

Salary Continuation Agreements

AMRB has entered into a Salary Continuation Agreement with Mr. Derenzo in 2003, as modified in 2007 to provide nonqualified retirement benefits to Mr. Derenzo. The agreement generally provides for annual normal retirement benefit payments of Fifty Thousand Dollars ($50,000) to Mr. Derenzo, or reduced retirement benefit payments upon earlier termination of employment, including termination in connection with a change in control of AMRB. The annual retirement benefit amount is payable in equal monthly installments over a fifteen (15) year period following retirement or earlier termination of employment. In the event of death, the normal retirement benefit payments are to be paid to Mr. Derenzo’s designated beneficiaries over fifteen (15) years, if payments have not commenced, or the remaining payout period if payments have commenced. On March 31, 2021 the vested annual benefit amount was Thirty-Five Thousand Dollars ($35,000). The amount of such benefit does not increase as a result of a change in control of AMRB or any termination of Mr. Derenzo’s employment in connection with such a change in control.

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AMRB has entered into a Salary Continuation Agreement with Mr. Bender in 2007, as modified in 2012, to provide nonqualified retirement benefits to Mr. Bender. The agreement generally provides for annual normal retirement benefit payments of Fifty Thousand Dollars ($50,000) to Mr. Bender, or reduced retirement benefit payments upon earlier termination of employment, including termination in connection with a change in control of AMRB. The annual retirement benefit amount is payable in equal monthly installments over fifteen (15) years following retirement or earlier termination of employment. In the event of Mr. Bender’s death, the normal retirement benefit payments are to be paid to Mr. Bender’s designated beneficiary over fifteen (15) years, if payments have not commenced, or the remaining payout period if payments have commenced. On March 31, 2021 the vested annual benefit amount was Thirty-Five Thousand Dollars $35,000. The amount of such benefit does not increase as a result of a change in control of AMRB or any termination of Mr. Bender’s employment in connection with such a change in control.

In connection with the merger, Bank of Marin will assume such Salary Continuation Agreements at the closing date and will honor them in accordance with their terms with the express understanding of all the parties that payments under such agreements will be unsecured obligations of Bank of Marin.

Golden Parachute Compensation.

This section sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation for each named executive officer of AMRB that is based on or otherwise relates to the merger and that will or may become payable to each such named executive officer at the effective time or on a qualifying termination of employment in connection with the merger. The “golden parachute” compensation payable to these individuals is subject to a non-binding advisory vote of AMRB’s shareholders, as described in more detail in the section titled “AMRB Proposals — Proposal 3: The Compensation Proposal” beginning on page 100.

The estimated potential payments in the table below are based on the following assumptions:

·a merger closing on August 1, 2021 (the assumed date of the closing of the merger solely for purposes of this golden parachute compensation disclosure);
·each named executive officer will experience a qualifying termination of employment at the effective time of the merger;
·a price per share of AMRB common stock equal to $19.69, the average closing market price of AMRB common stock over the first five business days following the public announcement of the merger on April 16, 2021; and
·base salary and equity award holdings as of the record date, excluding any dividends accrued on outstanding equity awards.

Depending on when the merger occurs, certain equity awards that are unvested as of the record date and included in the table below may vest pursuant to the terms of the equity awards based on the completion of continued service with AMRB, independent of the merger. The amounts indicated below are estimates based on multiple assumptions that may or may not actually occur, including assumptions described in this joint proxy statement/prospectus, and do not reflect certain compensation actions that may occur before completion of the merger. As a result, the actual amounts, if any, to be received by a named executive officer may materially differ from the amounts set forth below. All dollar amounts have been rounded to the nearest whole dollar.

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Payments Upon Termination in Connection with Change in Control

Executive
Officer
  Base
Salary
($)(1)
   Cash Incentive
Compensation
($)(2)
   COBRA
Payments
($)(3)
   Salary
Continuation
Plan Payments
($)(4)
   Restricted
Stock
($)(5)
   Stock
Options
($)(6)
   Total
Termination
Benefits
($)(7)
 
David E. Ritchie, Jr. (8)  $730,000   $442,664   $47,952       $213,715       $1,434,331 
Mitchell A. Derenzo (9)   397,500    46,375       $525,000    138,834   $49,667    1,157,376 
Kevin B. Bender (9)   390,000    45,500        525,000    138,834    152,476    1,251,810 
Dan C. McGregor (9)   361,500    42,175            110,185        513,860 

 

 
(1)This represents two years of annual salary for Mr. Ritchie and for Messrs. Derenzo, Bender and McGregor this represents eighteen (18) months of annual salary. These payments to Messrs. Ritchie, Derenzo, Bender and McGregor under their respective employment agreements are considered to be double-trigger benefits, as they are dependent on both the occurrence of a change in control and the termination of the applicable executive. As previously disclosed, the employment agreements with Messrs. Derenzo, Bender and McGregor were amended in February 2021 to increase the change in control benefit from twelve (12) months of annual salary to eighteen (18) months of annual salary.
(2)Mr. Ritchie would receive two (2) times the three-year average of his annual bonus for the three fiscal years prior to the year in which the merger occurs. This payment to Mr. Ritchie is also considered a double-trigger benefit as it is dependent on both the occurrence of a change in control and the termination of his employment. In addition, Messrs. Ritchie, Derenzo, Bender and McGregor are eligible to receive bonus amounts accrued through the date of the merger under the AMRB Executive Annual Incentive Plan. See “— Executive Annual Incentive Plan.” These Executive Annual Incentive Plan payments (in the amounts of $106,453, $46,375, $45,500 and $42,175 for Messrs. Ritchie, Derenzo, Bender and McGregor, respectively, and pro rated from the amounts the named executive would otherwise be entitled to receive under the Executive Annual Incentive Plan assuming all criteria were met) are being accelerated as a result of the merger and would otherwise be payable as part of the relevant executive’s overall incentive bonus assuming various individual and company-wide performance criteria were met.
(3)Mr. Ritchie would receive up to eighteen (18) months of COBRA reimbursement payments to be paid ratably over eighteen (18) months under his employment agreement provided that he elects such coverage for himself and his eligible dependents. The current rate is $2,664 per month, subject to change. Amount presented is based on eighteen (18) months at $2,664 per month.
(4)Represents aggregate amount payable under each of Messrs. Derenzo and Bender’s Salary Continuation Agreements. Payment would be $35,000 per year in equal monthly installments for fifteen (15) years following termination of employment, for a total payment of $525,000 each. The amount of such benefit does not increase as a result of a change in control of AMRB or any termination of Mr. Derenzo’s or Mr. Bender’s employment in connection with such a change in control.
(5)For Messrs. Ritchie, Derenzo, Bender and McGregor, this amount represents the value of all of their outstanding unvested shares of restricted AMRB common stock, which shares will vest upon closing of the merger.
(6)For Messrs. Derenzo and Bender, this amount represents the difference between the value of the shares of AMRB common stock subject to all of their outstanding stock options and the aggregate exercise price of all such stock options, which amount is to be paid to them in cash upon the closing of the merger. All of such stock options are fully vested such that no additional vesting will occur as a result of the merger or termination of employment. Messrs. Ritchie and McGregor do not have any stock options.
(7)Sum of columns 1 through 6.
(8)Mr. Ritchie’s base salary and cash incentive compensation severance payments under his employment agreement are to be made in a lump sum within 30 days of termination of employment and require Mr. Ritchie to provide AMRB a general release of claims.
(9)Messrs. Derenzo, Bender, and McGregor’s base salary severance payments under their employment agreements are to be made in a lump sum during the 90-day period beginning six (6) months following termination of employment.

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Executive Annual Incentive Plan

The AMRB executive officers participate in the Executive Annual Incentive Plan. The plan provides executive officers with the opportunity to earn cash incentive compensation based on the achievement of specific AMRB-wide, division, and individual performance goals. The Compensation Committee of AMRB designs the annual cash incentive compensation component to align executive officers’ compensation with the achievement of annual (short-term) performance results. Annual cash incentive compensation payments are generally paid in cash in March of each year for the prior fiscal year’s performance, provided that the executive officer remains in AMRB’s employ at the time of payment.

The Compensation Committee approves a target cash incentive compensation payout as a percentage of the base salary earned during the annual incentive compensation period for each executive officer. These targets are based on competitive practices for each comparable position and the compensation information provided by the consultant to the Compensation Committee. The incentive compensation target percentage in the table below represents the executive officer’s annual cash incentive compensation opportunity if the annual performance goals are achieved.

Messrs.  Ritchie   Derenzo   Bender   McGregor 
Target Incentive Compensation (% of Base Salary)   50%    30%    30%    30% 
                     

Several financial metrics are commonly referenced in defining AMRB performance for executive officer compensation, including profitability measures, asset quality measures, risk management measures.

The amount of cash incentive compensation paid to each executive officer under the incentive compensation plan is adjusted based on how well AMRB performs against the approved performance goal of each metric. The incentive compensation plan also establishes minimum funding thresholds. If performance on any metric falls below 85%, no cash incentive compensation will be paid for that metric and if the results of the quality of bank performance metric is not met then no cash incentive compensation will be earned for any of the metrics.

The following table sets forth the benefits that AMRB’s named executive officers would be eligible to receive under the incentive compensation plan in the event of and assuming consummation of the merger on August 1, 2021 regardless of whether the executive is terminated, and assuming AMRB achieves the target level of cash incentive compensation based on its current budget. The actual amounts, if any, to be received by the executive officers may differ materially from the amounts set forth below depending on the individual and AMRB’s performance through consummation of the merger.

Named Executive Officer  Target Levels
Cash
   Prorated
Cash Bonus
 
David E. Ritchie, Jr.  $182,500   $106,453 
Mitchell A. Derenzo  $79,500   $46,375 
Kevin B. Bender  $78,000   $45,500 
Dan. C. McGregor  $72,300   $42,175 

 

Acceleration of Stock Awards

Set forth below are the separate values for the Option Cancellation Payment and for unvested restricted stock held by each of AMRB’s named executive officers. The payments made or value received with respect to each award will be based on a price per share or exchange value of AMRB common stock, as described above. For purposes of this disclosure, we used a price per share of AMRB common stock of $19.69, which represents the average closing trading price of AMRB common stock over the first five business days following the first public announcement of the transaction. The cancellation and cash out of each stock option and the acceleration of vesting of each award of unvested share of restricted stock is a single-trigger (closing of the merger) benefit that will be received solely because of the merger and regardless of whether a named executive officer is terminated.

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Name  Number of
shares of
AMRB stock
underlying
stock options
subject to
cash
payment (#)
   Value of
payment for
stock
options ($)
   Number of
Unvested AMRB
Restricted Shares
Subject to
Acceleration (#)
   Value of
Accelerated
AMRB
Restricted
Share
Vesting ($)
   Total Value of
Stock Option
Payment and
Unvested
Equity
Acceleration
($)
 
David E. Ritchie, Jr.           10,854   $213,715   $213,715 
Mitchell A. Derenzo   4,903   $49,667    7,051   $138,834   $188,501 
Kevin B. Bender   13,838   $152,476    7,051   $138,834   $291,310 
Dan C. McGregor           5,596   $110,185   $110,185 

Indemnification.

From and after the closing, BMRC has agreed that it will indemnify and hold harmless each present and former director and officer of AMRB against all costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of actions or omissions occurring at or prior to the closing, to the fullest extent that AMRB would have been permitted under the California General Corporation Law and AMRB Articles and AMRB Bylaws in effect of the merger agreement to indemnify such person (and BMRC shall also advance expenses as incurred to the fullest extent permitted under applicable law). Further, BMRC shall assume, perform and observe the obligations of AMRB under any agreements in effect as of the date of the merger agreement to indemnify those persons who are or have at any time been directors and officers of AMRB for their acts and omissions occurring prior to the closing in their capacity as officers or directors.

In addition, for a period of six years from the closing, BMRC shall use its commercially reasonable efforts to provide that portion of director’s and officer’s liability insurance (“D&O Insurance”) that serves to reimburse the present and former officers and directors (determined as of the closing) of AMRB with respect to claims against such directors and officers arising from facts or events which occurred before the closing which D&O Insurance shall contain at least the same coverage and amounts, and contain terms and conditions no less advantageous, as that coverage currently provided by AMRB; provided, however, that in no event shall BMRC be required to expend on a total basis more than 250% of the current amount expended on an annual basis by AMRB to maintain or procure such D&O Insurance.

Continued Employment.

It is currently contemplated that certain of the senior executive officers of AMRB may continue their employment for some period of time with BMRC and/or Bank of Marin to assist with post-merger integration As of the date hereof, the terms of any such continued employment have not yet been determined.

Other than as set forth above, no director or officer of AMRB has any direct or indirect materi