Q1 2021 Bank of Marin Bancorp Earnings and Review of Additional Information Regarding the Transaction with American River Bankshares Call
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Good morning, and thank you for joining bank of Marin Bancorp earnings call for the first quarter ended March 31, 2021, I am Andrea Henderson director of marketing for bank of Marin.
During the presentation, all participants will be in a listen only mode. After the call. We will conduct a question and answer session.
At that time, if you have questions. Please press one followed by four on your telephone.
At any time during the call you need to reach an operator, Please press star zero. This.
This conference call is being recorded on April 19, 2021.
Joining us on the call today are Russ Colombo, President and CEO, Tani, Girton Executive Vice President and Chief Financial Officer.
Jim Meyers Executive Vice President and Chief operating Officer, and Beth Verizon Executive Vice President Chief Credit Officer.
Our earnings press release, along with the merger announcement press release and Investor presentation, which we issued this morning can be found on our Investor Relations page at bank of Marin Dot Com, where this call is also being webcast.
Before we get started I want.
Want to emphasize that the discussion on this call is based on information we know as of today Monday April 19, 2021 and May contain forward looking statements that involve risks and uncertainties.
Actual results may differ materially from those set forth in such statements.
For a discussion of these risks and uncertainties. Please review the forward looking statements disclosures in our earnings press release and merger announcement presentation as well as our SEC filings.
Following our prepared remarks, Russ and Tani, Tim and Beth will be available to answer your questions and now I'd like to turn the call over to Russ Colombo.
Thank you Andrew good morning.
I'd like to begin the call congrats on the exciting news, we announced in the press release. This morning with bank of Marin is acquiring American River Bank.
This combination will be of grid growth good growth in many ways. The brings together the exceptional institution, such your complementary values and discipline fundamentals.
Which allows us to expand our franchise by delivering the same legendary service on a regional scale.
After I discuss first quarter results, Tim Tony and I will walk through the details of the deal.
Thank you Britain opened 2021 on solid footing.
Generating first of order results that included strong credit quality and net income that exceeded results from the prior quarter and the first quarter of 2020.
Net income was $8 9 million with diluted earnings per share of <unk> 66.
Given improved economic forecasts.
Our model indicated that we were over reserve.
The during the quarter, we made the decision to reverse provisions for credit losses on loans and unfunded loan commitments.
We reversed $2 9 million from the allowance for credit losses on loans and 590000.
Of the allowance for credit losses on unfunded loan commitments.
As I noted our credit quality remained strong.
Non accrual loans totaled $9 2 million or 43% of the low portfolio and.
And classified loans increased slightly from the previous quarter, the $26 4 million.
While we continue to accommodate payment relief requests.
The portion of the loan portfolio required assistance has declined to 11 relationship.
<unk> of 17 loans totaling $59 million as of April 15th.
We grew our loan portfolio modestly from the prior quarter and 15% from a year ago to a total of $2 1 billion at March 31.
This growth reflected our ongoing focus on new loan originations as well as our continued participation in the SBA Paycheck protection program.
During the quarter, we funded $25 million non PPP loans, primarily in the marine and Napa markets.
In addition, we've accepted over 200 applications for new PPP loans totaling $139 million with 100 $127 million funded as of April 15th.
On the forgiveness portion of the program is accelerating of the.
$177 million in loan forgiveness requests by our original CPP borrowers, 81% of those applications totaling $130 million have been submitted to the SBA with $91 million forgiven and no application is denied.
Total deposits grew $152 million due.
$2 7 billion.
With noninterest bearing deposits comprising 54% totally pauses.
And the average cost of deposits.
The seven basis points.
Our total risk based capital ratio of 15, 7% at March 31 was well above well capitalized regulatory requirements.
Our balance sheet is strong and stands to benefit from any increases in interest rates.
During the quarter, we took advantage of market opportunities to invest excess cash and reduce high cost debt.
As advised on our last earnings call, we redeemed a $2 8 million subordinated debenture on March 15 2021.
Which resulted in accelerated discount accretion of $1 3 million.
This redemption reduced tax equivalent net interest margin by 18 basis points for the quarter.
It was also the primary driver of our increased efficiency ratio.
Which which would have otherwise been 50, 892%.
Finally, due to our continued profitability our board of directors declared a cash dividend of <unk> 23 per share on April 16 2021.
This represents the 64th consecutive quarterly dividend paid by bank of Marin Bancorp.
You will find more detail on our first quarter performance in our earnings press release.
In summary, our strong credit quality, the strength of our relationship banking business model and the resiliency of our customer base.
<unk> of the bank for success of the economic outlook improves from the markets we serve.
Now, let's talk about the deal.
With this merger bank of Marin becomes a $4 billion bank well positioned to emerge as the pre eminent business bank, serving northern California.
The combined company will be one of the largest northern California based community bank by market capitalization.
Growing the size and scale across the greater Bay area in Sacramento region.
It will allow us to increase the efficiency.
Manage costs.
<unk> helped offset the challenges brought on by a low interest rate environment across the two highly attractive markets.
Bank of Marin and American River Bank of very similar disciplined credit and risk management culture as.
As well as loan and deposit strategies.
Which allows for a seamless integration of business model.
These two organizations share of commitment to exceptional customer service and dedication to our local communities that candidly that can be amplified on a regional scale.
In the merger each share of American River Bankshares will be exchanged from 575% of.
Of one share of bank of Marin Bancorp.
The deal generate 14% accretion to 2022 earnings on a fully phased in basis and over 15% internal rate of return.
The earn back period.
On the 4% tangible book value dilution is three five years.
Tangible common equity at closing is projected to be 10, 8%.
Our regular core capital ratios, including total risk based capital of 17, 3%.
We will be well above well capitalized levels.
Bank of Marin Bancorp moving by two American River directors to join US both the board both of it.
Bank and holding company board.
Now, let me turn it over to Tim to give you a snapshot of American River Bank in the greater Sacramento market. Thanks.
Thank you Ross Slide four gives an overview of American River Bank.
Founded the 1983 in the headquartered in Rancho Cordova, California.
They have 10 full service branches, providing business banking services in Sacramento Amador Sonoma on plasma accounted.
Like Bank of Marin American River is focused on building relationships and maintaining strong credit discipline.
In addition of deep expertise in commercial real estate. They also on the small businesses wholesalers and manufacturers professionals and property managers and.
The loan portfolio is an excellent complement to our own.
Importantly, also like bank of Marin American rivers credit quality and capital ratios are strong.
They are like minded focus on disciplined management relationship banking and community commitment was very appealing to us.
Slide five gives you some regional highlights.
Projected population on household income growth expectations by 2020 are exceeding national estimates, providing long term economic benefits of the greater sacramental rates.
And the last year. The region has been ranked the top migration destination for people looking to relocate.
Driven in part by newly remote worker of seeking a more affordable lifestyle, while still accessible to everything Northern California has the offer.
There is ample existing office space throughout the region as well as well of new development on activity in Sacramento downtown and Midtown area.
There has been more than $6 billion invested in the new projects since the opening of the Golden One center the home of the Sacramento Kings in 2016.
Finally, with the University of such as UC Davis, Sacramento State and University of the Pacific nearby the reason as an increasingly attractive market for companies seeking educated young professionals.
Slide six profiles of the combined Bank branch network markets of operation and most recent financial highlights.
I will now turn the call over to economy, the share of the financial aspects of the transaction in greater detail.
Thank you Tim and good morning.
In modeling bank of Marin and American River Bank future earnings.
The consensus analyst.
Remainder of 2021 and 2020 sales in.
And apply the growth rate of 5% thereafter.
Savings on American River expenses are expected to be 35% or roughly $6 1 million phased over a six month period.
Estimated transaction expenses and not the $9 $5 million after tax or about seven 1% of aggregate deal value.
And we value the core deposit intangible at 50 basis points.
Slide seven provides details of fair market value adjustments, which I will summarize by saying that we believe American rivers allowance for credit losses on loans is a good indicator of both the credit component of the market valuation.
And the effects of the allowance for credit losses under the <unk> framework.
In addition, we applied a positive interest rate mark of $5 2 million on loans of one.
On a $5 million reduction to the accumulated other comprehensive income.
And the $1 $3 million write up on the owned the property in Healdsburg.
These marks of amortized accretive net depreciated through earnings going forward.
Turning to slide eight you can see the fixed exchange ratio of <unk> 575 shares of TMR feedstock for each AAM margin common share outstanding which results in pro forma ownership of approximately 20% for American river of shareholders.
Assuming 100% stock consideration with vested options to be cashed out at closing.
This translates to the transaction value of 135, $134 5 million as of April 16, when the MRC shares closed at $39 <unk> expense.
That represents $22 46 per share of an RFP Doc.
Key pricing multiples are 175 times tangible book value <unk>.
17 times consensus 2022 earnings.
And of core deposit premium of seven 9%.
Prior to signing the merger agreement, we completed due diligence, including an extensive review of the American River loan portfolio and from clients.
We anticipate a closing date in the third quarter of this year.
We very much look forward to the emerging our two company not only because the combination presents such attractive returns at 14% earnings accretion and internal rate of return over 15%.
But also because of our institutions are so well aligned.
This partnership will allow us to build on the excellent franchise that American River has established in the greater Sacramento and Amador market.
And now to wrap up our prepared remarks, I'll turn the call back over to Russell.
Thank you Tony.
I'd again like to reiterate how excited we are the team up with the American River Bank.
It's a great strategic fit for all of the.
For the reasons that we have discussed today.
And we want to welcome American River Bank clients and employees the bank of Marin.
Strategic acquisition of has always been part of our growth plan.
<unk> now has an opportunity to grow assets acquired talent.
Spanned our footprint and build infrastructure across a diversified geography.
Greater scale will increase efficiencies and spread our costs over a larger base.
As you know bank of Marin has experienced an acquisition with <unk>.
Successfully integrated multiple bank.
And we will draw on that experience and expertise to execute a seamless integration process with the American River team.
Now on our 30 <unk> year, we have built one of the industry's best bank in franchises and established the culture of consistency.
We remain dedicated to delivering exceptional customer service and creating shareholder value.
I am proud of the disciplined approach that has propelled bank of Marin to continued growth and new opportunities.
We are certainly looking forward to more success in the year ahead of the.
The future is bright.
Thank you for your time this morning, and now we will open it up to your questions.
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Our first question comes from Jeff The list with D. A Davidson you May proceed with your question.
Thanks, Good morning, Congrats on the deal.
Thank you good morning, Jeff.
I had a couple of questions on the margin.
One is just the legacy the.
So Tony do you have of core.
The margin I appreciate the impact on the the.
The sub debt.
I guess also exclusive of PPP.
A number of sequential on the core margin linked quarter.
So as it turns out yet.
As it turns out the Q1.
Margin was the only affected by one basis point from PPP because.
We had.
On the <unk>, a significant amount of forgiveness in the first quarter.
So by.
The rating.
The.
Some of the outstanding fees on the PPP that brought the PPP.
Okay.
Contribution in line with what we were getting from the other interest earning assets.
Got it okay. So.
I don't know what the net.
Net.
<unk> was in Q4, I guess I could go back and check but was that material.
Q4.
Was impacted by 13 basis points from PTC and that's because we didn't have the forgiveness of debt we had this quarter.
13, 14 basis point drag.
The substantial okay with those alright, we can back into the core so I appreciate that and the.
I guess as it relates to margin of the deal I just wanted to.
The American river carrying a slightly higher margin.
Just your.
Thought on that.
As you.
Is there any sort of what you would do with the funding side of that bank that may.
On net would you just assume.
Our positive cash.
Contribution to the margin or how should we think about as you put the two together and maybe sorry.
With the.
The sub debt.
Impact going forward any kind of.
Ballpark of where you think core kind of sales. Thanks.
Yes.
I hesitate to give a number but I think you hit the two drivers on ahead then.
Margin going to improve because of the sub debt.
The redemption, but we do have some tailwind from the yields on the <unk> portfolio.
Okay.
We looked at the point, we looked at the portfolio quite extensively.
Interestingly enough of it.
It mirrors, our portfolio of quite significantly I would say.
In many cases actually their yields are a little higher than ours.
So that's going to have a positive impact as we go forward I think on the funding side there.
Loan to deposit ratio is is it.
It's a bit lower than ours, so a lot of the excess liquidity.
No that's an opportunity maybe four four.
Total debt.
Reduction in their cost in terms of the deposit side.
On because they're a little bit higher does not not tremendously, but a little bit higher net so.
As I look forward I say, well it can improve our margins a little bit and we can bring the other funding costs a bit so all positive.
Okay. Thank you.
My other question was on the.
The of 35% cost saves as of as a considerable number of and maybe it speaks today as you said it the similarities the culturally.
The similar.
Company, So there's a comfort there and I guess.
The majority of those cost saves as debt.
You guys.
I didn't hear a branch consolidation expectation or is the bulk of that coming from all of the senior management.
Where do you expect the expenses to come out of.
And we do well, Jeff we do have to overlap we have.
They have a branch in Santa Rosa as do we and we have the branch in Healdsburg SUV, So theres going to be cost savings from that because of that because those two offices and.
The the 35% we've worked we work those numbers pretty hard.
Relative to the hard look at all employees and about job responsibilities of the people until.
We're very confident about that number.
Let's just put it that way.
Yes.
Okay, so it'll be some branch.
The branch savings in the back office.
I mean of.
Again.
Alright, I'll step aside on the.
Administrative side of Theres always going to be there's going to be profit.
Thanks Raj.
Sure.
Our next question comes from David Feaster with Raymond James You May proceed with your question.
Hey, good morning, everybody congrats on the deal.
Morning, David.
I just wanted to start on the growth front.
Could you just talk about how the pipeline is trending as we are heading into the second quarter.
Kind of how your conversations with clients are going.
And just whether you are still expecting a resurgence in growth from the back half of the year as we start hopefully get some drawdowns on C&I.
Just any commentary on the on the growth profit and then whether there's anything and American River that Youre expecting maybe that you need to run on offer.
<unk>.
We think of color there would be helpful.
All of them.
Im going to turn this over to Tim, but I will start by sustained debt.
We don't really look at anything for run off on the on their portfolio.
Like I said, we looked at 80% of it and liked what we saw so I'm not we're not anticipating.
And trying to drive any business out of the bank is small.
Of all good from our perspective, so on with that I'll, let him talk about pipelines and about the growth expectations. As we go forward sure. Thanks Ross on the <unk>.
One is definitely on improving and we're seeing an improvement.
Attitude of our outlook for the year, but I would say that's also very viewed by reality, meaning I think we sense of the optimism, but the loan demand is still relatively weak.
And so we're out Colin.
To the extent, we can virtually where necessary and we're seeing more requests but.
Quarter over quarter, just like commitments were still down about $8 million on utilization now of the kantar.
<unk> factored to our non PPP loans declines on the quarter and we still get a fair good amount of pay offs due to other people flying cash and we still see the.
Deleveraging.
Okay attitude going on so while we're getting more optimistic conversation of the pipeline is getting bigger.
The time that it takes the view that it's still a pretty protracted. So we are more optimistic but I couldnt tell you the timing within the year of when that's all going to come together.
Yes.
And then maybe just could you talk on the noma market.
The the deal really accelerates your growth. There you guys were playing on the expanding their yourselves just curious your plans for that market change Youre seeing there and just overall thoughts on on snow.
Yeah I'll jump on this is Tim I think we know their lending team up there. They are well respected we had transaction transition the new manager into that group on our side last year with a heavy emphasis on the wine industry and we're excited about the traction of our getting so we're very excited the combined.
<unk> the most folks who've been on the market of long time, we can benefit from their expertise and contacts and we're pretty optimistic now with the combination on on how we can grow in Santa Rosa of Sonoma County, overall, but particularly on northern Sonoma County market and then again with the overlap in Healdsburg with yields of our brands being there to support the.
Wind industry focus I think that we expect I'll, let the come together and lead the get growth the results for us down the road.
I would just add in discussions with Dave Ritchie of American River CEO.
Really excited about the growth opportunities that theyre seeing in Sonoma County.
He talked about that as much as the in Sacramento Wisdom. He had they are seeing a really.
Strong pipeline. So that's all good from our perspective, so not only Sacramento and Sonoma.
The normal growth out of out of this deal too so.
Yeah, I agree I think that's pretty exciting and the.
Then just maybe maybe higher level I guess you'd come of larger bank.
Both of your fee income contributions are in that mid to high single digits from 7% just curious.
Any thoughts on additional fee income opportunities I know you guys you talked about bringing on some of the waived fees, but other than the other fee income lines or cross sell opportunities maybe get that fee income contribution of a bit higher as you become a larger institution.
Yes first of all we waived.
Basically we have fee waivers that started back in April of 2000 linear.
And we just took them off.
From the last of the month or so.
And so youre going to see a resurgence of fees, which you hadn't seen during the last year.
Overdraft, the the ATM fees things like that.
Early withdrawal penalties.
So we didn't we didn't we went to every one of the peak during the last year. So that had a pretty negative impact in terms of of our fee income that will improve.
I think as you become a regional bank, we were out we will have opportunities to.
From the standpoint of.
Other fee income.
Whether it be entity potentially expanding our wealth management.
The offerings into into Sacramento.
You just the scale brings opportunities and being in that market.
What im excited about of that market is that there is a there has been over the last year maybe of the pandemic is accelerating.
On a surge of of growth in the market, which has come from the Bay area.
It's a much more affordable.
For those of you who aren't necessarily familiar with the geography, it's kind of halfway between the Bay area in Lake Tahoe, and so the opportunities for recreation are abundant and.
At a lower cost and.
For housing and the business growth as the <unk>.
Picking up so I think I think it's a great place to be because we just look at it from the standpoint of.
Younger adults.
Moving to that market, which which gives you all kinds of opportunities in the future to grow year, where not only of the bank with fee income in lots of different opportunities.
We're excited about that.
Terrific. Thank you.
Our next question comes from Bob Cowen from Piper Sandler You May proceed with your question.
Good morning, how are you doing.
How are you.
Good maybe if we could start on.
Potential of our obviously at the start off.
The integration is.
Forefront right here by knowing that strategic M&A is part of the company's growth strategy, what's kind of the banks' willingness to consider M&A. Once the integration is complete and if so.
Is further.
The penetration of the Sacramento market, where you want to be.
Or is there kind of other markets that you would consider.
It certainly opens up the.
The the valley to us.
Sacramento, if there are other opportunities certainly we're going to be open to them, whether it's the Sacramento area.
So on.
On the north or south of that.
The once you get into the <unk> once you get into the market do you want to if you want to grow and find opportunities to grow the bank and so we're certainly open to additional opportunities we havent, we havent quite integrated disciplined yet.
That's good.
Yes.
Yes.
It's exciting to be there because it certainly in the past we have been focused strictly on the bay area.
There are there are lots of opportunities in Sacramento.
Sacramento Valley, San Joaquin Valley that will open themselves up to us since the there.
Okay Awesome, and then maybe turning to the legacy.
Bank in terms of the reserve.
Given the improvement of the economic forecast, if we get kind of towards pre pandemic levels, you kind of have an estimation of how much lower the reserve percentage can go excluding PPP.
Considering if credit metrics remained stable.
So let me ask our chief credit off through the sitting here Beth horizon to the.
The answer that question for you.
Good morning.
We adopted this morning.
Good morning, and which is based on our forecast primarily.
We are affected by the California unemployment rate so.
<unk>.
The economy continues to improve we assumed that our reserve would also diminish however.
However, I can't really give an estimate I don't think that with the appropriate at this point in time.
Okay.
And then maybe last one from me.
Looking at looking at expenses outside of the was the reversal for unfunded commitments was there anything more onetime in nature in that number this quarter I'm, just trying to get a sense of kind of a good run rate going forward.
Yeah, not few months I mean, we have the seasonal sort of the normal seasonal staff associated with the 401 K matching.
Of that gets pumped up in the first quarter because of the payment of bonuses and then also the.
The acceleration of stock.
Stock vesting when people get closer to there.
Retirement eligibility.
<unk>.
And then a few items in the first quarter debt were delayed from 2020 because of the pandemic Q audit from that sort of thing, but not significant.
Okay. Thank you I'll step back.
Okay.
Our next question comes from Jackie Bohlen with <unk> you May proceed with your question.
Hi, good morning, everyone.
Thank you.
I just wanted to.
Start off with the strategy question Ross on.
Yes.
This deal makes perfect sense in terms of the expansion of especially which.
What's going on with the on the Bay area.
And just the movement of some people from there to back up I don't know that that highly retina model local newspapers, just wondering number one.
Steel is something that you would have considered call. It here on a half ago before we had a lot of trends change with the pandemic.
And number two.
How if at all of it yes. The overall strategy when you think about bank of Marin.
And just growth in operations and everything else.
First of all on a year and a half ago.
We had we had always stated that we were most interested in opportunities in the Bay area.
And so that was going to focus on and and as those opportunities started to diminish.
Certainly the Sacramento was always on our mind, but.
On some.
The net in market is probably more front and center.
On this became it became clear to us the Sacramento was the place that we should consider because of.
Exactly what you just debt.
The growth opportunities the the.
Kind of migration from the Bay area up there to Sacramento.
End of.
It's not we're not talking along the way I mean, it's it literally is that Howard of half drive from our offices to two.
The Sacramento so.
This is this is really.
It is really from a strategic standpoint, all of the sense of the world and really gives us on now that open up as the.
The previous question.
Does it really opens up the valley to us because of there we will have we.
Acquire people, who know the market and that's really important because it's one thing to go on open an office in the Sacramento Valley without the expertise of buying a bank that has really good people and I will tell you that.
Ben.
Very very.
I'm impressed.
With the people we meet the knowledge deep we may as we read as we've gone through the due diligence and sat down and I was I was one of those people looking at the Doctor looking at the the write offs.
They were very strong people were did a very good job in <unk>.
Breath of the underwriting of the presses and knowledge of the market and that makes a huge difference so.
It was an exciting opportunity and so that's why that's why we're there.
Okay.
It sounds like just based on conversations on the call in one of your comments to that.
This can be a good growth move one.
I know theres still a lot of moving parts right now on demand is a little bit on the weaker side, just given the environment, but it sounds like all else equal the growth outlook is probably improved from debt transaction. When we're looking at 2022 is that fair.
I think Thats fair I think of spirit.
Clearly when we make an acquisition.
We want to not only just.
Well acquire the bank, but we also one of them once we integrate it and grow it and we're into the new market, which we haven't been our business.
This bank.
And when you add the bank to ours the capacity to lend in Sacramento.
Gross dramatically and so I think there will be opportunities, even with the existing customer base to grow those relationships and as we talked to them about size and certainly the size of the transaction that we're willing to do and what they are willing to do on different.
The small because of capital requirements and things of that interest though the.
<unk>.
This will be of great opportunity for us to not only to build new relationships, but grow existing one.
Okay.
Yes.
And then interest in terms of the buyback on the items activity.
The activity in the quarter, how are you thinking about that in light of the deal announcement over the next couple of quarters.
Well, we still have plenty of capital and.
And you see the.
The capital after the acquisition is still weak.
We have on.
And the abundance of it and on.
So we haven't made any pronouncements the order of decisions about changing.
On our share repurchase program at this point.
Okay. Thanks, Tony.
One last one from me.
The securities yield in the quarter.
I have on my notes that last quarter, you benefited from some prepayment penalties and I'm just wondering if that wasn't of.
Contributors to the quarter's compression or if.
That was pretty muted last quarter, not a big impact.
No that actually did contribute to the contract to the compression.
<unk>.
Do you have of ballpark for about how much.
I do but not at my fingertips.
So I'll come back to you on the okay.
Okay.
Yeah, that's right alright, Thank you everyone. Congratulations thank.
Thank you Amy Thank you.
Our next question comes from Tim Coffey with Janney Montgomery Scott You May proceed with your question.
Thank you good morning, everybody.
Good morning, Good morning, Tim.
I had a question on your results for the quarter of start with.
And looking at the PPP loans that you originally of during the quarter you have the percentage of those loans that came from existing clients.
I don't have that in front of me, but it's almost the entirety of of that.
Okay.
We have we've done pretty of pretty low volume on both rounds of noncash.
Okay.
The only into the decision we would the care of our clients first.
The really important that we we didn't.
I mean.
We did we did bring in some of the first round I think there were.
250, something like that.
Non.
Customers of the bank, but they only were done after we took care of the existing clients because of the debt that was really important to do that first but then we open it up to other around I don't know what the percentages were but probably some of that's actually higher towards archives.
So the.
Okay, No that's fine.
And then a couple of questions on the deal.
So Russ.
Moving the combined loan to deposit ratio is that going to be a quick fix or you think that's going to take time.
Oh, It will certainly take time, because I think where we're running close to 80% there.
So much lower that in the system and so on.
That would certainly take time to.
Two of them.
The fixing.
The low demand is I think as we come out of the pandemic that will start to pick up and I think that will help.
And also I think.
As I was talking to you previously the fact that we can go to existing clients now of American River and expand relationships. There are things that they did which they hit the hour participate which frankly, we would have done the whole transaction of ourselves we'd like the deal with <unk>. The only did it because of the side.
So.
On a size in this respect we will be.
Really important for them to the yields and us as the combined organization to grow existing relationships. So that would be part of the part of the fixed so to speak on the other part will be just.
Continuing to.
Drive our our commercial banking office.
Okay.
And then what tax rate are you using on the merger accounting is it your own.
29%.
Great. Thank you very much and the.
Then Russ navigate the tune of the leaves on this question, but do you feel like youre going to need to rebrand the the company because I can see reasons why you wouldn't but I can also see reasons why you might consider it.
What are your thoughts.
I would share with you. This the I would say the reasons why we win in the there are reasonable.
Certainly.
We're getting a bit far afield from Marin.
Yeah that was the discussion with with the people at the American River early on and while there will be a period of time, where we they are branded still at the American River Bank.
The provision not a division of but a part of the bank of Marin.
Part of bank of Marin.
But.
There wasn't a tremendous pushback of about the name and felt that it would it would play just fine in the.
In the in Sacramento, the interesting enough they have they of branches in Sonoma County, and American Idol.
I'm on a great on geography, but I don't think of American River runs through Sonoma County.
So I.
I think.
And I think we.
It remains to be seen long term, but right now our our thought is to keep it on.
During the integration of the.
The American River Bank is part of bank of Marin, but ultimately.
You don't get the efficiencies unless you're one name.
<unk> been working really hard to build the.
The brand the franchise and.
The thoughts are probably probably that we will keep.
Bank of remain of the.
Is the name of the organization.
Okay, great. So those of my questions. Thank you very much.
Thanks, Andrew.
As a reminder, if you would like to register for a question on the phone it's one four.
Okay.
It appears we have no more phone questions at this time.
Well.
So I just wanted to thank everyone for joining us on the call today.
We're very excited about this.
Acquisition.
Between ourselves and <unk>.
American River Bank, we think it's going to open up many new opportunities for the for the organization for growth and success.
Alright. Thank you for your from your time, and we look forward to talking to you again next quarter. Thank you.
[noise].
Yeah.