Bank of Marin Gobbles Up Troubled Napa Bank

Napa's troubled has a new owner: Novato-based announced Friday that it has acquired Charter Oak and its two branches in Napa and St. Helena.

Charter Oak Bank, which had been ordered to close by the state’s governing body for financial institutions, was in receivership with the Federal Deposit Insurance Corporation.

Its new owner is about ten times the size of Charter Oak in terms of total deposits: Bank of Marin has assets of more than $1 billion, and Charter Oak is at about $105 million.

Friday’s announcement came from Bank of Marin Bancorp (NASDAQ: BMRC), which said in a release that Bank of Marin “acquired certain assets and assumed certain liabilities” of Charter Oak Bank. The transaction was completed under a modified whole-bank purchase and assumption agreement with the FDIC without loss share. The acquisition follows a decision by the California Department of Financial Institutions to close Charter Oak Bank. 

Russell Colombo, Bank of Marin’s president and CEO, said Charter Oak had a reputation of being focused on personalized customer service and community involvement. “In the 21 years we’ve been in business, we’ve established one of the healthiest banks in California,” he said in a statement. “We are excited for the opportunity to leverage our financial strength to expand into Napa.”

Bank of Marin Bancorp recently reported record annual earnings of $13.6 million in 2010. No capital was raised to complete transaction as “Bank of Marin Bancorp has grown capital through the retention of earnings in order to take advantage of such acquisition opportunities,” the bank said in its release.

Charter Oak Bank reported gross loans of $107 million and deposits of $105.3 million in its year-end 2010 report. The purchase price reflects an asset discount of $19.8 million and no deposit premium.

Charter Oak Bank has full-service branches at 600 Trancas St. in Napa and 1050 Adams St. in St. Helena. They will reopen as Bank of Marin branches on Feb. 22. Depositors have automatically become depositors of Bank of Marin.

To help customers with the transition, Bank of Marin representatives, along with the former Charter Oak staff, will be on-site at both branches to address customer needs. Since deposits will continue to be insured by the FDIC, there is no need for customers to change their banking relationship to retain their deposit insurance coverage.

“Bank of Marin welcomes the customers of Charter Oak Bank,” it said in the release. ”Customers’ deposits are safe and readily available, strengthened by the financial stability of Bank of Marin.”

Bank of Marin has 18 offices in Marin, San Francisco, Sonoma and Napa counties. The bank's administrative headquarters are on Redwood Boulevard in Novato.