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TABLE OF CONTENTS
TABLE OF CONTENTS APPENDIX A

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As filed with the Securities and Exchange Commission on September 14, 2017

Registration No. 333-[*]


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

BANK OF MARIN BANCORP
(Exact name of Registrant as specified in its charter)



California
(State or other jurisdiction of
incorporation or organization)
  6022
(Primary Standard Industrial
Classification Code No.)
  20-8859754
(I.R.S. Employer
Identification No.)

504 Redwood Blvd., Suite 100
Novato, California 94957
(415) 763-4520
(Address, including zip code and telephone number, including area code, of Registrant's principal executive offices)



Russell A. Colombo
Bank of Marin Bancorp
President and Chief Executive Officer
504 Redwood Blvd., Suite 100
Novato, California 94947
(415) 763-4520
(Name, address, including zip code, and telephone number, including area code, of agent for service)



with a copy to:

Kenneth E. Moore, Esq.
Michael K. Staub, Esq.
Stuart | Moore | Staub
641 Higuera Street, Suite 302
San Luis Obispo, CA 93401
(805) 545-8590

 

David J. Gershon, Esq.
Sheppard Mullin Richter & Hampton LLP
Four Embarcadero Center, 17th Floor
San Francisco, CA 94111
(415) 434-9100



Approximate date of commencement of proposed sale to the public:
As soon as practicable following the effectiveness of this Registration Statement,
satisfaction or waiver of the other conditions to closing of the merger described herein, and consummation of the merger.

           If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.     o

           If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

           If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

           Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  o   Accelerated Filer  ý   Non-accelerated filer  o
(Do not check if a
smaller reporting company)
  Smaller reporting company  o

Emerging growth company  o

           If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.     o

           If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

           Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)     o

           Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)     o



Calculation of Registration Fee

               
 
Title of Each Class of Securities
to be Registered

  Amount to be
Registered (1)

  Proposed Maximum
Offering Price Per
Share or Unit (2)

  Proposed Maximum
Aggregate Offering
Price (2)

  Amount of
Registration Fee

 

Common Stock, no par value

  805,620   N/A   $51,076,308   $5,920

 

(1)
Represents the maximum number of shares of Bank of Marin Bancorp common stock which could be issued in the merger with Bank of Napa, N.A., based upon the fixed exchange ratio set forth in the Agreement to Merge and Plan of Reorganization dated as of July 31, 2017.

(2)
Estimated solely for the purposes of calculating the registration fee and computed pursuant to Rule 457(c) and 457(f)(1) of the Securities Act. The proposed maximum aggregate offering price is equal to the product of (a) $63.40 (Bank of Marin Bancorp's closing stock price on September 7, 2017), and (b) the maximum number of shares of Marin common stock to be issued pursuant to the merger agreement.




            The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this document is not complete and may be changed. We may not sell the securities offered by this document until the registration statement filed with the Securities and Exchange Commission is effective. This document is not an offer to sell these securities, and we are not soliciting an offer to buy these securities, in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED SEPTEMBER 14, 2017

PROXY STATEMENT/PROSPECTUS

LOGO   LOGO
Proxy Statement of Bank of Napa, N.A.   Prospectus of Bank of Marin Bancorp

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

To the Shareholders of Bank of Napa, N.A.:

         Bank of Napa, N.A. ("Napa") will hold its special meeting of shareholders on [*], at [*] (local time), at its headquarters located at 2007 Redwood Rd., Suite 101, Napa, California. At the special meeting, you will be asked to consider and to vote upon the following matters:

         On July 31, 2017, Napa entered into an Agreement to Merge and Plan of Reorganization (the "merger agreement") with Bank of Marin Bancorp ("Marin") and Bank of Marin. If approved by Napa shareholders, under the merger agreement Napa will merge with and into Bank of Marin, Marin's wholly-owned bank subsidiary (the "merger").

         If the merger is approved and consummated, holders of Napa common stock will, subject to receiving cash in lieu of fractional shares, be entitled to receive, in exchange for each share of Napa common stock, 0.307 shares of Marin common stock.

         The value of Marin common stock to be received by a Napa shareholder will fluctuate with the market price of Marin common stock and will not be known at the time Napa shareholders vote on the merger. Based on the $[*] per share closing price of Marin's common stock on the NASDAQ Capital Market ("Nasdaq") on [*], 2017, the last practicable date before the date of this proxy statement/prospectus, the value of the per share merger consideration payable to holders of Napa common stock was approximately $[*] million. We urge you to obtain current market quotations for Marin common stock (Nasdaq trading symbol "BMRC") because the value of the Marin common stock you will receive as a result of the merger will fluctuate.

         As of [*], the record date for the Napa special meeting of shareholders, there were [*] shares of Napa common stock outstanding and entitled to vote.

         Based on the [*] shares of common stock outstanding, Marin will issue a maximum of [*] shares of common stock to holders of Napa common stock before taking into account any fractional shares; provided, however, holders of Napa common stock entitled to receive fractional interests of Marin common stock will be paid cash, without interest, determined by multiplying such fractional interest by the fifteen (15) day volume weighted average price of Marin common stock calculated prior to closing of the merger as provided in the merger agreement.

          This document, which serves as a proxy statement for Napa's special meeting of shareholders and as a prospectus with respect to the offering and issuance of the Marin common stock to be issued in the merger to the holders of Napa common stock, describes the Napa special meeting 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 24, for a discussion of the risks related to the proposed merger.

         Napa's board of directors has determined that the merger agreement and the transactions contemplated thereby, including the merger, are in the best interests of Napa and its shareholders, has unanimously approved the merger agreement and the transactions contemplated thereby, and recommends that Napa shareholders vote "FOR" the proposals described in this 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 Marin 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 [*], and they are expected to be first mailed to shareholders on or about [*].


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LOGO

BANK OF NAPA, N.A.
2007 Redwood Road, Suite 101
Napa, California 94558

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on [*]

TO THE SHAREHOLDERS OF BANK OF NAPA, N.A.:

        The special meeting of shareholders of Bank of Napa, N.A. will be held on [*], at [*] (local time), at the Bank of Napa's headquarters at 2007 Redwood Rd., Suite 101, Napa, California, for the following purposes:

        Management of Napa is not aware of any other business to be conducted at the special meeting.

        This 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 24.

        The board of directors has fixed the close of business on [*], 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 [*], you may vote at the special meeting.

        The board of directors has determined that the merger is advisable and in the best interests of Napa 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 or for any other legally permissible purpose.

        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

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purpose. 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 Napa, 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

 

 

GRAPHIC

M. Thomas LeMasters
President and Chief Executive Officer

September [*], 2017
Napa, California

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REFERENCES TO ADDITIONAL INFORMATION

        This proxy statement/prospectus incorporates important business and financial information about Marin from documents that are not included in or delivered with this document. Napa 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 Marin as follows:

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

         If any Napa shareholder would like to request documents, please do so by [*], 2017 in order to receive them before the Napa special meeting.

        The documents incorporated by reference are listed under the caption "Where You Can Find More Information." In addition, Marin hereby incorporates by reference all its subsequent filed reports with the SEC prior to the date of the consummation of the merger.

NAPA SHAREHOLDERS

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

Bank of Napa, N.A.
2007 Redwood Road, Suite 101
Napa, CA 94558

or at the following telephone number:

(707) 257-7777

        You may also call Napa's proxy solicitor, Georgeson Inc., toll-free at (800) 248-3170.

        Napa does not have a class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is not subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act, and accordingly, does not file documents or reports with the Commission.

        For additional information, please see "Where You Can Find More Information" beginning on page 90.

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TABLE OF CONTENTS

REFERENCES TO ADDITIONAL INFORMATION

    iii  

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

    3  

Questions and Answers about the Napa Special Meeting

    3  

Questions and Answers Specific to the Merger and the Merger Agreement

    6  

SUMMARY

    9  

SELECTED HISTORICAL FINANCIAL DATA

    19  

Selected Consolidated Historical Financial Data of Marin

    19  

Selected Historical Financial Data of Napa

    21  

Unaudited Per Share Equivalent Information

    22  

MARKET PRICE AND DIVIDEND INFORMATION

    23  

RISK FACTORS

    24  

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

    28  

GENERAL INFORMATION

    30  

THE NAPA SPECIAL MEETING

    31  

General

    31  

Date, Time and Place of the Napa Special Meeting

    31  

Record Date for the Napa Special Meeting; Stock Entitled to Vote; Audited Financial Statements

    31  

Quorum

    31  

Purposes of the Napa Special Meeting

    31  

Recommendation of the Napa Board of Directors

    32  

Number of Votes; Voting

    32  

Votes Required; Voting Agreements

    32  

Voting of Proxies

    33  

Abstentions and Broker Non-Votes

    34  

Dissenters' Rights

    34  

Other Matters

    34  

Solicitation of Proxies

    34  

PROPOSAL 1—THE MERGER

    35  

Structure of the Merger

    35  

Background of the Merger

    35  

Napa's Reasons for the Merger and Recommendation of the Napa Board of Directors

    39  

Opinion of Napa's Financial Advisor

    42  

The Merger Consideration

    53  

Procedures for Exchanging Napa Common Stock Certificates

    54  

Conditions to the Merger

    55  

Bank Regulatory Approvals

    57  

Business Pending the Merger

    58  

Additional Covenants

    60  

Napa Board of Directors' Covenant to Recommend the Merger and the Merger Agreement

    62  

No Solicitation

    62  

Representations and Warranties of the Parties

    63  

Effective Time of the Merger

    64  

Waiver and Amendment of the Merger Agreement

    64  

Termination of the Merger Agreement

    64  

Termination Fee

    65  

Certain Employee Matters

    66  

Interests of Certain Napa Officers and Directors in the Merger

    67  

Material Federal Income Tax Consequences

    71  

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Accounting Treatment of the Merger

    74  

Expenses of the Merger

    74  

Resale of Marin Common Stock

    74  

Shareholder Agreements

    75  

Non-Compete/Non-Solicitation Agreements

    75  

Dissenters' Rights

    75  

INFORMATION ABOUT MARIN

    77  

General

    77  

Bank of Marin

    77  

Management, Financial Information and Additional information

    77  

INFORMATION ABOUT NAPA

    78  

CERTAIN BENEFICIAL OWNERSHIP OF NAPA COMMON STOCK

    79  

DESCRIPTION OF MARIN CAPITAL STOCK

    80  

Common Stock

    80  

Preferred Stock

    80  

Dividends

    80  

Shareholder Rights Plan

    81  

Anti-takeover Provisions

    81  

Restrictions on Ownership

    82  

COMPARISON OF THE RIGHTS OF SHAREHOLDERS

    83  

Authorized Capital Stock

    83  

Number of Directors

    83  

Election of Directors—Cumulative Voting

    83  

Classification of Board of Directors

    83  

Removal of Directors

    84  

Nomination of Director Candidates by Shareholders

    84  

Shareholder Action Without a Meeting

    84  

Special Meetings of Shareholders

    84  

Indemnification of Directors and Officers

    85  

Amendments to Articles of Incorporation and Bylaws

    85  

Tax Treatment

    85  

Dividends

    86  

Liquidation Preferences

    86  

Redemption

    87  

Shareholders' Rights Plan

    87  

PROPOSAL 2—ADJOURNMENT OR POSTPONEMENT OF THE MEETING

    88  

General

    88  

Vote Required

    88  

Board Recommendation

    88  

OTHER MATTERS

    89  

EXPERTS

    90  

LEGAL MATTERS

    90  

WHERE YOU CAN FIND MORE INFORMATION

    90  

Bank of Marin Bancorp

    90  

Bank of Napa

    91  


LIST OF APPENDICES

Agreement to Merge and Plan of Reorganization

    APPENDIX A  

Opinion of Sandler O'Neill & Partners, L.P. 

    APPENDIX B  

Provisions of the National Bank Act at 12 U.S. Code § 214a(b) Relating to Dissenters' Rights

    APPENDIX C  

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QUESTIONS AND ANSWERS
ABOUT THE MERGER AND THE SPECIAL MEETING

        The following are some questions that you, as a Napa shareholder, may have regarding the merger, the merger agreement and the other matters being considered at the special meeting and the answers to those questions. Marin and Napa 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 proxy statement/prospectus and in the documents incorporated herein by reference.

Questions and Answers about the Napa Special Meeting

Q:
Why have I received these materials?

A:
Napa is sending these materials to its shareholders to help them decide how to vote their shares of Napa common stock with respect to the proposed merger at the special meeting.

Bank of Napa, N.A.
2007 Redwood Road, Suite 101
Napa, CA 94558

(707) 257-7777

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

A:
The Napa special meeting will be held at Napa's headquarters at 2007 Redwood Rd., Suite 101, Napa, California, on [*], at [*] (local time).

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

A:
Napa shareholders of record as of the close of business on [*] (referred to as the "record date") will be entitled to vote at the special meeting.

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

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

approve the merger and merger agreement;

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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 two-thirds of the issued and outstanding shares of Napa common stock based upon the number of shares outstanding as of the record date. Further, dissenting shares must not represent more than 10% of the outstanding shares of Napa common stock. There were [*] shares of common stock outstanding on the record date. Therefore, the approval of the merger and merger agreement will require the favorable vote of at least [*] shares.
Q:
How does the Napa board of directors recommend that I vote on each proposal?

A:
The Napa 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 Napa Special Meeting—Number of Votes; Voting" beginning on page 32 for a discussion of voting with respect to the proposals at the special meeting.

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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 rather than from Napa. 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 Proposal 2 and other routine proposals to be voted on at the special meeting, if any. See "The Napa Special Meeting—Abstentions and Broker Non-Votes" beginning on page 34.

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 two-thirds of Napa's 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, 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 Corporate Secretary of Napa 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.
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

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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 Napa's board of directors, including voting "FOR" approval of the merger and merger agreement, in which case you will be prohibited from exercising dissenters' rights.

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

A:
A quorum of shareholders is necessary to hold a valid meeting. A majority of the shares of Napa common stock issued and outstanding and entitled to vote 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, 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 Napa 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 Napa shareholders approve the merger and merger agreement: (i) Marin will acquire Napa by merging Napa with and into Bank of Marin, the wholly-owned subsidiary of Marin, with Bank of Marin surviving and continuing commercial bank operations of the combined bank following the merger; and (ii) Marin will issue shares of its common stock in exchange for shares of Napa common stock pursuant to the terms of the merger agreement.
Q:
Is the exchange ratio subject to adjustment based on changes in the price of Marin common stock or Napa common stock?

A:
No. The exchange ratio of 0.307 shares of Marin common stock for each share of Napa common stock is fixed and no adjustments to the exchange ratio will be made based upon changes in the price of either Marin common stock or Napa 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 Marin common stock that a Napa 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 proxy statement/prospectus, the date of the special meeting or the date on which such Napa shareholder actually receives shares of Marin common stock in the merger.

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Q:
Why has Napa's Board of Directors approved the merger?

A:
The board of directors of Napa has considered a number of strategic options and, in the board's opinion, none of these options, including remaining independent, is likely to create value for Napa shareholders greater than that created by the proposed transaction with Marin. Please read the sections entitled "Proposal 1—The Merger—Background of the Merger;—Napa's Reasons for the Merger;—Recommendation of the Napa Board of Directors and Opinion of Napa's Financial Advisor" beginning on page 35.

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

A:
Napa and Marin are working to complete the merger as soon as possible and expect to complete the merger in the fourth quarter of 2017. However, the merger is subject to various conditions, including shareholder and regulatory approvals. Subject to the various conditions and due to possible factors outside Napa's and Marin'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.

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

A:
Crowe Horwath LLP has issued a tax opinion to Marin 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"). As a "reorganization," Napa shareholders receiving Marin common stock will not recognize gain or loss on the exchange of their Napa common stock for Marin common stock for U.S. federal income tax purposes, except with respect to any cash received in exchange for fractional shares. See "Proposal 1—The Merger—Material Federal Income Tax Consequences— Tax Consequences of the Merger " beginning on page 71.

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, you will not have the right to receive any shares of Marin common stock in exchange for your former shares of Napa common stock if and when the merger is completed. In order to receive shares of Marin common stock in exchange for your shares of Napa common stock, you must hold your Napa common stock through the completion of the merger.

Q:
Should I send in my certificates now?

A:
No. You should NOT send in your 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:

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Q:
What if I lost my share certificates?

A:
IF YOUR CERTIFICATE(S) FOR NAPA COMMON STOCK IS/ARE LOST, STOLEN, OR DESTROYED, YOU ARE URGED TO IMMEDIATELY NOTIFY MR. TOM LEMASTERS, NAPA'S PRESIDENT AND CEO, AT (707) 257-7777, SO THAT A "STOP TRANSFER" INSTRUCTION CAN BE PLACED ON YOUR LOST CERTIFICATE(S) TO PREVENT TRANSFER OF OWNERSHIP TO ANOTHER PERSON. NAPA WILL SEND YOU THE FORMS TO PERMIT THE ISSUANCE OF A REPLACEMENT CERTIFICATE(S).

Q:
Who can help answer my other questions?

A:
If you have any additional questions about the merger or the merger agreement you may direct your questions to Mr. Tom LeMasters, President and Chief Executive Officer, Bank of Napa, N.A., 2007 Redwood Road, Suite 101, Napa, CA 94558; phone: (707) 257-7777. Napa shareholders may also call Napa's proxy solicitor, Georgeson Inc., toll-free at (800)-248-3170.

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SUMMARY

         This summary highlights selected information from this proxy statement/prospectus and may not contain all of the information that is important to the shareholders of Bank of Napa, N.A. 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 proxy statement/prospectus, including the merger agreement and the other documents included with this proxy statement/prospectus. See "Where You Can Find More Information" beginning on page 90. Page references are included in this summary to direct the reader to a more complete description of the topics.

         Throughout this proxy statement/prospectus, "Marin" refers to Bank of Marin Bancorp," and "Napa" refers to Bank of Napa, N.A. Also, throughout this proxy statement/prospectus, the Agreement to Merge and Plan of Reorganization, dated as of July 31, 2017 by and between Marin and Napa, is referred to as the "merger agreement." The merger of Napa with and into Bank of Marin is referred to as the "merger."

Parties to the Proposed Merger (Pages 77 and 78)

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 serving the counties of San Francisco, Marin, Napa, Sonoma, and Alameda, 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 legendary service to its customers and investing in its local communities, Bank of Marin was named "2016 Community Bank of the Year" by Western Independent Bankers and 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 Business Oversight, Division of Financial Institutions ("DBO"), and the FDIC.

        On July 1, 2007, a bank holding company reorganization was completed whereby Marin 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 Marin common stock. Upon its formation, Marin 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 Marin's accumulation of earnings.

        On November 29, 2013, Marin 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 Marin's assets to over $1.7 billion.

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        At June 30, 2017, Marin had total assets of $2.1 billion, total deposits of $1.8 billion and stockholders' equity of $240.7 million.

        Marin's common stock trades on the NASDAQ Capital Market ("Nasdaq") under the symbol "BMRC."

        Additional information about Marin, including consolidated financial statements and management's discussion and analysis thereof, are included in its Form 10-K for the year ended December 31, 2016, in its Form 10-Qs for the quarters ended June 30, 2017 and March 31, 2017 and other reports filed by Marin with the Securities and Exchange Commission since December 31, 2016. These reports are incorporated by reference into this proxy statement/prospectus. If you want to obtain copies of these documents or other information concerning Marin, please see "Where You Can Find More Information" on page 90.

        Marin'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 proxy statement/prospectus, is located at www.bankofmarin.com

Bank of Napa , N.A.

        Bank of Napa, N.A. is a national bank that engages in commercial banking primarily in Napa County, California, a region renown for producing premium wines and tourism.

        As of June 30, 2017, Napa's total deposits were $217.7 million, its gross loans were $139.3 million and its total assets were $246.1 million. At June 30, 2017, Napa had equity capital of $27.2 million.

        Napa operates through its main branch and headquarters located at 2007 Redwood Road, Suite 101 in Napa, California and a branch office located at 1715 Second Street, in Napa, California. The bank was organized on December 1, 2005 and commenced operations on August 14, 2006. Its phone number is (707) 257-7777 and its website, which is not part of this proxy statement/prospectus, is located at www.thebankofnapa.com.

        Napa offers a range of loan and deposit products and services to businesses and consumers in the Napa Valley. The bank's business banking focus is on small to medium sized businesses, professionals and not-for-profit organizations. Napa offers a broad range of commercial and retail lending programs designed to meet the needs of its target markets. These include commercial loans and lines of credit, construction financing, consumer loans, auto loans, home improvement loans and home equity lines of credit. Napa offers a proprietary Visa credit card combined with a rewards program to its customers, which includes a Business Visa program for business and professional customers. The bank has no foreign or international activities or operations.

        Napa offers a variety of checking and savings accounts, and a number of time deposit alternatives, including interest bearing and non-interest bearing personal and business checking accounts and time certificates of deposit. Napa also offers direct deposit of payroll, social security and pension checks. Deposits are FDIC insured up to applicable limits. An automatic teller machine is available at both branch offices and Napa's ATM network is linked to both the PLUS and EXCHANGE networks. The bank offers its depositors 24-hour access to their accounts by telephone and to both consumer and business accounts through its internet banking services.

        At June 30, 2017, Napa employed 28.3 full-time equivalent (FTE) staff.

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Date, Time and Location of the Napa Special Meeting (Page 31)

        The Napa special meeting will be held on [*], at [*] (local time), at the Napa's headquarters at 2007 Redwood Rd., Suite 101, Napa, California. At the special meeting, Napa shareholders will be asked to:

    approve a merger in which, and merger agreement providing for, the merger of Napa with and into Bank of Marin, as described in more detail in this proxy statement/prospectus and in the merger agreement itself; and

    approve 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.

Record Date and Voting Rights for the Napa Special Meeting (Page 31)

        Each Napa common shareholder is entitled to vote at the special meeting if he or she owned shares of Napa common stock as of the close of business on [*] , 2017, the record date for the Napa special meeting. Each Napa common shareholder will have one vote at the special meeting for each share of Napa common stock that he or she owned on that date.

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

The Merger (Page 35)

        The merger agreement is attached to this 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, Napa will be acquired by Marin in a transaction in which Napa 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 fourth quarter of 2017. The transaction will be immediately accretive to Marin's earnings, and upon closing Bank of Marin will have approximately $2.4 billion in assets and operate twenty-three branches in five Bay Area counties.

Napa's Reasons for Merger and Factors Considered by Napa's Board of Directors (Page 39)

        Based on Napa's reasons for the merger described in this proxy statement/prospectus, the Napa board of directors believes that the merger is fair to Napa shareholders from a financial point of view and in their best interests, and unanimously recommends that Napa shareholders vote "FOR" approval of the merger and merger agreement. For a discussion of the circumstances surrounding the merger and the factors considered by Napa's board of directors in approving the merger agreement, see "Proposal 1—The Merger—Napa's Reasons for the Merger and Recommendation of the Napa Board of Directors" beginning on page 39.

Opinion of Napa's Financial Advisor (Page 42 and Appendix B)

        Sandler O'Neill & Partners, L.P. ("Sandler") delivered its written opinion to Napa's board of directors on July 31, 2017, 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

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the review undertaken by 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 Napa common stock.

         The full text of the written opinion of Sandler, dated July 31, 2017, 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 proxy statement/prospectus. Napa's shareholders should read the opinion carefully in its entirety.

         Sandler's opinion speaks only as of the date of the opinion. Sandler provided its opinion for the information and assistance of Napa'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 Napa common stock. Sandler's opinion does not constitute a recommendation as to how any holder of Napa common stock should vote on matters to be considered at the Napa special meeting. Sandler's opinion does not address the underlying business decision of Napa 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 Napa or the effect of any other transaction in which Napa might engage.

Risk Factors (Page 24)

        An investment in Marin's common stock includes substantial risks. See the section entitled "Risk Factors" beginning on page 24 for a discussion of risks associated with the merger and an investment in Marin's common stock. Other risk factors are discussed in Marin's filings with the SEC which are incorporated herein by reference.

Napa Common Shareholders Will Receive Shares of Marin Common Stock for Each Share of Napa Common Stock Exchanged in the Merger, except to the Extent that Cash Is Received in lieu of Fractional Shares (Page 53)

        At the effective time of the merger, each outstanding share of Napa common stock (subject to certain exceptions) will, by virtue of the merger and without any action on the part of a Napa shareholder, be converted into the right to receive 0.307 shares of Marin 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 0.307 shares of Marin common stock for each share of Napa common stock, as described below under "Proposal 1—The Merger—The Merger Consideration" at page 53. The value of the stock to be received in the merger by the Napa shareholders will not be known at the time the Napa common shareholders vote on the merger and merger agreement.

Fractional Shares

        No fractional shares of Marin common stock will be issued and, in lieu thereof, each holder of Napa 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 Marin common stock calculated prior to closing of the merger as provided in the merger agreement, as described below under "Proposal 1—The Merger—The Merger Consideration" at page 53.

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Per Share Market Price and Dividend Information (Page 23)

        Shares of Marin common stock trade on Nasdaq under the symbol "BMRC." Shares of Napa common stock are quoted on the OTC Pink market under the symbol "BNNP."

        The following table sets forth the closing sale prices of (i) Marin common stock as quoted on Nasdaq, and (ii) Napa common stock as quoted on the OTC Pink market, on July 31, 2017, the last trading-day before Marin announced the merger, and on [*] , the last practicable trading-day before the distribution of this proxy statement/prospectus. To illustrate the market value of the per share merger consideration to be received by Napa's shareholders, the following table also presents the equivalent market values per share of Napa common stock as of July 31, 2017 and [*] , which were determined by multiplying the closing price for the Marin common stock on those dates by the exchange ratio of 0.307 of a share of Marin common stock for each share of Napa common stock. See "Proposal 1—The Merger—The Merger Consideration" beginning on page 53 for additional information about the merger consideration to be received by holders of Napa common stock.

 
  Marin
Common Stock
  Napa
Common Stock
  Equivalent Market
Value Per Share of
Napa
 

At July 31, 2017

  $ 66.65   $ 13.25   $ 20.46  

At [ * ]

  $ [*]   $ [*]   $ [*]  

        The market price of Marin common stock and Napa common stock will fluctuate prior to the date of the special meeting and the date the Napa shareholders receive the merger consideration. Therefore, the value of the stock to be received in the merger by the Napa shareholders will not be known at the time the Napa common shareholders vote on the merger and merger agreement. Napa shareholders should obtain a current price quotation for the shares of Marin common stock to update the implied value for a share of Napa common stock.

        Following the completion of the merger, and based on [*] shares of Marin common stock outstanding as of [*] , the former Napa common shareholders will own approximately [*] % of the outstanding shares of Marin common stock and the current shareholders of Marin will own the remaining approximately [*] % of the outstanding shares of Marin common stock.

        Marin follows a policy of paying quarterly cash dividends with payable dates historically during the second month of each calendar quarter. The record date for the dividend generally occurs around the first day of the second month of each quarter. Marin increased its quarterly dividend by $0.02 per share in 2015, $0.03 per share in 2016, and $0.02 per share in 2017. Marin most recently declared a quarterly cash dividend of $0.29 per share on July 21, 2017 with an August 4, 2017 record date and payable on August 11, 2017. Because the merger will not likely be effective by the next anticipated record date in November, Napa shareholders are not expected to participate in such dividend. The merger is expected to be completed before the record date for Marin's fourth quarter dividend (payable early in 2018); however, no assurance can be given regarding the time for the closing of the merger.

        Marin expects to pay cash dividends at the same general level but may change that policy in the sole discretion of its board of directors based on business conditions, its financial condition and earnings or other factors.

        Napa most recently declared a quarterly cash dividend of $0.17 per share on April 19, 2017 with a May 9, 2017 record date and a payable date of May 16, 2017. Pursuant to the merger agreement, Napa generally may not pay dividends to its shareholders pending the closing of the merger. See "Proposal 1—The Merger—Business Pending the Merger" beginning on page 58.

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Procedures for Exchanging Napa Common Stock Certificates (Page 54)

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

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

Material Federal Income Tax Consequences of the Merger (Page 71)

        The merger is intended to qualify as a "reorganization" within the meaning of Section 368(a) of the Code, which is referred to in this proxy statement/prospectus as the Code, and it is a condition to completion of the merger that Marin receives an opinion to that effect.

        Assuming the merger qualifies as a reorganization, subject to the limitations and more detailed discussion set forth in "Proposal 1—The Merger—Material Federal Income Tax Consequences" of this proxy statement/prospectus, a Napa 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 Marin common stock, the tax consequences of which are discussed at the portion of this proxy statement/prospectus referenced above.

        Tax matters are complicated, and the tax consequences of the merger to a particular Napa shareholder will depend in part on such shareholder's individual circumstances. Accordingly, each Napa 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 federal, state, local and foreign income and other tax laws.

Differences in Rights as a Shareholder (Page 83)

        As a Napa shareholder, your rights are currently governed by Napa's articles of association and bylaws. If you receive Marin common stock in exchange for your Napa common stock, you will become a shareholder of Marin and your rights will be governed by its articles of incorporation and bylaws. You can review the provisions of Marin common stock and comparison in the rights of shareholders between the two companies starting on page 83.

Approval of the Merger and Merger Agreement Requires the Affirmative Vote of Holders of Two-Thirds of the Issued and Outstanding Shares of Napa Common Stock (Page 32)

        The affirmative vote of the holders of two-thirds of the issued and outstanding shares of Napa common stock is necessary to approve the merger and merger agreement on behalf of Napa. At the close of business on the record date, there were [*] shares of Napa common stock outstanding held by [*] holders of record. If a Napa shareholder does not vote, it will have the same effect as a vote "AGAINST" the merger and merger agreement .

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The Board of Directors of Napa Owns Shares Which May Be Voted at the Napa Special Meeting (Pages 75 and 79)

        As of the record date, the directors of Napa, as a group, held (i) [*] shares of Napa common stock, or approximately [*]% of the outstanding Napa common stock. These directors have each entered into shareholder agreements with Marin pursuant to which they have agreed, among other things, in their capacity as shareholders of Napa, to vote their shares of Napa common stock in favor of the merger and merger agreement. The form of shareholder agreement is attached as Exhibit A to the merger agreement, which is attached as Appendix A to this proxy statement/prospectus.

Napa's Shareholders Have Dissenters' Rights (Page 75)

        Under federal law, holders of Napa common stock who dissent from the merger and comply with certain provisions of the National Bank Act at 12 U.S. Code § 214a(b) will be entitled to receive a cash payment for their shares of Napa common stock in connection with the merger. These procedures are described under "Proposal 1—The Merger—Dissenters' Rights" in this proxy statement/prospectus, and a copy of 12 U.S. Code § 214a(b) is attached as Appendix C to this proxy statement/prospectus.

Napa is Prohibited from Soliciting Other Offers (Page 62)

        Napa 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 Marin regarding extraordinary transactions such as a merger, business combination or sale of a material amount of its assets or capital stock.

Marin and Napa Must Meet Several Conditions to Complete the Merger (Page 55)

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

    two-thirds of the common shareholders of Napa must approve the merger and merger agreement;

    Marin, Bank of Marin and Napa must receive all required regulatory approvals for the merger, no such approval may contain any condition that would reasonably be likely to (1) have a material adverse effect on Napa, (2) restrict the business of Marin or any of its subsidiaries in a manner that would have a material adverse effect with respect to Napa's business, or (3) require the sale by Napa or Marin of any material portion of their respective assets;

    there must be no law, injunction or order enacted or issued preventing completion of the merger;

    the representations and warranties of each of Marin, Bank of Marin and Napa in the merger agreement must be true and correct, subject to the materiality standards provided in the merger agreement;

    Marin, Bank of Marin and Napa must have complied in all material respects with their respective obligations in the merger agreement;

    neither Marin nor Napa must have suffered any event which has had or could reasonably be expected to result in a material adverse effect;

    Marin shall have received shareholder agreements executed and delivered by each of the Napa directors and (which Marin 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

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      attached as Exhibit A to the merger agreement, which is attached as Appendix A to this proxy statement/prospectus;

    as of the last business day of the month prior to the closing of the merger, Napa's adjusted stockholders' equity will not be less than $26.58 million, subject to certain adjustments and its allowance for loan and lease losses will not be less than $1.9 million or 1.35% of total loans, whichever is greater;

    Marin shall have received a tax opinion from Crowe Horwath, LLP that the merger will be treated as a "reorganization" within the meaning of Section 368(a) of the Code, and Marin, Bank of Marin and Napa will be a party to that reorganization within the meaning of Section 368(b) of the Code;

    Marin shall have received executed non-solicitation agreements from each of the directors of Napa and from Napa's chief lending officer (which Marin received on the date that the merger agreement was signed), and on or before the closing of the merger an executed Consulting Agreement from M. Thomas LeMasters, each of which shall remain in full force and effect;

    Napa shall have obtained consents required to be obtained pursuant to agreements with third parties;

    Napa shall have paid all transaction expenses incurred in connection with the merger prior to the closing of the merger and shall have provided Marin with written evidence thereof; provided, Marin shall have been given an opportunity to review all invoices, bills and estimates relating to Napa's professional fees related to the merger;

    Marin shall have received the written resignation of each director of Napa; and

    dissenting shares must not represent more than 10% of the outstanding shares of Napa common stock.

        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.

Marin, Bank of Marin and Napa Have Filed Regulatory Applications to Seek Regulatory Approvals to Complete the Merger (Page 57)

        To complete the merger, the parties need the prior approval from (i) the Federal Reserve, (ii) the FDIC, and (iii) the DBO. The parties must also notify the Office of the Comptroller of the Currency ("OCC"). 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. Marin, Bank of Marin and Napa have filed all necessary applications with the FDIC and the DBO 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 August 30, 2017. Marin and Napa cannot predict whether the required regulatory approvals will be obtained or whether any such approvals will have conditions which would be detrimental to Marin following completion of the merger.

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Termination of the Merger Agreement (Page 64)

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

    Marin, Bank of Marin and Napa can mutually agree at any time to terminate the merger agreement before completing the merger, even if shareholders of Napa have already voted to approve it;

    by any party if the merger is not consummated by March 31, 2018, 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 Napa shareholders (if Napa 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 Marin and Bank of Marin, on the one hand, or by Napa, 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 Napa do not approve the merger and merger agreement; or

    by Napa, subject to certain conditions, in the event that it enters into a "superior" acquisition proposal with a third party, in which case Napa would become obligated to pay a termination fee to Marin.

        In addition, Marin and Bank of Marin may terminate the merger agreement at any time prior to the Napa special meeting if the board of directors of Napa withdraws or modifies its recommendation to the Napa shareholders that the merger and merger agreement be approved in any way which is adverse to Marin, or breaches its covenants requiring the calling and holding of the Napa special meeting to consider the merger and merger agreement and prohibiting the solicitation of other offers, or Napa fails to reaffirm its approval or recommendation of the merger and merger agreement after receipt of an acquisition proposal. Marin also may terminate the merger agreement if a third party commences a tender offer or exchange offer for the outstanding Napa common stock and the board of directors of Napa recommends that Napa 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, Napa would become obligated to pay a termination fee to Marin.

Termination Fee (Page 65)

        Napa is obligated to make a $1.9 million cash payment to Marin in the event the merger agreement is terminated for certain reasons.

Marin and Napa May Amend the Merger Agreement (Page 64)

        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 Napa special meeting which would reduce the aggregate value of the consideration to be received by the Napa shareholders, or which by applicable law would require further approval by the Napa shareholders without obtaining such approval.

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Napa's Directors and Officers Have Some Interests in the Merger that Are in Addition to or Different than the Interests of Napa Shareholders (Page 67)

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

    the agreement of Bank of Marin to honor indemnification obligations of Napa, as well as to purchase liability insurance for Napa's directors and officers for five (5) years following the merger, subject to the terms of the merger agreement;

    M. Thomas LeMasters, Napa's President and Chief Executive Officer and a director is required to enter into a Consulting Agreement with Bank of Marin, to be effective as of the closing of the merger, and to provide compensation to him for continued provision of services to Bank of Marin following the merger. Additionally, simultaneously with, the execution of the merger agreement, Diane Bishofberger, Napa's Executive Vice President and Bank Sales Manager, entered into an employment agreement with Bank of Marin;

    Napa executive officers M. Thomas LeMasters, Kathi Metro, Diane Bishofberger, and Michael Lundstrom each have change in control agreements which would be triggered by this transaction and are to be paid, for total aggregate consideration of $988,521, under the merger agreement prior to closing in exchange for termination and release agreements;

    Napa executive officers M. Thomas LeMasters, Michael Lundstrom, and Diane Bishofberger each have salary continuation agreements, the vesting and fixing of annual benefits under which will occur as a result of the merger, and such agreements will be assumed by Bank of Marin for payment of benefits thereunder; and

    the merger agreement provides that Marin shall grant vested substitute stock options to certain Napa directors and officers who hold outstanding Napa stock options at closing.

        These and other interests of Napa directors and officers are described in more detail in the section entitled "Proposal I—The Merger—Interests of Certain Napa Officers and Directors in the Merger." The boards of directors of Marin and Napa 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 74)

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

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SELECTED HISTORICAL FINANCIAL DATA

        The following information is provided to aid you in your analysis of the financial effects of the merger. The historical selected financial data in the following tables shows financial results actually achieved by Napa and by Marin for the periods presented. These are historical figures.

Selected Consolidated Historical Financial Data of Marin

        The following selected consolidated financial data with respect to Marin as of and for the years ended December 31, 2016, 2015, 2014, 2013 and 2012 have been derived from its audited financial statements. The selected consolidated financial data as of and for the six months ended June 30, 2017 and 2016 comes from the unaudited financial statements of Marin. Such interim financial statements include all adjustments that are, in the opinion of management, necessary to present fairly Marin's financial information for the interim periods presented. The operating results for the six months ended June 30, 2017, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2017.

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  Unaudited as of and
for the Six Months
Ended June 30,
  As of and for the Year Ended December 31,  
(Dollars in thousands,
except share and per share data)

  2017   2016   2016   2015   2014   2013   2012  

Income statement data:

                                           

Interest income

  $ 36,735   $ 37,188   $ 75,430   $ 69,438   $ 72,790   $ 60,560   $ 65,766  

Interest expense

    810     1,384     2,269     2,251     2,349     1,785     2,576  

Net interest income

    35,925     35,804     73,161     67,187     70,441     58,775     63,190  

(Reversal of) provision for loan losses

    0     0     (1,850 )   500     750     540     2,900  

Non-interest income

    4,211     4,584     9,161     9,193     9,041     8,066     7,112  

Non-interest expense

    25,642     24,027     47,692     46,949     47,263     44,092     38,694  

Net income available to common stockholders

    9,734     10,483     23,134     18,441     19,771     14,270     17,817  

Common share and per common share data:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Earnings—diluted per share

  $ 1.58   $ 1.72   $ 3.78   $ 3.04   $ 3.29   $ 2.57   $ 3.28  

Book value per common share

    39.07     37.00     37.63     35.34     33.68     30.78     28.17  

Dividends on common stock

    3,315     3,044     6,223     5,390     4,733     3,970     3,751  

Weighted-average diluted shares outstanding

    6,172,961     6,099,674     6,114,850     6,065,230     6,006,103     5,558,033     5,437,737  

End of period shares outstanding

    6,160,952     6,120,684     6,127,314     6,068,543     5,939,482     5,877,524     5,389,210  

Balance sheet data at period end:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Total assets

  $ 2,100,716   $ 1,950,452   $ 2,023,493   $ 2,031,134   $ 1,787,130   $ 1,805,194   $ 1,434,749  

Gross loans

    1,491,485     1,448,399     1,486,616     1,451,228     1,363,351     1,269,322     1,073,952  

Allowance for loan losses

    15,232     15,087     15,442     14,999     15,099     14,224     13,661  

Investment securities

    401,888     381,852     417,018     487,424     317,285     366,493     293,414  

Deposits

    1,840,540     1,705,615     1,772,700     1,728,226     1,551,619     1,587,102     1,253,289  

Total borrowings

    5,666     5,493     5,586     72,395     20,185     19,969     15,000  

Total stockholders' equity

    240,733     226,452     230,563     214,473     200,026     180,887     151,792  

Loan-to-deposit ratio

    81.0 %   84.9 %   83.9 %   84.0 %   87.9 %   80.0 %   85.7 %

Average balance sheet data:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Total average assets

  $ 2,047,122   $ 1,972,511   $ 2,008,286   $ 1,889,747   $ 1,833,065   $ 1,494,163   $ 1,434,461  

Total average common stockholders' equity

    235,500     221,505     226,216     208,526     191,733     161,034     144,111  

Average common equity to average assets

    11.50 %   11.23 %   11.26 %   11.03 %   10.46 %   10.78 %   10.05 %

Performance ratios:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Return on average assets (1)

    0.96 %   1.07 %   1.15 %   0.98 %   1.08 %   0.96 %   1.24 %

Return on average common stockholders' equity (1)               

    8.34 %   9.52 %   10.23 %   8.84 %   10.31 %   8.86 %   12.36 %

Net interest margin—full tax-equivalent (2)

    3.82 %   3.90 %   3.91 %   3.83 %   4.13 %   4.20 %   4.74 %

Efficiency ratio

    63.89 %   59.49 %   57.93 %   61.47 %   59.46 %   65.97 %   55.04 %

Common stock dividend payout ratio

    33.75 %   28.90 %   26.77 %   29.10 %   23.90 %   27.90 %   21.00 %

Asset quality ratios:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Net charge-offs (recoveries) to average loans (1)

    0.01 %   (0.01 )%   (0.16 )%   0.04 %   (0.01 )%   0.00 %   0.38 %

Non-accrual loans to total loans

    0.08 %   0.19 %   0.01 %   0.15 %   0.69 %   0.92 %   1.64 %

Nonperforming assets to total assets

    0.07 %   0.16 %   0.03 %   0.13 %   0.55 %   0.67 %   1.23 %

Allowance for loan losses as a percentage of:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Total loans

    1.02 %   1.04 %   1.04 %   1.03 %   1.11 %   1.12 %   1.27 %

Non-accrual loans

    1,291.9 %   553.7 %   10,649.7 %   688.3 %   161.5 %   121.8 %   77.4 %

Capital ratios at period end:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Tier 1 leverage

    11.61 %   11.28 %   11.39 %   10.67 %   10.62 %   10.78 %   10.30 %

Tier 1 risk-based capital

    14.06 %   13.10 %   13.37 %   12.44 %   12.87 %   12.18 %   12.52 %

Total risk-based capital

    15.01 %   14.05 %   14.32 %   13.37 %   13.94 %   13.21 %   13.71 %

(1)
Amounts for interim periods are annualized based on actual number of days in the periods.

(2)
Yields on tax-exempt securities and loans are presented on a taxable-equivalent basis assuming a Federal tax rate of 35%.

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Selected Historical Financial Data of Napa

        The following selected financial data with respect to Napa as of and for the years ended December 31, 2016, 2015, 2014, 2013 and 2012 have been derived from its audited financial statements. The selected financial data as of and for the six months ended June 30, 2017 and 2016 comes from the unaudited financial statements of Napa. Such interim financial statements include all adjustments that are, in the opinion of management, necessary to present fairly Napa's financial information for the interim periods presented. The operating results for the six months ended June 30, 2017, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2017.

 
  Unaudited as of and
for the Six Months
Ended June 30,
  As of and for the Year ended December 31,  
(Dollars in thousands,
except share and per share data)

  2017   2016   2016   2015   2014   2013   2012  

Income statement data:

                                           

Interest income

  $ 4,332   $ 4,004   $ 8,103   $ 7,062   $ 6,423   $ 6,068   $ 5,867  

Interest expense

    178     181     366     336     363     364     377  

Net interest income

    4,154     3,823     7,737     6,726     6,060     5,704     5,490  

Provision for loan and lease losses

    20     63     100     87     84     121     272  

Non-interest income

    302     270     568     571     499     432     432  

Non-interest expense

    2,967     2,798     5,585     5,133     4,422     4,231     4,128  

Income before income taxes

    1,469     1,232     2,620     2,077     2,053     1,784     1,522  

Net income available to common stockholders

    993     810     1,742     1,352     1,246     1,926     1,913  

Common share and per common share data:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Earnings per diluted share

  $ .41   $ .35   $ .73   $ .58   $ .54   $ .83   $ .83  

Book value per common share

  $ 11.50   $ 11.21   $ 10.90   $ 10.67   $ 10.13   $ 9.37   $ 8.91  

Weighted average diluted shares outstanding

    2,439,880     2,341,709     2,376,004     2,329,239     2,317,436     2,312,038     2,293,015  

Balance sheet data at period end:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Total assets

  $ 246,056   $ 231,643   $ 244,447   $ 212,059   $ 179,335   $ 166,498   $ 149,924  

Gross loans and leases

    139,297     128,323     135,170     127,398     103,432     99,159     87,602  

Allowance for loan and lease losses

    1,927     1,864     1,904     1,800     1,711     1,562     1,500  

Investment securities

    88,583     80,061     94,365     72,209     55,504     46,007     38,008  

Deposits

    217,746     204,322     217,571     186,501     155,229     144,159     128,763  

Total stockholders' equity

    27,175     25,831     25,755     24,583     23,194     21,440     20,402  

Loan-to-deposit ratio

    63.97 %   62.80 %   62.13 %   68.31 %   66.63 %   68.78 %   68.03 %

Average balance sheet data:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Total average assets

  $ 246,379   $ 223,603   $ 232,771   $ 197,705   $ 169,630   $ 152,205   $ 137,598  

Total average common stockholders' equity

    26,420     25,188     25,748     23,959     22,408     20,876     19,273  

Average common equity to average assets

    10.72 %   11.26 %   11.06 %   12.12 %   13.21 %   13.72 %   14.01 %

Performance ratios:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Return on average assets (1)

    .81 %   .73 %   .75 %   .68 %   .73 %   1.27 %   1.39 %

Return on average common stockholders' equity (1)               

    7.58 %   6.47 %   6.76 %   5.64 %   5.56 %   9.23 %   9.93 %

Net interest margin-tax equivalent adjusted (2)

    3.73 %   3.74 %   3.64 %   3.69 %   3.80 %   3.98 %   4.24 %

Efficiency ratio

    66.56 %   68.36 %   67.24 %   70.34 %   67.41 %   68.96 %   69.69 %

Asset quality ratios:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Net (recoveries) charge-offs to average loans

    0 %   0 %   0 %   0 %   (.06 )%   .06 %   .25 %

Nonperforming loans to total loans

    .10 %   .11 %   .10 %   0 %   0 %   .53 %   .63 %

Nonperforming assets to total assets

    .06 %   .06 %   .06 %   0 %   0 %   .31 %   .37 %

Allowance for loan losses as a percentage of:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Total loans

    1.38 %   1.45 %   1.41 %   1.41 %   1.65 %   1.58 %   1.71 %

Nonperforming loans

    1,407 %   1,361 %   1,391 %           302 %   270 %

Capital ratios at period end:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Tier 1 leverage

    10.99 %   10.95 %   10.76 %   11.48 %   12.92 %   12.98 %   13.45 %

Tier 1 risk-based capital

    16.40 %   16.45 %   16.34 %   16.91 %   19.45 %   18.93 %   19.13 %

Total risk-based capital

    17.56 %   17.68 %   17.51 %   18.16 %   20.70 %   20.19 %   20.40 %

(1)
Amounts for interim periods are annualized based on actual number of days in the periods.

(2)
Yields on tax-exempt securities and loans are presented on a taxable-equivalent basis assuming a Federal tax rate of 35%.

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Unaudited Per Share Equivalent Information

        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 Marin and Napa on a historical basis, for Marin on a pro forma combined basis, and on a pro forma combined basis per Napa equivalent share.

        The unaudited pro forma data gives effect to: (i) the acquisition by Marin of Napa through the merger of Napa into Bank of Marin; and (ii) the issuance of a number of shares of Marin common stock to the shareholders of Napa 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 Napa acquisition and the merger of Napa into Bank of Marin were effective on December 31, 2016 and June 30, 2017, as applicable. The data in the column "Pro Forma Equivalent Per Napa Share" shows the effect of the merger from the perspective of an owner of Napa common stock, and was obtained by multiplying the Combined Pro Forma Amounts for Marin by the exchange ratio of 0.307. 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.

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

 
  Marin
Historical
  Napa
Historical
  Combined
Pro Forma
Amounts for
Marin (1)
  Pro Forma
Equivalent
Per Napa Share
 

Book value per share:

                         

at June 30, 2017

  $ 39.07   $ 11.50   $ 41.79   $ 12.83  

at December 31, 2016

  $ 37.63   $ 10.90   $ 40.51   $ 12.44  

Cash dividends per share (2) :

   
 
   
 
   
 
   
 
 

Six months ended June 30, 2017

  $ 0.54   $ 0.17   $ 0.54   $ 0.17  

Year ended December 31, 2016

  $ 1.02   $ 0.15   $ 1.02   $ 0.32  

Basic earnings per share:

   
 
   
 
   
 
   
 
 

Six months ended June 30, 2017

  $ 1.60   $ 0.42   $ 1.57   $ 0.48  

Year ended December 31, 2016

  $ 3.81   $ 0.75   $ 3.66   $ 1.12  

Diluted earnings per share:

   
 
   
 
   
 
   
 
 

Six months ended June 30, 2017

  $ 1.58   $ 0.41   $ 1.54   $ 0.47  

Year ended December 31, 2016

  $ 3.78   $ 0.73   $ 3.61   $ 1.11  

(1)
Pro forma adjustment assumes Marin stock price of $65.95 as of July 28, 2017.

(2)
Pro forma combined cash dividends are based on Marin's historical amounts.

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MARKET PRICE AND DIVIDEND INFORMATION

Marin common stock

        The following table sets forth the high and low intra-day sales prices for shares of Marin's common stock and cash dividends paid per share for the periods indicated.

 
   
  High   Low   Cash
Dividends
Per Share
 

2015

  First Quarter   $ 52.96   $ 48.63   $ 0.22  

  Second Quarter   $ 53.00   $ 45.81   $ 0.22  

  Third Quarter   $ 52.89   $ 46.81   $ 0.22  

  Fourth Quarter   $ 56.77   $ 47.75   $ 0.24  

2016

 

First Quarter

 
$

54.50
 
$

45.65
 
$

0.25
 

  Second Quarter   $ 51.61   $ 47.16   $ 0.25  

  Third Quarter   $ 52.47   $ 47.25   $ 0.25  

  Fourth Quarter   $ 75.05   $ 49.25   $ 0.27  

2017

 

First Quarter

 
$

72.50
 
$

63.25
 
$

0.27
 

  Second Quarter   $ 69.95   $ 59.05   $ 0.27  

  Third Quarter through August 31, 2017   $ 68.15   $ 60.95   $ 0.29  

Napa common stock

        The following table sets forth the high and low intra-day sales prices for shares of Napa's common stock for the periods indicated.

 
   
  High   Low   Cash
Dividends
Per Share
 

2015

  First Quarter   $ 8.65   $ 8.20        

  Second Quarter   $ 8.49   $ 8.30        

  Third Quarter   $ 9.20   $ 8.36        

  Fourth Quarter   $ 10.00   $ 8.50        

2016

 

First Quarter

 
$

9.90
 
$

8.77
       

  Second Quarter   $ 10.00   $ 9.01   $ 0.15  

  Third Quarter   $ 12.00   $ 9.80        

  Fourth Quarter   $ 11.95   $ 10.50        

2017

 

First Quarter

 
$

13.00
 
$

11.70
       

  Second Quarter   $ 13.35   $ 12.65   $ 0.17  

  Third Quarter through August 31, 2017   $ 19.49   $ 13.25        

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RISK FACTORS

         In addition to the other information included and incorporated by reference into this 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, Marin, Bank of Marin, and Napa 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 Napa special meeting, 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 Marin and ownership of Marin common stock contained in Part I, Item 1A of Marin's Annual Report on Form 10-K for the year ended December 31, 2016 that has been filed with the Commission, as well as any subsequent documents filed by Marin with the Commission, which are incorporated into this proxy statement/prospectus by reference. See "Where You Can Find More Information."

Because the market price of Marin common stock may fluctuate, Napa shareholders cannot be sure of the market value of the Marin 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 Marin to Napa shareholders is fixed at 0.307 shares of Marin common stock for each share of Napa common stock. The closing price of Marin's common stock as quoted on Nasdaq was $66.65 on July 31, 2017, the trading date immediately preceding the day on which the merger was publicly announced. As of [*], 2017, the closing price of Marin common stock as reported on Nasdaq was $[*]. The market price of Marin common stock will vary from these prices, and will also vary from the price on the date that this document is mailed to Napa shareholders or on the date of the special meeting of shareholders of Napa. The market price of Marin 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 Marin. As a result of the fixed 0.307 exchange ratio, the market value of shares of Marin common stock that a Napa shareholder receives in the merger will both increase and decline correspondingly with increases and declines in the market price of Marin common stock. Because the date that the merger will be completed will be later than the date of the Napa special meeting, at the time of the special meeting you will not know the exact market value of the Marin common stock that you will receive for your shares of Napa common stock upon completion of the merger.

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

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

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        You should consider these interests in conjunction with the recommendation of the board of directors of Napa with respect to approval of the merger. For a more detailed discussion of these interests, see the section entitled "Proposal 1—The Merger—Interests of Certain Napa 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 Napa.

        Until the closing of the merger, with some limited exceptions, Napa 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 Marin. In addition, Napa has agreed to pay a termination fee of $1.9 million to Marin in specified circumstances. See "Proposal 1—The Merger—Termination Fee." These provisions could discourage other companies from trying to acquire Napa even though those other companies might be willing to offer greater value to Napa shareholders than Marin has offered in the merger. The payment of the termination fee could also have a material adverse effect on Napa's financial condition.

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

        The success of the merger will depend on, among other things, Marin's ability to realize the anticipated revenue enhancements and efficiencies and to combine the businesses of Bank of Marin and Napa in a manner that does not materially disrupt the existing customer relationships of Napa or result in decreased revenues resulting from any loss of customers and that permits growth opportunities to occur. If Marin 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 Napa 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 Marin to achieve the anticipated benefits of the merger. Integration efforts between the Bank of Marin and Napa could also divert management attention and resources. These integration matters could have an adverse effect on each of Bank of Marin and Napa during the transition period and on the combined company following completion of the merger.

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

        Upon completion of the merger, holders of Napa common stock will become holders of Marin common stock. Marin's business differs from that of Napa, and, accordingly, the financial condition and results of operations of the combined company and the market price of Marin 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 Napa.

The fairness opinion received by Napa's board of directors from Sandler will not reflect any changes since the date of such opinion.

        Changes in the operations and prospects of Marin, Bank of Marin or Napa, general market and economic conditions and other factors that may be beyond the control of Marin and Napa, may alter the value of Marin or Napa or the market price for shares of Marin common stock or Napa common stock by the time the merger is completed. The fairness opinion delivered by Sandler to the Napa board of directors does not speak as of any date other than the date of such opinion, which was July 31, 2017. The merger agreement does not require that Sandler's fairness opinion be updated as a condition to the completion of the merger, and Napa does not intend to request that the fairness opinion be updated. Sandler's fairness opinion is attached as Appendix B to this proxy statement/prospectus. For a description of Sandler's opinion, see "Proposal 1—The Merger—Opinion of Napa's Financial Advisor." For a description of the other factors considered by Napa's board of directors in determining to approve the merger, see "Proposal 1—The Merger—Napa's Reasons for the Merger and Recommendation of the Napa 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 Marin.

        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 Marin and Napa 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 Marin following the merger or causing the merger transaction between Marin and Napa to terminate. See "Proposal 1—The Merger—Bank Regulatory Approvals" and "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 Marin common stock and Napa 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 Napa 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, Marin and Napa may terminate the merger agreement under certain circumstances even if the merger agreement is approved by Napa shareholders, including if the merger has not been completed on or before March 31, 2018. If the merger is not completed, the respective trading prices of Marin common stock on the Nasdaq and of Napa common stock on the OTC Pink 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, Napa 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 "Proposal 1—The Merger—Conditions to the Merger."

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The shares of Marin common stock to be received by Napa common shareholders as a result of the merger will have different rights than shares of Napa common stock.

        Upon completion of the merger, Napa common shareholders will become Marin shareholders and their rights as shareholders will be governed by the Marin articles of incorporation, the Marin bylaws and the California General Corporation Law ("CGCL"). Some of the rights associated with Napa common stock are different from the rights associated with Marin common stock. See "Comparison of the Rights of Shareholders."

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

        This 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 Marin, Bank of Marin and Napa and the potential combined company and may include statements for the periods following the completion of the merger. Shareholders of Napa 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 proxy statement/prospectus or in the documents incorporated by reference in this 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 Marin's, Bank of Marin's or Napa's control. The ability of Marin, Bank of Marin or Napa 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 Marin that are incorporated into this proxy statement/prospectus by reference, including the following:

        Because these forward-looking statements are subject to assumptions and uncertainties, Marin's, Bank of Marin's and Napa'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 Marin, Bank of Marin and Napa based on information

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known to them as of the date of this proxy statement/prospectus. Napa and Marin shareholders are cautioned not to place undue reliance on these statements, which speak only as of the date of this proxy statement/prospectus or the date of any document incorporated by reference in this proxy statement/prospectus.

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

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GENERAL INFORMATION

        This document constitutes a proxy statement for, and is being furnished to all record holders of, Napa in connection with the solicitation of proxies by the board of directors of Napa to be used at a special meeting of shareholders of Napa to be held on [*], 2017 and any adjournment or postponement of the Napa special meeting. The purposes of the Napa special meeting are to consider and vote upon a proposal to approve the merger and merger agreement and a proposal to adjourn the Napa special meeting to the extent necessary to solicit additional votes on the merger and merger agreement.

        Marin has supplied all of the information contained or incorporated by reference herein relating to Marin and Bank of Marin, and Napa has supplied all of the information contained herein relating to Napa.

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THE NAPA SPECIAL MEETING

General

        This proxy statement/prospectus is being provided to Napa 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 proxy statement/prospectus provides Napa shareholders with important information about the special meeting and should be read carefully in its entirety.

Date, Time and Place of the Napa Special Meeting

        The special meeting will be held at Napa's headquarters at 2007 Redwood Rd., Suite 101, Napa, California, on [*], at [*] (local time).

Record Date for the Napa Special Meeting; Stock Entitled to Vote; Audited Financial Statements

        Only holders of record of Napa common stock at the close of business on [*], which is the record date for the special meeting, are entitled to receive notice of and to vote at the meeting. On the record date, Napa had [*] shares of its common stock issued, outstanding and eligible to vote at the special meeting.

        The audited financial statements of Napa were previously mailed to shareholders as a part of Napa's 2016 Annual Report. Shareholders requesting an additional copy of the Annual Report should contact Mr. Tom LeMasters, Napa's President & CEO, at the following address:

Bank of Napa, N.A.
2007 Redwood Road, Suite 101
Napa, CA 94558

or at the following telephone number:

(707) 257-7777

Quorum

        A majority of the shares of Napa common stock issued and outstanding and entitled to vote on the record date (taken together) 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 entitled to vote at the special meeting may adjourn the special meeting to another date.

Purposes of the Napa Special Meeting

        The special meeting is being held for the following purposes:

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Recommendation of the Napa Board of Directors

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

        " 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.

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

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

Number of Votes; Voting

        Each holder of Napa 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 Napa as of the 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:

        As of the record date, Napa's directors owned [*] shares of Napa common stock, representing [*]% of Napa's issued and outstanding shares of common stock. Pursuant to voting agreements more fully described under the section "Proposal 1—The Merger—Shareholder Agreements," each of Napa's directors has agreed to vote his or her shares of Napa common stock "FOR" approval of the merger and merger agreement. A copy of the form of voting agreement is attached as Exhibit A to the merger

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agreement which is attached to this 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 proxy statement/prospectus.

        Napa 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.

        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 proxy statement/prospectus went to press, Napa did not know of any other matters which needed to be acted on at the special meeting, other than those discussed in this proxy statement/prospectus.

Revoking Proxies

        Napa 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 Napa 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 NAPA'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:

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        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 two-thirds of Napa's 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 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 NAPA STOCK, THE BROKER OR OTHER NOMINEE MAY NOT VOTE THE SHARES "FOR" APPROVAL OF THE MERGER AND MERGER AGREEMENT 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 two-thirds of Napa's 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.

Dissenters' Rights

        Holders of Napa common stock will have dissenters' rights in accordance with 12 U.S. Code § 214a(b) with respect to the proposal to approve the merger and merger agreement. See "Proposal 1—The Merger—Dissenters' Rights" for more information.

Other Matters

        Napa 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. Napa will pay for the cost of solicitation of proxies. In addition to solicitation by mail, Napa's directors, officers and employees may also solicit proxies from shareholders by telephone, facsimile, or in person. Napa 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. Napa has engaged Georgeson Inc. to assist in the solicitation of proxies for the special meeting. Napa estimates that it will pay Georgeson Inc. a fee of approximately $14,000, will reimburse Georgeson Inc. for reasonable out-of-pocket expenses and will indemnify Georgeson Inc. 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. Napa will, upon request, reimburse those brokerage houses and custodians for their reasonable expenses in so doing.

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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 proxy statement/prospectus, including the merger agreement which is attached as Appendix A. Shareholders of Napa should carefully read the appendices in their entirety.

Structure of the Merger

        Pursuant to the terms and conditions set forth in the merger agreement, Napa will be acquired by Marin in a transaction in which Napa will merge with and into Bank of Marin, with Bank of Marin as the surviving institution, which is referred to as the merger. Following consummation of the merger, Bank of Marin intends to continue to operate all of the branches acquired from Napa.

        Following the consummation of the merger, Marin'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 Marin. The directors and executive officers of Marin immediately prior to the merger will continue as the directors and executive officers of Marin after the merger, in each case, until their respective successors are duly elected or appointed and qualified. However, one current member of Napa's board of directors will be added to the boards of directors of Marin and Bank of Marin at the time of the merger.

Background of the Merger

        The Napa board of directors and executive management team regularly review and assess strategic opportunities that may be available to Napa. As part of the strategic planning process the Napa board of directors regularly considers the benefits and challenges of operating as an independent bank, including the challenges associated with succession planning and growth, compared to the benefits and challenges of engaging in a strategic combination with another institution. To date, Napa's strategy has been to continue a path of independence and growth while, beginning in 2016, returning excess capital to its shareholders through dividends and a stock repurchase program.

        On December 2, 2016, Marin's President and CEO, Russell Colombo, and Napa's President and CEO, Thomas LeMasters, met for lunch and, among other things, informally discussed a possible acquisition of Napa. Following this informal discussion, on January 5, 2017, Marin emailed a nonbinding indication of interest to Napa proposing Marin's acquisition of Napa through an all-stock merger with Bank of Marin. The indication of interest proposed that shares of Napa common stock would be converted to shares of Marin common stock based on an exchange ratio of 0.2705 shares of Marin common stock per share of Napa common stock; that options to purchase Napa common stock be canceled in exchange for cash payments; and that the merger agreement include a termination fee equal to approximately 5.0% of the aggregate value of the merger consideration. Based on the trading values of Marin and Napa common stock on January 4, 2017, the exchange ratio valued implied a value of $18.50 per share of Napa, which was approximately 58% above Napa's trading price, or an aggregate transaction value of $44.8 million (including amounts paid to cash out options). The indication of interest contemplated an exclusivity period of 45 days with a potential 30-day extension.

        On February 1, 2017, the Napa board of directors held a special meeting to consider Marin's indication of interest. In attendance were representatives of Napa's legal counsel at Manatt, Phelps and Phillips, LLP, which we refer to as "Manatt", and representatives of Sandler. A representative of Manatt advised the Napa board of directors concerning its fiduciary duties in considering a merger. A representative of Sandler provided financial analyses of Marin's offer and Napa on a standalone basis. A representative of Sandler also discussed the mergers and acquisitions market generally and provided a list of some other potential parties that could be interested in a merger with Napa. The Napa board

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of directors discussed whether to pursue a transaction with Marin or some other party or to decline Marin's offer and continue to operate as an independent bank, but no decision was made.

        On February 6, 2017, the Napa board of directors held a second special meeting to further consider Marin's indication of interest. Representatives of Manatt and Sandler attended the meeting. After discussion, the Napa board of directors concluded that while the compatibility of Marin's market area and culture made Marin a compelling merger partner, Marin's proposal was inadequate from a financial point of view. Napa was not at that time exploring strategic alternatives or otherwise seeking a merger transaction. However, taking into account Marin's resources and its likely strategic interest in Napa's banking markets, Napa considered Marin's level of interest sufficiently serious and substantial that it determined that it would be prudent to further explore and consider Marin's indication of interest through continued dialogue.

        On February 8, 2017, a Sandler representative called his counterpart at Keefe, Bruyette & Woods, which we refer to as "KBW", and was Marin's financial advisor, to relay some of Napa's board of directors questions regarding early thoughts about plans for key personnel and to inquire whether Marin contemplated any branch closures. The Sandler representative indicated that the Napa board of directors was still having internal discussions on the merits of a potential transaction with Marin.

        On February 14, 2017, the Napa board of directors held a special meeting to consider a response to Marin's proposal. Representatives of Manatt and Sandler attended the meeting. After discussion, the Napa board of directors directed representatives of Sandler to propose that Marin increase the exchange ratio to 0.31 shares of Marin common stock per share of Napa common stock, decrease the termination fee to 4.0% of the aggregate transaction value, provide that Mr. LeMasters, a member of Napa's board of directors, would join Marin's board of directors and increase the severance payable to Napa employees terminated in connection with the transaction from the one week per year of service proposed in Marin's indication of interest to three weeks' per year of service and to shorten the proposed exclusivity period to 30 days. Because it believed that Marin's markets, customers and employees complemented those of Napa to an extent unlike other potential merger candidates and based on the level of merger consideration offered by Marin and its familiarity with Napa's financial performance, the Napa board of directors elected not to pursue discussions with other potential merger partners. Taken together these factors indicated that the probability of receiving a higher offer as the result of such a solicitation was outweighed by the risks such a course of action would involve, including potentially losing the proposed Marin transaction and leaks and speculation that could disrupt and damage Napa. On February 15, 2017, a representative of Sandler verbally relayed the counterproposal to KBW.

        On February 27, 2017, a representative from KBW conveyed the need for certain non-public information to further evaluate whether there was room to move Marin's initial offer. On March 2, 2017, Napa and Marin entered into a mutual nondisclosure agreement, after which Napa provided certain non-public information concerning projected merger expenses and budgets to Marin.

        Discussions between representatives of Napa and Marin continued through March and April. In mid-March, Marin through KBW communicated to Sandler a possible willingness to increase its initial offer to $19 per share. Sandler communicated to KBW, on behalf of the Napa board of directors, that the board was more focused on an exchange ratio than a price, but that the exchange ratio implied by a $19 per share offer would not be acceptable to Napa. Through various discussions between Sandler and KBW comparing inputs in their respective models and sharing model refinements with their respective clients, KBW verbally communicated to Sandler that a 0.30x exchange ratio could potentially work.

        The Napa board of directors met on April 19, 2017 to discuss the state of negotiations with Marin. On April 20, 2017, at the direction of the Napa board of directors, representatives of Sandler advised Marin that Napa would be willing to continue discussions premised on an exchange ratio of 0.30 shares

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of Marin common stock per share of Napa common stock, Marin's assumption of Napa's stock options at closing, a breakup fee equal to approximately 4.0% of the aggregate merger consideration value, one board seat, and the satisfactory resolution of severance amounts payable to Napa employees terminated in connection with the transaction. Representatives of Sandler also indicated to Marin that Napa wanted to gain a better understanding of the potential tax implications related to the transaction.

        In late April 2017, Marin reported net earnings for the first quarter of 2017, which were slightly below publicly available Wall Street analyst estimates. On May 16, 2017, the Napa board of directors met to consider the proposed transaction with Marin. In particular, the Napa board of directors considered whether it would be appropriate to reconsider the proposed exchange ratio in light of Marin's confirmation to representatives of Napa that the updated mean analyst earnings per share estimates were a reasonable representation of Marin's internal earnings expectations. After conferring with representatives of Sandler and Manatt, the Napa board of directors directed representatives of Sandler to propose an increase in the exchange ratio to 0.32 shares of Marin common stock per share of Napa common stock.

        On May 25, 2017, Marin presented a revised indication of interest offering an increased exchange ratio of 0.3065 shares of Marin common stock per share of Napa common stock, with options to purchase Napa common stock to be assumed by Marin at closing. Napa employees terminated in connection with the transaction would be entitled to receive severance equal to two weeks' salary for each year of service. The indication of interest also required that, as a condition to closing, Napa must have stockholders' equity of at least $26.58 million (subject to certain adjustments) and a minimum reserve for loan losses. The indication of interest also proposed that Marin would enter into a consulting agreement with Mr. LeMasters for a value to be determined. Discussions between the representatives of Napa and Sandler, on the one hand, and Marin and KBW on the other hand, continued throughout May and June.

        On June 7, 2017, Marin provided a revised draft indication of interest proposing an exchange ratio of 0.307 shares of Marin common stock per share of Napa common stock. The draft also contemplated a special bonus pool of up to $150,000 for Napa employees who may be terminated in connection with the merger and closing conditions that included a stockholders equity test with a separate limit on transaction expenses, a minimum reserve for loan losses and employment agreements with certain unnamed Napa employees.

        On June 13, 2017, the Napa board of directors held a special meeting to discuss the status of negotiations, whether to continue discussions with Marin and the response to Marin's most recent draft indication of interest, if any. Representatives of Manatt and Sandler were present. After a lengthy discussion, the Napa board of directors voted to continue discussions with Marin. The Napa board of directors also designated an independent mergers and acquisition committee consisting of Napa directors Anderson, Barlow and Orndorf, which we refer to as the "Napa M&A Committee", to consider, direct and oversee the negotiation of the indication of interest and any definitive merger agreement.

        The Napa M&A Committee met by telephone on June 14, 2017. Also present were Mr. LeMasters and representatives of Manatt and Sandler. After discussion, the Napa M&A Committee directed representatives of Sandler to relay to Marin that Napa would be willing to enter into the indication of interest and continue discussions subject to the elimination of several proposed closing conditions, including a requirement that Marin enter into employment agreements with certain unnamed Napa employees and that there be a limit on transaction expenses as a separate closing condition, and that the indication of interest clarify certain terms of the employee severance and the assumption of Napa stock options.

        The Napa M&A Committee met by telephone on June 21, 2017. On June 21, 2017, at the direction of the Napa M&A Committee, a representative of Manatt sent a revised draft of the

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indication of interest to Marin's counsel eliminating the limit on transaction expenses as a separate closing condition. At the direction of the Napa M&A Committee, a representative of Sandler relayed the proposed revisions to the indication of interest to representatives of KBW the following day. The Napa M&A Committee met again on June 23, 2017 with Mr. LeMasters and representatives of Manatt and Sandler present. At the June 23, 2017 meeting, the Napa M&A Committee directed Mr. LeMasters to speak directly with Mr. Colombo regarding the elimination of transaction expenses as a separate closing condition and making clarifications regarding the terms of employee severance payments and the assumption of Napa stock options.

        Mr. LeMasters and Mr. Colombo met in person on June 26, 2017 to discuss the issues raised by the Napa M&A Committee. Later that day, the Napa M&A Committee met with Mr. LeMasters and representatives of Manatt and Sandler present. Mr. LeMasters reported that Mr. Colombo had agreed to the Napa M&A Committee's proposed changes. Manatt reviewed a revised version of the indication of interest with the Napa M&A Committee. The indication of interest proposed that shares of Napa common stock would be converted to shares of Marin common stock based on an exchange ratio of 0.307 shares of Marin common stock per share of Napa common stock; that options to purchase Napa common stock would be assumed and would become options to purchase Marin common stock at closing with appropriate adjustments based on the exchange ratio, and that the merger agreement include a termination fee equal to approximately 4.0% of the aggregate value of the merger consideration. The indication of interest provided for a 30-day exclusivity period with a potential 30-day extension. After discussion, the Napa M&A Committee unanimously approved the indication of interest and directed Mr. LeMasters to sign the revised indication of interest. Napa and Marin entered into a final non-binding indication of interest on June 27, 2017.

        During the month of July 2017, Marin conducted a due diligence review of Napa at Napa's headquarters, engaged in interviews at Marin's headquarters and reviewed due diligence materials which were made available via an online due diligence site. Napa management, Manatt and Sandler also conducted a due diligence review of Marin and Bank of Marin which included reviewing documents and information relating to Marin's business through an online diligence room and onsite at Marin's headquarters.

        On July 18, 2017, Marin's legal counsel delivered a draft of the definitive merger agreement to Manatt. The draft was delivered to the Napa board of directors and on July 19, 2017, at a regular meeting of the Napa board of directors, a representative of Manatt confirmed, through a preliminary analysis of the merger agreement, that the financial terms of the merger described in the draft merger agreement matched those described in the signed indication of interest, though a full legal review of the draft was not complete.

        At a meeting of the Napa M&A Committee on July 21, 2017 at which representatives of Sandler and Napa management were present, a representative of Manatt reviewed the draft definitive agreement with the Napa M&A Committee in detail. At the direction of the Napa M&A Committee, a representative of Manatt delivered a revised draft of the definitive agreement incorporating comments from the Napa M&A Committee and Napa management to Marin's counsel later that afternoon.

        During the week of July 24, 2017, the parties continued to negotiate the terms of the merger agreement and its exhibits. The Napa M&A Committee met on July 27, 2017 with representatives of Manatt, Sandler and Napa's management to discuss the status of negotiations.

        On July 28, 2017, Marin's legal counsel presented a revised draft of the definitive agreement to Manatt. That afternoon, the Napa board of directors held a special meeting to consider the definitive agreement and its exhibits, including the shareholder agreements, non-competition/non-solicitation agreements and consulting agreement, drafts of which were provided to the board in advance of the meeting. A representative of Manatt reviewed the draft merger agreement and its exhibits in detail, noting the items that were still open to negotiation. Representatives of Sandler provided a financial

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analysis of the merger. The Napa board of directors discussed the draft merger agreement and the terms of the merger in detail.

        The Napa board of directors held a special meeting on July 31, 2017. At the meeting, a representative of Manatt reviewed with the Napa board of directors the Napa directors' fiduciary duties. Following this review, a representative of Manatt outlined for the directors the revisions to the merger agreement since the meeting on July 28, 2017, a marked copy of which had been distributed to the directors prior to the meeting, and the related shareholder agreements, non-competition/non-solicitation agreements and consulting agreement to be entered into in connection therewith, copies of which had also been made available to the directors in advance of the meeting. Representatives of Sandler reviewed the financial aspects of the proposed transaction and rendered to the Napa board of directors its oral opinion (later confirmed in writing) to the effect that, as of July 31, 2017 and subject to the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler as set forth in its opinion, the exchange ratio in the proposed merger agreement was fair, from a financial point of view, to the holders of Napa common stock. The Napa board of directors engaged in a vigorous discussion of the terms of the agreements, and the representatives of Manatt and Sandler present at the meeting answered various questions. After extensive discussion and taking into account the factors described below under "—Napa's Reasons for the Merger and Recommendation of the Napa Board of Directors", the Napa board of directors adopted resolutions approving the merger agreement and transactions contemplated thereby.

        Marin and Bank of Marin's respective boards of directors approved the merger agreement at special meetings on July 31, 2017.

        Following the Napa, Marin and Bank of Marin boards of directors meetings, the merger agreement and the related agreements were executed and delivered. The transaction was publicly announced on the afternoon of July 31, 2017 in a press release jointly issued by Napa and Marin.

Napa's Reasons for the Merger and Recommendation of the Napa Board of Directors

        The Napa board of directors believes the proposed merger with Marin is fair and in the best interests of the Napa shareholders, as well as its employees and the communities served by Napa. In reaching this conclusion, the Napa board of directors discussed the proposed merger with its senior management and with its financial and legal advisors and considered the relative advantages and disadvantages of remaining independent rather than entering into the merger. The directors unanimously recommend that Napa shareholders vote in favor of the merger and merger agreement and consummation of the merger and the other transactions contemplated by the merger agreement.

        In approving the merger with Marin, the Napa board of directors considered a variety of factors, both positive and negative. The primary factors that favor the merger include, but are not limited to, the following:

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        In the course of its deliberations regarding the merger, the Napa board of directors also considered the following factors and risks, which the board of directors determined did not outweigh the expected benefits to Napa and its shareholders:

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        The foregoing discussion of the information and factors considered by the Napa board of directors is not intended to be exhaustive, but includes the material factors, both positive and negative, considered by the Napa board of directors. In reaching its decision to approve the merger agreement, the Napa 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 Napa board of directors considered all these factors as a whole, including discussions with, and questioning of, Napa's management team, its legal counsel and financial advisor. The Napa board of directors determined that overall, the totality of information and factors (positive and negative) considered by the Napa board of directors, was favorable to, and supported, its determination.

        This explanation of Napa'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 Concerning Forward-Looking Statements" beginning on page 28 of this joint proxy statement/prospectus.

         For the reasons set forth above, the Napa board of directors unanimously approved the merger agreement and the transactions contemplated thereby and unanimously recommends that Napa shareholders vote "FOR" the merger and merger agreement and "FOR" the adjournment proposal (if necessary or appropriate).

         Each of the directors of Napa has entered into a shareholder agreement with Marin and Napa, pursuant to which they have agreed to vote "FOR" the merger and merger agreement and "FOR" the adjournment proposal (if necessary or appropriate). For more information regarding the shareholder agreements, please see the section entitled "Proposal 1—Shareholder Agreements" beginning on page 75.

Opinion of Napa's Financial Advisor

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

        Sandler acted as an independent financial advisor in connection with the proposed transaction and participated in certain of the negotiations leading to the execution of the merger agreement. At the July 31, 2017 meeting at which Napa's board of directors considered and discussed the terms of the merger agreement and the merger, Sandler delivered to Napa's board of directors its oral opinion, which was subsequently confirmed in writing, to the effect that, as of July 31, 2017, the exchange ratio provided for in the merger agreement was fair to the holders of Napa common stock from a financial point of view. The full text of Sandler's opinion is attached as Appendix B to this proxy statement/prospectus. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by 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 Napa common stock are urged to read the entire opinion carefully in connection with their consideration of the proposed merger.

         Sandler's opinion speaks only as of the date of the opinion. The opinion was directed to Napa's board of directors in connection with its consideration of the merger agreement and the merger and does not constitute a recommendation to any shareholder of Napa as to how any such shareholder should vote at any meeting of shareholders called to consider and vote upon the approval of the merger agreement and the merger. Sandler's opinion was directed only to the fairness, from a financial point of view, of the exchange ratio to the holders of Napa common stock and does not address the

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underlying business decision of Napa to engage in the merger, the form or structure of the merger or any other transactions contemplated in the merger agreement, the relative merits of the merger as compared to any other alternative transactions or business strategies that might exist for Napa or the effect of any other transaction in which Napa might engage. Sandler 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 Napa or Marin, or any class of such persons, if any, relative to the compensation to be received in the merger by any other shareholder, including the exchange ratio to be received by the holders of Napa common stock. Sandler's opinion was approved by Sandler's fairness opinion committee.

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

        Sandler also discussed with certain members of the senior management of Napa the business, financial condition, results of operations and prospects of Napa and held similar discussions with certain members of the senior management of Marin regarding the business, financial condition, results of operations and prospects of Marin.

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        In performing its review, Sandler relied upon the accuracy and completeness of all of the financial and other information that was available to and reviewed by Sandler from public sources, that was provided to Sandler by Napa or Marin or their respective representatives, or that was otherwise reviewed by Sandler, and Sandler assumed such accuracy and completeness for purposes of rendering its opinion without any independent verification or investigation. Sandler relied on the assurances of the respective managements of Napa and Marin that they were not aware of any facts or circumstances that would have made any of such information inaccurate or misleading. Sandler was not asked to and did not undertake an independent verification of any of such information and Sandler did not assume any responsibility or liability for the accuracy or completeness thereof. 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 Napa or Marin or any of their respective subsidiaries, nor was Sandler furnished with any such evaluations or appraisals. Sandler rendered no opinion or evaluation on the collectability of any assets or the future performance of any loans of Napa or Marin. Sandler did not make an independent evaluation of the adequacy of the allowance for loan losses of Napa or Marin, or of the combined entity after the merger, and Sandler did not review any individual credit files relating to Napa or Marin. Sandler assumed, with Napa's consent, that the respective allowances for loan losses for both Napa and Marin were adequate to cover such losses and will be adequate on a pro forma basis for the combined entity.

        In preparing its analyses, Sandler used internal net income and dividends per share projections for Napa for the year ending December 31, 2017, as provided by the senior management of Napa, as well as an estimated long-term earnings per share growth rate and dividends per share for the years thereafter, as provided by the senior management of Napa. In addition, Sandler used publicly available consensus mean analyst earnings per share estimates for Marin for the years ending December 31, 2017 and December 31, 2018, as well as an estimated long-term earnings per share growth rate and dividend payout ratio for the years thereafter, as provided by the senior management of Marin. Sandler also received and used in its pro forma analyses certain assumptions relating to purchase accounting adjustments, cost savings and transaction expenses, as provided by the senior management of Marin, as well as certain financial projections for Napa for the years ending December 31, 2017 through December 31, 2021, as provided by the senior management of Napa and adjusted by the senior management of Marin. With respect to the foregoing information, the respective senior managements of Napa and Marin confirmed to Sandler that such information reflected (or, in the case of the publicly available consensus mean analyst earnings per share estimates referred to above, were consistent with) the best currently available projections, estimates and judgments of those respective senior managements as to the future financial performance of Napa and Marin, respectively, and the other matters covered thereby, and Sandler assumed that the future financial performance reflected in such information would be achieved. Sandler expressed no opinion as to such information, or the assumptions on which such information was based. Sandler also assumed that there had been no material change in the respective assets, financial condition, results of operations, business or prospects of Napa or Marin since the date of the most recent financial statements made available to Sandler. Sandler assumed in all respects material to its analysis that Napa and Marin would remain as going concerns for all periods relevant to its analysis.

        Sandler also assumed, with Napa's consent, that (i) each of the parties to the merger agreement will comply in all material respects with all material terms and conditions of the merger agreement and all related agreements, 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 will 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 will 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 will be imposed that would have an adverse effect on Napa, Marin or the merger or any related transaction, (iii) the

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merger and any related transactions will 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, and (iv) the merger will qualify as a tax-free reorganization for federal income tax purposes. Finally, with Napa's consent, Sandler relied upon the advice that Napa 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. Sandler expressed no opinion as to any such matters.

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

        In rendering its opinion, Sandler performed a variety of financial analyses. The summary below is not a complete description of the analyses underlying Sandler's opinion or the presentation made by Sandler to Napa's board of directors, but is a summary of all material analyses performed and presented by 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. 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 Sandler's comparative analyses described below is identical to Napa or Marin 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 merger transaction values, as the case may be, of Napa and Marin and the companies to which they are being compared. In arriving at its opinion, Sandler did not attribute any particular weight to any analysis or factor that it considered. Rather, Sandler made qualitative judgments as to the significance and relevance of each analysis and factor. 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, Sandler made its determination as to the fairness of the exchange ratio 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, Sandler also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which are beyond the control of Napa, Marin and Sandler. The analyses performed by 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. Sandler prepared its analyses solely for purposes of rendering its opinion and provided such analyses to Napa's board of directors at its July 31, 2017 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, Sandler's analyses do not necessarily reflect the value of Napa common stock or the prices at which Napa common stock or Marin common stock may be sold at any time. The analyses of Sandler and its opinion were among a number of factors taken into consideration by Napa's board of directors in making its determination to approve the

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merger agreement and should not be viewed as determinative of the exchange ratio or the decision of Napa's board of directors or management with respect to the fairness of the merger. The type and amount of consideration payable in the merger were determined through negotiation between Napa and Marin.

        Summary of Implied Exchange Ratio and Implied Transaction Metrics.     Sandler reviewed the financial terms of the proposed merger. Subject to certain termination provisions, as more fully described in the merger agreement, at closing, holders of Napa common stock will receive a fraction of a share of the common stock of Marin stock equal to the exchange ratio. Based on the closing price of Marin common stock on July 28, 2017 of $65.95 and a per share exchange ratio of 0.307, Sandler calculated an implied transaction price per share of Napa common stock of $20.25 and an aggregate implied transaction value of approximately $51.0 million in exchange for all Napa common stock and options issued and outstanding as of July 25, 2017. Based upon historical financial information for Napa as of or for the last twelve months ("LTM") ended June 30, 2017, as provided by Napa senior management, Sandler calculated the following implied transaction metrics.

Transaction Price / Last Twelve Months Earnings Per Share of Napa:

    25.6x  

Transaction Price / Book Value Per Share of Napa:

    176 %

Transaction Price / Tangible Book Value Per Share of Napa:

    176 %

Tangible Book Premium / Core Deposits (1) :

    12.0 %

One Day Market Premium to Napa Closing Stock Price (2) :

    50 %

Notes:

(1)
Core deposits calculated as total deposits less CD's greater than $100,000

(2)
Based on Bank of Marin closing price of $65.95 and Napa closing price of $13.50 as of July 28, 2017

        Napa Comparable Company Analyses.     Sandler used publicly available information to compare selected financial information for Napa with a group of financial institutions selected by Sandler (the "Napa Western Region Peer Group"). The Napa Western Region Peer Group consisted of publicly traded banks headquartered in the western region with assets between $200 million and $300 million and NPAs/ Assets below 1.5%, excluding announced merger targets. The Napa Western Region Peer Group consisted of the following companies:

Mission National Bank   Summit Bank

Uniti Financial Corporation

 

Americas United Bank

Liberty Bank

 

US Metro Bank

Community Bank of the Bay

 

Golden Valley Bank

Pacific Alliance Bank

 

Northern California National Bank

Community Bancorp of Santa Maria

 

Cornerstone Community Bancorp

Lighthouse Bank

 

 

        The analysis compared publicly available financial information for Napa as of or for the LTM period ended June 30, 2017 with the corresponding publicly available data for the Napa Western Region Peer Group as of or for the LTM period ended March 31, 2017 (unless otherwise noted), with

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pricing data as of July 28, 2017. The table below sets forth the data for Napa and the high, low, median and mean data for the Napa Western Region Peer Group.

 
   
  Napa Western Region Peer Group (1)  
 
  BNNP   High   Low   Mean   Median  

Total Assets (in millions)

  $ 246   $ 285   $ 200   $ 247   $ 254  

Market Value (in millions)

  $ 32   $ 48   $ 16   $ 28   $ 26  

Price/Tangible Book Value

    120 %   147 %   80 %   104 %   100 %

Price/LTM Earnings Per Share

    16.9x     20.1x     2.2x     13.6x     15.6x  

Current Dividend Yield

    1.3 %   1.7 %   0.0 %   0.4 %   0.0 %

LTM Efficiency Ratio

    67 %   83 %   52 %   68 %   71 %

LTM Net interest Margin

    3.50 %   5.00 %   2.36 %   3.66 %   3.73 %

LTM Return on Average Assets

    0.79 %   3.67 %   0.54 %   1.03 %   0.79 %

LTM Return on Average Equity

    7.3 %   25.9 %   4.7 %   8.9 %   7.2 %

Tangible Common Equity/Tangible Assets

    11.1 %   20.6 %   8.1 %   11.6 %   11.6 %

CRE Concentration Ratio

    222 %   471 %   111 %   279 %   259 %

Loans/Deposits

    64 %   106 %   43 %   80 %   86 %

Non-performing Assets/Total Assets

    0.06 %   1.29 %   0.00 %   0.31 %   0.25 %

Note:

(1)
Bank level data used where consolidated data is unavailable

        Napa Stock Trading History.     Sandler reviewed the historical stock price performance of Napa common stock for the one-year and three-year periods ended July 28, 2017. Sandler then compared the relationship between the stock price performance of Napa's common stock to movements in the Napa Western Region Peer Group as well as certain stock indices.


Napa One-Year Stock Price Performance

 
  Beginning
July 28, 2016
  Ending
July 28, 2017
 

Napa

    100.0 %   128.0 %

Napa Western Region Peer Group

    100.0 %   127.0 %

NASDAQ Bank Index

    100.0 %   130.0 %

S&P 500 Index

    100.0 %   113.9 %


Napa Three-Year Stock Price Performance

 
  Beginning
July 28, 2014
  Ending
July 28, 2017
 

Napa

    100.0 %   157.7 %

Napa Western Region Peer Group

    100.0 %   145.5 %

NASDAQ Bank Index

    100.0 %   147.2 %

S&P 500 Index

    100.0 %   124.9 %

        Napa Net Present Value Analyses.     Sandler performed an analysis that estimated the net present value per share of Napa common stock assuming Napa performed in accordance with internal net income and dividends per share projections for Napa for the year ending December 31, 2017, as provided by the senior management of Napa, as well as an estimated long-term earnings per share growth rate and dividends per share for the years thereafter, as provided by the senior management of Napa. To approximate the terminal value of a share of Napa common stock at December 31, 2021, Sandler applied price to 2021 earnings per share multiples ranging from 10.0x to 17.5x and price to

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December 31, 2021 tangible book value per share multiples ranging from 80% to 130%. The terminal values were then discounted to present values using different discount rates ranging from 10.0% to 15.0% which were chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of Napa common stock. As illustrated in the following tables, the analysis indicated an imputed range of values per share of Napa common stock of $7.31 to $14.90 when applying multiples of earnings per share and $7.23 to $13.70 when applying multiples of tangible book value per share.

 
  Earnings Per Share Multiples  
Discount Rate
  10.0x   11.5x   13.0x   14.5x   16.0x   17.5x  

10.0%

  $ 8.85   $ 10.06   $ 11.27   $ 12.48   $ 13.69   $ 14.90  

11.0%

  $ 8.51   $ 9.67   $ 10.83   $ 12.00   $ 13.16   $ 14.32  

12.0%

  $ 8.19   $ 9.30   $ 10.42   $ 11.53   $ 12.65   $ 13.77  

13.0%

  $ 7.88   $ 8.95   $ 10.02   $ 11.10   $ 12.17   $ 13.24  

14.0%

  $ 7.59   $ 8.62   $ 9.65   $ 10.68   $ 11.71   $ 12.74  

15.0%

  $ 7.31   $ 8.30   $ 9.29   $ 10.28   $ 11.27   $ 12.26  

 

 
  Tangible Book Value Per Share Multiples  
Discount Rate
  80%   90%   100%   110%   120%   130%  

10.0%

  $ 8.75   $ 9.74   $ 10.73   $ 11.72   $ 12.71   $ 13.70  

11.0%

  $ 8.41   $ 9.36   $ 10.32   $ 11.27   $ 12.22   $ 13.17  

12.0%

  $ 8.09   $ 9.01   $ 9.92   $ 10.84   $ 11.75   $ 12.66  

13.0%

  $ 7.79   $ 8.67   $ 9.55   $ 10.42   $ 11.30   $ 12.18  

14.0%

  $ 7.50   $ 8.35   $ 9.19   $ 10.03   $ 10.88   $ 11.72  

15.0%

  $ 7.23   $ 8.04   $ 8.85   $ 9.66   $ 10.47   $ 11.28  

        Sandler also considered and discussed with the Napa board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to net income. To illustrate this impact, Sandler performed a similar analysis assuming Napa's net income varied from 15% above projections to 15% below projections. This analysis resulted in the following range of per share values for Napa common stock, applying the price to 2021 earnings per share multiples range of 10.0x to 17.5x referred to above and a discount rate of 12.92%.

 
  Earnings Per Share Multiples  
Variance to Net Income Forecast
  10.0x   11.5x   13.0x   14.5x   16.0x   17.5x  

(15.0%)

  $ 6.83   $ 7.74   $ 8.66   $ 9.57   $ 10.48   $ 11.40  

(10.0%)

  $ 7.19   $ 8.16   $ 9.12   $ 10.09   $ 11.06   $ 12.03  

(5.0%)

  $ 7.55   $ 8.57   $ 9.59   $ 10.61   $ 11.63   $ 12.65  

0.0%

  $ 7.90   $ 8.98   $ 10.05   $ 11.13   $ 12.21   $ 13.28  

5.0%

  $ 8.26   $ 9.39   $ 10.52   $ 11.65   $ 12.78   $ 13.91  

10.0%

  $ 8.62   $ 9.80   $ 10.99   $ 12.17   $ 13.35   $ 14.53  

15.0%

  $ 8.98   $ 10.22   $ 11.45   $ 12.69   $ 13.93   $ 15.16  

        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.

        Analysis of Selected Merger Transactions.     Sandler reviewed a group of selected merger and acquisition transactions involving U.S. banks (the "Nationwide Precedent Transactions"). The Nationwide Precedent Transactions group consisted of bank transactions announced between November 8, 2016 and June 27, 2017 with disclosed deal values, target assets between $150 million and

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$500 million, target LTM ROAA between 0.50% and 1.50%, and target NPAs/Assets ratio less than 1.5%.

        The Nationwide Precedent Transactions group was composed of the following transactions:

Acquirer   Target
Entegra Financial Corp. (NC)   Chattahoochee Bank of Georgia (GA)

QCR Holdings, Inc. (IL)

 

Guaranty Bank and Trust Company and other assets (IA)

Glacier Bancorp, Inc. (MT)

 

Columbine Capital Corporation (CO)

Charter Financial Corporation (GA)

 

Resurgens Bancorp (GA)

Horizon Bancorp (IN)

 

Lafayette Community Bancorp (IN)

Seacoast Commerce Banc Holdings (CA)

 

Capital Bank (CA)

Central Valley Community Bancorp (CA)

 

Folsom Lake Bank (CA)

Sierra Bancorp (CA)

 

OCB Bancorp (CA)

National Commerce Corporation (AL)

 

Patriot Bank (FL)

Riverview Financial Corporation (PA)

 

CBT Financial Corporation (PA)

Citizens Community Bancorp, Inc. (WI)

 

Wells Financial Corp. (MN)

Investar Holding Corporation (LA)

 

Citizens Bancshares, Inc. (LA)

West Town Bancorp, Inc. (NC)

 

Sound Banking Company (NC)

Progress Financial Corporation (AL)

 

First Partners Financial, Inc. (AL)

Investor Group (-)

 

Bank Management, Inc. (NE)

Texas State Bankshares, Inc. (TX)

 

Blanco National Holdings, Inc. (TX)

ACNB Corporation (PA)

 

New Windsor Bancorp, Inc. (MD)

Simmons First National Corporation (AR)

 

Hardeman County Investment Company, Inc. (TN)

Little Bank, Inc. (NC)

 

Union Banc Corp. (NC)

Trustmark Corporation (MS)

 

RB Bancorporation (AL)

Carolina Financial Corporation (SC)

 

Greer Bancshares Incorporated (SC)

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

 
   
  Nationwide Precedent Transactions  
 
  BNNP / BMRC  
 
  Mean   Median   High   Low  

Transaction Price / LTM Earnings Per Share:

    25.6x     20.6x     20.3x     33.8x     13.8x  

Transaction Price/ Tangible Book Value Per Share:

    176 %   156 %   160 %   197 %   125 %

Tangible Book Value Premium to Core Deposits:

    12.0 %   7.8 %   6.9 %   15.3 %   3.0 %

1-Day Market Premium

    50.0 %   42.6 %   47.5 %   67.2 %   1.5 %

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        Marin Comparable Company Analyses.     Sandler used publicly available information to compare selected financial information for Marin with a group of financial institutions selected by Sandler (the "Marin Peer Group"). The Marin Peer Group consisted of major exchange-traded banks headquartered in California with assets between $1 billion and $5 billion, excluding announced merger targets. The Marin Peer Group consisted of the following companies:

Hanmi Financial Corporation   Central Valley Community Bancorp
TriCo Bancshares   FNB Bancorp
First Foundation Inc.   Pacific Mercantile Bancorp
Preferred Bank   Bank of Commerce Holdings
Heritage Commerce Corp   Oak Valley Bancorp
Sierra Bancorp    

        The analysis compared publicly available financial information for Marin as of or for the LTM period ended June 30, 2017 with the corresponding publicly available data for the Marin Peer Group as of or for the LTM period ended June 30, 2017 (unless otherwise noted), with pricing data as of July 28, 2017. The table below sets forth the data for Marin and the high, low, median and mean data for the Marin Peer Group.

 
   
  Marin Peer Group  
 
  Marin   Mean   Median   High   Low  

Total Assets (in millions)

  $ 2,101   $ 2,539   $ 2,078   $ 4,973   $ 1,020  

Market Value (in millions)

  $ 406   $ 457   $ 369   $ 928   $ 124  

Price/Tangible Book Value

    175 %   191 %   189 %   268 %   137 %

Price/LTM Earnings Per Share

    18.1x     17.4x     17.8x     19.5x     13.3x  

Price/Mean Analyst 2017E Earnings Per Share

    20.3x     17.0x     17.3x     18.6x     15.7x  

Price/Mean Analyst 2018E Earnings Per Share

    18.8x     14.5x     15.1x     16.1x     9.8x  

Current Dividend Yield

    1.8 %   1.5 %   1.6 %   2.9 %   0.0 %

LTM Efficiency ratio

    58 %   62 %   63 %   88 %   38 %

LTM Net Interest Margin

    3.92 %   3.80 %   3.87 %   4.22 %   3.03 %

LTM Return on Average Assets

    1.09 %   0.74 %   0.99 %   1.31 %   –2.27 %

LTM Return on Average Equity

    9.6 %   7.5 %   10.4 %   14.2 %   –23.6 %

Tangible Common Equity/Tangible Assets

    11.1 %   9.3 %   9.6 %   10.8 %   8.1 %

CRE Concentration Ratio

    314 %   308 %   274 %   656 %   167 %

Loans/Deposits

    81 %   81 %   78 %   104 %   62 %

Non-performing Assets/Total Assets

    0.92 %   0.79 %   0.56 %   2.18 %   0.12 %

        Marin Stock Trading History.     Sandler reviewed the historical stock price performance of Marin common stock for the one and three-year periods ended July 28, 2017. Sandler then compared the relationship between the stock price performance of Marin's common stock to movements in the Marin Peer Group as well as certain stock indices.


Marin One-Year Stock Price Performance

 
  Beginning
July 28, 2016
  Ending
July 28, 2017
 

Marin

    100.0 %   132.6 %

Marin Peer Group

    100.0 %   144.0 %

NASDAQ Bank Index

    100.0 %   130.0 %

S&P 500 Index

    100.0 %   113.9 %

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Marin Three-Year Stock Price Performance (1)

 
  Beginning
July 28, 2014
  Ending
July 28, 2017
 

Marin

    100.0 %   146.3 %

Marin Peer Group

    100.0 %   167.4 %

NASDAQ Bank Index

    100.0 %   147.2 %

S&P 500 Index

    100.0 %   124.9 %

Note:

(1)
First Foundation Inc. excluded from Marin Peer Group Three-Year Stock Price Performance due to lack of trading history

        Marin Net Present Value Analyses.     Sandler performed an analysis that estimated the net present value per share of Marin common stock assuming that Marin performed in accordance with publicly available consensus mean analyst earnings per share estimates for the years ending December 31, 2017 and December 31, 2018, as well as an estimated long-term annual earnings per share growth rate and dividend payout ratio for Marin for the years thereafter, as provided by the senior management of Marin. To approximate the terminal value of Marin common stock at December 31, 2021, Sandler applied price to 2021 earnings per share multiples ranging from 16.0x to 20.0x and price to December 31, 2021 tangible book value per share multiples ranging from 160% to 240%. The terminal values were then discounted to present values using different discount rates ranging from 9.0% to 14.0% chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of Marin common stock. As illustrated in the following tables, the analysis indicated an imputed range of values per share of Marin common stock of $43.90 to $65.31 when applying multiples of earnings per share and $48.50 to $85.77 when applying multiples of tangible book value per share.

 
  Earnings Per Share Multiples  
Discount Rate
  16.0x   17.0x   18.0x   19.0x   20.0x  

9.0%

  $ 53.24   $ 56.25   $ 59.27   $ 62.29   $ 65.31  

10.0%

  $ 51.18   $ 54.08   $ 56.97   $ 59.87   $ 62.77  

11.0%

  $ 49.23   $ 52.01   $ 54.79   $ 57.57   $ 60.35  

12.0%

  $ 47.37   $ 50.04   $ 52.71   $ 55.38   $ 58.05  

13.0%

  $ 45.59   $ 48.16   $ 50.72   $ 53.29   $ 55.86  

14.0%

  $ 43.90   $ 46.37   $ 48.83   $ 51.30   $ 53.77  

 

 
  Tangible Book Value Per Share Multiples  
Discount Rate
  160%   180%   200%   220%   240%  

9.0%

  $ 58.85   $ 65.58   $ 72.31   $ 79.04   $ 85.77  

10.0%

  $ 56.57   $ 63.03   $ 69.49   $ 75.95   $ 82.41  

11.0%

  $ 54.40   $ 60.60   $ 66.80   $ 73.01   $ 79.21  

12.0%

  $ 52.34   $ 58.29   $ 64.25   $ 70.20   $ 76.16  

13.0%

  $ 50.37   $ 56.09   $ 61.81   $ 67.54   $ 73.26  

14.0%

  $ 48.50   $ 54.00   $ 59.50   $ 64.99   $ 70.49  

        Sandler also considered and discussed with the Napa board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to net income. To illustrate this impact, Sandler performed a similar analysis assuming Marin's net income varied from 15% above estimates to 15% below estimates. This analysis resulted in the following range of per share

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values for Marin common stock, applying the price to 2021 earnings per share multiples range of 16.0x to 20.0x referred to above and a discount rate of 12.92%.

 
  Earnings Per Share Multiples  
Variance to Net Income Forecast
  16.0x   17.0x   18.0x   19.0x   20.0x  

(15.0%)

  $ 39.55   $ 41.74   $ 43.93   $ 46.12   $ 48.31  

(10.0%)

  $ 41.61   $ 43.93   $ 46.25   $ 48.56   $ 50.88  

(5.0%)

  $ 43.67   $ 46.12   $ 48.56   $ 51.01   $ 53.45  

0.0%

  $ 45.73   $ 48.31   $ 50.88   $ 53.45   $ 56.03  

5.0%

  $ 47.79   $ 50.49   $ 53.20   $ 55.90   $ 58.60  

10.0%

  $ 49.85   $ 52.68   $ 55.51   $ 58.34   $ 61.17  

15.0%

  $ 51.91   $ 54.87   $ 57.83   $ 60.79   $ 63.75  

        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 Merger Analysis.     Sandler analyzed certain potential pro forma effects of the merger. In performing this analysis, Sandler utilized the following information and assumptions: (i) the merger closes on December 31, 2017; (ii) certain internal financial projections for Napa for the years ending December 31, 2017 through December 31, 2021, as provided by the senior management of Napa and adjusted by the senior management of Marin; (iii) publicly available consensus mean analyst earnings per share estimates for Marin for the years ending December 31, 2017 and December 31, 2018, as well as an estimated long-term annual earnings per share growth rate for Marin for the years thereafter, as provided by the senior management of Marin; and (iv) certain assumptions relating to transaction expenses, purchase accounting adjustments, and cost savings, as provided by the senior management of Marin. The analysis indicated that the merger could be accretive to Marin's earnings per share (excluding one-time transaction costs and expenses) in the years ended December 31, 2018 through December 31, 2021, and dilutive to Marin's estimated tangible book at close and through the year end of 2020.

        In connection with this analysis, Sandler considered and discussed with the Napa 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.

        Sandler's Relationship.     Sandler acted as Napa's financial advisor in connection with the merger and will receive a fee for its services in an amount equal to 1.50% of the aggregate purchase price, which fee at the time of announcement was approximately $765,244. Sandler's transaction fee is contingent upon consummation of the merger. Sandler also received a fee for rendering its opinion, which fairness opinion fee will be credited in full towards the fee becoming due and payable to Sandler on the day of closing of the merger. Napa has also agreed to indemnify Sandler against certain claims and liabilities arising out of Sandler's engagement and to reimburse Sandler for certain of its out-of-pocket expenses incurred in connection with Sandler's engagement. In the two years preceding the date of Sandler's opinion, Sandler did not provide any other investment banking services to Napa, nor did Sandler provide any investment banking services to Marin in the two years preceding the date thereof. In the ordinary course of Sandler's business as a broker-dealer, Sandler may purchase securities from and sell securities to Marin and its affiliates. Sandler may also actively trade the equity and debt securities of Napa, Marin or their respective affiliates for Sandler's own account and for the accounts of Sandler's customers.

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The Merger Consideration

General

        At the effective time of the merger, each share of Napa common stock 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 Napa shareholder, be converted into the right to receive whole shares of common stock of Marin at a rate of 0.307 shares of Marin common stock for each share of Napa common stock. Cash will be paid in lieu of fractional shares of Marin common stock. You are urged to read carefully the information set forth below under "—Material Federal Income Tax Consequences" to better understand the federal income tax effects of your receipt of Marin common stock and cash in lieu of fractional shares in exchange for your Napa common stock.

Merger Consideration

    Common Stock

        Upon consummation of the merger and except for cash paid in lieu of fractional shares, each share of Napa common stock issued and outstanding immediately prior to the effective time of the merger will be canceled and converted into the right to receive 0.307 shares of Marin common stock, which is referred to as the exchange ratio.

        The value of the Marin common stock to be issued to the common shareholders of Napa would amount to approximately $[*] million, based on the 15-day daily volume weighted average price of Marin common stock as of [*], 2017. This estimation is based solely on the number of Napa common shares outstanding on the date of this proxy statement/prospectus multiplied by the exchange ratio, with the result then multiplied by said 15-day daily volume weighted average price of Marin common stock.

        Upon completion of the merger, and based on [*] shares of Napa common stock outstanding as of the date of this proxy statement/prospectus, Napa shareholders are expected to receive approximately [*] shares of Marin common stock. Following the completion of the merger and based on [*] shares of Marin common stock outstanding as of [*], 2017, the former Napa shareholders will own approximately [*]% of the outstanding shares of Marin common stock and the current shareholders of Marin will own the remaining approximately [*]% of the outstanding shares of Marin common stock.

        The following table sets forth the closing sale prices of (i) Marin common stock as quoted on Nasdaq on July 31, 2017, and (ii) Napa common stock as quoted on the OTC Pink market, on July 31, 2017, the last trading-day before Marin announced the merger, and on [*] , the last practicable trading-day before the distribution of this proxy statement/prospectus. To illustrate the market value of the per share merger consideration to be received by Napa's shareholders, the following table also presents the equivalent market value per share of Napa common stock as of July 31, 2017, and [*] , which were determined by multiplying the closing price for the Marin common stock on those dates by the exchange ratio of 0.307 of a share of Marin common stock for each share of Napa common stock.

 
  Marin
Common Stock
  Napa
Common Stock
  Equivalent Market
Value Per Share of
Napa
 

At July 31, 2017

  $ 66.65   $ 13.25   $ 20.46  

At [ * ]

  $ [*]   $ [*]   $ [*]  

        The market price of Marin common stock and Napa common stock will fluctuate prior to the date of Napa's special meeting and the date a Napa shareholder receives their shares of Marin common stock. Therefore, the value of the stock to be received in the merger by the Napa shareholders will not be known at the time the Napa shareholders vote on the merger and merger agreement. Napa

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shareholders should obtain a current price quotation for the shares of Marin common stock to update the implied value for a share of Napa common stock.

        Shares of Napa common stock held by Napa shareholders who have elected to exercise their dissenters' rights will not be converted into the right to receive shares of Marin common stock upon consummation of the merger. The dissenters' rights available to Napa shareholders are described more fully in this proxy statement/prospectus under "—Dissenters' Rights."

    Fractional Shares

        No fractional shares of Marin common stock will be issued and, in lieu thereof, each holder of Napa 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 Marin 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 Marin common stock.

Procedures for Exchanging Napa Common Stock Certificates

        Promptly following the closing of the merger, Computershare, Marin's transfer agent and the exchange agent for the merger, will mail to each holder of record of Napa 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 Napa common stock in exchange for the merger consideration allocated to them. Upon surrender of a stock certificate of Napa common stock for exchange and cancellation to the exchange agent, 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 Napa common stock so surrendered will be canceled. No interest will be paid or accrued on any cash paid in lieu of fractional shares of Marin common stock.

        Napa 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 Napa 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 Marin common stock and cash in lieu of fractional shares to which they are entitled.

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

        After completion of the merger, no transfers of Napa common stock issued and outstanding immediately prior to the completion of the merger will be allowed. Napa stock certificates that are presented for transfer after the completion of the merger will be canceled and exchanged for the appropriate merger consideration.

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

        If a Napa shareholder has lost his or her Napa stock certificate, or the Napa stock certificate has been stolen or destroyed, the Napa 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.

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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 two-thirds of the common shares of Napa must approve the merger and merger agreement;

    Marin, Bank of Marin and Napa must receive all required regulatory approvals for the merger, no such approval may contain any condition that would reasonably be likely to (1) have a material adverse effect on Napa, (2) restrict the business of Marin or any of its subsidiaries in a manner that would have a material adverse effect with respect to Napa's business, or (3) require the sale by Napa or Marin of any material portion of their respective assets; 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 Marin to consummate the merger under the merger agreement is subject to the following conditions, which may be waived by Marin:

    the representations and warranties of Napa 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 Napa, and Marin shall have received a certificate signed by the chief executive officer and chief financial officer of Napa to that effect;

    Napa must have performed in all material respects all obligations required to be performed by it at or prior to consummation of the merger, and Marin shall have received a certificate signed by the chief executive officer and chief financial officer of Napa to that effect;

    Marin shall have received shareholder agreements executed and delivered by each of the Napa directors (which Marin 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 to the merger agreement, which is attached as Appendix A to this proxy statement/prospectus;

    as of the last business day of the month prior to the closing of the merger (or, if the merger occurs prior to the seventh business day of the month, the last business day of the second month end immediately preceding the date of the merger), Napa's adjusted stockholders' equity must not be less than $26.58 million and its allowance for loan and lease losses must not be less than $1.9 million or 1.35% of total loans, whichever is greater; for purposes of this condition, Napa's adjusted stockholders' equity means Napa's stockholders' equity excluding the effect or accrual of (i) any unrealized gains or losses in Napa's securities portfolio due to mark-to-market adjustments since March 31, 2017, (ii) severance payments to Napa employees made in accordance with merger agreement, (iii) all amounts paid or accrued in connection with certain actions taken to conform certain policies and practices to those of Marin to the extent that such actions were not necessary to bring Napa into conformity with generally accepted accounting principles or any applicable law of any governmental authority, and (iv) all fees and expenses of all attorneys, accountants, investment bankers for Napa for services rendered solely in connection with the transactions contemplated by the merger agreement and other merger-related expenses that do not exceed an aggregate of $3,300,000;

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    Marin shall have received a tax opinion from Crowe Horwath, LLP that the merger will be treated as a "reorganization" within the meaning of Section 368(a) of the Code, and Marin, Bank of Marin and Napa will be a party to that reorganization within the meaning of Section 368(b) of the Code;

    Marin shall have received executed non-solicitation agreements from each of the directors of Napa and from Napa's chief lending officer (which Marin has received) and an executed Consulting Agreement from M. Thomas LeMasters each of which shall remain in full force and effect;

    Napa shall have obtained consents required to be obtained pursuant to agreements with third parties;

    Napa shall have paid all transaction expenses incurred in connection with the merger prior to the closing and shall have provided Marin with written evidence thereof; provided, Marin shall have been given an opportunity to review all invoices, bills and estimates relating to professional fees;

    Marin shall have received the written resignation of each director of Napa; and

    dissenting shares must not represent more than 10% of the outstanding shares of Napa common stock.

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

    the representations and warranties of Marin 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 Marin, and Napa shall have received a certificate signed by the chief executive officer and chief financial officer of Marin to that effect; and

    Marin must have performed in all material respects all obligations required to be performed by it at or prior to consummation of the merger, and Napa shall have received a certificate signed by the chief executive officer and chief financial officer of Marin to that effect.

        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 Marin or Napa is defined to mean any effect that is material and adverse to the business, assets or deposit liabilities, properties, operations, results of operations, condition (financial or otherwise) or prospects of either Marin or Napa, 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:

    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

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      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;

    any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism.

    with respect to Napa, any expense of Napa arising out of the acceleration of the vesting of its stock options as contemplated by the merger agreement;

    and with respect to Napa, any termination of Diane Bishofberger's employment with Napa (other than a termination by Napa without cause or absent the directive of a bank regulatory agency) or a breach by Diane Bishofberger or Bank of Marin of her employment agreement with Bank of Marin entered in connection with the merger agreement; or

    with respect to Marin, 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 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, DBO and Federal Reserve.

        Bank holding companies, such as Marin, and banks such as Bank of Marin and Napa, 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 DBO and the FDIC. The Federal Reserve has confirmed to Marin no application is necessary by letter dated August 30, 2017. There can be no assurance that the DBO 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 Napa, restrict Marin or Bank of Marin after the merger in a manner that would have a material adverse effect on Napa's business, or would require the sale by Napa or Bank of Marin of any material portion of their respective assets. If any such condition or requirement is imposed, Marin 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, Napa shareholders. Regulatory approval does not constitute an endorsement or recommendation of the proposed merger.

        Neither Marin nor Napa 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

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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 proxy statement/prospectus, are briefly described below.

        Pending consummation of the merger, Napa may not, among other things, take the following actions without the prior written consent of Marin:

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

Additional Covenants

        Napa, Marin and Bank of Marin have also agreed to:

        Napa has further agreed to:

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        Marin and/or Bank of Marin has further agreed to:

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Napa Board of Directors' Covenant to Recommend the Merger and Merger Agreement

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

        The Napa board of directors is permitted to change its recommendation if Napa has complied with the merger agreement and the Napa 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 Napa 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 Marin, that another acquisition proposal constitutes a superior proposal, as defined in "—No Solicitation" below. Napa also must notify Marin 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 Marin the material terms and conditions of any proposal or offer and keep Marin 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, Napa 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:

        For purposes of the merger agreement, "acquisition proposal" means:

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        However, the above restriction would not prevent Napa or its board of directors from:

        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 Napa 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 Napa'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 Marin and the time likely to be required to consummate such acquisition proposal).

        Napa 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. Napa has agreed that it will notify Marin 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 Marin 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, Marin and Napa 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 proxy statement/prospectus. Such representations and warranties generally must remain accurate through the completion of the merger,

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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 Marin and Napa 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 Marin nor Napa 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.

        Accordingly, shareholders of Napa 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 Marin's or Napa's public disclosures.

Effective Time of the Merger

        Pursuant to the terms and conditions set forth in the merger agreement, Napa will be acquired by Marin in a transaction in which Napa will merge with and into Bank of Marin, with Bank of Marin as the surviving institution. The merger will become effective upon the acceptance of a certificate of merger by the DBO 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 fourth quarter of 2017.

Waiver and Amendment of the Merger Agreement

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

        However, after any approval of the transactions contemplated by the merger agreement by the shareholders of Napa, 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 Napa shareholders under the merger agreement, other than as contemplated by the merger agreement.

Termination of the Merger Agreement

        The merger agreement may be terminated:

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Termination Fee

        The merger agreement provides that Napa must pay Marin a $1.9 million termination fee under the circumstances and in the manner described below:

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

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

Certain Employee Matters

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

        As soon as administratively practicable after the effective time of the merger, Marin will take all reasonable action so that continuing employees of Napa will be entitled to participate in the Marin 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, Marin will recognize years of service with Napa 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 Marin to amend or terminate any Napa benefit plan in accordance with their terms at any time.

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

        Those employees of Napa 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

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Napa in an amount equal to two weeks of his or her current salary for each full year of service worked by such employee for Napa. In addition, Napa is allowed to accrue a bonus pool of up to $150,000 for employees to be displaced in the merger and make payments from this bonus pool (after written approval by Bank of Marin) immediately prior to the closing of the merger in a fair and equitable manner to recognize employee longevity and other appropriate bases. However, none of these bonus funds 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 positon or salary, or who is terminated by either Bank of Napa or Bank of Marin for cause.

        No later than the day immediately preceding the effective time of the merger, Napa shall provide Marin with evidence that its 401(k) profit sharing plan is in the process of being terminated pursuant to resolutions of the Napa 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 Marin. Napa will also take such other actions in furtherance of terminating its 401(k) profit sharing plan as Marin may reasonably require; provided, however, that the effectiveness of any such actions may be conditioned on the consummation of the merger. Marin will, and will cause its affiliates to, designate a tax-qualified defined contribution plan of Marin 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 Napa employees of eligible rollover distributions. Each continuing Napa employee who is a participant in a Napa 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.

Interests of Certain Napa Officers and Directors in the Merger

        When Napa shareholders are considering the recommendation of Napa's board of directors with respect to approving the merger and merger agreement, Napa shareholders should be aware that Napa directors and officers have interests in the merger as individuals that are in addition to, or different from, their interests as shareholders of Napa. The Napa board of directors was aware of these factors and considered them, among other matters, in approving the merger agreement and the merger. These interests are described below. Other than as set forth below, no director or officer of Napa has any direct or indirect material interest in the merger, except insofar as ownership of Napa common stock might be deemed such an interest.

Stock Ownership

        The directors of Napa beneficially owned and had the power to vote as of [*], 2017, a total of [*] shares of Napa common stock, representing approximately [*]% of the outstanding shares of Napa common stock. See "Certain Beneficial Ownership of Napa Common Stock." All of these shares are expected to be voted in favor of the merger and merger agreement pursuant to the shareholder agreements entered into by each of the directors of Napa. See "—Shareholder Agreements." Each of these persons will receive the same merger consideration for their shares of Napa common stock as the other Napa shareholders.

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Indemnification

        Napa's directors, officers and employees are entitled to continuing indemnification against certain liabilities by virtue of provisions contained in the Napa articles of association, as amended, and bylaws, as amended, and the merger agreement. Napa's articles of association, as amended, are referred to as the Napa articles of association, and Napa's bylaws, as amended, are referred to as the Napa bylaws. Pursuant to the merger agreement, Bank of Marin agreed to indemnify and hold harmless each present and former director, and officer of Napa, determined as of the effective time of the merger, against any 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 matters existing or occurring at or prior to the effective time of the merger, whether asserted or claimed prior to, at or after the effective time of the merger to the fullest extent that Napa would have been permitted under the National Bank Act, the Napa articles of association and the Napa bylaws, in each case as in effect on the date of the merger agreement.

        Pursuant to the merger agreement, Bank of Marin has agreed to purchase "tail coverage" for a period of five years in order to continue providing liability insurance, including directors' and officers' liability insurance, to the officers and directors of Napa.

Stock Options

        The merger agreement provides that immediately prior to the merger, Napa shall cause each outstanding option to purchase Napa common stock to vest in full, to the extent not previously vested and with the consent of the option holder. Marin shall grant substitute stock options to certain Napa directors and officers who hold outstanding Napa stock options at closing. Each substitute stock option will be exercisable for a number of whole shares of Marin common stock equal to the number of shares of Napa common stock purchasable under that option multiplied by the exchange ratio of 0.307. In addition, the exercise price of each substitute option will be equal to the exercise price of the relevant option for Napa common stock divided by the exchange ratio of 0.307. Finally, each substitute stock option will have a duration equal to the remaining duration of the relevant Napa option and shall be vested to the extent it was vested at the time immediately prior to the merger.

        The following table sets forth the value of the Napa stock options held by each Napa director and executive officer that may vest at the closing of the merger. To determine the value of the accelerated options, the table assumes that the closing date of the merger will be December 1, 2017 and a merger consideration value per Napa common share of $20.46, which was calculated by multiplying, $66.65, which was the closing price of Marin common stock on July 31, 2017, by the exchange ratio of 0.307.

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Name
  Title   All Options
Outstanding as
of September 8,
2017 (1)
  Options that
May Accelerate
in Vesting as a
Result of the
Merger (1)
  Total Value of
Accelerated
Option
Awards
 

Richard Anderson

  Director     0     0   $ 0  

Steven Barlow

  Director     1,000     0   $ 0  

Greg Bennett

  Director     0     0   $ 0  

Jeff Gerlomes

  Director     1,000     0   $ 0  

Kathleen Lucier

  Director     1,000     0   $ 0  

Malcolm Mackenzie

  Chairman of the Board     0     0   $ 0  

Steve Orndorf

  Director     1,000     0   $ 0  

Kelly Solomon

  Director     1,000     0   $ 0  

Tony Torres

  Director     1,000     0   $ 0  

Diane Bishofberger

  Executive Vice President and Bank Sales Manager     37,000     8,333   $ 78,083  

M. Thomas LeMasters

  President, Chief Executive Officer and Director     122,500     42,667   $ 468,627  

Mike Lundstrom

  Executive Vice President and Chief Financial Officer     30,000     8,333   $ 78,083  

Kathi Metro

  Executive Vice President and Chief Credit Officer     20,000     8,333   $ 78,083  

(1)
Excludes options that will expire or vest under current option terms prior to the merger.

Consulting/Employment Agreements

        M. Thomas LeMasters, Napa's President and CEO has agreed to enter into a consulting agreement with Bank of Marin pursuant to which he has agreed to provide consulting services to Bank of Marin following the merger, including but not limited to assisting Bank of Marin with overall business development in the greater Napa market, and other assignments mutually agreed to by Mr. LeMasters and Mr. Colombo, the President and CEO of Bank of Marin. The consulting agreement provides for a term of 12 months, a compensation rate of $11,500 per month, and the reimbursement of reasonable out-of-pocket expenses.

        Simultaneously with the execution of the merger agreement, Diane Bishofberger, Napa's Executive Vice President and Bank Sales Manager, entered into an employment agreement with Bank of Marin. Upon the closing of the merger, Ms. Bishofberger's employment agreement will be effective and her employment with Bank of Marin will commence. Ms. Bishofberger will have the title of First Vice President—Market Manager, and she will be paid an annual salary of $140,000, and a possible maximum incentive based bonus of thirty percent (30%) of her annual salary subject to adjustments and based on certain performance measures, with a guaranteed minimum incentive bonus of $25,000 if she remains employed by Bank of Marin on December 31, 2018. The initial term of the employment agreement will be twelve months, and any extension beyond this initial term is subject to agreement between Bank of Marin and Ms. Bishofberger. Following termination of employment, Ms. Bishofberger will be subject to certain non-solicitation limitations relating to Bank of Marin customers for a period of one year, and to Bank of Marin employees for a period of six months.

Change in Control Agreements

        Napa is party to change in control agreements with each of M. Thomas LeMasters, Kathi Metro, Diane Bishofberger, and Michael Lundstrom. Each of these agreements provides for severance benefits in the event of certain qualifying terminations of employment, including a termination by the executive

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due to a change in control. In connection with the merger agreement, each officer agreed to cancel their change in control agreement and provide a release of claims in favor of Napa, Marin and Bank of Marin, in exchange for receiving a payment equal to what they would have been entitled under their respective change in control agreements had the merger triggered the payment obligations thereunder.

        Under his change in control agreement, under certain circumstances following a change in control Mr. LeMasters will be entitled to a lump sum severance payment in an amount equal to two times the sum of Mr. LeMasters' then annual base salary, plus the equivalent of two years' worth of COBRA health insurance premiums. However, the merger agreement also contains a covenant requiring Napa and Mr. LeMasters to acknowledge that such amount will be reduced by the Section 280G cut-back provisions of his change in control agreement and to mutually agree in writing on the maximum amount of benefits payable to him under such change in control agreement. Section 280G of the Code imposes certain restrictions on "excess parachute payments." The amount of such cut-back is dependent on a number of factors not presently known such as the date that the merger will occur and Marin's stock price on that date.

        Under their change in control agreements, under certain circumstances following a change in control, each of Kathi Metro, Diane Bishofberger, and Michael Lundstrom may be entitled to a lump sum severance payment in an amount equal to twelve months' of annual base salary plus the equivalent of one year's worth of COBRA health insurance payments upon entry of termination and release agreements and on termination of employment following the merger. None of such officers is expected to be subject to any cut-back under Section 280G.

        The following table sets forth the estimated value of the cash severance payments and COBRA premium payments to which Napa's executive officers would be entitled pursuant to their change in control agreements, based on compensation levels as of the date of this proxy statement/prospectus, in the event of and assuming closing of the merger on December 1, 2017 and a termination of employment immediately following closing of the merger on such date. The actual amounts, if any, to be received by the executive officers may differ from the amounts set forth below.

Name
  Cash (1)   Perquisites/
Benefits (2)
  Tax
Reimbursement
  Total  

M. Thomas LeMasters

    343,000   $ 55,016     0     398,016  

Kathi Metro Chinberg

  $ 180,000   $ 13,312     0   $ 193,312  

Michael Lundstrom

  $ 175,000   $ 36,381     0   $ 211,381  

Diane Bishofberger

  $ 172,500   $ 13,312     0   $ 185,812  

(1)
The change of control agreements include a 280G cutback provision limited to the total amount payable following a change in control under all plans, contracts and arrangements to three times the average compensation paid to the executive officer during the five years (or shorter period) prior to the change in control. Amounts above that limit will be offset against the cash severance payable under the executive's change in control agreement. As a result of such limit, the total cash severance payable to Mr. LeMasters disclosed in the table reflects a reduction of $137,000 and represents an estimate of the actual cash benefit that ultimately will be paid to Mr. LeMasters. For purposes of calculating this reduction, it was assumed that Marin's share value was $66.65, which was the closing price of Marin's common stock on July 31, 2017. The final reduction and ultimate cash benefit paid to Mr. LeMasters will be calculated at the time of the closing of the merger, and may vary from the estimate in the table based on, among other things, Marin's share value and the Applicable Federal Rates at that time. No reduction is expected or reflected in the table with respect to any other executive officer.

(2)
Represents estimated amount payable on behalf of employee with respect to COBRA payments.

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Salary Continuation Agreements

        Napa executive officers M. Thomas LeMasters, Michael Lundstrom, and Diane Bishofberger each have salary continuation agreements, the vesting and fixing of annual benefits under which will occur as a result of the merger, and such agreements will be assumed by Bank of Marin for payment of benefits thereunder. In general, each salary continuation agreement provides for a fixed annual benefit to be paid for a period of ten years beginning the first day of the month following the executive reaching the age of 65. The merger will have the effect of fixing the annual benefit amount and vesting the executive's right to receive such annual amount for a period of ten years once he or she reaches the age of 65.

        The following table sets forth the benefits that the Napa executive officers would be entitled to receive, pursuant to the terms of their salary continuation agreements, in the event of a termination of employment immediately following closing of the merger, assuming closing of the merger on [*], 2017. The actual amounts, if any, to be received by the Napa named executive officers may differ from the amounts set forth below.

Name
  Annual Benefit
at Normal
Retirement Age
  Increase in
Present Value of
Benefit Due to
Change in Control (1)
 

M. Thomas LeMasters

  $ 90,000   $ 293,766  

Kathi Metro

         

Michael Lundstrom

  $ 25,492   $ 69,469  

Diane Bishofberger

  $ 55,484   $ 123,840  

(1)
Represents the present value of the future payments payable at age 65 using a 4% discount rate minus the accrued liability without the change in control. The amount is the acceleration in vesting of the benefit that accrues when a termination occurs within 24 months following a change in control.

Material Federal Income Tax Consequences

        The following is a general description of the anticipated material U.S. federal income tax consequences of the merger. This discussion is based upon the Code, Treasury regulations, judicial authorities and published positions of the IRS, all as currently in effect and all of which are subject to change. Accordingly, the U.S. federal income tax consequences of the merger to the holders of Napa common stock could differ from those described below. This discussion does not address any tax consequences arising under the laws of any state, local or foreign jurisdiction, or under any U.S. federal laws other than those pertaining to income tax. This discussion also does not address the tax consequences of any transaction other than the merger. This discussion relies upon certain representations made by Marin, Bank of Marin, Napa, and is based upon the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations, judicial authorities, published positions of the Internal Revenue Service (the "IRS") and other applicable authorities, all as in effect on the date of this document and all of which are subject to change or differing interpretations (possibly with retroactive effect).

        Except as specifically stated herein, this discussion is limited to U.S. holders (as defined below) that hold shares of Napa common stock as a capital asset within the meaning of Section 1221 of the Code for U.S. federal income tax purposes. This discussion does not address the tax consequences applicable to Napa shareholders that are not U.S. holders, nor does it address all of the tax consequences that may be relevant to particular U.S. holders that are subject to special treatment under U.S. federal income tax laws, including, without limitation, financial institutions, insurance companies, partnerships and other pass-through entities, tax-exempt organizations, regulated investment

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companies, real estate investment trusts, dealers in securities or currencies, U.S. persons whose functional currency is not the U.S. dollar, traders in securities that elect to use a mark-to-market method of accounting, persons that hold Napa common stock as part of a straddle, hedge, constructive sale or conversion transaction, and U.S. holders that acquired their shares of Napa common stock as compensation, those subject to the alternative minimum tax provisions of the Code, or those subject to tax under Sections 877 or 877A of the Code as a U.S. expatriate.

        If a partnership or other entity taxed as a partnership holds Napa common stock, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships holding Napa common stock and partners in such partnerships should consult with their tax advisors about the tax consequences of the merger to them.

        For purposes of this section, the term "U.S. holder" means a beneficial owner of Napa common stock that is for U.S. federal income tax purposes (i) an individual who is a citizen or resident of the United States, (ii) a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state or the District of Columbia or a political subdivision thereof, (iii) an estate that is subject to U.S. federal income tax on its income regardless of its source, or (iv) a trust, the substantial decisions of which are controlled by one or more U.S. persons and which is subject to the primary supervision of a U.S. court, or that has validly elected under applicable Treasury regulations to be treated as a U.S. person for U.S. federal income tax purposes.

Tax Consequences of the Merger

        The parties intend for the merger to qualify as a "reorganization" under Section 368(a) of the Code for U.S. federal income tax purposes. As a condition to the completion of the merger, Crowe Horwath, LLP ("Crowe") is required to deliver an opinion, dated the closing date of the merger, to the effect that the merger will be treated as a "reorganization" for U.S. federal income tax purposes within the meaning of Section 368(a) of the Code. The opinion will assume that the merger will be completed according to the terms of the merger agreement and that the parties will report the merger in a manner consistent with the opinion. The opinion will rely on the facts as stated in the merger agreement, the Registration Statement on Form S-4 filed by Marin in connection with the merger (of which this proxy statement/prospectus is a part) and certain other documents. In rendering the opinion, Crowe will rely on the representations of Marin and Napa, to be delivered at the time of closing (and counsel will assume that any representation that is qualified by belief, knowledge or materiality is true, correct and complete without such qualification). If any assumption or representation is or becomes inaccurate, the U.S. federal income tax consequences of the merger could be adversely affected. The opinion will be based on statutory, regulatory and judicial authority existing as of the date of the opinion.

        A tax opinion represents such firm's best judgment but is not binding on the IRS or on any court. Neither Marin nor Napa intends to request any ruling from the IRS as to the U.S. federal income tax consequences of the merger. Consequently, no assurance can be given that the IRS will not assert, or that a court will not sustain, a position contrary to any of the tax consequences set forth below or any of the tax consequences described in the opinion.

        Based on representations to be contained in representation letters of officers of Marin and Napa, all of which must continue to be true and accurate in all material respects as of the effective time of the merger, and subject to the other matters set forth above, it is the opinion of Crowe that the merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. Based upon the foregoing, the material U.S. federal income tax consequences of the merger will be as described below.

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Tax Consequences of the Merger for Marin and Napa

        No gain or loss will be recognized by Marin or Napa as a result of the merger.

Tax Consequences of the Merger for U.S. Holders of Napa Common Stock

        A U.S. holder that exchanges all of their shares of Napa common stock solely for shares of Marin common stock pursuant to the merger will not recognize gain or loss in connection with such exchange, except with respect to cash received in lieu of fractional shares.

        A U.S. holder's aggregate tax basis in the Marin common stock received in the merger, including any fractional shares deemed received by the U.S. holder under the treatment discussed below under "—Material Federal Income Tax Consequences—Cash in Lieu of Fractional Shares of Marin Common Stock," will equal such U.S. holder's aggregate tax basis in the Napa common stock surrendered by such U.S. holder in the merger. The holding period for the shares of Marin common stock received by such U.S. holder in the merger, including any fractional shares deemed received by the U.S. holder under the treatment discussed below under "—Material Federal Income Tax Consequences—Cash in Lieu of Fractional Shares of Marin Common Stock," will include the holding period for the shares of Napa common stock exchanged therefor.

Cash in Lieu of Fractional Shares of Marin Common Stock

        A U.S. holder that receives cash instead of a fractional share of Marin common stock will be treated as having received the fractional share of Marin common stock pursuant to the merger and then having exchanged the fractional share of Marin common stock for cash in a redemption by Marin. In general, this deemed redemption will be treated as a sale or exchange and a U.S. holder will recognize gain or loss equal to the difference between (i) the amount of cash received by such U.S. holder and (ii) the portion of the basis of the shares of Napa common stock allocable to such fractional interest. Such gain or loss will constitute capital gain or loss and will be long-term capital gain or loss if the U.S. holder's holding period for the Napa common stock exchanged by such U.S. holder is greater than one year as of the effective time of the merger. Long-term capital gains of non-corporate U.S. holders are generally subject to reduced rates of taxation. The deductibility of capital losses is subject to limitations. Capital gains recognized by individuals, trusts and estates also may be subject to a 3.8% federal Medicare contribution tax on "net investment income" as provided in Section 1411 of the Code.

        Notwithstanding the previous paragraph, if the receipt of the cash has the effect of the distribution of a dividend to the U.S. holder, as described above, all or portion of the cash would be treated as ordinary dividend income as described above.

Information Reporting and Backup Withholding

        Cash payments received in the merger by a U.S. holder may, under certain circumstances, be subject to information reporting and backup withholding at a current rate of 28% of the cash payable to the U.S. holder, unless the U.S. holder provides proof of an applicable exemption, furnishes its taxpayer identification number (in the case of individuals, their social security number) and otherwise complies with all applicable requirements of the backup withholding rules. Any amounts withheld from payments to a U.S. holder under the backup withholding rules are not additional tax and will be allowed as a refund or credit against the U.S. holder's U.S. federal income tax liability, provided the required information is timely furnished to the IRS.

Reporting Requirements

        A U.S. holder that receives shares of Marin common stock as a result of the merger will be required to retain records pertaining to the merger. Each U.S. holder that is required to file a U.S. tax

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return and that is a "significant holder" that receives Marin common stock in the merger will be required to file a statement with the significant holder's U.S. federal income tax return setting forth such significant holder's basis (determined immediately before the exchange) in the Napa common stock surrendered and the fair market value (determined immediately before the exchange) of the Napa common stock that is exchanged by such significant holder. A "significant holder" is a U.S. holder that receives shares of Marin common stock in the merger and that, immediately before the merger, owned at least 5% of the outstanding stock of Napa (by vote or value) or securities of Napa with a tax basis of $1 million or more.

         THE FOREGOING DISCUSSION IS NOT INTENDED TO BE A COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER. THE FOREGOING IS NOT A SUBSTITUTE FOR AN INDIVIDUAL ANALYSIS OF THE TAX CONSEQUENCES OF THE MERGER TO NAPA SHAREHOLDERS. MOREOVER, THE DISCUSSION DOES NOT ADDRESS ANY NON-INCOME TAX OR ANY FOREIGN, STATE OR LOCAL TAX CONSEQUENCES OF THE MERGER. NAPA SHAREHOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THE MERGER IN THEIR PARTICULAR CIRCUMSTANCES, INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL (INCLUDING THE ALTERNATIVE MINIMUM TAX), STATE, LOCAL OR FOREIGN AND OTHER TAX LAWS AND OF CHANGES IN THOSE LAWS.

Accounting Treatment of the Merger

        In accordance with current accounting guidance, the merger will be accounted for using the acquisition method. The result of this is that (1) the recorded assets and liabilities of Marin will be carried forward at their recorded amounts, (2) Marin historical operating results will be unchanged for the prior periods being reported on and (3) the assets and liabilities of Napa will be adjusted to fair value, with certain exceptions, at the date Marin assumes control of the combined entities (referred to in this paragraph as the "merger date"). In addition, all identifiable intangibles will be recorded at fair value and included as part of the net assets acquired. The amount by which to the extent the purchase price, consisting of the value of cash and shares of Marin common stock and stock option replacements to be issued to former Napa shareholders exceeds the fair value of the net assets including identifiable intangibles of Napa at the merger date will be reported as goodwill. If the fair value of the net assets, including identifiable intangible assets, exceeds the purchase price, a bargain purchase gain would be recorded at the acquisition date. In accordance with current accounting guidance, goodwill is not amortized and will be evaluated for impairment at least annually. Identified intangibles will be amortized over their estimated lives. Further, the acquisition method of accounting results in the operating results of Napa being included in the operating results of Marin from the merger date forward.

Expenses of the Merger

        Each of Napa and Marin will bear and pay all costs and expenses incurred by it in connection with the transactions contemplated by the merger agreement, including fees and expenses of its own financial consultants, accountants and counsel except in connection with termination fees that might be due and owing.

Resale of Marin Common Stock

        The shares of Marin common stock to be issued to shareholders of Napa in the merger have been registered under the Securities Act of 1933 (the "Securities Act"). Such shares will be freely transferable under such Act, except for shares issued to any shareholder who may be deemed to be an "affiliate" of Marin for purposes of Rule 144 under the Securities Act. The term "affiliate" is defined

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in Rule 144 under the Securities Act and generally includes executive officers, directors and shareholders beneficially owning 10% or more of the outstanding Marin common shares.

Shareholder Agreements

        All Napa directors have separately entered into shareholder agreements with Marin and Napa in which they have agreed to vote all shares of Napa common stock that they owned as of the date of their respective agreements, and that they subsequently acquire, in favor of the merger proposal therein. As of the record date, these shareholders beneficially owned, in the aggregate, [*] shares of the common stock of Napa, allowing them to exercise approximately [*]% of the voting power of Napa common stock (which does not include shares issuable upon the exercise of stock options that were not outstanding as of the record date).

Non-Compete/Non-Solicitation Agreements

        Simultaneously with the execution of the merger agreement, all Napa directors entered into non-compete and non-solicitation agreements with Marin, substantially in the form of Exhibit B to the merger agreement, which is attached as Appendix A to this proxy statement/prospectus. They are prohibited, for a two year period following the effective time, from transacting any activity customarily associated with commercial banking or lending or the operation of an institution the deposits of which are insured by the FDIC, called herein a competitive enterprise, with any customers of Napa. This restriction extends to the geographic area consisting of the California counties of Alameda, Contra Costa, Marin, Sonoma, Napa and San Francisco. Customers for purposes of these agreements include existing customers of Napa or potential customers who were solicited in the 12 months prior to closing. In addition, they will not solicit the business of customers of Napa for a competitive enterprise, or solicit for employment the employees of Napa, or interfere or damage any relationship between Napa and its customers. They have also agreed not to disclose or use confidential information of Napa. Additionally, Kathi Metro, Napa's Executive Vice President and Chief Lending Officer, has also entered into a non-solicitation agreement with Marin, similarly prohibiting her from soliciting employees and customers of Napa for a two year period following the effective time and obligating her not to disclose or use confidential information of Napa, the form of which is attached as Exhibit B-1 to the merger agreement, which is attached as Appendix A to this proxy statement/prospectus.

Dissenters' Rights

        Dissenters' rights will be available to the Napa shareholders in accordance with Section 214a(b) of Title 12 of the United States Code. The required procedure set forth in Section 214a(b) of the United States Code must be followed exactly or any dissenters' rights may be lost.

        The information set forth below is a general summary of dissenters' rights as they apply to Napa shareholders and is qualified in its entirety by reference to Section 214a(b) of Title 12 of the United States Code which is attached to this joint proxy statement/prospectus as Appendix C.

Fair Market Value of Shares

        If the merger is approved, Napa shareholders who dissent from the merger by complying with the procedures set forth in Section 214a(b) of Title 12 of the United States Code will be entitled to receive an amount equal to the fair market value of their shares as of the date on which the shareholders' meeting was held authorizing the merger.

Voting Procedure

        In order to be entitled to exercise dissenters' rights, the shares of Napa common stock which are outstanding and are entitled to be voted at the special meeting of shareholders must be voted

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"AGAINST" the merger by the holder of such shares, or the holder of such shares must give written notice to Napa at or prior to the special meeting of shareholders that such shareholder dissents from merger and the merger agreement. Thus, any Napa shareholder who wishes to dissent and executes and returns a proxy in the accompanying form or votes at the special shareholders' meeting must vote "AGAINST" the merger. If the shareholder does not return a proxy or provide written notice of dissent, or returns a proxy without voting instructions or with instructions to vote "FOR" or "ABSTAIN" with respect to the merger, or votes in person at the special shareholders' meeting "FOR" or "ABSTAIN" with respect to the merger, the shareholder will lose any dissenters' rights associated with those shares.

Written Demand

        Furthermore, in order to preserve his or her dissenters' rights, a Napa shareholder must make a written demand upon Marin for payment of cash equal to the value of such dissenting shares at any time before thirty (30) days after the date of completion of the merger, accompanied by the surrender of the dissenting share certificates. The demand must be addressed to Bank of Marin Bancorp, 504 Redwood Blvd., Suite 100, Novato, California 94947; Attention: Nancy Rinaldi Boatright, and the demand must be received by Marin at any time before 30 days after the date of completion of the merger. A vote "AGAINST" the merger does not constitute the written demand.

Surrender of Certificates

        At any time before 30 days after the date of completion of the merger, the dissenting shareholder must surrender to Marin, both the written demand and the certificates representing the dissenting shares. Any shares of Napa common stock that are transferred prior to their submission lose their status as dissenting shares.

Valuation of Shares and Payment

        The value of the shares of Napa common stock will be determined by a committee of three persons, one to be selected by the majority vote of the dissenting shareholders entitled to receive the value of their shares, one by the directors of Marin and the third by the two so chosen. The valuation agreed upon by any two of the three appraisers shall be the value used for payment to the dissenters.

Disagreement on Price and Comptroller Determination

        If the value decided by the appraisers is not satisfactory to a dissenting shareholder who has requested payment, such shareholder may within five days after being notified of the appraised value of his or her shares appeal to the Comptroller of the Currency, who shall cause a reappraisal to be made, which shall be final and binding as to the value of the shares. If within ninety days from the date of completion of the merger, for any reason one or more of the appraisers is not selected as provided above, or the appraisers fail to determine the value of the shares, the Comptroller shall upon written request of any interested party, cause an appraisal to be made, which shall be final and binding on all parties.

Withdrawal of Demand

        A dissenting shareholder may not withdraw his or her dissent or demand for payment unless Napa consents to the withdrawal. The foregoing summary of such rights is qualified in its entirety by reference to Appendix C attached to this proxy statement/prospectus.

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INFORMATION ABOUT MARIN

General

        Marin is a California corporation and is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended. As a bank holding company, Marin is allowed to acquire or invest in the securities of companies that are engaged in banking or in activities closely related to banking as authorized by the Federal Reserve.

        Marin's principal asset is its wholly owned subsidiary, Bank of Marin. At June 30, 2017, Marin had total consolidated assets of $2.1 billion, consolidated deposits of $1.8 billion, and consolidated stockholders' equity of $240.7 million.

Bank of Marin

        Bank of Marin was licensed by the California Department of Financial Institutions (currently the DBO) on January 23, 1990, and commenced operation as a California state bank on the same day. As a California state bank, Bank of Marin is subject to primary supervision, examination and regulation by the DBO, and the FDIC is its primary federal regulator. Bank of Marin is also subject to certain other state and federal laws and regulations. The deposits of Bank of Marin are insured by the FDIC up to the applicable limits thereof. Bank of Marin is not a member of the Federal Reserve System. Bank of Marin presently has no subsidiaries.

        The Bank provides traditional commercial banking services to small and medium-sized businesses and individuals in the communities of Marin (10 branches), Petaluma (3 offices), Alameda (3 offices), one office in each of Napa, Healdsburg, Sonoma, Santa Rosa, and San Francisco. Bank of Marin serves the counties of Marin, Sonoma, Napa, Alameda and San Francisco, offering a broad range of deposit products, commercial and personal loans, cash management solutions, and wealth management services.

Management, Financial Information and Additional Information

        Certain information relating to director and executive compensation, benefit plans, voting securities and the principal holders thereof, certain relationships and related transactions, financial statements and other related matters as to Marin is incorporated by reference or set forth in Marin's annual report on Form 10-K for the year ended December 31, 2016, which is incorporated herein by reference. Shareholders wishing to obtain a copy of such document may contact Marin at its address or telephone number indicated under "Where You Can Find More Information."

Additional Information Concerning Marin .

        Information concerning Marin's directors and executive officers, executive compensation, principal shareholders, certain relationships and related transactions, and other related matters concerning Marin is included or incorporated by reference in its annual report on Form 10-K for the year ended December 31, 2016. Additionally, financial statements and information as well as management's discussion and analysis thereof are included in the Form 10-K, its Form 10-Qs for the quarters ended June 30, 2017 and March 31, 2017 and Marin's annual meeting proxy statement, filed on April 5, 2017 (only those portions that have been incorporated by reference in the 2016 Annual Report on Form 10-K). These reports are incorporated by reference into this proxy statement/prospectus. If you want to obtain copies of these documents or other information concerning Marin, please see "Where You Can Find More Information" at page 90.

        Marin's principal executive offices are located at 504 Redwood Blvd., Suite 100, Novato, California 94947 and its telephone number is (415) 763-4520.

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INFORMATION ABOUT NAPA

        Napa is a national bank that engages in commercial banking primarily in Napa County, California, a region renown for producing premium wines and tourism.

        As of June 30, 2017, total deposits at June 30, 2017 were $217.7 million, gross loans were $139.3 million and total assets were $246.1 million. At June 30, 2017, the bank had equity capital of $27.2 million.

        Napa operates through its main branch and headquarters located at 2007 Redwood Road, Suite 101 in Napa, California and through a branch office located at 1715 Second Street, in Napa, California. The bank was organized on December 1, 2005 and commenced operations on August 14, 2006. Its phone number is (707) 257-7777 and its website, which is not part of this proxy statement/prospectus, is located at www.thebankofnapa.com.

        Napa offers a range of loan and deposit products, and services to businesses and consumers in the Napa Valley. The bank's business banking focus is on small to medium sized businesses, professionals and not-for-profit organizations. Napa offers a broad range of commercial and retail lending programs designed to meet the needs of its target markets. These include commercial loans and lines of credit, construction financing, consumer loans, auto loans, home improvement loans and home equity lines of credit. Napa offers a proprietary Visa credit card combined with a rewards program to its customers, which includes a Business Visa program for business and professional customers. The bank has no foreign or international activities or operations.

        Napa offers a variety of checking and savings accounts, and a number of time deposit alternatives, including interest bearing and non-interest bearing personal and business checking accounts and time certificates of deposit. Napa also offers direct deposit of payroll, social security and pension checks. Deposits are FDIC insured up to applicable limits. An automatic teller machine is available at both branch offices and Napa's ATM network is linked to both the PLUS and EXCHANGE networks. The bank offers its depositors 24-hour access to their accounts by telephone and to both consumer and business accounts through its internet banking services.

        At June 30, 2017, Napa employed 28.3 full-time equivalent (FTE) staff.

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CERTAIN BENEFICIAL OWNERSHIP OF NAPA COMMON STOCK

        The following table sets forth certain information as of [*], 2017, the record date for the special meeting, concerning the stock ownership of Napa's outstanding common stock by each of the directors of Napa, by each of Napa's named executive officers, by holders of five percent or more of each class of Napa's outstanding common stock, and by all directors and executive officers as a group:

Name and Address of Beneficial Owner (1)
  Title   Shares
Beneficially
Owned (2)
  Exercisable
Options (3)
  Percent  

Richard Anderson

  Director     42,000     0     1.8 %

Steven Barlow

  Director     3,166     666     0.1 %

Greg Bennett

  Director     16,200     0     0.7 %

Diane Bishofberger

  Executive Vice President and Bank Sales Manager     38,766     36,666     1.6 %

Jeff Gerlomes

  Director     6,400     1,000     0.3 %

M. Thomas LeMasters

  President, Chief Executive Officer and Director     105,083     79,833     4.3 %

Kathleen Lucier

  Director     3,500     1,000     0.1 %

Mike Lundstrom

  Executive Vice President and Chief Financial Officer     24,666     21,666     1.0 %

Malcolm Mackenzie

  Chairman of the Board     21,000     0     0.9 %

Kathi Metro

  Executive Vice President and Chief Credit Officer     14,166     11,666     0.6 %

Steve Orndorf

  Director     9,417     1,000     0.4 %

Kelly Solomon

  Director     1,750     1,000     0.1 %

Tony Torres

  Director     6,650     1,000     0.3 %

All Directors and Executive Officers as a Group (13 persons)

        292,764     155,497     11.6 %

(1)
The address of all persons is c/o Bank of Napa, N.A., 2007 Redwood Road, suite 101, Napa, California 94558.

(2)
Includes exercisable options shown in the next column. In calculating the percentage of ownership, all shares which the identified person or persons have the right to acquire by exercise of options are deemed to be outstanding for the purpose of computing the percentage of the class owned by such person, but are not deemed to be outstanding for the purpose of computing the percentage of the class owned by any other person..

(3)
Indicates number of shares subject to options currently exercisable or exercisable within 60 days of the record date.

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DESCRIPTION OF MARIN CAPITAL STOCK

        The following summary of the current terms of the capital stock of Marin and the terms of capital stock of Marin to be in effect after completion of the merger is not meant to be complete and is qualified in its entirety by reference to the CGCL, federal law, the Marin articles of incorporation, and the Marin bylaws, copies of which have been filed with the Commission and are also available upon request from Marin. See "Where You Can Find More Information."

Common Stock

        The Marin articles of incorporation authorize 15,000,000 shares of common stock, no par value. At [*], 2017, there were [*] shares of Marin common stock issued and outstanding, held of record by approximately [*] shareholders. The Marin common stock is listed on the Nasdaq Capital Market under the symbol "BMRC." The transfer agent and registrar for Marin common stock is Computershare.

        Holders of Marin common stock are entitled to one vote, in person or by proxy, for each share of Marin common stock held of record in the shareholder's name on the books of Marin as of the record date on any matter submitted to the vote of the shareholders except that, for the election of directors, each shareholder has cumulative voting rights and is entitled to as many votes as shall equal the number of shares held by such shareholder multiplied by the number of directors to be elected. Each shareholder may cast all his or her votes for a single candidate or distribute such votes among any or all of the candidates as he or she chooses. However, no shareholder shall be entitled to cumulate votes (in other words, cast for any candidate a number of votes greater than the number of shares of stock held by such shareholder) unless such candidate's name has been placed in nomination prior to the voting and the shareholder has given notice at the meeting prior to the voting of the shareholder's intention to cumulate his or her votes. If any shareholder has given such notice, all shareholders may cumulate their votes for candidates in nomination.

        Each share of Marin common stock has the same rights, privileges and preferences as every other share and will share equally in Marin's net assets upon liquidation or dissolution. Marin common stock has no preemptive, conversion or redemption rights or sinking fund provisions and all of the issued and outstanding shares of Marin common stock, when issued, will be fully paid and nonassessable.

Preferred Stock

        The preferred stock may be issued from time to time in one or more series without action by the shareholders. The board of directors is authorized to designate and to fix the number of shares of any such series of preferred stock and to determine and alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of preferred stock, including, but not limited to, dividend rate, voting, liquidation preference and conversion rights. The board of directors, within the limits stated in any resolution of the board of directors originally fixing the number of shares constituting any series, may increase or decrease the number of shares in such series (but not below the number of shares of any series subsequent to the issue of shares of that series). The preferred stock has no preemptive rights.

Dividends

        Marin's shareholders are entitled to dividends when, as and if declared by Marin's board of directors out of funds legally available therefor (subject to certain restrictions on payment of dividends imposed by the laws of California). For information concerning Marin's recent dividend history, see "Summary—Dividends After the Merger" and "Market Price and Dividend Information."

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Shareholder Rights Plan

        On July 6, 2017, Marin's board of directors adopted a shareholder rights plan which provides one preferred share purchase right (a "Right") for each outstanding share of common stock, no par value of Marin, including shares of common stock that may be issued by Marin from time to time after such date as, for example, in the merger. The description and terms of the Rights are set forth in a Rights Agreement dated as of July 6, 2017 (the "Rights Agreement") between Marin and Computershare, as Rights Agent.

        The Rights Agreement is designed to discourage takeovers that involve abusive tactics and or do not provide fair value to shareholders.

        Pursuant to the Rights Agreement, upon the occurrence of certain "triggering events," each registered holder of Marin common stock is entitled to purchase from Marin one one-hundredth of a share of Series A Junior Participating Preferred Stock, no par value, of Marin at a price of $90.00 per one one-hundredth of a Preferred Share, subject to adjustment.

        At any time before the occurrence of a "triggering event", the board of directors of Marin may redeem the Rights in whole, but not in part, at a price of $0.001 per Right.

        A copy of the Rights Agreement has been filed with the Commission as an Exhibit to a Registration Statement on Form 8-A. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement. See "Where You Can Find More Information" to learn how to obtain a copy of this document.

Anti-takeover Provisions

        In addition to the shareholder rights plan described above, Marin's articles of incorporation and bylaws, or Marin's charter documents, contain certain provisions that deal with matters of corporate governance and certain rights of shareholders which might be deemed to have a potential "anti-takeover" effect. Such provisions will also render the removal of an incumbent board of directors or management more difficult.

        The following description of certain of the provisions of Marin's charter documents is necessarily general, and reference should be made in each case to such documents, which are contained as exhibits to Marin's previous filings with the Securities and Exchange Commission. See "Where You Can Find More Information" to learn how to obtain a copy of these documents.

        Directors.     Certain provisions of Marin's charter documents will impede changes in majority control of the board of directors. Marin's charter documents provide that:

        Authorized Shares.     Marin's articles of incorporation authorize the issuance of 15,000,000 shares of common stock and 5,000,000 shares of preferred stock. The shares of common stock and preferred

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stock were authorized to provide Marin's board of directors with as much flexibility as possible to effect, among other transactions, financings, acquisitions, stock dividends, and the exercise of employee stock options. However, these authorized shares may also be used by the board of directors, to the extent consistent with its fiduciary duty, to deter future attempts to gain control of Marin. As a result of the ability to fix voting rights for a series of preferred stock and to issue additional shares of common stock, the board has the power to issue stock to persons friendly to management in order to attempt to block a tender offer, merger or other transaction by which a third party seeks control of Marin, and thereby allow members of management to retain their positions.

        Purpose and Takeover Defensive Effects of Marin's Charter Documents and Shareholder Rights Plan.     Marin's board believes that the provisions described above are prudent and will reduce Marin's vulnerability to takeover attempts and certain other transactions which have not been negotiated with and approved by its board of directors. The board of directors believes these provisions are in the best interest of Marin and its shareholders. In the judgment of the board of directors, Marin's board will be in the best position to determine the true value of Marin and to negotiate more effectively for terms that will be in the best interest of its shareholders. Accordingly, the board of directors believes that it is in the best interest of Marin and its shareholders to encourage a potential acquirer to negotiate directly with the board of directors, and that these provisions will encourage such negotiations and discourage hostile takeover attempts. It is also the view of the board of directors that these provisions should not discourage persons from proposing a merger or other transaction at a price reflective of the true value of Marin and otherwise in the best interest of all shareholders.

        Despite the belief of Marin as to the benefits to shareholders of these provisions, these provisions may also have the effect of discouraging a future takeover attempt which would not be approved by Marin's board of directors, but pursuant to which shareholders may receive a substantial premium for their shares over then current market prices. As a result, shareholders who might desire to participate in such a transaction may not have any opportunity to do so.

Restrictions on Ownership

        The Bank Holding Company Act generally prohibits any company that is not engaged in banking activities and activities that are permissible for a bank holding company or a financial holding company from acquiring control of a bank holding company, such as Marin. "Control" is generally defined as ownership of 25% or more of the voting stock or other exercise of a controlling influence. Any existing bank holding company would need the prior approval of the Federal Reserve before acquiring 5% or more of the voting stock of Marin. In addition, the Change in Bank Control Act of 1978, as amended, prohibits a person or group of persons from acquiring control of a bank holding company unless the Federal Reserve has been notified and has not objected to the transaction. Under a rebuttable presumption established by the Federal Reserve, the acquisition of 10% or more of a class of voting stock of a bank holding company with a class of securities registered under Section 12 of the Exchange Act, such as Marin, could constitute acquisition of control of the bank holding company.

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COMPARISON OF THE RIGHTS OF SHAREHOLDERS

        When the merger becomes effective, shareholders of Napa who receive shares of Marin common stock in exchange for their shares of Napa common stock will become shareholders of Marin. Marin is a California corporation and the rights of Marin shareholders are governed by the CGCL, as well as the Marin articles of incorporation and the Marin bylaws. Napa is a national banking association, and its shareholders' rights are governed by the National Bank Act and its accompanying regulations ("NBA") and the Napa articles of association and Napa bylaws.

        After the merger, as Marin shareholders, the rights of former Napa shareholders will be governed by the Marin articles of incorporation, the Marin bylaws and the CGCL. The following is a summary of material differences between the rights of holders of Marin common stock and holders of Napa common stock. The summary does not purport to be a complete statement of the provisions affecting, and differences between, the rights of holders of Marin common stock and holders of Napa common stock. Rather, the summary is intended to provide a general overview of the differences in shareholders' rights under the governing corporate instruments of Marin and Napa, and other known material differences. For more detailed information with respect to Marin, see "Description of Marin Capital Stock."

NAPA   MARIN
Authorized Capital Stock

The authorized capital stock of Napa consists of 30,000,000 shares of common stock, $5.00 par value per share.

 

The authorized capital stock of Marin consists of 15,000,000 shares of common stock, no par value, and 5,000,000 shares of preferred stock.


Number of Directors

Napa's articles of association and bylaws state that the number of directors comprising the board of directors will be from five (5) to twenty-five (25), with exact number to be determined from time to time by the board of directors. There are currently nine (9) members of the Napa board of directors.

 

Marin's bylaws state that the number of directors comprising the board of directors will be from nine (9) to seventeen (17), with the exact number to be determined from time to time by the Marin board of directors. There are currently nine (9) members of the Marin board of directors.


Election of Directors—Cumulative Voting

Pursuant to the Napa articles of association, voting for directors will be done pursuant to cumulative voting.

 

The CGCL generally requires that cumulative voting be available to shareholders in the election of directors, with certain exceptions. Marin's shareholders are permitted to cumulate their votes in the election of directors.


Classification of Board of Directors

Napa's board is divided into three classes of directors of approximately equal size. The classes have staggered terms, with the directors of one of the three classes elected at each annual meeting to a term of three years.

 

Marin's charter documents do not provide for a classified board of directors; each director is elected annually and serves until his/her respective successor is elected.

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NAPA