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Acquisition (Tables) | 12 Months Ended
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Dec. 31, 2017
Business Combinations [Abstract] |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table reflects the estimated fair values of the assets acquired and liabilities assumed related to the acquisition:
(dollars in thousands) | Acquisition Date November 21, 2017
Assets: |
Cash and cash equivalents | $ | 59,779 |
Investment securities | 75,469 |
Loans | 134,720 |
Core deposit intangible | 4,441 |
Goodwill | 23,705 |
Bank premises and equipment | 599 |
Other assets | 6,408 |
Total assets acquired | $ | 305,121 |
Liabilities: |
Deposits: |
Non-interest bearing | $ | 77,266 |
Interest bearing |
Transaction accounts | 50,080 |
Savings accounts | 12,157 |
Money market accounts | 85,045 |
Other time accounts | 25,338 |
Total deposits | 249,886 |
Other liabilities | 2,050 |
Total liabilities assumed | $ | 251,936 |
Merger consideration of $53,185 (735,264 common shares and 70,145 shares of replacement stock options issued by Bank of Marin Bancorp). | $ | 53,185 |
The following table presents the net assets acquired from Bank of Napa, consideration paid and the estimated fair value adjustments:
(dollars in thousands) | Acquisition Date November 21, 2017
Book value of net assets acquired from Bank of Napa | $ | 26,152 |
Fair value adjustments: |
Loans | 1,301 |
Core deposit intangible asset | 4,441 |
Total purchase accounting adjustments | 5,742 |
Deferred tax liabilities (tax effect of purchase accounting adjustments at 42.05%) | (2,414 | )
Fair value of net assets acquired from Bank of Napa | $ | 29,480 |
Merger consideration | $ | 53,185 |
Less: fair value of net assets acquired | (29,480 | )
Goodwill | $ | 23,705 |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period | The following table reflects the unpaid principal balance and related carrying value of PCI loans:
PCI Loans | December 31, 2017 | December 31, 2016
(in thousands) | Unpaid Principal Balance |  | Carrying Value |  | Unpaid Principal Balance |  | Carrying Value |
Commercial and industrial | $ | 276 |  | $ | 65 |  | $ | 45 |  | $ | 40 |
Commercial real estate, owner occupied | 1,297 |  | 1,166 |  | 1,344 |  | 1,072 |
Commercial real estate, investor | 1,064 |  | 790 |  | 1,713 |  | 1,706 |
Construction | — |  | — |  | — |  | — |
Home equity | 231 |  | 94 |  | 248 |  | 102 |
Total purchased credit-impaired loans | $ | 2,868 |  | $ | 2,115 |  | $ | 3,350 |  | $ | 2,920 |
The following table presents the fair value of loans acquired from Bank of Napa for PCI loans as of the acquisition date (November 21, 2017):
(in thousands) | PCI loans
Contractually required payments including interest | $ | 1,769 |
Less: contractual cash flows not expected to be collected (nonaccretable difference) | 805 |
Cash flows expected to be collected (undiscounted) | 964 |
Less: interest component of cash flows expected to be collected (accretable yield) | 109 |
Fair value of PCI loans | $ | 855 |
The following table presents the fair value of loans acquired from Bank of Napa for non-PCI loans as of the acquisition date (November 21, 2017):
(in thousands) | Non-PCI loans
Contractually required payments including interest | $ | 183,833 |
Contractual cash flows not expected to be collected | $ | 14,227 |
Fair value of non-PCI loans | $ | 133,865 |
The following table reflects the outstanding balance and related fair value of PCI loans as of the acquisition date:
PCI Loans (in thousands) | Unpaid principal balance |  | Fair value |
Commercial | $ | 417 |  | $ | 70 |
Commercial real estate | 1,070 |  | 785 |
Total purchased credit-impaired loans | $ | 1,487 |  | $ | 855 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | At December 31, 2017, the future estimated amortization expense for the CDI arising from our past acquisitions is as follows:
(in thousands) | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | Thereafter |  | Total |
Core deposit intangible amortization | $ | 921 |  | $ | 887 |  | $ | 853 |  | $ | 818 |  | $ | 782 |  | $ | 2,231 |  | $ | 6,492 |
At December 31, 2017, the future estimated amortization expense on the CDI from the Bank of Napa acquisition is as follows:
(in thousands) | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | Thereafter |  | Total |
Core deposit intangible amortization | $ | 508 |  | $ | 499 |  | $ | 488 |  | $ | 475 |  | $ | 460 |  | $ | 1,955 |  | $ | 4,385 |
Business Acquisition, Pro Forma Information | The first column of the following table presents the former Bank of Napa's operations and its actual contribution to our net interest income and net income included in our consolidated statement of comprehensive income from the acquisition date (November 21, 2017) through December 31, 2017. The table also presents pro forma information of the combined entity as if the acquisition occurred on January 1, 2016. The pro forma information does not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the periods presented, nor is it indicative of the results of operations in future periods. Furthermore, cost savings and other business synergies related to the acquisition are not reflected in the pro forma amounts.
Pro Forma Revenue and Earnings |  |  |  |
(in thousands) | Actual from acquisition date through December 31, 2017 |  |  | 2017 |  |  | 2016 |  |
Net interest income | $ | 913 |  |  | $ | 82,802 |  |  | $ | 80,898 |  |
Net (loss) Income | $ | (576 | ) | 1 | $ | 18,898 |  | 2 | $ | 21,559 |  | 2
1 Bank of Napa's net loss from November 21, 2017 through December 31, 2017 includes acquisition-related costs, accretion of the discount on acquired loans and core deposit intangible amortization.
2 2017 pro forma combined net income was adjusted to exclude acquisition related costs of $2.2 million incurred by Bank of Marin Bancorp and $2.5 million incurred by Bank of Napa. 2016 pro forma combined earnings were adjusted to include these acquisition related costs as if the merger occurred on January 1, 2016.
Schedule Of Acquisition-Related Expenses | Bancorp incurred acquisition-related expenses in the consolidated statements of comprehensive income in 2017 for the Bank of Napa acquisition as follows:
(in thousands) | Year Ended December 31, 2017
Data processing 1 | $ | 1,108 |
Professional services | 952 |
Personnel severance | 35 |
Other | 114 |
Total | $ | 2,209 |
1 Primarily relates to Bank of Napa's core processing system contract termination and deconversion fees.

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- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=84161108&loc=d3e4845-128472 + Details
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