Merger Resources
FDIC Insurance Coverage Information
Santa Cruz County Bank Fact Sheet
Click here for the Investor Presentation
Santa Cruz County Bank & 1st Capital Bank Agree to Merge
Dear Valued Clients,
I am delighted to share exciting news. On Monday May 20, 2024, West Coast Community Bancorp and 1st Capital Bancorp, holding companies for Santa Cruz County Bank and 1st Capital Bank, have announced their agreement to join forces. Each company has a rich history spanning more than two decades and founded on strong relationships with the local communities we serve. There is additional alignment between our organizational values and the exceptional service we provide for our clients. Together, we will form the preeminent community bank serving the Central Coast.
Why merge and what does this mean for you? This merger is not just about the success of our banks; it is about improving technology and scale to enhance your client experience. Our similar geographic market footprint, corporate cultures, and commitment to helping our clients succeed should lead to a smooth and successful transaction and integration. This next chapter will diversify and enhance product offerings and present new strategic growth opportunities to help you reach your financial goals. This union will also allow us to significantly increase our lending power to help businesses across the Central Coast grow and expand. It will also increase the breadth and depth of service we provide. Our combined team of dedicated professionals will be able to serve you with even greater personalized attention.
What’s next? Be on the lookout for communications from us and we encourage you to visit our website for the most current updates. Business clients may receive a call from your account Relationship Manager who will be able to provide answers to any immediate questions you have. For more information, please visit the links below.
Through this process, you can expect the same level of extraordinary support you have come to know and trust, now backed by even greater resources and expertise.
Thank you for your continued loyalty.
Sincerely,
Samuel Jimenez
President and CEO
West Coast Community Bancorp and 1st Capital Bancorp Announce Agreement to Merge
Santa Cruz and Salinas, CA – May 20, 2024: West Coast Community Bancorp (OTCQX: “SCZC”) (“Bancorp”), the holding company for Santa Cruz County Bank (“Bank”), headquartered in Santa Cruz, California, and 1st Capital Bancorp (OTCQX: “FISB”), the holding company for 1st Capital Bank, headquartered in Salinas, California, jointly announced today that they have entered into an agreement and plan of reorganization and merger (the “Agreement”), pursuant to which 1st Capital Bancorp will merge with and into West Coast Community Bancorp in an all-stock transaction valued at approximately $63 million, or $10.78 per FISB share, based on the closing price of $29.94 for West Coast Community Bancorp shares on May 20, 2024.
The transaction is subject to customary closing conditions, including regulatory approvals and shareholder approval from both parties. Both Boards of Directors of West Coast Community Bancorp and 1st Capital Bancorp have unanimously approved the transaction, which is expected to close in the fourth quarter of 2024. The directors of West Coast Community Bancorp and 1st Capital Bancorp have entered into agreements pursuant to which they have committed to vote their shares in favor of the transaction. At closing, Krista Snelling, President and CEO of the Bancorp and Bank, will lead the combined franchise.
Highlights of the Announced Transaction
• At nearly $3 billion in pro forma assets and 10% deposit market share in Santa Cruz and Monterey Counties (on a combined basis, based on FDIC data as of June 30, 2023), the Bank is well-positioned for continued success as the leading community business bank in a vibrant market area.
• The transaction enhances the Bank’s profitability, diversifies the Bank’s client base, deepens and extends the Bank’s market reach, and better positions the Bank to profitably deploy the technology and services that will enhance the client experience and provide both product diversification and additional growth opportunities.
• SCZC expects to realize approximately 20% annual EPS accretion following full realization of operating efficiencies.
Under the terms of the Agreement, shareholders of FISB are expected to receive a fixed exchange ratio of 0.36 shares of SCZC common stock in exchange for each share of FISB common stock. The value of the merger consideration will fluctuate based on SCZC’s stock price. On a pro forma basis, the holders of FISB common shares will own approximately 20% of the issued and outstanding SCZC common stock. At closing, current Chairman and Vice Chairman of 1st Capital Bancorp, Kurt J. Gollnick and Daniel R. Hightower, MD, respectively, will join the Boards of Directors of West Coast Community Bancorp and Santa Cruz County Bank. Kurt J. Gollnick will join as Vice Chairman.
Krista Snelling, President and CEO of West Coast Community Bancorp and Santa Cruz County Bank stated, “We are thrilled to announce this exciting merger with 1st Capital Bank, a strategic move that underscores our commitment to sustained growth and exceptional service. Our institutions have a rich history of serving
our communities with dedication and passion, and this merger will only strengthen that commitment. 1st Capital Bank has built an impressive deposit market share, especially within Monterey County, and a solid reputation for expertise in business lending.”
Stephen Pahl, Chairman of the Boards of West Coast Community Bancorp and Santa Cruz County Bank said, “This announcement is a significant milestone for our combined franchise. The complementary strengths of both institutions create the capacity to unlock exciting opportunities for our shareholders, much like the Bank’s successful merger with Lighthouse Bank in 2019. The expanded scale and geographic reach resulting from this merger has the potential to deliver sustained value creation. With a solid balance sheet and a focus on operational efficiency, we are positioned to drive profitability and deliver enhanced returns for our shareholders.”
Kurt J. Gollnick, Chairman of the Boards of 1st Capital Bancorp and 1st Capital Bank remarked, “In essence, this merger represents a strategic alignment of values, capabilities, and aspirations - a catalyst for growth, profitability and enduring success. Together, with Santa Cruz County Bank, we are excited to embark on this journey, confident in our ability to create lasting value for all stakeholders. We have long admired Santa Cruz County Bank’s commitment to building shareholder value, achievement of top-level financial performance and sharing the value of positive impact on the regions it serves.”
Sam Jimenez President and CEO of 1st Capital Bancorp and 1st Capital Bank stated, “This merger allows us to leverage our combined resources more effectively, empowering us to innovate and adapt to the evolving needs of our clients and communities. Another compelling reason behind this merger is the enhanced lending capacity it brings as our combined assets upon closing will be nearly $3 billion. By joining forces, our enhanced lending power and geographic footprint will drive opportunities for business expansion, agriculture, entrepreneurship, and economic growth.”
Concurrent with this press release, West Coast Community Bancorp issued presentation slides providing supplemental information, intended to be reviewed together with this release. These can be found online at: Investor Relations.
Advisors to the Transaction
Keefe, Bruyette & Woods, A Stifel Company, acted as financial advisor and Gary Steven Findley & Associates as legal counsel to West Coast Community Bancorp in the transaction. Piper Sandler & Co. acted as financial advisor and Stuart | Moore | Staub as legal counsel to 1st Capital Bancorp.
About West Coast Community Bancorp and Santa Cruz County Bank
Founded in 2004, Santa Cruz County Bank is the wholly-owned subsidiary of West Coast Community Bancorp, a bank holding company. The Bank is a top-rated, locally operated, and full-service community bank headquartered in Santa Cruz, California with eight branches in Aptos, Capitola, Cupertino, Monterey, Salinas, Santa Cruz, Scotts Valley, and Watsonville. Santa Cruz County Bank is distinguished from "big banks" by its relationship-based service, problem-solving focus, and direct access to decision makers. The Bank is a leading SBA lender in Santa Cruz County and Silicon Valley. As a full-service bank, Santa Cruz County Bank offers competitive deposit and lending solutions for businesses and individuals; including business loans, lines of credit, commercial real estate financing, construction lending, asset-based lending, agricultural loans, SBA and USDA government guaranteed loans, credit cards, merchant services, remote deposit capture, mobile and online banking, bill payment, and treasury management. True to its community roots, Santa Cruz County Bank has supported regional well-being by actively participating in and donating to local nonprofit organizations. As of March 31, 2024, West Coast Community Bancorp had total assets of $1.7 billion, total loans of $1.4 billion and total deposits of $1.5 billion.
To find out more about West Coast Community Bancorp, please visit www.sccountybank.com. The Bank and Bancorp use their website to distribute financial and other material information.
About 1st Capital Bancorp and 1st Capital Bank
1st Capital Bancorp is the holding company for 1st Capital Bank, whose primary target markets are commercial enterprises, professionals, real estate investors, family business entities, and residents along the Central Coast region of California. 1st Capital Bank provides a wide range of credit products, including loans under various government programs such as those provided through the U.S. Small Business Administration and the U.S. Department of Agriculture. A full suite of deposit accounts also is furnished, complemented by robust cash management services. 1st Capital Bank operates five full-service branch offices in Monterey, Salinas, King City, San Luis Obispo and Santa Cruz. As of March 31, 2024, 1st Capital Bancorp had total assets of $1.0 billion, total loans of $0.6 billion and total deposits of $0.9 billion.
To find out more about 1st Capital Bancorp, please visit www.1stCapital.bank.
Forward-Looking Statements
This press release contains certain forward-looking information about West Coast Community Bancorp and Santa Cruz County Bank (“Santa Cruz”), 1st Capital Bancorp and 1st Capital Bank (“1st Capital”), and the combined company after the close of the merger and is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Such statements involve inherent risks, uncertainties, and contingencies, many of which are difficult to predict and are generally beyond the control of Santa Cruz, 1st Capital and the combined company. Santa Cruz and 1st Capital caution readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. Risks and uncertainties for each institution and the combined institution include, but are not limited to the ability of the parties to complete the merger; the occurrence of any event, change or other circumstances that could give rise to the right of Santa Cruz or 1st Capital to terminate the agreement with respect to the merger; the outcome of any legal proceedings that may be instituted against Santa Cruz or 1st Capital; government approval may not be obtained or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger; approval by the shareholders of Santa Cruz and 1st Capital may not be obtained; failing to achieve the successful integration of 1st Capital, or expected cost savings, beneficial synergies and/or operating efficiencies within expected time-frames or at all; ; the impact of bank failures or other adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; and the possibility that personnel changes/retention will not proceed as planned. Pro forma, projected and estimated numbers are used for illustrative purposes only and are not forecasts, and actual results may differ materially. Other forward-looking statements contained within this release that are subject to risks and uncertainties may include, but are not necessarily limited to, fluctuations in interest rates (including but not limited to changes in depositor behavior in relation thereto), inflation, government regulations and general economic conditions, and competition within the business areas in which the companies are conducting operations, health of the real estate market in California, Santa Cruz’s and 1st Capital’s ability to effectively execute their respective business plans, and other factors beyond their control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. Neither company assumes any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.
Media Contacts
West Coast Community Bancorp: Krista Snelling, President & Chief Executive Officer, ksnelling@sccountybank.com 1st Capital Bancorp: Sam Jimenez, President & Chief Executive Officer, sam.jimenez@1stcapitalbank.com
Frequently Asked Questions
What is happening?
1st Capital Bancorp and West Coast Community Bancorp, our holding companies, have announced that 1st Capital Bank is merging into Santa Cruz County Bank ("SCCB"), a strategic move to enhance our capabilities and better serve our community. Both community banks have a combined history of nearly 40 years serving their communities with delivery of personalized, relationship-style banking which has set us both apart from other banks in the marketplace. This merger is subject to receipt of necessary regulatory and shareholder approval.
Why 1st Capital Bank?
SCCB believes the merger to be compelling from a strategic, financial, geographic, and cultural perspective. The merged bank will be the premier bank on the Central Coast with nearly $2.7 billion in assets. This is an excellent combination given our similar culture, clients, and operations. We both started with the same community values, by founders with common community and banking experience. This union is positive for shareholders, employees, and the communities we serve. We've prepared a Fact Sheet about Santa Cruz County Bank for your reference.
How is the merger structured?
The merger is structured as a tax-free stock exchange (100% stock), meaning that 1st Capital Bancorp (FISB) shareholders will receive 0.36 shares of West Coast Community Bancorp (SCZC) stock for each FISB share they own once the merger is officially finalized.
Is the merger completed now?
No. While both sides have done significant due diligence and have executed a Definitive Agreement to merge, the merger still needs regulatory approval and approval from the shareholders of both banks. We anticipate the approvals by shareholders and regulators, defined as the "merger closing", to occur in the fourth quarter of this year. As soon as we have information to share regarding the timing of the conversion, we will share it with everyone. For now, we will continue to operate as we always have, business as usual.
When will the merger be finalized?
The merger process will follow regulatory approvals and is currently anticipated to close in the fourth quarter of this year.
The following are key milestones:
1. Filing of Proxy/Prospectus, with all the details of the merger
2. Shareholder Approval, by both stockholder groups (SCZC, FISB)
3. Regulatory Approval
4. Close of Merger, anticipated in Q4, 2024
As these dates become more certain, we will update you.
Who will be running the combined Bank?
Krista Snelling, the current President, and CEO of Santa Cruz County Bank will remain the President and CEO of the combined Bank and holding company, West Coast Community Bancorp.
Will any 1st Capital Bank Board members have roles in the combined Bank?
Yes. At closing, current Chairman and Vice Chairman of 1st Capital Bancorp, Kurt J. Gollnick and Daniel R. Hightower, MD, respectively, will join the Boards of Directors of West Coast Community Bancorp and Santa Cruz County Bank. Kurt J. Gollnick will join as Vice Chairman.
How will this affect 1st Capital Bank clients?
There will be no change to banking relationships or accounts for 1st Capital Bank or Santa Cruz County Bank clients. Once the merger is completed, there will be numerous enhancements including the expanded ability to serve our clients across a broader market area with greater capacity as well as the addition of a full-service branch in King City and San Luis Obispo. This merger will create the preeminent community bank on the Central Coast. Our goal is to leverage the strength of both banks, enhance our product offerings, technological capabilities, and overall competitiveness.
How can I stay informed throughout the merger process?
We will provide regular updates on this page for the latest information and resources related to the merger.
For more information about FDIC coverage, visit fdic.gov.
*The merger estimated closing date is in the fourth quarter of 2024.
FDIC Insurance Coverage Information
The following question and answers will help depositors understand their insurance coverage following the merger. Additional resources are available at fdic.gov.
Q. I have deposit accounts at 1st Capital Bank and Santa Cruz County Bank. What happens to my FDIC Insurance when the two banks merge?
When the merger closes*, and the deposit accounts at 1st Capital Bank are acquired by Santa Cruz County Bank, the 1st Capital deposits will be separately insured from any accounts a depositor may already have at Santa Cruz County Bank for an initial period of six months. This grace period is intended to give depositors an opportunity to restructure their accounts if the merger causes a depositor to have funds in excess of the insurance limits at Santa Cruz County Bank. If a depositor has funds at only Santa Cruz County Bank or 1st Capital, this grace period will not apply, as the depositor's insurance coverage will be unaffected by the merger. *The merger estimated closing date is in the fourth quarter of 2024.
Q. I have a CD at 1st Capital Bank, how will the merger affect my FDIC Insurance?
The CDs that will be acquired by Santa Cruz County Bank will be separately insured from pre-existing deposit accounts at Santa Cruz County Bank, subject to the following rules:
1. Time deposits that mature after the initial six-month grace period remain separately insured until they mature.
2. Time deposits that mature during the initial six-month grace period and are renewed for the same time period and the same dollar amount as the original deposit (with or without accrued interest added to the principal amount), will continue to be separately insured until the first maturity date after the expiration of the six-month period.
3. Time deposits that mature during the initial six-month grace period and are renewed for a different dollar amount or a different time period (even if Santa Cruz County Bank does not offer CDs for the original time period), or time deposits that mature within the first six months and are not renewed and thereby become regular savings or demand deposits, are separately insured only until the end of the six-month period.
Q. Once the six-month grace period has expired, I will have more than $250,000.00 on deposit and want it all to be FDIC insured, what are my options?
The FDIC insures deposits according to the ownership category in which the funds are insured and how the accounts are titled. Deposits held in different ownership categories are separately insured up to at least the $250,000 each. Designating beneficiaries can also increase coverage. For example, a revocable trust account including POD accounts.
1st Capital Bank Fact Sheet
Headquarters: Salinas
Mission: Providing sustainable value to our customers, communities, team members and shareholders.
Years in Business: 17 Years (2007-2024)
Asset Size: $1.0 billion (3/31/24)
Holding Company: 1st Capital Bancorp FISB-OTCQX
Employees: 100
6 Branches Total:
- Hours 9 - 5 pm (except Salinas Admin City Center)
- ATM at all branches (except City Center and Santa Cruz)
- Night Drop at all branches (except City Center and King City)
Monterey County - 3 Branches:
- 300 Bonifacio Place, Monterey, 93940
- 1097 South Main Street, Salinas, 93901
- 432 Broadway Street, King City, 93930
Santa Cruz County - 1 Branch:
- 3110 Mission Drive, Santa Cruz, 95065 (night drop only, no ATM)
San Luis Obispo County - 1 Branch:
- 599 Higuera Street, Suite B, San Luis Obispo, 93401
Administration City Center:
- 150 Main Street, Suite 150, Salinas, 93901
Bauer Financial: Rated 5-Star "Superior"
Business of the Year (2022): SC Chamber of Commerce
Shared award with SCCB / Bay Fed for PPP efforts to fund local businesses and save jobs during the pandemic
Santa Cruz County Bank Fact Sheet
Headquarters: Santa Cruz
Mission: We are committed to our community by building lasting relationships and being a trusted partner that together empowers growth, economic vitality and community well-being.
Years in Business: 20 Years (2004-2024)
Asset Size: $1.7 billion (3/31/24)
Holding Company: West Coast Community Bancorp SCZC – OTCQX
Employees: 140
8 Branches Total:
- Hours 9 - 5 pm
- ATM and Night Drop at all branches
Santa Cruz County - 5 Branches:
- 7775 Soquel Drive, Aptos, 95003
- 819 Bay Avenue, Capitola, 95010
- 75 River Street, Santa Cruz, 95060
- 4604 Scotts Valley Drive, Scotts Valley, 95066
- 595 Auto Center Drive, Watsonville, 95076
Monterey County - 2 Branches:
- 584 Munrus Ave, Monterey, 93940
- 480 S. Main Street, Salinas, 93901
Cupertino/Silicon Valley - 1 Branch:
- 19240 Stevens Creek Blvd., Cupertino, 95014
Bauer Financial: Rated 5-Star "Superior"
Business of the Year (2022): SC Chamber of Commerce
Shared award with SCCB / Bay Fed for PPP efforts to fund local businesses and save jobs during the pandemic
Visit sccountybank.com for more information.
