Finance

Pivotal Merger in California's Banking Sector: West Coast Community Bancorp and 1st Capital Bancorp Join Forces

SANTA CRUZ, Calif. and SALINAS, Calif., May 20, 2024 /PRNewswire/ -- Today marked a significant milestone in the financial landscape of California as West Coast Community Bancorp and 1st Capital Bancorp jointly announced their definitive agreement to a strategic reorganization and merger. This merger, set to unify two prominent banking entities, is structured as an all-stock transaction with an estimated value of $63 million, equivalent to $10.78 for each FISB share, referencing the West Coast Community Bancorp share price of $29.94 recorded on May 20, 2024.

The undertaking of such a merger is contingent on conventional closing protocols, including obtaining regulatory sanction and the assent of shareholders from both companies. Both West Coast Community Bancorp and 1st Capital Bancorp’s boards of directors have given their unanimous approval for the merger, projecting its culmination in the latter part of 2024. As a sign of their support, directors from both banking institutions have committed to voting their shares in favor of the strategic merger. As the clocks chime to close the deal, Krista Snelling, the current President and CEO of Bancorp and Bank, is ready to steer the future path of the united entity.

Transaction Highlights: A Promising Future for Community Banking

The merger presents a bank poised with nearly $3 billion in assets and a commanding 10% deposit market share across Santa Cruz and Monterey Counties, reflecting data from the FDIC as of June 30, 2023. This formidable alliance underscores the commitment to continued success within a dynamic market area. The union is designed to fortify the bank's profitability, diversify its clientele, broaden its market influence, and further its ability to competently apply technology and services, thus enhancing customer experiences and fostering growth and product diversification.

According to projections, SCZC anticipates a 20% annual increase in earnings per share, subsequent to the full realization of operational efficiencies springing from the merger.

Under the merger agreement’s terms, FISB shareholders will be entitled to a fixed exchange ratio of 0.36 shares of SCZC common stock for each FISB share they possess. The merger’s value will naturally follow the ebbs and flows of SCZC's stock price. In a forward-looking view, FISB's common shareholders will come to own about 20% of SCZC's outstanding common stock post-closing. High-ranking members from 1st Capital Bancorp – Chairmen Kurt J. Gollnick and Daniel R. Hightower - will transition into the board of the combined entity, with Gollnick ascending as Vice Chairman.

A United Vision for the Future

Krista Snelling, championing her hope for the merger, said, "This merger is an exuberant leap forward with 1st Capital Bank, reinforcing our allegiance to growth and premier service. This confluence of our banking institutions, both rooted in community-first ideals, strengthens our dedication to service. 1st Capital Bank, in particular, boasts a laudable deposit market share within Monterey County and is well-recognized for its expertise in business lending."

Echoing the sentiment, Stephen Pahl, Chairman of the Boards of West Coast Community Bancorp and Santa Cruz County Bank, emphasized, "This announcement heralds an epoch of great significance for our collective franchise. The synergies of both banks create avenues to unlock opportunities for shareholders – paralleling the success of the Bank's 2019 merger with Lighthouse Bank. The merged entity's enlarged scale and geographic reach hold tremendous prospects for creating lasting shareholder value."

The Chairman of the Boards of 1st Capital Bancorp and 1st Capital Bank, Kurt J. Gollnick, remarked on the strategic alliance, declaring, "This merger is fundamentally a strategic alignment of our core values, capabilities, and future-oriented aspirations – destined to foster growth, profitability, and enduring success. Uniting with Santa Cruz County Bank propels us onto an exciting trajectory, assuring us in our combined ability to generate substantial value for all stakeholders."

Sam Jimenez, the President and CEO of 1st Capital Bancorp and 1st Capital Bank, highlighted the merger’s benefits, stating, "This merger enables us to harness our collective resources more effectively, equipping us with the agility to innovate and respond to our community and client needs. The increased lending capability post-merger, with assets nearing $3 billion, will fuel opportunities for business growth, agricultural development, entrepreneurship, and overall economic advancement."

Enhanced Accessibility and Insight: Investor Relations

West Coast Community Bancorp, alongside this announcement, issued presentation slides providing supplemental data meant to be assessed in conjunction with this press release. These insightful slides are accessible via the Investor Relations section: Investor Relations.

Transaction Counsel and Advice

Keefe, Bruyette & Woods, a Stifel Company, provided financial advisory services, while Gary Steven Findley & Associates offered legal counsel to West Coast Community Bancorp for the transaction. On the other hand, Piper Sandler & Co. acted as financial advisors with Stuart | Moore | Staub providing legal counsel to 1st Capital Bancorp, collectively navigating the complex intricacies of the merger process.

Introductory Glimpse into West Coast Community Bancorp and Santa Cruz County Bank

Founded in 2004, Santa Cruz County Bank stands as the fully-owned subsidiary of West Coast Community Bancorp. This reputable community bank, headquartered in Santa Cruz, California, offers comprehensive services, setting itself apart from larger banks with its personalized service, keen problem-solving, and direct access to decision-makers.

It leads as a top SBA lender in both Santa Cruz County and Silicon Valley. The bank’s menu of services widens to encompass competitive deposit and lending solutions tailored for both commercial and individual clients. This includes a range of loan options, credit cards, treasury management, and all enhanced by leading-edge digital banking tools. True to its community bank essence, Santa Cruz County Bank has backed local wellbeing with active participation and contributions to nonprofit ventures. As of March 31, 2024, West Coast Community Bancorp reported assets amounting to $1.7 billion, loan portfolios of $1.4 billion, and deposit accounts totaling $1.5 billion.

To discover more about West Coast Community Bancorp, one can visit their website www.sccountybank.com, which also doubles as a hub for disseminating their financial and material intelligence.

Insight into 1st Capital Bancorp and 1st Capital Bank

1st Capital Bancorp, the parent company to 1st Capital Bank, primarily serves commercial enterprises, professionals, real estate investors, family business entities, and the broader population along California’s Central Coast. It offers a broad spectrum of credit products, supplemented with robust cash management services.

Operating five full-service branch offices in strategic locations such as Monterey, Salinas, King City, San Luis Obispo, and Santa Cruz, it stands ready to meet and exceed the dynamic needs of its clientele. As of March 31, 2024, the financial strength of 1st Capital Bancorp can be illustrated through its total assets of $1.0 billion, its loans aggregating to $0.6 billion, and total deposits of $0.9 billion.

For further insights into 1st Capital Bancorp, their website www.1stCapital.bank is available for those who seek more information about their banking solutions and services.

Forward-Thinking Statements: A Prospect of Future Growth

The press release contains forward-looking statements that involve risks, uncertainties, and other factors that could cause actual results to deviate from those projected. These statements, protected under the Private Securities Litigation Reform Act of 1995, are not guarantees of future performance, and the companies caution readers to not place undue reliance on them. Factors that could influence actual results include the dynamics of interest rates, inflation, regulatory changes, general economic conditions, competitive forces, and the successful integration of 1st Capital.

Furthermore, risks like government approvals, shareholder consent, expected synergies, and operational efficiencies are inherently uncertain. The stability of the real estate market in California, as well as the execution of business plans, also falls under such forward-looking statements. Despite the illustrative nature of pro forma, projected, and estimated figures, there is a clear acknowledgment that actual results could differ. West Coast Community Bancorp and 1st Capital Bancorp express their commitment to revising these statements responsibly as future events warrant.

The Dawn of a New Chapter

This merger between West Coast Community Bancorp and 1st Capital Bancorp is shaping up to be a monumental venture, harmonizing their bank’s respective strengths and heritages to form a formidable presence in the California banking sector. With a focus on boosting profitability, enhancing technological innovation, and deepening community relationships, the future of this joint force promises to be as prosperous as it is transformative.

SOURCE: West Coast Community Bancorp

With eyes set on the horizon, the newly unified West Coast Community Bancorp and 1st Capital Bancorp look to navigate the currents of change, poised to meet the evolving financial needs of Californians across Santa Cruz, Monterey, and beyond. A story of strategic growth and commitment, this merger serves as a beacon for the banking industry, signaling the promising union of tradition and innovation in community banking.