West Coast Community Bancorp to acquire 1st Capital Bancorp in $63m deal
West Coast Community Bancorp (OTCQX: “SCZC”), headquartered in Santa Cruz, California, and 1st Capital Bancorp (OTCQX: “FISB”), headquartered in Salinas, California, have announced a merger agreement valued at approximately $63 million. The all-stock transaction will see 1st Capital Bancorp merge into West Coast Community Bancorp, exchanging each FISB share for 0.36 SCZC shares, based on the latter’s closing price of $29.94 as of May 20, 2024.
Key Transaction Details
The deal, unanimously approved by both companies’ Boards of Directors, is expected to finalize in the fourth quarter of 2024, pending regulatory and shareholder approvals. The merger is poised to create a combined entity with nearly $3 billion in pro forma assets and a 10% deposit market share in Santa Cruz and Monterey Counties. This merger is not only a significant stride in expanding West Coast Community Bancorp’s market reach but also enhances its profitability and client service capabilities.
Krista Snelling, President and CEO of West Coast Community Bancorp, expressed enthusiasm about the merger, emphasizing its strategic importance for sustained growth and enhanced customer service. “This merger is a testament to our dedication to community service and our strategic vision for growth,” Snelling stated.
Strategic Implications of the Merger
The merger is expected to yield about 20% annual EPS accretion following the full realization of operational efficiencies. It will diversify and deepen the customer base of West Coast Community Bancorp, positioning it to better deploy technology and services that enhance client experiences and offer more growth opportunities.
Stephen Pahl, Chairman of West Coast Community Bancorp, highlighted the transaction’s capacity to unlock shareholder value, comparing it to the successful merger with Lighthouse Bank in 2019. “This expanded scale and reach will drive profitability and deliver enhanced returns for our shareholders,” Pahl noted.
Future Leadership and Board Changes
Post-merger, the leadership will include key figures from both institutions. Krista Snelling will lead the combined franchise, while Kurt J. Gollnick and Daniel R. Hightower, currently Chairman and Vice Chairman of 1st Capital Bancorp, will join the Boards of Directors of the new entity.
Sam Jimenez, President and CEO of 1st Capital Bancorp, also commented on the merger’s benefits, particularly its enhanced lending capacity and broader geographic footprint, which will foster business expansion and economic growth.
Advisory Roles
Keefe, Bruyette & Woods, A Stifel Company, and Gary Steven Findley & Associates advised West Coast Community Bancorp, while Piper Sandler & Co. and Stuart | Moore | Staub advised 1st Capital Bancorp.