West Coast Community Bancorp in Santa Cruz, California, said late Monday it would pay $63 million in stock to acquire in-state rival 1st Capital Bancorp in Salinas.
The $1.7 billion-asset West Coast Community projected that the deal, scheduled to close in the fourth quarter, would generate 16% earnings per share accretion in 2025 and 20% annually thereafter. It expects to earn back tangible book value dilution in two-and-a-half years.
West Coast Community is targeting 45% savings on the seller's noninterest expense base.
With five branches along California's Central Coast, the $1 billion-asset 1st Capital Bancorp is the second-ranked community bank by deposit market share in Monterey County at 6.1%. It has $600 million of loans and $900 million of deposits.
The combined bank would have 13 branches, $2.1 billion of loans and $2.4 billion of deposits.
West Coast Community's Santa Cruz County Bank is a prominent Small Business Administration lender. 1st Capital Bank is active across a diverse range of commercial loan categories, including agriculture and wine industry lending.
Krista Snelling, president and CEO of West Coast Community, would be the top executive at the merged bank.
"1st Capital Bank has built an impressive deposit market share, especially within Monterey County, and a solid reputation for expertise in business lending," she said in a release announcing the deal.
Sam Jimenez, president and CEO of 1st Capital, said the combined bank would gain scale and increase its lending limits. "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," Jimenez said in the release.
