As Krista Snelling entered her fourth year as president and CEO of Santa Cruz County Bank in Santa Cruz, California, the bank was on an even keel.
Snelling had joined the bank in March 2021 from Five Star Bank in Sacramento, California, where she had been chief financial officer for five years. She proceeded to build an executive team that combined local people and bankers from outside the Santa Cruz market, while making herself a fixture at area events. The $1.7 billion-asset bank earned $9.3 million in the first quarter of 2024, the second-highest earnings in its history, and reduced its nonperforming loans to 0.01% of total loans.
Maybe that started to seem a bit tame — so Snelling shook things up. Her next move was to agree to buy the $1 billion-asset 1st Capital Bank in nearby Monterey County. Though the combined bank will have a new, to-be-determined name, Santa Cruz County Bank will be the legal entity. If all goes according to plan, the deal will close in early October.
Snelling has many reasons for pursuing the merger. "The idea is to combine forces," she said. "These are two banks that have similar cultures, with high-touch service. They're both very community oriented and many employees have worked in both places."
The deal will let the two banks spread the fixed costs of regulatory compliance and technology maintenance and upgrades. It will bring some new products to 1st Capital customers, including a newly updated online banking product, a credit card offering and greater capacity for asset-based and construction lending, both of which are specialties for Santa Cruz. (The combined bank will have an $80 million lending limit for secured real estate.) Business customers will benefit from an integrated payables product and all bank customers will be able to use newly updated online banking.
The combination also makes sense from a geographical perspective. As its name suggests, Santa Cruz County Bank is prominent in Santa Cruz County, with a smaller presence in nearby Monterey County. Conversely, 1st Capital Bank is prominent in Monterey County, with a smaller presence in Santa Cruz County.
With $2.7 billion in assets, the combined bank will be well positioned to compete with larger banks while still being a place where humans answer incoming calls, Snelling said.
"In our markets, there are some smaller community banks that are great, as well as some really big banks," she added. "There aren't a lot of banks in the middle ground."
A midsize bank with high-touch customer service and a devotion to the surrounding community is what stakeholders and potential business borrowers want, according to a Santa Cruz County Bank marketing survey.
When she's not visiting 1st Capital Bank customers to assure them that they will still get the same level of service, Snelling has found time to serve as chairperson of the California Bankers Association. She began that role on June 1.
