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Santa Cruz County Bank will merge with Salinas-based 1st Capital Bank

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Krista Snelling, president and CEO of both Santa Cruz County Bank and West Coast Community Bancorp, will lead the combined company, which will be headquartered in Santa Cruz.

The owner of Santa Cruz County Bank is merging with 1st Capital Bank to expand the combined entity’s footprint in Monterey County and beyond.

West Coast Community Bancorp announced Monday evening that it would merge with 1st Capital Bancorp, owner of the regional banking chain headquartered in Salinas. Krista Snelling, president and CEO of both Santa Cruz County Bank and West Coast Community Bancorp, will lead the combined company, which will be headquartered in Santa Cruz.

Founded in 2004, Santa Cruz County Bank currently operates eight bank branches; five in Santa Cruz County, two in Monterey County and one in Santa Clara County. Founded in 2007, 1st Capital operates five offices, including three in Monterey County and one each in San Luis Obispo and Santa Cruz.

Krista Snelling, president and CEO of Santa Cruz County Bank. Credit: Kevin Painchaud / Lookout Santa Cruz

For customers, it will be ‘business as usual’ at both banks while the merger undergoes final regulatory, shareholder and regulatory approval. Snelling expects it to be completed later this year. Once that is finalized, a new name for the combined banking chain will be announced, but that has yet to be determined, she said.

The merger comes as regional banks across the country have struggled amid rising interest rates and general economic uncertainty. In 2023, five regional banks failed, the most since 2017. In January, as Santa Cruz County Bank celebrated its 20th anniversary, Snelling told Lookout that its success was due to the strong relationship they built with the local community . The company previously merged with Lighthouse Bank in 2019.

The new merger brings together two community-focused banks with similar business models to grow existing markets and expand into new markets. 1st Capital’s reputation for excellent customer service was another selling point, Snelling said. The combined company will also have greater credit capacity. Currently, Santa Cruz County Bank can make loans to a single borrower up to $60 million; that will increase to $80-85 million upon completion of the merger. As of March 31, Santa Cruz County Bank’s assets were listed at $1.79 billion; 1st Capital owns $1 billion.

There will inevitably be some layoffs and possible branch closures as a result of the consolidation, but Snelling said bank leaders are still making those decisions and will work to minimize staff cuts as much as possible. Currently, Santa Cruz County Bank has approximately 140 employees; The first capital has 100.

Santa Cruz County Bank created the holding company West Coast Community Bancorp in 2022 to give it more flexibility in terms of the types of transactions it can offer and options for continued growth, including the ability to acquire and operate other banks. In January, Snelling told Lookout that the bank was very focused on growing in Monterey County, where it currently operates two branches, including one in Salinas that opened last year.