West Coast Community Bancorp in Santa Cruz, Calif., has agreed to buy 1st Capital Bancorp in Salinas, Calif.
The $1.7 billion-asset West Coast said in a press release that it will pay $63 million in stock for the $1 billion-asset 1st Capital. The deal, which is expected to close in the fourth quarter, priced 1st Capital at 97% of its tangible book value.
Krista Snelling will remain West Coast’s president and CEO, and Kurt Gollnick, 1st Capital’s chairman, will serve as vice chairman. Gollnick and Daniel Hightower, its vice chairman, will join West Coast’s board.
West Coast said the deal should be 16% accretive to its 2025 earnings per share, including cost savings, and 20% accretive the following year. It should take between two and three years to earn back any dilution to West Coast’s tangible book value.
West Coast plans to cut 45% of 1st Capital’s annual noninterest expenses. The company expects to incur about $15.8 million of merger-related charges.
“Our institutions have a rich history of serving our communities with dedication and passion, and this merger will only strengthen that commitment,” Snelling said. “1st Capital Bank has built an impressive deposit market share, especially within Monterey County, and a solid reputation for expertise in business lending.”
Keefe, Bruyette & Woods and Gary Steven Findley & Associates advised West Coast. Piper Sandler and Stuart | Moore | Staub advised 1st Capital.