Q: Congratulations on Santa Cruz County Bank’s 20th anniversary! How would you describe the journey and evolution of the bank from its inception to where it stands today?
A: Santa Cruz County Bank was a de novo bank that opened its doors in 2004 with $13.2 million in capital raised from local investors and a stand-alone banking office. Today, we are at $1.7 billion in assets, serving a tri-county area with eight banking offices and more than 150 employees. So, you could say we went from zero to $1.7 billion in 20 years!
At its core, Santa Cruz County Bank’s brand and culture are the same today as they were the day that we opened our doors, only stronger. Community is at the heart and soul of everything we do. We continue to show up for our community partners no matter how much we grow. We’re not just writing checks to support local causes and nonprofit organizations; we provide support in the community in hands-on ways. Our staff logged over 2,700 community volunteer hours in 2023. We consider community organizations, nonprofits and our clients as partners. We have worked for two decades to establish deep, long-term relationships. It’s the way we do business, focusing on building and maintaining mutual successes for the long run.
Q: Who have been some of the key mentors or influencers in your career, and how have they shaped your approach to leadership in the banking industry?
A: My key mentor in the banking industry is James Beckwith, president and CEO of Five Star Bank, whom I reported to for eight years. He is the person who first planted the seed for me to think bigger in my banking career path and encouraged me to apply for my current position as president and CEO.
West Coast Community Bancorp (OTCQX: "SCZC") ("Bancorp"), the holding company for Santa Cruz County Bank ("Bank"), headquartered in Santa Cruz, California, and 1st Capital Bancorp (OTCQX: "FISB"), the holding company for 1st Capital Bank, headquartered in Salinas, California, jointly announced today that they have entered into an agreement and plan of reorganization and merger (the "Agreement"), pursuant to which 1st Capital Bancorp will merge with and into West Coast Community Bancorp in an all-stock transaction valued at approximately $63 million, or $10.78 per FISB share, based on the closing price of $29.94 for West Coast Community Bancorp shares on May 20, 2024.
The transaction is subject to customary closing conditions, including regulatory approvals and shareholder approval from both parties. Both Boards of Directors of West Coast Community Bancorp and 1st Capital Bancorp have unanimously approved the transaction, which is expected to close in the fourth quarter of 2024. The directors of West Coast Community Bancorp and 1st Capital Bancorp have entered into agreements pursuant to which they have committed to vote their shares in favor of the transaction. At closing, Krista Snelling, President and CEO of the Bancorp and Bank, will lead the combined franchise.
Highlights of the Announced Transaction
At nearly $3 billion in pro forma assets and 10% deposit market share in Santa Cruz and Monterey Counties (on a combined basis, based on FDIC data as of June 30, 2023), the Bank is well-positioned for continued success as the leading community business bank in a vibrant market area.
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, which owns the Salinas-headquartered regional bank chain. 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.
Santa Cruz County Bank, founded in 2004, currently operates eight bank branches – five in Santa Cruz County, two in Monterey County and one in Santa Clara County. 1st Capital was founded in 2007 and operates five branches, including three in Monterey County and one each in San Luis Obispo and Santa Cruz.
For customers, it will be business as usual at both banks while the merger undergoes final legal, shareholder and regulatory approval, which Snelling expects to be completed later this year. Once that’s completed, a new name will be announced for the combined bank chain, but that’s still to be determined, she said.
The merger comes as regional banks around the country have struggled amid rising interest rates and overall economic uncertainty. Five regional banks failed in 2023, the highest number since 2017. In January, as Santa Cruz County Bank marked its 20th anniversary, Snelling told Lookout that its success was due to the strong relationship it has created with the local community. The company previously merged with Lighthouse Bank in 2019.
With a market share of 15.5%, $1.8 billion-asset Santa Cruz County Bank (SCCB) ranks fourth in California’s Santa Cruz county, trailing only megabanks. Krista Snelling, president and CEO, believes the community bank’s strong performance reflects its strategy of investing in up-to-date technology to serve and therefore strengthen customer relationships.
Snelling created SCCB’s digital transformation committee when she joined the community bank in 2021. Composed of SCCB executives, IT leaders and some client-facing team members, the committee’s mission is to identify and prioritize opportunities for technology upgrades.
The community bank started with small improvements that simply required policy changes as opposedto major technology investments. “I chipped away at things that we could do that were in our control and we could do really quickly,” Snelling recalls. “Then we started to look to the technology.”
SCCB’s tech revolution
Gradually, SCCB implemented numerous initiatives aimed at efficiency, such as teller cash recyclers, teller deposit capture and cashier check automation. “We’ve made significant investments in both client-facing and back-office technologies that create a better and safer client experience,” Snelling says.
Amid all the technology upgrades, customer experience has been the key criterion. “We look to technology in everything we do in order to drive a good client experience,” Snelling explains. “On the back end, manual operations take away from the time you can spend interacting face-to-face with clients. Taking the friction out of back-office processes allows us to focus on the client that’s standing in front of us.”
Santa Cruz County Bank will mark 20 years in business on Saturday, Feb. 3, and it remains one of the top ranked community banks in the country. It currently operates eight branches in Santa Cruz, Monterey and Santa Clara counties, with Salinas marking its newest branch. (It opened last year.) It’s those strong community ties that have been crucial to Santa Cruz County Bank’s success, said CEO Krista Snelling. Unlike a bigger operation, all deposits made at the bank are reinvested back into the three counties where it does business.
“If your deposits are with a major bank, who knows where that money is being deployed,” said Snelling. “We only lend here.” Community banks are financial institutions owned and operated locally, and serving a specific geographic area. They’re generally on the smaller side; the Federal Deposit Insurance Corporation (FDIC) loosely defines them as having less than $10 billion in assets. In other words, these aren’t your Bank of Americas or Wells Fargos of the world.
According to the latest stats available from the FDIC, the number of community banks nationally dropped from 6,802 to 4,750 between 2012 and 2019, though community banks acquired more than two-thirds of the community banks that closed during the study period. Count Santa Cruz County Bank among those; it merged with Lighthouse Bank in 2019. The bank currently employs around 150 people, five of whom have been with the company since Day 1, including executive vice president and chief marketing officer Mary Anne Carson, who was hired three months before the bank opened. The bank will honor Carson and four others at its anniversary celebration next month.
Last year was a turbulent one for smaller community banks. Rapidly rising interest rates caught some off-guard, leading to a run on deposits and the high-profile failure of several regional banks, including two in the San Francisco Bay Area. That spooked some customers, who moved their deposits to bigger banks and more lucrative savings and investment accounts, squeezing profits for small banks even further. Five regional banks failed in 2023, the most since 2017.
Santa Cruz County Bank wasn’t immune to these challenges. But the community bank, which celebrates its 20th anniversary on Saturday, Feb. 3, has weathered such storms before and did so again in 2023 by doubling down on what it sees as its strengths: its relationships with the local community.
“The No. 1 thing for us is that all of the decisions are made here in this market,” said CEO Krista Snelling. “Every decision that affects this market is made here by people who live and work here, and policies are set here. Our board of directors lives here. We know our market better than a bank where policies are set elsewhere.”
Started in 2004 by a group of business leaders who wanted a locally owned and operated bank, Santa Cruz County Bank now operates eight locations in three counties, holds $1.79 billion in assets and ranks as one of the region’s top Small Business Administration lenders.
When Santa Cruz County Bank merged with Lighthouse Bank, another Santa Cruz-based community bank, in 2019, not only did it add more locations but it also helped the bank expand its offerings and make technological investments. Along the way, the financial institution’s leadership has helped guide the bank through two recessions, a global pandemic and rising inflation — all while remaining locally owned and operated.
West Coast Community Bancorp ("Bancorp", OTCQX: SCZC), the parent company of Santa Cruz County Bank (the "Bank"), announced unaudited record earnings for the year ended December 31, 2023 of $35.2 million, a $4.2 million or 14% increase over 2022. Basic and diluted earnings per share in 2023 improved over 2022 by $0.55 and $0.54, respectively, to $4.18 and $4.16. Unaudited earnings for the quarter ended December 31, 2023 were $8.8 million, a decrease of 3% from $9.1 million in the prior quarter and a decrease of 12% from $10.0 million in the fourth quarter of 2022. Basic and diluted earnings per share in the fourth quarter of 2023 were both $1.05, and decreased over the prior quarter by $0.04 and $0.03, respectively. Both basic and diluted earnings per share in the fourth quarter of 2023 decreased over the prior year comparative quarter by $0.13.
President and CEO, Krista Snelling commented: "We are pleased to report record net income for the year and record gross loans at year-end. Our team grew loans despite the high interest rate environment, which speaks volumes for our relationship banking model and our reputation in the industry for responsiveness and delivery. In addition, we ranked as the top SBA lender by number of loans made in the Silicon Valley region for the SBA's 2023 fiscal year.
In February, we will celebrate our 20th anniversary as a community bank. The achievements of the past two decades are attributable to our dedicated employees, longstanding community partners, and loyal clients who value placing their deposits locally for the benefit of the communities we serve."
Santa Cruz County Bank tops other banks for number of small business loans issued locally
Santa Cruz County Bank issued 23 U.S. Small Business Administration (SBA) loans totaling $22.58 million to small businesses in greater Silicon Valley last year, making it the top such lender in the region.
SBA loans are backed by the federal agency, enabling financial institutions to provide business loans with more favorable terms than conventional loans. These are often a better option for small business owners who might not qualify for a traditional business loan, and the program helps encourage banks to lend to such companies.
Santa Cruz County Bank, which marks its 20th anniversary next month, continues to be one of the biggest local providers of SBA loans in the region, including Santa Clara, Santa Cruz and Monterey counties. Businesses receiving these loans include grocery stores, restaurants, gas stations and retail stores, among others.
“Our lending volume confirms our commitment to supporting small businesses to promote economic development and job growth,” said Susan Chandler, senior vice president and director of SBA lending.
Santa Cruz County Bank consummated a holding company reorganization with the formation of West Coast Community Bancorp, which went into effect on Aug. 18.
The formation of the bank’s holding company, West Coast Community Bancorp, was discussed in detail in the bank’s annual proxy statement, approved by shareholders on May 24, 2023, and subsequently approved by the bank’s regulators. As a result of the transaction, Santa Cruz County Bank has become a wholly-owned subsidiary of West Coast Community Bancorp, and shareholders of the bank have become shareholders of the holding company on a “one share for one share” basis. Shares of West Coast Community Bancorp began being quoted on the OTC Markets OTCQX U.S. Premier Market on Aug. 28 under the trading symbol SCZC, retaining continuity with the bank’s prior quotation and symbol.
The board of directors of West Coast Community Bancorp and Santa Cruz County Bank are identical, with Stephen D. Pahl serving as chairman, John C. Burroughs serving as vice chairman and corporate secretary. The board also includes Caroline D. Chapin, Kenneth R. Chappell, Craig French, Thomas N. Griffin, James L. Weisenstein and Krista Snelling, who is the president and CEO of the bank.
“We believe the formation of our holding company will provide additional flexibility for future capital needs necessary to respond to evolving changes in the banking and financial services industries and will allow us to take advantage of opportunities afforded by this restructure,” Snelling said. “There are no changes to the operations of Santa Cruz County Bank or its employees.”
Santa Cruz County Bank announced Shawn Lipman will succeed Susan Just as executive vice president and chief credit officer. Just has served in the chief credit officer role for the past two years and will leave the bank later this month.
In his 12-year career at Santa Cruz County Bank, Lipman has been promoted multiple times. He has served as senior vice president and director of credit administration for the last two years. Under his leadership, the bank’s credit portfolio has grown in size and complexity, with privately placed municipal bond purchases, loans issued under the New Market Tax Credit program, and structured credits originated by the bank’s asset-based lending division, which launched last year. In addition, Lipman led the department through systems conversions, the bank’s merger with Lighthouse Bank and the implementation of the Paycheck Protection Program.
Earlier in his career, Lipman served as senior vice president and regional portfolio manager at GMAC Commercial Finance, where he was responsible for managing new business for the western region. In addition, he served as senior relationship manager and team leader at Union Bank, managing a portfolio of loans throughout California.
“We are excited for Shawn to step into the role of chief credit officer. He has been a key employee of the bank for 12 years and has progressively advanced to a leadership position, making him the logical successor to the role of chief credit officer,” Krista Snelling, president and CEO of Santa Cruz County Bank, said. “His promotion is a natural next step in his career given his background, expertise and detailed knowledge of the bank’s clients and policies, and we are excited to work with Shawn as he takes the top credit role at the bank. Susan has been a valued member of the bank and our executive team for the past two years and we wish her well in her future endeavors.”
Around 50 men slipped into pairs of bright red and pink high heels Friday for a quick dash around the block in downtown Santa Cruz in the 2023 Santa Cruz County Bank Walk a Mile in Her Shoes event.
In its 11th year, the annual gathering originated as a fundraiser for Monarch Services and to promote awareness about domestic violence and sexual assault.
The Walk features male employees of Santa Cruz County Bank and their local business partners.
After a brief welcoming ceremony, the crowd of heeled runners burst out from the starting line in an awkward and jilted sprint.
“Let me tell you, even the first 50 feet was tough,” said Dug Fisher, senior vice president for County Bank. “But it’s worth it, to be able to help places like Monarch Services. They’re an amazing community service for our community.”
At the close of the race, Fischer was pulled from the cheering crowd to be presented the, “He’s Got Legs Award.”
Leeann Luna, Program Director of Monarch Services, said, “We are excited to partner, once again, in this fun event that supports our vital services to empower individuals, families and our communities to take action against violence and abuse.”
Monarch Services has been providing community assistance to survivors of violence for over 45 years. Their services include counseling, shelter, emergency financial aid, transportation, support groups and more. Monarch Services is the only rape crisis and human trafficking center in Santa Cruz County. All services are available in Spanish and English and are free or low cost.
Coming from a family of strawberry growers, Jaime Manriquez had been expected to eventually take over the family business.
But when his father brought home the family's first home computer, Manriquez's outlook quickly changed. The then-elementary school student went from future strawberry farmer to budding computer programmer.
It's perhaps fitting that as a professional, Manriquez has gone back to his roots, after a fashion. In the early stages of the Covid-19 outbreak, Manriquez, by then the chief information and chief information security officer at Santa Cruz County Bank, helped set up the technology needed to process the pandemic-related loans that allowed many local farmers to keep working.
Thanks to his and his team's efforts, which involved using artificial intelligence, the bank ended up processing $574 million worth of Paycheck Protection Program (PPP) loans, ultimately saving about 50,000 jobs.
"We set up an environment where we had three or four robots processing loans for those who needed PPP payouts," Manriquez said. "We automated that process."
A fourth-generation Mexican-American who grew up in Watsonville, Manriquez was well prepared for the effort. He'd been working in technical roles for nearly 25 years. As a technical-support engineer at International Business Machines Corp. around the turn of the millennium, he worked on a series of Y2K-related projects. He'd been with Santa Cruz County Bank, helping head its technology and information security operations, since before it opened in 2004.
Shelly Medina has played a critical role in the establishment and operation of successful asset-based lending businesses in Silicon Valley. Her most recent foray took place just last year, as she joined Santa Cruz County Bank to launch a new ABL division that serves emerging growth companies that require asset liquidity and flexible lines of credit.
To get the new division up and running, Medina employed her historical knowledge across nearly three decades in ABL to complete the many steps required to build internal workflows, including creating client application forms, legal agreements and loan documents, while identifying and implementing specialized software. Medina also coordinated and delivered internal employee training and communications for the new division.
As she has shown in building Santa Cruz County Bank’s ABL unit, Medina possesses unmatched skills that allow her to start from scratch and create operational and leading documentation teams within business units. Her management and leadership lead to quantifiable successes. She also has the proven ability to lead a startup operation through significant scale, having previously supported the launch of Bridge Bank’s factoring and ABL division in 2002.
Santa Cruz County Bank on Thursday announced the opening of a full-service branch in Salinas. The address of the bank's newest branch is 480 S. Main St., Salinas.
In January of 2021, Santa Cruz County Bank opened its first branch in Monterey County at 584 Munras Ave., in Monterey.
"We are excited for the opportunity to serve the Salinas Valley following our successful expansion into Monterey County in 2021," said Santa Cruz County Bank President and CEO, Krista Snelling in a prepared release.
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Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.