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Santa Cruz County Bank and Lighthouse Bank
Announce Agreement to Merge
Highlights of Announced Transaction
- Creates the Monterey Bay Area’s premier community business bank with nearly $1 billion in total assets upon estimated closing date: the largest community bank in the Monterey Bay Area with approximately 12.75% of deposits in Santa Cruz County based on FDIC data as of June 30, 2018.
- Enhances Santa Cruz County Bank’s community bank dominance in the Monterey Bay Area with expansion into the Silicon Valley and more resources to execute strategic plans and additional growth opportunities.
- Combined company forms a high-performing franchise with industry recognized earnings, net interest margin and efficiency ratio, while maintaining pristine credit metrics.
Santa Cruz County Bank and Lighthouse Bank announced they have entered into an agreement and plan of reorganization and merger (the “Agreement”), pursuant to which Lighthouse Bank will merge with and into Santa Cruz County Bank in an all-stock transaction valued at approximately $68.87 million or $25.50 per Lighthouse Bank common share as of close of market on May 28,2019. The merger will increase Santa Cruz County Bank’s total assets to nearly $1 billion on a pro forma basis with 7 full service banking offices in Santa Cruz and Santa Clara Counties.
Lighthouse Bank is a full-service community bank headquartered in Santa Cruz with a branch in Cupertino. As of March 31, 2019, Lighthouse Bank had approximately $314 million in total assets and a return on average assets of 1.73% for the first quarter of 2019.
“We are excited to welcome Lighthouse Bank to our company. This merger creates tremendous opportunity for shareholders, employees and customers of both banks, all of whom stand to benefit greatly. The merger offers all shareholders both immediate value and the opportunity to participate in potential upside as the bank generates momentous growth from its market-focused community banking strategy. Planning for the integration of these two banks is in progress and we expect to expeditiously realize the full value of the cost synergies we have identified,” said William Hansen, Chairman of Santa Cruz County Bank.
David Heald, Santa Cruz County Bank President and CEO added, “We are very pleased to welcome Lighthouse Bank’s board members, executives and employees to our team and look forward to their contributions to our combined premier performing institution. Together, we will achieve even greater milestones. We have all worked together in our community for many years and have tremendous mutual respect. Individuals who choose to bank with community driven institutions over the major banks recognize our shared values of community reinvestment, high-touch customer service, and local decision-making. These fundamentals will not change.”
“Lighthouse has long regarded Santa Cruz County Bank and shares similar values, celebrating community and a commitment to excellent customer service and shareholder returns,” remarked John Burroughs, Chairman of Lighthouse Bank. “We have tremendous respect for the leadership at Santa Cruz County Bank, many of whom are former colleagues,” said Jon Sisk, President of Lighthouse Bank. “We’re thrilled to come together with their team, and to expand the breadth and depth of service and resources for our customers. The blending of two of the nation’s top-performing banks, each of them founded and headquartered in Santa Cruz, will deliver a premier banking experience for our community.”
The boards of Santa Cruz County Bank and Lighthouse Bank have unanimously approved the transaction, which is subject to customary closing conditions, including the approvals of state and federal bank regulatory agencies and the shareholders of both Lighthouse and Santa Cruz and other conditions specified in the Agreement. The transaction is expected to close in the third quarter of 2019.
To view the Santa Cruz County Bank and Lighthouse Bank Announce Agreement to Merge press release, click here.
Top 200 Best Performing Banks
We are thrilled to announce for a sixth consecutive year, Santa Cruz County Bank is ranked in American Banker Magazine’s Top 200 Best Performing Community Banks and Thrifts in the United States. Our Bank ranked 12th out of 601 publicly traded institutions with less than $2 billion in assets in the nationwide ranking. Based upon 3-year average return on equity from 2016-2018, Santa Cruz County Bank also ranked 4th in the state out of a total of 26 California banks in the Top 200 list.
Optimal Bank Ranking by Seifried & Brew
We are pleased to announce receipt of ranking as an optimal performer in the prestigious Seifried & Brew 2018 Top 15th Percentile. The Top 15th Percentile represents a select group of high-performing banks that are made up of the best 782 out of 5,213 community banks in the nation. Within the Top 15th, Santa Cruz County Bank ranked at number 267 nationally and ranked 7th in the Top 10 list for the state of California. To receive this rating, Santa Cruz County Bank demonstrated exemplary performance by managing its exposure to risk while maintaining a notable level of reward.
The Top 15th ranking is based on a comparison of the S&B Risk Index and measures of performance. The Risk Index includes an array of risk factors that banks must constantly manage, such as liquidity risk and capital risk. Measures of performance, or reward, are primarily a bank’s return on average assets or return on average equity. S&B measures individual bank performance by determining the balance of risk and reward and then compares banks across the United States. The banks included in this index have assets between $10 million and $30 billion.
Santa Cruz County Bank Voted “Favorite Bank”!
Santa Cruz County Bank received the Santa Cruz Waves 2019 Swellies Award for “Favorite Bank”. Thank you to everyone who voted and congratulations to all 2019 Swellies Award winners!
Bank Reports First Quarter Earnings
We are pleased to announce unaudited net income for the first quarter ended March 31, 2019 of $2.96 million. This represents an increase of 17% comparing this quarter with the same quarter in 2018. For the quarter, basic earnings per share increased $0.16 to $1.21, a 15% increase over the first quarter in 2018.
Pretax income for the quarter ended March 31, 2019 was $4.16 million, an increase of $592 thousand, 17%, compared to $3.57 million for the quarter ended March 31, 2018.
First Quarter Financial Highlights:
- Net interest margin of 4.92%
- First quarter return on average assets and equity of 1.80% and 17.07%, respectively
- Well capitalized with a total risk based capital ratio of 15.36%
- Continued exceptional credit quality with no loans on non-accrual
- 3% growth in loans, $15.7 million increase over the first quarter of 2018
- 1% growth in deposits, $5.4 million increase over the first quarter of 2018
- Basic earnings per share increased to $1.21 from $1.05 over the first quarter of 2018
- Book value per share after dividends increased by $4.61 or 19%, to $29.14 over the first quarter of 2018
President and CEO David V. Heald commented, “We achieved greater returns year over year for our first quarter, with $2.96 million in net income and 17% growth over the first quarter of last year. We continue to receive recognition highlighting the strength of our bank’s sustained financial performance as evidenced by our ninth designation as a Super Premier performing bank by the Findley Reports, Inc. for 2018.”
To view the entire first quarter 2019 press release and for more information on Santa Cruz County Bank’s performance, please visit our Investor Relations page.
Super Premier Performing Bank Designation
The Findley Reports, Inc. recently designated Santa Cruz County Bank as a Super Premier Performing Bank for a 9th consecutive year based on 2018 financial performance. For a bank to achieve the Super Premier performance rating it must meet four key performance ratios established by Findley Reports, Inc.. Super Premier is the highest rating level established by Findley Reports, Inc. Santa Cruz County Bank met the four criteria at a high level of performance: growth, return on beginning equity, net operating income as a percentage of average assets and loan losses as a percentage of gross loans. The Findley Reports, Inc. has been recognizing the financial performance of banking institutions in California and the Western United States for over fifty years. Findley Reports also recognized Santa Cruz County Bank as an exceptional bank in its March 2019 newsletter.
Top 100 Best Performing Community Banks in the U.S.
For a third consecutive year, Santa Cruz County Bank is one of the Top Best Performing Community Banks in the entire country! We are honored to rank 35th in S&P Global’s Top 100 Best Performing Banks in the U.S out of approximately 3,000 banks under $3 billion in assets, based upon 2018 financial performance.
Santa Cruz County Bank is a 5-Star “Superior” Rated Bank
Santa Cruz County Bank is rated a 5-Star “Superior” bank by Bauer Financial, Inc. based upon its financial performance for the quarter ending March 31, 2019. 5-Star is the highest rating determined by Bauer Financial. Bauer Financial has been reporting on and analyzing the performance of U.S. banks and credit unions since 1983. For more information on Bauer Financial, Inc. visit www.bauerfinancial.com. Santa Cruz County Bank has ranked as a 4-Star “Excellent” and 5-Star “Superior” bank every quarter in the history of our ratings from Bauer Financial.
Santa Cruz County Bank Voted “Best Bank”!
For a seventh consecutive year, Santa Cruz County Bank received the most votes for “Best Bank” in the Good Times Best Of Santa Cruz County annual poll. Thank you to everyone who voted and congratulations to all the Best Of winners in our community!
My Business Mobile App
Business doesn’t stop just because you’re away from the office, and some of those important financial decisions simply won’t wait until you get back. Whether it's approving a transfer, making a bill payment or depositing a check, My Business Mobile allows you to manage your business finances on–the–go from almost anywhere your business takes you.
With our new My Business Mobile app, businesses can enjoy mobile access to:
- View account balances
- Review recent transactions
- View check images
- Transfer funds (ACH, Wire, Loans)
- Originate Bill Payments
- Review and Approve: Wire & ACH Transfers, Positive Pay exceptions, Pending Approval Alerts
- Deposit checks
- Multifactor authentication for secure login
- And much more!
Bank Hires Michelle Navarro
Michelle Navarro has joined the Bank as Assistant Vice President and Business Banking Officer.
Ms. Navarro has over 10 years of experience in banking, extending from operations to sales and branch management. Most recently, Ms. Navarro was Branch Manager for JP Morgan Chase, where she obtained certification as a mentor to coach branch managers and served as Chairperson of volunteer events for the bank’s Silicon Valley – Santa Cruz Markets.
A native of Santa Cruz County, Ms. Navarro obtained an Associate of Arts degree from Cabrillo College and is a graduate of Watsonville High School.
As Business Banking Officer for Santa Cruz County Bank, Ms. Navarro will be responsible for client relationship development in the greater Santa Cruz area, with an office based in Watsonville. Ms. Navarro currently resides in Watsonville with her husband and four children.
2018 Business of the Year Award
The Bank is honored to receive the 2018 Business of the Year Award from the Santa Cruz Chamber of Commerce. We congratulate all the Businesses and Awardees who were chosen for their significant achievements and community leadership. Together, these individuals and businesses make Santa Cruz County a better place to live, work and play.
#1 Bank in California
Santa Cruz County Bank is pleased to announce its rank as the top bank in California for its first quarter 2018 financial performance by Financial Management Consulting Group (FMC). In addition, the Bank ranks #1 in asset quality and #1 (lowest) in non-performing assets for the first quarter 2018. The Bank has been ranked in FMC's Top 10 California Banks for three consecutive years. FMC ranks all 159 California banks on a quarterly and annual basis based on a variety of factors including: net interest margin, efficiency, asset quality and earnings.
Bank Hires Brent Dunton
Brent Dunton has joined the Bank as Vice President and Business Banking Officer.
Mr. Dunton has a 14 year career in finance and banking, extending from mortgage lending to business development to treasury and wealth management. Most recently, Mr. Dunton was Vice President, Treasury Management Officer for Comerica Bank. Prior to his career at Comerica, Mr. Dunton was a loan officer for Santa Cruz Home Finance and Sales Manager at the Santa Cruz Seaside Company.
Mr. Dunton obtained a Master of Arts in Education as well as a Bachelor of Science degree in Communications with a Minor in Business Administration from California State University of Chico. Mr. Dunton has been an active community volunteer who has served on the boards of the American Red Cross, Kennolyn Camp Foundation, and is a past President of the Aptos Chamber of Commerce and the Soquel Parent Education Nursery School. He is a past member of Santa Cruz Sunrise Rotary and served on the United Way of Santa Cruz Allocations panel for numerous years.
President and CEO, David Heald commented, “Brent brings a well-rounded background and community minded approach to banking which is a direct fit with the culture of Santa Cruz County Bank. We welcome Brent and look forward to his contributions to the Bank and our community in the years ahead.”
Mr. Dunton will be responsible for client relationship development in the greater Santa Cruz area.
A Santa Cruz native, Mr. Dunton currently resides in Santa Cruz with his wife and three children.
Bank receives Al Smith Friend of Agriculture award
Santa Cruz County Bank was recently recognized with the 2018 Al Smith Friend of Agriculture award at the National Agriculture Day Luncheon, presented by the Santa Cruz County Farm Bureau and Agri-Culture. This award is presented annually to an individual, business, or organization that is not directly involved in the production of agriculture, yet supports the industry in other ways. The Bank has played a role in supporting this important business sector in our community through lending, donations to support agricultural education and volunteerism.
Santa Cruz County Bank Named Industry Top Performer in National Community Bank Rankings
ICBA Independent Banker, published by the Independent Community Bankers of America (ICBA) has recognized the Bank as an ICBA industry top performer in its May issue. Santa Cruz County Bank’s recognition is based on the strength of its competitive banking services and operational efficiencies throughout 2015, which resulted in its rank of 22nd for return on average equity of 13.15%.
“Santa Cruz County Bank is delighted to be recognized as an ICBA top performer,” said David V. Heald, president and CEO. “As a proud member of the Santa Cruz County community, we credit our loyal, local customers and dedicated employees for our success. We look forward to serving the unique needs of our community and helping it grow and prosper in the years to come.”
“Whether serving rural, suburban or large metropolitan areas, community banks operate with a focus on their customers and communities,” said Chris Lorence, ICBA’s executive vice president and chief marketing officer. “Santa Cruz County Bank knows their local market and thrives because they stay true to the principles of community banking while showcasing drive, ingenuity and community commitment. Santa Cruz County Bank demonstrates integrity, enthusiasm and inventiveness in the financial industry, and for that reason ICBA is proud to recognize this community bank and its employees for their outstanding efforts.”
This year’s ICBA top-performers rankings underscore the importance of focusing on serving customers and communities, first and foremost. Delivering superior service, following disciplined pricing models, and supporting their local communities and neighborhoods are trends among those community banks recognized within the rankings. These community banks featured stick to well-known industry fundamentals, while embracing the changing industry landscape.
As part of its annual performance rankings of its member institutions, ICBA pulled year-end FDIC call report earnings data to identify the 25 community banks with the highest return on average assets (ROAA) and return on average equity (ROAE) ratios for all of 2015. Both Subchapter C corporation and Subchapter S corporation institutions in six asset-size categories were recognized.
To see this year’s ICBA top-performers listings, read the article “The Best of the Best” on ICBA Independent Banker’s website at www.independentbanker.org.