Santa Cruz County Bank (OTCPK:SCZC) entered into an agreement and plan of reorganization and merger to acquire Lighthouse Bank (OTCPK:LGHT) for $67.7 million on May 28, 2019. Under the terms of the agreement, shareholders of Lighthouse Bank will receive a fixed exchange ratio of 0.5204 shares of Santa Cruz County Bank common stock in exchange for each share of Lighthouse Bank common stock. Under the terms of the transaction, 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 a result of the transaction, the holders of Lighthouse Bank common shares will own approximately 36% of the issued and outstanding Santa Cruz County Bank common stock.

At closing, four Directors from Lighthouse Bank, John Burroughs, Stephen Pahl, James Weisenstein and Craig French, will join the Santa Cruz County Bank Board of Directors. Jon Sisk, President of Lighthouse Bank, will join Santa Cruz County Bank as a Regional President. Lane Lawson, Chief Executive Officer and Director of Lighthouse Bank, will retire at closing. Post the transaction, both Lighthouse Bank branches, one in Santa Cruz and one in Cupertino, will remain as full service branches, and customers of both banks will have access to a total of seven branches, six in Santa Cruz County and one in Cupertino.

The transaction 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 boards of Santa Cruz County Bank and Lighthouse Bank have unanimously approved the transaction. As of September 18, 2019, the transaction has been approved by the shareholders of both Santa Cruz County Bank and Lighthouse Bank, and, all regulatory approvals for the transaction have been received. The transaction is expected to close in the third quarter of 2019. As of September 18, 2019, the transaction is expected to close on October 18, 2019.

Patrick Nicolini, Greg Gersack and Jason Werner of FIG Partners acted as financial advisors to Santa Cruz County Bank in the transaction. Gary Steven Findley & Associates served as legal counsel to Santa Cruz County Bank. Sandler O'Neill + Partners, L.P. acted as financial advisor to Lighthouse Bank. Stuart | Moore | Staub is legal counsel to Lighthouse Bank.