Santa Barbara Bank & Trust Owner Takes Ratings Hit

Pacific Capital Bancorp's credit is downgraded to "questionable," and interest payments to shareholders are deferred indefinitely

By Lara Cooper, Noozhawk Staff Writer | Published on 06.23.2009

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Just as Santa Barbara Bank & Trust owner Pacific Capital Bancorp announced that shareholders may not see interest payments for some time, the company was socked Tuesday with a downgrade from credit ratings company Moody’s.

Pacific Capital Bancorp’s new Ba classification puts the company’s credit as “questionable credit quality.”

Regularly scheduled interest payments on $69.4 million in notes will be deferred until an undisclosed time, and the company is allowed to defer payments for up to 20 consecutive quarters without penalty. It also has suspended payments of cash dividends on outstanding common and preferred stock. The move is meant to help maintain the bank’s capital ratios.

“We believe the actions we have announced today are the most prudent course of action and will improve our flexibility to consider other actions that may need to be taken in order to achieve our targeted capital ratios,” George Leis, the company’s president and CEO, said in a statement. “We would expect to resume paying dividends when such payments would be consistent with our overall financial performance and capital requirements.”

Pacific Capital Bancorp received more than $180 million from the Treasury Department’s Troubled Asset Relief Program last November, and the company announced in April that its loss for the first quarter of 2009 was nearly $8 million. Its net income in the same period last year was $72.5 million.

— Noozhawk staff writer Lara Cooper can be reached at .(JavaScript must be enabled to view this email address).

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» cot on 06.24.09 @ 02:15 AM

Tragic ...


» Eic Salveson on 06.24.09 @ 05:36 AM

What is shape is the banks portfolio in?


» Lou Segal on 06.24.09 @ 10:59 AM

I would remind everyone to stay under the FDIC Insurance thresholds. It is $250,000 per depositor, but may be increased depending on how you title your accounts.


» What about safe-deposit boxes? on 06.25.09 @ 04:46 AM

Is there any risk regarding safe-deposit box content?
Are the contents safe?
Do they fall under the FDIC Insurance limits? 

Does anyone know this?
Thanks


» Very bad news on 06.25.09 @ 04:48 AM

SBBT has been a long term friend of the community. It has already effect many jobs at SBBT. It will likely effect their ability to continue their local charitable giving program.
Let’s hope this is a short term issue for them.


» RHS on 06.25.09 @ 05:45 AM

SBB&T;‘s “charitable contributions” are now being paid by the taxpayers.  Banks and other private businesses should do their business and stay out of such activities as it invariably involves spending money belonging to shareholders or others. If the Board of Directors wants to make contributions let them do it out their bonuses/salary/stock options.


» I heard on 06.25.09 @ 10:39 AM

I heard that they have 7 days and that they’re hoping wells fargo will buy them before they collapse.

Yesterday the carpinteria branch dished out over 2 mil. to people withdrawing their money. They had to give cashier’s checks as they ran low on cash.


» Native SBer on 06.26.09 @ 02:23 AM

Everyone should remain calm. SBBT has been a friend to this community for a long time - in good times and bad. Let’s avoid the rumor “I heard” thing. None-the-less, some diversification of your deposits among various banks is always a good idea regardless of the times.


» Charitable giving on 06.27.09 @ 01:44 PM

I think private companies should do charitable giving out of their profits.  Through charitable donations they can reduce the amount given to the state and feds in taxes and keep the money locally.
  It would be great if we could give donations directly to our pubic schools and greatly reduce the need for any state funding and the bureaucracy and associated overhead.
It would be wonderful if we as a community could hire our own nonunion teachers that could be paid and retained based on performance.


» LU on 07.13.09 @ 10:31 AM

A Safe Deposit box contents are safe, however it is not legal to put cash in them.


» bank alchemist on 10.19.09 @ 07:49 AM

Truely a troublesome time for such an anchor tenant in the community. SBB&T has been a flagship in the banking community for a log time. A bank that others aspired to be. Some of its acqusitions over the last years never made real since as other than just massing up as a regional perhaps without any intention of selling. I hope it is around another 20 years in spite of some poor choices by others.


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