Santa Barbara Bank & Trust Owner Takes Ratings Hit

http://www.noozhawk.com/noozhawk/article/062309_pacific_capital_bancorp_takes_a_ratings_hit/

By Lara Cooper, Noozhawk Staff Writer

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

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).

http://www.noozhawk.com/noozhawk/article/062309_pacific_capital_bancorp_takes_a_ratings_hit/