For the second time this month, Pacific Capital Bancorp, parent company of Santa Barbara Bank & Trust, has extended the deadline for bondholders to cash in on its outstanding trust-preferred securities.
The move is another attempt to aid a Texas firm’s bid to acquire the South Coast’s largest bank holding company by allowing bondholders more time to sell their securities at a better price. The new deadline is July 26.
On June 18, Pacific Capital said it was extending the offer until June 30 for the holding company and the bank’s outstanding trust-preferred securities to 40 cents on the dollar from 20 cents. About $60 million in such securities would be retired if the offer is successful.
Shares of Pacific Capital sank in late trading Wednesday, to about 70 cents a share.
Pacific Capital increased the purchase price and extended the expiration date and early deadline for its cash tender offers on any of its outstanding trust-preferred securities and outstanding subordinated debt securities as part of a proposed deal by Texas banker Gerald Ford to buy most of its stock.
The tender offers stem from an April 29 investment agreement between Pacific Capital and SB Acquisition Company LLC, a wholly owned subsidiary of Ford Financial Fund LP.
Regulators have said their requirements are not being met by Pacific Capital, and that government officials no longer considered the bank to be well capitalized.
The Office of the Comptroller of the Currency, or OCC, has called for Pacific Capital to achieve tier-1 risk-based capital of at least 9 percent by September and a ratio of total capital to risk-weighted assets of at least 12 percent within four months, and that it comply or face possible liquidation.
Ford said the investment will shore up Pacific Capital’s sagging capital ratios when the deal is completed in a few months, but that was before regulators issued a Sept. 8 deadline.
The minimum tier-1 risk-based capital ratio needed to be considered well capitalized is 6 percent for most banks.
Nonperforming assets made up 6.13 percent of Pacific Capital’s total assets as of March 31. The bank’s annualized ratio of net charge-offs, or loan losses less recoveries, to average loans was 6.62 percent for the first quarter of this year.
A first-quarter net loss for the bank of $72.6 million followed a 2009 net loss of $405 million, as provisions for loan losses hurt the bank’s capital.
— Noozhawk contributor Ray Estrada can be reached at news@noozhawk.com.