Pixel Tracker

Tuesday, December 18 , 2018, 10:33 pm | Fair 49º


Pacific Capital Bancorp Gives Debt Holders a Better Offer

The parent company of Santa Barbara Bank & Trust ups its price and extends its deadline as part of a proposed purchase deal by a Texas banker

In an attempt to pave the way for a deal that would mean a Texas firm could acquire the South Coast’s largest bank holding, Pacific Capital Bancorp, the embattled owner of Santa Barbara Bank & Trust, announced Tuesday that it has offered its debt holders up to 40 cents on the dollar instead of 20 cents or more.

Pacific Capital Bancorp increased the purchase price and extended the expiration date and early tender 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 a Texas banker to buy most of its stock.

The tender offers are being made stemming from an April 29 investment agreement between Pacific Capital and SB Acquisition Company LLC, a wholly owned subsidiary of Ford Financial Fund L.P.

The April proposal was made by Texas billionaire banker Gerald Ford, who offered to buy 91 percent of Pacific Capital stock, which could save the company from having to merge with another firm or liquidate its assets.

“Pacific Capital has extended the period of time (by six days) that holders of its trust preferred securities and subordinated debt securities have to sell their securities back to the company,” said Tony Rossi of Los Angeles-based firm Financial Profiles. “Pacific Capital has also increased the amount it is offering to the holders of these securities. This is being done to attract the desired level of participation in the tender offer.”

Ford has agreed to invest $500 million in the company with a requirement that Pacific Capital purchase for cash not less than 70 percent of the combined aggregate liquidation or principal amount of the trust preferred securities and subordinated debt securities. For that, the company would exchange for common stock all Series B fixed rate cumulative perpetual preferred stock held by the U.S. Treasury Department, which has an “aggregate liquidation preference of $180.6 million, together with all accrued but unpaid dividends on such preferred stock and the related warrants to purchase common stock,” according to a company news release.

That $180.6 million is about the amount Pacific Capital received in Troubled Asset Relief Program, or TARP, funds last year and has admitted it can’t pay back right now.

The company and Ford have agreed to modify the tender offer for each series of trust preferred securities and subordinated debt securities.

On Tuesday, Pacific Capital received a tender from the holder of the subordinated debenture for $50 million, due in 2014, but had not received valid tenders from holders of any other trust preferred securities or subordinated debt securities.

Last month, federal regulators said if Pacific Capital can’t meet minimum capital ratios by Sept. 8, they may force its board of directors to sell, merge or liquidate the bank holding company.

Pacific Capital had a net loss in the first quarter of 2010 of $83 million, or $1.77 per share to common shareholders, compared with a net loss of $7.9 million, or 17 cents per share, for the first quarter of 2009.

Even though it’s valued at $7 billion, the company has dropped more than 315 of its 1,164 workers and slashed retirees’ benefits since 2008. Pacific Capital reported more than $400 million in losses during that time. That has been blamed on soured real estate loans.

Earlier, Ford said his company has been turning things around for banks similar to Santa Barbara Bank & Trust and the other banks Pacific Capital has owned for nearly 40 years. Pacific Capital-owned banks include First National Bank of Central California, South Valley National Bank, San Benito Bank and First Bank of San Luis Obispo, with a total of 48 branches.

Noozhawk contributor Ray Estrada can be reached at .(JavaScript must be enabled to view this email address).

Support Noozhawk Today

You are an important ally in our mission to deliver clear, objective, high-quality professional news reporting for Santa Barbara, Goleta and the rest of Santa Barbara County. Join the Hawks Club today to help keep Noozhawk soaring.

We offer four membership levels: $5 a month, $10 a month, $25 a month or $1 a week. Payments can be made using a credit card, Apple Pay or Google Pay, or click here for information on recurring credit-card payments and a mailing address for checks.

Thank you for your vital support.

Become a Noozhawk Supporter

First name
Last name
Select your monthly membership
Or choose an annual membership

Payment Information

Membership Subscription

You are enrolling in . Thank you for joining the Hawks Club.

Payment Method

Pay by Credit Card:

Mastercard, Visa, American Express, Discover
One click only, please!

Pay with Apple Pay or Google Pay:

Noozhawk partners with Stripe to provide secure invoicing and payments processing.
You may cancel your membership at any time by sending an email to .(JavaScript must be enabled to view this email address).

  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click Here to Get Started >

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.

Daily Noozhawk

Subscribe to Noozhawk's A.M. Report, our free e-Bulletin sent out every day at 4:15 a.m. with Noozhawk's top stories, hand-picked by the editors.

Sign Up Now >

Meet Your Realtor Sponsored by Village Properties

Photo of Dianne and Brianna Johnson
Dianne and Brianna Johnson
"We are committed to making our clients feel special by providing the concierge level service they deserve."

Full Profile >