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Pacific Capital Bancorp Sets Record Date for Rights Offering

Under the deal, shareholders will be entitled to buy common stock at a price equal to 20 cents per share

As a federal deadline nears and key executives scramble to trade stock, Pacific Capital Bancorp announced Thursday that it has set 1:01 p.m. Pacific time Aug. 30 as the record date and time for its anticipated rights offering.

If the recapitalization deal with Texas-based Ford Financial Fund L.P. closes by then, the rights offering will be made through the distribution of nontransferable subscription rights to purchase shares of Pacific Capital’s common stock.

Shareholders will receive 15.335 subscription rights for each share of common stock held of record at the record date, company officials said.

The company recently has posted quite a few items on its Web site regarding trading of its stock, which closed at about $1 per share Thursday.

“These are transactions from key executives (‘Section 16 officers’). I am one of those people, as are the other management team members,” Pacific Capital spokeswoman Debbie Whiteley said. “It means that these individuals are either buying or selling shares of PCBC stock. This group has been in a blackout period for some time, which means they could not buy or sell stock because they were aware of material information that had not been publicly disclosed.

“The blackout period was lifted following our recent announcements, and so the Section 16 officers are once again allowed to buy or sell shares, and that’s what is happening. You will often also see this group buy or sell after an earnings announcement, because they are also not allowed to do that prior to our quarterly earnings releases. This is the way it works at publicly traded companies.”

Under the terms of Thursday’s announcement, each whole subscription right will entitle a shareholder to purchase one share of Pacific Capital common stock at a subscription price equal to 20 cents per share. Shareholders will not have a right to oversubscribe for shares in the rights offering, company officials said in a news release.

The rights offering is expected to commence as soon as possible after the closing of the recapitalization transaction and effectiveness of a registration statement relating to the rights offering.

Even though it posted $61 million quarterly loss, Pacific Capital officials in Santa Barbara said last month the company has satisfied “significant conditions” to close a $500 million investment in the company by the Texas firm, run by billionaire banker Gerald J. Ford.

The company said it has reached a deal with the U.S. Department of the Treasury on the treatment of the preferred stock issued by the company under the Troubled Asset Relief Program, or TARP, and is waiting for regulatory approval of the proposed Ford investment. Pacific Capital has taken $188 million in TARP funds and said it can’t yet pay it back.

Federal officials did not comment on last month’s announcement and did not immediately respond to Thursday’s release. Earlier this year, regulators expressed “no confidence” in Pacific Capital and demanded that by Sept. 8 the company meet minimum capital ratio requirements or liquidate itself.

More than 315 employees have been laid off since 2008, and the company has cut retiree benefits. A first-quarter net loss for the bank of $72.6 million followed a 2009 net loss of $405 million, as loan losses cut the bank’s capital.

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

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