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Thursday, February 10 2011
Daily Sound
Pacific Capital reports income; will hire employees, increase loans NEWS
BY RAY ESTRADA
FOR THE DAILY SOUND
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With Wednesday’s announcement of its earnings report, officials at the largest bank holding company in the region said they are gearing up to offer more home loans while bringing back almost 200 jobs that were cut in the last two years. With its total assets down more than $1 billion from a year ago, Santa Barbara-based Pacific Capital Bancorp on Wednesday reported net income of $20.8 million for the three-month period that ended Dec. 31 and $25.7 million for the four months since the closing of the $500 million investment from Ford Financial Fund, L.P. in August. Even though company officials have played it down, Pacific Capital, which owns Santa Barbara Bank & Trust and six other regional banks, has been embattled during the past three years, mostly because of bad commercial loans. Some 315 employees lost their jobs. The company suffered hundreds of millions of dollars in losses. Until last month Nasdaq was considering delisting the company from its stock index which would have been a demoralizing blow. Pacific Capital also took $180 million in federal Troubled Asset Recovery Program, or TARP, funds which it could not pay back.
“That’s all in the past,” bank President George Leis told the Daily Sound. “We’ve hired back 105 employees since September and plan to hire another 80.” He said about half of the employees who lost their jobs were hired back, but not everyone who left will return to the company. Leis said the bank is hiring back employees because there is a growing need in the market for more jumbo, single-family home loans. The company pulled back on such lending because of the economy. But it is getting ready to offer many more such loans, he said. “We are pleased with the results Pacific Capital Bancorp has achieved over the past four months,” said Carl B. Webb, chief executive officer, in a prepared statement. “Following the completion of our recapitalization transactions, we have resumed our position as the premier community banking franchise along the Central Coast of California. Webb became CEO when the $500 million rescue was announced. He said the company has returned to the basic community banking principles that it was built upon, is in a position to “fully serve the financial services needs of our customers with a broad array of lending, depository and wealth management products and services.”
In the fourth quarter of 2010, Pacific Capital had its shareholders rights offering, which raised $76.4 million, and completed its 1-for-100 reverse stock split of its common stock, reducing the number of outstanding shares from about 3.29 billion to some 32.9 million. Chief Financial Officer Mark Olsen said Pacific Capital exceeds the ratios required to be considered “well capitalized” under generally applicable regulatory guidelines. Tier 1 leverage capital ratios were 9.2 percent and 10.3 percent. Texas billionaire banker Gerald Ford, of Ford Financial Fund, L.P., rode to the rescue Aug. 31 when his company became the majority owner of Pacific Capital through a with his half-billion-dollar investment. Ford said he cut a deal with Treasury officials to pay back only a fraction of the TARP funds Pacific Capital received. Pacific Capital was required to account for Ford’s transaction using the acquisition method of accounting and applied “push down accounting” based on authoritative accounting guidance. The company was required to allocate the aggregate purchase price of $500 million to the assets, liabilities and non-controlling interests of the Pacific Capital based on their fair values.
financial abuses by local governments, seizing upon a scandal involving a city official pulling in nearly $800,000 a year in pay, and he is calling for its prompt review. "This will allow me to go in and check to see if the books are as they state," Chiang told Reuters in a phone interview. Chiang, who is sponsoring the bills, said the legislation would help pry
open the books of local governments suspected of financial abuses or mismanagement, a concern that gained momentum in California after the pay practices of the city of Bell came to light last year. That led to prosecutors accusing eight current and former officials in Bell, a blue-collar city of 40,000 near Los Angeles, of fleecing its taxpayers See AUDITS, page 12
California mulls aggressive audits of city finances amid scandals BY JIM CHRISTIE
REUTERS NEWS SERVICE
California's controller said on Wednesday he has received more than four dozen tips about suspect financial practices by local governments and will ask the state legislature for power to open up cities' books. A group of California lawmakers has unveiled a package of bills to help State Controller John Chiang uncover