Pacific Capital Bancorp, the holding company of nationally chartered Pacific Capital Bank, today announced the close of a previously disclosed $500 million investment by Ford Financial Fund, a private equity firm specializing in financial services companies.
Pacific Capital Bancorp (the “Company”) (Nasdaq: PCBC), a community bank holding company, announced today the closing of the previously announced $500 million investment in the Company by SB Acquisition Company LLC, a wholly-owned subsidiary of Ford Financial Fund, L.P.
“We are very pleased to join the Pacific Capital family,” said Gerald J. Ford, Managing Member of the Ford Financial Fund. “We are career bankers committed to the long-term operations of our banking partners. This is an outstanding community bank operating in some of the best markets in California. Combine that with Pacific Capital’s long history, deep community roots, and exceptional employees, and you have a very powerful formula for long-term success.”
Said Carl B. Webb, Senior Principal with Ford Financial Fund, “Everyone involved in this complex transaction has worked very hard to get to this day, and we could not be more pleased to be here. As a result of the significant capital infusion, Pacific Capital is once again one of the strongest community banks in California, with significant capacity to offer a full selection of products and services that are competitive with those at much larger financial institutions. We fully intend to provide basic community banking products in a convenient, high-touch fashion; be very active in financing the expansion needs of our business customers; and focus on the investment products and advisory services that are key to so many high net worth customers in our markets.
“There is no other bank in our markets with this profile of big-bank capabilities delivered with local bank service and community commitment, and we believe that is a very powerful competitive advantage,” said Mr. Webb.
Upon the closing of the investment, Mr. Ford was appointed Chairman of the Board of the Company and a member of the Board of Directors of Pacific Capital Bank, N.A. (the “Bank”). In addition, Mr. Webb was appointed Chief Executive Officer and a member of the Board of Directors of the Company and Chairman of the Board and Chief Executive Officer of the Bank.
Said George S. Leis, who was appointed President and Chief Operating Officer of the Company and the Bank following the closing of the investment, “This is a very important day for all stakeholders in our Bank – customers, community partners, employees and shareholders. Our loyal customers retain their long-time local bank, our local nonprofit organizations continue to receive much-needed financial support, our employees continue in their jobs, and our shareholders now have the opportunity to make investment decisions about a company that is once again among the strongest community banks in California.”
Edward E. Birch, a member of the Company’s Board of Directors since 1983 and Chairman of the Board since April 2004, will continue to serve on the Company’s Board of Directors with the title Chairman Emeritus.
In connection with the closing of the investment, the Company also announced today the completion of the previously announced exchange with the United States Department of the Treasury (“Treasury”) pursuant to which Treasury exchanged all 180,634 shares of the Company’s Series B Fixed Rate Cumulative Perpetual Preferred Stock, having a liquidation amount of $1,000 per share (the “Series B Stock”), issued to Treasury pursuant to the TARP Capital Purchase Program, plus accrued and unpaid dividends on such shares of Series B Stock (which were approximately $14.4 million as of the date of exchange), for 195,045 shares of a newly created series of the Company’s preferred stock, Series D Fixed Rate Cumulative Mandatorily Convertible Preferred Stock (“Series D Stock”), having an aggregate liquidation amount of approximately $195.0 million. Subject to satisfaction of certain conditions, the Series D Stock will be converted at a discounted conversion value equal to 37% of the liquidation amount of such Series D Stock into shares of the Company’s common stock at a conversion price of $0.20 per share.