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Pacific Capital Bancorp Announces Closing of $500 Million Investment from a Subsidiary of Ford Financial Fund, L.P.

^{Published on 2010-08-31 13:45:39 - Market Wire}
 

SANTA BARBARA, Calif.--([ BUSINESS WIRE ])--Pacific Capital Bancorp (the aCompanya) (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.

"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"

aWe are very pleased to join the Pacific Capital family,a said Gerald J. Ford, Managing Member of the Ford Financial Fund. aWe 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 Capitala™s long history, deep community roots, and exceptional employees, and you have a very powerful formula for long-term success.a

Said Carl B. Webb, Senior Principal with Ford Financial Fund, aEveryone 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.

aThere 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,a 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 aBanka). 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, aThis is a very important day for all stakeholders in our Bank a" 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.a

Edward E. Birch, a member of the Companya™s Board of Directors since 1983 and Chairman of the Board since April 2004, will continue to serve on the Companya™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 (aTreasurya) pursuant to which Treasury exchanged all 180,634 shares of the Companya™s Series B Fixed Rate Cumulative Perpetual Preferred Stock, having a liquidation amount of $1,000 per share (the aSeries B Stocka), 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 Companya™s preferred stock, Series D Fixed Rate Cumulative Mandatorily Convertible Preferred Stock (aSeries D Stocka), 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 Companya™s common stock at a conversion price of $0.20 per share.

Advisors

Sandler Oa™Neill + Partners served as financial advisor and Manatt, Phelps & Phillips, LLP and Wachtell, Lipton, Rosen & Katz served as legal advisors to Pacific Capital Bancorp. J.P. Morgan served as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to Ford Financial Fund.

About Pacific Capital Bancorp

Pacific Capital Bancorp, with $7.1 billion in assets, is the holding company of Pacific Capital Bank, N.A., a nationally chartered bank that operates 48 branches under the local brand names of Santa Barbara Bank & Trust, First National Bank of Central California, South Valley National Bank, San Benito Bank, and First Bank of San Luis Obispo. The Companya™s website is at [ www.pcbancorp.com ].

About Ford Financial

Ford Financial Fund, L.P., is a private equity investment firm that specializes in financial services companies. Its principals, Gerald J. Ford and Carl B. Webb, are experienced career bankers with a 35-year history of demonstrated success at acquiring and managing a wide range of financial services operations, which have included Golden State Bancorp, Inc., First Gibraltar Bank, FSB and First United Bank Group, Inc. The Ford team is committed to the long-term operations of the companies in which they invest.

Forward Looking Statements

This press release contains aforward-looking statementsa within the meaning of Section27A of the Securities Act of 1933, as amended, and Section21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, statements about anticipated future operating and financial performance, financial position and liquidity, business prospects and business strategies. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in these provisions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. The Company cautions you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, adverse changes in general economic or market conditions and other risks and factors detailed in reports filed by the Company with the Securities and Exchange Commission, including the Companya™s Annual Report on Form 10-K for the year ended December31, 2009 and the Companya™s Quarterly Reports on Form 10-Q for the quarters ended March31, 2010 and June 30, 2010. The Company cautions that the foregoing factors are not exclusive.