The Federal Reserve last week announced that it had approved, along with the Office of the Comptroller of the Currency, the merger of Union Bank and Santa Barbara Bank & Trust (SBB&T). UnionBanCal, the parent company of Union Bank, announced in March that it had purchased Pacific Capital Bancorp, SBB&T’s holding company, for $1.5 billion. The latter was bailed out by Texas billionaire Gerald Ford after it almost went under in 2010. He infused the lending institution with half a billion dollars for 86 percent of its stock.
According to the Fed’s order, one sticking point was competitiveness in the Lompoc market, where the footprints of Union and SBB&T overlap and, combined, account for 40.6 percent of the area’s bank deposits. It noted, however, that that share dips to 31 percent when accounting for CoastHills Federal Credit Union.
One of the most attractive features of SBB&T for its buyer, however, is that it provides 45 branches between Monterey and Thousand Oaks where Union previously had little-to-no presence. UnionBanCal Corporation is owned by the Japanese company, Mitsubishi. It holds the fourth largest number of deposits in California, $53.4 billion.
The deal is expected to close on December 1, at which point stock for Pacific Capital Bancorp (PCBC) will be unlisted on the NASDAQ and other exchanges. Shareholders will receive instructions for converting their stock (worth $46 per share). Bank officers last month settled a class-action lawsuit filed by PCBC shareholders alleging that the merger was a breach of fiduciary duty. The bank agreed to disclose more information about the transaction and pay plaintiffs’ lawyer fees up to $1 million.
According to Union spokesperson Dan Weidman, SBB&T’s branding will be phased out in the spring of 2013. It’s too early to speculate, he said, on changes in personnel. SBB&T was founded in 1960 on Carrillo Street, where the main branch still resides.