Aug 31, 2010 11:05 PM by Ariel Wesler
After several quarters of losing millions of dollars, the parent company of First Bank of San Luis Obispo and Santa Barbara Bank and Trust has closed a deal to keep both banks alive.
The largest owner of community banks on the Central Coast is getting a second chance thanks to Texas banking tycoon Gerald Ford. He has invested $500 million into Pacific Capital Bank, which means community banks like First Bank of San Luis Obispo and Santa Barbara Bank and Trust will remain part of the community.
"Members of our bank get to retain their bank. Our non-profit groups get to continue to receive much needed financial support. Employees continue with their jobs," said Pacific Capital Bank President and Chief Operating Officer George Leis.
In fact, the Santa Barbara-based company now plans to rehire some of the 300 employees that it cut in the last couple years.
"We didn't wire the 500 million dollars today to buy the bank that you just see today. It will be a platform that we will grow over the years to come," said Pacific Capital Bank CEO Carl Webb.
"As long as they take care of me and take care of my money, I don't have no problems," said Bob Whitmore of Santa Maria, a longtime Santa Barbara Bank and Trust customer.
Pacific Capital struggled as the California real estate market went under and many loans turned bad, but bank executives promise to keep the bank local.
"It will still be locally owned. It will still be locally managed. It will have a local presence. The decisions will be made locally," Webb said.
Ford says the new capital should allow them to start lending more money.
"The reality of it is the only way you can be successful in the banking business is to have a successful lending function," Ford said.
Pacific Capital Bancorp has been part of the Central Coast community for about 50 years.
As part of the agreement, Ford nows owns 91 percent of the company's common stock. The rest belongs to shareholders and the U.S. Treasury.
Pacific Capital Bank currently operates 35 branches on the Central Coast.
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