Two weeks after the owner of First Bank of San Luis Obispo announced an expected $500 million capital infusion, Pacific Capital Bancorp has been issued another order by federal regulators designed to help improve its financial health.
The Office of the Comptroller of the Currency, the regulator of nationally chartered banks, has given Pacific Capital Bancorp until Sept. 8 to submit an acceptable capital plan. If it fails to do so or does not achieve minimum capital ratios, the OCC could direct the company’s board of directors to sell, merge or liquidate, according to a recent filing with the Securities and Exchange Commission.
As of March 31, the company failed to meet the minimum level for the Tier 1 leverage ratio — a bank’s capital divided by its assets — required to be considered well-capitalized according to federal regulatory standards.
Among other things, the order requires the bank to develop and implement a three-year strategic plan and a three-year capital plan, which outlines how the bank will maintain adequate capital and have a contingency plan for alternative sources of capital.
As part of the agreement, the bank holding company also may not pay a dividend or make a capital distribution without the prior written consent of the regulatory agency, and it must develop a written credit policy and a commercial real estate concentration management program.
The enforcement action comes on the heels of an agreement with a Texas-based private equity fund that has promised the $500 million capital investment. Pacific Capital is expected to receive the infusion from SB Acquisition Co. LLC, a subsidiary of Ford Financial Fund, managed by managing member and billionaire Gerald J. Ford.
Under the agreement, which must still be approved by federal regulators, Ford would acquire 91 percent of the Santa Barbara-based company’s common stock. After the investment, the U.S. Treasury Department, which has given the company $188 million as part of the Troubled Asset Relief Program’s Capital Purchase Program, would own about 7 percent, while shareholders would own about 2 percent.
When the agreement was announced April 29, company officials said they were hopeful that the additional capital and its recapitalization plan would allow it to continue and strengthen its Central Coast franchise. If the deal with the private-equity firm falls through, however, the company’s capital levels “will decline further and it will need to raise more capital to satisfy its regulatory requirements,” according to the SEC filing.
Pacific Capital Bancorp posted a net loss of $83 million in the first quarter of this year, and last year it announced a plan to reduce its work force by about 300 employees.
— Julie Lynem
TJA Advertising marks 30 years
TJA Advertising is celebrating its 30th anniversary on the Central Coast, a year after moving its offices from San Luis Obispo to Pismo Beach.
The advertising, marketing and public relations firm serves retail and tourism industries, with clients that included the cities of Pismo Beach and Morro Bay, the Merced airport and Michael’s Optical, one of its original clients.
Owner John Sorgenfrei bought TJA in 2002, where he had worked for 10 years, from retiring founder Tom Jones. He employs seven full-time and four part-time employees. The firm has an annual revenue of $2.8 million.
— Julia Hickey
• • •
Deep Blue Integration Inc., an employee-owned licensed contractor, has opened at 47 S. Tassajara Drive in San Luis Obispo.
The firm specializes in consulting, design, installation, and service of low-voltage electrical, security and fire protection systems for large and small clients.
Founders Curtis Streeter and Greg Robinson have a combined 25 years of industry experience on the Central Coast.
— Julia Hickey