Pacific Capital suspends dividend payments
Santa Barbara-based Pacific Capital Bancorp said June 22 it has suspended dividend payments on its stock and has deferred interest payments on $69.4 million in debt.
The parent company of Santa Barbara Bank & Trust and four other banks on the Central Coast, Pacific Capital Bancorp said the moves would preserve about $8 million per quarter while supporting its capital ratios.
“Maintaining strong capital ratios is essential for ensuring the health of the bank during these difficult economic times and is in the best long-term interest of all of our shareholders,” George Leis, the company’s president and chief executive, said in a statement.
In announcing the moves, Pacific Capital noted that the terms of its debt allow it to suspend interest payments up to 2 0 consecutive quarters without default or penalty. The bank didn’t say when it might begin paying dividends to stockholders again.
“We would expect to resume paying dividends when such payments would be consistent with our overall financial performance and capital requirements,” Leis said.
Shares of Pacific Capital have been hammered in the recession and have shed 75 percent of their value over the past year, falling from about $14.70 to the mid-$3 range.