October 1, 2022
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PCBC buys time to survive

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Though Pacific Capital Bancorp announced narrower losses and an intent to sell branches, the drama surrounding the fate of the struggling parent of Santa Barbara Bank & Trust is likely to continue for months.

On Feb. 1, Pacific Capital, which has been under pressure from regulators to boost its capital ratios, announced a $20 million loss in the fourth quarter. Though the loss was small compared to the $400 million in losses the previous two quarters, the bank didn’t make any progress in meeting capital requirements it agreed to with regulators.

At least two analysts called the bank’s intent to sell some branches and cut costs “a drop in the bucket” toward coming up with the more than $250 million it needs to satisfy regulators. But Pacific Capital has been working to stretch its existing capital across a smaller bank, and the question now is whether it can shrink fast enough, sell enough branches and make enough money before regulators seize it or a buyer surfaces.

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