Even though it may owe the federal government $60 million, UnionBanCal Corp., the holding company of Union Bank NA, has received approval from the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency for its purchase of the parent company of Santa Barbara Bank & Trust, officials reported this week.
This follows the Japan Financial Services Agency’s clearance of the transaction announced March 12. UnionBanCal expects the legal closing date to be Dec. 1.
Union Bank spokesmen had no immediate response to the report Thursday, nor did the office of U.S. Sen. Dianne Feinstein, D-Calif., who said in May that Pacific Capital Bancorp, SBB&T’s parent, will be forced to repay the one-third of the $180 million in bailout funds it was given three years ago.
During an appearance in Santa Barbara in May, Feinstein said all banks that were given Troubled Asset Recovery Program funds would be forced to pay them back to ease the national debt.
Actually, it was Texas billionaire banker Gerald Ford who plugged $500 million into Pacific Capital in 2010 and convinced the U.S. Treasury Department he would only have to pay back about two-thirds of the $180 million in TARP funds that the Santa Barbara-based company took from the taxpayers.
During the recession of 2008 and after a succession of bad real estate loans, Pacific Capital shed several hundred workers in an effort to shore up its sagging financials, although company officials never really admitted it. About a year after Ford’s executives took over, Union Bank offered to swallow up Pacific Capital for $1.5 billion and eventually discard the half-century old Santa Barbara Bank &Trust brand along with five other regional subsidiary banks.
Union Bank says it will add 45 branches along the Central Coast with the acquisition, which includes $3.7 billion in loans held for investment and $4.7 billion in deposits.
On completion of the acquisition, the registration of Pacific Capital’s common stock under the U.S. Securities Exchange Act of 1934 will be terminated and its stock will not be listed on any stock exchange or quotation system.
UnionBanCal Corp. is a wholly owned subsidiary of the Bank of Tokyo-Mitsubishi UFJ Ltd, which is a subsidiary of Mitsubishi UFJ Financial Group Inc. Union Bank is a member of the Mitsubishi UFJ Financial Group.