A Union Bank spokesman said Nov. 30 that Santa Barbara Bank & Trust will shed 468 jobs as the larger financial institution swallows up the parent company of Santa Barbara Bank & Trust.
And, the spokesman said, Union Bank will repay federal bailout funds when the $1.5 billion merger is finalized Dec. 1.
“Union Bank will retain 570 Santa Barbara Bank & Trust employees, including most customer-facing positions across the bank,” Union Bank spokesman Daniel Weidman told Santa Barbara View. He said 468 positions will be eliminated over the course of the next year.
In an e-mail, Weidman said 80 percent of those workers whose positions have been eliminated will not leave their jobs until at least April 30. “Union Bank currently has 175 open positions from Los Angeles to San Jose for which impacted employees can apply,” Weidman said. “This year, Union Bank filled 2,400 positions in California.”
Regarding the bank’s remaining $60 million in federal bailout money, known as Troubled Asset Recovery Funds, or TARP, “Santa Barbara Bank & Trust’s TARP debt with the U.S. Treasury was converted to mandatory convertible stock at the time of the recapitalization,” Weidman said. “Since that time, Treasury has been the second-largest shareholder in the company.
The Treasury Department’s shares will be paid out after the close of the deal, along with all other shareholders, he said. “Santa Barbara Bank & Trust’s TARP debt will be retired when the merger with Union Bank is finalized,” Weidman said.
Union Bank officials said they hoped to close the deal by the end of the year. The huge international banking conglomerate agreed to buy Santa Barbara Bank & Trust’s parent, Pacific Capital Bancorp, the largest regional bank in the area, earlier this year for $1.5 billion.
This came a couple of years after Texas billionaire banker Gerald Ford agreed to bail out Pacific Capital with $500 million of his company’s money, while getting a haircut on the $180 in TARP fund Pacific Capital was given in 2009 to keep afloat after a series of bad real estate loans.
Treasury officials told Ford he would only have to pay back $120 million in TARP funds.