SB Bank & Trust Downsizing

Thank you for the informative article, but please remove the comment above which is blatant advertising.

This shows how little I know about business. This bank can lose $431M and still stay in business. Even with the TARP loan of $180 M that is more than a few fill ups at the gas station difference. Even with $78 B of assets, I just do not understand how that would make a difference. If I had a house ($ 78 B assets) and lost a good chunk of the roof ($431 M loss), that would be a house that would not be able to function and would have to be repaired or torn down.

This American Life did a great show on the trouble with banks called "Bad Bank". Listen here:

http://www.thisamericanlife.org/Radio...

As a former employee of SBB&T, and owner of the now greatly devalued stock (which is offered as part of their pension plan and incentive to employees to remain through many years of vesting), I am very disappointed in the bank's foolish expansion and loan decisions which have jeopardized all their loyal employees' and stockholders futures!

When I think of all the huge bonuses paid to the top executives there throughout the years, which could have instead shored up the bank's promises to it's retirees, former employee's and all other stockholders, it is truly heart-sickening! I was foolish, myself, to hold onto that stock, believing the bank was fiscally conservative, as it started out being. But sadly, the bank had turned a greedy eye toward loans to developers, who themselves rode a wave of greed... Make money fast, allocate it to the 'top executives' as a reward, and to hell with everyone is the modus operandi with the bank's management.

I worked for SBBT for 18 years, held up my next career that I was pursuing because I could take retirement and they would pay so much of my health insurance coverage. Only now they are not only going back on their promise but their stocks which I hold a lot of have gone plummeting down that was another benefit I originally got from working their, my salary was not much of a benefit as they paid a very poor wage for being a telephone technician which is what I was at one point. They still quote themselves as being a community bank that helps the community but they have not been that for quite some time now they are like most big banks nickling and dimming people out of their money for their profits, well actually their losses right now whilst their President makes the biggest profit, which does not make any sense to me why should be be rewarded for breaking the bank or robbing the bank, they should not advertise as a community bank because they are not, they could have done much better if they had gone back to the way they were founded. Shame on you Santa Barbara Bank and Trust shame on you. We the stockholders should take the bank back and run it the way it was created to run

Wow, Santa Barbara National Bank is in trouble? In real estate rich Santa Barbara which is not suffering half as bad as the rest of the country? Does that mean the bank blew it even worse than other than other notable failures in this downturn economy? Did the Board of Directors take their eye off the ball and bring in shooting star CEO talent not old enough to recall that there is an economic cycle called boom and bust and that banks are supposed to know this and maintain reserves for the bust part of the cycle? Amazing. Thank the Lord they are too big to fail just not big enough to protect the workers who put their life's blood into a once great community bank.

how do they continue to loose all this money and the Board remains unchanged??

Something smells rotten.

As Gomer Pyle would say "surprise, surprise." Pacific Capital Bancorp (formenrly SBB&T) began its journey down the road to ruin when it decided to focus on Refund Anticipation Loans (RALs) and growth by acquisition around the year 2000. The former president ("Tom" Thomas) and his cronies all came from Security Pacific in L.A which failed long before the financial/ mortgage crisis hit in 2008. The writing was on the wall long before the "surprise" larger than expected bad loan loss was publicly revealed in 2008. At one point, the stock traded for 4 times book value, an unheard of premium for a bank unless it is a takeover candidate. (The most likely acquirer at the time? Washington Mutual, which was nationalized by the U.S Gov't during the financial meltdown). In any event, the Thomas administration gobbled up Cental Coast regional banks willy nilly with scant regard to how they would digest these acquisitions. In fact, the head of IT at the time tried to cover up a large loss related to the bank's inability to consolidate their new brethern, until it was publicly revealed. How a "community bank" justified what amounts to financial larceny by participating in a RAL program actively targeted at the poor and Hispanic community is beyond me. Why do you think they issued those large, teaser-rate CDs every December? The interest rate on an average refund of $200 for two weeks with a $50 "service charge" amounts to over 600% annuallly!
Yes, I worked for the bank for a number of years, and finally left when Don Anderson, the 2nd in command at the time, told me "when someone wants to get out of the pool, our job is to push them back in." Cheers, Chumash tribe! Hope you stay in the pool long enough to at least get a few cents back on your investment.
I'll say this about Mr. Thomas, he had one skill that all good bank presidents should possess - he was really good at remembering names. Pity that was apparently it. The rest of them, Fred Clough included, should be doing the perp walk for the fraud they committed.

Wow, way to go, LittleBoPeep!
Thanks for sharing this info. with us all. In my position at the bank, I wasn't able to have your insights into the problems. All I saw was a culture that failed to support 'the little people' and so I knew there was something 'rotten in Denmark', as they say, with the whole culture at SBB&T!