DBRS Discontinues Ratings of Pacific Capital Bancorp Following Acquisition by UnionBanCal Corp.

DBRS, Inc. (DBRS) has taken a number of ratings actions today following the completion of the acquisition of Pacific Capital Bancorp (PCBC or the Company) by UnionBanCal Corporation (UB – rated ‘A’ with a Stable trend). At the close of the transaction, PCBC merged into UB. Consequently, its ratings were upgraded and equalized with those of UB and subsequently withdrawn. Furthermore, PCBC’s bank subsidiary, Santa Barbara Bank & Trust, N.A. (the Bank), was merged with and into Union Bank, N.A. As a result, the ratings of the Bank were upgraded and equalized with Union Bank, N.A.’s ratings and subsequently withdrawn. This action removes the ratings from Under Review with Positive Implications where they were placed on March 12, 2012.

Specifically, DBRS upgraded PCBC’s Issuer & Senior Debt rating to ‘A’ from B (high), its Subordinated Debt rating to A (low) from ‘B’, and its Short-Term Instruments rating to R-1 (low) from R-4. These ratings were placed on Stable trend. Additionally, DBRS upgraded the Bank’s Deposits & Senior Debt rating to A (high) from BB (low), its Subordinated Debt rating to ‘A’ from B (high) and its Short-Term Instruments rating to R-1 (middle) from R-4. These ratings were also placed on Stable trend. Subsequently, DBRS withdrew all ratings of Pacific Capital Bancorp and the Bank.

UnionBanCal’s ratings reflect its strong banking franchise that is underpinned by a robust low-cost deposit base, strong capital position and better-than-peer asset quality. The ratings also consider the Company’s reliance on spread income, a still sluggish, albeit improving, California economy that accounts for the vast majority of UB’s revenues, loans and deposits, and an elevated expense base.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodologies are the Global Methodology for Rating Banks and Banking Organizations, and DBRS Criteria – Intrinsic and Support Assessments. Both can be found on the DBRS website under Methodologies.

The sources of information used for this rating include the company documents, the Federal Reserve, the Federal Deposit Insurance Corporation and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

Lead Analyst: Michael Driscoll
Rating Committee Chair: Roger Lister
Approver: Alan G. Reid
Initial Rating Date: 24 October 2005
Most Recent Rating Update: 12 March 2012

For additional information on this rating, please refer to the linking document below.