SANTA BARBARA BANCORP, DEF 14A, 1994-03-17

SANTA BARBARA BANCORP
DEF 14A, 1994-03-17
STATE COMMERCIAL BANKS

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<PAGE> 1

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12

SANTA BARBARA BANCORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

JAY D. SMITH
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

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4) Proposed maximum aggregate value of transaction:

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Set forth the amount on which the filing fee is calculated and state how it
was determined.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

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2) Form, Schedule or Registration Statement No.:

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3) Filing Party:

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4) Date Filed:

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<PAGE> 2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

OF SANTA BARBARA BANCORP

TO BE HELD APRIL 26, 1994

TO THE SHAREHOLDERS OF SANTA BARBARA BANCORP:

NOTICE IS HEREBY GIVEN that, pursuant to the call of its Board of
Directors, an annual Meeting of Shareholders (the "Meeting") of Santa Barbara
Bancorp (the "Company") will be held at the Lobero Theater, 33 E. Canon
Perdido, Santa Barbara, California, on Tuesday, April 26, 1994, at 2:00 P.M.,
for the purpose of considering and voting on the following matters:

1. Election of Directors. Electing nine (9) persons to the Board
of Directors to serve until the 1995 Annual Meeting or until
their successors are elected and have qualified. The persons
nominated by Management to serve as Directors are: Donald M.
Anderson, Frank Barranco, M.D., Edward E. Birch, B. Paul
Blasingame, Richard M. Davis, Anthony Guntermann, Dale E.
Hanst, Harry B. Powell and David W. Spainhour.

2. Selection of Auditors. To vote upon a resolution of the Board
of Directors of the Company to approve the selection of Arthur
Andersen & Co. to serve as independent certified public
accountants for the Company for the 1994 calendar year.

3. Other Business. Transacting such other business as may
properly come before the Meeting, and any adjournments
thereof.

The Board of Directors has fixed the close of business on March 9,
1994 as the record date for determination of shareholders entitled to notice
of, and the right to vote at, the Meeting.

Section 3.6 of the By-laws sets forth the procedure for nomination of
Directors. That Section provides:

"Section 3.6 Nomination of Directors.

3.6.1 Authority to Make Nominations. Nominations for
Directors may be made by the Board of Directors or by any holder of record of
any outstanding class of capital stock of the Corporation entitled to vote for
the election of Directors.

3.6.2 Nomination Procedures. At annual meetings and
special meetings of the shareholders called by the Board of Directors,
nominations for Directors, other than those approved by the Board of Directors
of the Corporation, shall be made in writing and shall be delivered or mailed
to the Secretary of the Corporation at its principal place of business not less
than fourteen (14) days nor more than fifty (50) days prior to scheduled date
of the meeting; provided, however, that if less than twenty-one (21) days'
notice of the meeting is given to the shareholders, such nominations shall be
mailed or delivered to the Secretary of the Corporation not later than the
close of business on the seventh (7th) day following the day on which notice of
the meeting was mailed to the shareholders. Any such notification shall (a) be
accompanied by a written statement signed and acknowledged by the nominee
consenting to his or her nomination and agreeing to serve as director if
elected by the shareholders, and (b) shall contain the following information,
to the extent known to the nominating shareholder:

A. The name and address of each proposed nominee;

B. The total number of shares of capital stock
of the Corporation expected to be voted for
each proposed nominee;

C. The principal occupation of each proposed
nominee;

D. The name and residence address of the
nominating shareholder; and
<PAGE> 3
E. The number of shares of capital stock of the
Corporation owned by the nominating
shareholder.

3.6.3 Defective Nominations. Nominations not made in
accordance with this Section 3.6 may be disregarded by the Chairperson of the
meeting, at his or her discretion, and upon the instructions of the
Chairperson, the inspectors of the election may disregard any votes cast for
any such nominee.

3.6.4 Exceptions. The provisions of this Section 3.6
shall apply only to nominations for Directors who are to be elected at the
annual meeting or any special meeting of shareholders called by the Board of
Directors, and this Section shall not apply to (a) nominations for Directors
who are to be elected at a special meeting of shareholders properly called by
the shareholders at which Directors are to be elected pursuant to Section 305
of the California Corporations Code to fill a vacancy on the Board of
Directors, or (b) the election of Directors by the written consent of the
shareholders pursuant to Section 603 of the California Corporations Code."

You are urged to vote in favor of each of the proposals by so
indicating on the enclosed proxy and by signing and returning the enclosed
proxy as promptly as possible, whether or not you plan to attend the Meeting in
person. The enclosed proxy is solicited by the Company's Board of Directors.
Any shareholder giving a proxy may revoke it prior to the time it is voted by
notifying the Secretary, in writing, to that effect, by filing with him a later
dated proxy, or by voting in person at the Meeting.

By Order of the Board of Directors

______________________________________
Donald M. Anderson,
Chairman of the Board

Dated: March 17, 1994
<PAGE> 4
PROXY STATEMENT
FOR AN
ANNUAL MEETING OF SHAREHOLDERS
OF
SANTA BARBARA BANCORP
1021 Anacapa Street
Santa Barbara, CA 93101

To Be Held April 26, 1994

INTRODUCTION

This proxy statement is furnished in connection with the solicitation
of proxies for use at the Annual Meeting of Shareholders (the "Meeting") of
Santa Barbara Bancorp (the "Company"), to be held at the Lobero Theater, 33 E.
Canon Perdido, Santa Barbara, California, 93101, at 2:00 P.M. on Tuesday, April
26, 1994, and at all adjournments thereof.

It is expected that this proxy statement and accompanying Notice and
form of proxy will be mailed to shareholders on or about March 17, 1994.

The matters to be considered and voted upon at the Meeting will
include:

2. Selection of Auditors. To vote upon the recommendation of the
Board of Directors of the Company to approve Arthur Andersen &
Co. to serve as independent certified public accountants for
the Company for the 1994 calendar year.

3. Other Business. Transacting such other business as may
properly come before the Meeting, and any adjournments
thereof.

1
<PAGE> 5
REVOCABILITY OF PROXIES

A proxy for use at the Meeting is enclosed. Any shareholder who
executes and delivers such proxy has the right to revoke it at any time before
it is exercised, (a) by filing with the Secretary of the Company an instrument
revoking it, or (b) by executing a proxy bearing a later date, or (c) by
attending the Meeting and voting in person. Subject to such revocation or
suspension, all shares represented by a properly executed proxy received in
time for the Meeting will be voted by the proxy-holders, in accordance with the
instructions on the proxy. IF NO INSTRUCTION IS SPECIFIED WITH REGARD TO A
MATTER TO BE ACTED UPON, THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF MANAGEMENT.

PERSONS MAKING THE SOLICITATION

This solicitation of proxies is being made by the Board of Directors
of the Company. The expense of preparing, assembling, printing and mailing
this proxy statement and the material used in the solicitation of proxies for
the Meeting will be borne by the Company. It is contemplated that proxies will
be solicited principally through the use of the mail, but officers, directors,
and employees of the Company may solicit proxies personally or by telephone,
without receiving special compensation therefor. Although there is no formal
agreement to do so, the Company may reimburse banks, brokerage houses, and
other custodians, nominees and fiduciaries for their reasonable expense in
forwarding these proxy materials to their principals. The proxy materials will
first be sent or given to shareholders on or about March 17, 1994.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

There were issued and outstanding 5,065,742 shares of the Company's
common stock on March 9, 1994. March 9, 1994 has been fixed as the record date
for the purpose of determining the shareholders entitled to notice of, and to
vote at, the Meeting (the "Record Date"). Each holder of the Company's common
stock will be entitled to one vote, in person or by proxy, for each share of
common stock held of record on the books of the Company as of the Record Date,
on any matter submitted to the vote of the shareholders, except in the election
of directors, where cumulative voting is permitted. See "Cumulative Voting" on
page 3 below.

The presence in person or by proxy of the holders of a majority of the
outstanding shares of stock entitled to vote at the Annual Meeting will
constitute a quorum for the purpose of transacting business at the meeting.

If the enclosed proxy is completed in the appropriate spaces, signed,
dated and returned, the proxy will be voted as specified in the proxy. If no
specification is made on a signed, dated and returned proxy, it will be voted
at the discretion of the proxy holders on any matter described in this proxy
statement. The proxy also grants the proxy holders authority to vote as they
deem appropriate, in their sole discretion on such other business as may
properly come before the Meeting or any adjournments thereof.

ELECTION OF DIRECTORS OF COMPANY (Proposal 1)

The By-laws of the Company provide that the number of directors shall
not be less than seven (7) nor more than thirteen (13) until changed by an
amendment to the Articles of Incorporation or the By-laws duly adopted by the
Company's shareholders. The By-laws further provide that the exact number of
directors shall be fixed from time-to-time within the stated range by a by-law,
by-law amendment, or resolution adopted by the Company's shareholders or Board
of Directors. Accordingly, the Board of Directors has fixed the number of
directors at nine (9) by a by-law.

At the Annual Meeting, nine (9) directors (the entire Board of
Directors) are to be elected to serve until the next Annual Meeting of
Shareholders or until their successors are elected and qualified.

A shareholder may withhold authority for the proxy holders to vote for
the nominees identified below by so indicating on the enclosed proxy. Further,
a shareholder may withhold authority for the proxy holders to vote for an
individual nominee by writing that nominee's name in the appropriate space
provided on the proxy. Unless authority to vote for the nominees is so
withheld, the proxy holders will vote the proxies received by them for the
election of the nominees identified below as Directors of the Company. Should
any shareholder vote for a nominee not identified below,

2
<PAGE> 6
the proxy holders will vote such shareholder's shares in accordance
with his or her wishes. If any of the nominees should be unable or decline to
serve, which is not now anticipated, the proxy holders shall have discretionary
authority to vote for a substitute at the meeting (or any adjournment thereof),
or alternatively, a substitute may be designated by the present Board of
Directors to fill the resulting vacancy. In the event that additional persons
are nominated for election as directors, the proxy holders intend to vote all
of the proxies received by them in such a manner, in accordance with cumulative
voting, as will assure the election of as many of the nominees identified below
as possible. In such event, the specific nominees to be voted for will be
determined by the proxy holders.

None of the Directors or Executive Officers of the Company or the Bank
was selected pursuant to any arrangement or understanding between themselves
and any other individual (other than arrangements or understandings with
Directors or officers acting solely in their capacities as such). There are no
family relationships between the Directors and Executive Officers, and except
as noted below, none serve as directors of any company which has a class of
securities registered under, or which is subject to the periodic reporting
requirements of the Securities Exchange Act of 1934 or any investment company
registered under the Investment Company Act of 1940.

VOTING RIGHTS--CUMULATIVE VOTING

All voting rights are vested in the holders of the common stock of the
Company, each share being entitled to one vote, except with respect to the
election of directors, as described below.

California State law provides that a shareholder of a California
corporation, or the shareholder's proxy, may cumulate votes in the election of
directors. That is, each shareholder has a number of votes equal to the number
of shares owned by that shareholder, multiplied by the number of directors to
be elected, and the shareholder may cumulate such votes for a single candidate
or distribute such votes among as many candidates as is deemed appropriate.
However, a shareholder may cumulate votes only for a candidate or candidates
whose names have been placed in nomination prior to the voting, and only if the
shareholder has given notice at the meeting prior to the voting of the
shareholder's intention to cumulate votes. If any one shareholder has given
such notice, all shareholders may cumulate votes for candidates in nomination.

Certain affirmative steps must be taken by the shareholders of the
Company in order to be entitled to vote their shares cumulatively in the
election of directors. At the shareholders' meeting at which directors are to
be elected, no shareholder shall be entitled to cumulate votes (i.e., cast for
any one or more candidates a number of votes greater than the number of the
shareholder's shares) unless the candidates' names have been placed in
nomination prior to the commencement of the voting and a shareholder has given
notice prior to commencement of the voting of the shareholder's intention to
cumulate votes. If any shareholder has given such a notice, then every
shareholder entitled to vote may cumulate votes for candidates in nomination
and give one candidate a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which that shareholder's shares
are entitled, or distribute the shareholder's votes on the same principle among
any or all of the candidates, as the shareholder thinks fit; the candidates
receiving the highest number of votes, up to the number of directors to be
elected, shall be elected. It is intended that shares represented by proxies
in the accompanying form will be voted for the election of persons nominated by
Management. Although the Board of Directors does not know whether there will
be any nominations for directors other than those shown above, if any such
nomination is made, or if votes are cast for any candidates other than those
nominated by the Board of Directors, the persons authorized to vote shares
represented by executed proxies in the enclosed form (if authority to vote for
the election of directors or for any particular nominees is not withheld) will
have full discretion and authority to vote cumulatively and to allocate votes
among any or all of the nominees of the Board of Directors in such order as
they may determine, provided all the above-listed requirements are met.

3
<PAGE> 7
Directors and Nominees

The following table sets forth as to each director and each of the
persons nominated for election as a director of the Company, such person's age,
such person's principal occupations during the past five years, and the period
during which such person has served as a director of the Company. All of the
nominees were elected as directors of the Company at the 1993 Annual Meeting of
the Company's shareholders.

Persons nominated to serve on the Company's Board of Directors would
simultaneously serve on the Board of Directors of Santa Barbara Bank & Trust, a
wholly-owned subsidiary of the Company (the "Bank").

<TABLE>
<CAPTION>
Director Background, Business Experience, and
Director Age Since Position with the Company/Bank
-------- --- -------- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Donald M. Anderson 66 1971 Chairman of the Board and Chief Executive Officer of the Company and Chairman of the Board of
the Bank. Mr. Anderson joined the Bank in October, 1969, as Vice President and Commercial
Lending Officer. He was elected President and Director in 1971 and Chairman of the Board in
February, 1989. He has served on numerous charitable, civic and banking organizations.

Frank Barranco M.D. 63 1989 Dr. Barranco is a retired physician and was a founding director of the Community Bank of
Santa Ynez Valley. Prior to his retirement, he practiced family medicine in Solvang and was
a member of the teaching staffs at both UCLA and USC medical schools. He has been Chief of
Staff at Santa Ynez Community Hospital and has served on the Board of Trustees of the Santa
Ynez School District.

Edward E. Birch 55 1983 Dr. Birch was Vice-Chancellor of the University of California at Santa Barbara from 1976
until his retirement in 1993. He is currently Executive Vice President, College Advancement,
for Westmont College in Santa Barbara, California. He has been involved in a number of civic
and community organizations, including the Cancer Foundation of Santa Barbara, Goleta Valley
Community Hospital, and the Santa Barbara Industry Education Council, and is a past President
of the Santa Barbara Chamber of Commerce.

B. Paul Blasingame 75 1984 Prior to his retirement in 1979, Mr. Blasingame was manager of Santa Barbara Operations of
the Delco Electronics Division of General Motors Corporation. He has been on the Board of
Santa Barbara Cottage Hospital, Santa Barbara Foundation and the Santa Barbara Industry
Education Council. He is a past President of the Santa Barbara Foundation and past Chairman
of the National Alliance of Business for the tri-counties.

Richard M. Davis 59 1984 Mr. Davis is a retired business executive. He is a past Chairman of the Board of Directors
of Santa Barbara Cottage Hospital, a past Chairman of the Santa Barbara Chamber of Commerce,
and a past Chairman of the Board of United Way of Santa Barbara.

Anthony Guntermann 74 1960 Mr. Guntermann, a Certified Public Accountant since 1954, recently retired from the
accounting firm of Guntermann, Thompson & Lanza, Accountants, Inc. (now McGowen-Guntermann).
He has served as a Director and President of the California State Board of Accountancy and as
a member of the Santa Barbara City Council, as well as on numerous civic and community
organizations. He was one of the organizers of the Bank. He also was one of the organizers
of Investors Research Fund, Inc., and continues to serve on its Board of Directors.
</TABLE>

4
<PAGE> 8

<TABLE>
<CAPTION>
Director Background, Business Experience, and
Director Age Since Position with the Company/Bank
-------- --- -------- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Dale E. Hanst 62 1983 Mr. Hanst is currently a senior partner in the law firm of Schramm & Raddue,
having started with the firm in 1960. He was President of the State Bar of
California in 1984 and served on the California Commission on Judicial
Performance from 1984 to 1988. Mr. Hanst is a past President of the Santa
Barbara Zoological Society.

Harry B. Powell 65 1989 Mr. Powell is a retired businessman residing in Carpinteria. He is a past
President of Rexall Clubs International, the Carpinteria Business Association
and the Carpinteria Unified School District. He is the immediate past
Treasurer of the Board of Directors of Birnam Wood Golf Club.

David W. Spainhour 62 1974 Mr. Spainhour is President of the Company and President and Chief Executive
Officer of the Bank. Mr. Spainhour joined the Bank in 1966 as Controller. He
became Cashier in 1969, Senior Vice President in 1972, was elected to the
Board of Directors in 1974, was named Executive Vice President in 1980, and
elected President in February, 1989. Mr. Spainhour serves on the boards of
the Santa Barbara Industry Education Council, Channel City Club and
Westmont College.
</TABLE>

Committees of the Board of Directors

The Company had a standing Nominating Committee and Audit Committee
during 1993. The Bank had a standing Audit Committee and a Compensation
Committee during 1993.

During 1993 the Nominating Committee, which considers the
qualifications and the composition of the Board of Directors of the Company,
was composed of Messrs. Hanst, Guntermann, Anderson and Spainhour. The
Committee met once in 1993. The Committee does not consider shareholder
nominations for director's positions.

Section 3.6 of the By-laws sets forth the procedure for nomination of
Directors. That Section provides:

"Section 3.6 Nomination of Directors.

A. The name and address of each proposed nominee;

B. The total number of shares of capital stock
of the Corporation expected to be voted for
each proposed nominee;

C. The principal occupation of each proposed
nominee;

D. The name and residence address of the
nominating shareholder; and

5
<PAGE> 9
E. The number of shares of capital stock of the
Corporation owned by the nominating
shareholder.

The Audit Committees of the Company and the Bank provide for suitable
annual examinations of each branch office and administrative division of the
Bank. The Committees are responsible for reporting the results of the
examinations and the adequacy of internal controls and procedures to the Board.
The Audit Committees are also responsible for recommending to the Board any
changes in doing business or corrective actions necessary for the soundness of
the Bank and the Company. The members of both the Audit Committee of the
Company and of the Bank during 1993 were Anthony Guntermann, Chairman, Dale E.
Hanst, B. Paul Blasingame, Richard M. Davis, Frank Barranco, Edward Birch, and
Harry B. Powell. The Committees met five (5) times during 1993.

The members of the Bank Compensation Committee during 1993 were
Anthony Guntermann, Dale E. Hanst and Richard M. Davis. They met two (2) times
during 1993 to determine what the Bank's salary philosophy should be, set the
objective of the Bank's Salary Administration Program, approve exempt salary
ranges, determine Senior Officers' salaries and perform the function of
overseer to ensure that the objectives of the Salary Administration Program
were being met.

The full Board of Directors met fourteen (14) times during 1993. No
director attended fewer than 75 percent of the total number of meetings of the
Board and of the committees of which he is a member.

Executive Officers

Except for Messrs. Anderson and Spainhour, the following table sets
forth as to each of the persons who currently serves as an Executive Officer of
the Company and the Bank, such person's age, such person's principal
occupations during the past five years, such person's current position with the
Company and the Bank, and the period during which the person has served in such
position. Each of the Executive Officers named herein serves at the pleasure
of the Board. The information for Messrs. Anderson and Spainhour is provided
on pages 4 and 5 of this proxy statement.

<TABLE>
<CAPTION>
Position and Principal Occupations
Officer Age During the Past Five Years
------- --- -----------------------------------------------------------------------------
<S> <C> <C>
David Abts 49 Currently serves as Senior Vice President and Director of MIS/Operations.
Before joining the Bank in July, 1989, he was President of Key Pacific Services,
a data processing subsidiary of Key Corp., a bank holding company, from November 1986
to June 1989. Prior to that time, he was Senior Vice President and Director of
MIS/Operations for Pacific Western Bank in Oregon.

John J. McGrath 51 Currently serves as Senior Vice President and Chief Administrative Officer of the
Company and the Bank. During 1987, he served as Manager of the Trust Division and
from February 1982 to December 1986, he served as Loan Administrator of the Bank.

John F. Murphy 57 Currently serves as a Senior Vice President and Manager of the Commercial Loan
Division. From 1977 to 1993, he also served as Manager of the Bank's Main Office.

Jay D. Smith 53 Currently serves as Senior Vice President, General Counsel and Corporate Secretary
of the Company and the Bank. He has served as Legal Counsel of the Bank since July 1979.

Kent M. Vining 46 Currently serves as Senior Vice President and Chief Financial Officer of the Company
and the Bank. He has served as Chief Financial Officer of the Bank since April 1980.
</TABLE>

6
<PAGE> 10
Common Stock Ownership of Directors, Executive Officers and Certain Principal
Shareholders

The following table sets forth information concerning the beneficial
ownership of the Company's common stock as of December 31, 1993, by each
Director, by each named Executive Officer, by the Directors and Executive
Officers as a group, and by beneficial owners of more than 5 percent of the
Company's outstanding common stock.

<TABLE>
<CAPTION>
Amount and
Nature of Percent
Beneficial of
Beneficial Owner Ownership (1) Class (2)
---------------- ------------- ---------
<S> <C> <C>
Santa Barbara Bank and Trust, Trustee
of the Santa Barbara Bank
and Trust Employee Stock Ownership Trust
1021 Anacapa Street
Santa Barbara, CA 93101 582,124 11.14

Directors
Donald M. Anderson 212,620 (3) 4.07
Frank H. Barranco, M.D. 15,980 (4) .31
Edward E. Birch 17,594 (5) .34
B. Paul Blasingame 24,671 (6) .47
Richard M. Davis 11,786 (7) .23
Anthony Guntermann 31,615 (8) .61
Dale E. Hanst 37,847 (9) .72
Harry B. Powell 11,193 (10) .21
David W. Spainhour 145,252 (11) 2.78

Executive Officers
John J. McGrath 45,127 (12) .86
John F. Murphy 42,157 (13) .81
Kent M. Vining 23,574 (14) .45
All Directors and Executive Officers as a Group (14) 692,750 (15) 13.26
</TABLE>
- -------------
(1) Includes all shares beneficially owned, whether directly or
indirectly, together with known associates. Also includes any shares
owned, whether jointly or as community property, with a spouse. Also
includes any stock acquirable by exercise of stock options exercisable
within 60 days following December 31, 1993, though not exercised on or
before such date. All share data are stated as of December 31, 1993.
(2) Percentages are stated to include exercisable stock options accounted
for in the column listing Amount and Nature of Beneficial Ownership.
See Footnote (1) above.
(3) Includes 11,631 shares acquirable by exercise of exercisable stock
options.
(4) Includes 6,439 shares acquirable by exercise of exercisable stock
options.
(5) Includes 12,824 shares acquirable by exercise of exercisable stock
options.
(6) Includes 2,000 shares acquirable by exercise of exercisable stock
options.
(7) Includes 9,786 shares acquirable by exercise of exercisable stock
options.
(8) Includes 14,355 shares acquirable by exercise of exercisable stock
options.
(9) Includes 18,831 shares acquirable by exercise of exercisable stock
options.
(10) Includes 6,042 shares acquirable by exercise of exercisable stock
options.
(11) Includes 5,947 shares acquirable by exercise of exercisable stock
options.
(12) Includes 16,360 shares acquirable by exercise of exercisable stock
options.
(13) Includes 16,266 shares acquirable by exercise of exercisable stock
options.
(14) Includes 11,631 shares acquirable by exercise of exercisable stock
options.
(15) Includes 158,941 shares acquirable by exercise of exercisable stock
options. Actual share ownership as of December 31, 1993 by the
Directors and Executive Officers was 533,809.

7
<PAGE> 11
EXECUTIVE COMPENSATION

Shown below is information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1993, 1992 and 1991, of those persons who were, as of said
date, (i) the chief Executive Officer and (ii) the other four most highly
compensated Executive Officers of the Company (the "Named Officers"):

Summary Compensation Table

<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
----------------------------------------------- ------------
Other Securities All Other
Annual Underlying Annual
Salary Bonus (2) Compensation (1) Options Compensation (3)
Name and Principal Position Year (Dollars) (Dollars) (Dollars) (Number) (Dollars)
- --------------------------- ---- --------- --------- ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Donald M. Anderson . . . . . . . . . . 1993 178,333 65,000 12,340 7,500 35,970
Chairman of the Board . . . . . . . 1992 170,000 60,000 10,333 10,000 39,400
. . . . . . . . . . . . . . . . . . 1991 170,000 50,000 -- -0- --

David W. Spainhour . . . . . . . . . . 1993 195,833 130,000 73,833 15,000 40,338
President and Director . . . . . . . 1992 175,000 120,000 8,604 20,000 37,410
. . . . . . . . . . . . . . . . . . 1991 175,000 100,000 -- 6,334 --

John F. Murphy . . . . . . . . . . . . 1993 108,400 65,000 11,145 7,500 31,255
Senior Vice President and . . . . . 1992 100,273 60,000 41,012 14,635 29,453
Manager, Commercial Loan Division . 1991 100,821 50,000 -- -0- --

John J. McGrath . . . . . . . . . . . . 1993 108,333 65,000 40,447 14,229 32,304
Senior Vice President and . . . . . 1992 100,006 60,000 8,891 10,000 28,762
Chief Administrative Officer . . . . 1991 100,007 50,000 -- 3,585 --

Kent M. Vining . . . . . . . . . . . . 1993 108,334 65,000 10,863 7,500 30,989
Senior Vice President and . . . . . 1992 100,003 60,000 10,749 10,000 27,636
Chief Financial Officer . . . . . . 1991 100,005 50,000 -- 1,676 --
- -------------------
</TABLE>
(1) In accordance with the transitional provisions applicable to the
revised rules on executive officer and director compensation
disclosure adopted by the Securities and Exchange Commission, as
informally interpreted by the Commission's Staff, amounts of Other
Annual Compensation and All Other Compensation are excluded for the
Company's 1991 fiscal year. Other Annual Compensation consists of
insurance premiums (other than term insurance) and dues and
memberships paid on behalf of the Named Officers for fiscal year 1993
and 1992. The amounts stated for David W. Spainhour and John J.
McGrath include $65,059 and $31,368, respectively, received in the
form of the difference between the price paid for stock of the Company
purchased upon exercise of employee stock options, and the fair market
value of such stock at the date of purchase.

(2) Amounts in this column represent bonuses awarded by the Company's
Compensation Committee upon evaluation of performance during fiscal
years 1992, 1991 and 1990, respectively, but paid during fiscal years
1993, 1992 and 1991, respectively.

(3) This column includes amounts contributed by the Company on behalf of
the Named Officers to the Company's Incentive & Investment and Salary
Savings Plan, which is a defined contribution profit sharing plan
which includes a 401(k) savings feature. Under this Plan, the Company
makes discretionary contributions which are allocated among Plan
participants ratably based on participants' relative compensation
levels. During the Company's last fiscal year, the Company did not
make discretionary contributions to the Plan on behalf of the Named
Officers. Under the 401(k) savings feature of the Plan during 1993,
the Company matched $.50 for every $1.00 of voluntary employee
contributions up to 6% of employee compensation. During the last
fiscal year, the Company made matching contributions on behalf of the
Named Officers totaling $15,423, in the respective amounts set forth
in the second Table below.

8
<PAGE> 12
I & I Discretionary Contributions

<TABLE>
<S> <C>
Donald M. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . . $ -0-
David W. Spainhour . . . . . . . . . . . . . . . . . . . . . . . . . . $ -0-
John F. Murphy . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ -0-
John J. McGrath . . . . . . . . . . . . . . . . . . . . . . . . . . . $ -0-
Kent M. Vining . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ -0-
</TABLE>

401(k) Matching Contributions

<TABLE>
<S> <C>
Donald M. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,497
David W. Spainhour . . . . . . . . . . . . . . . . . . . . . . . . . . $ -0-
John F. Murphy . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,689
John J. McGrath . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,687
Kent M. Vining . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,550
</TABLE>

All Other Compensation also include contributions made by the Company,
if any, on behalf of the Named Officers under the Company's Employee
Stock Ownership Plan. During the last fiscal year, the Company made
contributions to the ESOP on behalf of the Named Officers in the
following amounts (including dividends paid on stock held in the Named
Officers' accounts under the Plan, if any):

ESOP Cash Contributions and Dividends

<TABLE>
<S> <C>
Donald M. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,793
David W. Spainhour . . . . . . . . . . . . . . . . . . . . . . . . . . $ 35,874
John F. Murphy . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,202
John J. McGrath . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,409
Kent M. Vining . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,191
</TABLE>

A portion of the above ESOP contributions (including dividends) made
during 1993 was used to make principal and interest payments on an
outstanding ESOP loan. In 1990, the ESOP acquired 289,406 shares of
the Company's common stock (as adjusted for subsequent stock
dividends) partially through the use of a loan from a commercial bank.
The terms of the loan required that the shares so acquired remain
pledged as security for the loan, with the shares being released from
that pledge only as the principal loan balance was periodically
repaid. Thus, as principal payments were periodically made on the
loan and shares were released from the pledge, allocations of those
released shares were made to individual Plan participants' accounts,
including the accounts of the Named Officers. This loan was repaid in
full in January of 1993. The specific number of shares allocated to
the participant accounts of each Named Officer for the last fiscal
year of the Company (which includes allocations relating to the
repayment of the aforesaid loan in full), together with the total
number of shares allocated to the Named Officer ESOP accounts as of
the date hereof, are as follows:

ESOP Share Allocations

<TABLE>
<CAPTION>
Number of Shares Allocated Total Number Shares
Named Officers During 1993 As Of 12/31/93
-------------- -------------------------- -------------------
<S> <C> <C>
Donald M. Anderson . . . . . . . 847 15,971
David W. Spainhour . . . . . . . 1,233 16,577
John F. Murphy . . . . . . . . . 863 11,891
John J. McGrath . . . . . . . . 906 12,247
Kent M. Vining . . . . . . . . . 906 11,927
</TABLE>

9
<PAGE> 13
The dollar value of these shares allocated to these Named Officers'
accounts are represented in the table "ESOP Cash Contributions and
Dividends" above, and are thus included in the above Summary
Compensation Table.

All Other Compensation also include the dollar value of any premiums
paid by the Company during its last fiscal year with respect to term
life insurance for the benefit of the Named Officers. During the last
fiscal year, the dollar value of such premiums paid on behalf of the
Named Officers were as follows:

Term Life Insurance Premiums

<TABLE>
<S> <C>
Donald M. Anderson . . . . . . . . . . . . . . . . $ 4,680
David W. Spainhour . . . . . . . . . . . . . . . . $ 4,464
John F. Murphy . . . . . . . . . . . . . . . . . . $ 2,364
John J. McGrath . . . . . . . . . . . . . . . . . $ 2,208
Kent M. Vining . . . . . . . . . . . . . . . . . . $ 1,248
</TABLE>

The Company also maintains for the benefit of the Named Officers, and
other "key" employees, its Key Employee Retiree Health Plan, which was
adopted by the Company effective December 29, 1992. This Plan is an
unfunded plan which pays a portion of health insurance coverage for
retired key employees and their spouses (but not dependents). While
the Named Officers may be eligible for coverage under this Plan when
they retire, no amounts were paid by the Company during the last
fiscal year for coverage for any Named Officers, nor were any amounts
contributed to the Plan during the last fiscal year.

Option Grants

Shown below is information on grants of stock options to the Named
Officers pursuant to the Company's various employee stock option plans during
the fiscal year ended December 31, 1993, which are reflected in the Summary
Compensation Table on page 8.

<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
-----------------------------------------------------------------------------------------
Number of
Securities Percent of
Underlying Total Options
Options Granted to Exercise Grant Date
Granted in Employees in Price Expiration Present
Name Fiscal 1993(1) Fiscal 1993 (per share) Date Value(2)
---- -------------- ------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Donald M. Anderson . . . . . . . 7,500 4.82% $19.00 03/01/98 $ 24,450
David W. Spainhour . . . . . . . 15,000 9.64% $19.00 03/01/98 $ 48,900
John F. Murphy . . . . . . . . . 7,500 4.82% $19.00 03/01/98 $ 24,450
John J. McGrath . . . . . . . . . 1,632 1.05% $19.00 05/01/02 $ 6,969
2,401 1.54% $19.00 01/25/98 $ 7,827
2,696 1.73% $19.00 01/25/98 $ 8,789
7,500 4.82% $19.00 03/01/98 $ 24,450
Kent M. Vining . . . . . . . . . 7,500 4.82% $19.00 03/01/98 $ 24,450
</TABLE>
_______________

(1) Options granted under the Company's Stock Option Plan and Restricted Stock
Option Plan are administered by the Company's Compensation Committee. All
of the above options granted during 1993 contain the following terms, in
addition to those terms set forth above: (a) they vest over a period of
five years at the rate of 20% per year; and (b) options granted under the
Restricted Stock Option Plan are subject to the restrictions that the
shares issued may not be transferred without the approval of the Committee
for five years following the option grant or two years following the
exercise of the option, whichever is later. Of the above options, all
were granted under the Restricted Stock Option Plan. Of the shares
optioned to Mr. McGrath, 6,729 shares were reload options.

(2) Values are based on Black-Scholes option pricing model adapted for use in
valuing executive stock options. The actual value, if any, a Named
Officer may realize will depend on the excess of the stock price over the
exercise price on the date the option is exercised, and there is no
assurance that the value realized by a Named Officer will be at or near
the value estimated by the Black-Scholes model. The estimated values
under this model are based on certain assumptions as to variables such as
interest rates, stock price volatility and future dividend yield. The
above

10
<PAGE> 14
calculations are based on the remaining term of the options, which
is 5 years except for those reload options which have a remaining life of
9.25 years, a risk-free rate of return of 6%, an annual dividend yield of
3%, and stock price volatility of 15%.

Option Exercises and Fiscal Year-end Values

Shown below is information with respect to the unexercised options to
purchase the Company's Common Stock granted to the Named Officers in fiscal
1993 and prior years under the Company's Stock Option Plan, and Restricted
Stock Option Plan and held by them at December 31, 1993.

Aggregate Option Exercises Last Fiscal Year and FY-end Option Values

<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options Exercised Options Held At In-the-Money Options at
During Fiscal Year 1993 December 31, 1993 December 31, 1993(1)
---------------------------- ----------------------------- ------------------------------
Shares
Acquired Value
on Exercise Realized(1)
Name (Number) (Dollars) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald M. Anderson . -0- -0- 10,131 16,630 $ 39,840 $ 64,712
David W. Spainhour . 22,314 $65,058 2,946 30,946 $ 6,815 $124,070
John F. Murphy . . . -0- -0- 14,766 16,630 $ 76,641 $ 64,712
John J. McGrath . . . 8,378 $31,368 8,131 23,359 $ 27,340 $ 83,217
Kent M. Vining . . . -0- -0- 10,131 16,630 $ 39,840 $ 64,712
</TABLE>

_______________

(1) Dollar values are calculated by determining the difference between the
estimated fair market value of the stock underlying the options, based
on third-party transactions reported to the Company ($21.75 per
share), and the exercise price of the options as of the exercise date
or as of year-end, respectively.

Executive Employment Contracts

The Company has no contract of employment with any Named Officer, nor
does it have any compensatory plan or arrangement with any Named Officer
concerning termination of employment or change in control of the Company.

Compensation Committee Interlocks and Insider Participation

The Company's Compensation Committee is composed of three of the
Company's "outside" directors: Anthony Guntermann, Richard M. Davis and Dale E.
Hanst. None of these Directors has ever been employed by the Company in any
position, other than as a director. Mr. Hanst is a senior partner in the law
firm of Schramm & Raddue, Santa Barbara, California. During the past fiscal
year, Schramm & Raddue served as outside corporate and litigation counsel to
the Company.

No Executive Officer of the Company had any interlocking relationship
with any other for-profit entity during the last fiscal year, including (a)
serving on the compensation committee of any other such entity, or (b) serving
as a director of any other such entity.

Extent of Participation in the Company's Stock Plans

As of the date of this proxy statement, the following number of
employees of the Company and/or the Bank were eligible to participate and were
participating in each of the employee plans of the Company:

<TABLE>
<CAPTION>
Number Number
Plan Eligible Participating
---- -------- -------------
<S> <C> <C>
Employee Stock Ownership Plan . . 402 402
Stock Option Plan . . . . . . . . 93 66
Restricted Stock Option Plan . . . 62 8
Director Stock Option Plan . . . . 7 7
</TABLE>

11
<PAGE> 15
Securities Subject to Option Plans

The following tables set forth information, as of the date of this
proxy statement (as adjusted to reflect subsequent stock splits and stock
dividends), regarding options under the various employee and director stock
option plans of the Company:

Stock Option Plan

<TABLE>
<CAPTION>
Number of
Shares Remaining
Reserved for
Issuance Number of Shares Number of Shares
(Exclusive of Issued Pursuant Subject to Weighted Average Range of
Outstanding to Exercises of Outstanding Exercise Price Expiration
Options) Options Options Per Share Dates
---------------- ---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
-0- 647,544 175,919 $18.84 01/01/94
to 07/01/99
</TABLE>

Restricted Stock Option Plan

<TABLE>
<CAPTION>
Number of
Shares Remaining
Reserved for
Issuance Number of Shares Number of Shares
(Exclusive of Issued Pursuant Subject to Weighted Average Range of
Outstanding to Exercises of Outstanding Exercise Price Expiration
Options) Options Options Per Share Dates
---------------- ---------------- ---------------- ---------------- ----------
<S> <C> <C> <C> <C>
190,198 15,000 294,802 $17.34 05/01/97
to 05/01/02
</TABLE>

Director Stock Option Plan

<TABLE>
<CAPTION>
Number of
Shares Remaining
Reserved for
Issuance Number of Shares Number of Shares
(Exclusive of Issued Pursuant Subject to Weighted Average Range of
Outstanding to Exercises of Outstanding Exercise Price Expiration
Options) Options Options Per Share Dates
---------------- ---------------- ---------------- ---------------- ----------
<S> <C> <C> <C> <C>
50,137 116,972 45,277 $17.27 06/01/94
to 07/01/98
</TABLE>

Compensation of Directors

The Company has a policy of paying non-employee directors an annual
retainer of $6,000 plus $500 per board meeting attended and $250 per committee
meeting, except for the Executive Committee. Each outside director who is a
member of the Executive Committee is paid $1,000 per meeting. Total directors'
fees paid in 1993 were $211,282.

12
<PAGE> 16
Report of Compensation Committee on Executive Compensation

The Compensation Committee of the Bank is composed of the undersigned
independent outside directors. The Committee meets after the end of each year
to review the performance of the Bank's Chief Executive Officer and its other
Executive Officers, including those named in the Summary Compensation Table set
forth above, during the just-completed calendar year and to make
recommendations to the Board on executive salaries for the ensuing year,
bonuses for the past year, and grants of stock options. The Committee met in
February, 1993, to make its compensation recommendations for calendar year
1993. The Committee met again in February 1994, to review the Bank's 1993
performance and recommend bonuses for the Bank's Executive Officers.

The Committee makes this report to the Shareholders so that they may
be fully informed as to the factors utilized by the Committee in making its
recommendations to the Board of Directors concerning compensation levels for
the Bank's senior executives for calendar year 1993. The discretionary
components of executive compensation (excluding those benefits which are
generally available to all employees, such as ESOP contributions, insurance,
etc.) are salary, bonus, and stock options.

In considering salary levels of the Chief Executive Officer and other
Executive Officers, the Committee's recommendations, while subjective, are
intended to be competitive within the industry to ensure retention of the
Bank's high quality Executive Officers, and to maintain the "team approach" to
Management of the Bank. In making these recommendations, the Committee
considers the compensation levels of peer group companies (which are other
California independent community banks) through reference to information
available in the industry such as the State Banking Department's Executive
Officer Compensation Survey, the Survey of Executive Compensation of California
Independent Banks, and the survey prepared by Hay Management Consultants for
the Bank of Stockton dated November 22, 1993. The Committee attempts to set a
salary level which is approximately the median range for peer group companies
which have a comparable performance.

Another component of executive compensation is the bonus which is
available to the Bank's Executive Officers. Again, the bonus recommendations
of the Committee are subjective but every effort is made to relate the
recommended bonuses to the Bank's overall performance for the period in
question as measured by its profitability and its capital levels. In addition,
the Bank's past performance relative to the industry is an important factor,
e.g. 28 consecutive years of increased earnings and return on assets and equity
that are consistently in the top quartile of California banks. The Committee
also considers the Bank's problem asset levels, its loan production, the
quality of its asset-liability management and its regulatory compliance. The
overall value of the Bank and shareholder equity levels are also important
factors considered by the Committee in making its recommendations.

A final component of executive compensation is stock options which are
granted from time-to-time to members of the executive group. Stock options are
primarily utilized to provide longer range incentives to the executives to
insure their long-range commitment to the Bank.

SANTA BARBARA BANK & TRUST
COMPENSATION COMMITTEE

Dale E. Hanst, Committee Chairman
Richard Davis, Committee Member
Anthony Guntermann, Committee Member

13
<PAGE> 17
Performance Graph

The following graph compares the yearly percentage change in the
Company's cumulative total shareholder return on its outstanding common stock,
stated as if a $100 initial investment had been made at the beginning of the
period, including reinvestment of dividends, utilizing a measurement period
beginning on December 31, 1988 through December 31, 1993, measured against (i)
the Standard & Poor's 500 Stock Index and (ii) Montgomery Securities' Southern
California Bank Proxy Index as published in its Western Bank Monitor.

<TABLE>
<CAPTION>
1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
Santa Barbara Bancorp $100.00 $99.09 $79.48 $66.84 $98.33 $116.26
S&P 500 $100.00 $131.59 $127.49 $166.17 $178.81 $196.75
Montgomery Securities $100.00 $134.71 $106.73 $99.79 $91.84 $100.61
</TABLE>

SELECTION OF INDEPENDENT ACCOUNTANTS
(Proposal 2)

The firm of Arthur Andersen & Co. served as independent certified
public accountants for the Company and the Bank with respect to the year 1993,
and has been recommended by the Board to be the Company's and the Bank's
accountants for calendar year 1994. It is expected that one or more
representatives of Arthur Andersen & Co. will be present at the meeting, and
will be given the opportunity to make a statement, if desired, and to respond
to all appropriate questions.

Audit services performed by Arthur Andersen & Co. for the year ended
December 31, 1993 consisted of examination of the financial statements of the
Company, the Bank and its employee benefit plans, certain services related to
filings with the Securities and Exchange Commission, and consultation on
matters related to accounting and financial reporting. In addition to these
services, Arthur Andersen & Co. performed certain non-audit services
consisting primarily of consultation on matters relating to the preparation of
tax returns, the total fees for which amounted to approximately 20.4% of the
total fees for services paid to Arthur Andersen & Co. for the year ended
December 31, 1993. All such services were approved by the Bank's Audit
Committee, which has determined the firm of Arthur Andersen & Co. to be fully
independent of the operations of the Bank.

Recommendation of the Board of Directors

The Company's Board of Directors recommends that the shareholders
approve Arthur Andersen & Co. to serve as certified independent public
accountants for the Company for the calendar year 1994. The affirmative vote
of a majority of the shares present or represented and entitled to vote at the
meeting will be required to approve this action.

14
<PAGE> 18
CERTAIN TRANSACTIONS

Some of the Directors of the Company and the companies with which they
are associated are customers of, and have had banking transactions with the
Bank in the ordinary course of the Bank's business, and the Bank expects to
have banking transactions with such persons in the future. In Management's
opinion, all loans and commitments to lend included in such transactions were
made in the ordinary course of the Company's business and in compliance with
applicable laws on substantially the same terms, including interest rates and
collateral, as those prevailing for comparable transactions with other persons
of similar creditworthiness and, in the opinion of Management, did not involve
more than a normal risk of collectability or present other unfavorable
features. The aggregate amount of all such loans and credit extensions
outstanding as of December 31, 1993, to all Directors and Executive Officers,
together with their associates and members of their immediate family, was
approximately $926,615, constituting approximately 1.08% of Company's
stockholders' equity. The Company has a very strong policy regarding review of
the adequacy and fairness to the Bank of loans to its Directors and officers.

Mr. Dale Hanst, a director of the Company, is a senior partner in the
law firm of Schramm & Raddue. The firm of Schramm & Raddue represented the
Bank in corporate and certain litigation matters in 1993.

Donald M. Anderson, Chairman of the Board and Director of the Company,
is a general partner in Pueblo Associates, from which the Company leases space
at 1021 Anacapa Street for its executive headquarters and the housing of
administrative functions of the Bank. The lease, covering 14,520 square feet
of space, commenced November 1978, originally was for a term of ten and
one-half (10 1/2) years with two (2) five (5) year options to renew. In May
1989, the lease was amended to provide for two (2) additional five (5) year
options to renew. An additional 4,635 square feet of space was added to the
lease, effective July 1, 1980, 1,958 square feet was added to the lease in
1985, 2,960 square feet was added to the lease in 1987, and 2,900 square feet
in 1993. The lease payments to Pueblo Associates totaled $499,506 during 1993.
In the Company's opinion the lease is comparable to an "arms length" negotiated
lease.

COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's Directors and Executive Officers, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of Common Stock of the Company.
Officers, Directors and greater than ten-percent stockholders are required by
Securities and Exchange Commission regulation to furnish the Company with
copies of all Section 16(a) forms they file.

To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1993, all
Section 16(a) filing requirements applicable to its officers, Directors and
greater than ten-percent beneficial owners were complied with except that John
J. McGrath and John J. Murphy each reported stock option expirations on Form 5
in June, 1993, that should have been filed on or before March 15, 1993.

SHAREHOLDER PROPOSALS

The deadline for shareholders to submit proposals to be considered for
including in the proxy statement for the Company at the Company's 1995 Annual
Meeting of Shareholders is November 10, 1994. No such proposals were submitted
with respect to the 1994 Annual Meeting.

LEGAL MATTERS

There are no pending or threatened legal proceedings to which the
Company or Bank is or may become a party, which may materially affect its
property or proposed business, other than ordinary routine litigation
incidental to the Company's business.

15
<PAGE> 19
OTHER MATTERS

Management does not know of any matters to be presented at the
Meeting, other than those set forth above. However, if other matters come
before the Meeting, it is the intention of the persons named in the
accompanying proxy to vote said proxy in accordance with the recommendations of
Management on such matters, and discretionary authority to do so is included in
the proxy.

FINANCIAL STATEMENTS OF THE COMPANY

Shareholders of the Company are advised that they may, upon request
made to the Company's Head Office located at 1021 Anacapa, Santa Barbara,
California 93101, obtain copies (free of charge) of the Company's Financial
Statements or additional copies of the Company's Annual Report for 1993 by
requesting them from the Secretary of the Corporation. Pursuant to regulations
of the Securities and Exchange Commission, shareholders of the Company will
receive the 1993 Annual Report of the Company together with this proxy
statement. If for any reason any shareholder does not receive a copy of the
1993 Annual Report of the Company together with this proxy statement, please
advise the Company, and a copy will be provided without any delay or
inconvenience.

NOTICE OF AVAILABILITY OF MATERIAL

THE BANK WILL PROVIDE WITHOUT CHARGE TO THE SHAREHOLDERS OF RECORD ON
MARCH 9, 1994 (THE RECORD DATE FOR ELIGIBILITY TO VOTE AT THE ANNUAL MEETING) A
COPY OF THE COMPANY'S 1993 FORM 10-K AND ANNUAL REPORT, WHICH WILL BE FILED
UNDER THE SECURITIES AND EXCHANGE ACT OF 1934.

All written requests for this report should be addressed to:

Dr. Clare McGivney
Assistant Vice President
Santa Barbara Bank & Trust
Post Office Box 1119
Santa Barbara, California 93102

STOCKHOLDERS ARE REQUESTED TO VOTE, DATE, SIGN AND RETURN
PROMPTLY THE ENCLOSED PROXY WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING. A
RETURN, SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE
IS REQUIRED IF MAILED WITHIN THE UNITED STATES. PROMPT RESPONSE IS HELPFUL AND
YOUR COOPERATION WILL BE APPRECIATED. YOU MAY, WITHOUT AFFECTING ANY VOTE
PREVIOUSLY TAKEN, REVOKE YOUR PROXY BY A LATER PROXY FILED WITH THE SECRETARY
OF THE COMPANY OR BY FILING WRITTEN NOTICE OF REVOCATION WITH THE SECRETARY OF
THE COMPANY. ATTENDANCE AT THE MEETING WILL NOT IN AND OF ITSELF REVOKE A
PROXY. IF YOU ATTEND THE MEETING, YOU MAY REVOKE THE PROXY BY ADVISING THE
INSPECTOR OF ELECTIONS THAT YOU ELECT TO VOTE IN PERSON.

SANTA BARBARA BANCORP

By:_________________________________________
Donald M. Anderson
Chairman of the Board

Dated: March 17, 1994