<PAGE>
TYPE: 425
SEQUENCE: 1
DESCRIPTION: LETTER FILED PURSUANT TO RULE 425
Rule 425
Filer: Pacific Capital Bancorp
Issuer: Pacific Capital Bancorp
Commission File Number: 0-11113
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CONTACT: CLAY LARSON (Monterey)
(831) 373-4900
VERN HORTON (Salinas)
(831) 757-4900
ED STEPHENSON (Hollister)
(831) 638-3349
TOM THOMAS (Santa Barbara)
(805) 564-6216
PACIFIC CAPITAL BANCORP
SIGNS MERGER AGREEMENT WITH
SAN BENITO BANK
SALINAS, CALIFORNIA, FEBRUARY 3, 2000 - Pacific Capital Bancorp
(Nasdaq:SABB), holding company for First National Bank of Central California,
its affiliate South Valley National Bank, and Santa Barbara Bank & Trust,
announced today that it has signed a merger agreement with Hollister,
California-based San Benito Bank (OTC BB:SABH).
The acquisition presents a significant opportunity for in-market
savings and is expected to be accretive to Pacific Capital Bancorp earnings
within the first full year of operation. It will be accounted for under the
pooling of interests method of accounting for business combinations. Under
the terms of the agreement, each outstanding share of San Benito Bank common
stock will be converted into the right to receive .605 shares of Pacific
Capital Bancorp common stock. Based on the closing price of Pacific Capital
Bancorp common stock on Thursday, February 3, of $30 per share, the
transaction is valued at $51.8 million, representing 2.80 times San Benito
Bank's book value at December 31, 1999, and 22.9 times the bank's 1999
earnings. The transaction, which is subject to regulatory approval and the
approval of San Benito Bank shareholders, is expected to close during the
second quarter of 2000.
San Benito Bank operates three offices in San Benito County, in the
communities of Hollister and San Juan Bautista, and an office in Gilroy, in
Santa Clara County. Pacific Capital Bancorp is the parent of a 37-office
community bank network serving customers in six Central Coast counties. First
National Bank of Central California maintains branches in Monterey, Salinas
(2), Carmel, Watsonville, and Soledad. Offices in Gilroy, Morgan Hill,
Hollister and San Juan Bautista operate under the name South Valley National
Bank. Santa Barbara Bank & Trust operates 27 offices in Santa Barbara and
West Ventura counties.
At December 31, 1999, San Benito Bank reported net income of $2.26
million and assets of $201 million. Pacific Capital Bancorp reported record
earnings of $44.3 million, and assets of $2.78 billion at year-end 1999.
"This is a very natural and timely combination of community banks
which have similar philosophies on serving their customers and communities,"
said Clayton C. Larson, Vice Chairman of Pacific Capital Bancorp and
President of First National Bank of Central California. "San Benito Bank's
commitment to 'COMMUNITY BANKING AT ITS BEST' is a perfect fit with our
dedication to legendary service to the customers and communities we serve.
Bringing this organization into the Pacific Capital Bancorp network of
community banks is an excellent next growth step for us as we continue to
position ourselves as THE bank of choice along the Central Coast."
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"We are very enthusiastic about our alliance with Pacific Capital
Bancorp," said Gerald T. McCullough, Chairman of the Board of San Benito
Bank, which has served its local markets since 1984. "Our board considered a
number of possible affiliations and, after careful review, unanimously
concluded that joining the Pacific Capital Bancorp community bank network
offers the best opportunity for our bank, our community and our shareholders.
The current market for our stock is not very active, and we feel that our
shareholders will benefit from owning stock in a company with greater market
liquidity and a favorable dividend policy."
"As the pressures on community banks increase, it is imperative for
those organizations that strive to continue serving their markets with
superior service to align with other institutions that share their operating
philosophy," said Edward T. Stephenson, President & Chief Executive Officer
of San Benito Bank. "Our alliance with Pacific Capital Bancorp will allow us
to preserve the name and identity of San Benito Bank."
Stephenson will remain President of San Benito Bank, which will
become an affiliate of First National Bank of Central California. One member
of the San Benito Bank board will be nominated for election to the Pacific
Capital Bancorp board of directors at the company's annual shareholders'
meeting in 2001, and additional members of the current board of San Benito
Bank will join the board of First National Bank of Central California
following the close of the transaction.
"We intend to maintain the high level of service that San Benito Bank
customers have come to expect from their financial institution," said Vernon
Horton, Vice Chairman of Pacific Capital Bancorp and Chairman of the Board of
First National Bank of Central California, "which includes the local
leadership, authority and decision making that sets community banks apart
from their larger competitors. Additionally, we are looking forward to
providing our new customers with some exciting new banking products and
services which they've not had before, including trust and investment
services, international banking, trade finance, and the largest proprietary
ATM network on the Central Coast.
"Overall," said Horton, "we believe that the alliance between these
highly-respected community banks will result in the best of both worlds for
our customers - all the products and services of a big bank, delivered with
the same personalized high quality service our customers have come to expect
from their local banker."
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITH RESPECT
TO THE FINANCIAL CONDITION, RESULTS OF OPERATION AND BUSINESS OF PACIFIC
CAPITAL BANCORP. THESE INCLUDE STATEMENTS THAT RELATE TO OR ARE DEPENDENT ON
ESTIMATES OR ASSUMPTIONS RELATING TO THE PROSPECTS OF CONTINUED LOAN GROWTH,
IMPROVED CREDIT QUALITY AND CERTAIN OPERATING EFFICIENCIES RESULTING FROM THE
INTEGRATION OF COMBINED OPERATIONS. THESE FORWARD-LOOKING STATEMENTS INVOLVE
CERTAIN RISKS AND UNCERTAINTIES. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS
INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (1) COMPETITIVE PRESSURE
AMONG FINANCIAL SERVICES COMPANIES INCREASES SIGNIFICANTLY; (2) CHANGES IN
THE INTEREST RATE ENVIRONMENT REDUCE INTEREST MARGINS; (3) GENERAL ECONOMIC
CONDITIONS, INTERNATIONALLY, NATIONALLY OR IN THE STATE OF CALIFORNIA ARE
LESS FAVORABLE THAN EXPECTED; (4) LEGISLATION OR REGULATORY REQUIREMENTS OR
CHANGES ADVERSELY AFFECT THE BUSINESS IN WHICH THE COMBINED ORGANIZATION WILL
BE ENGAGED; AND (5) OTHER RISKS DETAILED IN THE PACIFIC CAPITAL BANCORP
REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES FOR
SALE. PACIFIC CAPITAL BANCORP WILL FILE A REGISTRATION STATEMENT ON FORM S-4
WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE SECURITIES
OF PACIFIC CAPITAL BANCORP TO BE OFFERED AND ISSUED TO SHAREHOLDERS OF SAN
BENITO BANK IN THE PROPOSED TRANSACTION. THE REGISTRATION STATEMENT WILL
INCLUDE A PROSPECTUS/PROXY STATEMENT WHICH WILL BE SENT TO SHAREHOLDERS OF
SAN BENITO BANK SEEKING THEIR APPROVAL OF THE PROPOSED TRANSACTION. WHEN
FILED, THE REGISTRATION STATEMENT CAN BE OBTAINED FREE OF CHARGE AT THE
INTERNET WORLD WIDE WEBSITE MAINTAINED BY THE SECURITIES AND EXCHANGE
COMMISSION AT HTTP://WWW.SEC.GOV.
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