Pacific Capital Bancorp (PCBC)

All Comments on PCBC

  • commenter
    Geoff
    Considine
    Jul 08 10:37 AM
    My Website
    The Do-It-Yourself Market-Neutral Portfolio [view article]
    Steve:

    Over the last 12 months, I get about the same result--depending on whether you drop OMM when it was delisted due to acquisition or substitute its acquirer. Either way, the portfolio is down by an amount close to the S&P500, as you suggest. That said, note that the R^2 of 20% or less over long periods of time means that it is not really a good idea to benchmark against something like the S&P500--most of the volatility in the portfolio is not due to moves in the S&P500. A "market neutral" apporoach that has fairly high volatility (like this one) may not drop when the market drops--or it may--the market direction is not the driver. In this case, the credit crisis has been a big driver because of the exposure to banks here.

    This kind of portfolio is a good one to monitor over the long haul--thanks for the reminder :)

    Geoff     Reply
  • commenter
    Steveal50
    Jul 08 06:07 AM
    The Do-It-Yourself Market-Neutral Portfolio [view article]
    Geoff,

    Any comment on this article in the light of a subsequent years performance?

    The banks were hammered, of course, but the overall performance seems right in line with the indices.

    Steve     Reply
  • commenter
    Cruzer the
    Bruiser
    Jun 26 11:44 PM
    Pacific Capital Bancorp: Evasive Maneuvers [view article]
    Dude. Loan loss provisions are not dollar for dollar on collateralized loans. Provisioning 100% on real estate deals is re-cock-u-lous and a really bad use of balance sheet liquidity. The banking business is based on using leverage. You should know that. Hello?

    PCBS should remain as under provisioned as it possibly can withstand for as long as it can and utilize those funds elsewhere. Excess provision is a leading cause of bank under-performance.

    Specifically regarding PCBS's provisioning level(s): there exist determining variables that aren't apparent and cannot be made transparent until after they occur -- namely, work out scenarios, short collateral sales, note sales, guarantors stepping up to the plate, etc. Skilled banks are pretty good at looking 90 - 180 days down the road. That the provision hasn’t been increased proportionately to the rise in non accrual loans is an indicator ONLY that losses equivalent to those non accruals are not expected in the next 180 days.

    Meanwhile, back at the ranch. The last time I looked, PCBS had $700 million in Tier I and Tier II capital on the balance sheet. I imagine they aren’t going anywhere any time soon, whether they earn $100 million in 2008 or only forty seven cents – maybe somewhere in the middle.

    So, while you may be gaming short, PCBS's stock has declined at the same rate as 95% of the rest of the market. You haven't predicted much. Just so we are all very clear that you aren't an expert in bank balance sheet management, and that you have a financially vested interest in the stock's decline, all in all I would say that your comments are pretty much lack luster.

    By the way… a 113% increase in non performing loans means what? They went from $76 million to $163 million in non performing assets? Yikes! That leaves $5,836,300,000 in performing loans. You need to look at peer banks and see what they are doing. Analysis requires objective comparison. PCBS’s overall loan portfolio has been well performing over time. As such, a doubling in non performing assets in the worst banking crises in 50 years is actually remarkable. Remarkably LOW.
    Reply
  • commenter
    thebird
    Jun 17 03:39 PM
    Subprime Red Flag in Pacific Capital Bancorp's 10Q? [view article]
    The real story with this bank is the VERY WEAK MANAGEMENT who has destroyed what used to be top performing community bank and the leader in their markets. They no longer have a core competency or a viable strategy. Reply
  • commenter
    thebird
    Jun 03 04:18 PM
    General Discussion on PCBC
    I only see downside risk with PCBC. They have completely lost their franchise value as a dominant community bank in their market in favor of some mgmt fantasy of competing in the wealth mgmt and commercial lending jungle of metro Los Angeles and the Bay Area. What branch retail value they had is now gone and they can't generate deposits to fund any growth or preserve spreads. They even abandoned their small business strategy when they jettisoned the equipment leasing and auto finance businesses. At least those portfolios generated attractive spreads and high asset diversification. Now they are stuck with huge transaction risk on very large commercial client exposures at very thin margins to begin with. That was the only way they could even compete in those markets. The only thins they have left is a good residential real estate portfolio and thier RAL/RT business. The RAL/RT business is not compatible with a regional bank and is illiquid from a divestiture perspective. Sr Mgmt, Chairman, Pres & Head of Commercial Lending has totally messed up this bank. Any potential suitor would no longer pay a premium and are probably mired in their own challenges to even bother looking. Alot of downside with little upside. Not a pretty picture in my opinion. Reply
  • commenter
    heynow
    May 16 01:09 PM
    Subprime Red Flag in Pacific Capital Bancorp's 10Q? [view article]
    It sounds to me like you are grasping at straws. In Q4 2007, PCBC recognized a loss on some securities that were marked-to-market. Wouldn't that demonstrate that they recognize losses when they need to?

     Reply
  • commenter
    thannagan
    May 16 08:56 AM
    Subprime Red Flag in Pacific Capital Bancorp's 10Q? [view article]
    1) Not all CMO's have been downgraded. If this one is still AAA, as the bank reports, then it's AAA. 2) It is not held as a "for sale" investment and does not have to be marked to market. 3) Even if your emotions are correct, and you are not just trying to rationalize your short, what's the amount involved? Is it material? 4) The RAL business is always a first quarter event. This is no surprise to anyone and actually performed better than estimates. 5) What is your support (ie:numbers) to say the loss reserve is too low? I'm not saying your conclusion is wrong, but in the spirit of this site, I'd like some hard analysis and less fear mongering. Reply
  • commenter
    heynow
    May 06 07:44 PM
    Pacific Capital Bancorp: Evasive Maneuvers [view article]
    Did you not notice that they happened to blow away the analyst estimates in Q1 because of all the money they made in the RAL program? Maybe that is why the stock has held up.

    Did you not do any research on the RAL program before you put on your short position? Sounds to me like you didn't do enough homework on this one and now you are crying about it.     Reply
  • commenter
    mgr1929
    May 04 09:40 PM
    My Website
    Pacific Capital Bancorp: Evasive Maneuvers [view article]
    One of the worst signs a CEO or CFO can give off is evasiveness. Share holders should review the conference call for themselves. All bank stock owners should be very wary of these types of stocks and switch to a more transparent and stable financial institution.There is no way the assets on the books of these banks should be valued at 100 cents on the dollar which is where most of their loans are valued.
    mgr1929     Reply
  • commenter
    magistock
    May 04 06:21 PM
    Pacific Capital Bancorp: Evasive Maneuvers [view article]
    Some reasons why the stock isn't down.

    "The following table provides comparative asset quality data for the comparable three-month periods of the Core Bank (dollars in millions):

    March 31, December 31,
    2008 2007
    --------- ------------

    Allowance for loan losses $ 58.3 $44.8
    Allowance for loan losses/total loans 1.06% 0.84%

    Total non-performing assets $163.7 $76.7
    Total non-performing assets/total assets 2.37% 1.04%

    Allowance to non-performing loans 36% 61%

    Net charge-offs $ 2.2 $ 1.4
    Annualized net charge-offs/total average
    loans 0.16% 0.10%

    The Company's total risk weighted capital ratios as of March 31, 2008, and December 31, 2007, were 13.2% and 12.3%, respectively.

    Outlook

    Commenting on the outlook for Pacific Capital Bancorp, Leis said, "Based on the strength of our RAL and RT programs, we still expect our overall earnings per share to increase in 2008. However, due to the higher credit costs we are experiencing in 2008, we no longer expect earnings in the Core Bank to be higher than last year. Over the remainder of 2008, we expect our quarterly provisions for loan losses to remain elevated, although they should steadily trend lower as we move through the year. We expect that our positive trends in loan growth will continue to help us mitigate the impact of the higher credit costs."

    Albeit, the numbers are not great. It isn't a disaster, considering how bad it is for other banks. The market is telling you to cover your short and move on to another bank that is being shorted more heavily and that you can try to manipulate with other shorts to make a profit when the news is bad.     Reply
  • commenter
    biomedlives
    May 04 08:52 AM
    Pacific Capital Bancorp: Evasive Maneuvers [view article]
    I absolutely agree that the loan loss coverage is inadequate here. In addition, the returns on assets and equity for the core bank are poor. Reply
  • commenter
    VP of
    Common Sense
    Apr 30 05:21 PM
    Pacific Capital Bancorp: Immune to the Housing Crisis - or in Denial? [view article]
    Remember Thornburg. They had quality loans too... Reply
  • commenter
    Ex15:26
    Apr 23 05:18 PM
    Pacific Capital Bancorp: Immune to the Housing Crisis - or in Denial? [view article]
    As a clarification - I didn't mean to say that my word is my bond, but if you can't eat oh well......

    I meant that my word is so important, and I'm sure that the homebuilder is a stand up guy, but if he can't sell homes, he can't pay the debt on the land - even if he wanted to.

    And frankly, that is what we are beginning to see from the consumer that simply walks out on the house. He is so overwhelmed and other home values around him are so depressed that even though he wants to stick in it, it would kill him to do so.

    I'm sure that if there are a number of personal bankruptcies and foreclosures in these neighborhoods that the builder put up, it will further weigh on pricing and the ability to move inventory. I wonder if that is in their model?

    Reply
  • commenter
    Ex15:26
    Apr 23 05:13 PM
    Pacific Capital Bancorp: Immune to the Housing Crisis - or in Denial? [view article]
    Good stuff as a start for my research. I appreciate your review and will begin digging in to it. I think all of the regionals will start seeing significant declines in the performance of their loan portfolios. As for all the estimates for asset write downs and their stress testing, we'll have to see how good they are at modeling and whether their haircuts were enough.
    I love the reference to the 30 year relationship.... while integrity is everything to me and my word and reputation is critical in my business, it won't help pay the bills if no one is buying.

    Thanks,
    Put stops on everything.     Reply
  • commenter
    SeekingAlpha
    Editors
    Apr 06 05:19 AM
    My Website
    General Discussion on PCBC
    Is this a buy or a sell? Reply

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