Gerald J. Ford, who became a billionaire buying distressed lenders during the savings and loan crisis, could reap $650 million from his 2010 investment in Pacific Capital Bancorp following its sale to UnionBanCal Corp.
Ford stands to receive $1.15 billion for his 25 million-share investment in Pacific Capital, a stake that cost him $500 million in 2010, according to a filing last year from the Santa Barbara, California-based bank. UnionBanCal, based in San Francisco, said yesterday it will purchase Pacific Capital for $46 a share, 60 percent more than its March 9 closing price. Completion is scheduled for the fourth quarter.
Affiliates of Ford bought into Pacific Capital after the bank said its survival was in doubt and that shareholders might be wiped out. The company hadn’t reported a quarterly profit since the first three months of 2008. After Ford’s investment, Pacific Capital posted net income in the fourth quarter of 2010 and has been profitable ever since.
“Our guys did a terrific job of assessing and managing the business,” Ford, who is the bank’s chairman, said in a telephone interview. Deborah Whiteley, a spokeswoman for Pacific Capital, didn’t immediately respond to messages seeking comment.
Ford, 67, who isn’t related to the former U.S. president or the founders of the U.S. auto-making empire, amassed his fortune during the 1980s and 1990s by acquiring distressed banks and turning them around.
The Texan, who ranks 764 on the Forbes billionaires list, transformed Golden State Bancorp Inc. into the second-largest U.S. savings and loan, which he sold to Citigroup Inc. in 2002 for $5.3 billion. Much of his wealth was tied to California, where Golden State was based and Pacific Capital and UnionBanCorp are headquartered.
Pacific Capital has $5.9 billion in assets and is the parent company of Santa Barbara Bank & Trust, which has 47 branches in California. Pacific Capital’s shares rose 57 percent to close at $45.03 yesterday in New York. They had fallen 7.7 percent in the 12 months through March 9.