Moody's drops Pacific Capital

Moody's Investors Service said it downgraded the ratings of Pacific Capital Bancorp (issuer rating to Baa1 from A3) and its subsidiary, Pacific Capital Bank, NA (long-term bank deposits to A3 from A2; bank financial strength rating to C from C+).

According to the agency, Pacific Capital Bank, NAs short-term ratings were downgraded to Prime-2 from Prime-1.

The outlook is negative.

This concludes the review for possible downgrade initiated on Dec. 17.

The downgrade reflects Moody's view that Pacific Capital's intrinsic financial strength, particularly its recurring earnings, has been eroded by the weaker economic environment and its high concentration in real estate lending.

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