A lot of people are wondering what is about to happen to Pacific Capital.  Since the beginning of the year, PCBC has slowly, but steadily, marched downhill.   The shares entered 2009 at $17.  Today, they closed at $1.44.

The future is not clear, though.  PCBC may be acquired by another bank.  The FDIC might intervene.  It is hard to know, although the decline in the share price suggests that investors are dubious about the bank’s prospects.  Analysts have talked about selling off the refund anticipation loan (RALs) business.  That is an interesting question – and something that I would like to consider today.

As bad as things are right now, it could get worse.  For one, PCBC may lose some of its ability to shelter (more…)

Pacific Capital Bancorp (PCBC) is about to face the music.  In the next several days, significant events may occur that shape the future of PCBC as a going concern.

Shareholders will vote on two questions at the bank’s meeting tomorrow.  First, they will have the chance to weigh in on these questions:

• raise the number of authorized shares from 100 million to 500 million.
• effect a stock split of at least three-to-one and as much as ten-to-one, with a reduction in shares by a complementary proportion

The reverse stock split might be nothing more than window dressing.  Some hold that a share price below $10 (more…)

Student loans are on the horizon of people in the education world and in public policy.  While much of the debate has focused on the level of debt and the challenge of making payment on those loans in a recession, it seems that all of these eyeballs have lately come to a new conclusion: that schools vary widely in their ability to make good on their promise to train their pupils.

It is a mistake to ignore the significance of investment in education to the overall functioning of our economy.  Gary S. Becker, writing after the stock market crash in 1987, suggested that more than 70 percent of invested assets in the United States were in human talent.  The stock market’s losses amounted to less than 1 percent of our (more…)

The plain vanilla mortgage, once a stunning bit of common sense that has emerged in a sea of financial obfuscation, is now a policy proposal of the past.

Barney Frank dropped the Obama Administration’s plain vanilla language in the Consumer Financial Protection Act Tuesday.

Many writers, approaching this issue from a behavioral economics perspective, saw a lot of merit to this idea.  Richard Thaler, who studies how people make financial decisions, called it “mortgages made easy.”The logic of his viewpoints are neatly expressed in this (more…)

The latest round of exam scores are out for the OCC’s Community Reinvestment Act examinations.  Surprise!  Everyone is a winner! The OCC handed out all A’s and B’s.  Wouldn’t you love to take that class?  Last month, they handed out all A’s and B’s, too!

This time, five banks got outstanding, and thirty got satisfactory.  No one earned a score that would require any kind of a strategic plan to improve their service.

One large bank, Fifth Third,  dropped from Outstanding! to Satisfactory.  The OCC decided not to examine any of Fifth Third’s service, investment, or lending for North Carolina.  That is in spite of the fact that Fifth Third acquired First (more…)