Santa Barbara Bank & Trust and Citizens State Bank of Santa Paula agree to merge

Business Wire, June 3, 1997

SANTA BARBARA, Calif.--(BUSINESS WIRE)--June 3, 1997--Santa Barbara Bancorp (NASDAQ/NM:SABB), holding company for Santa Barbara Bank & Trust, and Citizens State Bank of Santa Paula Tuesday announced the signing of a definitive agreement whereby Citizens State Bank would be merged with and into Santa Barbara Bank & Trust.

The agreement provides for Citizens State Bank shareholders to receive $1,925 in cash for each of the 8,400 Citizens' shares outstanding. The transaction, valued at $16.17 million, represents 1.79 times Citizens' estimated book value at March 31, 1997, and 14.3 times 1996 earnings.

The merger is anticipated to close at the end of the third quarter of 1997, subject to regulatory approval and the approval of Citizens State Bank shareholders.

Citizens State Bank has three offices in the Santa Clara River Valley of Ventura County, two in Santa Paula and one in Fillmore. All of the existing offices will remain open as offices of Santa Barbara Bank & Trust.

David W. Spainhour, chairman of the board of Santa Barbara Bank & Trust, stated: "Citizens State Bank is a perfect addition to our Ventura County operations. We are impressed by the reputation of Citizens as a bank whose employees have been committed to serving the communities of Santa Paula and Fillmore for nearly 70 years.

"This is another milestone in our endeavor to create a strong and enduring community banking network on the Central Coast of California."

Dr. Samuel R. Edwards, chairman of the board of Citizens State Bank, commented: "We have a great deal of admiration for Santa Barbara Bank & Trust's dedication to the communities they serve. We have used their bank as a model for many of our policies and practices."

The addition of the three offices of Citizens State Bank will provide Santa Barbara Bank & Trust with a total of 24 offices -- seven in Ventura County, 10 on the South Coast of Santa Barbara County and seven in north Santa Barbara County.

William S. "Tom" Thomas Jr., president of Santa Barbara Bank & Trust, added: "In addition to maintaining the high level of service Citizens' customers expect from their bank, we will offer many new and different products such as trust and investment services, international banking and trade finance, home banking, proprietary ATMs throughout Santa Barbara and Ventura counties, accounts receivable financing, commercial leasing, competitive commercial and residential mortgage options and an array of deposit and personal investment products designed with the customers' needs in mind.

"We want to exceed our customers' expectations. Our goal is to deliver legendary customer service."

Steve Voelker, president of Citizens State Bank, added: "Santa Barbara Bank & Trust has been the premier bank on the Central Coast for a long time. The bank has a sterling reputation for personal customer service and commitment to its employees."

Voelker will remain with Santa Barbara Bank & Trust following the merger as area manager for the communities of the Santa Clara River Valley.

As of March 31, 1997, Santa Barbara Bancorp had total assets of $1.34 billion and Citizens State Bank reported assets of $86.4 million. Net income for the first three months of 1997 was $6.64 million for Santa Barbara Bancorp and $348,563 for Citizens State Bank.

CONTACT: Santa Barbara Bank & Trust

David W. Spainhour, 805/564-6345

William S. "Tom" Thomas Jr., 805/564-6216