Pacific Capital Bancorp (PCBC)

[Enterprising Investor]

PCBC Reports Second Quarter 2012 Results (7/25/12)

SANTA BARBARA, Calif.--(BUSINESS WIRE)--Pacific Capital Bancorp (Nasdaq: PCBC), a community bank holding company and parent of Santa Barbara Bank & Trust, N.A., reported net income of $24.1 million, or $0.73 per diluted share, for the three months ended June 30, 2012, compared with $21.0 million, or $0.64 per diluted share, for the three months ended June 30, 2011. Net income for the second quarter of 2012 was the highest reported for a quarter since the Ford Financial Group’s investment in Pacific Capital Bancorp in August 2010. Net income for the second quarter of 2012, included $1.4 million of merger related costs.

Second Quarter Highlights

The Written Agreement dated May 11, 2010, between Pacific Capital Bancorp and the Federal Reserve Bank of San Francisco was terminated effective as of May 23, 2012;

Achieved a return on average assets of 1.66% and a return on average equity of 12.02% for the three months ended June 30, 2012;

Improved net interest margins to 4.55% for the second quarter of 2012, compared with 4.42% for the second quarter of 2011;
Increased regulatory capital ratios to 13.3% and 22.1% for Tier 1 Leverage and Total Risk-Based Capital at June 30, 2012, respectively; and

Progress continues to be made to consummate the acquisition of PCBC by UnionBanCal Corporation that was announced on March 12, 2012. The acquisition requires approval from banking regulators and is subject to other customary closing conditions, and is expected to be completed in the fourth quarter of 2012.

“Our strong performance in the second quarter reflects our successful execution of bringing high quality banking and financial services to our customers,” said Carl B. Webb, Chief Executive Officer of Pacific Capital Bancorp. “This customer focus is shared by Union Bank and makes us confident that joining forces with such a strong, California-based financial services organization will position us to continue to provide this level of service to the communities we serve,” continued Mr. Webb.

Net interest income was $61.2 million, or 4.55% of average interest earning assets for the second quarter of 2012, compared with $60.2 million, or 4.42%, for the same period a year ago. The increase in net interest income is primarily the result of lower cost of funds due to the maturity of high rate certificates of deposit and the redemption of subordinated debentures.

The provision for loan losses was $317,000 for the second quarter of 2012, compared with $1.8 million for the second quarter of 2011. The decline in the provision for loan loss is attributed to lower historical loss rates, and better performance of purchased credit impaired loan portfolios than expected.

Total noninterest income was $15.6 million in the second quarter of 2012, compared with $12.5 million in the second quarter of 2011. The increase is primarily the result of increased gain on sales of other real estate owned, loans, and investment securities.

Noninterest expense increased to $52.3 million for the second quarter of 2012, compared with $50.2 million in same period of 2011. The increase was primarily the result of additional employees in 2012, when comparing to the same period a year ago, and increased accrued incentives for employees resulting from improved performance by the Company.

Pacific Capital Bancorp and its wholly-owned banking subsidiary, Santa Barbara Bank & Trust, N.A. (“SBB&T”), exceed the ratios required to be considered “well capitalized” as well as capital levels that SBB&T is required to meet under its Operating Agreement with the Office of the Comptroller of the Currency. Regulatory capital ratios for SBB&T and the Company were 12.1% and 20.2%, and 13.3% and 22.1% at June 30, 2012, for Tier 1 leverage capital and total risk-based capital ratios, respectively.

Quarterly Report on Form 10-Q

The Company intends to file with the Securities and Exchange Commission its Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, on or before August 9, 2012. This report can be accessed at the Securities and Exchange Commission’s website, www.sec.gov. Shortly after filing, it is also available free of charge at the Company’s website, www.pcbancorp.com or by contacting the Company’s Investor Relations Department.

About Pacific Capital Bancorp

Pacific Capital Bancorp, with $5.9 billion in assets, is the parent company of Santa Barbara Bank & Trust, N.A., a nationally chartered bank headquartered in Santa Barbara which operates 45 branches in eight California counties on the Central Coast of California. SBB&T provides a full line-up of community banking, commercial banking, and trust and wealth management products and services. The Company’s website, including investor relations information, can be found at www.pcbancorp.com; SBB&T’s website, including products and services information and branch locations, can be found at www.sbbt.com.

Additional Information and Where To Find It

In connection with the proposed merger, the Company has filed a definitive information statement relating to the merger with the Securities and Exchange Commission (SEC). INVESTORS SHOULD READ THE DEFINITIVE INFORMATION STATEMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND THE COMPANY. You can obtain the definitive information statement, as well as other filings containing information about the Company, free of charge, at the website maintained by the SEC at www.sec.gov. In addition, filings made by the Company with the SEC, other than preliminary materials, may be obtained free of charge by contacting the Company at 805-884-6680 or 1021 Anacapa Street, Santa Barbara, California 93101, Attention: Investor Relations.

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