Pacific Capital Bancorp (PCBC)

[Enterprising Investor]

PCBC Reports Q2 Net Income of $21.0 Million; Completes Brand Consolidation Initiative (7/27/11)

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 $21.0 million, or $0.64 per diluted share, for the three months ended June 30, 2011, compared with $16.8 million, or $0.51 per diluted share, for the three months ended March 31, 2011. This brings total net income to $63.5 million, or $2.00 per diluted share, since the closing of the $500 million investment from a wholly-owned subsidiary of Ford Financial Fund, L.P. on August 31, 2010.

Second Quarter Highlights

Achieved a return on average assets of 1.43% and a return on equity of 12.27% for the second quarter of 2011, compared with 1.14% and 10.39%, respectively, for the first quarter of 2011;

Improved net interest margins to 4.42% for the second quarter of 2011, compared with 3.99% for the first quarter of 2011;

Grew regulatory capital ratios to 11.6% and 18.3% for Tier 1 Leverage and Total Risk-Based Capital ratios, respectively; and,

Completed initiative to consolidate all operations under the single brand name of Santa Barbara Bank & Trust; changed banking subsidiary name to Santa Barbara Bank & Trust, N.A. (from Pacific Capital Bank, N.A.)

“Pacific Capital Bancorp has delivered its third consecutive quarter of strong performance since our successful recapitalization last August,” said Carl B. Webb, Chief Executive Officer. “We are very pleased with the progress we have made towards achieving our strategic goals in just ten months. Our capital levels, which have continued to grow even stronger each quarter, significantly exceed the regulatory levels to be considered well capitalized. This has allowed us to undertake the important investments in the Bank’s infrastructure that will ensure a quality banking experience for our customers, provide scalability for future growth, and allow us to operate at a lower overall cost in the future.

“During the quarter, we completed the consolidation of our bank names into a single brand. Today, we are operating throughout our footprint and in all respects as one unified bank, guided by the basic banking principles that have long defined quality community banking,” said Mr. Webb. “We are fully back in the business of banking in all areas, delivering a wide range of competitive lending, depository and wealth management products and services to businesses and individuals in communities throughout the Central Coast of California.”

Net interest income grew to $60.2 million, or 4.42% of average interest earning assets for the second quarter of 2011, compared with $54.3 million, or 3.99%, for the previous quarter. The improvement in net interest income is primarily the result of an increase in loan interest income due to higher loan accretion related to better than expected cash flows from the legacy loan portfolio; an increase in the average amount of investment securities held as the Company continues to put to work its excess liquidity; and lower interest cost of deposits.

Provision for loan losses slightly increased to $1.8 million for the second quarter of 2011, compared with $1.7 million for the previous quarter, due primarily to new loan growth. The Company expects that loan originations and purchases will continue to increase as its lending activities continue to be reintroduced throughout its footprint.

Total noninterest income was $12.5 million in the second quarter of 2011, compared with $12.9 million in the first quarter of 2011. The decline in noninterest income is primarily the result of the loss on sale of investment securities and lower gains on the sale of loans as the Company discontinued selling nonconforming residential real estate products into the secondary markets.

Noninterest expense increased to $50.2 million for the second quarter of 2011, compared with $48.3 million in the prior quarter. The increase was primarily the result of higher marketing costs associated with the Company’s brand consolidation initiative and higher software expenses. The Company expects noninterest expense to continue to increase during the rest of 2011 as it makes significant investments in technology and personnel in order to expand and improve its operations.

Pacific Capital Bancorp and its wholly-owned banking subsidiary, Santa Barbara Bank & Trust, N.A. (the “Bank”), exceed the ratios required to be considered, ”well capitalized” as well as capital levels that the Bank is required to meet under its agreement with the Office of the Comptroller of the Currency. Tier 1 leverage capital ratios were 10.4% and 11.6%, and total risk-based capital ratios were 16.5% and 18.3% at June 30, 2011, for the Bank and Company, 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, 2011, on or before August 15, 2011. 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 $5.8 billion in assets, is the parent company of Santa Barbara Bank & Trust, N.A., a nationally chartered bank headquartered in Santa Barbara which operates 47 branches in eight California counties on the Central Coast of California. The Bank 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; the Bank’s website, including products and services information and branch locations, can be found at www.sbbt.com.

http://www.businesswire.com/news/home/20110727006910/en/Pacific-Capital-Bancorp-Reports-Quarter-2011-Net