Pacific Capital Bancorp (PCBC)

[Enterprising Investor]

PCBC Reports Third Quarter 2011 Net Income of $20.5 Million (10/27/11)

SANTA BARBARA, Calif.--(BUSINESS WIRE)--Pacific Capital Bancorp (Nasdaq: PCBC), a community bank holding company and parent of Santa Barbara Bank & Trust, reported net income of $20.5 million, or $0.62 per diluted share, for the three months ended September 30, 2011, compared with $21.0 million, or $0.64 per diluted share, for the three months ended June 30, 2011. This brings total net income to $84.0 million, or $2.62 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.

Third Quarter Highlights

• Delivered the fourth consecutive quarter of strong profitable results, following the successful recapitalization on August 31, 2010;

• Achieved a return on average assets of 1.39% and a return on average equity of 11.14% for the third quarter of 2011;

• Increased regulatory capital ratios to 12.1% and 20.0% for Tier 1 Leverage and Total Risk-Based Capital ratios, respectively; and,

• Continued to execute strategic plan to focus on core deposit growth, increase loan originations to commercial and private clients, and enhance technology and operational infrastructure.

“We’re pleased with what has been achieved in the first year since our recapitalization of this great community bank,” said Carl B. Webb, Chief Executive Officer of Pacific Capital Bancorp. “We’ve achieved strong earnings performance, effectively managed credit issues from the Company’s legacy loan portfolio, reintroduced lending products within our footprint, and continue to grow our core deposit base. At the same time, our capital levels have continued to grow stronger each quarter, and today, our capital significantly exceeds the regulatory levels to be considered a well capitalized financial institution.

“Our strong performance has allowed us to make important investments in the Bank’s systems and operational infrastructure,” said Mr. Webb. “These upgrades will enhance our clients’ banking experience in the years ahead, provide a substantial platform for future growth initiatives, and allow us to operate more efficiently in the future.”

Net interest income was $55.8 million, or 4.08% of average interest earning assets for the third quarter of 2011, compared with $60.2 million, or 4.42%, for the previous quarter. The decline in net interest income is primarily the result of lower loan accretion related to purchased credit impaired loans in the third quarter as compared with the prior quarter. This was offset by lower interest expense due to the maturity of longer-term debt and the decline in interest expense of deposits due primarily to the maturity of broker deposits.

Provision for loan losses declined to $0.8 million for the third quarter of 2011 compared with $1.8 million for the previous quarter. The decline is primarily the result of lower new loan originations and purchases when compared with the second quarter. The Company expects that loan originations and purchases will increase as its lending activities continue to be reintroduced throughout its footprint.

Total noninterest income was $13.0 million in the third quarter of 2011, compared with $12.5 million in the second quarter of 2011. The increase in noninterest income is primarily the result of a gain on sale of low income housing tax investments and corresponding lower operating costs associated with these investments.

Noninterest expense decreased to $48.1 million for the third quarter of 2011, compared with $50.2 million in the prior quarter. The decrease was primarily the result of lower regulatory assessment costs and professional fees, offset by higher salaries and benefits expense associated with the continued investment in personnel needed to enhance the Company’s technology and operational infrastructure. The Company expects noninterest expense to continue to increase during 2011 and 2012, as it makes further investments in its technology and personnel.

Pacific Capital Bancorp and its wholly-owned banking subsidiary, Santa Barbara Bank & Trust, N.A. (the “Bank” or “SBB&T”), 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. Regulatory capital ratios for the Bank and the Company were 10.9% and 18.1%, and 12.1% and 20.0% at September 30, 2011, 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 September 30, 2011, on or before November 14, 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/20111027007023/en/Pacific-Capital-Bancorp-Reports-Quarter-2011-Net