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Pacific Capital Bancorp Reports First Quarter 2011 Net Income of $16.8 Million

^{Published on 2011-04-27 04:11:26 - Market Wire}
 

SANTA BARBARA, Calif.--([ BUSINESS WIRE ])--Pacific Capital Bancorp (Nasdaq: PCBC), a community bank holding company (athe Companya), reported net income of $16.8 million, or $0.51 per diluted share for the three months ended March 31, 2011, compared with $20.8 million, or $0.68 per diluted share, for the three months ended December 31, 2010. This brings total net income to $42.5 million or $1.36 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 (aTransaction Datea).

"Pacific Capital Bancorp delivered another quarter of solid performance"

First Quarter Highlights

• Achieved a return on average assets of 1.1% for the first quarter 2011 compared with 1.3% for the fourth quarter of 2010;
• Improved net interest margins to 3.99% for the first quarter of 2011 compared with 3.76% for the fourth quarter of 2010;
• Grew regulatory capital ratios to 11.1% and 17.3% for Tier 1 Leverage and Total Risk-Based Capital ratios, respectively.

aPacific Capital Bancorp delivered another quarter of solid performance,a said Carl B. Webb, Chief Executive Officer. aIn the seven months since our recapitalization, we have made great strides towards achieving our strategic goals. This includes returning to the basic community banking principles that this franchise was built upon. Today, we are positioned to fully serve the financial services needs of our customers with a broad array of lending, depository and wealth management products and services. In addition, we have the capital needed to make substantial investments in the Companya™s infrastructure to improve our customersa™ experience banking with us, provide scalability as we grow, and operate at a lower overall cost.a

Net interest income grew to $54.3 million or 3.99% of average interest earning assets for the first quarter of 2011 compared with $54.1 million or 3.76% in the previous quarter. The improvement in net interest is primarily the result of an increase in loan interest income related to better than expected cash flows on certain loan pools; an increase in the average amount of investment securities held as the Company continues to put to work its excess liquidity; and lower cost of interest bearing deposits. These higher amounts were offset by higher interest expense on time deposits due to a reduction in non-cash accretion on deposit premiums resulting from a change in the weighted average estimated duration of time deposits.

Provision for loan losses increased to $1.7 million in the first quarter of 2011 compared with $535 thousand in the previous quarter. The increase in provision for loan losses is the result of the Company purchasing $188 million of commercial loans and the origination of $42 million in loans during the first quarter. Total loans contractually delinquent 30 or more days, regardless of the credit protection provided by purchased credit impaired loan accounting, have declined $34 million or 10% from December 31, 2010. The Company expects that origination and purchase of loans will continue to increase as it re-introduces lending activities throughout its footprint.

Total noninterest income was $12.9 million in the first quarter compared with $16.1 million in the fourth quarter of 2010. The decline in noninterest income is primarily the result of $2.7 million lower gains on sale and higher valuation write downs of other real estate owned, and $1.0 million lower gains on loans sold as the Company discontinued selling nonconforming residential real estate products into the secondary markets.

Noninterest expense declined to $48.3 million for the first quarter of 2011 compared with $48.8 million in the prior quarter. The decline was primarily the result of lower depreciation costs on the Companya™s legacy software applications offset by higher salaries and employee benefits costs. The Company expects noninterest expense 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, Pacific Capital Bank, N.A. (the aBanka or aPCBNAa), exceed the ratios required to be considered awell capitalizeda under generally applicable regulatory guidelines, 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 9.9% and 11.1% and total risk-based capital ratios were 15.5% and 17.3% at March 31, 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 March 31, 2011 on or before May 16, 2011. This report can be accessed at the Securities and Exchange Commissiona™s website, [ www.sec.gov ]. Shortly after filing, it is also available free of charge at the Companya™s website, [ www.pcbancorp.com ] or by contacting the Companya™s Investor Relations Department.

About Pacific Capital Bancorp

Pacific Capital Bancorp, with $5.9 billion in assets, is the parent company of Pacific Capital Bank, N.A., a nationally chartered bank that is headquartered in Santa Barbara and operates 47 branches throughout the Central Coast of California.

Forward Looking Statements

This press release contains aforwardalooking statementsa within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forwardalooking statements to be covered by the safe harbor provisions for forwardalooking statements. All statements other than statements of historical fact are aforward- looking statementsa for purposes of federal and state securities laws, including, but not limited to, statements about anticipated future operating and financial performance, financial position and liquidity, business prospects, strategic alternatives, business strategies, regulatory and competitive outlook, investment and expenditure plans, capital and financing needs and availability, acquisition and divestiture opportunities, plans and objectives of management for future operations, and other similar forecasts and statements of expectation and statements of assumptions underlying any of the foregoing. Words such as awill likely result,a aaims,a aanticipates,a abelieves,a acould,a aestimates,a aexpects,a ahopes,a aintends,a amay,a aplans,a aprojects,a aseeks,a ashould,a awill,a and variations of these words and similar expressions are intended to identify these forwardalooking statements.

Forwardalooking statements are based on the Companya™s current expectations and assumptions regarding its business, the regulatory environment, the economy and other future conditions. The Companya™s actual results may differ materially from those contemplated by the forwardalooking statements. The Company cautions you against relying on any of these forwardalooking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forwardalooking statements are detailed in reports filed by the Company with the Securities and Exchange Commission, including the Companya™s Annual Report on Form 10-K for the year ended December31, 2010 filed by the Company with the Securities and Exchange Commission on March 25, 2011. Forwardalooking statements speak only as of the date they are made, and the Company does not undertake to update forwardalooking statements to reflect circumstances or events that occur after the date the forwardalooking statements are made, whether as a result of new information, future developments or otherwise, except as may be required by law.

(1) Nonaccrual loans are included in loan balances. Interest income includes related net deferred fee income.
(2) Commercial real estate loans include multi family residential real estate loans.