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Pacific Capital Bancorp Reports Third Quarter 2011 Net Income of $20.5 Million

^{Published on 2011-10-27 15:31:57 - Market Wire}
 

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.

"Our strong performance has allowed us to make important investments in the Bankas systems and operational infrastructure"

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.

aWeare pleased with what has been achieved in the first year since our recapitalization of this great community bank,a said Carl B. Webb, Chief Executive Officer of Pacific Capital Bancorp. aWeave achieved strong earnings performance, effectively managed credit issues from the Companyas 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.

aOur strong performance has allowed us to make important investments in the Bankas systems and operational infrastructure,a said Mr. Webb. aThese upgrades will enhance our clientsa banking experience in the years ahead, provide a substantial platform for future growth initiatives, and allow us to operate more efficiently in the future.a

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 Companyas 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 aBanka or aSBB&Ta), exceed the ratios required to be considered, awell capitalizeda 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 Commissionas website, [ www.sec.gov ]. Shortly after filing, it is also available free of charge at the Companyas website, [ www.pcbancorp.com ] or by contacting the Companyas 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 Companyas website, including investor relations information, can be found at [ www.pcbancorp.com ]; the Bankas website, including products and services information and branch locations, can be found at [ www.sbbt.com ].

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 Companyas current expectations and assumptions regarding its business, the regulatory environment, the economy and other future conditions. The Companyas 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 Companyas 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.