Pacific Capital Bancorp (Nasdaq:PCBC), a community bank holding company and parent of Santa Barbara Bank & Trust, reported net income of $12.3 million, or $0.37 per diluted share, for the three months ended December 31, 2011, compared with $20.5 million, or $0.62 per diluted share, for the three months ended September 30, 2011. Fourth quarter earnings results were impacted by a one-time, non-cash charge of $4.7 million related to the early redemption of $35.0 million in subordinated debt and a $3.9 million increase in the estimated earnout liability associated with final payments for the purchase of the Company’s two registered investment advisor subsidiaries.
This brings total net income to $96.3 million, or $2.99 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. Net income for the year ended December 31, 2011, was $70.5 million, or $2.14 per diluted share.
Fourth Quarter Highlights
- Completed the early redemption of $35.0 million of outstanding subordinated debentures, resulting in a $4.7 million fourth quarter charge to noninterest expense, which eliminated an obligation that no longer fully qualified as Tier 2 capital value and will reduce interest expense by approximately $1.1 million in 2012. Including the redemption of subordinated debt, the Company has eliminated over $1.2 billion in wholesale funding since the recapitalization transaction;
- Ended the deferral of interest payments on Trust Preferred Securities and brought the obligations current;
- Delivered the fifth consecutive quarter of profitability following the successful recapitalization on August 31, 2010;
- Increased regulatory capital ratios to 12.4% and 20.2% for Tier 1 Leverage and Total Risk-Based Capital, respectively; and,
- Continued to execute the strategic plan to focus on core deposit growth, loan origination to commercial and private clients, and technology and operational infrastructure enhancements.
“We are very pleased with our achievements in the fourth quarter,” said Carl B. Webb, Chief Executive Officer of Pacific Capital Bancorp. “Our success in returning this outstanding community bank to profitability allowed us to move forward with the early redemption of our subordinated debt and end the deferral of interest payments on our trust preferred securities, both important milestones in our many months of progress.