By Marlize van Romburgh Friday, February 3rd, 2012

Pacific Capital Bancorp, the largest banking company based in the Tri-Counties, turned a $70.5 million profit in 2011 after years of staggering losses. At the same time, First California Financial Group and Heritage Oaks Bancorp, the next two largest banks on the list, reported improved earnings for the year and bold plans to expand.

Here’s a closer look at year-end earnings at the region’s banks:

Pacific Capital

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Pacific Capital, parent of Santa Barbara Bank & Trust, earned $70.5 million in 2011, its first full calendar year under the ownership of a Texas-based private equity group.

Pacific Capital did see its fourth-quarter profits drop 39.8 percent to $12.3 million year-over-year, a decline it pinned on one-time costs. The bank reported a charge of $4.7 million related to the early redemption of $35 million in subordinated debt, as well as a $3.9 million increase in the estimated liability it incurred when it bought two registered investment advisors.

“We are very pleased with our achievements in the fourth quarter,” Pacific Capital CEO Carl Webb said in a statement. “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.”

Webb and business partner Gerald Ford recapitalized and took controlling ownership of Pacific Capital in August 2010 with a $500 million cash investment. The bank had reported multimillion-dollar losses per quarter and was on the verge of regulatory failure prior to the infusion, which the investors coupled with a cleanup of the bank’s balance sheet and loan portfolio.
Pacific Capital’s net interest income was $57 million in the fourth quarter, compared with $55.8 million in the third quarter. Deposits increased 0.6 percent during the quarter, to $4.6 billion. Assets were up 0.1 percent to $5.8 billion.

First California

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Westlake Village-based First California reported profits of $23.4 million in 2011, a company earnings record. A year earlier, it had earned $1.4 million.

“Our record breaking performance in 2011 was driven by the combination of continued successful execution of our strategic plan that focuses on organic growth and opportunistic acquisitions,” the bank’s CEO and president, C.G. Kum, said in a statement. First California entered the San Luis Obispo County market in February 2011 with the acquisition of failed San Luis Trust Bank in downtown SLO. The company also acquired the electronic banking division, a prepaid debit card operation, of Palm Desert National Bank.

It recently announced plans to open a branch in downtown Santa Barbara as a launchpad to roll out a presence in that county for the first time.

Net income available to common shareholders for 2011 was $20.8 million, or 71 cents per share, compared with $160,000, or 1 cent per share, a year earlier.
First California said net interest income, the money it makes from loans, rose 33 percent to $59.5 million during the year. Deposits increased $269 million to end the year at $1.4 billion, it said.

Heritage Oaks

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Paso Robles-based Heritage Oaks is focusing on a lean-and-mean approach in 2012 after returning to profitability in 2011.

The company said it will consolidate three smaller branches — in Morro Bay on Morro Bay Boulevard, in Santa Maria in the Oak Knolls Shopping Center and in Santa Barbara on Milpas Street — to allow it to open new branches in Santa Barbara and Ventura counties.

In another move designed to cut costs, President Ron Oliveira has left the company, and his position will be taken up by CEO Simone Lagomarsino. The chief operating officer slot, which Oliveira also held, will be left unfilled.
Lagomarsino said the executive suite consolidation creates a flatter, more efficient organization and cuts costs.

Joanne Funari, who heads up the bank’s Business First division in Santa Barbara, has also taken on the role of market president, and will be in charge of heading up an expansion in Santa Barbara and Ventura counties.
Lagomarsino said Heritage Oaks plans to open branches in Goleta and Oxnard. “Really, when we looked at Ventura County, it’s a natural extension from where we are in Santa Barbara,” she said. “We already have the area from

San Luis Obispo to Santa Barbara counties. We felt Ventura [County] is the next step. It’s a larger market.”

Heritage Oaks earned $7.7 million in 2011, after a $17.6 million loss the year before. Lagomarsino said improving asset quality — non-performing loans were down $21.7 million to $11.1 million, year-over-year — resulted in a smaller allowance for loan losses, which boosted profits.
The bank’s deposits declined 1.5 percent to $786.2 million year-over-year. Assets inched up 0.5 percent during the year, to $987.1 million.

Montecito Bank & Trust

Montecito Bank & Trust, a privately owned bank based in Santa Barbara, swung to a higher profit after reducing its allowance for loan losses. The bank earned $12.4 million in 2011, compared to $3.1 million a year ago.
Assets topped the billion-dollar mark, growing 8.4 percent. Deposits were up 8 percent to $876.4 million, but soft loan demand and develeraging by borrowers meant loans remained flat, at $520.5 million.

American Riviera

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American Riviera Bank, a one-branch business bank based in Santa Barbara, saw profits increase three-fold to $3.4 million, or $1.35 per share, in 2011. The bank’s loans increased 15 percent to $108 million during the year.