Santa Barbara-based Pacific Capital Bancorp turned in a $40.7 million loss in the third quarter driven by another round of setting aside cash to deal with soured real estate loans. At 87 cents per share, the loss was slightly larger than the 80-cent loss expected by three analysts surveyed by Thomson Financial Network.

The results may signal a wait-and-see quarter for Pacific Capital, the parent of Santa Barbara Bank & Trust and several other banking brands on the Central Coast. The bank held its capital steady in the third quarter, halting a decline in capital ratios that had drawn informal scrutiny from federal regulators. But the bank is still retaining an investment bank to help it evaluate options – which could include a merger – to boost its liquidity.

Investors responded positively to the fact that Pacific Capital has stabilized its capital ratios without a cash infusion. They pushed shares up 7 percent to $1.24 in early trading Nov. 3.

Still, Pacific Capital fell well short of its voluntary agreement with federal regulators to boost its tier one capital ratio to 9 percent by Sept. 30. The ratio – which consists of the bank’s free cash divided by its loans and other assets – came in at 5.6 percent, essentially unchanged from the quarter before.

The bank may have stopped its most profuse bleeding. Despite a $47.1 million provision for loan losses, a figure that includes $35 million in net charge-offs heavily concentrated in land and construction loans, the bank grew its deposits and shrank its loan portfolio to keep its capital ratios essentially steady. Total loans were $5.37 billion Sept. 30 compared with $5.65 billion the quarter before, and total deposits were $5.53 billion at Sept. 30 compared with $5.25 billion the quarter before.

“Our capital ratios remained relatively stable during the third quarter, and with the help of our outside financial advisors, we continue to actively explore possibilities for further strengthening our capital position going forward,” Pacific Capital Chief Executive Officer George Leis said in a release.

But Pacific Capital is far from out of the woods. The bank had to increase its allowance for loan losses – the money the bank is required to set aside to deal with potentially soured loans – to $269.4 million at the end of the third quarter, compared with $258 million the quarter before. Non-performing assets – the loans that aren’t paying on time, whose collateral values have declined or whose borrowers have cash-flow problems – grew from $348.3 million in the second quarter to $384.8 million in the third.

Pacific Capital faces a number of shareholder lawsuits alleging that bank officials didn’t properly warn investors of the problems that led to a staggering $362 million loss in the second quarter. But there is some light in the bank’s most recent report: It eked out a tiny $1 million profit before accounting for taxes and the money it set aside to deal with problem loans, and the deposit growth and steady capital ratios may signal that the harshest part of the storm has passed.

“Our liquidity remains strong and we continue to see solid deposit growth,” Leis said in a release.