Pacific Capital Bancorp, the struggling parent of Santa Barbara Bank & Trust, cut its losses to $20 million in the fourth quarter of 2009 and held its capital ratios steady though below where regulators want them to be. The bank said it has started talks over the potential sale of branches and that it will move its downtown Santa Barbara headquarters.

In an earnings announcement Feb. 1, Pacific Capital said it had a tier one leverage ratio – its cash divided by loans and other assets – of 5.5 percent at Dec. 31. Last spring, the firm agreed with regulators to boost that figure to 8.5 percent by June 30 and 9 percent by Sept. 30. It missed those marks and came in with a ratio of 5.6 percent at Sept. 30.

During a conference call, Chief Executive Officer George Leis said the bank plans to refocus on its core operations. But he would not discuss whether the bank will sell branches outside of its historical South Coast footprint.

“Speculation would be disastrous for the company,” Leis said during the call.

The bank’s losses were smaller than the previous two quarters. Last year, it lost $40.7 million in the third quarter and $362.6 million in the second quarter.

Pacific Capital kept its capital ratios nearly the same by trimming its loan portfolio, one of the strategies it announced last year to deal with its capital shortfall. Its total gross loans were $5.17 billion at the end of the quarter, down about $20 million from the quarter before and almost $60 million from a year before. Pacific Capital said it sold $42.7 million in residential and commercial real estate loans.

“We need to be a smaller bank,” Leis said during the conference call. “We need to remain focused on markets where we have the strongest positioning and brand loyalty.”

Deposits were down to $5.45 billion from $6.59 billion a year earlier. But factoring out deposits related to the bank’s tax refund anticipation loan division, a controversial program that swelled its balance sheet each year with short-term loans to taxpayers, deposits were up slightly from a total of $5.31 billion a year earlier.

On Jan. 14, Pacific Capital sold the refund anticipation loan program, which had generated hundreds of millions of dollars in profits in recent years, for $10 million, a price analysts considered low. The move was part of the bank’s plan to boost its capital.

That plan also includes cutting operating expenses by cutting jobs, reducing health benefits to retirees and moving the bank’s downtown Santa Barbara headquarters.

During the conference call, Leis said the bank shed 47 more jobs in January in addition to the 300 cut last year. Leis also said the bank will move its headquarters from its current Anacapa Street site to “another location owned by the bank in the downtown area in Santa Barbara,” Leis said.

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