[Editor’s note: This story has been updated from an earlier version on July 27.]

Pacific Capital Bancorp, the struggling parent of Santa Barbara Bank & Trust, reported a $61 million second-quarter loss on July 27 and said that with the U.S. Treasury agreeing to wipe out $180.6 million in TARP debt in exchange for equity, it now expects to complete a $500 million acquisition by Texas-based Ford Financial Fund by Aug. 31.

The Ford deal will get done, according to a Pacific Capital news release, without the cooperation of bondholders. Remaining bondholders can elect to cash out at 40 cents to 65 cents on the dollar under a new Aug. 27 deadline, but according to officials the recapitalization agreement will go through regardless.

Pacific Capital shares were up more than 40 percent to about $1.23 in early morning trading.

“Overall, this very significant investment by the Ford fund truly puts Pacific Capital back in the business of banking,” Pacific Capital President and CEO George Leis said in a second-quarter earnings call with investors. The banking company’s newly appointed chief financial officer, Mark Olson, was also in on the call.

The Ford acquisition — which would leave the Texas private equity firm with up to 91 percent of the bank and would heavily dilute shareholders — is critical for Pacific Capital, which faces potential liquidation if it doesn’t satisfy regulators’ capitalization requirements by Sept. 8. In May, the banking company agreed to a consent order from the Office of the Comptroller of the Currency, under which it must boost its tier one leverage ratio — its capital divided by its assets — to 9 percent and its risk-based capital ratio to 12 percent. At the end of the second quarter, the bank’s ratios were 4 percent and 9.5 percent, respectively.

“We are pleased that we have reached an agreement with Treasury and that Ford has indicated to us that we have made sufficient progress on our tender offers,” Leis said in a July 27 news release. “These were clearly two of the most critical conditions to completing the Ford investment and their resolution allows us to see a clear path to a targeted closing by the end of August.”

Gerald Ford, the Texas banker behind the deal, said July 27, “in our 35-year history in the financial services sector, we have been highly selective in identifying financial services partners, focusing on quality companies that meet our high standards. We believe Pacific Capital is one of the great community bank franchises in California.”

Pacific Capital’s loss of $61 million, or $1.24 per share, compares to a $362.6 million, or $7.80 per share, loss in the second quarter of 2009. Combined with a $81 million first-quarter loss, the bank finishes the first half of the year $142 million in the red.

“These have been challenging months and we’ve had very many difficult decisions to make,” Leis said in the conference call, adding that “we are very pleased to be closing on the culmination of a long and challenging process.”