Pacific Capital Bancorp, the largest bank based in the region, earned $70.5 million in 2011, its first full calendar year under the ownership of a Texas-based private equity group.

The parent company of Santa Barbara Bank & Trust saw 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.

The company continues to operate under an operating agreement with banking regulators that was set in place prior to the recapitalization. It said that the bank’s latest capital ratios — 11.2 percent and 18.3 percent for its tier-one leverage capital and total risk-based capital, respectively — exceed the minimums required under its agreement with the Office of the Comptroller of the Currency.

Pacific Capital shares were up 0.6 percent to $27.67 following the after-market earnings announcement.