Heritage Oaks Bancorp reported a $3.7 million first-quarter profit, up 131 percent over a year earlier, and said it is gearing up to repay $25 million in bailout funds it took at the height of the recession.

The repayment comes with the announcement that two sets of banking regulators have lifted an order over the bank.

The Paso Robles-based parent company of Heritage Oaks Bank and Business First Bank said quarterly income before taxes was $6.1 million for the three months ended March 31, a $4.9 million increase from $1.2 million for the same period a year earlier.

Heritage Oaks’ memorandum of understanding — a regulatory order that posed restrictions on the bank’s ability to pay out dividends and incur other expenses and required it to maintain certain capital levels — with the Federal Deposit Insurance Corp. and the California Department of Financial Institutions was terminated effective April 24.

Heritage Oaks said it has since filed a request with its regulators to approve a $25 million dividend that would be used to repay the U.S. Treasury the bank’s debt under the Troubled Asset Relief Program, or TARP. The federal bank bailout program was rolled out at the height of the financial crisis to offer support to large and small banks alike.

“We believe the termination of the MOU reflects the progress that we’ve made in improving our overall credit quality, operations, and financial profitability,” Heritage Oaks CEO and President Simone Lagomarsino said in an earnings release.

The bank remains under an MOU with the Federal Reserve Board and is expecting an onsite inspection from those regulators later this year, she said.

Heritage Oaks said first-quarter total gross loans were up 9.2 percent to $704.9 million, an increase primarily driven by commercial, residential and agriculture lending business. New loan production, including mortgage loans originated for sale, jumped 28.9 percent to $80.8 million during the three months.

Total assets increased by 5.5 percent to $1.1 billion. Deposits were up 7 percent to $862.8 million at the end of the quarter.

“We are pleased with our strong financial performance for the first quarter of 2013,” Lagomarsino said in an earnings release. “During 2012 we restructured the organization, which reduced some of our back office and administrative expenses. We redeployed a portion of these savings to hire additional relationship lenders.”

The bank operates along the Central Coast and in Santa Barbara and recently opened an Oxnard loan office with an eye toward expanding into Ventura County.