Pacific Capital Bancorp in Santa Barbara, Calif., said Wednesday that its credit troubles are starting to spread beyond residential construction loans.
Despite a boost from its tax-refund-anticipation loan program, the $7.5 billion-asset Pacific Capital swung to a $5.9 million loss in the second quarter because a spike in chargeoffs required a higher provision. It had earned $33.2 million in the year-earlier period.
George Leis, the president and chief executive officer, said in a press release that weakness in the home building industry and the slowing economy caused "substantial stress" in its loan portfolios.
Though most of the deterioration is tied to home construction, he said, "we saw increasing problem loans in other portfolios as well."
Mr. Leis said Pacific Capital's results reflect a more aggressive approach to chargeoffs.
The company's loan-loss provision rose sevenfold from the year earlier, to $37.2 million.
About $29.3 million of the provision covered chargeoffs, which were up 211% from the year earlier. Residential construction loans accounted for $13.7 million of the chargeoffs; commercial and industrial loans, $5.4 million; small-business loans, $2.3 million; home equity lines of credit, $2.2 million; and other loans, $800,000.
The company also recorded a "negative" provision of $6.4 million due to higher than expected collections in its tax-refund-anticipation loan program. Pretax income from this program and its refund transfer program rose 13.6% from a year earlier, to $10 million.
Pacific Capital's loss of 13 cents per share missed the average of analysts' estimates by a wide margin. They had anticipated a profit of 18 cents per share on average, according to Thomson Reuters.
Still, shares of Pacific Capital edged up 0.74% by late Wednesday, to $14.99.
