Pacific Mercantile Swings to Q3 ProfitTuesday, November 15, 2011
Costa Mesa-based Pacific Mercantile Bancorp Inc. posted a profit for the third-straight quarter.
The holding company of Pacific Mercantile Bank posted net income of $731,000, or 6 cents per share, up from a loss of 4 cents in the same quarter last year.
Pacific Mercantile is the second-largest bank based in Orange County, with assets of $1 billion.
The bank saw net interest income of $8.2 million in the quarter and wasn’t required to set aside any money for potential bad loans. Net interest income was up from $6.2 million in the year-ago quarter after the bank set aside $1.7 million in cushion for loan losses.
Noninterest income fell 3% from a year earlier to $2.2 million.
Pacific Mercantile attributed the drop to a $415,000 decrease in income on sales of securities. The dip was moderated by a $312,000 increase in gains by the mortgage division, according to bank.
Neil B. Kornswiet, president of the mortgage division, said mortgage loan origination volume for the quarter is about 46% above the year-earlier period.
The bank recently added about 90 employees primarily for that division.
Pacific Mercantile had about $689 million in total loans at quarter-end, about 10% less than a year earlier.
The bank made more commercial real estate and consumer loans, compared with the same period last year.
It saw declines in commercial, construction and land development loans, among others categories.
Total nonperforming loans fell to $27.9 million from $43.9 million a year ago.
Chief Executive Raymond Dellerba said a new round of capital raise is slated for the first quarter next year. The bank expects to sell $11.8 million of its series B convertible preferred stock and $15.5 million worth of common stock.
“This new capital will allow us to expand our commercial, industrial and professional lending, as well as to expand our mortgage division, and, subject to regulatory approval, to commence an electronic money movement business,” he said.