Costa Mesa’s Pacific Mercantile Bank, the largest based in Orange County, reported a narrowed fourth-quarter loss on Wednesday.
The bank reported a loss of $6.8 million, or about half of what it lost a year earlier.
Pacific Mercantile, the county’s biggest homegrown bank by assets, cited a slow recovery and low interest rates for the loss.
Low interest rates limit what banks can charge for loans, impacting profitability.
A rise in loan defaults and late payments at Pacific Mercantile resulted in loan write-offs of $10 million for fourth quarter. That was up from $9.2 million from a year earlier.
Pacific Mercantile is considered well-capitalized by bank regulators. Even so, the bank is in the process of raising money in a private offering of preferred shares, according to Chief Executive Ray Dellerba.
During a conference call with analysts, he said that the placement is under way with a target of raising up to $15.5 million.
Entering this month, the company had generated proceeds of $9 million, according to Dellerba.
Pacific Mercantile finished the fourth quarter with a 17% increase in deposits to $960 million. Net assets remained flat at just slightly more than $1.2 billion.
