Pacific Mercantile Profit Up Eightfold

Costa Mesa-based Pacific Mercantile Bancorp (Nasdaq: PMBC) reported fourth-quarter net income jumped to $3.7 million from $440,000 in the same period a year ago.

“Our strong fourth-quarter operating results reflect the continuation of improved financial performance resulting from our efforts to lower our cost of deposits, reduce our cost structure, and improve our ability to attract new operating companies to the Bank,” CEO Brad Dinsmore said in a statement.

In 2020, the bank eliminated $3 million in annual expenses, shifted more of its personnel towards business development roles and expanded its commercial banking team.

Its shares were relatively unchanged in the days following the results’ release. Its shares have almost doubled to around $6.70 since the third-quarter results were announced.

CW Goes Main Street

CW Bancorp, the holding company of Irvine-based CommerceWest Bank, reported fourth-quarter net income more than doubled to $5 million from the same period in 2019.

The bulk of the profit occurred when it funded $390 million in the government’s new Main Street Lending Program, which it said was the highest amount by any bank in California. While many other banks skipped this program, CommerceWest found it profitable by selling these loans for a $2.9 million gain. 

Chief Executive Ivo Tjan said the other profits were led by a combination of record loan funding, record deposit growth, lower cost of funds and an increase in fee income.

“CW reduced our cost of deposits 83%, because we took a very proactive aggressive approach as soon as the Feds drop interest rates to zero last year,” Tjan said. “We had a reduction in our loan yields, but it does lag longer due to some loans being fixed rates for a period of time.”

Shares of the thinly traded bank rose about 20% in the days following the report to an $84 million market cap.