The parent of Costa Mesa’s Pacific Mercantile Bank, the largest homegrown bank in the county by assets, said it wasn’t able to meet terms of an August deal with regulators as scheduled but is being given more time to do so.
Regulators from the California Department of Financial Institutions ordered Pacific Mercantile to raise money, rid itself of bad loans and increase its equity-to-tangible assets ratio by Jan. 31.
The bank said it was unable to reach agreed upon benchmarks but the Department of Financial Institutions won’t take any action based on progress it has made.
From the end of September to Dec. 31, Pacific Mercantile said its non-performing assets—loans where borrowers are behind or have stopped payments—fell by 50% or by $22 million.
Pacific Mercantile’s equity-to-tangible assets, a measure of financial strength, was 7.4% at Dec. 31, up from 6% at Aug. 31, when regulators issued their order.
The bank has about $1.1 billion in assets.
