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Thursday, Mar 28, 2024
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Costa Mesa Bank Approved for Federal Investment Program

Costa Mesa-based Pacific Mercantile Bancorp, operator of the largest bank based in Orange County, has gotten approval to receive $25.5 million in federal money aimed at spurring lending.

Pacific Mercantile said Friday it received preliminary approval from the Treasury Department to take part in the government’s bank investment program.

Under the program, Treasury buys preferred shares in banks.

Pacific Mercantile Chief Executive Ray Dellerba said his bank doesn’t need the money, and its board still is considering whether to pursue an investment.

Directors “will update and complete its earlier review and analysis to determine whether the expense and changing requirements of this program are consistent with Pacific Mercantile Bancorp’s longer term strategic objectives and whether participation in the program would be in the best interests of our shareholders,” he said.

In November, Dellerba told the Business Journal that his bank was “very strongly” looking at applying for federal money.

Pacific Mercantile has more than $1 billion in assets, making it the largest bank headquartered in the county.

It is considered a takeover target because of its size. The billion-dollar asset mark tends to bring local banks to the attention of acquirers.

Pacific Mercantile doesn’t necessarily need federal money. As of Sept. 30, it had an 11% core capital ratio, a measure of bank health.

Regulators require a core capital ratio of at least 5%. Banks try to stay above 7% to feel comfortable.

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