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Costa Mesa-based Pacific Mercantile Bancorp Inc. last week completed a $26.3 million sale of common stock to the Carpenter Funds, the private equity arm of Irvine-based investment firm Carpenter & Co.

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The deal gives Carpenter Funds a 26% stake and makes it the largest shareholder in the holding company, which operates Pacific Mercantile Bank, the third-largest bank based in Orange County, with assets of about $1 billion.

The Carpenter Funds bought more than 4.2 million shares at $6.26 per share, a 17% premium over the $5.36 mark the day before the sale.

Pacific Mercantile has been raising capital for some time, in part because of orders from state regulators to bump up its capital ratio. The earlier round of stock sale included $11.2 million worth of preferred shares to three investors—two other Carpenter funds and an affiliate of New York-based Clinton Group Inc.—and helped the bank meet the regulators' benchmark.