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Costa Mesa-based Pacific Mercantile Bancorp posted an 18% drop in first-quarter profit from a year earlier to $1.4 million.
Part of the decline was an increase in provision for income taxes totaling $823,000.
Per share earnings for the holding company of Pacific Mercantile Bank declined to 9 cents from 13 cents a year earlier. The dip was prompted in part by a 19% increase in the average number of common shares outstanding, which came when the bank issued about 1.6 million shares of common stock last July on the conversion of its preferred stock.
Net interest income fell 7% to $8 million. The bank cited the environment of low interest rates set by the Federal Reserve Board as part of a decrease in yields on loans and other interest-earning assets.
Noninterest income grew more than four times to $6 million in the first quarter compared with a year earlier period. The growth primarily was attributable to a jump in mortgage banking revenue, which surged more than fivefold last quarter for a total of $4.5 million.
The bank reversed its provision for loan losses last quarter by $400,000.
Interest-bearing deposits grew 4% to $702 million. Non-interest bearing deposits also grew 7% to $166.1 million.
Total assets inched up 4% to $1.04 billion.
Pacific Mercantile recently completed the final installment of its $50.2 million capital-raise with the sale of $26.3 million worth of common stock to two funds under Carpenter Community BancFund LP, the private equity division of Irvine-based financial advisory firm Carpenter & Co.