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Costa Mesa-based Pacific Mercantile Bancorp quadrupled its profit in the third quarter from a year earlier to $3.4 million, primarily driven by large gains in mortgage banking revenue.
Shares were down 3.6% in early trading.
Income related to mortgage banking, which includes net gains on sales of loans, was $9.2 million, a more than six-fold increase from last year’s total of $1.4 million.
That drove the growth in the company’s total non-interest income to $10 million, compared with $2.2 million in the same period a year ago.
Net interest income was $9.3 million, up 13% year over year.
The holding company of Pacific Mercantile Bank set apart $500,000 for possible loan losses in the third quarter, versus zero in provisions in the same quarter last year.
Gains in the third quarter boosted the bank’s nine-month earnings to $10.5 million, roughly triple the profit for the same time span last year.
Pacific Mercantile posted total assets of $1.1 billion as of the end of September, a 9% increase from a year earlier.
Total deposits grew 4% to $880.2 million.
The amount of loans outstanding remained about flat from a year ago at $693.4 million. Single-family mortgage loans increased 29% and made up 13% of the entire loan portfolio. The bank currently has no construction loans.
Nonperforming assets summed up to about $47.5 million at quarter-end, down 9% from a year ago. Loans past due dropped 60% to $11.9 million.