Pacific Mercantile Posts Six-Fold Revenue Gain; Earns No. 4 Spot
By ANDREW SIMONS
Some experts say banks are some of the best long-term investments; looking at Costa Mesa-based Pacific Mercantile Bancorp, it’s hard to argue with that.
Pacific Mercantile Bank saw its revenue grow to $32.7 million for the 12 months through June 30, up 643.9% from the same period in 2000.
That growth is good enough to put Pacific Mercantile at No. 4 among OC’s fastest-growing public companies.
And the bank has swung to a profit in the three-year period. It reported net income of $3 million for the 12 months through June 30, compared to a loss of $400,000 in the same period in 2000.
The bank’s asset base also has grown fast, up 88% to $605 million at the end of the second quarter versus a year earlier.
The results have attracted investors. Shares of Pacific Mercantile are up 48% to 10 in the past 12 months.
OC-based commercial banks have seen strong asset growth in the past few years as stock market declines had investors looking for a safer place to park their money.
To keep up with the growth, Pacific Mercantile has boosted its workforce 19% to 139 in the past year. The bank earned the No. 1 spot on last year’s Business Journal list of OC-based commercial banks, ranked by assets. The Business Journal next checks in on OC-based banks in November.
“They have a very active online bank that lets their customers do a lot of things,” said Ed Carpenter, chief executive of Irvine-based Carpenter & Co., in a past interview. Carpenter & Co. is an investment bank that specializes in consulting and fundraising for community banks in California.
Real estate lending has helped the bank. In the second quarter, its mortgage lending business generated $1.9 million in revenue, double that of a year earlier. Pacific Mercantile’s mortgage bankers originated about $231 million in loans in the June quarter, an increase of 165% from the same quarter last year.
Pacific Mercantile has been expanding.
It raised $17 million in private sales of preferred stock in the second and third quarters last year to fund expansion.
Pacific Mercantile has six branches, with the latest opening in La Habra in September. Other branches are in Newport Beach, Costa Mesa, San Clemente, Beverly Hills and La Jolla.
It also launched a securities business, PMB Securities Corp. last year.
The bank’s asset quality remains strong. Pacific Mercantile reported no non-performing loans or loans that were ninety days or more delinquent as of June 30.
