Pacific Mercantile Bancorp (PMBC) 銘柄情報

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Pacific Mercantile Bancorp Reports Second Quarter and Year to Date 2014 Operating Results (7/25/14)

Pacific Mercantile Bancorp (Nasdaq:PMBC) today reported its results of operations for the three months ended June 30, 2014. For the second quarter of 2014, the Company reported net income of $4 thousand, or $0.00 per share. This compares with net income of $451 thousand, or $0.02 per share, in the first quarter of 2014, and a net loss of $3.1 million, or $(0.17) per share, in the second quarter of 2013. The decline in earnings as compared to the first quarter of 2014 is primarily attributable to an increase in the provision for loan and lease losses, a decline in net interest income, and a smaller contribution from discontinued operations during the quarter, partially offset by a decrease in noninterest expense.

Commenting on the results, Steve Buster, President & CEO of Pacific Mercantile Bancorp, said, "We had a very strong quarter of business development with annualized loan growth of 15%. Our loan growth for the first half of the year was driven by more than 20% annualized growth in both commercial loans and owner-occupied commercial real estate loans and reflects our continued efforts and progress in developing a robust commercial banking platform. We also continue to build a productive small business administration ("SBA") lending group and it is providing a consistent source of gain-on-sale income. We expect to see an increasing level of deposit inflow from our new commercial relationships and an increase should drive improvement in our deposit mix and reduce our cost of funds. We continue to have a strong loan pipeline which we expect will drive balance sheet growth and steady improvement in our level of profitability over the second half of 2014. Substantial progress in resolving nonperforming assets and other cost containment efforts have resulted in reduced noninterest expenses that will continue to enhance profitability."

Q2 2014 vs Q1 2014. Net interest income decreased $218 thousand, or 2.8%, for the three months ended June 30, 2014 as compared to the three months ended March 31, 2014, primarily as a result of:
• A decrease in interest income of $153 thousand, or 1.6%, primarily attributable to a decrease in interest earned on loans as a result of a slightly lower yield for the three months ended June 30, 2014 as compared to the three months ended March 31, 2014. This decrease was partially offset by a higher average loan balance during the three months ended June 30, 2014 as compared to the three months ended March 31, 2014; and
• An increase in interest expense of $65 thousand, or 4.5%, due to an increase in the volume of certificates of deposit, partially offset by a decrease in the rates of interest paid on certificates of deposit.

Our net interest margin declined to 3.09% for the three months ended June 30, 2014 from 3.26% for the three months ended March 31, 2014, primarily attributable to a decrease in our average yield on interest earning assets to 3.70% for the three months ended June 30, 2014 from 3.86% for the three months ended March 31, 2014. Also contributing to the decline in our net interest margin was an increase in our cost of funds to 0.85% for the three months ended June 30, 2014 from 0.82% for the three months ended March 31, 2014.

Q2 2014 vs Q2 2013. Net interest income increased $255 thousand, or 3.5%, for the three months ended June 30, 2014 as compared to the three months ended June 30, 2013, primarily as a result of the increase in interest income, partially offset by the increase in interest expenses, as described below:
• The increase in interest income of $406 thousand, or 4.7%, was primarily attributable to an increase in interest earned on loans as a result of a higher average loan balance during the three months ended June 30, 2014 as compared to the three months ended June 30, 2013, partially offset by a decrease in the yield on loans; and
• The increase in interest expense of $151 thousand, or 11.1%, was due primarily to an increase in the volume of certificates of deposit partially offset by a decrease in the rates of interest paid on certificates of deposit.

YTD 2014 vs YTD 2013. Net interest income increased $937 thousand, or 6.4%, for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013, primarily as a result of an increase in interest income of $943 thousand, or 5.4%, primarily attributable to an increase in interest earned on loans as a result of a higher average loan balance during the six months ended June 30, 2014 as compared to the six months ended June 30, 2013.

Provision for Loan and Lease Losses

Q2 2014 vs Q1 2014. The provision for loan and lease losses increased $150 thousand, or 33.3%, for the three months ended June 30, 2014 as compared to the three months ended March 31, 2014, primarily as a result of an increase in loan balances by $28.0 million during the second quarter of 2014 compared to $1.8 million in the first quarter of 2014. In addition, we had net recoveries of $40 thousand for the three months ended June 30, 2014 versus net recoveries of $132 thousand for the three months ended March 31, 2014.

Q2 2014 vs Q2 2013. The provision for loan and lease losses increased $600 thousand, or 100.0%, for the three months ended June 30, 2014 as compared to the three months ended June 30, 2013, primarily as a result of an increase in loan balances by $28.0 million for the three months ended June 30, 2014 compared to $14.3 million for the three months ended June 30, 2013.

YTD 2014 vs YTD 2013. The provision for loan and lease losses decreased $100 thousand, or 8.7%, for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013, primarily as a result of net recoveries of $172 thousand for the six months ended June 30, 2014, along with increased loan balances of $29.8 million in the first half of 2014 compared to net charge-offs of $908 thousand during the six months ended June 30, 2013 and a decrease in loan balances of $1.4 million for the same period.

Noninterest Income

Q2 2014 vs Q1 2014. Noninterest income decreased $85 thousand, or 6.6%, for the three months June 30, 2014 as compared to the three months ended March 31, 2014, primarily as a result of a $212 thousand, or 30.9%, decrease in net gain on sale of SBA loans.

Q2 2014 vs Q2 2013. Noninterest income increased by $1.5 million for the three months ended June 30, 2014 as compared to the three months ended June 30, 2013 primarily as a result of:
• A $474 thousand increase in net gain on sale of SBA loans;
• A $224 thousand increase in income from real properties acquired by or in lieu of loan foreclosures (commonly referred to as other real estate owned or "OREO"); and
• No sales of loans in the current period as compared to a net loss on the sale of loans of $576 thousand for the three months ended June 30, 2013.

YTD 2014 vs YTD 2013. Noninterest income increased $2.3 million, or 1,363.7%, for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013, primarily as a result of:
• An increase of $1.2 million in net gain on sale of SBA loans;
• An increase of $273 thousand in income from OREO; and
• No sales of loans in the current period as compared to a net loss on the sale of loans of $485 thousand for the six months ended June 30, 2013.

Noninterest Expense

Q2 2014 vs Q1 2014. Noninterest expense decreased $418 thousand, or 4.4%, for the three months ended June 30, 2014 as compared to the three months ended March 31, 2014, primarily as a result of:
• A decrease of $323 thousand in carrying costs and other expenses incurred in connection with OREO as a result of higher expenses during the first quarter of 2014 due to a write down taken on one OREO property; and
• A decrease of $184 thousand in salaries and employee benefits primarily related to a partial refund received in the second quarter for health care insurance costs charged in the first quarter; partially offset by
• An increase of $175 thousand in our legal expenses as a result of a settlement of a legal dispute in the second quarter of 2014.

Q2 2014 vs Q2 2013. Noninterest expense decreased $718 thousand, or 7.4%, for the three months ended June 30, 2014 as compared to the three months ended June 30, 2013, as a result of:
• A decrease of $707 thousand in OREO expenses attributable to the reduction in OREO properties during the previous 12-month period; and
• A decrease of $355 thousand in professional fees related to decreased legal expenses due to the resolution of certain lawsuits and other disputes and a decline in nonperforming loans; partially offset by
• An increase of $270 thousand in salaries and employee benefits related to the hiring of key employees during 2013, increases in health care insurance costs, and increases in workers' compensation premiums.

YTD 2014 vs YTD 2013. Noninterest expense decreased $1.6 million, or 7.9%, for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013, primarily as a result of:
• A decrease of $2.0 million in OREO expenses attributable to the reduction in OREO properties during the previous 12-month period; and
• A decrease of $1.1 million in professional fees related to decreased legal expenses due to the resolution of certain lawsuits and other disputes and a decline in nonperforming loans; partially offset by
• An increase of $1.5 million in salaries and employee benefits related to the hiring of key employees during 2013, increases in health care insurance costs, and increases in workers' compensation premiums.

Income tax provision (benefit)

For each of the three months ended June 30, 2014, March 31, 2014 and June 30, 2013, we recorded no income tax provision. We had no income tax provision for the first and second quarters of 2014 as a result of the utilization of a net operating loss ("NOL") credit against our taxable income in the current year. We had no income tax provision for the second quarter of 2013 as we had a pre-tax loss of $2.6 million.

We had no income tax provision for the six months ended June 30, 2014 as a result of the utilization of the NOL credit against our taxable income in the current year. The tax benefit of $1.3 million for the six months ended June 30, 2013 was primarily related to the release of the remainder of a valuation allowance in the first quarter of 2013, which we had established against our deferred tax assets by means of non-cash charges to the provision for income taxes prior to 2013.

Discontinued operations

For the three months ended June 30, 2014 and March 31, 2014, we had net income related to our discontinued operations of $772 thousand and $1.2 million, respectively, as compared to a net loss from discontinued operations of $518 thousand for the three months ended June 30, 2013. The net income from discontinued operations for the three months ended June 30, 2014 was primarily attributable to a partial reversal of our repurchase reserve as a result of our sale of the mortgage servicing rights in April 2014. The net income from discontinued operations for the three months ended March 31, 2014 was primarily the result of an increase in the fair value of our mortgage servicing rights. The net loss from discontinued operations for the three months ended June 30, 2013 primarily related to higher expenses than incoming revenues related to the mortgage banking division.

For the six months ended June 30, 2014, we had net income related to our discontinued operations of $2.0 million as compared to a net loss of $1.2 million for the six months ended June 30, 2013. The net income from discontinued operations for the six months ended June 30, 2014 was attributable to the gain on the sale of the mortgage servicing rights in connection with the closure of our mortgage banking business, and the partial reversal of our repurchase reserve as a result of our sale of the mortgage servicing rights. The net loss from discontinued operations for the six months ended June 30, 2013 primarily related to higher expenses than incoming revenues related to our former mortgage banking business.

Balance Sheet Information

Loans

As indicated in the table below, at June 30, 2014 gross loans totaled approximately $806.6 million, which represented an increase of $28.0 million, or 3.6%, from gross loans outstanding at March 31, 2014, and an increase of $29.8 million, or 3.8%, from the gross loans outstanding at December 31, 2013. The following table sets forth the composition, by loan category, of our loan portfolio at June 30, 2014, March 31, 2014 and December 31, 2013.


Q2 2014 vs Q1 2014. Net interest income decreased $218 thousand, or 2.8%, for the three months ended June 30, 2014 as compared to the three months ended March 31, 2014, primarily as a result of:
• A decrease in interest income of $153 thousand, or 1.6%, primarily attributable to a decrease in interest earned on loans as a result of a slightly lower yield for the three months ended June 30, 2014 as compared to the three months ended March 31, 2014. This decrease was partially offset by a higher average loan balance during the three months ended June 30, 2014 as compared to the three months ended March 31, 2014; and
• An increase in interest expense of $65 thousand, or 4.5%, due to an increase in the volume of certificates of deposit, partially offset by a decrease in the rates of interest paid on certificates of deposit.

Our net interest margin declined to 3.09% for the three months ended June 30, 2014 from 3.26% for the three months ended March 31, 2014, primarily attributable to a decrease in our average yield on interest earning assets to 3.70% for the three months ended June 30, 2014 from 3.86% for the three months ended March 31, 2014. Also contributing to the decline in our net interest margin was an increase in our cost of funds to 0.85% for the three months ended June 30, 2014 from 0.82% for the three months ended March 31, 2014.

Q2 2014 vs Q2 2013. Net interest income increased $255 thousand, or 3.5%, for the three months ended June 30, 2014 as compared to the three months ended June 30, 2013, primarily as a result of the increase in interest income, partially offset by the increase in interest expenses, as described below:
• The increase in interest income of $406 thousand, or 4.7%, was primarily attributable to an increase in interest earned on loans as a result of a higher average loan balance during the three months ended June 30, 2014 as compared to the three months ended June 30, 2013, partially offset by a decrease in the yield on loans; and
• The increase in interest expense of $151 thousand, or 11.1%, was due primarily to an increase in the volume of certificates of deposit partially offset by a decrease in the rates of interest paid on certificates of deposit.

YTD 2014 vs YTD 2013. Net interest income increased $937 thousand, or 6.4%, for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013, primarily as a result of an increase in interest income of $943 thousand, or 5.4%, primarily attributable to an increase in interest earned on loans as a result of a higher average loan balance during the six months ended June 30, 2014 as compared to the six months ended June 30, 2013.

Provision for Loan and Lease Losses

Q2 2014 vs Q1 2014. The provision for loan and lease losses increased $150 thousand, or 33.3%, for the three months ended June 30, 2014 as compared to the three months ended March 31, 2014, primarily as a result of an increase in loan balances by $28.0 million during the second quarter of 2014 compared to $1.8 million in the first quarter of 2014. In addition, we had net recoveries of $40 thousand for the three months ended June 30, 2014 versus net recoveries of $132 thousand for the three months ended March 31, 2014.

Q2 2014 vs Q2 2013. The provision for loan and lease losses increased $600 thousand, or 100.0%, for the three months ended June 30, 2014 as compared to the three months ended June 30, 2013, primarily as a result of an increase in loan balances by $28.0 million for the three months ended June 30, 2014 compared to $14.3 million for the three months ended June 30, 2013.

YTD 2014 vs YTD 2013. The provision for loan and lease losses decreased $100 thousand, or 8.7%, for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013, primarily as a result of net recoveries of $172 thousand for the six months ended June 30, 2014, along with increased loan balances of $29.8 million in the first half of 2014 compared to net charge-offs of $908 thousand during the six months ended June 30, 2013 and a decrease in loan balances of $1.4 million for the same period.

Noninterest Income

Q2 2014 vs Q1 2014. Noninterest income decreased $85 thousand, or 6.6%, for the three months June 30, 2014 as compared to the three months ended March 31, 2014, primarily as a result of a $212 thousand, or 30.9%, decrease in net gain on sale of SBA loans.

Q2 2014 vs Q2 2013. Noninterest income increased by $1.5 million for the three months ended June 30, 2014 as compared to the three months ended June 30, 2013 primarily as a result of:
• A $474 thousand increase in net gain on sale of SBA loans;
• A $224 thousand increase in income from real properties acquired by or in lieu of loan foreclosures (commonly referred to as other real estate owned or "OREO"); and
• No sales of loans in the current period as compared to a net loss on the sale of loans of $576 thousand for the three months ended June 30, 2013.

YTD 2014 vs YTD 2013. Noninterest income increased $2.3 million, or 1,363.7%, for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013, primarily as a result of:
• An increase of $1.2 million in net gain on sale of SBA loans;
• An increase of $273 thousand in income from OREO; and
• No sales of loans in the current period as compared to a net loss on the sale of loans of $485 thousand for the six months ended June 30, 2013.

Noninterest Expense

Q2 2014 vs Q1 2014. Noninterest expense decreased $418 thousand, or 4.4%, for the three months ended June 30, 2014 as compared to the three months ended March 31, 2014, primarily as a result of:
• A decrease of $323 thousand in carrying costs and other expenses incurred in connection with OREO as a result of higher expenses during the first quarter of 2014 due to a write down taken on one OREO property; and
• A decrease of $184 thousand in salaries and employee benefits primarily related to a partial refund received in the second quarter for health care insurance costs charged in the first quarter; partially offset by
• An increase of $175 thousand in our legal expenses as a result of a settlement of a legal dispute in the second quarter of 2014.

Q2 2014 vs Q2 2013. Noninterest expense decreased $718 thousand, or 7.4%, for the three months ended June 30, 2014 as compared to the three months ended June 30, 2013, as a result of:
• A decrease of $707 thousand in OREO expenses attributable to the reduction in OREO properties during the previous 12-month period; and
• A decrease of $355 thousand in professional fees related to decreased legal expenses due to the resolution of certain lawsuits and other disputes and a decline in nonperforming loans; partially offset by
• An increase of $270 thousand in salaries and employee benefits related to the hiring of key employees during 2013, increases in health care insurance costs, and increases in workers' compensation premiums.

YTD 2014 vs YTD 2013. Noninterest expense decreased $1.6 million, or 7.9%, for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013, primarily as a result of:
• A decrease of $2.0 million in OREO expenses attributable to the reduction in OREO properties during the previous 12-month period; and
• A decrease of $1.1 million in professional fees related to decreased legal expenses due to the resolution of certain lawsuits and other disputes and a decline in nonperforming loans; partially offset by
• An increase of $1.5 million in salaries and employee benefits related to the hiring of key employees during 2013, increases in health care insurance costs, and increases in workers' compensation premiums.

Income tax provision (benefit)

For each of the three months ended June 30, 2014, March 31, 2014 and June 30, 2013, we recorded no income tax provision. We had no income tax provision for the first and second quarters of 2014 as a result of the utilization of a net operating loss ("NOL") credit against our taxable income in the current year. We had no income tax provision for the second quarter of 2013 as we had a pre-tax loss of $2.6 million.

We had no income tax provision for the six months ended June 30, 2014 as a result of the utilization of the NOL credit against our taxable income in the current year. The tax benefit of $1.3 million for the six months ended June 30, 2013 was primarily related to the release of the remainder of a valuation allowance in the first quarter of 2013, which we had established against our deferred tax assets by means of non-cash charges to the provision for income taxes prior to 2013.

Discontinued operations

For the three months ended June 30, 2014 and March 31, 2014, we had net income related to our discontinued operations of $772 thousand and $1.2 million, respectively, as compared to a net loss from discontinued operations of $518 thousand for the three months ended June 30, 2013. The net income from discontinued operations for the three months ended June 30, 2014 was primarily attributable to a partial reversal of our repurchase reserve as a result of our sale of the mortgage servicing rights in April 2014. The net income from discontinued operations for the three months ended March 31, 2014 was primarily the result of an increase in the fair value of our mortgage servicing rights. The net loss from discontinued operations for the three months ended June 30, 2013 primarily related to higher expenses than incoming revenues related to the mortgage banking division.

For the six months ended June 30, 2014, we had net income related to our discontinued operations of $2.0 million as compared to a net loss of $1.2 million for the six months ended June 30, 2013. The net income from discontinued operations for the six months ended June 30, 2014 was attributable to the gain on the sale of the mortgage servicing rights in connection with the closure of our mortgage banking business, and the partial reversal of our repurchase reserve as a result of our sale of the mortgage servicing rights. The net loss from discontinued operations for the six months ended June 30, 2013 primarily related to higher expenses than incoming revenues related to our former mortgage banking business.

Balance Sheet Information

Loans

As indicated in the table below, at June 30, 2014 gross loans totaled approximately $806.6 million, which represented an increase of $28.0 million, or 3.6%, from gross loans outstanding at March 31, 2014, and an increase of $29.8 million, or 3.8%, from the gross loans outstanding at December 31, 2013. The following table sets forth the composition, by loan category, of our loan portfolio at June 30, 2014, March 31, 2014 and December 31, 2013.

Deposits

The decrease in our total deposits from March 31, 2014 to June 30, 2014 is primarily attributable to customers withdrawing funds to pay their tax payments, which they had built up in the previous quarter. As a result, our lower priced core deposits decreased to 45%, and higher priced time deposits increased to 55%, of total deposits at June 30, 2014, as compared to 46% and 54% of total deposits, respectively, at March 31, 2014.

The increase in certificates of deposit from December 31, 2013 was primarily the result of our decision to increase our deposit base and improve our loan-to-deposit ratio. Due primarily to that decision and the resulting increase in certificates of deposit, lower priced core deposits decreased to 45%, and higher priced time deposits increased to 55%, of total deposits at June 30, 2014, as compared to 51% and 49%, respectively, at December 31, 2013.

Asset Quality

Nonperforming Assets

Nonperforming assets at June 30, 2014 increased $2.3 million from March 31, 2014 as a result of a $3.6 million increase in non-performing loans, partially offset by a decrease of $1.6 million in other non-performing assets in the second quarter of 2014. Non-performing loans increased to $11.6 million at June 30, 2014 from $8.0 million at March 31, 2014, which was primarily attributable to a $2.7 million loan relationship moved to non-accrual status, which consists of a $947 thousand commercial loan and $1.8 million in commercial real estate loans. The decrease in other non-performing assets at June 30, 2014 compared to March 31, 2014 relates to one investment security moving to accrual status.

Allowance for loan and lease losses

At June 30, 2014, the allowance for loan and lease losses ("ALLL") totaled $12.6 million, which was approximately $640 thousand more than at March 31, 2014 and $1.5 million more than at June 30, 2013. The ALLL activity during the six months ended June 30, 2014 included net recoveries of $172 thousand, combined with a $600 thousand provision that we made for possible loan and lease losses. The ratio of the ALLL-to-total loans outstanding as of June 30, 2014 was 1.56% as compared to 1.53% as of both March 31, 2014 and June 30, 2013.

Capital Resources

At June 30, 2014, we had total regulatory capital on a consolidated basis of approximately $139.8 million, and Pacific Mercantile Bank (the "Bank"), our wholly owned banking subsidiary, had total regulatory capital of approximately $119.8 million. The ratio of the Bank's total capital-to-risk weighted assets, which is the principal federal bank regulatory measure of the financial strength of banking institutions, was 14.9% and, as a result, the Bank continued to be classified, under federal bank regulatory guidelines, as a "well-capitalized" banking institution, which is the highest of the capital standards established by federal banking regulatory authorities.

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp is the parent holding company of Pacific Mercantile Bank, which opened for business March 1, 1999. The Bank, which is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System, provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services.

The Bank operates a total of seven financial centers in Southern California, four in Orange County and one each in Los Angeles and San Diego County, and another in San Bernardino County. The four Orange County financial centers are located in the cities of Newport Beach, Costa Mesa, La Habra and San Juan Capistrano. Our Los Angeles County financial center is located in the city of Beverly Hills. Our San Diego County financial center is located in La Jolla and our San Bernardino County financial center is located in the city of Ontario. In addition, the Bank offers comprehensive online banking services accessible at www.pmbank.com.

Pacific Mercantile Bancorp Reports Fourth Quarter and Full Year 2013 Operating Results (3/07/14)

COSTA MESA, Mar 07, 2014 (GLOBE NEWSWIRE via COMTEX) -- Pacific Mercantile Bancorp today reported its results of operations for the fourth quarter and year ended December 31, 2013.

Overview

Financial results for the three months ended December 31, 2013 include the following items:

-- A $5.0 million charge related to our exit from the mortgage banking business, which primarily includes severance and fees related to contract and lease terminations;

-- A $3.4 million provision for loan and lease losses primarily reflecting the impact of a credit quality downgrade of one legacy commercial loan relationship; and

-- A $7.1 million tax provision related to an increase in the valuation allowance held against our deferred tax assets.

In the three months ended December 31, 2013, we incurred a net loss of $15.1 million, or $0.79 per share, as compared to net income of $1.1 million, or $0.06 per diluted share in the same three months of 2012. During the year ended December 31, 2013, we incurred a net loss of $23.3 million, or $1.28 per share, as compared to net income of $8.7 million, or $0.55 per diluted share for the year ended December 31, 2012. The net losses were primarily attributable to increases in our provision for loan losses, increases in noninterest expense, an increase in our income tax provision, and a charge related to the discontinuation of our mortgage banking business. Another factor contributing to our net loss for the year ended December 31, 2013 was the operating loss we suffered from operations of our mortgage banking business during 2013, which is discussed further under Results of Operations -- Discontinued Operations.

Additionally, non-performing loans declined to $11.5 million at December 31, 2013, down from $17.7 million at December 31, 2012. This decrease was primarily attributable to, among other things, restoration to accrual status of a commercial real estate loan, the foreclosure of certain nonperforming loans and their transfer to other real estate owned, and impairment write downs based on our loan impairment analyses.

"Our fourth quarter results reflect steps we took to exit the mortgage banking business and address a legacy commercial loan relationship, which are steps we believe will help us towards our goal to become a prominent community business bank in Southern California," said Steve Buster, President & CEO of Pacific Mercantile Bancorp. "We continue to make excellent progress on transitioning to a business bank and building our commercial lending platform. During the fourth quarter, we increased our commercial loans outstanding by 21% as we continued to attract more commercial customers to the Bank. With our strong capital position, our new state-of-the-art treasury products, and the experienced talent we have added to our banking team, we believe we are well positioned to continue growing our commercial relationships and deliver improved financial performance in 2014."

Results of Operation

Net Interest Income. Net interest income increased $0.9 million, or 12.0%, for the three months ended December 31, 2013 as compared to the three months ended December 31, 2012, primarily as a result of an increase in interest income of $0.2 million, or 2.6%, and a decrease in interest expense of $0.6 million, or 34.8%. The increase in interest income was primarily attributable to an increase in interest earned on loans as a result of a higher average loan balance during the three months ended December 31, 2013 as compared to the three months ended December 31, 2012. The decrease in interest expense for the three months ended December 31, 2013 was due primarily to a combination of declines in the rates of interest paid on deposits and decreases in the volume of higher priced time deposits.

Net interest income remained relatively flat for the year ended December 31, 2013 as compared to the year ended December 31, 2012, primarily as a result of offsetting decreases in interest income of $2.8 million and interest expense of $2.7 million. The decrease in interest income was primarily attributable to a decline in interest earned on loans as a result of actions taken by the Federal Reserve Board ("FRB") to keep interest rates low partially offset by the increase in the average loan balance. Also contributing to the decrease in interest income for the year ended December 31, 2013 was a decline in the volume of securities available for sale as a result of sales and maturities of, and payments on, securities we did not fully replace. The decrease in interest expense for the year ended December 31, 2013 was due primarily to a combination of declines in the rates of interest paid on deposits and decreases in the volume of higher priced time deposits.

Provision for Loan and Lease Losses. During the three months ended December 31, 2013, we made provisions for loan and lease losses of $3.4 million, as compared to no provision made during the three months ended December 31, 2012. The increase in the fourth quarter of 2013 was primarily the result of the write down of one commercial loan relationship. During the year ended December 31, 2013, we made provisions for loan and lease losses of $4.5 million, as compared to $2.0 million for the year ended December 31, 2012. At December 31, 2013, the allowance for loan and lease losses ("ALLL") totaled $11.4 million, which was approximately $0.5 million more than at December 31, 2012. The ALLL activity during the year ended December 31, 2013 included net charge-offs of $4.0 million, which were offset by a $4.5 million provision that we made for loan and lease losses. The ratio of the ALLL-to-total loans outstanding as of December 31, 2013 was 1.46% as compared to 1.49% as of December 31, 2012.

Non-interest income. Noninterest income increased by $1.8 million, or 629.7%, for the three months ended December 31, 2013 as compared to the three months ended December 31, 2012 primarily as a result of a $1.4 million, or 1,807.6%, increase in gains on sale of other real estate owned. For the year ended December 31, 2013, noninterest income decreased by $0.7 million, or 21.0%, as compared to the three months ended December 31, 2012, primarily as a result of a $2.1 million, or 97.9%, decrease in gains on sales of securities available for sale and a $0.4 million increase in net loss on sale of loans, partially offset by an increase of $1.9 million in gains on sale of other real estate owned.

Non-interest expense. Noninterest expense decreased by $0.2 million, or 2.3%, for the three months ended December 31, 2013 as compared to the three months ended December 31, 2012. The decrease was attributable to decreases in carrying costs and other expenses incurred in connection with real properties acquired by or in lieu of loan foreclosures (commonly referred to as other real estate owned or "OREO") as a result of a significant reduction in those real properties throughout 2013, a decrease in professional fees related to decreased legal expenses partially offset by an increase in compensation-related expenses as a result of the hiring of key employees during 2013. For the year ended December 31, 2013, noninterest expense increased by $1.8 million, or 4.9%, as compared to the year ended December 31, 2012, primarily as a result of an increase of $4.6 million in salaries and employee benefits related to the hiring of key employees during the year, partially offset by decreases of $1.9 million in OREO expenses attributable to the reduction in OREO properties during the year and a decrease of $0.8 million in professional fees related to a decrease in legal expenses due to the resolution of certain lawsuits and other disputes.

Income tax provision (benefit). For the three months ended December 31, 2013 and 2012, we recorded an income tax provision of $7.1 million and an income tax benefit of $1.7 million, respectively. The income tax provision was primarily attributable to pre-tax losses we incurred during the quarter which resulted in an increase in the valuation allowance held against our deferred tax assets. The tax benefit in 2012 was primarily related to the release of the remainder of a valuation allowance, which we had established against our deferred tax asset by means of non-cash charges to the provision for income taxes prior to the fourth quarter of 2012. For the year ended December 31, 2013 and 2012, we recorded an income tax provision of $5.6 million and an income tax benefit of $6.9 million, respectively. The tax provision was primarily attributable to pre-tax losses we incurred during the year which resulted in an increase in the valuation allowance held against our deferred tax assets. The tax benefit in 2012 was primarily related to the release of the remainder of a valuation allowance, which we had established against our deferred tax asset by means of non-cash charges to the provision for income taxes prior to 2012.

Discontinued operations. For the three months ended December 31, 2013, we had a net loss related to our discontinued operations of $5.0 million as compared to a net loss from discontinued operations of $0.4 million for the three months ended December 31, 2012. For the year ended December 31, 2013, we had a net loss of $7.3 million, as compared to net income of $7.0 million for the year ended December 31, 2012. The decreases primarily relate to our decision in December 2013 to discontinue our mortgage banking division and the associated reserves incurred with exiting a business, including severance and termination of existing contracts and leases.

http://www.marketwatch.com/story/pacific-mercantile-bancorp-reports-fourth-quarter-and-full-year-2013-operating-results-2014-03-07?reflink=MW_news_stmp

Pacific Mercantile Bank to Exit Its Mortgage Banking Operations (12/11/13)

COSTA MESA, Calif., Dec. 11, 2013 (GLOBE NEWSWIRE) -- Pacific Mercantile Bank, a wholly-owned subsidiary of Pacific Mercantile Bancorp (Nasdaq:PMBC), today announced that its Board of Directors has determined the Bank will exit the consumer mortgage origination business and terminate operations of its Mortgage Banking Division. The Bank expects to sell or terminate substantially all business activities of its consumer mortgage origination unit (previously reported as its Mortgage Banking segment).

"We made the strategic decision to exit the consumer mortgage origination business due to the operating performance of the unit and the Bank's desire to focus on continuing to develop the commercial banking opportunity in its marketplace," said Steven K. Buster, President & CEO of Pacific Mercantile Bancorp and Bank. "We believe that this change will support our mission of becoming a prominent Southern California business banking franchise."

Management anticipates that the Bank's consumer mortgage origination business will cease accepting new applications on or about December 20, 2013, if not sold prior to that date, and terminate all operations on or about April 30, 2014. The Bank will continue to serve the needs of mortgage customers with loans that are in process on December 20, 2013. "We fully understand the importance of ensuring that our customers are provided with the same level of excellent customer service that we have provided in the past," Gary Braunstein, Executive Vice President of the Bank's Mortgage Banking Division said.

The Bank will honor all contractual commitments for mortgage loans that are in process as of December 20, 2013. Management expects the majority of those loans will close in 75 days. The Bank expects to incur approximately $3.3 to $3.8 million, after tax, in costs related to exiting the business.

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp is the parent holding company of Pacific Mercantile Bank, which opened for business March 1, 1999. The Bank, which is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System, provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services.

The Bank operates a total of seven financial centers in Southern California, four in Orange County and one each in Los Angeles, San Diego Counties, and San Bernardino Counties. The four Orange County financial centers are located, respectively, in the cities of Newport Beach, Costa Mesa, La Habra and San Juan Capistrano. Our Los Angeles County financial center is located in the city of Beverly Hills. Our San Diego financial center is located in the city of La Jolla and our Inland Empire financial center is located in the city of Ontario. In addition, the Bank offers comprehensive banking services over its Internet Bank, which is accessible 24/7 worldwide at www.pmbank.com.

http://globenewswire.com/news-release/2013/12/12/596318/10061224/en/Pacific-Mercantile-Bank-to-Exit-Its-Mortgage-Banking-Operations.html

Sharp reduction in mortgage banking revenue.

YoY the decline is $9.6 million.

PMBC

http://banktracker.investigativereportingworkshop.org/banks/california/costa-mesa/pacific-mercantile-bank/

*marker- PPS as of 9/12/2013 was $6.21...BV is $6.89...not sure why the heavy losses in Q2 of 2013..???... and no time right now to look into it but this is still a strong bank...well capitalized..and no TARP.

~ $PMBC ~ Daily Par Sar Buy Signal ~ Criteria alert triggered during a recent trading session!

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Pacific Mercantile Bancorp Reports First Quarter 2013 Operating Results (5/14/13)

COSTA MESA, Calif., May 14, 2013 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (PMBC) today reported its results of operations for the first quarter ended March 31, 2012.

Overview

Pacific Mercantile Bancorp, reported that it incurred a net loss of $3.2 million, or $0.21 per diluted share, in the first three months of 2013, as compared to net income of $1.4 million, or $0.09 per diluted share, in the same three months of 2012. That loss was attributable to a number of factors, including (i) a $1.3 million, or 12.9%, decline in interest income, due primarily to continuing declines in prevailing market rates of interest; (ii) a $1.55 million increase in the provision for loan losses made primarily to offset $1.0 million of write-downs in the carrying values of certain nonperforming loans which were charged against the allowance for loan losses; (iii) a $4.0 million, or 66.3%, decline in noninterest income, of which $3.0 million was due to a decrease in mortgage banking revenues that resulted from our exit from the wholesale residential mortgage loan business in late August 2012, and (iv) a $1.1 million, or 9%, increase in noninterest expense. Partially offsetting the decline in interest income was a $669,000, or 29.2%, reduction in interest expense in this year's first quarter, as compared to the first quarter of 2012, that was primarily attributable to reductions in the volume of higher-cost time deposits due to a decision we made to not seek renewal of some of those deposits and decreases in interest rates on deposits and borrowings.

"I am pleased and privileged to join Pacific Mercantile Bank as its new President and CEO and look forward to the challenges and opportunities ahead to assist in guiding the Bank to the next level over the coming years," said Steven K. Buster, President and CEO of Pacific Mercantile Bank and Bancorp.

"The Bank embarked on a new strategy in the fourth quarter of 2012, a strategy we are now putting into play by refocusing the Bank, moving from disposing of problem loans and a workout management style to the enhancement of the following key areas; Commercial Loans along with Treasury Management and DDA Deposits, Small Business Association (SBA) Loans, Import-Export Loans, Entertainment Industry Financing and Mortgage Loans," stated the President.

Mr. Buster continued, "Thanks to the Carpenter Community BancFunds and the Clinton Group (SBAV LP), we have been successful in raising the capital we need to deploy in order to achieve the growth of these departments. In the Commercial Loan Division we have added a regional manager and additional loan officers with books of business, as well as a new treasury and cash management professional to bring in the DDA balances needed to fund those loans and to move us away from the higher costing time certificates of deposits (CDs). A new SBA manager has built a very seasoned SBA team to grow this department. Our Entertainment Industries Division has hired additional proven producers and will occupy their expanded facility this month. Our Import-Export Manager is now working with all branches in our market place to grow that department. We have hired a very experienced Mortgage Division Manager, who is re-focusing the mortgage department from wholesale to a retail focused group. "We believe that these are very positive, forward looking changes. The high caliber of new people employed have increased expenses for compensation, training, facilities, finance and accounting, and technology, for which we have received the strong support from our Board of Directors, enabling us to implement our strategy to move the Bank to the next level. I am very thankful to the Board for its foresight and support," concluded President Buster.

Results of Operations

Net Interest Income. In the three months ended March 31, 2013, net interest income decreased by $657,000, or 8.2%, due to a $1.3 million, or 12.9% decrease in interest income, which was only partially offset by a $669,000, or 29.2%, decrease in interest expense, in each case as compared to the same three months of 2012. The decrease in interest income was primarily attributable to a decrease in the average rate of interest earned on loans outstanding, to 4.62% for the first three months of 2013, from 5.19% in the same three months of 2012, which more than offset increases in the volume of our interest earning assets. The decrease in average interest rates earned on loans and other interest earning assets was primarily attributable to actions taken by the Federal Reserve Board designed to keep interest rates low as a means of stimulating economic growth. The decrease in interest expense was primarily attributable to reductions in the volume of higher priced time certificates of deposit and decreases in interest rates on deposits and borrowings, in the three months ended March 31, 2013 as compared to the same three months of 2012.

Provision for Loan Losses. At March 31, 2013, the allowance for loan losses (ALL) totaled $11.0 million, which was approximately $100,000, or 1.3%, higher than at December 31, 2012. ALL activity in the first three months of 2013 included provisions of $1.15 million made for possible loan losses, which more than offset net write-downs of $1.0 million of nonperforming loans which were charged to the ALL. The ratio of the ALL to total loans outstanding as of March 31, 2013 was 1.54% compared to 1.49% as of December 31, 2012.

Noninterest Income. The decline in noninterest income in the three months ended March 31, 2013, as compared to the same three months of 2012, was primarily attributable to a $3.0 million, or 64.9%, decrease in revenue generated by our mortgage banking business, and a decrease of $1.2 million in net gains on sales of securities available for sale. The decrease in mortgage banking revenue was primarily the result of declines in both mortgage loan originations and sales of mortgage loans in the secondary mortgage market due to our exit from the wholesale residential mortgage business in August 2012, which, as we had previously reported, was expected to result in a significant decrease in our mortgage banking revenues during 2013. The nearly $1.2 million decline in net gains on sales of securities in the first three months of 2013 was due primarily to a decrease in volume of sales of such securities to $6 million in the three months ended March 31, 2013, from approximately $135 million of sales of such securities in the three months ended March 31, 2012. The volume of sales of securities held for sale can vary, sometimes materially, from period to period, primarily in response to changes in interest rates in the securities markets.

Noninterest expense. Noninterest expense increased by $1.1 million, or 9.0%, in the first three months of 2013, as compared to the same period of 2012. That increase was primarily attributable to (i) a $500,000 increase in compensation expense that was due primarily to staffing increases in our commercial banking division, (ii) a $440,000 increase in professional fees, (iii) a $293,000 increase in other real estate expense that was primarily due to $1.6 million of write-downs in the carrying values of other real estate owned to their respective fair values, and (iv) a $245,000 increase in equipment and depreciation expenses incurred in connection with software and infrastructure upgrades. Those increases were partially offset by a nearly $600,000 reduction in contingency reserves made possible by favorable rulings obtained in pending litigation.

A measure of our ability to control noninterest expense is our efficiency ratio, which is the ratio of noninterest expense to net revenue (net interest income plus noninterest income). As a general rule, a lower efficiency ratio indicates an ability to generate increased revenue without a commensurate increase in the staffing and equipment and third party services and, therefore, would be indicative of greater operational efficiencies. Due to the substantial decrease in noninterest income, primarily attributable to the exit of our mortgage division from the wholesale residential mortgage business and, to a lesser extent, the increase in noninterest expense, our efficiency ratio increased to 142.0% in the three months ended March 31, 2013 from 87.1% in the corresponding three month period of 2012.

Income Tax Provision (Benefit). We recorded income tax benefit of $1.9 million, due to the pre-tax loss we incurred, in the three months ended March 31, 2013.

Financial Condition

Loans. The economic recovery regained momentum in 2012 and, as a result, gross loans totaled approximately $715 million at March 31, 2013, which represented a $26 million, or 3.8%, increase from $689 million of gross loans outstanding at March 31, 2012.

Deposits. Deposits decreased by $52 million, or 6.0%, to $816 million at March 31, 2013, from $868 million at March 31, 2012, primarily as a result of a decrease of $64 million, or 12.9%, in time deposits, partially offset by an increase in core deposits, comprised of a $17 million, or 10.3%, increase in noninterest bearing demand deposits. As a result, the volume of lower-cost core deposits increased to 47.2% of total deposits at March 31, 2013 from 43.1% at March 31, 2012, while higher-cost time deposits decreased as a percentage of total deposits to 52.7% at March 31, 2013 from 56.9% at March 31, 2012.

http://finance.yahoo.com/news/pacific-mercantile-bancorp-reports-first-032550935.html

Pacific Mercantile Bancorp Announces Retirement of Founding CEO Raymond E. Dellerba and Appointment of Steven K. Buster as His Successor (4/23/13)

COSTA MESA, Calif., April 23, 2013 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC). Pacific Mercantile Bancorp (the "Company"), parent of Pacific Mercantile Bank (the "Bank" "PMB"), today announced the retirement of its founding President and CEO, Raymond E. Dellerba, and the appointment of Steven Buster as his successor as President and Chief Executive Officer of the Company and the Bank. Mr. Dellerba, who reached retirement age in January of this year, has agreed to stay on with the Company as a Director, and to provide strategic counsel and market support to the new CEO over the next two years in the newly created position of Vice Chairman and CEO Emeritus of the Company and the Bank.

Mr. Dellerba founded the Bank in 1998, led efforts to raise $150 million in equity for the Company, and continued to lead it until his retirement. Under his leadership, the Bank experienced strong growth and became Orange County's largest local bank. During his tenure, the Bank opened major offices in Newport Beach, Costa Mesa, San Juan Capistrano, La Habra, Beverly Hills, Ontario, and La Jolla.

"I couldn't be more pleased that Steve Buster has agreed to take the helm at PMB," Mr. Dellerba said. "Finding the right leader for the Company as I retire has been a major objective for me and my fellow Directors." "To have a banker of Steve's stature join us is a great outcome. I look forward to supporting his leadership as the Company grows and prospers in the future," he added.

A Tustin native and holder of a BA and MBA from USC, Mr. Buster has held senior positions at First Interstate Bank, Standard Chartered Bank, and most recently as Chief Executive Officer of the $3.0 billion Mechanics Bank in Richmond, California, which post he held for 9 years. He is the immediate past Chairman of the California Bankers Association, and is active in many other industry and civic groups in the state.

"I am delighted to join the Company and the Bank as CEO and appreciate very much the opportunity to build on the legacy that has been created here," Mr. Buster said. "It's also a great pleasure to come home to Orange County and Southern California as I step into the leadership of one of the area's key business banks."

"The Company and the Bank are most fortunate today, as are both our clients and employees," said Chairman of the Board Edward J. Carpenter. "Ray Dellerba has done what few bankers have accomplished, in building and growing an Orange County-based bank to over $1.2 billion in assets. His agreement to play a key support role in the Bank following his retirement, while remaining as Vice Chairman and CEO Emeritus, is a benefit to the Company. Steve Buster, past Chairman of the California Bankers Association and a major figure in our state's banking industry, stepping in as Ray's successor – well positions the Bank for the future."

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp, a publicly traded company with its shares listed on the Nasdaq Stock Market under the trading symbol, "PMBC", is the parent holding company of Pacific Mercantile Bank ("PMB"). PMB is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System, which provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services. The Bank's major product lines include commercial loans, commercial real estate loans, entertainment industry loans, small business (SBA) loans, import-export loans, mortgage loans, asset based financing, deposit products, treasury and cash management services. The Bank, which opened for business on March 1, 1999, had total assets exceeding $1 billion as of December 31, 2012. PMB operates a total of seven financial centers in Southern California, four in Orange County located in the cities of Newport Beach, Costa Mesa, La Habra and San Juan Capistrano, one in Los Angeles County in the city of Beverly Hills, one in San Diego County in the city of La Jolla and one in the Inland Empire in San Bernardino County, in the city of Ontario. In addition to the Bank's physical locations, it offers comprehensive business and individual banking services over its Internet Bank at www.pmbank.com.
For more information contact
Nancy Gray, SEVP & CFO, 714-438-2500
Barbara Palermo, EVP & IR, 714-438-2500

http://globenewswire.com/news-release/2013/04/23/540490/10029536/en/Pacific-Mercantile-Bancorp-Announces-Retirement-of-Founding-CEO-Raymond-E-Dellerba-and-Appointment-of-Steven-K-Buster-as-His-Successor.html

Pacific Mercantile Bancorp Announces Closing of Sale of $15 Million of Shares of Common Stock at $6.75 Per Share to the Carpenter Funds (4/03/13)

COSTA MESA, Calif., April 3, 2013 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) announced today that effective as of March 30, 2013, it completed the sale of a total of 2,222,222 shares of the Company's common stock at $6.75 per share to Carpenter Community BancFund LP and Carpenter Community BancFund-A LP (collectively, the "Carpenter Funds"). As previously reported, we are contributing the net proceeds from the sale of those shares, which totaled approximately $14.8 million, to a new wholly-owned asset management subsidiary, which has used approximately $11.0 of those funds to purchase nonperforming loans and foreclosed real properties from the Company's wholly-owned banking subsidiary, Pacific Mercantile Bank. The sale of those assets by the Bank to that new subsidiary is expected to result in improvements in the Bank's financial condition and future financial performance and, at the same time, will provide the Bank with additional financial resources that it plans to use to fund new loans and grow its business.

The remainder of the those proceeds will be used by that subsidiary to fund the costs of managing and disposing of the assets it is purchasing from the Bank and, subject to obtaining required regulatory approvals, plans to use the remainder of those proceeds to purchase additional nonperforming assets from the Bank.

As a result of their purchase of the shares, the Carpenter Funds, which are the Company's largest shareholder, now own approximately 34% of the Company's outstanding voting shares, as compared to the 28% that they owned prior to the sale.

Raymond E. Dellerba, President and CEO of Pacific Mercantile Bancorp, stated that, "Most of the non-performing assets we will be purchasing from the Bank are assets which have proven to be the most difficult to sell or resolve due to the poor condition of the properties or the financial difficulties of the borrowers." We are appreciative of the willingness of the Carpenter Funds to purchase our shares at a price above our recent market prices to enable us to purchase these troubled assets through our new asset management subsidiary," concluded Bancorp CEO Dellerba.

The sale of the shares of common stock to the Carpenter Funds also will strengthen the Company's financial condition by increasing its capital and capital ratios. However, the Bank's sale of non-performing assets to the Company's new asset management subsidiary will not result in changes in or improvements to the Company's consolidated financial condition or operating results, because those non-performing assets will remain on the Company's consolidated balance sheet and the costs of managing and disposing of those assets, and any losses that may be recognized on their sale or other disposition, will continue to negatively affect the Company's consolidated operating results and cash flows until the sales or dispositions of those assets are completed.

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp, a publicly traded company with its shares listed on the Nasdaq Stock Market under the trading symbol, "PMBC", is the parent holding company of Pacific Mercantile Bank ("PMB"). PMB is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System, which provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of established banking financial centers and comprehensive, sophisticated electronic banking services. The Bank's major product lines include commercial and commercial real estate loans, entertainment industry loans, small business (SBA) loans, import-export loans, mortgage loans, asset based financing and cash management services.

The Bank, which opened for business on March 1, 1999, had total assets exceeding $1 billion as of December 31, 2012. PMB operates a total of seven financial centers in Southern California, four in Orange County located in the cities of Newport Beach, Costa Mesa, La Habra and San Juan Capistrano, one in Los Angeles County in the city of Beverly Hills, one in San Diego County in the city of La Jolla and one in the Inland Empire in San Bernardino County, in the city of Ontario. In addition to the Bank's physical locations, it offers comprehensive banking services over its Internet Bank at www.pmbank.com.

Forward-Looking Statements

This news release contains statements regarding our expectations, beliefs and views about our future financial condition and performance and our business. Those statements, which constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), can be identified by the fact that they do not relate strictly to historical or current facts. Often, they include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are based on current information available to us and our assumptions about future events over which we do not have control. Moreover, our business and our markets are subject to a number of risks and uncertainties which could cause our actual financial condition or results of operating in the future to differ, possibly significantly, from our expectations as set forth in the forward-looking statements contained in this news release.

In addition to the risk of incurring loan losses, which is an inherent feature of the banking business, these risks and uncertainties include, but are not limited to, the following: the risk that expected benefits from the sale of the shares to the Carpenter Funds and the use of the proceeds to purchase nonperforming assets from the Bank may not be realized; the risk that the economic recovery in the United States, which is still relatively weak, will be adversely affected by domestic or international economic conditions, which could cause us to incur additional loan losses and adversely affect our results of operations in the future; uncertainties and risks with respect to the effects that our compliance with the Federal Reserve Bank regulatory agreement (the "FRB Agreement") and regulatory order of the California Department of Financial Institutions (the "DFI Order") will have on our business and results of operations because, among other things, that Agreement and that Order impose restrictions on our operations and our ability to grow our banking franchise, and the risk of potential future supervisory action against us or the Bank by the FRB or the DFI if we are unable to meet the requirements of the FRB Agreement or the DFI Order; the risk that our earnings will be hurt by our recent exit from the wholesale mortgage lending business because that will result in a reduction, which could be significant, in our mortgage banking revenues; the risk that our interest margins and, therefore, our net interest income will be adversely affected if the economy remains weak or interest rates remain low for an extended period of time; the risk that we will not be able to manage our interest rate risks effectively, including the additional interest rate risks associated with our residential mortgage lending business, in which event our operating results could be harmed; and the prospect that government regulation of banking and other financial services organizations will increase, causing our costs of doing business to increase and restricting our ability to take advantage of business and growth opportunities.

Additional information regarding these and other risks and uncertainties to which our business is subject is contained in our fiscal year 2012 Annual Report on Form 10-K that we filed with the SEC on March 20, 2013. Due to these risks and uncertainties, you are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of its date, or to make predictions about our future financial performance based solely on our historical financial performance, and readers of this news release are urged to review the additional information contained in those reports.

We disclaim any obligation to update or revise any of the forward-looking statements as a result of new information, future events or otherwise, except as may be required by law or NASDAQ rules.
Nancy Gray, SEVP & CFO, 714-438-2500
Barbara Palermo, EVP & IR, 714-438-2500

http://www.globenewswire.com/news-release/2013/04/03/535500/10027220/en/Pacific-Mercantile-Bancorp-Announces-Closing-of-Sale-of-15-Million-of-Shares-of-Common-Stock-at-6-75-Per-Share-to-the-Carpenter-Funds.html

PMBC Announces the Election of Stephen P. Yost to Its Board of Directors (3/26/13)

COSTA MESA, Calif., March 26, 2013 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC). Edward J. Carpenter, Chairman of the Board of Pacific Mercantile Bancorp (the "Company"), announced today that on March 20, 2013, Stephen P. Yost was elected as a member of the Company's Board of Directors. Mr. Yost also has been appointed as a member of the Board of Directors of the Company's wholly-owned banking subsidiary, Pacific Mercantile Bank. "Mr. Yost brings a wealth of credit expertise to the Board, as well as management experience to the Company," stated Mr. Carpenter. "We are very fortunate to have Mr. Yost join our Boards and look forward to his chairmanship of the board's Credit Policy Committee," concluded Chairman Carpenter.

During the span of his 35 year career in banking, spent mostly in credit administration, Mr. Yost held the position of Regional Chief Credit Officer for Comerica Bank, where he was the Executive in charge of its Special Assets Group for the western region. Mr. Yost was the Chief Credit Officer of Imperial Bank prior to its merger with Comerica. He was also a Senior Credit Officer with First Interstate Bank and Mellon Bank, N.A. Upon his retirement in 2006, he established Kestrel Advisors, a credit risk consulting firm that focuses on the banking, financial, and legal communities.

Mr. Yost currently is a member of the boards of directors of two other bank holding companies and their subsidiaries, chairing the directors' loan committees of both banks, as well as being a member of several other standing committees. Mr. Yost received his Bachelor of Science degree in Economics from St. Mary's College and his MBA from the University of Santa Clara, Santa Clara, California.

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp, a publicly traded company with its shares listed on the Nasdaq Stock Market under the trading symbol, "PMBC", is the parent holding company of Pacific Mercantile Bank ("PMB"). PMB is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System, which provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services. The Bank's major product lines include commercial and commercial real estate loans, entertainment industry loans, small business (SBA) loans, import-export loans, mortgage loans, asset based financing and cash management services. The Bank, which opened for business on March 1, 1999, had total assets exceeding $1 billion as of December 31, 2012. PMB operates a total of seven financial centers in Southern California, four in Orange County located in the cities of Newport Beach, Costa Mesa, La Habra and San Juan Capistrano, one in Los Angeles County in the city of Beverly Hills, one in San Diego County in the city of La Jolla and one in the Inland Empire in San Bernardino County, in the city of Ontario. In addition to the Bank's physical locations, it offers comprehensive banking services over its Internet Bank at www.pmbank.com.

For more information contact
Nancy Gray, SEVP & CFO, 714-438-2500
Barbara Palermo, EVP & IR, 714-438-2500

http://www.globenewswire.com/news-release/2013/03/26/533916/10026430/en/Pacific-Mercantile-Bancorp-Announces-the-Election-of-Stephen-P-Yost-to-Its-Board-of-Directors.html

PMBC Reports Fiscal 2012 Operating Results (3/07/13)

COSTA MESA, Calif., March 7, 2013 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) today reported its results of operation for the fiscal year and fourth quarter ended December 31, 2012.

Fiscal 2012 vs. Fiscal 2011.

Pretax Income. In the year ended December 31, 2012, pre-tax income increased by $1.5 million, or 28.7%, to nearly $6.7 million from $5.2 million in the year ended December 31, 2011. That increase was primarily attributable to a $20.3 million increase in noninterest income, which more than offset a $16.0 million increase in noninterest expense and a $2.8 million increase in the provision for loan losses in 2012, as compared to 2011.

Net Income and Income per Diluted Share. Notwithstanding the increase in pre-tax income, net income declined by 17.0% to approximately $9.7 million in the year ended December 31, 2012 from $11.6 million in the year ended December 31, 2011. That decrease was due to a $3.4 million reduction in income tax benefits to $3.0 million in 2012 from $6.4 million in 2011. These income tax benefits were attributable to reductions, in both 2012 and 2011, in a reserve established in prior years against our deferred tax asset. Of the $9.7 million of net income earned in 2012, approximately $8.7 million was allocable to the holders of our common stock and approximately $1.0 million was allocable to the holders of our preferred stock.

Income per diluted share of common stock was $0.55 for 2012, as compared to $0.98 per diluted share in 2011. That decrease was due not only to the lower income tax benefits in 2012, but also to a 55% increase in the weighted average number of shares outstanding in 2012, as compared to 2011, which was primarily attributable to our sale, in a private placement, of a total of 4,201,278 shares of our common stock in April 2012 at a price of $6.26 per share.

Fourth Quarter 2012 vs. Fourth Quarter 2011.

Pretax Income (Loss). We recorded a pretax loss of $2.6 million in the fourth quarter of 2012, as compared to pre-tax income of $1.0 million in the same quarter of 2011. This decline was primarily attributable to a $3.4 million, or 33%, increase in non-interest expense, partially offset by a $600,000 increase in non-interest income, in each case as compared to the fourth quarter of 2011.

Net Income (Loss) and Income (Loss) per Diluted Share. We recorded a net loss in the fourth quarter of 2012 of $882,000, as compared to net income of $7.9 million in the same quarter of 2011. That swing from net income to a net loss was primarily attributable to a $5.2 million, or 76%, decrease in income tax benefits in the fourth quarter of 2012, as compared to the same quarter of 2011. We recorded a loss per diluted share of $0.07 in the fourth quarter of 2012, from income per diluted share of $0.62 in the same quarter of 2011, due not only to the fourth quarter 2012 net loss, but also to a 55% increase in the weighted average number of shares outstanding during that quarter, which was primarily the result of the April 2012 sale of 4,201,278 shares of our common stock.

"The expected injection of $15 million of capital from the Carpenter Funds, which was announced on Tuesday of this week, will strengthen the Bank's financial condition, enabling us to increase the resources available for our core banking competencies" stated Raymond E. Dellerba, President and CEO of the Company. "Assuming the economic recovery continues, we expect to see growth in our commercial loan division, our SBA Division and our entertainment industries division in 2013. Additionally, we plan to grow our import/export and technology lending businesses, with the hiring of expertise in both areas," noted Mr. Dellerba. "On the deposit side, we will be continuing programs, initiated in 2011, to further increase lower-cost demand deposits, with the goal of reducing our reliance on more expensive time certificates of deposit for funding loans and investments. Additionally, we also will be focusing on building our retail mortgage banking division under new leadership." Mr. Dellerba concluded, "In short, we will be putting our new capital to work for our customers, shareholders and our hardworking, loyal and re-energized employees."

Results of Operations

Net Interest Income. In fiscal 2012, net interest income increased by $80,000, or 0.2%, to $33.3 million, from $33.2 million in fiscal 2011. That increase was primarily attributable to a $2.6 million, or 23.0%, decline in interest expense, substantially offset by a $2.5 million, or 5.6%, decrease in interest income in 2012, as compared to 2011. The decline in interest expense was due primarily to reductions in market rates of interest as a result of which the average rate of interest that we paid on our interest-bearing liabilities declined to 1.11% in 2012 from 1.43% in 2011. Also contributing, to a lesser extent, to that decline was a $18 million reduction in average borrowings outstanding and a change in the mix of our deposits to a higher proportion of lower-cost "core" deposits and a lower proportion of higher-cost certificates of deposits. The decline in interest income in 2012, as compared to 2011, was primarily attributable to the continued low interest rates as a result of the Federal Reserve Board monetary policy, which affected the interest rates we were able to earn on those of our loans and investments which re-priced at lower rates during 2012. Primarily as a result of the decrease in interest income, our net interest margin declined to 3.29% for the year ended December 31, 2012 from 3.41% for the year ended December 31, 2011.

In the fourth quarter of 2012, net interest income increased by $40,000, or 0.5%, to nearly $7.9 million from $7.8 million in the fourth quarter of 2011. That increase was the result of a $700,000, or 26.5%, decrease in interest expense, which was partially offset by a $650,000, or 6.3%, reduction in interest income due primarily to a decrease in average earning assets.

Provision for Loan Losses and Net Interest Income after Provision for Loan Losses. We made provisions for loan losses of nearly $2.0 million during the fiscal year ended December 31, 2012, as compared to an $833,000 reversal to the provision for loan losses in 2011. This increase in the provision for loan losses in 2012 was made as a result of the recognition of $6.7 million of net loan charge-offs. Notwithstanding those net loan charge-offs, we were able to reduce the allowance for loan losses to $10.9 million, or 1.49% of the loans outstanding, at December 31, 2012, from $15.6 million, or 2.37% of the loans outstanding, at December 31, 2011. That reduction was made possible primarily by a combination of factors including net transfers of $12.6 million of loans, which had been classified as "special mention" or "substandard as of December 31, 2011, to "pass" at December 31, 2012, primarily as a result of improvements in the financial condition and cash flows of borrowers which enabled them to increase their principal and interest payments on those loans and a change in the composition of our loan portfolio to a higher proportion of apartment, single family and SBA loans with respect to which we have, in the past, incurred lower levels of loan losses than with respect to commercial and other loans. As a result, based on the methodologies we use to assess asset quality, bank regulatory guidelines and our historical loan loss history, we believe that that allowance for loan losses at December 31, 2012 remained adequate to cover inherent losses in the loan portfolio.

Noninterest income. Noninterest income increased by $20.3 million, or 246.3%, in the year ended December 31, 2012, primarily as a result of a $19.2 million, or 316.1%, increase in mortgage banking revenues and a $1.7 million increase in gains on sales of securities held for sale, in each case as compared to 2011. During the fourth quarter of 2012, non-interest income increased by $600,000, or 21.4%, to $3.4 million, from $2.8 million in 2011, as a result of a $600,000 increase in mortgage banking revenues, primarily due to increases in the volume of residential mortgage loans we originated in the year. However, the rate of growth in our mortgage banking revenues in the fourth quarter of 2012 declined when compared to the rate of growth achieved in the prior three quarters of 2012, in each case as compared to its respective corresponding quarter of 2011, and we expect to see a further slowing in the growth or even a decline in such revenues during 2013, due primarily to our exit from the wholesale mortgage business effective August 31, 2012.

Noninterest expense. Noninterest expense in 2012 increased by $16 million, or 43.4%, as compared to 2011, due primarily to a (i) $9.0 million, or 52.8%, increase in compensation expense, attributable primarily to an increase in staffing in the mortgage loan division during the first three quarters of 2012 to make it possible to take advantage of an increase in demand for residential mortgage loans and, to a lesser extent, the addition of management personnel at the Bank in the second half of 2012 to grow our commercial banking business and to manage and dispose of nonperforming assets at the Bank, (ii) an increase of $3.4 million, or 106.5%, principally in connection with write-downs of other real estate owned ("OREO") to their fair values, and (iii) a $1.9 million, or 253.5%, increase in mortgage related loan expense as a result of increased mortgage loan volume and the expenses of exiting the wholesale mortgage business.

In the fourth quarter of 2012, non-interest expense increased by $3.4 million, or 32.5%, as compared to the same quarter of 2011, due primarily to increases of (i) $1.8 million, or 37%, in compensation expense, primarily attributable to bonus compensation and commissions paid on mortgage loans funded in the fourth quarter of 2012 and the above-described addition of management personnel at the Bank; (ii) $670,000, or 213.4%, in mortgage related loan expense, also attributable to an increase in the volume of mortgage loans processed, which included mortgage loans for which funding commitments had been made in the third quarter of 2012, and expenses incurred in connection with the exit from the wholesale mortgage business, and (iii) $470,000, or 38.8%, in expenses incurred in connection with write downs to fair value and the management and disposition of OREO.

Income Tax Provision (Benefit). During 2008 and 2010 we created a valuation allowance against our deferred tax asset totaling $13.7 million, due to uncertainties as to our ability to fully use that deferred tax asset to reduce or offset income taxes in future years. During 2011, we released $7.0 million of that valuation allowance based on an assessment that, due to a strengthening of economic conditions, improvements in the quality of our loan portfolio and our improving results of operations, it had become more likely, than not, that we would be able to use $7 million of the deferred tax asset to reduce or offset income taxes in future periods. That reduction was effectuated through the recognition of a $6.4 million non-cash tax benefit in our consolidated statement of operations for the year ended December 31, 2011. During 2012, we released the remaining valuation allowance of $6.6 million based on an assessment that, due primarily to a further strengthening of economic conditions and a further increase in our earnings, it had become more likely, than not, that we would be able to use the remaining deferred tax asset to reduce or offset income taxes in future periods. That reduction in the valuation allowance was effectuated through the recognition of a $3.0 million non-cash tax benefit in our consolidated statement of operations for the year ended December 31, 2012.

Financial Condition

Loans. During 2012, the average volume of loans outstanding decreased to $698 million from $709 million in 2011, primarily reflecting the effects on loan demand of the sluggishness, and continuing uncertainties about the strength, of the economic recovery in early 2012. The economic recovery regained momentum towards the third quarter of 2012 and, as a result, gross loans totaled approximately $730 million at December 31, 2012, which represented a $72 million, or 10.9%, increase from the nearly $658 million of gross loans outstanding at December 31, 2011.

Deposits. Deposits decreased by $17 million, or 1.9%, to $845 million at December 31, 2012, from $862 million at December 31, 2011, primarily as a result of a decrease of $29 million, or 5.6%, in time deposits, partially offset by an increase in core deposits, comprised of a $6 million, or 3.6%, increase in noninterest bearing demand deposits and a $8 million, or 5.0% increase in savings and money market deposits. As a result, the volume of lower-cost core deposits increased to 43.1% of total deposits at December 31, 2012 from 40.9% at December 31, 2011, while higher-cost time deposits decreased as a percentage of total deposits to 56.9% at December 31, 2012 from 59.1% at December 31, 2011.

http://globenewswire.com/news-release/2013/03/07/528875/10024378/en/Pacific-Mercantile-Bancorp-Reports-Fiscal-2012-Operating-Results.html

PMBC Announces Agreement to Sell $15 Million of Common Shares to the Carpenter Funds (3/05/13)

COSTA MESA, Calif., March 5, 2013 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) announced today that it has entered into a Stock Purchase Agreement to sell up to a total of 2,222,222 shares of its common stock, at a price of $6.75 per share in cash, to Carpenter Community BancFund LP and Carpenter Community BancFund-A LP (collectively, the "Carpenter Funds"). The price of $6.75 per share of common stock represents a 13% premium over the $5.95 closing price of the Company's common stock on February 26, 2013, the day before the effective date of the Agreement. The net proceeds from the sale of those shares, which are expected to total approximately $14,800,000, will be contributed by the Company to a new wholly-owned asset management subsidiary, which will use those proceeds to fund the purchase of nonperforming loans and foreclosed real properties from the Company's wholly-owned banking subsidiary, Pacific Mercantile Bank. Following the purchase of those assets, the new asset management subsidiary will focus its efforts and resources principally on managing and disposing of those assets. The sale of those assets by the Bank to that subsidiary is expected to result in improvements in the Bank's financial condition and future financial performance and, at the same time, will provide the Bank with additional financial resources that it plans to use to fund new loans and grow its business.

"One of the responsibilities of a bank holding company is to be a source of financial strength for its banking subsidiary and the sale of the shares to the Carpenter Funds and the use of the sales proceeds to purchase non-performing assets from the Bank are being undertaken in furtherance of that responsibility," stated Raymond E. Dellerba, President and CEO of the Company. "Most of the non-performing assets we will be purchasing from the Bank are assets which have proven to be the most difficult to sell or resolve due to the poor condition of the properties or the financial difficulties of the borrowers," added Mr. Dellerba. We are appreciative of the willingness of the Carpenter Funds to purchase our shares at a price above our recent market prices to enable us to purchase these assets," stated CEO Dellerba.

Consummation of the sale of the Company's common stock to the Carpenter Funds pursuant to the Stock Purchase Agreement and the use of the net proceeds from that sale of shares to purchase non-performing assets from the Bank are subject to the receipt by the Company and the Carpenter Funds of federal bank regulatory approvals, and the satisfaction of conditions customary for transactions of this nature, in each case by no later than April 15, 2013, unless that date is extended by agreement of the Company and the Carpenter Funds.

If the sale of the shares is consummated, the Carpenter Funds will own, beneficially, approximately 34% of the Company's outstanding voting shares, as compared to 28%, which they currently own.

The sale of the shares of common stock to the Carpenter Funds also will strengthen the Company's financial condition by increasing its capital and capital ratios. However, the Bank's sale of non-performing assets to the Company's new asset management subsidiary will not result in changes in or improvements to the Company's consolidated financial condition or operating results, because those non-performing assets will remain on the Company's consolidated balance sheet and the costs of managing and disposing of those assets, and any losses that may be recognized on their sale or other disposition, will continue to negatively affect the Company's consolidated operating results and cash flows until the sales or dispositions of those assets are completed.

The summary of the Stock Purchase Agreement set forth above in this news release is not intended to be complete and is qualified in their entirety by reference to that Agreement, a copy of which is appended as Exhibit 10.1 to the Company's Current Report on Form 8-K which the Company will be filing with the SEC by March 5, 2013.

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp is the parent holding company of Pacific Mercantile Bank, which opened for business March 1, 1999. The Bank, which is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System, provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services.

The Bank operates a total of seven financial centers in Southern California, four in Orange County and one each in Los Angeles and San Diego Counties, and another in the Inland Empire in San Bernardino County. The four Orange County financial centers are located, respectively, in the cities of Newport Beach, Costa Mesa (which is visible from the 405 and 73 Freeways), La Habra and San Juan Capistrano (which is our South County financial center that is visible from the Interstate 5 Freeway). Our Los Angeles County financial center is located in the city of Beverly Hills. Our San Diego financial center is located in La Jolla and our Inland Empire financial center is located in the city of Ontario (visible from the Interstate 10 Freeway). In addition, the Bank offers comprehensive banking services over its Internet Bank, which is accessible 24/7 worldwide at www.pmbank.com.

Forward-Looking Statements

This news release contains statements regarding our expectations, beliefs and views about our future financial condition and performance and our business. Those statements, which constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), can be identified by the fact that they do not relate strictly to historical or current facts. Often, they include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are based on current information available to us and our assumptions about future events over which we do not have control. Moreover, our business and our markets are subject to a number of risks and uncertainties which could cause our actual financial condition or results of operating in the future to differ, possibly significantly, from our expectations as set forth in the forward-looking statements contained in this news release.

In addition to the risk of incurring loan losses, which is an inherent feature of the banking business, these risks and uncertainties include, but are not limited to, the following: the risk that the Stock Purchase Agreement and the sale of shares contemplated thereby will have to be terminated, in the event we are not able to obtain required regulatory approvals or other conditions to the consummation of the transactions contemplated by that Agreement are not satisfied; the risk that expected benefits from the transactions contemplated by the Stock Purchase Agreement, including from the sale by the Bank of nonperforming assets, may not materialize; the risk that the economic recovery in the United States, which is still relatively fragile, will be adversely affected by domestic or international economic conditions, which could cause us to incur additional loan losses and adversely affect our results of operations in the future; uncertainties and risks with respect to the effects that our compliance with the Federal Reserve Bank regulatory agreement (the "FRB Agreement") and regulatory order of the California Department of Financial Institutions (the "DFI Order") will have on our business and results of operations because, among other things, that Agreement and that Order impose restrictions on our operations and our ability to grow our banking franchise, and the risk of potential future supervisory action against us or the Bank by the FRB or the DFI if we are unable to meet the requirements of the FRB Agreement or the DFI Order; the risk that our earnings will be hurt by our recent exit from the wholesale mortgage lending business because that will result in a reduction, which could be significant, in our mortgage banking revenues; the risk that our interest margins and, therefore, our net interest income will be adversely affected if the economy remains weak or interest rates remain low for an extended period of time; the risk that we will not be able to manage our interest rate risks effectively, including the additional interest rate risks associated with our residential mortgage lending business, in which event our operating results could be harmed; and the prospect that government regulation of banking and other financial services organizations will increase, causing our costs of doing business to increase and restricting our ability to take advantage of business and growth opportunities.

Additional information regarding these and other risks and uncertainties to which our business is subject is contained in our Annual Report on Form 10-K that we filed with the SEC on February 27, 2012, as updated and modified by the discussion of risk factors contained in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012, which we filed with the SEC on May 7, 2012 and August 14, 2012, respectively. Due to these risks and uncertainties, you are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of its date, or to make predictions about our future financial performance based solely on our historical financial performance, and readers of this news release are urged to review the additional information contained in those reports.

We disclaim any obligation to update or revise any of the forward-looking statements as a result of new information, future events or otherwise, except as may be required by law or NASDAQ rules.

Nancy Gray, SEVP & CFO, 714-438-2500
Barbara Palermo, EVP & IR, 714-438-2500

http://www.globenewswire.com/news-release/2013/03/05/528364/10024154/en/Pacific-Mercantile-Bancorp-Announces-Agreement-to-Sell-15-Million-of-Common-Shares-to-the-Carpenter-Funds.html

Pacific Mercantile Bancorp Reports Net Income of $3.4 Million, and $0.18 Per Diluted Share, in the Third Quarter of 2012
Seven Consecutive Quarters of Net Income
Company Release - 11/08/2012 09:00
COSTA MESA, Calif., Nov. 8, 2012 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) today reported its results of operations for the third quarter and nine months ended September 30, 2012.

Overview

Three Months Ended September 30, 2012. Net income increased by $2.5 million, or 294%, to $3.4 million, from $852,000 in the same three months of 2011, notwithstanding a $2.2 million increase in income taxes in this year's third quarter. At the same time, income per diluted share of common stock increased by 200% to $0.18 for the three months ended September 30, 2012, from $0.06 per diluted share of common stock for the same three months of 2011, notwithstanding a 55% increase in the weighted average number of diluted shares of common stock outstanding in this year's third quarter over the same quarter of 2011. These increases were primarily attributable to an increase in net interest income of $1.1 million, or 13.2%, to $9.3 million, and an increase in mortgage banking revenues of $7.8 million, or 543%, to $9.2 million, in each case as compared to the same three months of 2011. These increases in net interest income and mortgage banking revenues more than offset a $500,000 increase in the provision made for loan losses and a $3.6 million, or 37%, increase in noninterest expense, to $13.4 million in the three months ended September 30, 2012 from $9.8 million in the same three months of 2011.

Nine Months Ended September 30, 2012. Net income increased by $6.7 million, or 179%, to $10.5 million, or $0.61 per diluted share, from $3.8 million, or $0.33 per diluted share, in the same nine months of 2011. Those increases were primarily attributable to an increase of $18.5 million, or 517%, in mortgage banking revenues to $22.1 million, and an increase of $1.7 million, or 424%, in net gains on sales of securities, to $2.1 million, in the nine months ended September 30, 2012, in each case as compared to the same nine months of 2011. Those increases more than offset a nearly $2.0 million increase in the provision made for loan losses, and an increase of $12.7 million, or 47.6%, in non-interest expense, in each case as compared to the same nine months of 2011.

Raymond E. Dellerba, the Company's President and CEO, stated, "We are very pleased to report our 7th consecutive profitable quarter, which is a direct result of the focus, dedication, and hard work of our officers and employees. The increase in earnings in the three and nine months ended September 30, 2012, as compared to the same respective periods of 2011, reflect improvements in the operating results of all of our operating divisions. Moreover, the return on our average equity (ROE) improved to 10.9% and 14.5%, respectively, for the three and nine months ended September 30, 2012, from 4.6% and 7.5%, respectively, for the same three and nine months of 2011. At the same time, we generated returns on our average assets (ROA) in the three and nine months ended September 30, 2012 of 1.22% and 1.32%, respectively, as compared to 0.32% and 0.49%, respectively, in the same three and nine months of 2011. On the deposit side, we continue to grow our non-interest bearing deposits, which represent our lowest cost funding source and to reduce the volume of higher cost time certificates of deposit, which contributed to the improvement in our net interest income in the three and nine months ended September 30, 2012." Mr. Dellerba continued, "We also have strengthened the Bank's management team, with the recent addition of Mr. Tom Vertin, as President of the Bank's commercial banking division and look forward to his contributions to the Bank's financial performance. Mr. Vertin brings 20 plus years of banking experience in the business banking area."

Recent Developments

As we reported on August 13, 2012, we decided to focus our mortgage banking business entirely on our direct-to-consumer retail channel and to exit the wholesale mortgage banking business. Consequently, on August 31, 2012, we ceased taking mortgage submissions from mortgage brokers. Due to the volume of wholesale mortgage loan applications received or in process through August 31, 2012, we do not believe that the exit from our wholesale mortgage business materially affected our mortgage banking revenues in this year's third quarter. However, due to the exit from the wholesale mortgage business, we expect that there will be a significant decline in mortgage loan originations and mortgage banking revenues in this year's fourth quarter as compared to the first three quarters of 2012. As stated in our August 13, 2012 news release, we made this decision based on our judgment that our exit from the wholesale mortgage business will enhance the value of our banking franchise in the future by reducing and controlling our operating costs and reducing interest rate and other risks inherent in the wholesale mortgage business, thereby enabling us to build a stronger foundation for achieving consistent improvements in profitability in the future.

Results of Operation

Net Interest Income.

In the three months ended September 30, 2012, net interest income increased by $1.1 million, or 13.2%, due to a $431,000, or 3.9%, increase in interest income and a $648,000, or 23.5%, decrease in interest expense, in each case as compared to the same three months of 2011. The increase in interest income was primarily attributable to a nearly $117 million increase in the average volume of loans outstanding, including loans held for sale. The decrease in interest expense was primarily attributable to reductions in the rates of interest we were paying on time certificates of deposit, which resulted, as well, in declines in the volume of those deposits in the three months ended September 30, 2012 as compared to the same three months of 2011.

In the nine months ended September 30, 2012, net interest income was essentially unchanged from the same nine months of 2011, as a $1.9 million decrease in interest income was offset by a nearly $1.9 million reduction in interest expense that was primarily due to reductions we decided to make in the rates of interest we paid on, and a resulting decline in the volume of, time certificates of deposit.

Provision for Loan Losses. We made provisions for loan losses of $500,000 and approximately $2.0 million, respectively, in the three and nine months ended September 30, 2012, primarily due to net loan charge offs of $2.5 million and $4.9 million, respectively, in the third quarter and nine months ended September 30, 2012. The allowance for loan losses at September 30, 2012 totaled $12.7 million, or 1.83% of the loans outstanding, as compared to $15.6 million, or 2.37% of the loans outstanding at December 31, 2011. However, notwithstanding that decrease in the allowance for loan losses, based on the methodologies we use to assess asset quality, bank regulatory guidelines and our historical loan loss history, we believe that that allowance for loan losses at September 30, 2012 remained adequate to cover inherent losses in the loan portfolio.

Non-interest income. Noninterest income increased by $7.8 million to $10.0 million in the third quarter of 2012, from nearly $2.2 million in the same quarter of 2011, primarily as a result of a $7.8 million increase in income generated by our mortgage banking operations. In the nine months ended September 30, 2012, noninterest income increased by $19.7 million to $25.1 million from $5.4 million in the same nine months of 2011, due primarily to a $18.5 million increase in income generated by the mortgage banking division and a $1.7 million increase in net gains on sales of securities available for sale, somewhat offset by a $449,000 loss on sale of other real estate owned.

Non-interest expense. In the three and nine months ended September 30, 2012, noninterest expense increased by $3.6 million, or 37.1%, and $12.7 million, or 47.6%, respectively, as compared to the same three and nine months of 2011. Those increases in noninterest expense were due primarily to (i) the growth of our mortgage banking business, as we added mortgage personnel and related support staff and increased leased office space, and incurred higher marketing, business development and other costs to increase the volume of mortgage loan originations, and (ii) write-downs of $933,00 and $3.8 million, respectively, in the carrying values of other real estate owned ("OREO") to their respective fair values , in the three and nine months ended September 30, 2012. Notwithstanding the increases in noninterest expense, due to the increase in noninterest income, our efficiency ratio improved to 69.8% in the three months ended September 30, 2012 from 94% in the corresponding three months of 2011, and to 77.8% in the nine months ended September 30, 2012 from 86.4% in the same nine months of 2011. As a result of our recent exit from the wholesale mortgage business, we expect mortgage banking related noninterest expense to decline, beginning in the fourth quarter of 2012.

Income tax provision (benefit). We recorded an income tax provision of $1.9 million in the three months ended September 30, 2012, as compared to recording an income tax benefit of $225,000 for the same three months in 2011. In the nine months ended September 30, 2012, we recorded a non-cash income tax benefit of $1.3 million, as a result of the release of the remainder of the valuation allowance, in the amount of $5.0 million, during the second quarter of 2012, which we had established against our deferred tax asset by means of non-cash charges to the provision for income taxes in prior years. The release in the valuation allowance was based on an assessment we made in the second quarter of 2012 that, due primarily to the taxable earnings we had been generating during the 18 months that ended June 30, 2012, it had become more likely than not that we would be able to use the income tax benefits comprising our remaining deferred tax asset to offset or reduce taxes in future periods.

http://www.snl.com/irweblinkx/file.aspx?IID=4055039&FID=15118778

PMBC announced it is closing down the wholesale division for the second time just after over about a year of re-opening it.

PMBC Announces Management Transition at Pacific Mercantile Bank (8/27/12)

COSTA MESA, Calif., Aug. 27, 2012 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) (the "Company"), parent holding company of Pacific Mercantile Bank (the "Bank"), today announced that Raymond E. Dellerba will assume a new role with the Bank as its Vice Chairman. The move will enable him to focus, as President and CEO of the Company, on the development and implementation of strategic plans to move the Company and the Bank forward to a successful long-term future. On Friday, the Board of Directors of the Bank approved Mr. Dellerba's decision and formed a special committee to identify and hire a new President for the Bank.

To ensure continuity of the management of its day-to-day operations during the search process, the Bank will form an Office of the President, which will be comprised of its senior officers and will report directly to the Board of Directors of the Bank. The Office of President will be headed by newly nominated director Howard Gould, who has performed similar roles at other Southern California banking institutions. In 2005, Mr. Gould joined Carpenter & Company after a nearly 35-year career as a senior banker, consultant and regulator, including as Vice Chairman and Chief Operating Officer of one of California's largest regional banks and two appointments as California's chief banking regulator.

"After focusing much of my time on day-to-day operations of the Bank since 1999, I look forward to this opportunity to devote more of my time, as President and CEO of the Company, to the steps ahead that will enable us to offer more services to our banking customers, grow the value of our banking franchise and enhance long-term shareholder value," said Dellerba. "I'm proud of what our team at Pacific Mercantile has built and I am confident that, working together, we will succeed in accomplishing these objectives."

Edward J. Carpenter, Chairman and CEO of Carpenter & Company, who serves as Pacific Mercantile's non-executive Chairman, stated, "Ray Dellerba has made many contributions as a visionary founder of both the Company and the Bank and we look forward to continuing to benefit from his experience and keen knowledge of the Bank and its businesses, markets and customers." Carpenter & Company, which is the Company's largest shareholder, is a bank holding company, capitalized in 2008, which has expertise and a track record of success in managing financial institutions.

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp is the parent holding company of Pacific Mercantile Bank, which opened for business March 1, 1999. The Bank, which is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System, provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services.

The Bank operates a total of seven financial centers in Southern California, four in Orange County and one each in Los Angeles and San Diego Counties, and another in the Inland Empire in San Bernardino County. The four Orange County financial centers are located, respectively, in the cities of Newport Beach, Costa Mesa (which is visible from the 405 and 73 Freeways), La Habra and San Juan Capistrano (which is our South County financial center that is visible from the Interstate 5 Freeway). Our Los Angeles County financial center is located in the city of Beverly Hills. Our San Diego financial center is located in La Jolla and our Inland Empire financial center is located in the city of Ontario (visible from the Interstate 10 Freeway). In addition, the Bank offers comprehensive banking services over its Internet Bank, which is accessible 24/7 worldwide at www.pmbank.com.

The Pacific Mercantile Bancorp logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7241

Forward-Looking Statements

This news release contains statements regarding our expectations, beliefs and views about our future financial performance and business and our future plans, and trends in the markets in which we operate. Those statements, which constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), can be identified by the fact that they do not relate strictly to historical or current facts. Often, they include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are based on current information available to us and our assumptions about future events over which we do not have control. Moreover, our business and our markets are subject to a number of risks and uncertainties which could cause our actual financial performance in the future, and the future performance of our markets (which can affect both our financial performance and the market prices of our shares), to differ, possibly significantly, from our expectations as set forth in the forward-looking statements contained in this news release.

In addition to the risk of incurring loan losses, which is an inherent feature of the banking business, these risks and uncertainties include, but are not limited to, the following: the risk that the economic recovery in the United States, which is still relatively fragile, will be adversely affected by international monetary or other economic conditions, which could cause us to incur additional loan losses and adversely affect our results of operations and could, thereby, cause us to incur losses in the second half of 2012 and in subsequent years; uncertainties and risks with respect to the effects that our compliance with the Federal Reserve Bank regulatory agreement (the "FRB Agreement") and regulatory order of the California Department of Financial Institutions (the "DFI Order") will have on our business and results of operations because, among other things, that Agreement and that Order impose restrictions on our ability to grow our banking franchise, and the risk of potential future supervisory action against us or the Bank by the FRB or the DFI if we are unable to meet the requirements of the FRB Agreement or the DFI Order; the risk that our earnings will be hurt by our recent decision to exit the wholesale mortgage channel because that will result in a reduction, which could be significant, in our mortgage banking revenues; the risks that continued weakness in the economy and the possibility that the Federal Reserve Board will keep interest rates low for an extended period of time in an effort to stimulate the economic recovery, will further reduce our net interest margins and, therefore, our net interest income; the risks that we will not be able to manage our interest rate risks effectively, in which event, our operating results could be harmed; the prospect that government regulation of banking and other financial services organizations will increase generally and more particularly as a result of the implementation of the recently enacted Dodd-Frank Consumer Protection and Financial Reform Act, which could increase our costs of doing business and restrict our ability to take advantage of business and growth opportunities; the risk that our mortgage banking business may cause us to incur additional operating expenses and may not prove to be profitable or may even cause us to incur losses; the risk that sales of any equity securities we might make in the future to raise additional capital could be dilutive of our existing shareholders; and the risk that the change in the Bank's management, reported in this news release, could adversely affect our future operations.

Additional information regarding these and other risks and uncertainties to which our business is subject is contained in our Annual Report on Form 10-K that we filed with the SEC on February 27, 2012, as updated and modified by the discussion of risk factors contained in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012 which we filed with the SEC on May 7, 2012 and August 14, 2012, respectively. Due to those risks and uncertainties, you are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of its date, or to make predictions about our future financial performance based solely on our historical financial performance.

CONTACT: For investor inquiries, contact:
Nancy Gray, SEVP & CFO: (714) 438-2500
For media inquiries, contact:
Jim Lucas or Dan Hilley
The Abernathy MacGregor Group: (213) 630-6550

http://globenewswire.com/newsroom/news.html?d=10003095

PMBC Reports Net Income of $5.8 Million in the Second Quarter of 2012 (8/16/12)

Six Consecutive Quarters of Net Income

COSTA MESA, Calif., Aug. 13, 2012 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) today reported its results of operations for the second quarter and six months ended June 30, 2012.

Overview

The Company's net income improved in this year's second quarter to $5.8 million, and $0.35 per diluted share, from $1.2 million, and 0.08 per diluted share, in the second quarter of 2011. This improvement was primarily attributable to an increase of $7.2 million in mortgage banking revenues to $8.5 million and a non cash income tax benefit of $4.1 million, in each case in the three months ended June 30, 2012. By comparison, we generated $1.3 million of mortgage banking revenues and we made a provision of $630,000 for income taxes in the three months ended June 30, 2011. Partially offsetting the increase in mortgage banking revenues and the income tax benefit were (i) a $448,000 decline in net interest income, (ii) a $1.9 million increase in the provision made for loan losses, and (iii) a $5.1 million increase in non-interest expense, in each case in the three months ended June 30, 2012, as compared to the same three months of 2011.

Net income for the six months ended June 30, 2012 increased to $7.2 million, or $0.47 per diluted share, from $2.9 million or $0.19 per diluted share in the same six months of 2011, due to (i) a $10.8 million increase in mortgage banking revenues to $13.0 million, (ii) a $1.1 million increase in net gains on sales of securities to $1.2 million, and (iii) a non-cash income tax benefit of $3.2 million, as compared to, respectively, mortgage banking revenues of $2.2 million, net gains of $40,000 on sales of securities, and a $630,000 provision for income taxes in the first six months of 2011. The positive effect of the increases in mortgage banking revenues and in net gains on sales of securities and the income tax benefit on our operating results for the six months ended June 30, 2012 was partially offset by a $1.0 million decline in net interest income, a $1.5 million increase in the provision made for loan losses, and a $9.0 million increase in non-interest expense to $25.9 million, in each case in the six months ended June 30, 2012, as compared to the same six months of 2011.

Raymond E. Dellerba, the Company's CEO and President stated, "We are very pleased to report our sixth consecutive profitable quarter. We continued to see strong results and are starting to experience an increase in demand for commercial and industrial lending in manufacturing, wholesale, distribution and medical, with Small Business Administration ("SBA") and Entertainment Financing leading the way". "On the deposit side, our lowest cost of funding, Demand Deposit Accounts ("DDAs"), grew from $150 million to $170 million, a 13.4% increase. The increase in our checking accounts indicates new business activity for our core Bank. We have a significant amount of Other Real Estate Owned ("OREO") in escrow and anticipate a substantial OREO reduction in the third quarter," reported Mr. Dellerba. "We want to thank our loyal employees, investors and Board of Directors for their efforts and support to make these financial results a reality," concluded President Dellerba.

Recent Developments

We recently undertook a review of our mortgage banking business, which has grown rapidly over a relatively short period of time. The purpose of the review was to determine actions that could be taken to redeploy some of our capital resources, currently committed to our mortgage banking business, to our core commercial lending business in preparation for an eventual increase in prevailing interest rates, and to reduce the costs and improve the efficiencies of our mortgage banking operations. Based on that review, a decision has been made to focus our mortgage operations entirely on our direct-to-consumer retail channel and to exit our wholesale mortgage business, which depends on independent mortgage brokers to originate mortgage loans for us. Consequently, we will cease taking mortgage submissions from mortgage brokers after August 31, 2012; but will continue to process and fund all mortgage broker-originated loans in process or originated on our before that date. This action will result in a significant reduction in mortgage loan originations and, therefore, in our mortgage banking revenues, in future periods. Nevertheless, in our view, this action is in the best interests of the Company and our shareholders, because we believe that it will enable us to build a stronger foundation for achieving improved profitability in the future, reduce and control our operating costs and reduce interest rate and other risks inherent in the wholesale mortgage business, in order to enhance the value of our banking franchise in the future.

Results of Operation

Net Interest Income. Net interest income in the three and six months ended June 30, 2012 decreased by $448,000 and $1.0 million, respectively, as compared to the same respective periods of 2011, due primarily to reductions in interest income of $1.1 million and $2.3 million in the three and six months ended June 30, 2012. Those decreases were somewhat offset by reductions in interest expense of $656,000 and $1.2 million, respectively, in the three and six months ended June 30, 2012, as compared to the same respective periods of 2011. The declines in interest income were primarily attributable to decreases in market rates of interest and, to a lesser extent, a decrease in the volume of securities held for sale and a modest decrease in the average volume of loans outstanding. The decreases in interest expense were due to reductions in the interest we paid on deposits and a change in the mix of deposits to a higher proportion of demand and savings deposits and a lower proportion of more expensive time deposits, as we chose to allow a run-off of some of those deposits.

Provision for Loan Losses. We made provisions for loan losses of $1.9 million and $1.5 million, respectively, in the three and six months ended June 30, 2012, primarily to increase, by $1.5 million, reserves for specific non-performing loans, thereby increasing those reserves to $4.2 million at June 30, 2012 from $2.7 million at December 31, 2011. The allowance for loan losses at June 30, 2012 totaled $14.6 million of the loans then outstanding, as compared to $15.6 million of the loans outstanding at December 31, 2011 and $17.4 million of the loans outstanding at June 30, 2011.

Non-interest income. Noninterest income increased by $7.3 million to $9.1 million in the second quarter of 2012, from nearly $1.9 million in the same quarter of 2011, primarily as a result of a $7.1 million increase in income generated by our mortgage banking operations. In the six months ended June 30, 2012, noninterest income increased by $11.9 million to $15.1 million from $3.2 million in the same six months of 2011, due primarily to a $10.8 million increase in income generated by the mortgage banking division and a $1.1 million increase in net gains on sales of securities available for sale.

Non-interest expense. In the three and six months ended June 30, 2012, noninterest expense increased by $5.1 million, or 59.5% and $9.0 million, or 53.7%, respectively, as compared to the same three and six months of 2011. Those increases were primarily attributable to (i) the growth of our mortgage banking operations, as we added employees, increased leased office space, and expanded our marketing and business development programs to support that growth, (ii) an increase in the carrying costs of other real estate owned (OREO expense), due to an increase in foreclosures by us of real properties that had collateralized non-performing loans, and (iii) increases in legal and other professional fees incurred primarily in connection with the collection and foreclosure of non-performing loans. Notwithstanding the increase in non-interest expense, in the three months ended June 30, 2012 our efficiency ratio (non-interest expense as a percentage of the sum of net interest income and non-interest income) improved to 79.22%, from 82.11% in the corresponding three months of 2011, as the increase in non-interest income outpaced the increase in non-interest expense. In the six months ended June 30, 2012, our efficiency ratio remained substantially unchanged at 82.77% as compared to 82.61% in the same six months of 2011.

Income tax provision (benefit). We recorded a non-cash income tax benefit of $4.1 million and $3.2 million, respectively, in the second quarter and the six months ended June 30, 2012, as a result of the release of the remainder of the valuation allowance, in the amount of $5.0 million, which we had established against our deferred tax asset by means of charges to the provision for income taxes in prior years. The release in the valuation allowance was based on an assessment we made in the second quarter of 2012 that, due primarily to the taxable earnings we have been generating from operations in every quarter since the quarter ended December 31, 2010, it had become more likely, than not, that we would be able to use the income tax benefits comprising our deferred tax asset to offset or reduce taxes in future periods.

http://globenewswire.com/newsroom/news.html?d=10001767

PMBC Announces the Inclusion of the Company in the Russell 2000 Index (6/25/12)

COSTA MESA, Calif., June 25, 2012 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC). Raymond E. Dellerba, President and CEO of Pacific Mercantile Bancorp (the "Company"), announced today that the Company had met the criteria for inclusion in the Russell 2000 Index. The Russell Index was launched in 1984 to objectively track equity performance and reflect investment manager behavior. The Russell 2000 measures small cap securities' performance with an unbiased view. The Index is reconstituted yearly to make certain that large cap stocks don't distort the performance of the small cap segment. "We are proud to be a member once again of the prestigious Russell 2000 index and thank our investors and shareholders for their continued support of our stock and our Company," stated President Dellerba.

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp, which is a publicly traded company with its shares listed on the Nasdaq Stock Market under the trading symbol, "PMBC", is the parent holding company of Pacific Mercantile Bank. The Bank is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System which provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services. The Bank, which opened for business on March 1, 1999, had total assets exceeding $1 billion as of September 30, 2011.

The Bank operates a total of seven financial centers in Southern California, four of which are located in Orange County, one of which is located in Los Angeles County, one of which is located in San Diego County and the other of which is located in the Inland Empire in San Bernardino County. The four Orange County financial centers are located, respectively, in the cities of Newport Beach, Costa Mesa (which is visible from the 405 and 73 Freeways), La Habra and San Juan Capistrano (which is our South County financial center that is visible from the Interstate 5 Freeway). Our financial center in Los Angeles County is located in the city of Beverly Hills. Our San Diego financial center is located in La Jolla and our Inland Empire financial center is located in the city of Ontario, visible from the Interstate 10 Freeway. In addition to the Bank's physical locations, it offers comprehensive banking services over its Internet Bank, which is accessible 24/7 worldwide at www.pmbank.com.

CONTACT:
Nancy Gray, SEVP & CFO, 714-438-2500
Barbara Palermo, EVP & IR, 714-438-2500

http://globenewswire.com/newsroom/news.html?d=260240

PMBC marching up 100% over the last 6 months. wow. That's sexy stuff for any bank...simply outstanding!

Thank you for staying vigilant on this one EI!

PMBC Mourns the Passing of George H. Wells, Chairman of the Board of Directors (5/07/12)

COSTA MESA, Calif., May 7, 2012 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC), the parent holding company of Pacific Mercantile Bank, announced today the passing of George H. Wells, the Chairman of the Boards of Directors of both the Company and the Bank.

Raymond E. Dellerba, the Company's President and CEO stated, "It is with great sadness that I make the announcement of Mr. Wells' passing. Mr. Wells was the founding Chairman of the Board of Directors of Pacific Mercantile Bank and became the Chairman of the Board of Pacific Mercantile Bancorp, as well, upon its founding in 2000. Mr. Wells' leadership and his contributions to the growth and success of our Company and the Bank are immeasurable." Mr. Dellerba went on to say, "He was extremely knowledgeable and insightful, a strong leader and an exceptional Chairman. He was respected by all who had the privilege to work with him." "George was a true gentleman and a wonderful human being and will be missed by his many friends at Pacific Mercantile Bank. We offer our deepest condolences to his wife, Nancy, and George's entire family, as they face this tragic loss," concluded Mr. Dellerba.

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp is the parent holding company of Pacific Mercantile Bank, which opened for business March 1, 1999. The Bank, which is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System, provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services. The Bank operates a total of seven financial centers in Southern California, four of which are located in Orange County, one of which is located in Los Angeles County, one of which is located in San Diego County and the other of which is located in the Inland Empire in San Bernardino County. The four Orange County financial centers are located, respectively, in the cities of Newport Beach, Costa Mesa (which is visible from the 405 and 73 Freeways), La Habra and San Juan Capistrano (which is our South County financial center that is visible from the Interstate 5 Freeway). Our financial center in Los Angeles County is located in the city of Beverly Hills. Our San Diego financial center is located in La Jolla and our Inland Empire financial center is located in the city of Ontario (visible from the Interstate 10 Freeway). In addition to the Bank's physical locations, it offers comprehensive banking services over its Internet Bank, which is accessible 24/7 worldwide at www.pmbank.com.

CONTACT:

Nancy Gray, SEVP & CFO, 714-438-2500
Barbara Palermo, EVP & IR, 714-438-2500

http://globenewswire.com/newsroom/news.html?d=255018

PMBC Reports Net Income of $1.4 Million in the First Quarter of 2012 (5/07/12)

The Company's Fifth Consecutive Profitable Quarter

COSTA MESA, Calif., May 7, 2012 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) today reported net income of $1.4 million and $0.09 per diluted share of common stock in the quarter ended March 31, 2012, the fifth consecutive quarter of profits.

Raymond E. Dellerba, the Company's President and CEO, stated, "We are very pleased to be able to report our 5th consecutive profitable quarter. The Bank and our dedicated officers and employees will continue to do our part to support the small to medium size businesses in our California marketplace. The customers we bank provide the backbone of the well-being and growth of the economy." President Dellerba went on to say, "With the lending expertise and the cash management programs we have in place, we are able to give our business customers the tools to aid in the expansion of their businesses and, therefore, enable them to again hire new employees for the economic good of California."

"Furthermore, I really want to applaud the opportunities provided the Bank by our commercial lending and cash management, mortgage lending, and entertainment financing divisions, and our Preferred Lender status, customized SBA lending, including the Export-Import division, to support a world-wide influence that will benefit California well into the future. With the completion last month of the final installment of our $50.2 million capital raise, we have the capacity to promote these financial initiatives and programs," continued Mr. Dellerba. "But nothing can be accomplished without people, and again I want to thank our professional and dedicated officers and employees, our board of directors, and our customers and shareholders, for their unwavering support," concluded President Dellerba.

Results of Operations

Overview.

In the three months ended March 31, 2012, the Company generated $2.2 million of pretax income, an increase of $525,000, or 31%, over pretax income of $1.7 million for the same three months of in the same quarter of 2011. That increase was primarily attributable to a $4.7 million, or 344%, increase in noninterest income, as compared to noninterest income in the first three months of 2011. That increase was due primarily to the growth of our mortgage banking business which generated a $3.7 million, or 440%, increase in revenue in this year's first quarter as compared to the first quarter of 2011.

Net income in the three months ended March 31, 2012 total $1.4 million, which was $298,000, or nearly 18%, lower than in the same three months of 2011. That decline was due to an $823,000 increase in the provision for income taxes, which was somewhat offset by the increase in pretax income of $525,000, in this year's first quarter.

Net income per diluted share of common stock declined to $0.09 in the first three months of 2012, from $0.13 per diluted share of common stock in the same three months of 2011. That decline was due not only to the decrease in net income, but also to a nearly 19% increase in the weighted average number of common shares outstanding during this year's first quarter, as compared to the first quarter of 2011. That increase was primarily the result of our issuance, in July 2011, of approximately 1.6 million shares of common stock on the conversion of $11,555,000 of our Series A Preferred Stock at a conversion price of $7.65 per share of common stock.

Net Interest Income. Net interest income in the three months ended March 31, 2012 decreased by $591,000, or nearly 7%, to $8.0 million from $8.6 million in the same three months of 2011, due primarily to a $1.2 million, or 10%, decrease in interest income, partially offset by a $560,000, or nearly 20%, decrease in interest expense. The reduction in interest income was primarily the result of a decrease in yields on loans and other interest-earning assets due primarily to further reductions in interest rates by the Federal Reserve Board and a resulting $37 million reduction in the average volume of, securities available for sale during this year's first quarter.

Provision for Loan Losses. During the first quarter end March 31, 2012, we reversed the provision for loan losses by $400,000, as a result of a determination, based on the methodologies we employ in assessing the sufficiency of the allowance for loan losses, or "ALL", that we could reduce the ALL by that due primarily to an overall improvement in the quality of the loans in our loan portfolio over the prior 12 months. As result, the ALL totaled $13.6 million and 1.98% of total loans outstanding at March 31, 2012. By comparison, the ALL totaled $18.4 million and 2.56% of total loans outstanding at March 31, 2011.

Noninterest income. Noninterest income increased by $4.7 million, or 344%, in this year's first quarter, primarily attributable to a $3.7 million, or 440%, increase in mortgage banking revenue (inclusive of gains on sales of mortgage loans), as a result of the growth of our mortgage banking business. Also contributing to the increase in noninterest income was $1.2 million of net gains on sales of securities available for sale.

Non-interest expense. In the three months ended March 31, 2012, noninterest expense increased by $4.0 million, or 47.7%, as compared to the corresponding period of 2011. That increase was due primarily to (i) the growth of our mortgage banking business, as we added mortgage personnel and incurred higher marketing, business development and other costs to increase the volume of mortgage loan originations and (ii) $1.7 million of write downs of the carrying values of other real estate owned ("OREO") to fair value.

Income tax expense. In the three months ended March 31, 2012, we recorded income tax expense of $823,000, which represents an effective combined federal and tax income tax rate of 37%. By comparison, notwithstanding the nearly $1.7 million in pretax income that we generated in the first quarter of 2011, we did not record any provision for income taxes for that quarter, because we were able to reduce a portion of the valuation allowance we had established in prior years against our deferred tax asset, which had the effect of offsetting the provision for income taxes we would otherwise have had to record.

http://globenewswire.com/newsroom/news.html?d=254876

PMBC Announces Closing of Sale of $26.3 Million of Common Stock at $6.26 Per Share to the Carpenter Funds (4/23/12)

COSTA MESA, Calif., April 23, 2012 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) announced today that on April 20, 2012, it completed the sale of $26.3 million of the Company's common stock at $6.26 per share to Carpenter Community BancFund LP and Carpenter Community BancFund-A LP (collectively, the "Carpenter Funds"). The price of $6.26 per share of common stock was the Company's tangible book value per share of common stock as of December 31, 2011, and represents approximately a 17% premium over the $5.36 closing bid price of the common stock on April 19, 2012, the day before the closing.

A total of 4,201,278 shares of our common stock were sold to the Carpenter Funds in this transaction. As a result, the Carpenter Funds have become our largest shareholder, owning shares of preferred and common stock which represent approximately 26% of the Company's outstanding voting securities. The Carpenter Funds also purchased warrants from the Company for a purchase price of $51,105 that, subject to certain conditions, will entitle the Carpenter Funds to purchase up to 408,834 shares of the Company's common stock ("Warrant Shares"), at an exercise price of $6.26 per Warrant Share.

Keefe, Bruyette & Woods acted as the sole placement agent and financial advisor to the Company with respect to this common stock sale.

Raymond E. Dellerba, President and Chief Executive Officer of the Company and its wholly owned subsidiary, Pacific Mercantile Bank, stated, "This $26.3 million common stock sale is the final installment of the $50.155 million in capital that the Company has raised since 2009. This additional capital strengthens the capital position of the Company and the Bank and our ability to execute our strategic business plan to grow our franchise in commercial lending, mortgage banking and electronic banking. We also look forward to benefiting from the Carpenter Funds' experience and expertise in banking and financial services."

Edward Carpenter, Chairman of the Carpenter Funds, stated, "We are delighted to complete our investment in the Company. We look forward to further success together as the Bank seeks to capitalize on the exciting opportunity ahead of us."

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp is the parent holding company of Pacific Mercantile Bank, which opened for business March 1, 1999. The Bank, which is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System, provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services.

The Bank operates a total of seven financial centers in Southern California, four of which are located in Orange County, one of which is located in Los Angeles County, one of which is located in San Diego County and the other of which is located in the Inland Empire in San Bernardino County. The four Orange County financial centers are located, respectively, in the cities of Newport Beach, Costa Mesa (which is visible from the 405 and 73 Freeways), La Habra and San Juan Capistrano (which is our South County financial center that is visible from the Interstate 5 Freeway). Our financial center in Los Angeles County is located in the city of Beverly Hills. Our San Diego financial center is located in La Jolla and our Inland Empire financial center is located in the city of Ontario (visible from the Interstate 10 Freeway). In addition to the Bank's physical locations, it offers comprehensive banking services over its Internet Bank, which is accessible 24/7 worldwide at www.pmbank.com.

http://globenewswire.com/newsroom/news.html?d=252873

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Investorshub News ~ http://ih.advfn.com/p.php?pid=news&btn=s_ok&ctl00%24sb3%24tbq1=Get+Quote&as_values_IH=&ctl00%24sb3%24stb1=Search+iHub&symbol=PMBC&s_ok=OK&from_month=3&from_day=15&from_year=2012&order=desc&selsrc%5B%5D=prnca&selsrc%5B%5D=prnus&selsrc%5B%5D=zacks&selsrc%5B%5D=money2&selsrc%5B%5D=djn&selsrc%5B%5D=bw&selsrc%5B%5D=globe&selsrc%5B%5D=edgar&selsrc%5B%5D=mwus&force=1&last_ts=1331855999&p_n=1&p_count=&p_ts=1331794260


CandlestickChart ~ http://www.candlestickchart.com/cgi/chart.cgi?symbol=PMBC&exchange=US


Barchart Quote ~ http://barchart.com/quotes/stocks/PMBC?
Barchart Detailed Quote ~ http://barchart.com/detailedquote/stocks/PMBC
Barchart Options Quotes ~ http://barchart.com/options/stocks/PMBC
Barchart Technical Chart ~ http://barchart.com/charts/stocks/PMBC&style=technical
Barchart Interactive Chart ~ http://barchart.com/charts/stocks/PMBC&style=interactive
Barchart Technical Analysis ~ http://barchart.com/technicals/stocks/PMBC
Barchart Trader's Cheat Sheet ~ http://barchart.com/cheatsheet.php?sym=PMBC
Barchart Barchart Opinion ~ http://barchart.com/opinions/stocks/PMBC
Barchart Snapshot Opinion ~ http://barchart.com/snapopinion/stocks/PMBC
Barchart News Headlines ~ http://barchart.com/news/stocks/PMBC
Barchart Profile ~ http://barchart.com/profile//PMBC
Barchart Key Statistics ~ http://barchart.com/profile.php?sym=PMBC&view=key_statistics


OTC: American Bulls ~ http://www.americanbulls.com/StockPage.asp?CompanyTicker=PMBC&MarketTicker=OTC&TYP=S
NASDAQ: American Bulls ~ http://www.americanbulls.com/StockPage.asp?CompanyTicker=PMBC&MarketTicker=NASD&TYP=S
NYSE: American Bulls ~ http://www.americanbulls.com/StockPage.asp?CompanyTicker=PMBC&MarketTicker=NYSE&Typ=S


Marketwatch Profile ~ http://www.marketwatch.com/investing/stock/PMBC/profile
Marketwatch Analyst Estimates ~ http://www.marketwatch.com/investing/stock/PMBC/analystestimates
Marketwatch Historical Quotes ~ http://www.marketwatch.com/investing/stock/PMBC/historical
Marketwatch Financials ~ http://www.marketwatch.com/investing/stock/PMBC/financials
Marketwatch Overview ~ http://www.marketwatch.com/investing/stock/PMBC
Marketwatch SEC Filings ~ http://www.marketwatch.com/investing/stock/PMBC/secfilings
Marketwatch Picks ~ http://www.marketwatch.com/investing/stock/PMBC/picks
Marketwatch Hulbert ~ http://www.marketwatch.com/investing/stock/PMBC/hulbert
Marketwatch Insider Actions ~ http://www.marketwatch.com/investing/stock/PMBC/insideractions
Marketwatch Options ~ http://www.marketwatch.com/investing/stock/PMBC/options
Marketwatch Charts ~ http://www.marketwatch.com/investing/stock/PMBC/charts
Marketwatch News ~ http://bigcharts.marketwatch.com/news/symbolsearch/symbolnews.asp?news=markadv&symb=PMBC&sid=1795093&framed=False


The Lion ~ http://thelion.com/bin/aio_msg.cgi?cmd=search&msg=&si=1&tw=1&tt=1&rb=1&ih=1&fo=1&iv=1&yf=1&sa=1&fb=1&gg=1&symbol=PMBC


Search NYSE ~ http://www.nyse.com/about/listed/lcddata.html?ticker=PMBC


StockTA ~ http://www.stockta.com/cgi-bin/analysis.pl?symb=PMBC&num1=567&cobrand=&mode=stock


StockHouse ~ http://www.stockhouse.com/financialtools/sn_overview.aspx?qm_symbol=PMBC
StockHouse Delayed LII ~ http://www.stockhouse.com/financialtools/sn_level2.aspx?qm_page=46140&qm_symbol=PMBC


AlphaTrade ~ http://tools.alphatrade.com/index.php?t1=mc_quote_module&t2=mc_quote_module2&t3=historical&template=historical2html&sym=PMBC&client_id=2740&a_width=680&a_height=1000&language=english&showVol=1&chtype=8


Reuters ~ http://www.reuters.com/finance/stocks/companyOfficers?symbol=PMBC.PK&WTmodLOC=C4-Officers-5


StockWatch ~ http://www.stockwatch.com/Quote/Detail.aspx?symbol=PMBC®ion=U


Search NASDAQ ~ http://www.nasdaq.com/symbol/PMBC
NASDAQ Divy History ~ http://www.nasdaq.com/symbol/PMBC/dividend-history
NASDAQ Short Interest ~ http://www.nasdaq.com/symbol/PMBC/short-interest
NASDAQ Institutional Ownership ~ http://www.nasdaq.com/symbol/PMBC/institutional-holdings
NASDAQ FlashQuotes ~ http://www.nasdaq.com/aspx/flashquotes.aspx?symbol=PMBC&selected=PMBC
NASDAQ InfoQuotes ~ http://www.nasdaq.com/aspx/infoquotes.aspx?symbol=PMBC&selected=PMBC
NASDAQ After Hours Quote ~ http://www.nasdaq.com/symbol/PMBC/after-hours
NASDAQ Pre-Market Quote ~ http://www.nasdaq.com/symbol/PMBC/premarket
NASDAQ Historical Quote ~ http://www.nasdaq.com/symbol/PMBC/historical
NASDAQ Option Chain ~ http://www.nasdaq.com/symbol/PMBC/option-chain
NASDAQ Company Headlines ~ http://www.nasdaq.com/symbol/PMBC/news-headlines
NASDAQ Press Releases ~ http://www.nasdaq.com/symbol/PMBC/news-headlines
NASDAQ Sentiment ~ http://www.nasdaq.com/symbol/PMBC/sentiment
NASDAQ Analyst Summary ~ http://www.nasdaq.com/symbol/PMBC/analyst-research
NASDAQ Guru Analysis~ http://www.nasdaq.com/symbol/PMBC/guru-analysis
NASDAQ Stock Report ~ http://www.nasdaq.com/symbol/PMBC/stock-report
NASDAQ Competitors ~ http://www.nasdaq.com/symbol/PMBC/competitors
NASDAQ Stock Consultant ~ http://www.nasdaq.com/symbol/PMBC/stock-consultant
NASDAQ Stock Comparison ~ http://www.nasdaq.com/symbol/PMBC/stock-comparison
NASDAQ Call Transcripts ~ http://www.nasdaq.com/symbol/PMBC/call-transcripts
NASDAQ Annual Reports ~ http://www.nasdaq.com/aspx/annualreport.aspx?symbol=PMBC&selected=PMBC
NASDAQ Financials ~ http://www.nasdaq.com/symbol/PMBC/financials
NASDAQ Revenue & Earnings Per Share (EPS) ~ http://www.nasdaq.com/symbol/PMBC/revenue-eps
NASDAQ SEC Filings ~ http://www.nasdaq.com/symbol/PMBC/sec-filings
NASDAQ Ownership Summary ~ http://www.nasdaq.com/symbol/PMBC/ownership-summary
NASDAQ Institutional Ownership ~ http://www.nasdaq.com/symbol/PMBC/institutional-holdings
NASDAQ (SEC Form 4) ~
--------- All Trades ~ http://www.nasdaq.com/symbol/PMBC/insider-trades
--------- Buys ~ http://www.nasdaq.com/symbol/PMBC/insider-trades/buys
--------- Sells ~ http://www.nasdaq.com/symbol/PMBC/insider-trades/sells


The Motley Fool ~ http://caps.fool.com/Ticker/PMBC.aspx
The Motley Fool Earnings/Growth ~ http://caps.fool.com/Ticker/PMBC/EarningsGrowthRates.aspx?source=itxsittst0000001
The Motley Fool Ratios ~ http://caps.fool.com/Ticker/PMBC/Ratios.aspx?source=itxsittst0000001
The Motley Fool Stats ~ http://caps.fool.com/Ticker/PMBC/Stats.aspx?source=icasittab0000006
The Motley Fool Historical ~ http://caps.fool.com/Ticker/PMBC/Historical.aspx?source=icasittab0000004
The Motley Fool Scorecard ~ http://caps.fool.com/Ticker/PMBC/Scorecard.aspx?source=icasittab0000003
The Motley Fool Statements ~ http://caps.fool.com/Ticker/PMBC/Statements.aspx?source=icasittab0000009


MSN Money ~ http://investing.money.msn.com/investments/stock-ratings?symbol=PMBC


YCharts ~ http://ycharts.com/companies/PMBC
YCharts Performance ~ http://ycharts.com/companies/PMBC/performance
YCharts Dashboard ~ http://ycharts.com/companies/PMBC/dashboard


InsideStocks Opinion ~ http://www.insidestocks.com/texpert.asp?sym=PMBC&code=XDAILY
InsideStocks Profile ~ http://www.insidestocks.com/profile.asp?sym=PMBC&code=XDAILY
InsideStocks Quote ~ http://www.insidestocks.com/quote.asp?sym=PMBC&code=XDAILY
InsideStocks Projection ~ http://charts3.barchart.com/procal.asp?sym=PMBC


Zacks Quote ~ http://www.zacks.com/stock/quote/PMBC
Zacks Estimates ~ http://www.zacks.com/research/report.php?type=estimates&t=PMBC
Zacks Company Reports ~ http://www.zacks.com/research/report.php?type=report&t=PMBC


Knobias ~ http://knobias.10kwizard.com/files.php?sym=PMBC


StockScores ~ http://www.stockscores.com/quickreport.asp?ticker=PMBC


Trade-Ideas ~ http://www.trade-ideas.com/StockInfo/PMBC/HOT_TOPIC.html


Morningstar ~ http://performance.morningstar.com/stock/performance-return.action?region=USA&t=PMBC&culture=en-US
Morningstar Shareholders ~ http://investors.morningstar.com/ownership/shareholders-overview.html?t=PMBC®ion=USA&culture=en-us
Morningstar Transcripts~ http://www.morningstar.com/earnings/NoTranscript.aspx?t=PMBC®ion=USA
Morningstar Key Ratios ~ http://financials.morningstar.com/ratios/r.html?t=PMBC®ion=USA&culture=en-US
Morningstar Executive Compensation ~ http://insiders.morningstar.com/trading/executive-compensation.action?t=PMBC®ion=USA&culture=en-us
Morningstar Valuation ~ http://financials.morningstar.com/valuation/price-ratio.html?t=PMBC®ion=USA&culture=en-us


CCBN (Thompson Reuters) ~ http://ccbn.aol.com/company.asp?client=aol&ticker=PMBC


TradingMarkets ~ http://pr.tradingmarkets.com/?lid=leftPRbox&sym=PMBC


OTCBB ~ http://www.otcbb.com/asp/SiteSearch.asp?Criteria=PMBC&searcharea=e&image1.x=0&image1.y=0


Insidercow ~ http://www.insidercow.com/history/company.jsp?company=PMBC&B1=Search%21


Forbes News ~ http://search.forbes.com/search/find?tab=searchtabgeneraldark&MT=PMBC
Forbes Press Releases ~ http://search.forbes.com/search/find?&start=1&tab=searchtabgeneraldark&MT=PMBC&pub=businesswire,prnewswire&searchResults=pressRelease&tag=pr&premium=on
Forbes Web ~ http://search.forbes.com/search/web?MT=UNGS&start=1&max=10&searchResults=web&tag=web&sort=null


YouTube Symbol Search ~ http://www.youtube.com/results?search_query=PMBC


Buy-Ins ~ http://www.buyins.net/tools/symbol_stats.php?sym=PMBC


Quotemedia ~ http://www.quotemedia.com/results.php?qm_page=47556&qm_symbol=PMBC


Earnings Whispers ~ http://www.earningswhispers.com/stocks.asp?symbol=PMBC

Bloomberg Snapshot ~ http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=PMBC
Bloomberg People ~ http://investing.businessweek.com/research/stocks/people/people.asp?ticker=PMBC

Financial Times ~ http://markets.ft.com/Research/Markets/Tearsheets/Summary?s=PMBC

Investorpoint ~ http://www.investorpoint.com/ enter "PMBC" and click search.

Hotstocked ~ http://www.hotstocked.com/ enter "PMBC" and click search.

Raging Bull ~ http://ragingbull.quote.com/mboard/boards.cgi?board=PMBC

Hoovers ~ http://www.hoovers.com/search/company-search-results/100003765-1.html?type=company&term=PMBC

DD Machine ~ http://www.ddmachine.com/default.asp?m=stocktool_frame.asp?symbol=PMBC

SEC Form 4 ~ http://www.secform4.com/insider/showhistory.php?cik=PMBC

OTCBB Pulse ~ http://www.otcbbpulse.com/cgi-bin/pulsequote.cgi?symbol=PMBC

Failures To Deliver ~ http://failurestodeliver.com/default2.aspx enter "PMBC" and click search.

http://www.coordinatedlegal.com/SecretaryOfState.html

http://regsho.finra.org/regsho-Index.html

http://www.shortsqueeze.com/?symbol=PMBC&submit=Short+Quote%99



DTCC (PENSON/TDA) Check - (otc and pinks) - Note ~ I did not check for this chart blast. However, I try and help you to do so with the following links.
IHUB DTCC BOARD SEARCH #1 http://investorshub.advfn.com/boards/msgsearchbyboard.aspx?boardID=18682&srchyr=2011&SearchStr=PMBC
IHUB DTCC BOARD SEARCH #2: http://investorshub.advfn.com/boards/msgsearchbyboard.aspx?boardID=14482&srchyr=2011&SearchStr=PMBC
Check those searches for recent PMBC mentions. If PMBC is showing up on older posts and not on new posts found in link below, The DTCC issues may have been addressed and fixed. Always call the broker if your security turns up on any DTCC/PENSON list.
http://investorshub.advfn.com/boards/msgsearchbyboard.aspx?boardID=18682&srchyr=2011&SearchStr=Complete+list
For a complete list see the pinned threads at the top here ---> http://tinyurl.com/TWO-OLD-FARTS



MACDlinks

~ Wednesday! $PMBC ~ Q1 Earnings posted, pending or coming soon! In Charts and Links Below!

~ $PMBC ~ Earnings expected on Wednesday *
Want more like this? Search Keyword: MACMONEY >>> http://tinyurl.com/MACMONEY <<<
One or more of many earnings sites has alerted this security has or will be posting earnings on or around the day of this message.








http://stockcharts.com/h-sc/ui?s=PMBC&p=D&b=3&g=0&id=p88783918276&a=237480049




http://stockcharts.com/h-sc/ui?s=PMBC&p=W&b=3&g=0&id=p54550695994



~ Google Finance: http://www.google.com/finance?q=PMBC
~ Google Fin Options: hhttp://www.google.com/finance/option_chain?q=PMBC#
~ Yahoo! Finance ~ Stats: http://finance.yahoo.com/q/ks?s=PMBC+Key+Statistics
~ Yahoo! Finance ~ Profile: http://finance.yahoo.com/q/pr?s=PMBC
Finviz: http://finviz.com/quote.ashx?t=PMBC
~ BusyStock: http://busystock.com/i.php?s=PMBC&v=2


<<<<<< http://www.earningswhispers.com/stocks.asp?symbol=PMBC >>>>>>



http://investorshub.advfn.com/boards/post_prvt.aspx?user=251916

*If the earnings date is in error please ignore error. I do my best.

PMBC Amends Existing Equity Financing Agreements With Carpenter Funds (2/29/12)

Costa Mesa, Calif., Feb. 29, 2012 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) announced today that the agreements entered into on August 26, 2011 with Carpenter Community BancFund LP and Carpenter Community BancFund-A LP (collectively, the "Carpenter Funds") for the second round of its previously reported equity financing have been amended to terminate the sale of $10.8 million of additional shares of preferred stock and, correspondingly, increase by $10.8 million the amount of common stock that the Carpenter Funds will be purchasing from the Company. As a result of these changes, the Company expects to save approximately $907,200 annually in preferred stock dividends and increase its Tier 1 capital.

As previously reported, on August 26, 2011, the Company sold $11.2 million of a newly created class of preferred stock, designated as the Series B Convertible 8.4% Preferred Stock (the "Series B Shares"), including $3.7 million to the Carpenter Funds. On that same date, the Company and the Carpenter Funds entered into two additional stock purchase agreements: (i) an Additional Series B Preferred Stock Purchase Agreement (the "Additional Series B Purchase Agreement") which provided for the sale to the Carpenter Funds of an additional $10.8 million of Series B Preferred Stock (the "Additional Series B Shares"), at a purchase price of $100 per share, and (ii) a Common Stock Purchase Agreement, which provided for a sale to the Carpenter Funds of $15.5 million of shares of Company common stock ("Common Shares"), at a purchase price equal to $5.31 per share or, if greater, the per share book value of the Company's common stock last reported prior to the closing of that sale of Common Shares, in each case subject to the satisfaction of certain conditions. Among other things, as holders of the Additional Series B Shares, the Carpenter Funds would have been entitled to receive dividends, as and when declared, totaling approximately $907,200 each year in cash or, if not so declared and paid, in additional shares of preferred stock, and to convert, at their option, their Additional Series B Shares, at a conversion price of $5.32 per share, into a total of 2,030,075 shares of Company common stock.

Today, the Company and the Carpenter Funds entered into agreements which terminate the sale of the $10.8 million of Additional Series B Shares and, correspondingly, increase the amount of Common Shares to be purchased by the Carpenter Funds by an additional $10.8 million, from $15.5 million to a total of $26.3 million of Common Shares, pursuant to an Amended & Restated Common Stock Purchase Agreement (the "Amended Stock Purchase Agreement").

The Company also announced that Raymond E. Dellerba will remain President and Chief Executive Officer of the Company and the Bank. Mr. Dellerba stated, "I firmly believe that the agreements we have entered into today with the Carpenter Funds are a positive development for the Company and the Bank and especially for our long-term shareholders. These agreements will save the Company approximately $907,200 annually in preferred stock dividends that would otherwise have become payable on the Additional Series B Shares. Moreover, we believe that these agreements increase the likelihood that the conditions to the consummation of this sale of the $26.3 million of Common Shares to the Carpenter Funds will be satisfied. Also, the sale of the additional Common Shares to the Carpenter Funds will further increase our Tier 1 capital, which will strengthen even further our financial condition and provide us with additional financial and capital resources that we believe will enable us to resume our growth strategy and enhance our competitive position in the Southern California marketplace. I very much appreciate the efforts made by and the cooperation we received from the Carpenter Funds in connection with these changes in our agreements." Mr. Dellerba added, "Also, I am very pleased to continue leading the organization as President and CEO of the Company and the Bank."

"We have been friends and admirers of Pacific Mercantile for over a decade," said Edward Carpenter, Chairman of the Carpenter Funds. "We are delighted by this joint agreement that will increase our investment in the Company to $30 million."

The Additional Series B Purchase Agreement had provided for the sale of $1.0 million of Additional Series B Shares to SBAV LP ("SBAV"), which had purchased $7.5 million of Series B Preferred Stock on August 26, 2011. Due to the termination of that Agreement, the sale of the $1.0 million of Additional Series B Shares to SBAV will not occur.

As a result of the termination of the Additional Series B Purchase Agreement, it became necessary to amend certain of the ancillary agreements that either were entered into on August 26, 2011 or were appended as Exhibits to the Additional Series B Purchase Agreement (the "Ancillary Agreements"), including an Amended Investor Rights Agreement between the Company and the Carpenter Funds.

The Ancillary Agreements provide for the Carpenter Funds, for a purchase price of $51,105, and SBAV, for a purchase price of $44,056, to retain their rights to purchase common stock warrants from the Company that, subject to certain conditions, will entitle the Carpenter Funds and SBAV to purchase up to 408,834 shares and 352,444 shares, respectively, of the Company's common stock ("Warrant Shares"), at an exercise price of $6.26 per Warrant Share. The Carpenter Funds and SBAV also will retain their registration rights with respect to, in the case of the Carpenter Funds, the Common Shares and Warrant Shares, and in the case of SBAV, the Warrant Shares, as contemplated by the Additional Series B Purchase Agreement.

Consummation of the sale of the Common Shares pursuant to the Amended Common Stock Purchase Agreement is subject to the satisfaction of certain conditions, including the receipt by the Carpenter Funds of federal bank regulatory approvals for its purchase of the Common Shares by no later than April 27, 2012. There is no assurance that those conditions will be satisfied.The foregoing summaries of the Amended Common Stock Purchase Agreement and the above referenced Ancillary Agreements are not intended to be complete and are qualified in their entirety by reference to those Agreements, copies of which will be appended as exhibits to a Current Report on Form 8-K which the Company will be filing with the SEC to report the changes to the terms of the secondary equity financing summarized in this news release.

The summaries of the Additional Series B Purchase Agreement and the Common Stock Purchase Agreement, entered into on August 26, 2011 are not intended to be complete and are qualified in their entirety by reference to those Agreements, copies of which are appended as Exhibits 10.5 and 10.6 to the Company's Current Report on Form 8-K dated August 26, 2011.

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp is the parent holding company of Pacific Mercantile Bank, which opened for business March 1, 1999. The Bank, which is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System, provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services.

The Bank operates a total of seven financial centers in Southern California, four of which are located in Orange County, one of which is located in Los Angeles County, one of which is located in San Diego County and the other of which is located in the Inland Empire in San Bernardino County. The four Orange County financial centers are located, respectively, in the cities of Newport Beach, Costa Mesa (which is visible from the 405 and 73 Freeways), La Habra and San Juan Capistrano (which is our South County financial center that is visible from the Interstate 5 Freeway). Our financial center in Los Angeles County is located in the city of Beverly Hills. Our San Diego financial center is located in La Jolla and our Inland Empire financial center is located in the city of Ontario (visible from the Interstate 10 Freeway). In addition to the Bank's physical locations, it offers comprehensive banking services over its Internet Bank, which is accessible 24/7 worldwide at www.pmbank.com.

The Pacific Mercantile Bancorp logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7241

PMBC Reports Fiscal 2011 Operating Results (2/28/12)

Income before Taxes Improves to $5.2 million

Net Income Increases to $11.6 million

COSTA MESA, Calif., Feb. 28, 2012 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) today reported that income before income taxes increased to $5.2 million, and net income increased to $11.6 million, or $0.98 per diluted share, in the year ended 2011, as compared to a pre-tax loss of $5.0 million and a net loss of $14.0 million, or $1.44 per diluted share, in 2010. The increase in pre-tax income in 2011 was primarily attributable a reduction in provision for loan losses of $9.1 million, and an increase in non-interest income of $1.4 million, in each case as compared to 2010. The increases in net income and net income per diluted share were attributable to that reduction in the provision for loan losses and the increase in non-interest income, coupled with an income tax benefit of $6.4 million, as compared to a provision for income taxes of nearly $9.0 million in 2010. The income tax benefit was the result of a $7.0 million reversal, made possible by the improvements in our 2011 operating results, of charges taken to increase reserves against our deferred asset in 2010.

Income before income taxes increased to $1.0 million, and net income for the fourth quarter of 2011 increased to $7.9 million, or $0.62 per diluted share, as compared to pre-tax loss of $2.1 million and a net loss of $2.0 million, or $0.22 per diluted share, incurred in the same quarter of 2010. This improvement was primarily attributable to (i) a $1.6 million reduction in provision for loan losses, (ii) an increase in non-interest income of $1.4 million, (iii) a decrease in non-interest expense of $542,000 and (iv) an income tax benefit of $6.7 million, in each case as compared to the fourth quarter of 2010.

"I am pleased to report our return to profitability in 2011, which was the result of improvements in our operating results and in the quality of our loan portfolio," stated Raymond E. Dellerba, President and CEO of the Company and the Bank. "Banking revenues, consisting of net interest income and non-interest income increased every quarter during 2011, and by nearly 10% in the fourth quarter of 2011, despite a continuing sluggishness in and uncertainties regarding the strength of the economic recovery, which dampened loan demand in 2011. At the same time, due to the improvement in the quality of our loan portfolio, exemplified by reductions in loan charge-offs and delinquencies, we were able to reverse the provisions made for loan losses in 2011, as compared to provisions of $8.3 million made for loan losses in 2010. If the economic recovery strengthens and loan demand increases in 2012, we believe we will be able to achieve improvements in our net interest income and non-interest income and in the quality of our loan portfolio in 2012," stated Mr. Dellerba. "I also want to take this opportunity to thank the members of our management team for the efforts they devoted and the energies they expended, without which our return to profitability in 2011 could not have been achieved," added Mr. Dellerba.

Results of Operations

Net Interest Income. In fiscal 2011, net interest income increased by $353,000, or 1.1%, to $33.2 million, from $32.8 million in fiscal 2010. That increase was primarily attributable to a $7.0 million, or 38.6%, decline in interest expense, substantially offset by a $6.6 million, or 13.0%, decrease in interest income in 2011, as compared to 2010. The decline in interest expense was due primarily to reductions in market rates of interest, as a result of which the average rate of interest that we paid on our interest-bearing liabilities declined to 1.43% in 2011 from 1.98% in 2010. Also contributing, to a lesser extent, to that decline was a $34 million reduction in average borrowings outstanding and a change in the mix of our deposits to a higher proportion of lower-cost "core" deposits and a lower proportion of higher-cost certificates of deposits. The decline in interest income in 2011, as compared to 2010, was primarily attributable to the Federal Reserve Board's reductions in interest rates, which reduced the yields that we were able to realize on our loans and investments and, to a lesser extent, to a decline in average loans outstanding reflecting continuing weakness in loan demand which we believe was primarily attributable to the sluggishness of and uncertainties regarding the economic recovery in 2011.

In the fourth quarter of 2011, net interest income decreased by $441,000, or 5.3%, to $7.8 million from $8.3 million in the fourth quarter of 2010. That decrease was the result of a $1.6 million, or 13.3%, reduction in interest income due primarily to a decrease in average earning assets, partially offset by a $1.2 million, or 30.6%, decrease in interest expense.

Primarily as a result of the decreases in interest expense, our net interest margin improved to 3.41% for the year ended December 31, 2011, from 2.92% for 2010.

Provision for Loan Losses and Net Interest Income after Provision for Loan Losses. During the fiscal year ended December 31, 2011, we reversed the provision for loan losses by $833,000, as compared to making provisions for loans losses of $8.3 million in 2010. That reversal was made possible by an improvement in the quality of our loan portfolio, as evidenced by declines in net loan charge-offs and loan delinquencies and, to a lesser extent, by a decrease in total loans outstanding, in 2011 as compared in each case to 2010. Due to the reduction in the provisions made for loan losses, net interest income after those provisions increased by nearly $9.4 million, or 38.6%, to $34.0 million in 2011, as compared to $24.6 million in 2010. Although that reversal in the provisions made for loan losses resulted in a reduction in the amount of the allowance for loan losses at December 31, 2011, as compared to December 31, 2010, the ratio of the allowance to total loans outstanding at December 31, 2011 remained substantially unchanged at 2.37%, as compared to 2.44% at December 31, 2010.

Noninterest income. Noninterest income increased by $1.5 million, or 21.5%, due to a $2.4 million, or 62.3%, increase in mortgage banking revenues to $6.1 million in 2011, from $3.7 million in 2010. That increase was partially offset by a $1.1 million decline in gains on sales of securities held for sale in 2011 as compared to 2010. During the fourth quarter of 2011, non-interest income increased by $1.4 million, or 95.2%, to $2.8 million, from $1.4 million in 2010, as a result of a $1.5 million increase in mortgage banking revenues. The increases in mortgage banking revenues were primarily attributable to increases in the volume of residential mortgage loans we originated in the year and fourth quarter ended December 31, 2011 and the adoption of Accounting Standards Update ("ASU") 825, The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115 (ASU 825), on mortgage loans held for sale as of December 1, 2011.

Noninterest expense. Noninterest expense in 2011 increased by $737,000, or 2.0%, as compared to 2010, due primarily to a $1.7 million, or 11.3%, increase in compensation expense, primarily attributable to an increase in staffing in the mortgage loan division to make it possible to take advantage of an increase in demand for residential mortgage loans, and an increase of nearly $1.1 million in provisions made for litigation and other contingencies. Those increases were substantially offset by a $1.5 million, or 40.7%, decrease in FDIC insurance assessments and an $830,000, or 17.5%, decrease in professional fees consisting of legal fees and expenses incurred principally in connection with the collection and foreclosures of non-performing loans and loan restructurings.

In the fourth quarter of 2011, non-interest expense decreased by $542,000, or 4.9%, as compared to the same quarter of 2010, due primarily to a $821,000, or 53.1%, decrease in professional fees and a $726,000, or 59%, decrease in FDIC deposit insurance premiums, which were somewhat offset by a $1.2 million, or 33.9%, increase in compensation expense and a $175,000 increase in the provisions made for contingencies.

Income before income taxes. Due primarily to the above-described increase in non-interest income and the reversal in the provisions made for loan losses, we generated pre-tax income of $5.2 million in 2011, which represented a $10.2 million improvement over the pre-tax loss of $5.0 million incurred in 2010. Fourth quarter 2011 pre-tax income improved by nearly $3.1 million, or 149%, to $1.0 million, from a pre-tax loss of $2.1 million in the fourth quarter of 2010, due primarily to the above described increases in net interest income and noninterest income, the $833,000 reversal of the provision for loan losses and the $542,000 reduction in non-interest expense in the fourth quarter of 2011.

Income Tax Provision (Benefit). We recorded a non-cash income tax benefit of $6.4 million in 2011 as a result of a $7.0 million release in the valuation allowance that we had established against our deferred tax asset, by means of charges to the provision for income taxes, in 2010. That reduction was based on an assessment we made in the fourth quarter of 2011 that, due to a strengthening of economic conditions, an improvement in the quality of our loan portfolio and the improvement in our results of operations in 2011, it had become more likely, than not, that we would be able to use approximately $7.0 million of the $15.0 million of income tax benefits comprising our deferred tax asset to offset or reduce income taxes in future periods.

By comparison, in 2010, we recognized a non-cash charge of $9.0 million to the provision for income taxes in order to increase the valuation allowance we had previously established against our deferred tax asset by $10.7 million. That increase was the result of a determination we made in the second quarter of 2010 that, due to the continuing weakness of the economy, the uncertainties about the strength of the economic recovery and our continuing losses, it had become more likely, than not, that we would be unable to use the remainder of our deferred tax asset to offset or reduce income taxes in future periods.

Financial Condition

Loans. During 2011, the average volume of loans outstanding decreased to $709 million from $787 million in 2010, primarily reflecting the effects on loan demand of the sluggishness, and continuing uncertainties about the strength, of the economic recovery. As a result, at December 31, 2011, gross loans totaled approximately $657 million, a decrease of $83 million, or 11.2%, as compared to nearly $740 million at December 31, 2010.

Deposits. Deposits increased by $46 million, or 5.6%, to $862 million at December 31, 2011, from $816 million at December 31, 2010, primarily as a result of an increase in core deposits, comprised of a $20 million, or 14.1%, increase in noninterest bearing demand deposits to $164 million at December 31, 2011 from $144 million at December 31, 2010 and a $24 million, or 18.1% increase in savings and other interest bearing transaction deposits, to $159 million at December 31, 2011, from $134 million at December 31, 2010. As a result, the volume of lower-cost core deposits increased to 40.9% of total deposits at December 31, 2011 from 37.7% at December 31, 2010, while higher-cost time deposits decreased as a percentage of total deposits to 59.1% at December 31, 2011 from 62.3% at December 31, 2010.

http://globenewswire.com/newsroom/news.html?d=247376

PMBC Shareholders Approve Proposals at Special Meeting (1/31/12)

COSTA MESA, Calif., Jan. 31, 2012 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC), the parent holding company of Pacific Mercantile Bank, announced today that its shareholders approved all of the Company's proposals at its Special Shareholders Meeting held on January 26, 2012. Those proposals included the approval of:

* The sale of $15.5 million of shares of the Company's Common Stock to the Carpenter Funds, at a purchase price that will be equal to the book value per share of the Company's Common Stock, currently $5.55 per share, as part of the second phase of the Company's previously announced pending equity financing.

* An increase in the authorized number of shares of the Company's Common Stock to 85 million shares needed to enable the Company to complete the second phase of the pending equity financing and to provide shares for the resumption of the Company's strategic growth initiatives; and

* An amendment to the Certificate of Determination of the Rights, Preferences and Privileges of the Company's Series A Preferred Stock permitting accumulated dividends on the 11,000 Series A Preferred Shares that remain outstanding to be paid in shares of Common Stock, which will result in the automatic conversion of those Series A Preferred Shares into Common Stock when those accumulated dividends are paid.

The Company also reported today that, with the approval of that amendment to the Series A Certificate of Determination at the Special Shareholders Meeting, the Company's Board of Directors has declared a dividend on the outstanding shares of the Series A Preferred Stock, totaling $206,861, paid by the issuance, or the setting aside for issuance, of a total of 37,272 shares of Common Stock on January 30, 2012. As a result, all of the remaining Series A Preferred Stock automatically converted into a total of 143,790 shares of Common Stock on that date and no Series A Shares remain outstanding.

Raymond E. Dellerba, the Company's President and CEO stated, "We are very appreciative of the support we have received from our common and preferred shareholders, which enables us to move forward with our efforts to raise additional capital for the Company and the Bank."

Completion of the pending equity financing, which is comprised of the sale of the $15.5 million of shares of Common Stock and the sale of $10.8 million of additional shares of Series B Preferred Stock to the Carpenter Funds, remains subject to the satisfaction of certain conditions, including receipt of Federal Reserve Board approval by the Carpenter Funds and, as a result, there is no assurance that the financing can be completed.

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp is the parent holding company of Pacific Mercantile Bank, which opened for business March 1, 1999. The Bank, which is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System, provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services. The Bank operates a total of seven financial centers in Southern California, four of which are located in Orange County, one of which is located in Los Angeles County, one of which is located in San Diego County and the other of which is located in the Inland Empire in San Bernardino County. The four Orange County financial centers are located, respectively, in the cities of Newport Beach, Costa Mesa (which is visible from the 405 and 73 Freeways), La Habra and San Juan Capistrano (which is our South County financial center that is visible from the Interstate 5 Freeway). Our financial center in Los Angeles County is located in the city of Beverly Hills. Our San Diego financial center is located in La Jolla and our Inland Empire financial center is located in the city of Ontario (visible from the Interstate 10 Freeway). In addition to the Bank's physical locations, it offers comprehensive banking services over its Internet Bank, which is accessible 24/7 worldwide at www.pmbank.com.

http://globenewswire.com/newsroom/news.html?d=244226

The Deal

On August 26, 2011, the Company consummated the sale of a total of 112,000 shares of Series B Convertible 8.4% Noncumulative Preferred Stock (the “Initial Series B Shares”) for an aggregate purchase price of $11.2 million. The Carpenter Funds, purchased 37,000 of those Initial Series B Shares, designated as the “Series B-1” Shares. Those Initial Series B Shares are convertible, at the option of the Carpenter Funds, at a conversion price of $5.32 per share, into a total of 695,488 shares of our common stock which, as of December 15, 2011 would have represented approximately 4.8% of our outstanding voting shares. SBAV LP, an affiliate of Clinton Group, Inc. (“SBAV”), which is not affiliated with the Carpenter Funds, purchased the other 75,000 of those Initial Series B Shares, designated as the “Series B-2” Shares, which are convertible, at the option of SBAV, into a total of 1,409,774 shares of our common stock, also at a conversion price of $5.32 per share. The Carpenter Funds are private equity funds which invest primarily in California-based banks and bank holding companies.

On that same date, the Company entered into an Additional Series B Stock Purchase Agreement (the “Additional Series B SPA”), which provides for the Company to sell an additional 108,000 Series B Shares to the Carpenter Funds and an additional 10,000 Series B Shares to SBAV (the “Additional Series B Shares”). The Additional Series B Shares will be convertible at the option of the Carpenter Funds and SBAV into 2,030,075 and 187,969 shares, respectively, of our common stock at a conversion price of $5.32 per share. If the 108,000 Additional Series B Shares are sold to the Carpenter Funds, they would hold securities that would represent approximately 16% of our outstanding voting securities. Consummation of the sale of the Additional Series B Shares is conditioned on the sale of the Common Shares to the Carpenter Funds and the receipt of Federal Reserve Board approval by the Carpenter Funds of their purchase of the Additional Series B Shares.

On August 26, 2011, the Company and the Carpenter Funds also entered into a Common Stock Purchase Agreement (the “Common Stock Purchase Agreement” or the “CSPA”) which provides for us to sell $15.5 million of shares of our common stock (the “Common Shares”) to the Carpenter Funds, at a purchase price equal to the greater of (i) $5.31 per share or (ii) the book value per share of our common stock as determined from the SEC report last filed by us before the date on which the sale of the Common Shares is consummated (our “Last Reported Book Value”). A copy of the Common Stock Purchase Agreement is attached as Annex A to this Proxy Statement. If (i) this Proposal No. 1 and Proposal No. 2 are approved by our shareholders and the other conditions under the Common Stock Purchase Agreement (including the receipt by the Carpenter Funds of Federal Reserve Board approval of their purchase of the Common Shares) are satisfied by January 31, 2012, and (ii) the Last Reported Book Value at that time is $5.55 per share, then, we will sell a total of 2,792,792 Common Shares to the Carpenter Funds, which will further increase their voting power to approximately 28% of our outstanding voting shares.

If the sales of the Additional Series B Shares and the Common Shares are consummated, concurrently therewith, the Company will sell and issue stock purchase warrants (the “Warrants”), at a price of $0.125 per Warrant, which will entitle the Carpenter Funds and SBAV to purchase up to an additional 408,834 shares and 399,436 shares, respectively, of our common stock (the “Warrant Shares), at a purchase price of $6.38 per share, at any time within (4) years following the issuance of the Warrants, but only if the Company consummates, during that four year period, an acquisition (by merger or by the purchase of the outstanding shares or assets) of a bank or bank holding company with total assets of more than $250 million.

We believe that the sale of the Common Shares to the Carpenter Funds will be significantly less dilutive and, therefore, more advantageous to our existing shareholders than a sale by us of shares in a public offering, because the price that the Carpenter Funds will be paying for the Common Shares will be no less than the Last Reported Book Value per share of our common stock which, as of the date of this Proxy Statement, was $5.55. By comparison, we expect that the price at which we could sell shares in a public offering would not exceed (and more likely would be approximately 10%-15% below) the market price of our shares which, between October 1, 2011 and December 9, 2011, has ranged from a high of $3.41 to a low of $2.97 and which closed at $3.09 per share on December 9, 2011.

Even assuming, for example sake, that we could sell our shares at a price of $3.41 in a public offering, as the following table indicates that price would be approximately 38% lower than the $5.55 price which the Carpenter Funds will be paying for the Common Shares and, as a result, the number of shares that we would have to sell in such a public offering in order to raise $15,500,000 would be 38% greater than the number of shares that we will be selling to the Carpenter Funds to raise that same $15,500,000.

Definitive Proxy Statement

http://sec.gov/Archives/edgar/data/1109546/000119312511346908/d263914ddef14a.htm

Purposes of Special Shareholders Meeting:

(1) To approve, as required by NASDAQ Marketplace Rule 5635, the sale and issuance by the Company of up to 2,919,020 shares of common stock, for a total purchase price of $15.5 million, to Carpenter Community Bancfund, L.P. and Carpenter Community Bancfund - A, L.P., pursuant to a Common Stock Purchase Agreement dated August 26, 2011.

(2) To approve an amendment to our Articles of Incorporation to increase the authorized number of shares of our common stock to 85 million shares from 20 million shares;

(3) To approve an amendment to the Certificate of Determination of the Rights, Preferences and Privileges of the Company’s Series A Convertible 10% Cumulative Preferred Stock (the “Series A Shares”) to permit the payment of dividends on the Series A Shares in shares of common stock, as well as in cash; and

(4) To grant discretionary authority to the proxy holders to adjourn the Special Meeting, if necessary, to solicit additional proxies if the number of votes cast at the Special Meeting are not sufficient to approve any of the foregoing proposals.

PMBC Special Meeting of Shareholders scheduled for 1/26/12 (12/20/11)

Trading halted resumes. Up 27 cents to $4.10 now.Pacific Mercantile Bancorp completes $11.2 mln equity financing, satisfies capital requirement of DFI order, and enters into agreements to raise an additional $27.3 mln of equity (PMBC) 3.83 +0.01 : Co announced that, on August 26, 2011, it completed a private placement in which it sold 112K shares of a newly created Series B Convertible 8.4% Preferred Stock at a price of $100/share in cash, generating gross proceeds to the Company of $11.2 mln . Co also entered into definitive agreements to raise an additional $27.3 mln of capital consisting of the sale of $11.8 mln of additional Series B Shares to the same three investors also at a price of $100 in cash per share, the sale of $15.5 mln of common stock to the Carpenter Funds at a price equal to the book value of the co's common stock at the end of the quarter immediately preceding the close of the sale of the Common Shares, or $5.31/share, whichever is the greater. Additionally, the Company will be issuing warrants that, subject to certain conditions, will entitle the Clinton Group and the Carpenter Funds to purchase up to ~399K and ~408K shares of common stock, respectively, at a price of $6.38/share. (shares halted)

PMBC Completes $11.2 Million Equity Financing, Satisfies Capital Requirement of DFI Order, and Enters Into Agreements to Raise an Additional $27.3 Million of Equity (8/26/11)

COSTA MESA, Calif., Aug. 26, 2011 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) announced today that, on August 26, 2011, it completed a private placement in which it sold 112,000 shares of a newly created Series B Convertible 8.4% Preferred Stock (the "Series B Shares"), at a price of $100 per Share in cash, generating gross proceeds to the Company of $11.2 million. The Company will be contributing the net proceeds from the sale of the Series B Shares to its wholly-owned banking subsidiary, Pacific Mercantile Bank (the "Bank"), to increase the ratio of the Bank's adjusted tangible shareholders' equity to its tangible assets above 9%, thereby enabling the Bank to satisfy the capital requirement under a previously reported regulatory order issued in 2010 by the California Department of Financial Institutions (the "DFI Order").

The Series B Shares were sold to three institutional investors: SBAV LP, an affiliate of the Clinton Group (the "Clinton Group"), Carpenter Community BancFund LP and Carpenter Community BancFund-A LP (collectively, the "Carpenter Funds"). The Series B Shares are convertible, at the option of the investors, into shares of common stock of the Company at a conversion price of $5.32 per common share, which is above the Company's June 30, 2011 book value of $5.31 per share and represents a premium of approximately 39% over the closing price of the Company's common stock on August 25, 2011.

Concurrently with the sale of the Series B Shares, the Company entered into definitive agreements to raise an additional $27.3 million of capital consisting of: (i) the sale of $11.8 million of additional Series B Shares to the same three investors (the "Additional Series B Shares"), also at a price of $100 in cash per share; and (ii) the sale of $15.5 million of common stock (the "Common Shares") to the Carpenter Funds at a price equal to the book value of the Company's common stock at the end of the quarter immediately preceding the close of the sale of the Common Shares, or $5.31 per share, whichever is the greater. Additionally, the Company will be issuing warrants that, subject to certain conditions, will entitle the Clinton Group and the Carpenter Funds to purchase up to 399,436 and 408,834 shares of common stock, respectively, at a price of $6.38 per share. Upon the consummation of the sales of the Additional Series B Shares and the Common Shares, the Carpenter Funds will own approximately 29% of the Company's voting securities and will be the Company's largest shareholder. Consummation of the sales of the Additional Series B Shares and the Common Shares pursuant to these Agreements is subject to a number of conditions including, but not limited to, the receipt of required regulatory approvals. In addition, the sale of the Common Shares will require the prior approval of the Company's shareholders. Under the Agreements, all conditions must be satisfied and all approvals must be obtained for the investors to purchase either the Additional Series B Shares or the Common Shares.

Keefe, Bruyette & Woods acted as the sole placement agent and financial advisor to the Company with respect to this equity financing.

Raymond Dellerba, CEO and President of Pacific Mercantile Bancorp, stated, "I am delighted to announce that the Bank has now satisfied the capital requirement set forth in the DFI Order. Today's sale of the Series B Shares, accomplished under highly favorable terms to all of our shareholders, also strengthens the Bank's ability to execute on its 2011 business plan. Moreover, the sales of the Additional Series B Shares and the Common Shares, once completed, will further strengthen the Company and the Bank, and should, therefore, enhance our competitive positions in the Southern California marketplace."

Description of the Series B Shares. In addition to their right to convert their Series B Shares into common stock at a conversion price of $5.32 per share, the holders of the Series B Shares will be entitled to vote, on an as converted basis, with the common shareholders on all matters on which they are entitled to vote, including the election of directors. Dividends on the Series B Shares are payable in cash at a rate of 8.4% per annum if, as and when declared by the Board of Directors. If, however, due to legal or regulatory restrictions, the Company is unable to pay cash dividends on the Series B Shares on any semi-annual dividend payment date, then the Company will be required to pay the dividends in shares of a new series of preferred stock, designated as the Company's Series C 8.4% Preferred Stock (the "Series C Shares"), which will have the same dividend rights and preferences as the Series B Shares, except that the Series C Shares will not be convertible into common stock by the Carpenter Funds or the Clinton Group; and they will not be entitled to vote the Series C Shares on matters on which the common shareholders are entitled to vote.

In connection with the sale of the initial $11.2 million of Series B Shares, the Company entered into an agreement which: (i) entitles the Clinton Group to appoint a representative to the Boards of Directors of the Company and the Bank, and (ii) grants to the Carpenter Funds and the Clinton Group the right to purchase (subject to certain exceptions) a pro rata portion of any additional equity securities the Company sells during the next three years in order to enable the investors to maintain their percentage ownership interests in the Company. Upon the closing of the sales of the Additional Series B Shares and Common Shares, the Carpenter Funds will become entitled to appoint three directors to the Boards of both the Company and the Bank.

Continuing, Dellerba said, "I am excited that representatives of the Carpenter Funds and the Clinton Group will be joining our Board of Directors, and believe that their expertise and capable guidance will prove to be invaluable assets to the Company and the Bank and materially contribute to our future success."

In order to enable Dellerba to devote more of his time as the Company's CEO to the implementation of Company-wide strategic initiatives, following the completion of the sales of the Additional Series B Shares and Common Shares, a search will commence for a new Bank CEO, who will be responsible for the day-to-day operations of the Bank. The appointment of a new Bank CEO will be subject to the receipt of any then required regulatory approvals or clearances. At the time of that appointment, Dellerba will become the Vice Chairman of the Bank and in that capacity will continue to be involved in the oversight of its operations. He will also continue in his current role as CEO of the Company. The individual selected to become the new Bank CEO must also be reasonably acceptable to the Carpenter Funds.

The foregoing summaries of the agreements entered into by the Company with the investors and the rights, privileges and preferences of the Series B and Series C Shares are not intended to be complete and are qualified by reference to those agreements and the Certificates of Determination of the Rights, Preferences, Privileges and Restrictions of the Series B Shares and Series C Shares, copies of which are being filed by the Company with the Securities and Exchange Commission.

This News Release is neither an offer to sell nor the solicitation of an offer to buy any securities.

About Pacific Mercantile Bancorp

Headquartered in Costa Mesa, California, Pacific Mercantile Bancorp is the parent holding company of Pacific Mercantile Bank. The Bank is an FDIC insured, California state-chartered commercial bank and a member of the Federal Reserve System. The Bank provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services. The Bank operates a total of seven financial centers in Southern California and offers comprehensive banking service, over its Internet Bank, which can be accessed 24/7 worldwide at www.pmbank.com.

The Pacific Mercantile Bancorp logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7241

PMBC Reports Conversion of Its Outstanding Series A 10% Cumulative Preferred Stock Into Common Stock (7/05/11)

COSTA MESA, Calif., July 5, 2011 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) today reported that the holders of a total of 121,550 of the 126,550 outstanding shares the Company's Series A Convertible 10% Cumulative Preferred Stock (the "Series A Shares"), which the Company sold in a private placement completed in 2010, have converted their Series A Shares into a total of 1,588,658 shares of the Company's common stock at a conversion price of $7.65 per share of common stock. The terms of the Series A Shares had provided that these Series A Shares were to have been converted into common stock at the end of November 2011 and, then, only if the Company had first paid the dividends that had accrued on those Shares, in cash. In addition, the holders of those Series A Shares agreed to accept a total of 346,720 shares of common stock in lieu of the payment of a total of $1,716,274 of cash dividends that had accrued on the those Series A Shares to July 1, 2011, the effective date of the conversion.

Raymond E. Dellerba, the Company's President and CEO stated, "We are very appreciative of the support we have received from the Series A investors who have converted their Series A Shares into common stock and accepted shares of common stock in lieu of cash dividends."

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp is the parent holding company of Pacific Mercantile Bank, which opened for business March 1, 1999. The Bank, which is an FDIC insured, California state-chartered bank and a member of the Federal Reserve System, provides a wide range of commercial banking services to businesses, business professionals and individual clients through its combination of traditional banking financial centers and comprehensive, sophisticated electronic banking services.

The Bank operates a total of seven financial centers in Southern California, four of which are located in Orange County, two of which are located in Los Angeles County, one of which is located in San Diego County and the other of which is located in the Inland Empire in San Bernardino County. The four Orange County financial centers are located, respectively, in the cities of Newport Beach, Costa Mesa (which is visible from the 405 and 73 Freeways), La Habra and San Juan Capistrano (which is our South County financial center that is visible from the Interstate 5 Freeway). Our financial center in Los Angeles County is located in the city of Beverly Hills. Our San Diego financial center is located in La Jolla and our Inland Empire financial center is located in the city of Ontario (visible from the Interstate 10 Freeway). In addition to the Bank's physical locations, it offers comprehensive banking services over its Internet Bank, which is accessible 24/7 worldwide at www.pmbank.com.

Forward-Looking Statements

This news release contains statements regarding our expectations, beliefs, intentions and views about our future financial performance and our business and trends and expectations regarding the markets in which we operate. Those statements, which constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, can be identified by the use of words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Due to a number of risks and uncertainties to which our business and our markets are subject, our actual financial performance in the future and the future performance of our markets (which can affect both our financial performance and the market prices of our shares) may differ, possibly significantly, from our expectations as set forth in the forward-looking statements contained in this news release.

These risks and uncertainties include, but are not limited to, the following: The risk that the economic recovery will continue to be weak and sluggish, as a result of which we could incur additional credit losses that would adversely affect our results of operations and cause us to incur losses in 2011; uncertainties and risks with respect to the effects that our compliance with the Federal Reserve Bank regulatory agreement (the "FRB Agreement") and regulatory order of the California Department of Financial Institutions (the "DFI Order") will have on our business and results of operations, including the risk that sales of equity securities by us to raise additional capital could be dilutive of our existing shareholders and the risk of potential future supervisory action against us or the Bank if we are unable to meet the requirements of the FRB Agreement or the DFI Order; the risk that continued weakness in the economy also could lead to reductions in loan demand and, therefore, cause our interest income, net interest income and margins to decline in 2011; the possibility that the Federal Reserve Board will keep interest rates low in an effort to stimulate the economic recovery, which could reduce our net interest margins and net interest income and, therefore, adversely affect our operating results; the prospect that government regulation of banking and other financial services organizations will increase generally and more particularly as a result of the implementation of the recently enacted Dodd-Frank Consumer Protection and Financial Reform Act, which could increase our costs of doing business and restrict our ability to take advantage of business and growth opportunities; and the risk that our re-entry in the wholesale mortgage banking business may cause us to incur additional operating expenses and may not prove to be profitable or may even cause us to incur losses.

Additional information regarding these and other risks and uncertainties to which our business is subject is contained in our Annual Report on Form 10-K for our fiscal year ended December 31, 2011, which we filed with the Securities and Exchange Commission on April 1, 2011. Due to those risks and uncertainties, you are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of its date, or to make predictions about our future financial performance based solely on our historical financial performance. We also disclaim any obligation to update or revise any of the forward-looking statements as a result of new information, future events or otherwise, except as may be required by law or NASDAQ rules.

CONTACT:

Nancy Gray, SEVP & CFO
714-438-2500

Barbara Palermo, EVP & IR
714-438-2500

http://globenewswire.com/newsroom/news.html?d=225775

PMBC Reports First Quarter 2011 Earnings of $1.4 Million (4/19/11)

COSTA MESA, Calif., April 19, 2011 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) today reported its results of operations for the first quarter ended March 31, 2011.

Overview

During the quarter ended March 31, 2011, the Company generated net earnings of $1.7 million, of which $1.4 million, or $0.13 per diluted share, was allocable to the Company's common stockholders and $300,000 was allocable to accrued but unpaid dividends on the Company's Series A Preferred Stock. By comparison, in the first quarter of 2010, we reported net earnings of $126,000, and a loss allocable to common stockholders of $82,000, or $0.01 per common share, as $208,000 was allocated to accrued but unpaid dividends on the Series A Preferred Stock. This improvement was primarily attributable to a $1.2 million, or 100%, reduction in the provision for loan losses, a $159,000 or 2% increase in net interest income and an $83,000, or 1%, reduction in non-interest expense, as compared to the first quarter of 2010.

"I am pleased to be able to report our return to profitability in our first quarter of year 2011. I believe our positive results to be the product principally of four major factors; the continued economic recovery, as evidenced by four consecutive quarters of GDP growth with a forecast of 2.6% GDP growth for the quarter ended March 31, 2011; the planning, dedication and efforts of our senior management team; the unflagging support of our Board of Directors; and the hard work of the Company's entire team of employees," stated Raymond E. Dellerba, President and CEO. "The last two years have indeed been difficult ones for the financial sector, and we have had to make some difficult decisions during this period of time such as closing one office, and eliminating raises, bonuses and the match to our 401K plan. I want to take this opportunity to thank our employees for their dedication, unwavering faith in the Company and staying true to our goals, all of which were major contributors to the significant year-over-year improvement in our first quarter 2011 operating results. I have asked much of them and thank each and every one of them," continued President Dellerba.

"We also are making progress in our efforts toward raising the additional capital as called for by the state regulatory order," added Mr. Dellerba.

Results of Operation

Net Interest Income. Net interest income, which is a primary determinant of bank profitability, increased in the first quarter of 2011 by $159,000, or 2%, to $8.6 million, from $8.4 million in the first quarter of 2010, due to a reduction in interest expense of $2.3 million, or 45%, which more than offset a decrease of $2.2 million, or 16.1%, in interest income. The reduction in interest expense was primarily attributable to a Bank strategy implemented in the last six months of 2010 to de-leverage the balance sheet by reducing higher cost time deposits by $141 million, or 22%, to $505 million at March 31, 2011 from $646 million at March 31, 2010. As a result, as a percentage of total deposits, time deposits declined to 61% at March 31, 2011 from 65% at March 31, 2010. The decrease in interest income in the first quarter of 2011 was primarily due to a $102 million, or 12%, decrease in average gross loans outstanding during the first quarter of 2011, as compared to the same quarter of 2010.

"During the first quarter of 2011, our net interest margin improved by 64 basis points to 3.60%, up from 2.96% in the same quarter of 2010, as interest rates paid on time deposits, and other borrowings from the Federal Home Loan Bank declined by 66 basis points and 190 basis points, respectively, and the interest rates earned on loans decreased by 25 basis points," said Nancy A. Gray, Senior Executive Vice President and Chief Financial Officer.

Provision for Loan Losses. During the three months ended March 31, 2011, we made $265,000 in net recoveries of previously charged-off loans, which were added back to the allowance for loan losses. Due to those recoveries, a $16.9 million, or 37.7%, decrease in non-performing loans and a reduction in outstanding loans at March 31, 2011 as compared to March 31, 2010, we made a determination that the allowance for loan losses was adequate and, therefore, that it was not necessary to make any provisions for loan losses in this year's first quarter. By comparison, in the first quarter of 2010, we recorded net loan charge-offs of $682,000 and made provisions for loan losses totaling $1.2 million. Even though we did not make any provisions for loan losses during this year's first quarter, the allowance for loan losses at March 31, 2011 totaled nearly $18.4 million, or 2.56% of the loans then outstanding, as compared to $18.1 million, or 2.44% of the loans outstanding at December 31, 2010 and $20.9 million, or 2.57% of the loans outstanding at March 31, 2010.

Non-interest Income. Non-interest income increased by $13,000, or 1.0%, to nearly $1.4 million in the first quarter of 2011, from $1.3 million in the first quarter of 2010, primarily as a result of a $270,000, or 47.5%, increase in income generated by the mortgage banking division and a $107,000 gain on the sale of other real estate owned, offset by a $194,000 decrease in gains on sales of securities held for sale.

Non-Interest Expense. Non-interest expense declined by $83,000, or 1%, in the three months ended March 31, 2011, as compared to the same three months of 2010. That decline was, for the most part, due to a reduction of $360,000, or 8%, in salaries and employee benefits and a $107,000, or 8.3%, decrease in other non-interest expenses, which were attributable primarily to cost cutting measures that we initiated in February 2010 which included a work force reduction of the core bank, a freeze on salaries, elimination of a management bonus program for 2010 and the suspension of the Company's 401K plan matching contributions. Those decreases were substantially offset, however, by a $344,000, or 75.1%, increase in FDIC deposit insurance premiums and increases of $48,000, or 5.3%, and $40,000, or 12.0%, in professional fees and OREO expenses, respectively. Our efficiency ratio (non-interest expense as a percentage of total revenues) improved to 83.1% in the first quarter of 2011 from 85.5% in the same quarter of 2010.

http://globenewswire.com/newsroom/news.html?d=219196

Pacific Mercantile Bancorp Reports on Capital Augmentation Initiatives

GlobeNewswirePacific Mercantile Bancorp (Nasdaq:PMBC) today reported on the status of its efforts to increase the shareholders equity and improve the financial condition of its wholly-owned banking subsidiary, Pacific Mercantile Bank (the "Bank").

As previously reported, on August 31, 2010, the Bank consented to the issuance of a Final Order (the "Order") by the California Department of Financial Institutions (the "DFI"). Among other things, that Order required the Bank to reduce its non-performing assets and increase the ratio of the Bank's tangible equity-to-tangible assets to 9.0% by January 31, 2011 by raising additional capital, generating earnings or reducing the Bank's tangible assets, or a combination thereof.

Although we were not be able to meet those capital requirements by January 31, 2011, the DFI has notified us that it will not take action against the Bank at this time in order to enable us to continue our efforts to achieve the capital requirements of the Order. We understand that this decision is based on improvements made to date in the financial condition of the Bank that are attributable to reductions in non-performing assets and improvements in the Bank's capital ratio.

Improvement in the Bank's Financial Condition.

Decreases in Non-Performing Assets. Between September 30, 2010 and December 31, 2010, the Bank reduced the volume of its non-performing loans by approximately $22 million or 50%, and its total non-performing assets by approximately $9.8 million or 15%.

Improvement in Tangible Equity-to-Tangible Assets Ratio. Moreover, based on data contained in the Bank's Call Report filed with the FDIC, its ratio of tangible equity-to-tangible assets had increased to 7.4% at December 31, 2010 from 6.0% at August 31, 2010, the date of the DFI Order.

Well-Capitalized Banking Institution. Additionally, as of December 31, 2010 the Bank's capital ratios continued to exceed the federal regulatory capital ratios that are required to be met for a bank to be rated as a "well-capitalized" banking institution under the FDIC's prompt corrective action regulations:

At December 31, 2010 Capital Ratios to be Rated Bank's Actual as Well Pacific Mercantile Bank Capital Ratios(1) Capitalized Total capital to risk based assets 10.94% 10.0% Tier 1 capital ratio to risk asset 9.68% 6.0% Leverage ratio (Tier 1 capital to average asset) 7.41% 5.0% (1) Unaudited; taken from the Bank's December 31, 2010 Call Report as filed with the FDIC.

Substantial Liquidity. The Bank continues to have substantial liquidity, which totaled approximately $210 million, or 18% of the Bank's total assets, at December 31, 2010, including approximately $32 million of cash and cash equivalents and $165 million of securities available for sale.

Capital Augmentation Efforts

With the assistance of a nationally recognized investment banking firm, we have been exploring alternatives for meeting the capital requirements of the DFI Order. While we believe that we will be able to meet those capital requirements, we cannot provide assurances as to when or even if we will succeed in doing so. Moreover, the DFI is not precluded from taking enforcement action against the Bank if its financial condition were to worsen or if we are do not succeed in meeting the capital requirements of the DFI Order in the near term.

This is an encouraging report for the Bank. Non-performing, et al, improved by significant percentages!

PMBC Reports on Capital Augmentation Initiatives (2/01/11)

COSTA MESA, Calif., Feb. 1, 2011 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) today reported on the status of its efforts to increase the shareholders equity and improve the financial condition of its wholly-owned banking subsidiary, Pacific Mercantile Bank (the "Bank").

As previously reported, on August 31, 2010, the Bank consented to the issuance of a Final Order (the "Order") by the California Department of Financial Institutions (the "DFI"). Among other things, that Order required the Bank to reduce its non-performing assets and increase the ratio of the Bank's tangible equity-to-tangible assets to 9.0% by January 31, 2011 by raising additional capital, generating earnings or reducing the Bank's tangible assets, or a combination thereof.

Although we were not be able to meet those capital requirements by January 31, 2011, the DFI has notified us that it will not take action against the Bank at this time in order to enable us to continue our efforts to achieve the capital requirements of the Order. We understand that this decision is based on improvements made to date in the financial condition of the Bank that are attributable to reductions in non-performing assets and improvements in the Bank's capital ratio.

Improvement in the Bank's Financial Condition.

Decreases in Non-Performing Assets. Between September 30, 2010 and December 31, 2010, the Bank reduced the volume of its non-performing loans by approximately $22 million or 50%, and its total non-performing assets by approximately $9.8 million or 15%.

Improvement in Tangible Equity-to-Tangible Assets Ratio. Moreover, based on data contained in the Bank's Call Report filed with the FDIC, its ratio of tangible equity-to-tangible assets had increased to 7.4% at December 31, 2010 from 6.0% at August 31, 2010, the date of the DFI Order.

Well-Capitalized Banking Institution. Additionally, as of December 31, 2010 the Bank's capital ratios continued to exceed the federal regulatory capital ratios that are required to be met for a bank to be rated as a "well-capitalized" banking institution under the FDIC's prompt corrective action regulations:

At December 31, 2010
Pacific Mercantile Bank Bank's Actual
Capital Ratios(1) Capital Ratios
to be Rated
as Well Capitalized

Total capital to risk based assets 10.94% 10.0%
Tier 1 capital ratio to risk asset 9.68% 6.0%
Leverage ratio (Tier 1 capital to average asset) 7.41% 5.0%

(1) Unaudited; taken from the Bank's December 31, 2010 Call Report as filed with the FDIC.

Substantial Liquidity. The Bank continues to have substantial liquidity, which totaled approximately $210 million, or 18% of the Bank's total assets, at December 31, 2010, including approximately $32 million of cash and cash equivalents and $165 million of securities available for sale.

Capital Augmentation Efforts

With the assistance of a nationally recognized investment banking firm, we have been exploring alternatives for meeting the capital requirements of the DFI Order. While we believe that we will be able to meet those capital requirements, we cannot provide assurances as to when or even if we will succeed in doing so. Moreover, the DFI is not precluded from taking enforcement action against the Bank if its financial condition were to worsen or if we are do not succeed in meeting the capital requirements of the DFI Order in the near term.

http://www.globenewswire.com/newsroom/news.html?d=212417

#632 Pacific Mercantile Bank Costa Mesa, CA

Total Assets (000s) $1,146,319
NPA/ Assets 5.70
Equity/ Assets 7.11
Tier 1 Leverage Ratio 7.09
Tier 1 Risk-based Ratio 9.80
Total Risk-based Ratio 11.07
Texas Ratio 62.33
Effective Equity/ Assets 5.77
Effective Tier 1 Leverage Ratio 5.77

As stated in the previous post the banks Texas Ratio was 66% in Sept. 2010. The data above is from Nov. 24, 2010 which suggests an improvement. The lower the Texas Ratio number the better.

[an article from last Sept. 2010]

http://www.ocbj.com/news/2010/sep/07/pacific-mercantile-strikes-deal-regulators-shore-b/

The parent of Costa Mesa’s Pacific Mercantile Bank, the largest homegrown bank in the county by assets, has struck a consent order with federal and state regulators to reduce problem loans and assets while strengthening capital reserves.

The written agreement with the Federal Reserve Bank of San Francisco and order from the California Department of Financial Institutions went into affect Aug. 31. It wasn’t published by regulators until Tuesday.

The directive comes less than two weeks after Pacific Mercantile took a major writedown in the second quarter, pushing its losses to $12 million in the quarter.

The operational and compliance requirements announced Tuesday are intended to “address the adverse consequences that the economic recession has had on the quality of our loan portfolio and our operating results,” and “increase our capital to strengthen our ability to weather any further adverse conditions,” bank officials said in a released statement Tuesday morning.

In addition the bank may not pay or declare dividends, repurchase shares, make payments on trust preferred securities or incur or guarantee debt without regulatory approval.

Chief Executive Raymond Dellerba said in a press release the bank and its holding company have made progress on several of the consent order requirements and is committed to achieving all of them.

The bank remains “well capitalized” by regulator standards with a ratio of total capital-to-risk weighted assets at 10.6%, slightly above the 10% threshold that marks financial strength of banks.

Nevertheless, Pacific Mercantile must submit an approved capital plan for the bank and holding company to regulators and then implement it.

It also must raise additional capital, generate earnings or reduce tangible assets—or a combination of the three—by Jan. 31, 2011.

The bank raised $12.6 million in the second quarter by selling preferred shares.

Like other banks, PMBC is working through some loan issues, according to an analysis for the Business Journal by Anaheim-based Findley Reports Inc.

Pacific Mercantile, which controls $1.1 billion in assets, scored 66% on what’s known as a Texas ratio, a measurement of bank health that compares bad loans to how much shareholders would be owed if the bank failed.

The lower the score, the better, with a score higher than 100% indicating a bank could be teetering. Anything higher than 50% starts to get the attention of regulators and other bank watchers.

Pacific Mercantile has about $16 million in noncurrent loans, or those 90 days or more past due.

Through the first half off the year, the bank set aside $23.3 million for bad loans.

Fewer Bank Failures? Chapter 11 Sale Offers a New Way

Source: WSJ 1/6/2011
.
This has huge implications for the troubled banking situation's across the country!

============================================

By ERIC MORATH
The recent sale of a Washington state bank out of Chapter 11 created a new tool that potentially could rescue hundreds of similarly troubled institutions and save the Federal Deposit Insurance Corp. billions of dollars, according to a number of banking experts.

An investment vehicle backed by a Goldman Sachs Group Inc. fund and Oaktree Capital Management LP late last month purchased AmericanWest Bank, of Spokane, Wash., out of bankruptcy from its holding company, without the need for regulators to seize the bank and shore up its deposits.

The deal could open up options to save other banks teetering on the edge of failure, particularly those whose holding companies are saddled with so-called trust-preferred securities, and make it easier for hungry investors to acquire undercapitalized banks.

State banking regulators said the sale, which they believe to be the first transaction of its kind, could have a wide-ranging impact. "We are encouraged to find another way to skin the cat," said Brad Williamson, director of banks for the Washington State Department of Financial Institutions. The sale "allowed the bank to be recapitalized and addressed the TruPS conundrum."

Trust-preferred securities, commonly called TruPS, have weighed down many banks struggling to remain afloat. The securities were issued frequently in the 1990s as a way for bank holding companies to raise capital cheaply and without diluting their shareholders' equity.

However, as the financial crisis took hold, those securities often stood in the way of private investors willing to step in to rescue banks stung by bad loans and faltering real-estate markets. The reason so many bank holding companies, including AmericanWest Bancorp., couldn't persuade investors to come forward was because the ultimate holders of the trust-preferred securities are entitled to payment before any capital infusion can occur.

Trustees representing the debtholders often were unwilling or unable to negotiate a settlement that could allow a bank to be recapitalized without government intervention.

The result: Some banks that could have been rescued were seized and billions of dollars have been drained from the FDIC's insurance fund.

More than 150 banks failed last year, costing the FDIC more than $20 billion. AmericanWest's failure alone would have cost the FDIC $330 million, according to papers filed with the U.S. Bankruptcy Court in Spokane.

Instead, the bankruptcy sale allowed the 58-branch bank, which became insolvent in the first half of last year, to find its way to new owners without government assistance. SKBHC Holding LLC, the Goldman-Oaktree vehicle, paid $6.5 million for AmericanWest and pledged up to $200 million in additional capital.

SKBHC said it was attracted to AmericanWest because the investment vehicle feels the Pacific Northwest economy is poised to rebound and was impressed with the AmericanWest's operation. While AmericanWest was closely watched by regulators, it was never seized, in part because banking executives kept regulators closely informed of their plans to recapitalize.

"We made a strong business case to regulators that this could be a bit of a game changer," said Scott Kisting, SKBHC's chairman and chief executive.

Bankruptcy sales are commonplace in manufacturing and other industries, but they aren't in banking. Typically, bank holding companies file for bankruptcy after their bank is seized.

Mr. Kisting credited former AmericanWest Bank President Patrick Rusnak for developing the idea of using a bankruptcy sale to complete the transaction.

With a Chapter 11 sale, SKBHC acquired the bank free and clear of liens, including amounts owed to the trust-preferred securities holders.

AmericanWest Bancorporation raised capital years ago through the issuance of roughly $40 million in debt through trusts, which was then repackaged into several different collateralized debt obligations that held about $2 billion of securities. Those CDOs, in turn, issued bonds to investors.

That complicated investment structure meant it wasn't possible to trace individual holders of the holding company's debt—making it nearly impossible to negotiate with the debtholders.

"In cases like this, there is simply no one to negotiate with," said Van C. Durrer, an attorney for SKBHC. Durrer is a bankruptcy attorney with Skadden, Arps, Slate, Meagher & Flom.

"It would be very hard to do this transaction out of court and out of receivership," he said.

The sale drew the attention of others in the industry.

"AmericanWest very well could be an example to follow," said Frank Bonaventure, chairman of the financial-institutions group at law firm Ober Kaler.

This isn't to say that waves of holding companies will file for Chapter 11 protection in order to execute sales, he said, but even the threat of bankruptcy could be enough to bring trust-preferred securities trustees to the table for more serious negotiations.

Mr. Williamson, the state regulator, said he hopes that is the case.

"The AmericanWest recap shows that trust-preferred securities holders need to start being a little more flexible," he said.

Mr. Williamson said the outcome of the AmericanWest case was preferable to that of other holding companies weighed down by trust-preferred securities.

For example, when Troubled Asset Relief Program recipient Sterling Savings Bank, also based in Spokane, was recapitalized last year, TruPS holders received full payment while the U.S. Treasury took a significant loss, he said.

With private-equity firms, such as SKBHC, ready to recapitalize troubled banks, Chapter 11 proceedings could open the door to needed investment without government assistance, said banking analyst Brett Rabatin.

Many investors, including affiliates of billionaire Wilbur Ross, have purchased banks after the FDIC became a receiver. Mr. Rabatin, a senior analyst at Sterne, Agee & Leach Inc., said the AmericanWest deal could pave the way for a new model.

"The FDIC is realizing that they don't have to fail more banks," he said. "They can use private equity as a vehicle for institutions that need capital."

Write to Eric Morath at eric.morath@dowjones.com

http://online.wsj.com/article/SB10001424052748703675904576063852045473950.html

Thank you for the insight. I will do some DD and see what we see. GL

P.s.s....Another bank that fits the acquisition ticket even better than PMBC is FCAL. Both have potential.

P.s. If you follow PCBCD's story this may make more sense. I borrowed a post from that board from a friend. His insights have been uncanny ;)

----------------------------------------------------

Enterprising Investor Monday, December 27, 2010 10:04:09 PM
Re: nodice99 post# 561 Post # of 585

PCBC is not merely a bank.

It should be also viewed as an "investment vehicle". Ford, Webb & Co. are going to use PCBC to roll up community banks.

hey ekocnam...good to see you.

The skinny is PMBC by itself is not very impressive in it's current condition. So why follow it? PCBCD will need to grow as a bank and at a fairly agressive rate so I'm looking for possible acquisition candidates in the Californina/west coast area.

There are 19 troubled banks in California according to the FDIC. Only a few are large enough to possibly attract an aggressive "shopper" like PCBCD. PMBC isn't an ideal size ...it would be better if it were larger...but it does meet what some consider the minimum size.

So the answer is this is purely speculation on my part and opening this board was a way to track & record info. I haven't bought in just yet but want to study this further.

PMBC operating under supervisory actions.

On 8/31/10, the members of the respective Boards of Directors of PMBC and its the wholly-owned banking subsidiary, Pacific Mercantile Bank, entered into a Written Agreement with the Federal Reserve Bank of San Francisco. On the same date, the Bank consented to the issuance of a Final Order by the California Department of Financial Institutions. The principal purposes of the Agreement and Order, which constitute formal supervisory actions by the FRB and the DFI, are to require us to adopt and implement formal plans and take certain actions, as well as to continue to implement other measures that we previously adopted, to address the adverse consequences that the economic recession has had on the performance of our loan portfolio and our operating results, to improve our operating results, and to increase our capital to strengthen our ability to weather any further adverse conditions that might arise if the hoped-for improvement in the economy does not materialize.

The Agreement and Order contain substantially similar provisions. They require the Boards of Directors of the PMBC and the Bank to prepare and submit written plans to the FRB and the DFI that address the following matters: (i) strengthening board oversight of the management operations of the Bank; (ii) strengthening credit risk management practices; (iii) improving credit administration policies and procedures; (iv) improving the Bank’s position with respect to problem assets; (v) maintaining adequate reserves for loan and lease losses in accordance with applicable supervisory guidelines; (vi) improving the capital position of the Bank and, in the case of the FRB Agreement, the capital position of the Company; (vii) improving the Bank’s earnings through the formulation, adoption and implementation of a strategic plan and a budget for fiscal 2011; and (viii) submitting a satisfactory funding contingency plan for the Bank that identifies available sources of liquidity and includes a plan for dealing with adverse economic and market conditions. The Bank is also prohibited from paying dividends to PMBC without the prior approval of the DFI, and PMBC may not declare or pay cash dividends, repurchase any of its shares, make payments on its trust preferred securities or incur or guarantee any debt, without the prior approval of the FRB.

Under the Agreement, the PMBC also must submit a capital plan to the FRB that will meet with its approval and then implement that plan. Under the Order, the Bank is required to achieve a ratio of adjusted tangible shareholders’ equity to its tangible assets to 9.0% by 1/31/11, by raising additional capital, generating earnings or reducing the Bank’s tangible assets (subject to a 15% limitation on such a reduction) or a combination thereof and, upon achieving that ratio, to thereafter maintain that ratio during the Term of the Order.

PMBC and the Bank already have made progress with respect to several of these requirements, and is exploring alternatives for raising additional capital by 1/31/11, and both the Board of Directors and management are committed to achieving all of the requirements on a timely basis.

http://sec.gov/Archives/edgar/data/1109546/000119312510256517/d10q.htm

Chevy my friend! Is this the latest and greatest treasure? Looking to start the new year with some bank stocks. What's the skinny?

My interest in this is as a possible M&A target. 1/4/2011

Why?

1) It ranks 632 of the top 675 troubled banks in the US as of 11/24/2010 with a below Effective Tier 1 Leverage Ratio that the FDIC likes to see (8 or above). 2) It's located in Southern California. Healthy regional banks will want to acquire semi-troubled banks like this. 3) The FDIC may assist in helping someone else acquire it. Again this is only my opinion.

Name Pacific Mercantile Bank (PMBC)
City Costa Mesa
State CA

Total Assets (000s) $1,146,319
NPA/ Assets 5.70
Equity/ Assets 7.11
Tier 1 Leverage Ratio 7.09
Tier 1 Risk-based Ratio 9.80
Total Risk-based Ratio 11.07
Texas Ratio 62.33
Effective Equity/ Assets 5.77
Effective Tier 1 Leverage Ratio 5.77

CEO Insider purchase...a good sign!

http://ih.advfn.com/p.php?pid=nmona&article=45870922