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Pacific Mercantile Bancorp Reports Improved Results For The Third Quarter Of 2010

COSTA MESA, Calif., Oct. 27, 2010 (GLOBE NEWSWIRE) -- Pacific Mercantile Bancorp (Nasdaq:PMBC) today reported its results of operations for the third quarter and nine months ended September 30, 2010.

Overview

During the three months ended September 30, 2010, Pacific Mercantile Bancorp ("Company") achieved the following improvements in our results of operations:

  • Net interest income increased by $2.5 million, or 47%, to $7.9 million from $5.4 million in the three months ended September 30, 2009.
  • We were able to reduce the provision we made for loan losses by $2.1 million, or 56%, to $1.7 million from nearly $3.8 million for the same three months of 2009, due primarily to a decline in net loan charge-offs.
  • Accordingly, our net interest income, after the provision for loan losses, increased by $4.6 million, or 291%, to $6.2 million from $1.6 million in the same three months of 2009.
  • Our non-interest income increased by $817,000, or 55%, to $2.3 million from $1.5 million in the three months ended September 30, 2009, due primarily to an increase in our mortgage banking revenues and, to a lesser extent, an increase in gains on sales of securities.
  • We reduced our non-interest expense by $864,000, or 9.1%, to $8.6 million from $9.5 million in the same three months of 2009, due primarily to decreases in compensation expense and in other real estate owned ("OREO") expense, which more than offset a $573,000, or 83.9% increase in FDIC deposit insurance premiums.
  • Our efficiency ratio improved to 84.7%, from 139% in the same three months of 2009, due to the combination of the increases in our revenues and the reduction in our non-interest expense.
  • Due to the above described improvements, we reduced our net loss by $3.8 million, or 97%, to $125,000, or $0.04 per diluted common share, from $3.9 million, or $0.37 per diluted common share, in the same three months of 2009.
  • Additionally, Pacific Mercantile Bank, our wholly owned banking subsidiary, generated a net profit of $123,000 in the third quarter ended September 30, 2010, as the net loss for the quarter was attributable to the operations of the Company on a stand-alone basis.

Similarly, our operating results for the nine months ended September 30, 2010 showed improvement, due primarily to (i) a $9.4 million, or 62%, increase in net interest income, (ii) a $6.3 million, or 46%, reduction in the provision we made for loan losses, and (iii) a $752,000, or 16%, increase in non-interest income. Those improvements more than offset a $1.3 million, or 5.5%, increase in non-interest expense that was primarily attributable to an increase in FDIC deposit insurance premiums and an increase in professional fees incurred primarily in connection with the collection and foreclosures of non-performing loans. As a result, we were able to reduce the loss before income taxes by $15.2 million, or 84%, to $2.9 million in the nine months ended September 30, 2010 as compared to a pre-tax loss of $18.1 million in the same nine months of 2009. 

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