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.