Pacific Mercantile in Costa Mesa, Calif., reported a fourth-quarter loss as expenses rose and a tax benefit dwindled.
The $1.1 billion-asset company lost $882,000, or 7 cents a share, in the quarter, compared to a $7.8 million profit a year earlier. The main cause of the swing was a 76% decline in the tax benefit the company recorded, to $1.7 million.
Pacific Mercantile's net interest income was flat from a year earlier, at $7.8 million. The company did not record a loan-loss provision after setting aside $833,000 a year earlier. The net interest margin compressed by 12 basis points from a year earlier, to 3.03%.
Noninterest income rose 21% from a year earlier, to $3.44 million, because of higher mortgage-banking income. Noninterest expenses rose 32% from a year earlier, to $13.8 million, because of higher salaries and benefits, fees and expenses tied to mortgage loans.
On Tuesday, Pacific Mercantile said that it was raising $14.8 million from Carpenter Funds, a private equity firm, to create an asset-management unit to handle bad loans. Carpenter Funds had previously invested in the company and would be raising its ownership stake to 34%.