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Pacific Mercantile Bancorp Announces Agreement to Sell $15 Million of Common Shares to Carpenter Funds

Tuesday, 5 Mar 2013 04:30pm EST 

Pacific Mercantile Bancorp announced 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 (Carpenter Funds). The price of $6.75 per share of common stock represents a 13% over the $5.95 closing price of 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 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 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. If the sale of the shares is consummated, the Carpenter Funds will own, beneficially, approximately 34% of Company's outstanding voting shares, as compared to 28%, which they currently own. 

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