Pacific Mercantile Bancorp Completes Another $5 Million Trust Preferred Offering Financing.

Business Editors

COSTA MESA, Calif.--(BUSINESS WIRE)--Sept. 9, 2002

Pacific Mercantile Bancorp (Nasdaq:PMBC) today announced that it has completed a sale of $5 million of trust preferred securities to an institutional investor.

This sale follows the previously announced sale, completed in June 2002, of an initial issuance of $5 million of trust preferred securities to another institutional investor. The proceeds from the sale of these securities will be used to fund the company's continuing growth.

The trust preferred securities mature in 30 years, are redeemable at the company's option beginning after five years, and require semi-annual distribution, initially at a rate of 5.38875%, which will reset semi-annually at the six-month LIBOR rate plus 3.625%. The trust preferred securities are subordinated to other borrowings that may be obtained by the company in the future and qualify as capital for regulatory purposes.

Raymond E. Dellerba, president and CEO, stated: "The proceeds from this sale will be used to fund the continued growth of Pacific Mercantile Bank. In May and June the bank opened a new Financial Center in La Jolla and a Loan Production Office in north Orange County. Subject to regulatory approval, that office, with a site already identified, is expected to be expanded into a full Financial Center, with an anticipated opening this autumn.

"PMB Securities Corp., the second subsidiary under Pacific Mercantile Bancorp, formed to provide retail securities brokerage services to our customers, both in person and via the Internet, is expected to move into its new facility in Newport Beach this autumn. Architectural drawings are already in place to expand our San Clemente Financial Center to accommodate brokerage and retail mortgage services."

Pacific Mercantile Bank, the wholly owned subsidiary of Pacific Mercantile Bancorp, provides a wide range of commercial banking services to business and individual customers through its unique "click-to-mortar" combination of traditional brick-and-mortar Financial Centers and comprehensive, sophisticated electronic banking services via the Internet at www.pmbank.com.

The state-chartered bank, which is FDIC insured and a member of the Federal Reserve System, operates three Orange County Financial Centers located in Newport Beach, Costa Mesa and San Clemente, Calif., a Los Angeles County Financial Center in Beverly Hills, Calif. and a San Diego County Financial Center located in the La Jolla, Calif. golden triangle, as well as an Internet bank.

The bank's only Loan Production Office, located in north Orange County, is slated for expansion into a full Financial Center in the near future. In addition to the company's Financial Centers, it offers comprehensive banking services over the Internet worldwide, which has attracted customers throughout California and in other western states. The bank also provides electronic clearing and processing via Automated Clearing House (ACH) to its customers.