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Shah Capital Boosts Exposure To China; Clinton Group Keeps Trimming Stake In This Bank

As stated by a freshly-amended 13D filing, George Hall’s Clinton Group ceased to the beneficial owner of more than 5% of common stock in Pacific Mercantile Bancorp (NASDAQ:PMBC). Clinton Group has been gradually cutting its stake in the bank holding company, as revealed by several public filings submitted with the SEC. George Hall’s fund holds a stake of 1.10 million shares of the company, which represents 4.8% of its outstanding common stock. This denotes a decrease of 978,657 shares from the position disclosed in the latest round of 13Fs. According to the same 13D filing, Daniel A. Strauss, an employee of Clinton, resigned from Pacific Mercantile Bancorp (NASDAQ:PMBC)’s Board of Directors on December 14. The company generated total interest income of $28.9 million for the nine months that ended September 30, increasing by 3.0% year-on-year. This increase was mainly achieved due to higher average loan balances, as the average yield on interest-earning assets decreased to 3.77% from 3.79% year-on-year. The bank’s source of revenue relies on its net interest income, which represents the differential between the interest earned on loans (including other interest-earning assets) and interest expenses (paid on customers’ deposits, borrowings, and other interest-bearing liabilities). Hence, the rising interest rate environment pursued by the Federal Reserve will most likely drive up Pacific Mercantile Bank’s interest income in the medium- and long-term. Meanwhile, the shares of the bank are trading in negative territory for the year (less than 1%).

The hedge fund sentiment towards the stock did not change during the third quarter, as the number of smart money investors with positions in the bank remained flat during the three-month period at three. These top money managers accumulated 11.80% of the company’s outstanding common stock, while the value of their investments in the company grew to $15.67 million from $10.60 million quarter-on-quarter. Jim Simons’ Renaissance Technologies holds 235,000 shares in Pacific Mercantile Bancorp (NASDAQ:PMBC) as of September 30.

George Hall
George Hall
Clinton Group

Disclosure: None

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