Merger Agreement:

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Merger Agreement:

Note 13. Merger Agreement:

On July 8, 2013, PMC Commercial entered into a merger agreement with CIM Urban REIT, LLC (“CIM Urban REIT”) and subsidiaries of the respective parties. CIM Urban REIT is a private commercial REIT with Class A commercial real estate assets located in premier urban markets throughout the United States. The merger and other transactions were unanimously approved by both PMC Commercial’s Board of Trust Managers and CIM Urban REIT’s Director.

Pursuant to the merger agreement, CIM Urban REIT and its affiliates will receive approximately 22.0 million newly-issued PMC Commercial common shares of beneficial interest and approximately 65.0 million newly-issued PMC Commercial preferred shares. Each preferred share will be convertible into seven common shares of beneficial interest, resulting in the issuance of approximately 477.2 million common shares of beneficial interest in the merger and other transactions. This will represent approximately 97.8% of PMC Commercial’s outstanding shares.

All PMC Commercial common shares of beneficial interest that are outstanding immediately prior to the transactions will remain outstanding following the transactions. In addition, PMC Commercial shareholders of record at the close of the business day prior to the closing of the transactions will receive a special cash dividend of $5.50 per common share of beneficial interest, to be paid shortly after closing.

The “go-shop” period provided pursuant to the terms of the merger agreement, which has expired, did not result in any alternative acquisition proposals. Following the expiration of the go-shop period, PMC Commercial became subject to customary “no-shop” covenants which prohibit it from soliciting alternative acquisition proposals from third parties, but permit it to respond to any unsolicited alternative acquisition proposal that meets certain conditions.

Based on an arrangement with CIM Urban REIT, legal and due diligence expenses related to the potential merger incurred during a certain period of time were reimbursable. As of June 30, 2013 we had incurred $460,000 of costs and had been reimbursed $290,000 by CIM Urban REIT. The remainder of these costs were reimbursed in July 2013.

Under certain circumstances, if the potential merger does not occur, we may be required to pay CIM Urban REIT a termination fee equal to $4.0 million plus reimburse CIM Urban REIT for certain of its out-of-pocket expenses up to $700,000 (excludes the expenses reimbursed by CIM Urban REIT).

The merger and other transactions are subject to certain customary closing conditions, including the approval of PMC Commercial’s shareholders and other third parties and consent of the SBA. The transactions are expected to be completed during the fourth quarter of 2013.