Heritage Commerce Corp (Nasdaq:HTBK), the holding
company (the "Company") for Heritage Bank of Commerce (the "Bank"
or "HBC"), today reported solid operating performance for the
quarter ended and the year ended December 31, 2014. Net income
was $3.6 million, or $0.11 per average diluted common share, for
the fourth quarter of 2014, compared to net income of $3.4 million
for the fourth quarter of 2013, and $3.4 million for the third
quarter of 2014. For the year ended December 31, 2014, net income
increased 16% to $13.4 million, or $0.42 per average diluted common
share, from $11.5 million, or $0.36 per average diluted common
share, for the year ended December 31, 2013. All results are
unaudited.
"We generated solid earnings in 2014 driven by a strong momentum
in loan and deposit production, and continued credit quality
improvement. Our acquisition of BVF/CSNK Acquisition Corp., a
Delaware corporation ("Bay View Funding" or "BVF") in the fourth
quarter of 2014, a nationally recognized leader in the factoring
industry, opens a new lending niche for us," said Walter Kaczmarek,
President and Chief Executive Officer. "While maintaining our
strong asset quality trends our loan portfolio has continued to
grow, which has been the result of hard work and dedication by
our employees."
2014 Highlights (as of, or for the period ended
December 31, 2014, except as noted):
- Diluted earnings per share increased to $0.11 for the fourth
quarter of 2014, compared to $0.10 per diluted share for the fourth
quarter of 2013 and $0.11 per diluted share for the third quarter
of 2014. Diluted earnings per share were $0.42 for the year ended
December 31, 2014, compared to $0.36 per diluted share for the year
ended December 31, 2013. Net income increased 16% for the year
ended December 31, 2014, compared to the year ended December 31,
2013.
- The one-time pre-tax acquisition costs incurred by HBC for the
BVF acquisition totaled $609,000 and $895,000 for the fourth
quarter of 2014 and the year ended December 31, 2014,
respectively.
- Driven primarily by loan growth, including two months of
revenue from BVF, and increases in core deposits, net interest
income increased 23% to $16.1 million for the fourth quarter of
2014, compared to $13.0 million for the fourth quarter of 2013, and
increased 15% from $14.0 million for the third quarter of 2014. Net
interest income increased 14% to $57.1 million for the year ended
December 31, 2014, compared to $50.2 million for the year ended
December 31, 2013.
- The fully tax equivalent ("FTE") net interest margin improved
by 53 basis points to 4.33% for the fourth quarter of 2014, from
3.80% for the fourth quarter of 2013, and increased 40 basis points
from 3.93% for the third quarter of 2014. For the year ended
December 31, 2014, the net interest margin increased 26 basis
points to 4.10%, from 3.84% for the year ended December 31, 2013,
reflecting loan growth, two months of revenue from BVF, higher
yields on securities, and a lower cost of funds.
- Loans (excluding loans-held-for-sale) increased 19% to $1.09
billion at December 31, 2014, compared to $914.9 million at
December 31, 2013, and increased 6% from $1.03 billion at September
30, 2014. Excluding the $40.0 million of factored receivables at
BVF, loans increased 15% at December 31, 2014 from December 31,
2013, and increased 2% from September 30, 2014.
- Nonperforming assets ("NPAs") declined to $6.6 million, or
0.41% of total assets, at December 31, 2014, compared to $12.4
million, or 0.83% of total assets, at December 31, 2013, and $7.7
million, or 0.50% of total assets, at September 30, 2014.
- Classified assets, net of Small Business Administration ("SBA")
guarantees, decreased 32% to $16.0 million at December 31, 2014,
from $23.6 million at December 31, 2013, and decreased 10% from
$17.7 million at September 30, 2014.
- Net charge-offs totaled $56,000 for the fourth quarter of 2014,
compared to net charge-offs of $166,000 for the fourth quarter of
2013, and net charge-offs of $27,000 for the third quarter of
2014.
- There was a $106,000 credit to the provision for loan losses
for the fourth quarter of 2014, compared to a $12,000 credit to the
provision for loan losses for the fourth quarter of 2013, and a
$24,000 credit to the provision for loan losses for the third
quarter of 2014.
- The allowance for loan losses ("ALLL") decreased to 1.69% of
total loans at December 31, 2014, compared to 2.09% at December 31,
2013, and 1.80% at September 30, 2014. The ALLL to total
nonperforming loans increased to 313.90% at December 31, 2014,
compared to 162.16% at December 31, 2013, and 257.16% at September
30, 2014.
- Total deposits were $1.39 billion at December 31, 2014,
compared to $1.29 billion at December 31, 2013, and $1.34 billion
at September 30, 2014. Deposits (excluding all time deposits and
CDARS deposits) increased $154.5 million, or 16%, to $1.13 billion
at December 31, 2014, from $973.6 million at December 31, 2013, and
increased $46.6 million, or 4%, from $1.08 billion at September 30,
2014.
- Capital ratios exceeded regulatory requirements for a
well-capitalized financial institution at both the holding company
and bank levels at December 31, 2014:
Capital Ratios |
Heritage Commerce
Corp |
Heritage Bank of
Commerce |
Well-Capitalized Financial
Institution Regulatory Guidelines |
Total Risk-Based |
13.9% |
13.1% |
10.0% |
Tier 1 Risk-Based |
12.6% |
11.9% |
6.0% |
Leverage |
10.6% |
9.9% |
5.0% |
Operating Results
Net interest income increased 23% to $16.1 million for the
fourth quarter of 2014, compared to $13.0 million for the fourth
quarter of 2013, and increased 15% from $14.0 million for the third
quarter of 2014. Net interest income increased 14% to $57.1 million
for the year ended December 31, 2014, compared to $50.2 million for
the year ended December 31, 2013, as a result of growth in the loan
portfolio, two months of revenue from BVF, and increases in core
deposits.
The net interest margin (FTE) expanded 53 basis points to 4.33%
for the fourth quarter of 2014, compared to 3.80% for the fourth
quarter of 2013, and increased 40 basis points from 3.93% for the
third quarter of 2014. For the year ended December 31, 2014, the
net interest margin increased 26 basis points to 4.10%, from 3.84%
for the year ended December 31, 2013, reflecting loan growth, two
months of revenue from BVF, higher yields on securities, and a
lower cost of funds.
Solid credit quality metrics led to a $106,000 credit to the
provision for loan losses for the fourth quarter of 2014, compared
to a $12,000 credit to the provision for loan losses for the fourth
quarter of 2013, and a $24,000 credit to the provision for loan
losses for the third quarter of 2014. There was a $338,000 credit
to the provision for loan losses for the year ended December 31,
2014, compared to an $816,000 credit to the provision for loan
losses for the year ended December 31, 2013.
Noninterest income was $1.8 million for the fourth quarter of
2014, compared to $1.9 million for the fourth quarter of 2013, and
$1.9 million for the third quarter of 2014. For the year ended
December 31, 2014, noninterest income was $7.7 million, compared to
$7.2 million for the year ended December 31, 2013. The increase was
primarily due to a higher gain on sales of SBA loans.
Noninterest expense for the fourth quarter of 2014 was $12.4
million, an increase of 26% from $9.9 million for the fourth
quarter of 2013, and increased 18% from $10.5 million for the third
quarter of 2014. Noninterest expense for the year ended December
31, 2014 increased 9% to $44.2 million, compared to $40.5 million
for the year ended December 31, 2013. The increase in noninterest
expense for the fourth quarter of 2014 and for year ended December
31, 2014 was primarily due to two months of operating expenses
incurred by BVF and one-time costs related to the BVF acquisition.
Full-time equivalent employees were 242 (including 36 FTE at BVF)
at December 31, 2014, compared to 193 at December 31, 2013, and 200
at September 30, 2014.
Primarily due to the one-time acquisition costs from the BVF
acquisition, the efficiency ratio for the fourth quarter of 2014
increased to 69.34%, compared to 65.91% for the fourth quarter of
2013, and 66.15% for the third quarter of 2014. The efficiency
ratio for the year ended December 31, 2014 was 68.19%, compared to
70.51% for the year ended December 31, 2013. Excluding the one-time
pre-tax acquisition costs incurred by HBC for the BVF acquisition
of $609,000 for the fourth quarter of 2014 and $895,000 the year
ended December 31, 2014, the efficiency ratios were 65.93% and
66.81%, respectively. Excluding the one-time pre-tax acquisition
costs of $234,000 for the third quarter of 2014, the efficiency
ratio was 64.67% for the third quarter of 2014.
Income tax expense for the fourth quarter of 2014 was $2.0
million, compared to $1.8 million for the fourth quarter of 2013,
and $2.0 million for the third quarter of 2014. The effective tax
rate for the fourth quarter of 2014 was 35.6%, compared to 34.3%
for the fourth quarter of 2013 and 36.5% for the third quarter of
2014. Income tax expense for the year ended December 31, 2014 was
$7.5 million, compared to $6.2 million for the year ended December
31, 2013. The effective tax rate for the year ended December 31,
2014 was 36.0%, compared to 35.0% for the year ended December 31,
2013. The difference in the effective tax rate for the periods
reported, compared to the combined Federal and state statutory tax
rate of 42%, is primarily the result of the Company's investment in
life insurance policies whose earnings are not subject to taxes,
tax credits related to investments in low income housing limited
partnerships, the adoption of the proportional amortization method
of accounting for its low income housing investments in the third
quarter of 2014, and tax-exempt interest income earned on municipal
bonds. The Company had California Enterprise Zone tax savings of
approximately $162,000 for 2013. The California state legislature
eliminated the Enterprise Zone tax deductions beginning January 1,
2014.
The Company adopted the proportional amortization method of
accounting for its low income housing investments in the third
quarter of 2014. The Company quantified the impact of adopting the
proportional amortization method compared to the equity method to
its current year and prior period financial statements. The Company
determined that the adoption of the proportional amortization
method did not have a material impact to its financial statements.
The low income housing investment losses, net of the tax benefits
received, are included in income tax expense for all periods
reflected on the consolidated income statements.
Balance Sheet Review, Capital Management and Credit
Quality
Total assets were $1.62 billion at December 31, 2014, compared
to $1.49 billion at December 31, 2013, and $1.56 billion at
September 30, 2014.
The investment securities available-for-sale portfolio totaled
$206.3 million at December 31, 2014, compared to $280.1 million at
December 31, 2013, and $191.7 million at September 30, 2014. At
December 31, 2014, the securities available-for-sale portfolio was
comprised of $154.1 million agency mortgage-backed securities (all
issued by U.S. Government sponsored entities), $36.9 million of
corporate bonds, and $15.3 million of single entity issue trust
preferred securities. The pre-tax unrealized gain on securities
available-for-sale at December 31, 2014 was $4.8 million, compared
to a pre-tax unrealized loss on securities available-for-sale of
($2.4) million at December 31, 2013, and a pre-tax unrealized gain
on securities available-for-sale of $3.3 million at September 30,
2014. During the fourth quarter of 2014, the Company purchased
$18.7 million of agency mortgage-backed securities
available-for-sale with an aggregate book yield of 1.94% and
duration of 4.18 years.
At December 31, 2014, investment securities held-to-maturity
totaled $95.4 million, compared to $95.9 million at December 31,
2013, and $94.8 million at September 30, 2014. At December 31,
2014, the securities held-to-maturity portfolio, at amortized cost,
was comprised of $79.9 million tax-exempt municipal bonds and $15.5
million agency mortgage-backed securities. During the fourth
quarter of 2014, the Company purchased $2.2 million of agency
mortgage-backed securities held-to-maturity with an aggregate book
yield of 2.57% and duration of 6.14 years.
Loans, excluding loans held-for-sale, increased 19% to $1.09
billion at December 31, 2014, from $914.9 million at December 31,
2013, and increased 6% from $1.03 billion at September 30, 2014.
Excluding the $40.0 million of factored receivables at BVF, loans
increased 15% at December 31, 2014 from December 31, 2013, and
increased 2% from September 30, 2014. The loan portfolio remains
well-diversified with commercial and industrial ("C&I") loans
accounting for 43% of the loan portfolio at December 31, 2014,
which included the $40.0 million of factored receivables at BVF.
Commercial and residential real estate loans accounted for 44% of
the total loan portfolio, of which 46% were owner-occupied by
businesses. Consumer and home equity loans accounted for 7% of
total loans, and land and construction loans accounted for the
remaining 6% of total loans at December 31, 2014. C&I line
usage was 42% at December 31, 2014, compared to 41% at December 31,
2013, and 43% at September 30, 2014.
The yield on the loan portfolio was 5.39% for the fourth quarter
of 2014, compared to 4.79% for the fourth quarter of 2013, and
4.77% for the third quarter of 2014. For the year ended December
31, 2014, the yield on the loan portfolio was 4.96%, compared to
4.92% for the year ended December 31, 2013. The increase in the
yield on the loan portfolio for the fourth quarter and year ended
December 31, 2014, compared to the same periods in 2013, primarily
reflects the higher yielding BVF factoring portfolio.
NPAs decreased to $6.6 million, or 0.41% of total assets, at
December 31, 2014, compared to $12.4 million, or 0.83% of total
assets, at December 31, 2013, and $7.7 million, or 0.50% of total
assets, at September 30, 2014. The following is a breakout of NPAs
at December 31, 2014:
|
|
|
NONPERFORMING
ASSETS |
(in $000's,
unaudited) |
Balance |
% of Total |
SBA loans |
$ 2,335 |
36% |
Commercial real estate loans |
1,651 |
25% |
Land and construction loans |
1,320 |
20% |
Home equity and consumer loans |
350 |
5% |
Commercial and industrial loans |
199 |
3% |
Foreclosed assets |
696 |
11% |
Total nonperforming assets |
$ 6,551 |
100% |
|
|
|
At December 31, 2014, the $6.6 million of NPAs included $79,000
of loans guaranteed by the SBA. Foreclosed assets were $696,000 at
December 31, 2014, compared to $575,000 at December 31, 2013, and
$532,000 at September 30, 2014.
Classified assets (net of SBA guarantees) were $16.0 million at
December 31, 2014, compared to $23.6 million at December 31, 2013,
and $17.7 million at September 30, 2014.
The following table summarizes the allowance for loan
losses:
|
|
|
|
|
|
|
For the Quarter
Ended |
For the Year
Ended |
ALLOWANCE FOR LOAN
LOSSES |
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
(in $000's,
unaudited) |
2014 |
2014 |
2013 |
2014 |
2013 |
Balance at beginning of period |
$ 18,541 |
$ 18,592 |
$ 19,342 |
$ 19,164 |
$ 19,027 |
Provision (credit) for loan losses during the
period |
(106) |
(24) |
(12) |
(338) |
(816) |
Net (charge-offs) recoveries during the
period |
(56) |
(27) |
(166) |
(447) |
953 |
Balance at end of period |
$ 18,379 |
$ 18,541 |
$ 19,164 |
$ 18,379 |
$ 19,164 |
|
|
|
|
|
|
Total loans |
$ 1,088,643 |
$ 1,029,596 |
$ 914,913 |
$ 1,088,643 |
$ 914,913 |
Total nonperforming loans |
$ 5,855 |
$ 7,210 |
$ 11,818 |
$ 5,855 |
$ 11,818 |
|
|
|
|
|
|
Allowance for loan losses to total loans |
1.69% |
1.80% |
2.09% |
1.69% |
2.09% |
Allowance for loan losses to total
nonperforming loans |
313.90% |
257.16% |
162.16% |
313.90% |
162.16% |
|
|
|
|
|
|
The ALLL decreased to 1.69% of total loans at December 31, 2014,
compared to 2.09% at December 31, 2013, and 1.80% at September 30,
2014. The decrease in the ALLL to total loans at December 31, 2014
was primarily due to increasing loan balances and continuing
improvement in all credit metrics. The ALLL to total nonperforming
loans increased to 313.90% at December 31, 2014, compared to
162.16% at December 31, 2013, and 257.16% at September 30,
2014.
Total deposits increased $102.2 million to $1.39 billion at
December 31, 2014, compared to $1.29 billion at December 31, 2013,
and increased $46.6 million from $1.34 billion at September 30,
2014. Noninterest-bearing demand deposits increased $86.6 million
at December 31, 2014 from December 31, 2013, and increased $28.7
million from September 30, 2014. Interest-bearing demand deposits
increased $30.4 million at December 31, 2014 from December 31,
2013, and increased $2.7 million from September 30, 2014. Savings
and money market deposits increased $37.6 million at December 31,
2014 from December 31, 2013, and increased $15.3 million from
September 30, 2014. Brokered deposits decreased $27.4 million at
December 31, 2014 from December 31, 2013, and were relatively
unchanged from September 30, 2014. CDARS money market and time
deposits decreased $29.2 million at December 31, 2014 from December
31, 2013, primarily due to $27.5 million in deposits received from
a law firm for legal settlements during the fourth quarter of 2013,
all of which were withdrawn in January, 2014. Deposits (excluding
all time deposits and CDARS deposits) increased $154.5 million, or
16%, to $1.13 billion at December 31, 2014, from $973.6 million at
December 31, 2013, and increased $46.6 million, or 4%, from $1.08
billion at September 30, 2014.
The total cost of deposits decreased 3 basis points to 0.15% for
the fourth quarter of 2014, from 0.18% for the fourth quarter of
2013, and was unchanged from the third quarter of 2014. The total
cost of deposits decreased 3 basis points to 0.16% for the year
ended December 31, 2014, from 0.19% for the year ended December 31,
2013.
Tangible equity was $168.0 million, or $5.60 per share, at
December 31, 2014, compared to $171.9 million, or $5.78 per share,
at December 31, 2013, and $181.7 million, or $6.15 per share, at
September 30, 2014. The decrease in tangible equity at December 31,
2014 was primarily due to the addition of goodwill and other
intangible assets from the BVF acquisition, partially offset by an
increase in retained earnings. There were 21,004 shares of
Series C Preferred Stock outstanding at December 31, 2014, December
31, 2013, and September 30, 2014, and the Series C Preferred Stock
is convertible into an aggregate of 5.6 million shares of common
stock at a conversion price of $3.75, upon a transfer of the Series
C Preferred Stock in a widely dispersed offering. Pro forma
tangible book value per common share, assuming the Company's
outstanding Series C Preferred Stock was converted into common
stock, was $5.23 at December 31, 2014, compared to $5.38 at
December 31, 2013, and $5.68 at September 30, 2014.
Accumulated other comprehensive loss was ($1.9) million at
December 31, 2014, compared to accumulated other comprehensive loss
of ($4.0) million a year ago, and accumulated other comprehensive
loss of ($812,000) at September 30, 2014. The unrealized gain
(loss) on securities available-for-sale included in accumulated
other comprehensive loss was an unrealized gain of $2.8 million,
net of taxes, at December 31, 2014, compared to an unrealized loss
of ($1.4) million, net of taxes, at December 31, 2013, and an
unrealized gain of $1.9 million, net of taxes, at September 30,
2014. The components of accumulated other comprehensive loss,
net of taxes, at December 31, 2014 include the following: an
unrealized gain on available-for-sale securities of $2.8 million;
the remaining unamortized unrealized gain on securities
available-for-sale transferred to held-to-maturity of $434,000; a
split dollar insurance contracts liability of ($2.0) million; a
supplemental executive retirement plan liability of ($3.9) million;
and an unrealized gain on interest-only strip from SBA loans of
$860,000.
Bay View Funding Acquisition
On November 1, 2014, the Company acquired Bay View Funding,
pursuant to which HBC acquired all of the outstanding common stock
from the stockholders of BVF for an aggregate purchase price of
$22.52 million. BVF became a wholly-owned subsidiary of HBC.
Based in Santa Clara, California, BVF is the parent company of CSNK
Working Capital Finance Corp. dba Bay View Funding, which provides
business-essential working capital factoring financing to various
industries throughout the United States. The one-time pre-tax
acquisition costs incurred by HBC for the BVF acquisition totaled
$609,000 and $895,000 for the fourth quarter of 2014 and the year
ended December 31, 2014, respectively.
On November 1, 2014, the lease of the BVF office space located
in Santa Clara, California was estimated to be $109,000 below fair
market value, which is being amortized over three years.
Customer relationship and brokered relationship intangible
assets of $1.9 million resulted from the Bay View Funding
acquisition. They are initially measured at fair value and
then are amortized on the straight-line method over the 10 year
estimated useful lives.
The Chief Executive Officer of BVF entered into a three-year
non-compete agreement with HBC. On November 1, 2014, the
estimated fair value of the non-compete agreement was $250,000,
which is being amortized over three years.
On November 1, 2014, estimated goodwill of $13.0 million
resulted from the acquisition Bay View Funding, which represents
the excess of the purchase price over the fair value of acquired
tangible assets and liabilities and identifiable intangible
assets.
Heritage Commerce Corp, a bank holding company
established in February 1998, is the parent company of Heritage
Bank of Commerce, established in 1994 and headquartered in San Jose
with full-service branches in Danville, Fremont, Gilroy, Hollister,
Los Altos, Los Gatos, Morgan Hill, Pleasanton, Sunnyvale, and
Walnut Creek. Heritage Bank of Commerce is an SBA Preferred
Lender. Bay View Funding, a subsidiary of Heritage Bank of
Commerce, is based in Santa Clara and provides business-essential
working capital factoring financing to various industries
throughout the United States. For more information, please
visit www.heritagecommercecorp.com.
Forward Looking Statement
Disclaimer
Certain matters set forth herein constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including forward-looking statements relating
to the Company's current business plans and expectations regarding
future operating results. These forward looking statements
are subject to various risks and uncertainties that may be outside
our control and our actual results could differ materially from our
projected results. In addition, our past results of operations do
not necessarily indicate our future results. The forward looking
statements could be affected by many factors, including but not
limited to: (1) Local, regional, and national economic conditions
and events and the impact they may have on us and our customers,
and our assessment of that impact on our estimates including, the
allowance for loan losses; (2) Changes in the financial performance
or condition of the Company's customers, or changes in the
performance or creditworthiness of our customers' suppliers or
other counterparties, which could lead to decreased loan
utilization rates, delinquencies, or defaults, which could
negatively affect our customers' ability to meet certain credit
obligations; (3) Volatility in credit or equity markets and its
effect on the global economy; (4) Changes in consumer spending,
borrowing or saving habits; (5) Competition for loans and deposits
and failure to attract or retain deposits or loans; (6) Our ability
to increase market share and control expenses; (7) Our ability to
develop and promote customer acceptance of new products and
services in a timely manner; (8) Risks associated with
concentrations in real estate related loans; (9) Other than
temporary impairment charges to our securities portfolio; (10) An
oversupply of inventory and deterioration in values of California
commercial real estate; (11) A prolonged slowdown in construction
activity; (12) Changes in the level of nonperforming assets, charge
offs, or other credit quality measures, and their impact on the
adequacy of the Company's allowance for loan losses and the
Company's provision for loan losses; (13) The effects of and
changes in trade, monetary and fiscal policies and laws, including
the interest rate policies of the Federal Open Market Committee of
the Federal Reserve Board; (14) Changes in inflation, interest
rates, and market liquidity which may impact interest margins and
impact funding sources; (15) Our ability to raise capital or incur
debt on reasonable terms; (16) Regulatory limits on Heritage Bank
of Commerce's ability to pay dividends to the Company; (17) The
impact of reputational risk on such matters as business generation
and retention, funding and liquidity; (18) The impact of cyber
security attacks or other disruptions to the Company's information
systems and any resulting compromise of data or disruptions in
service; (19) The effect of the enactment of the Dodd Frank Wall
Street Reform and Consumer Protection Act of 2010 and the rules and
regulations to be promulgated by supervisory and oversight agencies
implementing the legislation taking into account that the precise
timing, extent and nature of such rules and regulations and the
impact on the Company are uncertain; (20) The impact of revised
capital requirements under Basel III; (21) Significant changes in
applicable laws and regulations, including those concerning taxes,
banking and securities; (22) Changes in the competitive environment
among financial or bank holding companies and other financial
service providers; (23) The effect of changes in accounting
policies and practices, as may be adopted by the regulatory
agencies, the Public Company Accounting Oversight Board, the
Financial Accounting Standards Board and other accounting standard
setters; (24) The costs and effects of legal and regulatory
developments, including resolution of legal proceedings or
regulatory or other governmental inquiries, and the results of
regulatory examinations or reviews; (25) The successful integration
of the business, employees and operations of Bay View Funding with
the Company and to achieve the projected synergies of this
acquisition; and (26) Our success in managing the risks involved in
the foregoing factors. For a discussion of factors which could
cause results to differ, please see the Company's reports on Forms
10-K and 10-Q as filed with the Securities and Exchange Commission
and the Company's press releases. Readers should not place undue
reliance on the forward-looking statements, which reflect
management's view only as of the date hereof. The Company
undertakes no obligation to publicly revise these forward-looking
statements to reflect subsequent events or circumstances.
Member FDIC
|
|
|
For the Quarter
Ended: |
Percent Change
From: |
For the Year
Ended: |
|
CONSOLIDATED INCOME
STATEMENTS |
December 31, |
September 30, |
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
Percent |
(in $000's,
unaudited) |
2014 |
2014 |
2013 |
2014 |
2013 |
2014 |
2013 |
Change |
Interest income |
$ 16,717 |
$ 14,492 |
$ 13,623 |
15% |
23% |
$ 59,256 |
$ 52,786 |
12% |
Interest expense |
625 |
500 |
574 |
25% |
9% |
2,153 |
2,600 |
-17% |
Net interest income before provision for
loan losses |
16,092 |
13,992 |
13,049 |
15% |
23% |
57,103 |
50,186 |
14% |
Provision (credit) for loan losses |
(106) |
(24) |
(12) |
-342% |
-783% |
(338) |
(816) |
59% |
Net interest income after provision for
loan losses |
16,198 |
14,016 |
13,061 |
16% |
24% |
57,441 |
51,002 |
13% |
Noninterest income: |
|
|
|
|
|
|
|
|
Service charges and fees on deposit
accounts |
622 |
631 |
617 |
-1% |
1% |
2,519 |
2,457 |
3% |
Increase in cash surrender value of life
insurance |
404 |
401 |
414 |
1% |
-2% |
1,600 |
1,654 |
-3% |
Servicing income |
319 |
316 |
365 |
1% |
-13% |
1,296 |
1,446 |
-10% |
Gain on sales of SBA loans |
113 |
259 |
76 |
-56% |
49% |
971 |
449 |
116% |
Gain on sales of securities |
-- |
47 |
-- |
-100% |
N/A |
97 |
38 |
155% |
Other |
354 |
216 |
426 |
64% |
-17% |
1,263 |
1,170 |
8% |
Total noninterest
income |
1,812 |
1,870 |
1,898 |
-3% |
-5% |
7,746 |
7,214 |
7% |
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
Salaries and employee benefits |
6,960 |
6,228 |
5,803 |
12% |
20% |
26,250 |
23,450 |
12% |
Occupancy and equipment |
1,072 |
1,055 |
961 |
2% |
12% |
4,059 |
4,043 |
0% |
Professional fees |
562 |
617 |
604 |
-9% |
-7% |
1,891 |
2,588 |
-27% |
Other |
3,821 |
2,592 |
2,483 |
47% |
54% |
12,022 |
10,389 |
16% |
Total noninterest
expense |
12,415 |
10,492 |
9,851 |
18% |
26% |
44,222 |
40,470 |
9% |
Income before income taxes |
5,595 |
5,394 |
5,108 |
4% |
10% |
20,965 |
17,746 |
18% |
Income tax expense |
1,993 |
1,969 |
1,754 |
1% |
14% |
7,538 |
6,206 |
21% |
Net income |
3,602 |
3,425 |
3,354 |
5% |
7% |
13,427 |
11,540 |
16% |
Dividends on preferred stock |
(280) |
(280) |
(168) |
0% |
67% |
(1,008) |
(336) |
200% |
Net income available to common
shareholders |
3,322 |
3,145 |
3,186 |
6% |
4% |
12,419 |
11,204 |
11% |
Undistributed earnings allocated to Series C
preferred stock |
(349) |
(320) |
(420) |
9% |
-17% |
(1,342) |
(1,688) |
-20% |
Distributed and undistributed earnings
allocated to common shareholders |
$ 2,973 |
$ 2,825 |
$ 2,766 |
5% |
7% |
$ 11,077 |
$ 9,516 |
16% |
|
|
|
|
|
|
|
|
|
PER COMMON SHARE DATA |
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
Basic earnings per share |
$ 0.11 |
$ 0.11 |
$ 0.10 |
0% |
10% |
$ 0.42 |
$ 0.36 |
17% |
Diluted earnings per share |
$ 0.11 |
$ 0.11 |
$ 0.10 |
0% |
10% |
$ 0.42 |
$ 0.36 |
17% |
Weighted average shares outstanding -
basic |
26,460,519 |
26,371,413 |
26,346,977 |
0% |
0% |
26,390,615 |
26,338,161 |
0% |
Weighted average shares outstanding -
diluted |
26,615,743 |
26,516,863 |
26,407,574 |
0% |
1% |
26,526,282 |
26,386,452 |
1% |
Common shares outstanding at period-end |
26,503,505 |
26,374,980 |
26,350,938 |
0% |
1% |
26,503,505 |
26,350,938 |
1% |
Pro forma common shares outstanding at
period-end, assuming Series C preferred stock was converted into
common stock |
32,104,505 |
31,975,980 |
31,951,938 |
0% |
0% |
32,104,505 |
31,951,938 |
0% |
Book value per share |
$ 6.22 |
$ 6.20 |
$ 5.84 |
0% |
7% |
$ 6.22 |
$ 5.84 |
7% |
Tangible book value per share |
$ 5.60 |
$ 6.15 |
$ 5.78 |
-9% |
-3% |
$ 5.60 |
$ 5.78 |
-3% |
Pro forma tangible book value per share,
assuming Series C preferred stock was converted into common
stock |
$ 5.23 |
$ 5.68 |
$ 5.38 |
-8% |
-3% |
$ 5.23 |
$ 5.38 |
-3% |
|
|
|
|
|
|
|
|
|
KEY FINANCIAL RATIOS |
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
Annualized return on average equity |
7.72% |
7.46% |
7.74% |
3% |
0% |
7.44% |
6.77% |
10% |
Annualized return on average tangible
equity |
8.20% |
7.51% |
7.81% |
9% |
5% |
7.60% |
6.84% |
11% |
Annualized return on average assets |
0.88% |
0.88% |
0.89% |
0% |
-1% |
0.88% |
0.81% |
9% |
Annualized return on average tangible
assets |
0.89% |
0.88% |
0.89% |
1% |
0% |
0.88% |
0.81% |
9% |
Net interest margin |
4.33% |
3.93% |
3.80% |
10% |
14% |
4.10% |
3.84% |
7% |
Efficiency ratio |
69.34% |
66.15% |
65.91% |
5% |
5% |
68.19% |
70.51% |
-3% |
|
|
|
|
|
|
|
|
|
AVERAGE BALANCES |
|
|
|
|
|
|
|
|
(in $000's, unaudited) |
|
|
|
|
|
|
|
|
Average assets |
$ 1,619,881 |
$ 1,543,254 |
$ 1,489,600 |
5% |
9% |
$ 1,523,272 |
$ 1,431,398 |
6% |
Average tangible assets |
$ 1,609,068 |
$ 1,542,007 |
$ 1,488,001 |
4% |
8% |
$ 1,519,526 |
$ 1,429,624 |
6% |
Average earning assets |
$ 1,500,270 |
$ 1,441,792 |
$ 1,388,239 |
4% |
8% |
$ 1,419,926 |
$ 1,329,936 |
7% |
Average loans held-for-sale |
$ 813 |
$ 1,485 |
$ 4,942 |
-45% |
-84% |
$ 2,503 |
$ 5,051 |
-50% |
Average total loans |
$ 1,057,866 |
$ 1,002,786 |
$ 881,830 |
5% |
20% |
$ 989,873 |
$ 840,252 |
18% |
Average deposits |
$ 1,376,503 |
$ 1,325,734 |
$ 1,282,358 |
4% |
7% |
$ 1,302,782 |
$ 1,220,044 |
7% |
Average demand deposits -
noninterest-bearing |
$ 515,209 |
$ 471,326 |
$ 437,661 |
9% |
18% |
$ 463,134 |
$ 427,299 |
8% |
Average interest-bearing deposits |
$ 861,294 |
$ 854,408 |
$ 844,697 |
1% |
2% |
$ 839,648 |
$ 792,745 |
6% |
Average interest-bearing liabilities |
$ 875,525 |
$ 854,460 |
$ 844,771 |
2% |
4% |
$ 843,651 |
$ 798,690 |
6% |
Average equity |
$ 185,107 |
$ 182,095 |
$ 171,952 |
2% |
8% |
$ 180,514 |
$ 170,391 |
6% |
Average tangible equity |
$ 174,294 |
$ 180,848 |
$ 170,353 |
-4% |
2% |
$ 176,768 |
$ 168,617 |
5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of
Period: |
Percent Change
From: |
CONSOLIDATED BALANCE
SHEETS |
December 31, |
September 30, |
December 31, |
September 30, |
December 31, |
(in $000's,
unaudited) |
2014 |
2014 |
2013 |
2014 |
2013 |
ASSETS |
|
|
|
|
|
Cash and due from banks |
$ 23,256 |
$ 23,905 |
$ 20,158 |
-3% |
15% |
Federal funds sold and interest-bearing
deposits in other financial institutions |
99,147 |
130,170 |
92,447 |
-24% |
7% |
Securities available-for-sale, at fair
value |
206,335 |
191,680 |
280,100 |
8% |
-26% |
Securities held-to-maturity, at amortized
cost |
95,362 |
94,759 |
95,921 |
1% |
-1% |
Loans held-for-sale - SBA, including deferred
costs |
1,172 |
673 |
3,148 |
74% |
-63% |
Loans: |
|
|
|
|
|
Commercial |
462,403 |
436,481 |
393,074 |
6% |
18% |
Real estate: |
|
|
|
|
|
Commercial and
residential |
478,335 |
464,991 |
423,288 |
3% |
13% |
Land and
construction |
67,980 |
53,064 |
31,443 |
28% |
116% |
Home equity |
61,644 |
61,079 |
51,815 |
1% |
19% |
Consumer |
18,867 |
14,609 |
15,677 |
29% |
20% |
Loans |
1,089,229 |
1,030,224 |
915,297 |
6% |
19% |
Deferred loan fees |
(586) |
(628) |
(384) |
-7% |
53% |
Total loans, net of
deferred fees |
1,088,643 |
1,029,596 |
914,913 |
6% |
19% |
Allowance for loan losses |
(18,379) |
(18,541) |
(19,164) |
-1% |
-4% |
Loans, net |
1,070,264 |
1,011,055 |
895,749 |
6% |
19% |
Company owned life insurance |
51,257 |
50,853 |
50,012 |
1% |
2% |
Premises and equipment, net |
7,451 |
7,377 |
7,240 |
1% |
3% |
Goodwill |
13,044 |
-- |
-- |
N/A |
N/A |
Other intangible assets |
3,276 |
1,182 |
1,527 |
177% |
115% |
Accrued interest receivable and other
assets |
46,539 |
46,660 |
45,330 |
0% |
3% |
Total assets |
$ 1,617,103 |
$ 1,558,314 |
$ 1,491,632 |
4% |
8% |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
|
Liabilities: |
|
|
|
|
|
Deposits: |
|
|
|
|
|
Demand,
noninterest-bearing |
$ 517,662 |
$ 488,987 |
$ 431,085 |
6% |
20% |
Demand,
interest-bearing |
225,821 |
223,121 |
195,451 |
1% |
16% |
Savings and money
market |
384,644 |
369,378 |
347,052 |
4% |
11% |
Time deposits - under
$100 |
20,005 |
20,067 |
21,646 |
0% |
-8% |
Time deposits - $100 and
over |
200,890 |
197,562 |
195,005 |
2% |
3% |
Time deposits -
brokered |
28,116 |
28,099 |
55,524 |
0% |
-49% |
CDARS - money market and
time deposits |
11,248 |
14,608 |
40,458 |
-23% |
-72% |
Total
deposits |
1,388,386 |
1,341,822 |
1,286,221 |
3% |
8% |
Accrued interest payable and other
liabilities |
44,359 |
33,576 |
32,015 |
32% |
39% |
Total liabilities |
1,432,745 |
1,375,398 |
1,318,236 |
4% |
9% |
|
|
|
|
|
|
Shareholders' Equity: |
|
|
|
|
|
Series C preferred stock, net |
19,519 |
19,519 |
19,519 |
0% |
0% |
Common stock |
133,676 |
133,195 |
132,561 |
0% |
1% |
Retained earnings |
33,014 |
31,014 |
25,345 |
6% |
30% |
Accumulated other comprehensive loss |
(1,851) |
(812) |
(4,029) |
-128% |
54% |
Total
shareholders' equity |
184,358 |
182,916 |
173,396 |
1% |
6% |
Total liabilities
and shareholders' equity |
$ 1,617,103 |
$ 1,558,314 |
$ 1,491,632 |
4% |
8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
End of
Period: |
Percent Change
From: |
|
December 31, |
September 30, |
December 31, |
September 30, |
December 31, |
|
2014 |
2014 |
2013 |
2014 |
2013 |
CREDIT QUALITY DATA |
|
|
|
|
|
(in $000's, unaudited) |
|
|
|
|
|
Nonaccrual loans - held-for-investment |
$ 5,855 |
$ 7,010 |
$ 11,326 |
-16% |
-48% |
Restructured and loans over 90 days past due
and still accruing |
-- |
200 |
492 |
-100% |
-100% |
Total nonperforming loans |
5,855 |
7,210 |
11,818 |
-19% |
-50% |
Foreclosed assets |
696 |
532 |
575 |
31% |
21% |
Total nonperforming assets |
$ 6,551 |
$ 7,742 |
$ 12,393 |
-15% |
-47% |
Other restructured loans still accruing |
$ 167 |
$ -- |
$ -- |
N/A |
N/A |
Net charge-offs during the quarter |
$ 56 |
$ 27 |
$ 166 |
107% |
-66% |
Provision (credit) for loan losses during the
quarter |
$ (106) |
$ (24) |
$ (12) |
-342% |
-783% |
Allowance for loan losses |
$ 18,379 |
$ 18,541 |
$ 19,164 |
-1% |
-4% |
Classified assets* |
$ 15,978 |
$ 17,725 |
$ 23,631 |
-10% |
-32% |
Allowance for loan losses to total loans |
1.69% |
1.80% |
2.09% |
-6% |
-19% |
Allowance for loan losses to total
nonperforming loans |
313.90% |
257.16% |
162.16% |
22% |
94% |
Nonperforming assets to total assets |
0.41% |
0.50% |
0.83% |
-18% |
-51% |
Nonperforming loans to total loans |
0.54% |
0.70% |
1.29% |
-23% |
-58% |
Classified assets* to Heritage Commerce Corp
Tier 1 capital plus allowance for loan losses |
9% |
9% |
13% |
0% |
-31% |
Classified assets* to Heritage Bank of
Commerce Tier 1 capital plus allowance for loan losses |
9% |
10% |
14% |
-10% |
-36% |
|
|
|
|
|
|
OTHER PERIOD-END
STATISTICS |
|
|
|
|
|
(in $000's, unaudited) |
|
|
|
|
|
Heritage Commerce Corp: |
|
|
|
|
|
Tangible equity |
$ 168,038 |
$ 181,734 |
$ 171,869 |
-8% |
-2% |
Tangible common equity |
$ 148,519 |
$ 162,215 |
$ 152,350 |
-8% |
-3% |
Shareholders' equity / total assets |
11.40% |
11.74% |
11.62% |
-3% |
-2% |
Tangible equity / tangible assets |
10.50% |
11.67% |
11.53% |
-10% |
-9% |
Tangible common equity / tangible
assets |
9.28% |
10.42% |
10.22% |
-11% |
-9% |
Loan to deposit ratio |
78.41% |
76.73% |
71.13% |
2% |
10% |
Noninterest-bearing deposits / total
deposits |
37.29% |
36.44% |
33.52% |
2% |
11% |
Total risk-based capital ratio |
13.9% |
15.3% |
15.3% |
-9% |
-9% |
Tier 1 risk-based capital ratio |
12.6% |
14.0% |
14.0% |
-10% |
-10% |
Leverage ratio |
10.6% |
11.7% |
11.2% |
-9% |
-5% |
|
|
|
|
|
|
Heritage Bank of Commerce: |
|
|
|
|
|
Total risk-based capital ratio |
13.1% |
14.3% |
13.9% |
-8% |
-6% |
Tier 1 risk-based capital ratio |
11.9% |
13.1% |
12.6% |
-9% |
-6% |
Leverage ratio |
9.9% |
10.9% |
10.1% |
-9% |
-2% |
|
|
|
|
|
|
*Net of SBA guarantees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter
Ended |
For the Quarter
Ended |
|
December 31,
2014 |
December 31,
2013 |
|
|
Interest |
Average |
|
Interest |
Average |
NET INTEREST INCOME AND NET INTEREST
MARGIN |
Average |
Income/ |
Yield/ |
Average |
Income/ |
Yield/ |
(in $000's,
unaudited) |
Balance |
Expense |
Rate |
Balance |
Expense |
Rate |
Assets: |
|
|
|
|
|
|
Loans, gross(1) |
$ 1,058,679 |
$ 14,375 |
5.39% |
$ 886,772 |
$ 10,696 |
4.79% |
Securities - taxable |
222,130 |
1,742 |
3.11% |
305,615 |
2,365 |
3.07% |
Securities - tax exempt(2) |
79,879 |
779 |
3.87% |
77,159 |
752 |
3.87% |
Federal funds sold and interest-bearing |
|
|
|
|
|
|
deposits in other financial
institutions |
139,582 |
94 |
0.27% |
118,693 |
74 |
0.25% |
Total interest earning
assets(2) |
1,500,270 |
16,990 |
4.49% |
1,388,239 |
13,887 |
3.97% |
Cash and due from banks |
28,085 |
|
|
24,095 |
|
|
Premises and equipment, net |
7,483 |
|
|
7,357 |
|
|
Goodwill and other intangible assets |
10,813 |
|
|
1,599 |
|
|
Other assets |
73,230 |
|
|
68,310 |
|
|
Total assets |
$ 1,619,881 |
|
|
$ 1,489,600 |
|
|
|
|
|
|
|
|
|
Liabilities and shareholders'
equity: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Demand,
noninterest-bearing |
$ 515,209 |
|
|
$ 437,661 |
|
|
|
|
|
|
|
|
|
Demand,
interest-bearing |
218,176 |
93 |
0.17% |
188,869 |
72 |
0.15% |
Savings and money
market |
382,799 |
183 |
0.19% |
352,158 |
160 |
0.18% |
Time deposits - under
$100 |
19,871 |
15 |
0.30% |
21,823 |
18 |
0.33% |
Time deposits - $100 and
over |
199,072 |
156 |
0.31% |
195,780 |
170 |
0.34% |
Time deposits -
brokered |
28,104 |
56 |
0.79% |
59,992 |
151 |
1.00% |
CDARS - money market and
time deposits |
13,272 |
2 |
0.06% |
26,075 |
2 |
0.03% |
Total
interest-bearing deposits |
861,294 |
505 |
0.23% |
844,697 |
573 |
0.27% |
Total
deposits |
1,376,503 |
505 |
0.15% |
1,282,358 |
573 |
0.18% |
|
|
|
|
|
|
|
Short-term borrowings |
14,231 |
120 |
3.35% |
74 |
1 |
5.36% |
Total interest-bearing liabilities |
875,525 |
625 |
0.28% |
844,771 |
574 |
0.27% |
Total
interest-bearing liabilities and demand, noninterest-bearing / cost
of funds |
1,390,734 |
625 |
0.18% |
1,282,432 |
574 |
0.18% |
Other liabilities |
44,040 |
|
|
35,216 |
|
|
Total liabilities |
1,434,774 |
|
|
1,317,648 |
|
|
Shareholders' equity |
185,107 |
|
|
171,952 |
|
|
Total liabilities and shareholders'
equity |
$ 1,619,881 |
|
|
$ 1,489,600 |
|
|
|
|
|
|
|
|
|
Net interest income(2) / margin |
|
16,365 |
4.33% |
|
13,313 |
3.80% |
Less tax equivalent adjustment(2) |
|
(273) |
|
|
(264) |
|
Net interest income |
|
$ 16,092 |
|
|
$ 13,049 |
|
|
|
|
|
|
|
|
(1) Includes loans
held-for-sale. Yield amounts earned on loans include loan fees
and costs. Nonaccrual loans are included in average
balance. |
|
(2) Reflects tax equivalent
adjustment for tax exempt income based on a 35% tax rate. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year
Ended |
For the Year
Ended |
|
December 31,
2014 |
December 31,
2013 |
|
|
Interest |
Average |
|
Interest |
Average |
NET INTEREST INCOME AND NET INTEREST
MARGIN |
Average |
Income/ |
Yield/ |
Average |
Income/ |
Yield/ |
(in $000's,
unaudited) |
Balance |
Expense |
Rate |
Balance |
Expense |
Rate |
Assets: |
|
|
|
|
|
|
Loans, gross(1) |
$ 992,376 |
$ 49,207 |
4.96% |
$ 845,303 |
$ 41,570 |
4.92% |
Securities - taxable |
261,527 |
7,810 |
2.99% |
339,778 |
9,472 |
2.79% |
Securities - tax exempt(2) |
79,939 |
3,115 |
3.90% |
61,636 |
2,355 |
3.82% |
Federal funds sold and interest-bearing |
|
|
|
|
|
|
deposits in other financial
institutions |
86,084 |
214 |
0.25% |
83,219 |
214 |
0.26% |
Total interest earning
assets(2) |
1,419,926 |
60,346 |
4.25% |
1,329,936 |
53,611 |
4.03% |
Cash and due from banks |
25,829 |
|
|
23,510 |
|
|
Premises and equipment, net |
7,343 |
|
|
7,500 |
|
|
Goodwill and other intangible assets |
3,746 |
|
|
1,774 |
|
|
Other assets |
66,428 |
|
|
68,678 |
|
|
Total assets |
$ 1,523,272 |
|
|
$ 1,431,398 |
|
|
|
|
|
|
|
|
|
Liabilities and shareholders'
equity: |
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
Demand,
noninterest-bearing |
$ 463,134 |
|
|
$ 427,299 |
|
|
|
|
|
|
|
|
|
Demand,
interest-bearing |
207,359 |
341 |
0.16% |
172,615 |
246 |
0.14% |
Savings and money
market |
363,903 |
671 |
0.18% |
308,510 |
544 |
0.18% |
Time deposits - under
$100 |
20,448 |
63 |
0.31% |
23,069 |
80 |
0.35% |
Time deposits - $100 and
over |
196,118 |
629 |
0.32% |
194,587 |
747 |
0.38% |
Time deposits -
brokered |
36,440 |
319 |
0.88% |
75,968 |
745 |
0.98% |
CDARS - money market and
time deposits |
15,380 |
9 |
0.06% |
17,996 |
7 |
0.04% |
Total
interest-bearing deposits |
839,648 |
2,032 |
0.24% |
792,745 |
2,369 |
0.30% |
Total
deposits |
1,302,782 |
2,032 |
0.16% |
1,220,044 |
2,369 |
0.19% |
|
|
|
|
|
|
|
Subordinated debt |
-- |
-- |
-- |
5,816 |
229 |
3.94% |
Short-term borrowings |
4,003 |
121 |
3.02% |
129 |
2 |
1.55% |
Total interest-bearing liabilities |
843,651 |
2,153 |
|
798,690 |
2,600 |
0.33% |
Total interest-bearing liabilities and
demand, noninterest-bearing / cost of funds |
1,306,785 |
2,153 |
0.16% |
1,225,989 |
2,600 |
0.21% |
Other liabilities |
35,973 |
|
|
35,018 |
|
|
Total liabilities |
1,342,758 |
|
|
1,261,007 |
|
|
Shareholders' equity |
180,514 |
|
|
170,391 |
|
|
Total liabilities and shareholders'
equity |
$ 1,523,272 |
|
|
$ 1,431,398 |
|
|
|
|
|
|
|
|
|
Net interest income(2) / margin |
|
58,193 |
4.10% |
|
51,011 |
3.84% |
Less tax equivalent adjustment(2) |
|
(1,090) |
|
|
(825) |
|
Net interest income |
|
$ 57,103 |
|
|
$ 50,186 |
|
|
|
|
|
|
|
|
(1) Includes loans
held-for-sale. Yield amounts earned on loans include loan fees
and costs. Nonaccrual loans are included in average
balance. |
(2) Reflects tax equivalent
adjustment for tax exempt income based on a 35% tax rate. |
|
|
|
|
|
|
|
CONTACT: Heritage Commerce Corp
Debbie Reuter, EVP, Corporate Secretary
(408) 494-4542
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