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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Heritage Commerce Corporation | NASDAQ:HTBK | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.19 | 2.39% | 8.13 | 7.93 | 8.38 | 8.26 | 7.97 | 8.02 | 396,559 | 01:00:00 |
California
|
000-23877
|
77-0469558
|
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
150 Almaden Boulevard, San Jose, California
|
95113
|
||
(Address of principal executive offices)
|
(Zip Code)
|
||
Registrant’s telephone number, including area code: (408) 947-6900
|
|||
Not Applicable
|
|||
(Former name or former address, if changed since last report.)
|
x | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Press Release, dated July 23, 2015, entitled “Heritage Commerce Corp Earnings Increase 35% to $4.5 Million for the Second Quarter of 2015 from the Second Quarter of 2014” |
99.2 | Press Release, dated July 23, 2015, entitled “Heritage Commerce Corp Declares Quarterly Cash Dividend of $0.08 Per Share” |
|
|
99.1
|
Press Release, dated July 23, 2015, entitled “Heritage Commerce Corp Earnings Increase 35% to $4.5 Million for the Second Quarter of 2015 from the Second Quarter of 2014”
|
99.2
|
Press Release, dated July 23, 2015, entitled “Heritage Commerce Corp Declares Quarterly Cash Dividend of $0.08 Per Share”
|
|
¨
|
Diluted earnings per share increased 40% to $0.14 for the second quarter of 2015, compared to $0.10 for the second quarter of 2014, and increased 8% from $0.13 for the first quarter of 2015. Diluted earnings per share increased 35% to $0.27 for the first six months of 2015, compared to $0.20 per diluted share for the first six months of 2014.
|
¨
|
Reflecting strong balance sheet growth, net interest income increased 29% to $17.6 million for the second quarter of 2015, compared to $13.7 million for the second quarter of 2014, and increased 5% from $16.9 million for the first quarter of 2015. For the first six months of 2015, net interest income increased 28% to $34.5 million, compared to $27.0 million for the first six months of 2014.
|
¨
|
The fully tax equivalent (“FTE”) net interest margin increased 59 basis points to 4.66% for the second quarter of 2015, from 4.07% for the second quarter of 2014, primarily due to loan growth, higher yields on securities, and revenue from the higher yielding Bay View Funding factored receivables portfolio, and a special dividend of $203,000 paid by the San Francisco Federal Home Loan Bank (“FHLB”). The net interest margin increased 8 basis points for the second quarter of 2015, from 4.58% for the first quarter of 2015 primarily due to loan growth and the special dividend paid by the FHLB. For the first six months of 2015, net interest margin increased 56 basis points to 4.62%, compared to 4.06% for the first six months of 2014, primarily due to revenue from the higher yielding Bay View Funding factored receivables portfolio, and the special dividend paid by the FHLB.
|
¨
|
Solid performance ratios include a return on average tangible assets of 1.09%, a return on average tangible equity of 10.49%, and an efficiency ratio of 63.70% for the second quarter of 2015.
|
¨
|
Loans (excluding loans-held-for-sale) increased 14% to $1.13 billion at June 30, 2015, compared to $990.3 million at June 30, 2014, and increased 3% from $1.10 billion at March 31, 2015.
|
¨
|
Nonperforming assets (“NPAs”) declined to $5.3 million, or 0.31% of total assets, at June 30, 2015, compared to $8.7 million, or 0.59% of total assets, at June 30, 2014, and $8.4 million, or 0.51% of total assets, at March 31, 2015.
|
¨
|
Classified assets, net of Small Business Administration (“SBA”) guarantees, decreased 52% to $11.2 million at June 30, 2015, from $23.1 million at June 30, 2014, and decreased 33% from $16.6 million at March 31, 2015.
|
¨
|
The Company had net recoveries of $181,000 for the second quarter of 2015, compared to net charge-offs of $27,000 for the second quarter of 2014, and net recoveries of $235,000 for the first quarter of 2015.
|
¨
|
There was a $22,000 provision for loan losses for the second quarter of 2015, compared to a $198,000 credit provision for loan losses for the second quarter of 2014, and a $60,000 credit provision for loan losses for the first quarter of 2015. There was a $38,000 credit provision for loan losses for the six months ended June 30, 2015, compared to a $208,000 credit provision for loan losses for the six months ended June 30, 2014.
|
¨
|
The allowance for loan losses (“ALLL”) was 1.65% of total loans at June 30, 2015, compared to 1.88% at June 30, 2014, and 1.68% at March 31, 2015.
|
¨
|
Deposits totaled $1.45 billion at June 30, 2015, compared to $1.27 billion at June 30, 2014, and $1.42 billion at March 31, 2015. Deposits (excluding all time deposits and CDARS deposits) increased $187.1 million, or 19%, to $1.19 billion at June 30, 2015, from $1.00 billion at June 30, 2014, and increased $24.2 million, or 2%, from $1.17 billion at March 31, 2015.
|
¨
|
As of January 1, 2015, along with other community banking organizations, we became subject to new capital requirements, and certain provisions of the new rules will be phased in from 2015 through 2019 under Basel III and Dodd-Frank. The Company’s consolidated capital ratios and the Bank’s capital ratios exceeded the regulatory guidelines for a well-capitalized financial institution under the Basel III regulatory requirements at June 30, 2015.
|
Capital Ratios
|
Heritage Commerce Corp
|
Heritage Bank of Commerce
|
Well-Capitalized Financial Institution Basel III Regulatory Guidelines
|
||
|
|
|
|
|
|
Total Risk-Based
|
13.0%
|
12.6%
|
|
10.0%
|
|
Tier 1 Risk-Based
|
11.8%
|
11.3%
|
|
8.0%
|
|
Common Equity Tier 1 Risk-based
|
10.5%
|
11.3%
|
|
6.5%
|
|
Leverage
|
10.6%
|
10.2%
|
|
5.0%
|
|
|
End of Period:
|
||||||||||||||||||||||
NONPERFORMING ASSETS
|
June 30, 2015
|
March 31, 2015
|
June 30, 2014
|
||||||||||||||||||||
(in $000's, unaudited)
|
Balance
|
% of Total
|
Balance
|
% of Total
|
Balance
|
% of Total
|
|||||||||||||||||
Commercial real estate loans
|
$
|
3,160
|
60
|
%
|
$
|
4,151
|
49%
|
|
$
|
1,693
|
20%
|
||||||||||||
SBA loans
|
741
|
14
|
%
|
799
|
10%
|
|
2,963
|
34%
|
|||||||||||||||
Land and construction loans
|
500
|
10
|
%
|
1,290
|
15%
|
|
1,688
|
19%
|
|||||||||||||||
Foreclosed assets
|
421
|
8
|
%
|
1,716
|
20%
|
|
525
|
6%
|
|||||||||||||||
Home equity and consumer loans
|
327
|
6
|
%
|
342
|
4%
|
|
578
|
7%
|
|||||||||||||||
Commercial and industrial loans
|
104
|
2
|
%
|
151
|
2%
|
|
766
|
9%
|
|||||||||||||||
Restructured and loans over 90 days past due and accruing
|
-
|
0
|
%
|
-
|
0%
|
|
454
|
5%
|
|||||||||||||||
Total nonperforming assets
|
$
|
5,253
|
100
|
%
|
$
|
8,449
|
100%
|
|
$
|
8,667
|
100%
|
|
For the Quarter Ended
|
For the Six Months Ended
|
|||||||||||||||||
ALLOWANCE FOR LOAN LOSSES
|
June 30,
|
March 31,
|
June 30,
|
June 30,
|
June 30,
|
||||||||||||||
(in $000's, unaudited)
|
2015
|
2015
|
2014
|
2015
|
2014
|
||||||||||||||
Balance at beginning of period
|
$
|
18,554
|
$
|
18,379
|
$
|
18,817
|
$
|
18,379
|
$
|
19,164
|
|||||||||
Provision (credit) for loan losses during the period
|
22
|
(60)
|
|
(198)
|
|
(38)
|
|
(208)
|
|||||||||||
Net (charge-offs) recoveries during the period
|
181
|
235
|
(27)
|
|
416
|
(364)
|
|||||||||||||
Balance at end of period
|
$
|
18,757
|
$
|
18,554
|
$
|
18,592
|
$
|
18,757
|
$
|
18,592
|
|||||||||
|
|||||||||||||||||||
Total loans
|
$
|
1,133,603
|
$
|
1,101,991
|
$
|
990,341
|
$
|
1,133,603
|
$
|
990,341
|
|||||||||
Total nonperforming loans
|
$
|
4,832
|
$
|
6,733
|
$
|
8,142
|
$
|
4,832
|
$
|
8,142
|
|||||||||
|
|||||||||||||||||||
Allowance for loan losses to total loans
|
1.65%
|
|
1.68%
|
|
1.88%
|
|
1.65%
|
|
1.88%
|
||||||||||
Allowance for loan losses to total nonperforming loans
|
388.18%
|
|
275.57%
|
|
228.35%
|
|
388.18%
|
|
228.35%
|
|
For the Quarter Ended:
|
Percent Change From:
|
For the Six Months Ended:
|
||||||||||||||||||||||||||||
CONSOLIDATED INCOME STATEMENTS
|
June 30,
|
March 31,
|
June 30,
|
March 31,
|
June 30,
|
June 30,
|
June 30,
|
Percent
|
|||||||||||||||||||||||
(in $000's, unaudited)
|
2015
|
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
Change
|
|||||||||||||||||||||||
Interest income
|
$
|
18,175
|
$
|
17,366
|
$
|
14,192
|
5
|
%
|
28
|
%
|
$
|
35,541
|
$
|
28,047
|
27
|
%
|
|||||||||||||||
Interest expense
|
533
|
508
|
507
|
5
|
%
|
5
|
%
|
1,041
|
1,028
|
1
|
%
|
||||||||||||||||||||
Net interest income before provision for loan losses
|
17,642
|
16,858
|
13,685
|
5
|
%
|
29
|
%
|
34,500
|
27,019
|
28
|
%
|
||||||||||||||||||||
Provision (credit) for loan losses
|
22
|
(60)
|
|
(198)
|
|
137
|
%
|
111
|
%
|
(38)
|
|
(208)
|
|
82
|
%
|
||||||||||||||||
Net interest income after provision for loan losses
|
17,620
|
16,918
|
13,883
|
4
|
%
|
27
|
%
|
34,538
|
27,227
|
27
|
%
|
||||||||||||||||||||
Noninterest income:
|
|||||||||||||||||||||||||||||||
Service charges and fees on deposit accounts
|
715
|
623
|
646
|
15
|
%
|
11
|
%
|
1,338
|
1,266
|
6
|
%
|
||||||||||||||||||||
Increase in cash surrender value of life insurance
|
396
|
400
|
397
|
-1
|
%
|
0
|
%
|
796
|
795
|
0
|
%
|
||||||||||||||||||||
Servicing income
|
299
|
306
|
313
|
-2
|
%
|
-4
|
%
|
605
|
661
|
-8
|
%
|
||||||||||||||||||||
Gain on sales of SBA loans
|
186
|
207
|
442
|
-10
|
%
|
-58
|
%
|
393
|
599
|
-34
|
%
|
||||||||||||||||||||
Gain on sales of securities
|
-
|
-
|
-
|
N/
|
A
|
N/
|
A
|
-
|
50
|
-100
|
%
|
||||||||||||||||||||
Other
|
568
|
390
|
249
|
46
|
%
|
128
|
%
|
958
|
693
|
38
|
%
|
||||||||||||||||||||
Total noninterest income
|
2,164
|
1,926
|
2,047
|
12
|
%
|
6
|
%
|
4,090
|
4,064
|
1
|
%
|
||||||||||||||||||||
|
|||||||||||||||||||||||||||||||
Noninterest expense:
|
|||||||||||||||||||||||||||||||
Salaries and employee benefits
|
7,712
|
8,042
|
6,819
|
-4
|
%
|
13
|
%
|
15,754
|
13,062
|
21
|
%
|
||||||||||||||||||||
Occupancy and equipment
|
1,045
|
1,045
|
987
|
0
|
%
|
6
|
%
|
2,090
|
1,932
|
8
|
%
|
||||||||||||||||||||
Professional fees
|
239
|
95
|
126
|
152
|
%
|
90
|
%
|
334
|
712
|
-53
|
%
|
||||||||||||||||||||
Other
|
3,621
|
3,094
|
2,837
|
17
|
%
|
28
|
%
|
6,715
|
5,609
|
20
|
%
|
||||||||||||||||||||
Total noninterest expense
|
12,617
|
12,276
|
10,769
|
3
|
%
|
17
|
%
|
24,893
|
21,315
|
17
|
%
|
||||||||||||||||||||
Income before income taxes
|
7,167
|
6,568
|
5,161
|
9
|
%
|
39
|
%
|
13,735
|
9,976
|
38
|
%
|
||||||||||||||||||||
Income tax expense
|
2,690
|
2,430
|
1,837
|
11
|
%
|
46
|
%
|
5,120
|
3,576
|
43
|
%
|
||||||||||||||||||||
Net income
|
4,477
|
4,138
|
3,324
|
8
|
%
|
35
|
%
|
8,615
|
6,400
|
35
|
%
|
||||||||||||||||||||
Dividends on preferred stock
|
(448)
|
|
(448)
|
|
(224)
|
|
0
|
%
|
100
|
%
|
(896)
|
|
(448)
|
|
100
|
%
|
|||||||||||||||
Net income available to common shareholders
|
4,029
|
3,690
|
3,100
|
9
|
%
|
30
|
%
|
7,719
|
5,952
|
30
|
%
|
||||||||||||||||||||
Undistributed earnings allocated to Series C preferred stock
|
(331)
|
|
(274)
|
|
(358)
|
|
21
|
%
|
-8
|
%
|
(605)
|
|
(673)
|
|
-10
|
%
|
|||||||||||||||
Distributed and undistributed earnings allocated to common
|
|||||||||||||||||||||||||||||||
shareholders
|
$
|
3,698
|
$
|
3,416
|
$
|
2,742
|
8
|
%
|
35
|
%
|
$
|
7,114
|
$
|
5,279
|
35
|
%
|
|||||||||||||||
|
|||||||||||||||||||||||||||||||
PER COMMON SHARE DATA
|
|||||||||||||||||||||||||||||||
(unaudited)
|
|||||||||||||||||||||||||||||||
Basic earnings per share
|
$
|
0.14
|
$
|
0.13
|
$
|
0.10
|
8
|
%
|
40
|
%
|
$
|
0.27
|
$
|
0.20
|
35
|
%
|
|||||||||||||||
Diluted earnings per share
|
$
|
0.14
|
$
|
0.13
|
$
|
0.10
|
8
|
%
|
40
|
%
|
$
|
0.27
|
$
|
0.20
|
35
|
%
|
|||||||||||||||
Weighted average shares outstanding - basic
|
26,573,909
|
26,509,723
|
26,370,510
|
0
|
%
|
1
|
%
|
26,541,816
|
26,365,167
|
1
|
%
|
||||||||||||||||||||
Weighted average shares outstanding - diluted
|
26,767,255
|
26,680,253
|
26,503,401
|
0
|
%
|
1
|
%
|
26,724,260
|
26,493,466
|
1
|
%
|
||||||||||||||||||||
Common shares outstanding at period-end
|
26,596,094
|
26,522,739
|
26,370,510
|
0
|
%
|
1
|
%
|
26,596,094
|
26,370,510
|
1
|
%
|
||||||||||||||||||||
Pro forma common shares outstanding at period-end, assuming
|
|||||||||||||||||||||||||||||||
Series C preferred stock was converted into common stock
|
32,197,094
|
32,123,739
|
31,971,510
|
0
|
%
|
1
|
%
|
32,197,094
|
31,971,510
|
1
|
%
|
||||||||||||||||||||
Book value per share
|
$
|
6.30
|
$
|
6.31
|
$
|
6.14
|
0
|
%
|
3
|
%
|
$
|
6.30
|
$
|
6.14
|
3
|
%
|
|||||||||||||||
Tangible book value per share
|
$
|
5.70
|
$
|
5.70
|
$
|
6.09
|
0
|
%
|
-6
|
%
|
$
|
5.70
|
$
|
6.09
|
-6
|
%
|
|||||||||||||||
Pro forma tangible book value per share, assuming Series C
|
|||||||||||||||||||||||||||||||
preferred stock was converted into common stock
|
$
|
5.31
|
$
|
5.31
|
$
|
5.64
|
0
|
%
|
-6
|
%
|
$
|
5.31
|
$
|
5.64
|
-6
|
%
|
|||||||||||||||
|
|||||||||||||||||||||||||||||||
KEY FINANCIAL RATIOS
|
|||||||||||||||||||||||||||||||
(unaudited)
|
|||||||||||||||||||||||||||||||
Annualized return on average equity
|
9.59
|
%
|
9.04
|
%
|
7.45
|
%
|
6
|
%
|
29
|
%
|
9.32
|
%
|
7.28
|
%
|
28
|
%
|
|||||||||||||||
Annualized return on average tangible equity
|
10.49
|
%
|
9.89
|
%
|
7.51
|
%
|
6
|
%
|
40
|
%
|
10.20
|
%
|
7.33
|
%
|
39
|
%
|
|||||||||||||||
Annualized return on average assets
|
1.08
|
%
|
1.03
|
%
|
0.91
|
%
|
5
|
%
|
19
|
%
|
1.05
|
%
|
0.88
|
%
|
19
|
%
|
|||||||||||||||
Annualized return on average tangible assets
|
1.09
|
%
|
1.04
|
%
|
0.91
|
%
|
5
|
%
|
20
|
%
|
1.06
|
%
|
0.88
|
%
|
20
|
%
|
|||||||||||||||
Annualized return before income taxes and provision (credit) for
|
|||||||||||||||||||||||||||||||
loan losses to average assets
|
1.73
|
%
|
1.61
|
%
|
1.36
|
%
|
7
|
%
|
27
|
%
|
1.67
|
%
|
1.35
|
%
|
24
|
%
|
|||||||||||||||
Net interest margin
|
4.66
|
%
|
4.58
|
%
|
4.07
|
%
|
2
|
%
|
14
|
%
|
4.62
|
%
|
4.06
|
%
|
14
|
%
|
|||||||||||||||
Efficiency ratio
|
63.70
|
%
|
65.35
|
%
|
68.45
|
%
|
-3
|
%
|
-7
|
%
|
64.51
|
%
|
68.57
|
%
|
-6
|
%
|
|||||||||||||||
|
|||||||||||||||||||||||||||||||
AVERAGE BALANCES
|
|||||||||||||||||||||||||||||||
(in $000's, unaudited)
|
|||||||||||||||||||||||||||||||
Average assets
|
$
|
1,664,568
|
$
|
1,634,923
|
$
|
1,469,085
|
2
|
%
|
13
|
%
|
$
|
1,649,839
|
$
|
1,464,008
|
13
|
%
|
|||||||||||||||
Average tangible assets
|
$
|
1,648,505
|
$
|
1,619,006
|
$
|
1,467,718
|
2
|
%
|
12
|
%
|
$
|
1,633,686
|
$
|
1,462,583
|
12
|
%
|
|||||||||||||||
Average earning assets
|
$
|
1,542,551
|
$
|
1,516,284
|
$
|
1,373,957
|
2
|
%
|
12
|
%
|
$
|
1,529,490
|
$
|
1,367,973
|
12
|
%
|
|||||||||||||||
Average loans held-for-sale
|
$
|
1,748
|
$
|
987
|
$
|
4,135
|
77
|
%
|
-58
|
%
|
$
|
1,370
|
$
|
3,717
|
-63
|
%
|
|||||||||||||||
Average total loans
|
$
|
1,106,158
|
$
|
1,064,849
|
$
|
970,538
|
4
|
%
|
14
|
%
|
$
|
1,085,618
|
$
|
948,911
|
14
|
%
|
|||||||||||||||
Average deposits
|
$
|
1,428,469
|
$
|
1,403,636
|
$
|
1,257,121
|
2
|
%
|
14
|
%
|
$
|
1,416,121
|
$
|
1,253,644
|
13
|
%
|
|||||||||||||||
Average demand deposits - noninterest-bearing
|
$
|
550,869
|
$
|
530,552
|
$
|
436,018
|
4
|
%
|
26
|
%
|
$
|
540,767
|
$
|
432,501
|
25
|
%
|
|||||||||||||||
Average interest-bearing deposits
|
$
|
877,600
|
$
|
873,084
|
$
|
821,103
|
1
|
%
|
7
|
%
|
$
|
875,354
|
$
|
821,143
|
7
|
%
|
|||||||||||||||
Average interest-bearing liabilities
|
$
|
877,613
|
$
|
873,135
|
$
|
822,660
|
1
|
%
|
7
|
%
|
$
|
875,392
|
$
|
821,955
|
7
|
%
|
|||||||||||||||
Average equity
|
$
|
187,179
|
$
|
185,620
|
$
|
178,963
|
1
|
%
|
5
|
%
|
$
|
186,400
|
$
|
177,377
|
5
|
%
|
|||||||||||||||
Average tangible equity
|
$
|
171,116
|
$
|
169,703
|
$
|
177,596
|
1
|
%
|
-4
|
%
|
$
|
170,247
|
$
|
175,952
|
-3
|
%
|
|
End of Period:
|
Percent Change From:
|
|||||||||||||||
CONSOLIDATED BALANCE SHEETS
|
June 30,
|
March 31,
|
June 30,
|
March 31,
|
June 30,
|
||||||||||||
(in $000's, unaudited)
|
2015
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
ASSETS
|
|||||||||||||||||
Cash and due from banks
|
$
|
36,960
|
$
|
27,388
|
$
|
32,162
|
35
|
%
|
15
|
%
|
|||||||
Federal funds sold and interest-bearing
|
|||||||||||||||||
deposits in other financial institutions
|
94,308
|
124,388
|
17,256
|
-24
|
%
|
447
|
%
|
||||||||||
Securities available-for-sale, at fair value
|
209,092
|
200,768
|
261,489
|
4
|
%
|
-20
|
%
|
||||||||||
Securities held-to-maturity, at amortized cost
|
100,321
|
94,588
|
95,972
|
6
|
%
|
5
|
%
|
||||||||||
Loans held-for-sale - SBA, including deferred costs
|
3,794
|
1,390
|
2,269
|
173
|
%
|
67
|
%
|
||||||||||
Loans:
|
|||||||||||||||||
Commercial
|
471,651
|
458,498
|
415,557
|
3
|
%
|
13
|
%
|
||||||||||
Real estate:
|
|||||||||||||||||
Commercial and residential
|
508,497
|
487,475
|
454,676
|
4
|
%
|
12
|
%
|
||||||||||
Land and construction
|
68,666
|
74,972
|
47,758
|
-8
|
%
|
44
|
%
|
||||||||||
Home equity
|
71,579
|
65,243
|
56,743
|
10
|
%
|
26
|
%
|
||||||||||
Consumer
|
13,739
|
16,200
|
16,112
|
-15
|
%
|
-15
|
%
|
||||||||||
Loans
|
1,134,132
|
1,102,388
|
990,846
|
3
|
%
|
14
|
%
|
||||||||||
Deferred loan fees
|
(529)
|
(397)
|
(505)
|
33
|
%
|
5
|
%
|
||||||||||
Total loans, net of deferred fees
|
1,133,603
|
1,101,991
|
990,341
|
3
|
%
|
14
|
%
|
||||||||||
Allowance for loan losses
|
(18,757)
|
(18,554)
|
(18,592)
|
1
|
%
|
1
|
%
|
||||||||||
Loans, net
|
1,114,846
|
1,083,437
|
971,749
|
3
|
%
|
15
|
%
|
||||||||||
Company owned life insurance
|
52,052
|
51,657
|
50,452
|
1
|
%
|
3
|
%
|
||||||||||
Premises and equipment, net
|
7,249
|
7,340
|
7,237
|
-1
|
%
|
0
|
%
|
||||||||||
Goodwill
|
13,055
|
13,054
|
-
|
0
|
%
|
N/
|
A
|
||||||||||
Other intangible assets
|
2,898
|
3,087
|
1,297
|
-6
|
%
|
123
|
%
|
||||||||||
Accrued interest receivable and other assets
|
45,631
|
45,790
|
40,736
|
0
|
%
|
12
|
%
|
||||||||||
Total assets
|
$
|
1,680,206
|
$
|
1,652,887
|
$
|
1,480,619
|
2
|
%
|
13
|
%
|
|||||||
|
|||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|||||||||||||||||
Liabilities:
|
|||||||||||||||||
Deposits:
|
|||||||||||||||||
Demand, noninterest-bearing
|
$
|
574,210
|
$
|
544,339
|
$
|
456,235
|
5
|
%
|
26
|
%
|
|||||||
Demand, interest-bearing
|
235,922
|
241,477
|
193,041
|
-2
|
%
|
22
|
%
|
||||||||||
Savings and money market
|
380,398
|
380,486
|
354,175
|
0
|
%
|
7
|
%
|
||||||||||
Time deposits-under $250
|
55,571
|
55,747
|
57,987
|
0
|
%
|
-4
|
%
|
||||||||||
Time deposits-$250 and over
|
160,106
|
163,066
|
158,011
|
-2
|
%
|
1
|
%
|
||||||||||
Time deposits - brokered
|
26,139
|
28,126
|
33,614
|
-7
|
%
|
-22
|
%
|
||||||||||
CDARS - money market and time deposits
|
14,791
|
10,408
|
14,785
|
42
|
%
|
0
|
%
|
||||||||||
Total deposits
|
1,447,137
|
1,423,649
|
1,267,848
|
2
|
%
|
14
|
%
|
||||||||||
Accrued interest payable and other liabilities
|
46,030
|
42,461
|
31,246
|
8
|
%
|
47
|
%
|
||||||||||
Total liabilities
|
1,493,167
|
1,466,110
|
1,299,094
|
2
|
%
|
15
|
%
|
||||||||||
|
|||||||||||||||||
Shareholders' Equity:
|
|||||||||||||||||
Series C preferred stock, net
|
19,519
|
19,519
|
19,519
|
0
|
%
|
0
|
%
|
||||||||||
Common stock
|
134,307
|
133,992
|
132,911
|
0
|
%
|
1
|
%
|
||||||||||
Retained earnings
|
36,484
|
34,583
|
29,187
|
5
|
%
|
25
|
%
|
||||||||||
Accumulated other comprehensive loss
|
(3,271)
|
(1,317)
|
(92)
|
-148
|
%
|
-3455
|
%
|
||||||||||
Total shareholders' equity
|
187,039
|
186,777
|
181,525
|
0
|
%
|
3
|
%
|
||||||||||
Total liabilities and shareholders' equity
|
$
|
1,680,206
|
$
|
1,652,887
|
$
|
1,480,619
|
2
|
%
|
13
|
%
|
|
End of Period:
|
Percent Change From:
|
|||||||||||||||
|
June 30,
|
March 31,
|
June 30,
|
March 31,
|
June 30,
|
||||||||||||
|
2015
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
CREDIT QUALITY DATA
|
|||||||||||||||||
(in $000's, unaudited)
|
|||||||||||||||||
Nonaccrual loans - held-for-investment
|
$
|
4,832
|
$
|
6,733
|
$
|
7,688
|
-28
|
%
|
-37
|
%
|
|||||||
Restructured and loans over 90 days past due and still accruing
|
-
|
-
|
454
|
N/
|
A
|
-100
|
%
|
||||||||||
Total nonperforming loans
|
4,832
|
6,733
|
8,142
|
-28
|
%
|
-41
|
%
|
||||||||||
Foreclosed assets
|
421
|
1,716
|
525
|
-75
|
%
|
-20
|
%
|
||||||||||
Total nonperforming assets
|
$
|
5,253
|
$
|
8,449
|
$
|
8,667
|
-38
|
%
|
-39
|
%
|
|||||||
Other restructured loans still accruing
|
$
|
158
|
$
|
163
|
$
|
1,180
|
-3
|
%
|
-87
|
%
|
|||||||
Net (recoveries) charge-offs during the quarter
|
$
|
(181)
|
$
|
(235)
|
$
|
27
|
23
|
%
|
-770
|
%
|
|||||||
Provision (credit) for loan losses during the quarter
|
$
|
22
|
$
|
(60)
|
$
|
(198)
|
137
|
%
|
111
|
%
|
|||||||
Allowance for loan losses
|
$
|
18,757
|
$
|
18,554
|
$
|
18,592
|
1
|
%
|
1
|
%
|
|||||||
Classified assets(1)
|
$
|
11,168
|
$
|
16,647
|
$
|
23,092
|
-33
|
%
|
-52
|
%
|
|||||||
Allowance for loan losses to total loans
|
1.65%
|
1.68%
|
1.88%
|
-2
|
%
|
-12
|
%
|
||||||||||
Allowance for loan losses to total nonperforming loans
|
388.18%
|
275.57%
|
228.35%
|
41
|
%
|
70
|
%
|
||||||||||
Nonperforming assets to total assets
|
0.31%
|
0.51%
|
0.59%
|
-39
|
%
|
-47
|
%
|
||||||||||
Nonperforming loans to total loans
|
0.43%
|
0.61%
|
0.82%
|
-30
|
%
|
-48
|
%
|
||||||||||
Classified assets* to Heritage Commerce Corp Tier 1
|
|||||||||||||||||
capital plus allowance for loan losses
|
6%
|
9%
|
12%
|
-33
|
%
|
-50
|
%
|
||||||||||
Classified assets* to Heritage Bank of Commerce Tier 1
|
|||||||||||||||||
capital plus allowance for loan losses
|
6%
|
9%
|
13%
|
-33
|
%
|
-54
|
%
|
||||||||||
|
|||||||||||||||||
OTHER PERIOD-END STATISTICS
|
|||||||||||||||||
(in $000's, unaudited)
|
|||||||||||||||||
Heritage Commerce Corp:
|
|||||||||||||||||
Tangible equity
|
$
|
171,086
|
$
|
170,636
|
$
|
180,228
|
0
|
%
|
-5
|
%
|
|||||||
Tangible common equity
|
$
|
151,567
|
$
|
151,117
|
$
|
160,709
|
0
|
%
|
-6
|
%
|
|||||||
Shareholders' equity / total assets
|
11.13%
|
11.30%
|
12.26%
|
-2
|
%
|
-9
|
%
|
||||||||||
Tangible equity / tangible assets
|
10.28%
|
10.43%
|
12.18%
|
-1
|
%
|
-16
|
%
|
||||||||||
Tangible common equity / tangible assets
|
9.11%
|
9.23%
|
10.86%
|
-1
|
%
|
-16
|
%
|
||||||||||
Loan to deposit ratio
|
78.33%
|
77.41%
|
78.11%
|
1
|
%
|
0
|
%
|
||||||||||
Noninterest-bearing deposits / total deposits
|
39.68%
|
38.24%
|
35.98%
|
4
|
%
|
10
|
%
|
||||||||||
Total risk-based capital ratio(2)
|
13.0%
|
13.0%
|
15.1%
|
0
|
%
|
-14
|
%
|
||||||||||
Tier 1 risk-based capital ratio(2)
|
11.8%
|
11.7%
|
13.9%
|
1
|
%
|
-15
|
%
|
||||||||||
Common Equity Tier 1 risk-based capital ratio(2)
|
10.5%
|
10.4%
|
N/A
|
1
|
%
|
N/
|
A
|
||||||||||
Leverage ratio(2)
|
10.6%
|
10.5%
|
12.0%
|
1
|
%
|
-12
|
%
|
||||||||||
|
|||||||||||||||||
Heritage Bank of Commerce:
|
|||||||||||||||||
Total risk-based capital ratio(2)
|
12.6%
|
12.3%
|
14.1%
|
2
|
%
|
-11
|
%
|
||||||||||
Tier 1 risk-based capital ratio(2)
|
11.3%
|
11.0%
|
12.9%
|
3
|
%
|
-12
|
%
|
||||||||||
Common Equity Tier 1 risk-based capital ratio(2)
|
11.3%
|
11.0%
|
N/A
|
3
|
%
|
N/
|
A
|
||||||||||
Leverage ratio(2)
|
10.2%
|
10.0%
|
11.2%
|
2
|
%
|
-9
|
%
|
||||||||||
|
|||||||||||||||||
(1)Net of SBA guarantees
|
|||||||||||||||||
(2)June 30, 2015 and March 31, 2015 capital ratios are based on the Basel III regulatory requirements;
|
|||||||||||||||||
June 30, 2014 capital ratios are based on the Basel I regulatory requirements.
|
|
For the Quarter Ended
|
For the Quarter Ended
|
||||||||||||||||
|
June 30, 2015
|
June 30, 2014
|
||||||||||||||||
|
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)
|
$
|
1,107,906
|
$
|
15,643
|
5.66
|
%
|
$
|
974,673
|
$
|
11,617
|
4.78
|
%
|
||||||
Securities - taxable
|
238,801
|
1,937
|
3.25
|
%
|
287,841
|
2,047
|
2.85
|
%
|
||||||||||
Securities - tax exempt(2)
|
80,943
|
792
|
3.92
|
%
|
79,845
|
779
|
3.91
|
%
|
||||||||||
Federal funds sold and interest-bearing
|
||||||||||||||||||
deposits in other financial institutions
|
114,901
|
80
|
0.28
|
%
|
31,598
|
22
|
0.28
|
%
|
||||||||||
Total interest earning assets(2)
|
1,542,551
|
18,452
|
4.80
|
%
|
1,373,957
|
14,465
|
4.22
|
%
|
||||||||||
Cash and due from banks
|
27,996
|
23,919
|
||||||||||||||||
Premises and equipment, net
|
7,342
|
7,212
|
||||||||||||||||
Goodwill and other intangible assets
|
16,063
|
1,367
|
||||||||||||||||
Other assets
|
70,616
|
62,630
|
||||||||||||||||
Total assets
|
$
|
1,664,568
|
$
|
1,469,085
|
||||||||||||||
|
||||||||||||||||||
Liabilities and shareholders' equity:
|
||||||||||||||||||
Deposits:
|
||||||||||||||||||
Demand, noninterest-bearing
|
$
|
550,869
|
$
|
436,018
|
||||||||||||||
|
||||||||||||||||||
Demand, interest-bearing
|
235,860
|
105
|
0.18
|
%
|
199,010
|
82
|
0.17
|
%
|
||||||||||
Savings and money market
|
382,751
|
198
|
0.21
|
%
|
354,826
|
166
|
0.19
|
%
|
||||||||||
Time deposits - under $100
|
19,065
|
14
|
0.29
|
%
|
20,610
|
16
|
0.31
|
%
|
||||||||||
Time deposits - $100 and over
|
199,615
|
161
|
0.32
|
%
|
194,483
|
157
|
0.32
|
%
|
||||||||||
Time deposits - brokered
|
26,790
|
53
|
0.79
|
%
|
37,766
|
83
|
0.88
|
%
|
||||||||||
CDARS - money market and time deposits
|
13,519
|
2
|
0.06
|
%
|
14,408
|
2
|
0.06
|
%
|
||||||||||
Total interest-bearing deposits
|
877,600
|
533
|
0.24
|
%
|
821,103
|
506
|
0.25
|
%
|
||||||||||
Total deposits
|
1,428,469
|
533
|
0.15
|
%
|
1,257,121
|
506
|
0.16
|
%
|
||||||||||
|
||||||||||||||||||
Short-term borrowings
|
13
|
-
|
0.00
|
%
|
1,557
|
1
|
0.26
|
%
|
||||||||||
Total interest-bearing liabilities
|
877,613
|
533
|
0.24
|
%
|
822,660
|
507
|
0.25
|
%
|
||||||||||
Total interest-bearing liabilities and demand,
|
||||||||||||||||||
noninterest-bearing / cost of funds
|
1,428,482
|
533
|
0.15
|
%
|
1,258,678
|
507
|
0.16
|
%
|
||||||||||
Other liabilities
|
48,907
|
31,444
|
||||||||||||||||
Total liabilities
|
1,477,389
|
1,290,122
|
||||||||||||||||
Shareholders' equity
|
187,179
|
178,963
|
||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
1,664,568
|
$
|
1,469,085
|
||||||||||||||
|
||||||||||||||||||
Net interest income(2) / margin
|
17,919
|
4.66
|
%
|
13,958
|
4.07
|
%
|
||||||||||||
Less tax equivalent adjustment(2)
|
(277)
|
(273)
|
||||||||||||||||
Net interest income
|
$
|
17,642
|
$
|
13,685
|
||||||||||||||
|
||||||||||||||||||
(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 Six Months Ended
|
For the Six Months Ended
|
|||||||||||||||||||
|
June 30, 2015
|
June 30, 2014
|
|||||||||||||||||||
|
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)
|
$
|
1,086,988
|
$
|
30,647
|
5.69
|
%
|
$
|
952,628
|
$
|
22,756
|
4.82
|
%
|
|||||||||
Securities - taxable
|
234,651
|
3,716
|
3.19
|
%
|
287,946
|
4,217
|
2.95
|
%
|
|||||||||||||
Securities - tax exempt(2)
|
80,410
|
1,571
|
3.94
|
%
|
79,895
|
1,557
|
3.93
|
%
|
|||||||||||||
Federal funds sold and interest-bearing
|
|||||||||||||||||||||
deposits in other financial institutions
|
127,441
|
157
|
0.25
|
%
|
47,504
|
62
|
0.26
|
%
|
|||||||||||||
Total interest earning assets(2)
|
1,529,490
|
36,091
|
4.76
|
%
|
1,367,973
|
28,592
|
4.21
|
%
|
|||||||||||||
Cash and due from banks
|
27,628
|
24,323
|
|||||||||||||||||||
Premises and equipment, net
|
7,397
|
7,224
|
|||||||||||||||||||
Goodwill and other intangible assets
|
16,153
|
1,425
|
|||||||||||||||||||
Other assets
|
69,171
|
63,063
|
|||||||||||||||||||
Total assets
|
$
|
1,649,839
|
$
|
1,464,008
|
|||||||||||||||||
|
|||||||||||||||||||||
Liabilities and shareholders' equity:
|
|||||||||||||||||||||
Deposits:
|
|||||||||||||||||||||
Demand, noninterest-bearing
|
$
|
540,767
|
$
|
432,501
|
|||||||||||||||||
|
|||||||||||||||||||||
Demand, interest-bearing
|
233,669
|
205
|
0.18
|
%
|
199,207
|
159
|
0.16
|
%
|
|||||||||||||
Savings and money market
|
382,385
|
383
|
0.20
|
%
|
346,251
|
317
|
0.18
|
%
|
|||||||||||||
Time deposits - under $100
|
19,370
|
29
|
0.30
|
%
|
20,887
|
33
|
0.32
|
%
|
|||||||||||||
Time deposits - $100 and over
|
200,277
|
312
|
0.31
|
%
|
194,644
|
316
|
0.33
|
%
|
|||||||||||||
Time deposits - brokered
|
27,450
|
108
|
0.79
|
%
|
43,384
|
199
|
0.92
|
%
|
|||||||||||||
CDARS - money market and time deposits
|
12,203
|
4
|
0.07
|
%
|
16,770
|
3
|
0.04
|
%
|
|||||||||||||
Total interest-bearing deposits
|
875,354
|
1,041
|
0.24
|
%
|
821,143
|
1,027
|
0.25
|
%
|
|||||||||||||
Total deposits
|
1,416,121
|
1,041
|
0.15
|
%
|
1,253,644
|
1,027
|
0.17
|
%
|
|||||||||||||
|
|||||||||||||||||||||
Short-term borrowings
|
38
|
-
|
0.00
|
%
|
812
|
1
|
0.25
|
%
|
|||||||||||||
Total interest-bearing liabilities
|
875,392
|
1,041
|
821,955
|
1,028
|
0.25
|
%
|
|||||||||||||||
Total interest-bearing liabilities and demand,
|
|||||||||||||||||||||
noninterest-bearing / cost of funds
|
1,416,159
|
1,041
|
0.15
|
%
|
1,254,456
|
1,028
|
0.17
|
%
|
|||||||||||||
Other liabilities
|
47,280
|
32,175
|
|||||||||||||||||||
Total liabilities
|
1,463,439
|
1,286,631
|
|||||||||||||||||||
Shareholders' equity
|
186,400
|
177,377
|
|||||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
1,649,839
|
$
|
1,464,008
|
|||||||||||||||||
|
|||||||||||||||||||||
Net interest income(2) / margin
|
35,050
|
4.62
|
%
|
27,564
|
4.06
|
%
|
|||||||||||||||
Less tax equivalent adjustment(2)
|
(550)
|
(545)
|
|
||||||||||||||||||
Net interest income
|
$
|
34,500
|
$
|
27,019
|
|||||||||||||||||
|
|||||||||||||||||||||
(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.
|
1 Year Heritage Commerce Chart |
1 Month Heritage Commerce Chart |
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