SAN JOSE, Calif., Oct. 26, 2023 (GLOBE NEWSWIRE) --
Heritage Commerce Corp (Nasdaq: HTBK), (the
“Company”), the holding company for Heritage Bank of Commerce (the
“Bank”), today announced that its third quarter 2023 net income was
$15.8 million, or $0.26 per average diluted common share, compared
to $18.1 million, or $0.30 per average diluted common share, for
the third quarter of 2022, and $16.4 million, or $0.27 per average
diluted common share, for the second quarter of 2023. For the nine
months ended September 30, 2023, net income increased 12% to $51.1
million, or $0.83 per average diluted common share, compared to
$45.8 million, or $0.75 per average diluted common share, for the
nine months ended September 30, 2022. All results are
unaudited.
“We delivered strong third quarter of 2023 operating results
allowing us to achieve record earnings for the first nine months of
2023,” said Clay Jones, President & Chief Executive Officer.
“While our third quarter profits were impacted by the expected
increased cost of deposits, our year-to-date net income increased
12% compared to the first nine months of 2022. These profits were
fueled by a steady growth in deposits, moderate loan demand, and
higher net interest income. The net interest margin contraction we
experienced during the third quarter was primarily related to
deposit pricing.”
“Our credits metrics remained strong during the third quarter,”
said Mr. Jones. “We continued to maintain the strength on our
balance sheet along with a solid allowance for credit losses on
loans, reflecting our prudent credit risk management. Further, our
strong liquidity position is enhanced by a well-diversified deposit
profile and access to ample alternative funding sources. We are
well positioned to navigate challenging economic headwinds and
continue to grow the franchise.”
"Our commitment to delivering exceptional client service and
meeting performance targets remains the driving force behind our
success. I would like to express my appreciation to our committed
Board of Directors and team members for their continued dedication
to serving our clients, communities, and shareholders," stated Mr.
Jones.
Current Financial Condition and Liquidity
Position
The following are important factors in understanding our current
financial condition and liquidity position:
Liquidity and Available Lines of Credit:
- The following table shows our liquidity and available lines of
credit at September 30, 2023:
LIQUIDITY AND
AVAILABLE LINES OF CREDIT |
|
Total |
(in $000’s, unaudited) |
|
Available |
Excess funds at the Federal
Reserve Bank ("FRB") |
|
$ |
599,000 |
FRB discount window
collateralized line of credit |
|
|
1,214,537 |
Federal Home Loan Bank
("FHLB") collateralized borrowing capacity |
|
|
1,151,769 |
Unpledged investment
securities (at fair value) |
|
|
76,712 |
Off-balance sheet
deposits |
|
|
47,094 |
Federal funds purchase
arrangements |
|
|
80,000 |
Holding company line of
credit |
|
|
20,000 |
Total |
|
$ |
3,189,112 |
|
|
|
|
- The Company’s total liquidity and borrowing capacity was $3.189
billion, all of which remained available at September 30,
2023.
- The available liquidity and borrowing capacity was 70% of total
deposits and approximately 150% of the Bank’s estimated uninsured
deposits at September 30, 2023.
- The Bank increased its credit line availability from the FRB
and the FHLB by $1.527 billion to $2.366 billion at September 30,
2023, from $839.5 million at December 31, 2022.
- The loan to deposit ratio was 71.81% at September 30, 2023,
compared to 75.14% at December 31, 2022, and 73.07% at June 30,
2023, providing us with ample liquidity and capacity to provide
future credit to the community.
Deposits:
- Total deposits increased $185.9 million, or 4%, to $4.575
billion at September 30, 2023 from $4.390 billion at December 31,
2022, and increased $74.7 million, or 2% from June 30, 2023.
- Migration of customer deposits resulted in an increase in
Insured Cash Sweep (“ICS”)/Certificate of Deposit Account Registry
Service (“CDARS”) deposits of $890.8 million to $921.2 million at
September 30, 2023, compared to $30.4 million at December 31, 2022,
and increased $97.1 million from $824.1 million at June 30,
2023.
- Noninterest-bearing demand deposits decreased ($493.2) million,
or (28%), to $1.244 billion at September 30, 2023 from December 31,
2022, and decreased ($76.3) million, or (6%) from June 30, 2023,
largely in response to the interest rate environment.
- The Bank had 24,769 deposit accounts at September 30, 2023,
with an average balance of $185,000, compared to 24,404 deposit
accounts at June 30, 2023, with an average balance of $187,000. At
December 31, 2022, the Company had 23,833 deposit accounts, with an
average balance of $184,000.
- Deposits from the Bank’s top 100 client relationships totaled
$2.185 billion, representing 48% of total deposits, with an average
account size of $408,000, representing 22% of the total number of
accounts at September 30, 2023.
Investment Securities:
- Investment securities totaled $1.122 billion at September 30,
2023, of which $457.2 million were in the securities
available-for-sale portfolio (at fair value), and $664.7 million
were in the securities held-to-maturity portfolio (at amortized
cost, net of allowance for credit losses of $13,000).
- The weighted average life of the total investment securities
portfolio was 4.72 years at September 30, 2023.
- The following are the projected cash flows from paydowns and
maturities in the investment securities portfolio for the periods
indicated based on the current interest rate environment:
|
|
|
|
|
Agency |
|
|
|
|
|
|
|
|
Mortgage- |
|
|
|
|
|
|
|
backed and |
|
|
PROJECTED INVESTMENT
SECURITIES CASH FLOWS |
|
U.S. |
|
Municipal |
|
|
(in $000’s, unaudited) |
|
Treasury |
|
Securities |
|
Total |
Fourth quarter of 2023 |
|
$ |
20,000 |
|
$ |
20,314 |
|
$ |
40,314 |
First quarter of 2024 |
|
|
37,000 |
|
|
19,578 |
|
|
56,578 |
Second quarter of 2024 |
|
|
131,000 |
|
|
18,752 |
|
|
149,752 |
Third quarter of 2024 |
|
|
37,500 |
|
|
19,522 |
|
|
57,022 |
Fourth quarter of 2024 |
|
|
9,000 |
|
|
18,028 |
|
|
27,028 |
First quarter of 2025 |
|
|
35,000 |
|
|
17,528 |
|
|
52,528 |
Second quarter of 2025 |
|
|
118,000 |
|
|
17,145 |
|
|
135,145 |
Third quarter of 2025 |
|
|
25,500 |
|
|
18,430 |
|
|
43,930 |
Fourth quarter of 2025 |
|
|
— |
|
|
16,961 |
|
|
16,961 |
Total |
|
$ |
413,000 |
|
$ |
166,258 |
|
$ |
579,258 |
|
|
|
|
|
|
|
|
|
|
Loans:
- Loans, excluding loans held-for-sale, decreased ($13.1) million
to $3.285 billion at September 30, 2023 from $3.299 billion at
December 31, 2022, and decreased ($3.3) million from $3.289 billion
at June 30, 2023. Loans, excluding residential mortgages, increased
$21.8 million, or 1%, to $2.782 billion at September 30, 2023,
compared to $2.761 billion at December 31, 2022, and increased $7.7
million from $2.775 billion at June 30, 2023.
- Commercial real estate (“CRE”) loans totaled $1.798 billion at
September 30, 2023, of which 33% were owner occupied and 67% were
investor CRE loans.
- During the third quarter of 2023, 42 new CRE loans were
originated totaling $86 million with a weighted average
loan-to-value and debt-service coverage for the non-owner occupied
portfolio of 43% and 2.37 times, respectively.
- The average loan size for all CRE loans was $1.6 million, and
the average loan size for office CRE loans was also $1.6
million.
- The Company has personal guarantees on 91% of its CRE
portfolio. A substantial portion of the unguaranteed CRE loans were
made to credit-worthy non-profit organizations.
- Total office exposure in the CRE portfolio was $401 million,
including 30 loans totaling approximately $76 million, in San Jose,
17 loans totaling approximately $26 million in San Francisco, and
eight loans totaling approximately $16 million, in Oakland, at
September 30, 2023. Non-owner occupied CRE with office
exposure totaled $316 million at September 30, 2023.
- Of the $401 million of CRE loans with office exposure,
approximately $37 million, or 9%, are situated in the Bay Area
downtown business districts of San Jose and San Francisco, with an
average balance of $2.2 million.
- At September 30, 2023, the weighted average loan-to-value and
debt-service coverage for the entire non-owner occupied office
portfolio were 43.1% and 1.82 times, respectively. For the nine
non-owner occupied office loans in San Francisco at September 30,
2023, the weighted average loan-to-value and debt-service coverage
were 36% and 1.49 times, respectively.
Third Quarter Ended September 30,
2023
Operating Results, Balance Sheet Review, Capital
Management, and Credit Quality
(as of, or for the periods ended September 30,
2023, compared to September 30, 2022, and June 30, 2023, except as
noted):
Operating Results:
- Diluted earnings per share were $0.26 for the third quarter of
2023, compared to $0.30 for the third quarter of 2022, and $0.27
for the second quarter of 2023. Diluted earnings per share were
$0.83 for the first nine months of 2023, compared to $0.75 for the
first nine months of 2022.
- The following table indicates the
ratios for the return on average tangible assets and the return on
average tangible common equity for the periods indicated:
|
|
For the Quarter Ended: |
|
For the Nine Months Ended: |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
(unaudited) |
|
2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Return on average tangible
assets |
|
1.20 |
% |
|
|
1.29 |
% |
|
|
1.36 |
% |
|
|
1.33 |
% |
|
|
1.17 |
% |
|
Return on average tangible
common equity |
|
13.06 |
% |
|
|
13.93 |
% |
|
|
16.60 |
% |
|
|
14.52 |
% |
|
|
14.41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Net interest income decreased (6%) to $45.4 million for the
third quarter of 2023, compared to $48.0 million for the third
quarter of 2022. The fully tax equivalent (“FTE”) net interest
margin decreased (16) basis points to 3.57% for the third quarter
of 2023, from 3.73% for the third quarter of 2022, primarily due to
a higher cost of funds, and a decrease in the average balances of
noninterest-bearing demand deposits, partially offset by increases
in the prime rate and the rate on overnight funds, and a shift in
the mix of earning assets as the Company invested its excess
liquidity into higher yielding loans and investment securities.
- Net interest income decreased (2%) to $45.4 million for the
third quarter of 2023, compared to $46.3 million for the second
quarter of 2023. The FTE net interest margin decreased (19) basis
points to 3.57% for the third quarter of 2023 from 3.76% for the
second quarter of 2023, primarily due to a higher cost of funds,
and a decrease in the average balances of noninterest bearing
demand deposits, partially offset by increases in the prime rate
and higher average yields on overnight funds, an increase in the
average balance of loans, and a decrease in the average balances of
short-term borrowings.
- For the first nine months of 2023, the net interest income
increased 10% to $140.9 million, compared to $128.1 million for the
first nine months of 2022. The FTE net interest margin increased 41
basis points to 3.80% for the first nine months of 2023, from 3.39%
for the first nine months of 2022, primarily due to increases in
the prime rate and the rate on overnight funds, and a shift in the
mix of earning assets as the Company invested its excess liquidity
into higher yielding loans and investment securities, partially
offset by a higher cost of funds, a decrease in the average
balances of noninterest-bearing demand deposits, and an increase in
the average balances of short-term borrowings.
- The following table, as of
September 30, 2023, sets forth the estimated changes in the
Company’s annual net interest income that would result from an
instantaneous shift in interest rates from the base rate:
|
|
Increase/(Decrease) in |
|
|
|
Estimated Net |
|
|
|
Interest Income(1) |
|
CHANGE IN INTEREST
RATES (basis points) |
|
Amount |
|
Percent |
|
(in $000's, unaudited) |
|
|
|
|
|
|
+400 |
|
$ |
15,507 |
|
|
7.7 |
|
% |
+300 |
|
$ |
11,594 |
|
|
5.8 |
|
% |
+200 |
|
$ |
7,702 |
|
|
3.8 |
|
% |
+100 |
|
$ |
3,844 |
|
|
1.9 |
|
% |
0 |
|
|
— |
|
|
— |
|
|
−100 |
|
$ |
(4,725 |
) |
|
(2.3 |
) |
% |
−200 |
|
$ |
(13,249 |
) |
|
(6.6 |
) |
% |
−300 |
|
$ |
(26,427 |
) |
|
(13.1 |
) |
% |
−400 |
|
$ |
(43,348 |
) |
|
(21.6 |
) |
% |
_____________________
(1) Computations of prospective effects of hypothetical interest
rate changes are based on numerous assumptions including relative
levels of market interest rates, loan prepayments and deposit
decay, and should not be relied upon as indicative of actual
results. These projections are forward-looking and should be
considered in light of the Forward-Looking Statement
Disclaimer below. Actual rates paid on deposits may differ
from the hypothetical interest rates modeled due to competitive or
market factors, which could reduce any actual impact on net
interest income.
_____________________
- The following tables present the
average balance of loans outstanding, interest income, and the
average yield for the periods indicated:
- The average yield on the total loan
portfolio was relatively flat at 5.46% for the third quarter of
2023, compared to 5.47% for the second quarter of 2023, as lower
average balances of Bay View Funding factored
receivables, were mostly offset by increases in the prime
rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
|
For the Quarter Ended |
|
|
|
September 30, 2023 |
|
June 30, 2023 |
|
|
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
|
(in $000’s, unaudited) |
|
Balance |
|
Income |
|
Yield |
|
Balance |
|
Income |
|
Yield |
|
Loans, core bank |
|
$ |
2,720,010 |
|
|
$ |
37,171 |
|
5.42 |
% |
$ |
2,660,119 |
|
|
$ |
35,310 |
|
5.32 |
% |
Prepayment fees |
|
|
— |
|
|
|
182 |
|
0.03 |
% |
|
— |
|
|
|
73 |
|
0.01 |
% |
Asset-based lending |
|
|
23,983 |
|
|
|
593 |
|
9.81 |
% |
|
28,251 |
|
|
|
686 |
|
9.74 |
% |
Bay View Funding factored
receivables |
|
|
51,664 |
|
|
|
2,775 |
|
21.31 |
% |
|
68,680 |
|
|
|
3,847 |
|
22.47 |
% |
Purchased residential
mortgages |
|
|
465,471 |
|
|
|
3,811 |
|
3.25 |
% |
|
478,220 |
|
|
|
3,829 |
|
3.21 |
% |
Loan fair value mark /
accretion |
|
|
(3,648 |
) |
|
|
321 |
|
0.05 |
% |
|
(3,929 |
) |
|
|
283 |
|
0.04 |
% |
Total loans (includes loans held-for-sale) |
|
$ |
3,257,480 |
|
|
$ |
44,853 |
|
5.46 |
% |
$ |
3,231,341 |
|
|
$ |
44,028 |
|
5.47 |
% |
|
- The average yield on the total loan
portfolio increased to 5.46% for the third quarter of 2023,
compared to 4.90% for the third quarter of 2022, primarily due to
increases in the prime rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
|
For the Quarter Ended |
|
|
|
September 30, 2023 |
|
September 30, 2022 |
|
|
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
|
(in $000’s, unaudited) |
|
Balance |
|
Income |
|
Yield |
|
Balance |
|
Income |
|
Yield |
|
Loans, core bank |
|
$ |
2,720,010 |
|
|
$ |
37,171 |
|
5.42 |
% |
$ |
2,587,772 |
|
|
$ |
30,774 |
|
4.72 |
% |
Prepayment fees |
|
|
— |
|
|
|
182 |
|
0.03 |
% |
|
— |
|
|
|
96 |
|
0.01 |
% |
Asset-based lending |
|
|
23,983 |
|
|
|
593 |
|
9.81 |
% |
|
53,514 |
|
|
|
1,032 |
|
7.65 |
% |
Bay View Funding factored
receivables |
|
|
51,664 |
|
|
|
2,775 |
|
21.31 |
% |
|
62,623 |
|
|
|
3,201 |
|
20.28 |
% |
Purchased residential
mortgages |
|
|
465,471 |
|
|
|
3,811 |
|
3.25 |
% |
|
445,256 |
|
|
|
3,414 |
|
3.04 |
% |
Loan fair value mark /
accretion |
|
|
(3,648 |
) |
|
|
321 |
|
0.05 |
% |
|
(5,178 |
) |
|
|
353 |
|
0.05 |
% |
Total loans (includes loans held-for-sale) |
|
$ |
3,257,480 |
|
|
$ |
44,853 |
|
5.46 |
% |
$ |
3,143,987 |
|
|
$ |
38,870 |
|
4.90 |
% |
|
• |
The average yield on the total loan portfolio increased to 5.46%
for the first nine months of 2023, compared to 4.81% for the first
nine months of 2022, primarily due to increases in the prime rate,
partially offset by a decrease in the accretion of the loan
purchase discount into interest income from acquired loans, lower
prepayment fees, and higher average balances of lower yielding
purchased residential mortgages. |
|
|
For the Nine Months Ended |
|
For the Nine Months Ended |
|
|
|
September 30, 2023 |
|
September 30, 2022 |
|
|
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
|
(in $000’s, unaudited) |
|
Balance |
|
Income |
|
Yield |
|
Balance |
|
Income |
|
Yield |
|
Loans, core bank |
|
$ |
2,689,763 |
|
|
$ |
107,448 |
|
5.34 |
% |
$ |
2,567,129 |
|
|
$ |
86,464 |
|
4.50 |
% |
Prepayment fees |
|
|
— |
|
|
|
393 |
|
0.02 |
% |
|
— |
|
|
|
1,155 |
|
0.06 |
% |
Asset-based lending |
|
|
26,582 |
|
|
|
1,906 |
|
9.59 |
% |
|
57,540 |
|
|
|
2,857 |
|
6.64 |
% |
Bay View Funding factored
receivables |
|
|
65,938 |
|
|
|
10,623 |
|
21.54 |
% |
|
61,508 |
|
|
|
9,123 |
|
19.83 |
% |
Purchased residential
mortgages |
|
|
477,068 |
|
|
|
11,497 |
|
3.22 |
% |
|
394,618 |
|
|
|
8,553 |
|
2.90 |
% |
Loan fair value mark /
accretion |
|
|
(3,976 |
) |
|
|
1,126 |
|
0.06 |
% |
|
(6,121 |
) |
|
|
2,357 |
|
0.12 |
% |
Total loans (includes loans held-for-sale) |
|
$ |
3,255,375 |
|
|
$ |
132,993 |
|
5.46 |
% |
$ |
3,074,674 |
|
|
$ |
110,509 |
|
4.81 |
% |
|
• |
In
aggregate, the remaining net purchase discount on total loans
acquired was $3.5 million at September 30, 2023. |
|
|
|
- The following table presents the
average balance of deposits and interest-bearing liabilities,
interest expense, and the average rate for the periods
indicated:
|
|
For the Quarter Ended |
|
For the Quarter Ended |
|
|
|
September 30, 2023 |
|
June 30, 2023 |
|
|
|
Average |
|
Interest |
|
Average |
|
Average |
|
Interest |
|
Average |
|
(in $000’s, unaudited) |
|
Balance |
|
Expense |
|
Rate |
|
Balance |
|
Expense |
|
Rate |
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand, noninterest-bearing |
|
$ |
1,302,606 |
|
|
|
|
|
|
$ |
1,368,373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand, interest-bearing |
|
|
1,017,686 |
|
$ |
1,730 |
|
0.67 |
% |
|
1,118,200 |
|
$ |
1,788 |
|
0.64 |
% |
Savings and money market |
|
|
1,087,336 |
|
|
5,514 |
|
2.01 |
% |
|
1,109,347 |
|
|
4,638 |
|
1.68 |
% |
Time deposits - under $100 |
|
|
11,966 |
|
|
30 |
|
0.99 |
% |
|
11,610 |
|
|
20 |
|
0.69 |
% |
Time deposits - $100 and over |
|
|
272,362 |
|
|
2,489 |
|
3.63 |
% |
|
201,600 |
|
|
1,410 |
|
2.81 |
% |
ICS/CDARS - interest-bearing demand, money market and time
deposits |
|
|
881,665 |
|
|
5,117 |
|
2.30 |
% |
|
614,911 |
|
|
2,867 |
|
1.87 |
% |
Total interest-bearing deposits |
|
|
3,271,015 |
|
|
14,880 |
|
1.80 |
% |
|
3,055,668 |
|
|
10,723 |
|
1.41 |
% |
Total deposits |
|
|
4,573,621 |
|
|
14,880 |
|
1.29 |
% |
|
4,424,041 |
|
|
10,723 |
|
0.97 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings |
|
|
31 |
|
|
— |
|
0.00 |
% |
|
62,653 |
|
|
787 |
|
5.04 |
% |
Subordinated debt, net of
issuance costs |
|
|
39,439 |
|
|
539 |
|
5.42 |
% |
|
39,401 |
|
|
538 |
|
5.48 |
% |
Total interest-bearing liabilities |
|
|
3,310,485 |
|
|
15,419 |
|
1.85 |
% |
|
3,157,722 |
|
|
12,048 |
|
1.53 |
% |
Total interest-bearing liabilities and demand,
noninterest-bearing / cost of funds |
|
$ |
4,613,091 |
|
$ |
15,419 |
|
1.33 |
% |
$ |
4,526,095 |
|
$ |
12,048 |
|
1.07 |
% |
|
• |
The average cost of total deposits increased to 1.29% for the third
quarter of 2023, compared to 0.97% for the second quarter of
2023. The average cost of funds increased to 1.33% for the
third quarter of 2023, compared to 1.07% for the second quarter of
2023. The average cost of deposits was 0.13% and the average
cost of funds was 0.18% for the third quarter of 2022. |
|
|
|
|
• |
The average cost of total
deposits increased to 0.94% for the first nine months of 2023,
compared to 0.11% for the first nine months of 2022. The
average cost of funds increased to 1.01% for the first nine months
of 2023, compared to 0.16% for the first nine months of 2022. |
|
|
|
|
• |
The increase in the average cost
of total deposits and the average cost of funds for the third
quarter of 2023 and first nine months of 2023 was primarily due to
clients seeking higher yields and moving noninterest-bearing
deposits to the Bank’s interest-bearing and ICS deposits and an
increase in market interest rates. |
|
|
|
- During the third quarter of 2023,
we recorded a provision for credit losses on loans of $168,000,
compared to a $1.0 million provision for credit losses on loans for
the third quarter of 2022, and a provision for credit losses on
loans of $260,000 for the second quarter of 2023. There was a
provision for credit losses on loans of $460,000 for the nine
months ended September 30, 2023, compared to a $258,000 provision
for credit losses on loans for the nine months ended September 30,
2022.
- Total noninterest income decreased
(20%) to $2.2 million for the third quarter of 2023, compared to
$2.8 million for the third quarter of 2022, primarily due to lower
service charges and fees on deposit accounts, a lower gain on sales
of SBA loans and lower servicing income, partially offset by higher
termination fees at Bay View Funding, and a gain on proceeds from
company-owned life insurance during the third quarter of 2023.
Total noninterest income increased 7% to $2.2 million for the third
quarter of 2023, compared to $2.1 million for the second quarter of
2023, primarily due to higher termination fees at Bay View Funding,
and a gain on proceeds from company-owned life insurance during the
third quarter of 2023.
|
• |
For the nine months ended September 30, 2023, total noninterest
income decreased (4%) to $7.1 million, compared to $7.4 million for
the nine months ended September 30, 2022, primarily due to a
$669,000 gain on warrants during the first nine months of 2022, and
lower interchange fee income on credit cards during the first nine
months of 2023, partially offset by higher service charges and fees
on deposit accounts during the first nine months of 2023. |
|
|
|
- Total noninterest expense for the
third quarter of 2023 increased to $25.2 million, compared to $23.9
million for the third quarter of 2022, primarily due to higher
insurance, regulatory assessments, and information technology
related expenses included in other noninterest expense, partially
offset by lower professional fees and occupancy and equipment
expense during the third quarter of 2023. Total noninterest expense
for the third quarter of 2023 remained relatively flat at $25.2
million, compared to $25.0 million for the second quarter of 2023,
as higher regulatory assessments, shareholders relations and
insurance expense were mostly offset by lower professional
fees.
|
• |
Total noninterest expense for the nine months ended September 30,
2023 increased to $75.6 million, compared to $70.3 million for the
nine months ended September 30, 2022, primarily due to higher
salaries and employee benefits, and higher insurance, regulatory
assessments, improvements in information technology, and ICS/CDARS
fee expenses included in other noninterest expense, partially
offset by lower professional fees during the nine months ended
September 30, 2023. |
|
|
|
|
• |
Full time equivalent employees
were 348 at September 30, 2023, and 327 at September 30, 2022, and
347 at June 30, 2023. |
|
|
|
- The efficiency ratio was 52.89% for the third quarter of 2023,
compared to 47.02% for the third quarter of 2022, and 51.67% for
the second quarter of 2023. The efficiency ratio was 51.06% for the
nine months ended September 30, 2023, compared to 51.92% for the
nine months ended September 30, 2022, primarily due to higher net
interest income.
- Income tax expense was $6.5 million for the third quarter of
2023, compared to $7.8 million for the third quarter of 2022, and
$6.7 million for the second quarter of 2023. The effective tax rate
for both the third quarter of 2023 and second quarter of 2023 was
29.0%, compared to 30.3% for the third quarter of 2022. Income tax
expense for the nine months ended September 30, 2023 was $20.8
million, compared to $19.1 million for the nine months ended
September 30, 2022. The effective tax rate for the nine months
ended September 30, 2023 was 29.0%, compared to 29.5% for the nine
months ended September 30, 2022.
Balance Sheet Review, Capital Management and Credit
Quality:
- Total assets decreased (1%) to $5.403 billion at September 30,
2023, compared to $5.431 billion at September 30, 2022, and
increased 2% from $5.312 billion at June 30, 2023.
- The following table shows the balances of securities
available-for-sale, at fair value, and the related pre-tax
unrealized (loss) for the periods indicated:
SECURITIES
AVAILABLE-FOR-SALE |
|
September 30, |
|
June 30, |
|
September 30, |
(in $000’s, unaudited) |
|
2023
|
|
2023
|
|
2022 |
Balance (at fair value): |
|
|
|
|
|
|
|
|
|
U.S. Treasury |
|
$ |
396,996 |
|
|
$ |
421,146 |
|
|
$ |
405,389 |
|
Agency mortgage-backed securities |
|
|
60,198 |
|
|
|
64,912 |
|
|
|
73,145 |
|
Total |
|
$ |
457,194 |
|
|
$ |
486,058 |
|
|
$ |
478,534 |
|
|
|
|
|
|
|
|
|
|
|
Pre-tax unrealized
(loss): |
|
|
|
|
|
|
|
|
|
U.S. Treasury |
|
$ |
(9,606 |
) |
|
$ |
(10,903 |
) |
|
$ |
(10,070 |
) |
Agency mortgage-backed securities |
|
|
(7,185 |
) |
|
|
(5,659 |
) |
|
|
(7,304 |
) |
Total |
|
$ |
(16,791 |
) |
|
$ |
(16,562 |
) |
|
$ |
(17,374 |
) |
|
• |
The pre-tax unrealized loss on the securities available-for-sale
portfolio was ($16.8) million, or ($12.0) million net of taxes,
which was 1.8% of total shareholders’ equity at September 30,
2023. |
|
|
|
|
• |
The weighted average life of the
securities available-for-sale portfolio was 1.49 years at September
30, 2023. |
|
|
|
- The following table shows the
balances of securities held-to-maturity, at amortized cost, and the
related pre-tax unrecognized (loss) and allowance for credit losses
for the periods indicated:
SECURITIES
HELD-TO-MATURITY |
|
September 30, |
|
June 30, |
|
September 30, |
(in $000’s, unaudited) |
|
2023 |
|
2023 |
|
2022 |
Balance (at amortized
cost): |
|
|
|
|
|
|
|
|
|
Agency mortgage-backed securities |
|
$ |
632,241 |
|
|
$ |
648,337 |
|
|
$ |
665,679 |
|
Municipals — exempt from Federal tax |
|
|
32,453 |
|
|
|
33,771 |
|
|
|
38,130 |
|
Total |
|
$ |
664,694 |
|
|
$ |
682,108 |
|
|
$ |
703,809 |
|
|
|
|
|
|
|
|
|
|
|
Pre-tax unrecognized
(loss): |
|
|
|
|
|
|
|
|
|
Agency mortgage-backed securities |
|
$ |
(119,932 |
) |
|
$ |
(95,285 |
) |
|
$ |
(108,074 |
) |
Municipals — exempt from Federal tax |
|
|
(2,753 |
) |
|
|
(1,052 |
) |
|
|
(2,125 |
) |
Total |
|
$ |
(122,685 |
) |
|
$ |
(96,337 |
) |
|
$ |
(110,199 |
) |
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses on
municipal securities |
|
$ |
(13 |
) |
|
$ |
(13 |
) |
|
$ |
(15 |
) |
|
• |
The pre-tax unrecognized loss on the securities held-to-maturity
portfolio was ($122.7) million, or ($86.4) million net of taxes,
which was 13.1% of total shareholders’ equity at September 30,
2023. |
|
|
|
|
• |
The weighted average life of the
securities held-to-maturity portfolio was 7.03 years at September
30, 2023. |
|
|
|
- The unrealized and unrecognized losses in both the
available-for-sale and held-to-maturity portfolios were due to
higher interest rates at September 30, 2023 compared to when the
securities were purchased. The issuers are of high credit quality
and all principal amounts are expected to be repaid when the
securities mature. The fair value is expected to recover as the
securities approach their maturity date and/or market rates
decline.
- The loan portfolio remains well-diversified as reflected in the
following table which summarizes the distribution of loans,
excluding loans held-for-sale, and the percentage of distribution
in each category for the periods indicated:
LOANS |
|
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
|
(in $000’s, unaudited) |
|
Balance |
|
% to Total |
|
Balance |
|
% to Total |
|
Balance |
|
% to Total |
|
Commercial |
|
$ |
430,664 |
|
|
13 |
% |
$ |
466,354 |
|
|
14 |
% |
$ |
542,829 |
|
|
17 |
% |
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRE - owner occupied |
|
|
589,751 |
|
|
18 |
% |
|
608,031 |
|
|
18 |
% |
|
612,241 |
|
|
19 |
% |
CRE - non-owner occupied |
|
|
1,208,324 |
|
|
37 |
% |
|
1,147,313 |
|
|
35 |
% |
|
1,023,405 |
|
|
32 |
% |
Land and construction |
|
|
158,138 |
|
|
5 |
% |
|
162,816 |
|
|
5 |
% |
|
167,439 |
|
|
5 |
% |
Home equity |
|
|
124,477 |
|
|
4 |
% |
|
128,009 |
|
|
4 |
% |
|
116,489 |
|
|
3 |
% |
Multifamily |
|
|
253,129 |
|
|
7 |
% |
|
244,959 |
|
|
7 |
% |
|
229,455 |
|
|
7 |
% |
Residential mortgages |
|
|
503,006 |
|
|
15 |
% |
|
514,064 |
|
|
16 |
% |
|
508,839 |
|
|
16 |
% |
Consumer and other |
|
|
18,526 |
|
|
1 |
% |
|
17,635 |
|
|
1 |
% |
|
16,620 |
|
|
1 |
% |
Total Loans |
|
|
3,286,015 |
|
|
100 |
% |
|
3,289,181 |
|
|
100 |
% |
|
3,217,317 |
|
|
100 |
% |
Deferred loan costs (fees),
net |
|
|
(554 |
) |
|
— |
|
|
(397 |
) |
|
— |
|
|
(844 |
) |
|
— |
|
Loans, net of deferred costs and fees |
|
$ |
3,285,461 |
|
|
100 |
% |
$ |
3,288,784 |
|
|
100 |
% |
$ |
3,216,473 |
|
|
100 |
% |
|
• |
Loans, excluding loans held-for-sale, increased $69.0 million, or
2%, to $3.285 billion at September 30, 2023, compared to $3.216
billion at September 30, 2022, and decreased ($3.3) million from
$3.289 billion at June 30, 2023. Loans, excluding residential
mortgages, increased $74.8 million, or 3%, to $2.782 billion at
September 30, 2023, compared to $2.708 billion at September 30,
2022, and increased $7.7 million from $2.775 billion at June 30,
2023. |
|
|
|
|
• |
Commercial and industrial
(“C&I”) line utilization was 27% at September 30, 2023,
compared to 29% at both September 30, 2022 and June 30, 2023. |
|
|
|
|
• |
At September 30, 2023, there was
33% of the CRE loan portfolio secured by owner occupied real
estate, compared to 37% at September 30, 2022, and 35% at June 30,
2023. |
|
|
|
- The following table presents the maturity distribution of the
Company’s loans, excluding loans held-for-sale, as of September 30,
2023. The table shows the distribution of such loans between those
loans with predetermined (fixed) interest rates and those with
variable (floating) interest rates. Floating rates generally
fluctuate with changes in the prime rate as reflected in the
Western Edition of The Wall Street Journal, and contractual
repricing dates.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due in |
|
Over One Year But |
|
|
|
|
|
|
|
|
|
LOAN
MATURITIES |
|
One Year or Less |
|
Less than Five Years |
|
Over Five Years |
|
|
|
(in $000’s, unaudited) |
|
Balance |
|
% to Total |
|
Balance |
|
% to Total |
|
Balance |
|
% to Total |
|
Total |
Loans with variable interest
rates |
|
$ |
348,293 |
|
39 |
% |
|
$ |
253,687 |
|
28 |
% |
|
$ |
295,647 |
|
33 |
% |
|
$ |
897,627 |
Loans with fixed interest
rates |
|
|
65,092 |
|
3 |
% |
|
|
590,351 |
|
25 |
% |
|
|
1,732,945 |
|
72 |
% |
|
|
2,388,388 |
Loans |
|
$ |
413,385 |
|
12 |
% |
|
$ |
844,038 |
|
26 |
% |
|
$ |
2,028,592 |
|
62 |
% |
|
$ |
3,286,015 |
|
• |
At
September 30, 2023, approximately 27% of the Company’s loan
portfolio consisted of floating interest rate loans, compared to
34% at September 30, 2022, and 29% at June 30, 2023. |
|
|
|
- The following table summarizes the allowance for credit losses
on loans (“ACLL”) for the periods indicated:
|
|
At or For the Quarter Ended: |
|
At or For the Nine Months Ended: |
|
ALLOWANCE FOR CREDIT
LOSSES ON LOANS |
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
(in $000’s, unaudited) |
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Balance at beginning of period |
|
$ |
47,803 |
|
|
$ |
47,273 |
|
|
$ |
45,490 |
|
|
$ |
47,512 |
|
|
$ |
43,290 |
|
|
Charge-offs during the
period |
|
|
(447 |
) |
|
|
(24 |
) |
|
|
(7 |
) |
|
|
(851 |
) |
|
|
(378 |
) |
|
Recoveries during the
period |
|
|
178 |
|
|
|
294 |
|
|
|
432 |
|
|
|
581 |
|
|
|
3,751 |
|
|
Net recoveries (charge-offs) during the period |
|
|
(269 |
) |
|
|
270 |
|
|
|
425 |
|
|
|
(270 |
) |
|
|
3,373 |
|
|
Provision for credit losses on
loans during the period |
|
|
168 |
|
|
|
260 |
|
|
|
1,006 |
|
|
|
460 |
|
|
|
258 |
|
|
Balance at end of period |
|
$ |
47,702 |
|
|
$ |
47,803 |
|
|
$ |
46,921 |
|
|
$ |
47,702 |
|
|
$ |
46,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans, net of deferred
fees |
|
$ |
3,285,461 |
|
|
$ |
3,288,784 |
|
|
$ |
3,216,473 |
|
|
$ |
3,285,461 |
|
|
$ |
3,216,473 |
|
|
Total nonperforming loans |
|
$ |
5,484 |
|
|
$ |
5,537 |
|
|
$ |
1,036 |
|
|
$ |
5,484 |
|
|
$ |
1,036 |
|
|
ACLL to total loans |
|
|
1.45 |
|
% |
|
1.45 |
|
% |
|
1.46 |
|
% |
|
1.45 |
|
% |
|
1.46 |
|
% |
ACLL to total nonperforming
loans |
|
|
869.84 |
|
% |
|
863.34 |
|
% |
|
4,529.05 |
|
% |
|
869.84 |
|
% |
|
4,529.05 |
|
% |
|
• |
The following table shows the drivers of change in ACLL for the
first, second, and third quarters of 2023: |
DRIVERS OF CHANGE IN
ACLL |
|
|
(in $000’s, unaudited) |
|
|
ACLL at December 31, 2022 |
|
$ |
47,512 |
|
Portfolio changes during the
first quarter of 2023 |
|
|
(160 |
) |
Qualitative and quantitative
changes during the first quarter of 2023 including changes in
economic forecasts |
|
|
(79 |
) |
ACLL at March 31, 2023 |
|
|
47,273 |
|
Portfolio changes during the
second quarter of 2023 |
|
|
1,652 |
|
Qualitative and quantitative
changes during the second quarter of 2023 including changes in
economic forecasts |
|
|
(1,122 |
) |
ACLL at June 30, 2023 |
|
|
47,803 |
|
Portfolio changes during the
third quarter of 2023 |
|
|
(117 |
) |
Qualitative and quantitative
changes during the third quarter of 2023 including changes in
economic forecasts |
|
|
16 |
|
ACLL at September 30, 2023 |
|
$ |
47,702 |
|
|
- The following is a breakout of
nonperforming assets (“NPAs”) at the periods indicated:
NONPERFORMING
ASSETS |
|
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
|
(in $000’s, unaudited) |
|
Balance |
|
% of Total |
|
Balance |
|
% of Total |
|
Balance |
|
% of Total |
|
Restructured and loans over
90 days past due and still accruing |
|
$ |
1,966 |
|
36 |
% |
$ |
2,262 |
|
41 |
% |
$ |
545 |
|
53 |
% |
Residential mortgages |
|
|
1,716 |
|
31 |
% |
|
1,873 |
|
34 |
% |
|
— |
|
— |
% |
Commercial loans |
|
|
1,712 |
|
31 |
% |
|
1,306 |
|
23 |
% |
|
491 |
|
47 |
% |
Home equity loans |
|
|
90 |
|
2 |
% |
|
96 |
|
2 |
% |
|
— |
|
— |
% |
CRE |
|
|
— |
|
— |
% |
|
— |
|
— |
% |
|
— |
|
— |
% |
Total nonperforming assets |
|
$ |
5,484 |
|
100 |
% |
$ |
5,537 |
|
100 |
% |
$ |
1,036 |
|
100 |
% |
|
• |
NPAs totaled $5.5 million, or 0.10% of total assets, at both
September 30, 2023 and June 30, 2023, compared to $1.0 million, or
0.02% of total assets, at September 30, 2022. |
|
|
|
|
• |
There were no foreclosed assets
on the balance sheet at September 30, 2023, September 30, 2022, or
June 30, 2023. |
|
|
|
|
• |
There were no CRE loans, Shared
National Credits (“SNCs”) or material purchased participations
included in NPAs or total loans at September 30, 2023, September
30, 2022, or June 30, 2023. |
|
|
|
|
• |
Classified assets totaled $31.1
million, or 0.57% of total assets, at September 30, 2023, compared
to $28.6 million, or 0.53% of total assets, at September 30, 2022,
and $30.5 million, or 0.57% of total assets, at June 30, 2023. |
|
|
|
- The following table summarizes the distribution of deposits and
the percentage of distribution in each category for the periods
indicated:
DEPOSITS |
|
September 30, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
|
(in $000’s, unaudited) |
|
Balance |
|
% to Total |
|
Balance |
|
% to Total |
|
Balance |
|
% to Total |
|
Demand, noninterest-bearing |
|
$ |
1,243,501 |
|
27 |
% |
$ |
1,319,844 |
|
29 |
% |
$ |
1,883,574 |
|
40 |
% |
Demand, interest-bearing |
|
|
1,004,185 |
|
22 |
% |
|
1,064,638 |
|
24 |
% |
|
1,154,403 |
|
24 |
% |
Savings and money market |
|
|
1,110,640 |
|
24 |
% |
|
1,075,835 |
|
24 |
% |
|
1,487,400 |
|
32 |
% |
Time deposits — under
$250 |
|
|
43,906 |
|
1 |
% |
|
44,520 |
|
1 |
% |
|
34,728 |
|
1 |
% |
Time deposits — $250 and
over |
|
|
252,001 |
|
6 |
% |
|
171,852 |
|
4 |
% |
|
93,263 |
|
2 |
% |
ICS/CDARS — interest-bearing
demand, money market and time deposits |
|
|
921,224 |
|
20 |
% |
|
824,083 |
|
18 |
% |
|
29,897 |
|
1 |
% |
Total deposits |
|
$ |
4,575,457 |
|
100 |
% |
$ |
4,500,772 |
|
100 |
% |
$ |
4,683,265 |
|
100 |
% |
|
• |
Total deposits increased $74.7 million, or 2%, to $4.575 billion at
September 30, 2023, compared to $4.501 billion at June 30, 2023,
and decreased ($107.8) million, or (2%), from $4.683 billion at
September 30, 2022. |
|
|
|
|
• |
ICS/CDARS deposits increased
$97.1 million to $921.2 million at September 30, 2023, compared to
$824.1 million at June 30, 2023, and increased $891.3 million from
$29.9 million at September 30, 2022. |
|
|
|
|
• |
The Bank’s uninsured deposits
were approximately $2.123 billion, or 46% of total deposits, at
September 30, 2023, compared to $2.148 billion, or 48% of total
deposits, at June 30, 2023, and $2.556 billion, or 58% of total
deposits, at March 31, 2023, and $2.788 billion, or 64% of total
deposits, at December 31, 2022. |
|
|
|
- The Company’s
consolidated capital ratios exceeded regulatory guidelines and the
Bank’s capital ratios exceeded regulatory guidelines under the
Basel III prompt corrective action (“PCA”) regulatory guidelines
for a well-capitalized financial institution, and the Basel III
minimum regulatory requirements at September 30, 2023, as reflected
in the following table:
|
|
|
|
|
|
|
|
Well-capitalized |
|
|
|
|
|
|
|
|
|
|
Financial |
|
|
|
|
|
|
|
|
|
|
Institution |
|
Basel III |
|
|
Heritage |
|
Heritage |
|
Basel III PCA |
|
Minimum |
|
|
Commerce |
|
Bank of |
|
Regulatory |
|
Regulatory |
CAPITAL RATIOS (unaudited) |
|
Corp |
|
Commerce |
|
Guidelines |
|
Requirement(1) |
Total Capital |
|
15.6 |
% |
|
15.0 |
% |
|
10.0 |
% |
|
10.5 |
% |
Tier 1 Capital |
|
13.4 |
% |
|
13.9 |
% |
|
8.0 |
% |
|
8.5 |
% |
Common Equity Tier 1
Capital |
|
13.4 |
% |
|
13.9 |
% |
|
6.5 |
% |
|
7.0 |
% |
Tier 1 Leverage |
|
9.6 |
% |
|
10.0 |
% |
|
5.0 |
% |
|
4.0 |
% |
Tangible common equity /
tangible assets (2) |
|
9.3 |
% |
|
9.6 |
% |
|
N/A |
|
|
N/A |
|
_____________________
(1) |
Basel III minimum
regulatory requirements for both the Company and the Bank include a
2.5% capital conservation buffer, except the leverage ratio. |
(2) |
Represents
shareholders’ equity minus goodwill and other intangible assets
divided by total assets minus goodwill and other intangible
assets.
|
_____________________
- The following table reflects the
components of accumulated other comprehensive loss, net of taxes,
for the periods indicated:
ACCUMULATED OTHER
COMPREHENSIVE LOSS |
|
September 30, |
|
June 30, |
|
September 30, |
(in $000’s, unaudited) |
|
2023
|
|
2023
|
|
2022
|
Unrealized loss on securities
available-for-sale |
|
$ |
(11,985 |
) |
|
$ |
(11,822 |
) |
|
$ |
(12,398 |
) |
Split dollar insurance contracts
liability |
|
|
(3,234 |
) |
|
|
(3,187 |
) |
|
|
(5,511 |
) |
Supplemental executive retirement
plan liability |
|
|
(2,343 |
) |
|
|
(2,352 |
) |
|
|
(7,428 |
) |
Unrealized gain on interest-only
strip from SBA loans |
|
|
93 |
|
|
|
103 |
|
|
|
125 |
|
Total accumulated other comprehensive loss |
|
$ |
(17,469 |
) |
|
$ |
(17,258 |
) |
|
$ |
(25,212 |
) |
|
|
|
|
|
|
|
|
|
|
Heritage Commerce Corp, a bank holding company
established in October 1997, is the parent company of Heritage
Bank of Commerce, established in 1994 and headquartered in San
Jose, CA with full-service branches in Danville, Fremont, Gilroy,
Hollister, Livermore, Los Altos, Los Gatos, Morgan Hill, Oakland,
Palo Alto, Pleasanton, Redwood City, San Francisco, San Jose, San
Mateo, San Rafael, 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 San Jose, CA and provides
business-essential working capital factoring financing to various
industries throughout the United States. For more information,
please visit www.heritagecommercecorp.com.
The contents of our website are not incorporated into, and do not
perform a part of, this release or of our filings with the
Securities and Exchange Commission.
Forward-Looking Statement
Disclaimer
Certain matters discussed in this press release constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements may be deemed to include, among other things, statements
relating to the Company’s future financial performance, projected
cash flows of our investment securities portfolio, the performance
of our loan portfolio, estimated net interest income resulting from
a shift in interest rates, expectation of high credit quality
issuers ability to repay, as well as statements relating to the
anticipated effects on the Company’s financial condition and
results of operations from expected developments or events. 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. Risks
and uncertainties that could cause our financial performance to
differ materially from our goals, plans, expectations and
projections expressed in forward-looking statements include those
set forth in our filings with the Securities and Exchange
Commission (“SEC”), Item 1A of the Company’s Annual Report on
Form 10-K for the year ended December 31, 2022, and the
following: (1) factors that affect our liquidity and our ability to
meet customer demands for deposit withdrawals, including our cash
on hand and the availability of funds from our lines of credit, and
media items and consumer confidence as those factors affect
depositors’ confidence in the banking system generally and our bank
in particular; (2) factors that affect the value and liquidity of
our investment portfolios, particularly the values of securities
available-for-sale; (3) the effect of our measures to assure
adequate liquidity of deposits as those measures affect
profitability, including increasing interest rates on deposits as a
component of our interest expense; (4) our ability to estimate
accurately, and to establish adequate reserves against, the risk of
loss associated with our loan and lease portfolio; (5) the ability
of issuers to repay the full principal amounts of securities, in
both the available-for-sale and held-to-maturity portfolios, at
maturity; (6) geopolitical and domestic political developments that
can increase levels of political and economic unpredictability,
contribute to rising energy and commodity prices, and increase the
volatility of financial markets; (7) current and future economic
and market conditions in the United States generally or in the
communities we serve, including the effects of declines in property
values and overall slowdowns in economic growth should these events
occur; (8) 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 and
other factors that affect market interest rates generally; (9)
inflationary pressures and changes in the interest rate environment
that reduce our margins and yields, the fair value of financial
instruments or our level of loan originations, or increase the
level of defaults, losses and prepayments on loans we have made and
make, whether held in the portfolio or in the secondary market;
(10) changes in the level of nonperforming assets and charge offs
and other credit quality measures, and their impact on the adequacy
of our allowance for credit losses and our provision for credit
losses; (11) volatility in credit and equity markets and its effect
on the global economy; (12) conditions relating to the impact of
the COVID-19 pandemic, and other infectious illness outbreaks that
may arise in the future, on our customers, employees, businesses,
liquidity, financial results and overall condition including
severity and duration of the associated uncertainties in U.S. and
global markets; (13) our ability to compete effectively with other
banks and financial services companies and the effects of
competition in the financial services industry on our business;
(14) our ability to achieve loan growth and attract deposits in our
market area; (15) risks associated with concentrations in real
estate related loans; (16) the relative strength or weakness of the
commercial and real estate markets where our borrowers are located,
including related vacancy rates, and asset and market prices; (17)
increased capital requirements for our continual growth or as
imposed by banking regulators, which may require us to raise
capital at a time when capital is not available on favorable terms
or at all; (18) regulatory limits on Heritage Bank of Commerce’s
ability to pay dividends to the Company; (19) operational issues
stemming from, and/or capital spending necessitated by, the
potential need to adapt to industry changes in information
technology systems, on which we are highly dependent; (20) our
inability to attract, recruit, and retain qualified officers and
other personnel could harm our ability to implement our strategic
plan, impair our relationships with customers and adversely affect
our business, results of operations and growth prospects; (21)
possible adjustment of the valuation of our deferred tax assets;
(22) our ability to keep pace with technological changes, including
our ability to identify and address cyber-security risks such as
data security breaches, “denial of service” attacks, “hacking” and
identity theft; (23) inability of our framework to manage risks
associated with our business, including operational risk and credit
risk; (24) risks of loss of funding of the Small Business
Administration (“SBA”) or SBA loan programs, or changes in those
programs; (25) compliance with applicable laws and governmental and
regulatory requirements, including the Dodd-Frank Act and others
relating to banking, consumer protection, securities, accounting
and tax matters; (26) effect of changes in accounting policies and
practices, as may be adopted by the regulatory agencies, as well as
the Public Company Accounting Oversight Board, the Financial
Accounting Standards Board and other accounting standard setters;
(27) the expense and uncertain resolution of litigation matters
whether occurring in the ordinary course of business or otherwise;
(28) availability of and competition for acquisition opportunities;
(29) risks resulting from domestic terrorism; (30) risks resulting
from social unrest and protests; (31) risks of natural disasters
(including earthquakes, fires, and flooding) and other events
beyond our control; and (32) our success in managing the risks
involved in the foregoing factors.
Member FDIC
For additional information,
contact:
Debbie
Reuter
EVP, Corporate Secretary
Direct: (408) 494-4542
Debbie.Reuter@herbank.com
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended: |
|
Percent Change From: |
|
|
For the Nine Months Ended: |
CONSOLIDATED INCOME
STATEMENTS |
|
September 30, |
|
June 30, |
|
September 30, |
|
June 30, |
|
September 30, |
|
|
September 30, |
|
September 30, |
|
Percent |
|
(in $000’s, unaudited) |
|
2023 |
|
2023 |
|
2022 |
|
2023
|
|
2022
|
|
|
2023 |
|
2022 |
|
Change |
|
Interest income |
|
$ |
60,791 |
|
$ |
58,341 |
|
$ |
50,174 |
|
4 |
|
% |
21 |
|
% |
|
$ |
175,406 |
|
$ |
133,636 |
|
31 |
|
% |
Interest expense |
|
|
15,419 |
|
|
12,048 |
|
|
2,133 |
|
28 |
|
% |
623 |
|
% |
|
|
34,483 |
|
|
5,495 |
|
528 |
|
% |
Net interest income before provision for credit losses on
loans |
|
|
45,372 |
|
|
46,293 |
|
|
48,041 |
|
(2 |
) |
% |
(6 |
) |
% |
|
|
140,923 |
|
|
128,141 |
|
10 |
|
% |
Provision for (recapture of)
credit losses on loans |
|
|
168 |
|
|
260 |
|
|
1,006 |
|
(35 |
) |
% |
(83 |
) |
% |
|
|
460 |
|
|
258 |
|
78 |
|
% |
Net interest income after provision for credit losses on
loans |
|
|
45,204 |
|
|
46,033 |
|
|
47,035 |
|
(2 |
) |
% |
(4 |
) |
% |
|
|
140,463 |
|
|
127,883 |
|
10 |
|
% |
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges and fees on deposit accounts |
|
|
859 |
|
|
901 |
|
|
1,360 |
|
(5 |
) |
% |
(37 |
) |
% |
|
|
3,503 |
|
|
2,839 |
|
23 |
|
% |
Increase in cash surrender value of life insurance |
|
|
517 |
|
|
502 |
|
|
484 |
|
3 |
|
% |
7 |
|
% |
|
|
1,512 |
|
|
1,444 |
|
5 |
|
% |
Gain on sales of SBA loans |
|
|
207 |
|
|
199 |
|
|
308 |
|
4 |
|
% |
(33 |
) |
% |
|
|
482 |
|
|
491 |
|
(2 |
) |
% |
Termination fees |
|
|
118 |
|
|
— |
|
|
16 |
|
N/A |
|
|
638 |
|
% |
|
|
129 |
|
|
61 |
|
111 |
|
% |
Gain on proceeds from company-owned life insurance |
|
|
100 |
|
|
— |
|
|
— |
|
N/A |
|
|
N/A |
|
|
|
|
100 |
|
|
27 |
|
270 |
|
% |
Servicing income |
|
|
62 |
|
|
104 |
|
|
125 |
|
(40 |
) |
% |
(50 |
) |
% |
|
|
297 |
|
|
370 |
|
(20 |
) |
% |
Gain on warrants |
|
|
— |
|
|
— |
|
|
32 |
|
N/A |
|
|
(100 |
) |
% |
|
|
— |
|
|
669 |
|
(100 |
) |
% |
Other |
|
|
353 |
|
|
368 |
|
|
456 |
|
(4 |
) |
% |
(23 |
) |
% |
|
|
1,033 |
|
|
1,438 |
|
(28 |
) |
% |
Total noninterest income |
|
|
2,216 |
|
|
2,074 |
|
|
2,781 |
|
7 |
|
% |
(20 |
) |
% |
|
|
7,056 |
|
|
7,339 |
|
(4 |
) |
% |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
14,147 |
|
|
13,987 |
|
|
14,119 |
|
1 |
|
% |
0 |
|
% |
|
|
42,943 |
|
|
41,416 |
|
4 |
|
% |
Occupancy and equipment |
|
|
2,301 |
|
|
2,422 |
|
|
2,415 |
|
(5 |
) |
% |
(5 |
) |
% |
|
|
7,123 |
|
|
7,129 |
|
0 |
|
% |
Professional fees |
|
|
717 |
|
|
1,149 |
|
|
1,230 |
|
(38 |
) |
% |
(42 |
) |
% |
|
|
3,265 |
|
|
3,601 |
|
(9 |
) |
% |
Other |
|
|
8,006 |
|
|
7,433 |
|
|
6,135 |
|
8 |
|
% |
30 |
|
% |
|
|
22,232 |
|
|
18,195 |
|
22 |
|
% |
Total noninterest expense |
|
|
25,171 |
|
|
24,991 |
|
|
23,899 |
|
1 |
|
% |
5 |
|
% |
|
|
75,563 |
|
|
70,341 |
|
7 |
|
% |
Income before income
taxes |
|
|
22,249 |
|
|
23,116 |
|
|
25,917 |
|
(4 |
) |
% |
(14 |
) |
% |
|
|
71,956 |
|
|
64,881 |
|
11 |
|
% |
Income tax expense |
|
|
6,454 |
|
|
6,713 |
|
|
7,848 |
|
(4 |
) |
% |
(18 |
) |
% |
|
|
20,841 |
|
|
19,125 |
|
9 |
|
% |
Net income |
|
$ |
15,795 |
|
$ |
16,403 |
|
$ |
18,069 |
|
(4 |
) |
% |
(13 |
) |
% |
|
$ |
51,115 |
|
$ |
45,756 |
|
12 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER COMMON SHARE DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.26 |
|
$ |
0.27 |
|
$ |
0.30 |
|
(4 |
) |
% |
(13 |
) |
% |
|
$ |
0.84 |
|
$ |
0.76 |
|
11 |
|
% |
Diluted earnings per
share |
|
$ |
0.26 |
|
$ |
0.27 |
|
$ |
0.30 |
|
(4 |
) |
% |
(13 |
) |
% |
|
$ |
0.83 |
|
$ |
0.75 |
|
11 |
|
% |
Weighted average shares
outstanding - basic |
|
|
61,093,289 |
|
|
61,035,435 |
|
|
60,686,992 |
|
0 |
|
% |
1 |
|
% |
|
|
61,012,315 |
|
|
60,541,015 |
|
1 |
|
% |
Weighted average shares
outstanding - diluted |
|
|
61,436,240 |
|
|
61,266,059 |
|
|
61,123,801 |
|
0 |
|
% |
1 |
|
% |
|
|
61,284,590 |
|
|
61,004,840 |
|
0 |
|
% |
Common shares outstanding at
period-end |
|
|
61,099,155 |
|
|
61,091,155 |
|
|
60,716,794 |
|
0 |
|
% |
1 |
|
% |
|
|
61,099,155 |
|
|
60,716,794 |
|
1 |
|
% |
Dividend per share |
|
$ |
0.13 |
|
$ |
0.13 |
|
$ |
0.13 |
|
0 |
|
% |
0 |
|
% |
|
$ |
0.39 |
|
$ |
0.39 |
|
0 |
|
% |
Book value per share |
|
$ |
10.83 |
|
$ |
10.70 |
|
$ |
10.04 |
|
1 |
|
% |
8 |
|
% |
|
$ |
10.83 |
|
$ |
10.04 |
|
8 |
|
% |
Tangible book value per
share |
|
$ |
7.94 |
|
$ |
7.80 |
|
$ |
7.09 |
|
2 |
|
% |
12 |
|
% |
|
$ |
7.94 |
|
$ |
7.09 |
|
12 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KEY FINANCIAL RATIOS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized return on average
equity |
|
|
9.54 |
% |
|
10.12 |
% |
|
11.72 |
% |
(6 |
) |
% |
(19 |
) |
% |
|
|
10.54 |
% |
|
10.12 |
% |
4 |
|
% |
Annualized return on average
tangible common equity |
|
|
13.06 |
% |
|
13.93 |
% |
|
16.60 |
% |
(6 |
) |
% |
(21 |
) |
% |
|
|
14.52 |
% |
|
14.41 |
% |
1 |
|
% |
Annualized return on average
assets |
|
|
1.16 |
% |
|
1.25 |
% |
|
1.31 |
% |
(7 |
) |
% |
(11 |
) |
% |
|
|
1.29 |
% |
|
1.13 |
% |
14 |
|
% |
Annualized return on average
tangible assets |
|
|
1.20 |
% |
|
1.29 |
% |
|
1.36 |
% |
(7 |
) |
% |
(12 |
) |
% |
|
|
1.33 |
% |
|
1.17 |
% |
14 |
|
% |
Net interest margin (FTE) |
|
|
3.57 |
% |
|
3.76 |
% |
|
3.73 |
% |
(5 |
) |
% |
(4 |
) |
% |
|
|
3.80 |
% |
|
3.39 |
% |
12 |
|
% |
Efficiency ratio |
|
|
52.89 |
% |
|
51.67 |
% |
|
47.02 |
% |
2 |
|
% |
12 |
|
% |
|
|
51.06 |
% |
|
51.92 |
% |
(2 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE BALANCES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in $000’s, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
$ |
5,399,930 |
|
$ |
5,278,243 |
|
$ |
5,466,330 |
|
2 |
|
% |
(1 |
) |
% |
|
$ |
5,316,447 |
|
$ |
5,414,820 |
|
(2 |
) |
% |
Average tangible assets |
|
$ |
5,222,692 |
|
$ |
5,100,399 |
|
$ |
5,286,591 |
|
2 |
|
% |
(1 |
) |
% |
|
$ |
5,138,610 |
|
$ |
5,234,427 |
|
(2 |
) |
% |
Average earning assets |
|
$ |
5,051,710 |
|
$ |
4,948,397 |
|
$ |
5,117,373 |
|
2 |
|
% |
(1 |
) |
% |
|
$ |
4,965,613 |
|
$ |
5,065,698 |
|
(2 |
) |
% |
Average loans
held-for-sale |
|
$ |
2,765 |
|
$ |
4,166 |
|
$ |
3,282 |
|
(34 |
) |
% |
(16 |
) |
% |
|
$ |
3,229 |
|
$ |
2,201 |
|
47 |
|
% |
Average total loans |
|
$ |
3,254,715 |
|
$ |
3,227,175 |
|
$ |
3,140,705 |
|
1 |
|
% |
4 |
|
% |
|
$ |
3,252,146 |
|
$ |
3,072,473 |
|
6 |
|
% |
Average deposits |
|
$ |
4,573,621 |
|
$ |
4,424,041 |
|
$ |
4,712,044 |
|
3 |
|
% |
(3 |
) |
% |
|
$ |
4,471,783 |
|
$ |
4,662,926 |
|
(4 |
) |
% |
Average demand deposits -
noninterest-bearing |
|
$ |
1,302,606 |
|
$ |
1,368,373 |
|
$ |
1,910,748 |
|
(5 |
) |
% |
(32 |
) |
% |
|
$ |
1,444,744 |
|
$ |
1,868,283 |
|
(23 |
) |
% |
Average interest-bearing
deposits |
|
$ |
3,271,015 |
|
$ |
3,055,668 |
|
$ |
2,801,296 |
|
7 |
|
% |
17 |
|
% |
|
$ |
3,027,039 |
|
$ |
2,794,643 |
|
8 |
|
% |
Average interest-bearing
liabilities |
|
$ |
3,310,485 |
|
$ |
3,157,722 |
|
$ |
2,840,611 |
|
5 |
|
% |
17 |
|
% |
|
$ |
3,102,723 |
|
$ |
2,837,219 |
|
9 |
|
% |
Average equity |
|
$ |
656,973 |
|
$ |
650,240 |
|
$ |
611,707 |
|
1 |
|
% |
7 |
|
% |
|
$ |
648,341 |
|
$ |
604,794 |
|
7 |
|
% |
Average tangible common
equity |
|
$ |
479,735 |
|
$ |
472,396 |
|
$ |
431,968 |
|
2 |
|
% |
11 |
|
% |
|
$ |
470,504 |
|
$ |
424,401 |
|
11 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended: |
|
CONSOLIDATED INCOME
STATEMENTS |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
(in $000’s, unaudited) |
|
2023 |
|
2023 |
|
2023 |
|
2022 |
|
2022 |
|
Interest income |
|
$ |
60,791 |
|
$ |
58,341 |
|
$ |
56,274 |
|
$ |
55,192 |
|
$ |
50,174 |
|
Interest expense |
|
|
15,419 |
|
|
12,048 |
|
|
7,016 |
|
|
3,453 |
|
|
2,133 |
|
Net interest income before provision for credit losses on
loans |
|
|
45,372 |
|
|
46,293 |
|
|
49,258 |
|
|
51,739 |
|
|
48,041 |
|
Provision for (recapture of)
credit losses on loans |
|
|
168 |
|
|
260 |
|
|
32 |
|
|
508 |
|
|
1,006 |
|
Net interest income after provision for credit losses on
loans |
|
|
45,204 |
|
|
46,033 |
|
|
49,226 |
|
|
51,231 |
|
|
47,035 |
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges and fees on deposit accounts |
|
|
859 |
|
|
901 |
|
|
1,743 |
|
|
1,801 |
|
|
1,360 |
|
Increase in cash surrender value of life insurance |
|
|
517 |
|
|
502 |
|
|
493 |
|
|
481 |
|
|
484 |
|
Gain on sales of SBA loans |
|
|
207 |
|
|
199 |
|
|
76 |
|
|
— |
|
|
308 |
|
Termination fees |
|
|
118 |
|
|
— |
|
|
11 |
|
|
— |
|
|
16 |
|
Gain on proceeds from company-owned life insurance |
|
|
100 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Servicing income |
|
|
62 |
|
|
104 |
|
|
131 |
|
|
138 |
|
|
125 |
|
Gain on warrants |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
32 |
|
Other |
|
|
353 |
|
|
368 |
|
|
312 |
|
|
352 |
|
|
456 |
|
Total noninterest income |
|
|
2,216 |
|
|
2,074 |
|
|
2,766 |
|
|
2,772 |
|
|
2,781 |
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
14,147 |
|
|
13,987 |
|
|
14,809 |
|
|
13,915 |
|
|
14,119 |
|
Occupancy and equipment |
|
|
2,301 |
|
|
2,422 |
|
|
2,400 |
|
|
2,510 |
|
|
2,415 |
|
Professional fees |
|
|
717 |
|
|
1,149 |
|
|
1,399 |
|
|
1,414 |
|
|
1,230 |
|
Other |
|
|
8,006 |
|
|
7,433 |
|
|
6,793 |
|
|
6,679 |
|
|
6,135 |
|
Total noninterest expense |
|
|
25,171 |
|
|
24,991 |
|
|
25,401 |
|
|
24,518 |
|
|
23,899 |
|
Income before income
taxes |
|
|
22,249 |
|
|
23,116 |
|
|
26,591 |
|
|
29,485 |
|
|
25,917 |
|
Income tax expense |
|
|
6,454 |
|
|
6,713 |
|
|
7,674 |
|
|
8,686 |
|
|
7,848 |
|
Net income |
|
$ |
15,795 |
|
$ |
16,403 |
|
$ |
18,917 |
|
$ |
20,799 |
|
$ |
18,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER COMMON SHARE DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.26 |
|
$ |
0.27 |
|
$ |
0.31 |
|
$ |
0.34 |
|
$ |
0.30 |
|
Diluted earnings per
share |
|
$ |
0.26 |
|
$ |
0.27 |
|
$ |
0.31 |
|
$ |
0.34 |
|
$ |
0.30 |
|
Weighted average shares
outstanding - basic |
|
|
61,093,289 |
|
|
61,035,435 |
|
|
60,908,221 |
|
|
60,788,803 |
|
|
60,686,992 |
|
Weighted average shares
outstanding - diluted |
|
|
61,436,240 |
|
|
61,266,059 |
|
|
61,268,072 |
|
|
61,357,023 |
|
|
61,123,801 |
|
Common shares outstanding at
period-end |
|
|
61,099,155 |
|
|
61,091,155 |
|
|
60,948,607 |
|
|
60,852,723 |
|
|
60,716,794 |
|
Dividend per share |
|
$ |
0.13 |
|
$ |
0.13 |
|
$ |
0.13 |
|
$ |
0.13 |
|
$ |
0.13 |
|
Book value per share |
|
$ |
10.83 |
|
$ |
10.70 |
|
$ |
10.62 |
|
$ |
10.39 |
|
$ |
10.04 |
|
Tangible book value per
share |
|
$ |
7.94 |
|
$ |
7.80 |
|
$ |
7.70 |
|
$ |
7.46 |
|
$ |
7.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KEY FINANCIAL RATIOS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized return on average
equity |
|
|
9.54 |
% |
|
10.12 |
% |
|
12.03 |
% |
|
13.40 |
% |
|
11.72 |
% |
Annualized return on average
tangible common equity |
|
|
13.06 |
% |
|
13.93 |
% |
|
16.71 |
% |
|
18.89 |
% |
|
16.60 |
% |
Annualized return on average
assets |
|
|
1.16 |
% |
|
1.25 |
% |
|
1.47 |
% |
|
1.54 |
% |
|
1.31 |
% |
Annualized return on average
tangible assets |
|
|
1.20 |
% |
|
1.29 |
% |
|
1.52 |
% |
|
1.59 |
% |
|
1.36 |
% |
Net interest margin (FTE) |
|
|
3.57 |
% |
|
3.76 |
% |
|
4.09 |
% |
|
4.10 |
% |
|
3.73 |
% |
Efficiency ratio |
|
|
52.89 |
% |
|
51.67 |
% |
|
48.83 |
% |
|
44.98 |
% |
|
47.02 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE BALANCES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in $000’s, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
$ |
5,399,930 |
|
$ |
5,278,243 |
|
$ |
5,235,506 |
|
$ |
5,360,867 |
|
$ |
5,466,330 |
|
Average tangible assets |
|
$ |
5,222,692 |
|
$ |
5,100,399 |
|
$ |
5,057,063 |
|
$ |
5,181,793 |
|
$ |
5,286,591 |
|
Average earning assets |
|
$ |
5,051,710 |
|
$ |
4,948,397 |
|
$ |
4,895,009 |
|
$ |
5,009,578 |
|
$ |
5,117,373 |
|
Average loans
held-for-sale |
|
$ |
2,765 |
|
$ |
4,166 |
|
$ |
2,755 |
|
$ |
2,346 |
|
$ |
3,282 |
|
Average total loans |
|
$ |
3,254,715 |
|
$ |
3,227,175 |
|
$ |
3,274,770 |
|
$ |
3,248,210 |
|
$ |
3,140,705 |
|
Average deposits |
|
$ |
4,573,621 |
|
$ |
4,424,041 |
|
$ |
4,415,952 |
|
$ |
4,600,533 |
|
$ |
4,712,044 |
|
Average demand deposits -
noninterest-bearing |
|
$ |
1,302,606 |
|
$ |
1,368,373 |
|
$ |
1,667,260 |
|
$ |
1,851,003 |
|
$ |
1,910,748 |
|
Average interest-bearing
deposits |
|
$ |
3,271,015 |
|
$ |
3,055,668 |
|
$ |
2,748,692 |
|
$ |
2,749,530 |
|
$ |
2,801,296 |
|
Average interest-bearing
liabilities |
|
$ |
3,310,485 |
|
$ |
3,157,722 |
|
$ |
2,834,732 |
|
$ |
2,788,880 |
|
$ |
2,840,611 |
|
Average equity |
|
$ |
656,973 |
|
$ |
650,240 |
|
$ |
637,597 |
|
$ |
615,941 |
|
$ |
611,707 |
|
Average tangible common
equity |
|
$ |
479,735 |
|
$ |
472,396 |
|
$ |
459,154 |
|
$ |
436,867 |
|
$ |
431,968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of Period: |
|
Percent Change From: |
|
CONSOLIDATED BALANCE
SHEETS |
|
September 30, |
|
June 30, |
|
September 30, |
|
June 30, |
|
September 30, |
|
(in $000’s, unaudited) |
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
40,076 |
|
|
$ |
42,551 |
|
|
$ |
40,500 |
|
|
(6 |
) |
% |
(1 |
) |
% |
Other investments and
interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in other financial
institutions |
|
|
605,476 |
|
|
|
468,951 |
|
|
|
641,251 |
|
|
29 |
|
% |
(6 |
) |
% |
Securities available-for-sale,
at fair value |
|
|
457,194 |
|
|
|
486,058 |
|
|
|
478,534 |
|
|
(6 |
) |
% |
(4 |
) |
% |
Securities held-to-maturity,
at amortized cost |
|
|
664,681 |
|
|
|
682,095 |
|
|
|
703,794 |
|
|
(3 |
) |
% |
(6 |
) |
% |
Loans held-for-sale - SBA,
including deferred costs |
|
|
841 |
|
|
|
3,136 |
|
|
|
2,081 |
|
|
(73 |
) |
% |
(60 |
) |
% |
Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
430,664 |
|
|
|
466,354 |
|
|
|
542,829 |
|
|
(8 |
) |
% |
(21 |
) |
% |
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRE - owner occupied |
|
|
589,751 |
|
|
|
608,031 |
|
|
|
612,241 |
|
|
(3 |
) |
% |
(4 |
) |
% |
CRE - non-owner occupied |
|
|
1,208,324 |
|
|
|
1,147,313 |
|
|
|
1,023,405 |
|
|
5 |
|
% |
18 |
|
% |
Land and construction |
|
|
158,138 |
|
|
|
162,816 |
|
|
|
167,439 |
|
|
(3 |
) |
% |
(6 |
) |
% |
Home equity |
|
|
124,477 |
|
|
|
128,009 |
|
|
|
116,489 |
|
|
(3 |
) |
% |
7 |
|
% |
Multifamily |
|
|
253,129 |
|
|
|
244,959 |
|
|
|
229,455 |
|
|
3 |
|
% |
10 |
|
% |
Residential mortgages |
|
|
503,006 |
|
|
|
514,064 |
|
|
|
508,839 |
|
|
(2 |
) |
% |
(1 |
) |
% |
Consumer and other |
|
|
18,526 |
|
|
|
17,635 |
|
|
|
16,620 |
|
|
5 |
|
% |
11 |
|
% |
Loans |
|
|
3,286,015 |
|
|
|
3,289,181 |
|
|
|
3,217,317 |
|
|
0 |
|
% |
2 |
|
% |
Deferred loan fees, net |
|
|
(554 |
) |
|
|
(397 |
) |
|
|
(844 |
) |
|
40 |
|
% |
(34 |
) |
% |
Total loans, net of deferred costs and fees |
|
|
3,285,461 |
|
|
|
3,288,784 |
|
|
|
3,216,473 |
|
|
0 |
|
% |
2 |
|
% |
Allowance for credit losses on
loans |
|
|
(47,702 |
) |
|
|
(47,803 |
) |
|
|
(46,921 |
) |
|
0 |
|
% |
2 |
|
% |
Loans, net |
|
|
3,237,759 |
|
|
|
3,240,981 |
|
|
|
3,169,552 |
|
|
0 |
|
% |
2 |
|
% |
Company-owned life
insurance |
|
|
79,607 |
|
|
|
79,940 |
|
|
|
78,456 |
|
|
0 |
|
% |
1 |
|
% |
Premises and equipment,
net |
|
|
9,707 |
|
|
|
9,197 |
|
|
|
9,428 |
|
|
6 |
|
% |
3 |
|
% |
Goodwill |
|
|
167,631 |
|
|
|
167,631 |
|
|
|
167,631 |
|
|
0 |
|
% |
0 |
|
% |
Other intangible assets |
|
|
9,229 |
|
|
|
9,830 |
|
|
|
11,692 |
|
|
(6 |
) |
% |
(21 |
) |
% |
Accrued interest receivable
and other assets |
|
|
131,106 |
|
|
|
121,467 |
|
|
|
128,343 |
|
|
8 |
|
% |
2 |
|
% |
Total assets |
|
$ |
5,403,307 |
|
|
$ |
5,311,837 |
|
|
$ |
5,431,262 |
|
|
2 |
|
% |
(1 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand, noninterest-bearing |
|
$ |
1,243,501 |
|
|
$ |
1,319,844 |
|
|
$ |
1,883,574 |
|
|
(6 |
) |
% |
(34 |
) |
% |
Demand, interest-bearing |
|
|
1,004,185 |
|
|
|
1,064,638 |
|
|
|
1,154,403 |
|
|
(6 |
) |
% |
(13 |
) |
% |
Savings and money market |
|
|
1,110,640 |
|
|
|
1,075,835 |
|
|
|
1,487,400 |
|
|
3 |
|
% |
(25 |
) |
% |
Time deposits - under $250 |
|
|
43,906 |
|
|
|
44,520 |
|
|
|
34,728 |
|
|
(1 |
) |
% |
26 |
|
% |
Time deposits - $250 and over |
|
|
252,001 |
|
|
|
171,852 |
|
|
|
93,263 |
|
|
47 |
|
% |
170 |
|
% |
ICS/CDARS - interest-bearing demand, money market and time
deposits |
|
|
921,224 |
|
|
|
824,083 |
|
|
|
29,897 |
|
|
12 |
|
% |
2981 |
|
% |
Total deposits |
|
|
4,575,457 |
|
|
|
4,500,772 |
|
|
|
4,683,265 |
|
|
2 |
|
% |
(2 |
) |
% |
Subordinated debt, net of issuance costs |
|
|
39,463 |
|
|
|
39,425 |
|
|
|
39,312 |
|
|
0 |
|
% |
0 |
|
% |
Accrued interest payable and other liabilities |
|
|
126,457 |
|
|
|
117,970 |
|
|
|
99,168 |
|
|
7 |
|
% |
28 |
|
% |
Total liabilities |
|
|
4,741,377 |
|
|
|
4,658,167 |
|
|
|
4,821,745 |
|
|
2 |
|
% |
(2 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
505,692 |
|
|
|
505,075 |
|
|
|
501,240 |
|
|
0 |
|
% |
1 |
|
% |
Retained earnings |
|
|
173,707 |
|
|
|
165,853 |
|
|
|
133,489 |
|
|
5 |
|
% |
30 |
|
% |
Accumulated other comprehensive loss |
|
|
(17,469 |
) |
|
|
(17,258 |
) |
|
|
(25,212 |
) |
|
1 |
|
% |
(31 |
) |
% |
Total shareholders' equity |
|
|
661,930 |
|
|
|
653,670 |
|
|
|
609,517 |
|
|
1 |
|
% |
9 |
|
% |
Total liabilities and shareholders’ equity |
|
$ |
5,403,307 |
|
|
$ |
5,311,837 |
|
|
$ |
5,431,262 |
|
|
2 |
|
% |
(1 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of Period: |
CONSOLIDATED BALANCE
SHEETS |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
(in $000’s, unaudited) |
|
2023
|
|
2023
|
|
2023
|
|
2022
|
|
2022
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
40,076 |
|
|
$ |
42,551 |
|
|
$ |
41,318 |
|
|
$ |
27,595 |
|
|
$ |
40,500 |
|
Other investments and
interest-bearing deposits in other financial institutions |
|
|
605,476 |
|
|
|
468,951 |
|
|
|
698,690 |
|
|
|
279,008 |
|
|
|
641,251 |
|
Securities available-for-sale,
at fair value |
|
|
457,194 |
|
|
|
486,058 |
|
|
|
491,751 |
|
|
|
489,596 |
|
|
|
478,534 |
|
Securities held-to-maturity,
at amortized cost |
|
|
664,681 |
|
|
|
682,095 |
|
|
|
698,231 |
|
|
|
714,990 |
|
|
|
703,794 |
|
Loans held-for-sale - SBA,
including deferred costs |
|
|
841 |
|
|
|
3,136 |
|
|
|
2,792 |
|
|
|
2,456 |
|
|
|
2,081 |
|
Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
430,664 |
|
|
|
466,354 |
|
|
|
506,602 |
|
|
|
533,915 |
|
|
|
542,829 |
|
Real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRE - owner occupied |
|
|
589,751 |
|
|
|
608,031 |
|
|
|
603,298 |
|
|
|
614,663 |
|
|
|
612,241 |
|
CRE - non-owner occupied |
|
|
1,208,324 |
|
|
|
1,147,313 |
|
|
|
1,083,852 |
|
|
|
1,066,368 |
|
|
|
1,023,405 |
|
Land and construction |
|
|
158,138 |
|
|
|
162,816 |
|
|
|
166,408 |
|
|
|
163,577 |
|
|
|
167,439 |
|
Home equity |
|
|
124,477 |
|
|
|
128,009 |
|
|
|
124,481 |
|
|
|
120,724 |
|
|
|
116,489 |
|
Multifamily |
|
|
253,129 |
|
|
|
244,959 |
|
|
|
231,242 |
|
|
|
244,882 |
|
|
|
229,455 |
|
Residential mortgages |
|
|
503,006 |
|
|
|
514,064 |
|
|
|
528,639 |
|
|
|
537,905 |
|
|
|
508,839 |
|
Consumer and other |
|
|
18,526 |
|
|
|
17,635 |
|
|
|
17,905 |
|
|
|
17,033 |
|
|
|
16,620 |
|
Loans |
|
|
3,286,015 |
|
|
|
3,289,181 |
|
|
|
3,262,427 |
|
|
|
3,299,067 |
|
|
|
3,217,317 |
|
Deferred loan fees, net |
|
|
(554 |
) |
|
|
(397 |
) |
|
|
(512 |
) |
|
|
(517 |
) |
|
|
(844 |
) |
Total loans, net of deferred fees |
|
|
3,285,461 |
|
|
|
3,288,784 |
|
|
|
3,261,915 |
|
|
|
3,298,550 |
|
|
|
3,216,473 |
|
Allowance for credit losses on
loans |
|
|
(47,702 |
) |
|
|
(47,803 |
) |
|
|
(47,273 |
) |
|
|
(47,512 |
) |
|
|
(46,921 |
) |
Loans, net |
|
|
3,237,759 |
|
|
|
3,240,981 |
|
|
|
3,214,642 |
|
|
|
3,251,038 |
|
|
|
3,169,552 |
|
Company-owned life
insurance |
|
|
79,607 |
|
|
|
79,940 |
|
|
|
79,438 |
|
|
|
78,945 |
|
|
|
78,456 |
|
Premises and equipment,
net |
|
|
9,707 |
|
|
|
9,197 |
|
|
|
9,142 |
|
|
|
9,301 |
|
|
|
9,428 |
|
Goodwill |
|
|
167,631 |
|
|
|
167,631 |
|
|
|
167,631 |
|
|
|
167,631 |
|
|
|
167,631 |
|
Other intangible assets |
|
|
9,229 |
|
|
|
9,830 |
|
|
|
10,431 |
|
|
|
11,033 |
|
|
|
11,692 |
|
Accrued interest receivable
and other assets |
|
|
131,106 |
|
|
|
121,467 |
|
|
|
122,474 |
|
|
|
125,987 |
|
|
|
128,343 |
|
Total assets |
|
$ |
5,403,307 |
|
|
$ |
5,311,837 |
|
|
$ |
5,536,540 |
|
|
$ |
5,157,580 |
|
|
$ |
5,431,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand, noninterest-bearing |
|
$ |
1,243,501 |
|
|
$ |
1,319,844 |
|
|
$ |
1,469,081 |
|
|
$ |
1,736,722 |
|
|
$ |
1,883,574 |
|
Demand, interest-bearing |
|
|
1,004,185 |
|
|
|
1,064,638 |
|
|
|
1,196,789 |
|
|
|
1,196,427 |
|
|
|
1,154,403 |
|
Savings and money market |
|
|
1,110,640 |
|
|
|
1,075,835 |
|
|
|
1,264,567 |
|
|
|
1,285,444 |
|
|
|
1,487,400 |
|
Time deposits - under $250 |
|
|
43,906 |
|
|
|
44,520 |
|
|
|
37,884 |
|
|
|
32,445 |
|
|
|
34,728 |
|
Time deposits - $250 and over |
|
|
252,001 |
|
|
|
171,852 |
|
|
|
172,070 |
|
|
|
108,192 |
|
|
|
93,263 |
|
ICS/CDARS - interest-bearing demand, money market and time
deposits |
|
|
921,224 |
|
|
|
824,083 |
|
|
|
304,147 |
|
|
|
30,374 |
|
|
|
29,897 |
|
Total deposits |
|
|
4,575,457 |
|
|
|
4,500,772 |
|
|
|
4,444,538 |
|
|
|
4,389,604 |
|
|
|
4,683,265 |
|
Other short-term borrowings |
|
|
— |
|
|
|
— |
|
|
|
300,000 |
|
|
|
— |
|
|
|
— |
|
Subordinated debt, net of issuance costs |
|
|
39,463 |
|
|
|
39,425 |
|
|
|
39,387 |
|
|
|
39,350 |
|
|
|
39,312 |
|
Accrued interest payable and other liabilities |
|
|
126,457 |
|
|
|
117,970 |
|
|
|
105,407 |
|
|
|
96,170 |
|
|
|
99,168 |
|
Total liabilities |
|
|
4,741,377 |
|
|
|
4,658,167 |
|
|
|
4,889,332 |
|
|
|
4,525,124 |
|
|
|
4,821,745 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
505,692 |
|
|
|
505,075 |
|
|
|
504,135 |
|
|
|
502,923 |
|
|
|
501,240 |
|
Retained earnings |
|
|
173,707 |
|
|
|
165,853 |
|
|
|
157,390 |
|
|
|
146,389 |
|
|
|
133,489 |
|
Accumulated other comprehensive loss |
|
|
(17,469 |
) |
|
|
(17,258 |
) |
|
|
(14,317 |
) |
|
|
(16,856 |
) |
|
|
(25,212 |
) |
Total shareholders' equity |
|
|
661,930 |
|
|
|
653,670 |
|
|
|
647,208 |
|
|
|
632,456 |
|
|
|
609,517 |
|
Total liabilities and shareholders’ equity |
|
$ |
5,403,307 |
|
|
$ |
5,311,837 |
|
|
$ |
5,536,540 |
|
|
$ |
5,157,580 |
|
|
$ |
5,431,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or For the Quarter Ended: |
|
Percent Change From: |
|
CREDIT QUALITY
DATA |
|
September 30, |
|
June 30, |
|
September 30, |
|
June 30, |
|
September 30, |
|
(in $000’s, unaudited) |
|
2023 |
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Nonaccrual loans -
held-for-investment |
|
$ |
3,518 |
|
$ |
3,275 |
|
|
$ |
491 |
|
|
7 |
|
% |
616 |
|
% |
Restructured and loans over 90
days past due and still accruing |
|
|
1,966 |
|
|
2,262 |
|
|
|
545 |
|
|
(13 |
) |
% |
261 |
|
% |
Total nonperforming loans |
|
|
5,484 |
|
|
5,537 |
|
|
|
1,036 |
|
|
(1 |
) |
% |
429 |
|
% |
Foreclosed assets |
|
|
— |
|
|
— |
|
|
|
— |
|
|
N/A |
|
|
N/A |
|
|
Total nonperforming assets |
|
$ |
5,484 |
|
$ |
5,537 |
|
|
$ |
1,036 |
|
|
(1 |
) |
% |
429 |
|
% |
Other restructured loans still
accruing |
|
$ |
— |
|
$ |
— |
|
|
$ |
93 |
|
|
N/A |
|
|
(100 |
) |
% |
Net charge-offs (recoveries)
during the quarter |
|
$ |
269 |
|
$ |
(270 |
) |
|
$ |
(425 |
) |
|
200 |
|
% |
163 |
|
% |
Provision for credit losses on
loans during the quarter |
|
$ |
168 |
|
$ |
260 |
|
|
$ |
1,006 |
|
|
(35 |
) |
% |
(83 |
) |
% |
Allowance for credit losses on
loans |
|
$ |
47,702 |
|
$ |
47,803 |
|
|
$ |
46,921 |
|
|
0 |
|
% |
2 |
|
% |
Classified assets |
|
$ |
31,062 |
|
$ |
30,500 |
|
|
$ |
28,570 |
|
|
2 |
|
% |
9 |
|
% |
Allowance for credit losses on
loans to total loans |
|
|
1.45 |
% |
|
1.45 |
|
% |
|
1.46 |
|
% |
0 |
|
% |
(1 |
) |
% |
Allowance for credit losses on
loans to total nonperforming loans |
|
|
869.84 |
% |
|
863.34 |
|
% |
|
4,529.05 |
|
% |
1 |
|
% |
(81 |
) |
% |
Nonperforming assets to total
assets |
|
|
0.10 |
% |
|
0.10 |
|
% |
|
0.02 |
|
% |
0 |
|
% |
400 |
|
% |
Nonperforming loans to total
loans |
|
|
0.17 |
% |
|
0.17 |
|
% |
|
0.03 |
|
% |
0 |
|
% |
467 |
|
% |
Classified assets to Heritage
Commerce Corp |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital plus allowance for credit losses on loans |
|
|
6 |
% |
|
6 |
|
% |
|
6 |
|
% |
0 |
|
% |
0 |
|
% |
Classified assets to Heritage
Bank of Commerce |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital plus allowance for credit losses on loans |
|
|
5 |
% |
|
5 |
|
% |
|
5 |
|
% |
0 |
|
% |
0 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER PERIOD-END
STATISTICS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in $000’s, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heritage Commerce
Corp: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity (1) |
|
$ |
485,070 |
|
$ |
476,209 |
|
|
$ |
430,194 |
|
|
2 |
|
% |
13 |
|
% |
Shareholders’ equity / total assets |
|
|
12.25 |
% |
|
12.31 |
|
% |
|
11.22 |
|
% |
0 |
|
% |
9 |
|
% |
Tangible common equity / tangible assets (2) |
|
|
9.28 |
% |
|
9.27 |
|
% |
|
8.19 |
|
% |
0 |
|
% |
13 |
|
% |
Loan to deposit ratio |
|
|
71.81 |
% |
|
73.07 |
|
% |
|
68.68 |
|
% |
(2 |
) |
% |
5 |
|
% |
Noninterest-bearing deposits / total deposits |
|
|
27.18 |
% |
|
29.32 |
|
% |
|
40.22 |
|
% |
(7 |
) |
% |
(32 |
) |
% |
Total capital ratio |
|
|
15.6 |
% |
|
15.4 |
|
% |
|
14.5 |
|
% |
1 |
|
% |
8 |
|
% |
Tier 1 capital ratio |
|
|
13.4 |
% |
|
13.2 |
|
% |
|
12.4 |
|
% |
2 |
|
% |
8 |
|
% |
Common Equity Tier 1 capital ratio |
|
|
13.4 |
% |
|
13.2 |
|
% |
|
12.4 |
|
% |
2 |
|
% |
8 |
|
% |
Tier 1 leverage ratio |
|
|
9.6 |
% |
|
9.7 |
|
% |
|
8.7 |
|
% |
(1 |
) |
% |
10 |
|
% |
Heritage Bank of
Commerce: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital ratio |
|
|
15.0 |
% |
|
14.8 |
|
% |
|
14.0 |
|
% |
1 |
|
% |
7 |
|
% |
Tier 1 capital ratio |
|
|
13.9 |
% |
|
13.7 |
|
% |
|
12.9 |
|
% |
1 |
|
% |
8 |
|
% |
Common Equity Tier 1 capital ratio |
|
|
13.9 |
% |
|
13.7 |
|
% |
|
12.9 |
|
% |
1 |
|
% |
8 |
|
% |
Tier 1 leverage ratio |
|
|
10.0 |
% |
|
10.0 |
|
% |
|
9.0 |
|
% |
0 |
|
% |
11 |
|
% |
|
|
|
|
|
|
|
|
|
|
(1) |
Represents shareholders' equity minus goodwill and
other intangible assets. |
(2) |
Represents shareholders' equity minus goodwill and
other intangible assets divided by total assets minus goodwill and
other intangible assets. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or For the Quarter Ended: |
|
CREDIT QUALITY
DATA |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
(in $000’s, unaudited) |
|
2023 |
|
2023 |
|
2023 |
|
2022 |
|
2022
|
|
Nonaccrual loans -
held-for-investment |
|
$ |
3,518 |
|
$ |
3,275 |
|
|
$ |
781 |
|
$ |
740 |
|
|
$ |
491 |
|
|
Restructured and loans over 90
days past due and still accruing |
|
|
1,966 |
|
|
2,262 |
|
|
|
1,459 |
|
|
1,685 |
|
|
|
545 |
|
|
Total nonperforming loans |
|
|
5,484 |
|
|
5,537 |
|
|
|
2,240 |
|
|
2,425 |
|
|
|
1,036 |
|
|
Foreclosed assets |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
Total nonperforming assets |
|
$ |
5,484 |
|
$ |
5,537 |
|
|
$ |
2,240 |
|
$ |
2,425 |
|
|
$ |
1,036 |
|
|
Other restructured loans still
accruing |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
171 |
|
|
$ |
93 |
|
|
Net charge-offs (recoveries)
during the quarter |
|
$ |
269 |
|
$ |
(270 |
) |
|
$ |
271 |
|
$ |
(83 |
) |
|
$ |
(425 |
) |
|
Provision for credit losses on
loans during the quarter |
|
$ |
168 |
|
$ |
260 |
|
|
$ |
32 |
|
$ |
508 |
|
|
$ |
1,006 |
|
|
Allowance for credit losses on
loans |
|
$ |
47,702 |
|
$ |
47,803 |
|
|
$ |
47,273 |
|
$ |
47,512 |
|
|
$ |
46,921 |
|
|
Classified assets |
|
$ |
31,062 |
|
$ |
30,500 |
|
|
$ |
26,800 |
|
$ |
14,544 |
|
|
$ |
28,570 |
|
|
Allowance for credit losses on
loans to total loans |
|
|
1.45 |
% |
|
1.45 |
|
% |
|
1.45 |
% |
|
1.44 |
|
% |
|
1.46 |
|
% |
Allowance for credit losses on
loans to total nonperforming loans |
|
|
869.84 |
% |
|
863.34 |
|
% |
|
2,110.40 |
% |
|
1,959.26 |
|
% |
|
4,529.05 |
|
% |
Nonperforming assets to total
assets |
|
|
0.10 |
% |
|
0.10 |
|
% |
|
0.04 |
% |
|
0.05 |
|
% |
|
0.02 |
|
% |
Nonperforming loans to total
loans |
|
|
0.17 |
% |
|
0.17 |
|
% |
|
0.07 |
% |
|
0.07 |
|
% |
|
0.03 |
|
% |
Classified assets to Heritage
Commerce Corp |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital plus allowance for credit losses on loans |
|
|
6 |
% |
|
6 |
|
% |
|
5 |
% |
|
3 |
|
% |
|
6 |
|
% |
Classified assets to Heritage
Bank of Commerce |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital plus allowance for credit losses on loans |
|
|
5 |
% |
|
5 |
|
% |
|
5 |
% |
|
3 |
|
% |
|
5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER PERIOD-END
STATISTICS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in $000’s, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heritage Commerce
Corp: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity (1) |
|
$ |
485,070 |
|
$ |
476,209 |
|
|
$ |
469,146 |
|
$ |
453,792 |
|
|
$ |
430,194 |
|
|
Shareholders’ equity / total assets |
|
|
12.25 |
% |
|
12.31 |
|
% |
|
11.69 |
% |
|
12.26 |
|
% |
|
11.22 |
|
% |
Tangible common equity / tangible assets (2) |
|
|
9.28 |
% |
|
9.27 |
|
% |
|
8.76 |
% |
|
9.11 |
|
% |
|
8.19 |
|
% |
Loan to deposit ratio |
|
|
71.81 |
% |
|
73.07 |
|
% |
|
73.39 |
% |
|
75.14 |
|
% |
|
68.68 |
|
% |
Noninterest-bearing deposits / total deposits |
|
|
27.18 |
% |
|
29.32 |
|
% |
|
33.05 |
% |
|
39.56 |
|
% |
|
40.22 |
|
% |
Total capital ratio |
|
|
15.6 |
% |
|
15.4 |
|
% |
|
15.3 |
% |
|
14.8 |
|
% |
|
14.5 |
|
% |
Tier 1 capital ratio |
|
|
13.4 |
% |
|
13.2 |
|
% |
|
13.1 |
% |
|
12.7 |
|
% |
|
12.4 |
|
% |
Common Equity Tier 1 capital ratio |
|
|
13.4 |
% |
|
13.2 |
|
% |
|
13.1 |
% |
|
12.7 |
|
% |
|
12.4 |
|
% |
Tier 1 leverage ratio |
|
|
9.6 |
% |
|
9.7 |
|
% |
|
9.6 |
% |
|
9.2 |
|
% |
|
8.7 |
|
% |
Heritage Bank of
Commerce: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital ratio |
|
|
15.0 |
% |
|
14.8 |
|
% |
|
14.7 |
% |
|
14.2 |
|
% |
|
14.0 |
|
% |
Tier 1 capital ratio |
|
|
13.9 |
% |
|
13.7 |
|
% |
|
13.5 |
% |
|
13.2 |
|
% |
|
12.9 |
|
% |
Common Equity Tier 1 capital ratio |
|
|
13.9 |
% |
|
13.7 |
|
% |
|
13.5 |
% |
|
13.2 |
|
% |
|
12.9 |
|
% |
Tier 1 leverage ratio |
|
|
10.0 |
% |
|
10.0 |
|
% |
|
9.9 |
% |
|
9.5 |
|
% |
|
9.0 |
|
% |
|
|
|
|
|
|
|
|
|
|
(1) |
Represents shareholders' equity minus goodwill and
other intangible assets.
|
(2) |
Represents shareholders' equity minus goodwill and
other intangible assets divided by total assets minus goodwill and
other intangible assets. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
|
For the Quarter Ended |
|
|
|
September 30, 2023 |
|
September 30, 2022 |
|
|
|
|
|
|
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)(2) |
|
$ |
3,257,480 |
|
$ |
44,853 |
|
|
5.46 |
% |
$ |
3,143,987 |
|
$ |
38,870 |
|
|
4.90 |
% |
Securities - taxable |
|
|
1,114,782 |
|
|
6,797 |
|
|
2.42 |
% |
|
1,076,742 |
|
|
5,874 |
|
|
2.16 |
% |
Securities - exempt from
Federal tax (3) |
|
|
32,947 |
|
|
293 |
|
|
3.53 |
% |
|
38,733 |
|
|
329 |
|
|
3.37 |
% |
Other investments and
interest-bearing deposits in other financial institutions |
|
|
646,501 |
|
|
8,909 |
|
|
5.47 |
% |
|
857,911 |
|
|
5,170 |
|
|
2.39 |
% |
Total interest earning assets (3) |
|
|
5,051,710 |
|
|
60,852 |
|
|
4.78 |
% |
|
5,117,373 |
|
|
50,243 |
|
|
3.90 |
% |
Cash and due from banks |
|
|
35,911 |
|
|
|
|
|
|
|
37,961 |
|
|
|
|
|
|
Premises and equipment,
net |
|
|
9,374 |
|
|
|
|
|
|
|
9,591 |
|
|
|
|
|
|
Goodwill and other intangible
assets |
|
|
177,238 |
|
|
|
|
|
|
|
179,739 |
|
|
|
|
|
|
Other assets |
|
|
125,697 |
|
|
|
|
|
|
|
121,666 |
|
|
|
|
|
|
Total assets |
|
$ |
5,399,930 |
|
|
|
|
|
|
$ |
5,466,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand, noninterest-bearing |
|
$ |
1,302,606 |
|
|
|
|
|
|
$ |
1,910,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand, interest-bearing |
|
|
1,017,686 |
|
|
1,730 |
|
|
0.67 |
% |
|
1,205,937 |
|
|
543 |
|
|
0.18 |
% |
Savings and money market |
|
|
1,087,336 |
|
|
5,514 |
|
|
2.01 |
% |
|
1,429,055 |
|
|
925 |
|
|
0.26 |
% |
Time deposits - under $100 |
|
|
11,966 |
|
|
30 |
|
|
0.99 |
% |
|
12,329 |
|
|
5 |
|
|
0.16 |
% |
Time deposits - $100 and over |
|
|
272,362 |
|
|
2,489 |
|
|
3.63 |
% |
|
123,458 |
|
|
121 |
|
|
0.39 |
% |
ICS/CDARS - interest-bearing demand, money market and time
deposits |
|
|
881,665 |
|
|
5,117 |
|
|
2.30 |
% |
|
30,517 |
|
|
1 |
|
|
0.01 |
% |
Total interest-bearing deposits |
|
|
3,271,015 |
|
|
14,880 |
|
|
1.80 |
% |
|
2,801,296 |
|
|
1,595 |
|
|
0.23 |
% |
Total deposits |
|
|
4,573,621 |
|
|
14,880 |
|
|
1.29 |
% |
|
4,712,044 |
|
|
1,595 |
|
|
0.13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings |
|
|
31 |
|
|
— |
|
|
0.00 |
% |
|
27 |
|
|
— |
|
|
0.00 |
% |
Subordinated debt, net of
issuance costs |
|
|
39,439 |
|
|
539 |
|
|
5.42 |
% |
|
39,288 |
|
|
538 |
|
|
5.43 |
% |
Total interest-bearing liabilities |
|
|
3,310,485 |
|
|
15,419 |
|
|
1.85 |
% |
|
2,840,611 |
|
|
2,133 |
|
|
0.30 |
% |
Total interest-bearing liabilities and demand,
noninterest-bearing / cost of funds |
|
|
4,613,091 |
|
|
15,419 |
|
|
1.33 |
% |
|
4,751,359 |
|
|
2,133 |
|
|
0.18 |
% |
Other liabilities |
|
|
129,866 |
|
|
|
|
|
|
|
103,264 |
|
|
|
|
|
|
Total liabilities |
|
|
4,742,957 |
|
|
|
|
|
|
|
4,854,623 |
|
|
|
|
|
|
Shareholders’ equity |
|
|
656,973 |
|
|
|
|
|
|
|
611,707 |
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
5,399,930 |
|
|
|
|
|
|
$ |
5,466,330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(3) / margin |
|
|
|
|
|
45,433 |
|
|
3.57 |
% |
|
|
|
|
48,110 |
|
|
3.73 |
% |
Less tax equivalent adjustment
(3) |
|
|
|
|
|
(61 |
) |
|
|
|
|
|
|
|
(69 |
) |
|
|
|
Net interest income |
|
|
|
|
$ |
45,372 |
|
|
|
|
|
|
|
$ |
48,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Includes loans
held-for-sale. Nonaccrual loans are included in average
balances. |
(2) |
Yield amounts earned
on loans include fees and costs. The accretion of net deferred loan
fees into loan interest income was $201,000 for the third quarter
of 2023, compared to $507,000 for the third quarter of 2022.
Prepayment fees totaled $182,000 for the third quarter of 2023,
compared to $96,000 for the third quarter of 2022. |
(3) |
Reflects the FTE
adjustment for Federal tax-exempt income based on a 21% tax
rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended |
|
For the Quarter Ended |
|
|
|
September 30, 2023 |
|
June 30, 2023 |
|
|
|
|
|
|
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)(2) |
|
$ |
3,257,480 |
|
$ |
44,853 |
|
|
5.46 |
% |
$ |
3,231,341 |
|
$ |
44,028 |
|
|
5.47 |
% |
Securities - taxable |
|
|
1,114,782 |
|
|
6,797 |
|
|
2.42 |
% |
|
1,147,375 |
|
|
6,982 |
|
|
2.44 |
% |
Securities - exempt from
Federal tax (3) |
|
|
32,947 |
|
|
293 |
|
|
3.53 |
% |
|
34,070 |
|
|
302 |
|
|
3.56 |
% |
Other investments and
interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in other financial
institutions |
|
|
646,501 |
|
|
8,909 |
|
|
5.47 |
% |
|
535,611 |
|
|
7,092 |
|
|
5.31 |
% |
Total interest earning assets (3) |
|
|
5,051,710 |
|
|
60,852 |
|
|
4.78 |
% |
|
4,948,397 |
|
|
58,404 |
|
|
4.73 |
% |
Cash and due from banks |
|
|
35,911 |
|
|
|
|
|
|
|
35,159 |
|
|
|
|
|
|
Premises and equipment,
net |
|
|
9,374 |
|
|
|
|
|
|
|
9,190 |
|
|
|
|
|
|
Goodwill and other intangible
assets |
|
|
177,238 |
|
|
|
|
|
|
|
177,844 |
|
|
|
|
|
|
Other assets |
|
|
125,697 |
|
|
|
|
|
|
|
107,653 |
|
|
|
|
|
|
Total assets |
|
$ |
5,399,930 |
|
|
|
|
|
|
$ |
5,278,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand, noninterest-bearing |
|
$ |
1,302,606 |
|
|
|
|
|
|
$ |
1,368,373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand, interest-bearing |
|
|
1,017,686 |
|
|
1,730 |
|
|
0.67 |
% |
|
1,118,200 |
|
|
1,788 |
|
|
0.64 |
% |
Savings and money market |
|
|
1,087,336 |
|
|
5,514 |
|
|
2.01 |
% |
|
1,109,347 |
|
|
4,638 |
|
|
1.68 |
% |
Time deposits - under $100 |
|
|
11,966 |
|
|
30 |
|
|
0.99 |
% |
|
11,610 |
|
|
20 |
|
|
0.69 |
% |
Time deposits - $100 and over |
|
|
272,362 |
|
|
2,489 |
|
|
3.63 |
% |
|
201,600 |
|
|
1,410 |
|
|
2.81 |
% |
ICS/CDARS - interest-bearing demand, money market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and time deposits |
|
|
881,665 |
|
|
5,117 |
|
|
2.30 |
% |
|
614,911 |
|
|
2,867 |
|
|
1.87 |
% |
Total interest-bearing deposits |
|
|
3,271,015 |
|
|
14,880 |
|
|
1.80 |
% |
|
3,055,668 |
|
|
10,723 |
|
|
1.41 |
% |
Total deposits |
|
|
4,573,621 |
|
|
14,880 |
|
|
1.29 |
% |
|
4,424,041 |
|
|
10,723 |
|
|
0.97 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings |
|
|
31 |
|
|
— |
|
|
0.00 |
% |
|
62,653 |
|
|
787 |
|
|
5.04 |
% |
Subordinated debt, net of
issuance costs |
|
|
39,439 |
|
|
539 |
|
|
5.42 |
% |
|
39,401 |
|
|
538 |
|
|
5.48 |
% |
Total interest-bearing liabilities |
|
|
3,310,485 |
|
|
15,419 |
|
|
1.85 |
% |
|
3,157,722 |
|
|
12,048 |
|
|
1.53 |
% |
Total interest-bearing liabilities and demand, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
noninterest-bearing / cost of funds |
|
|
4,613,091 |
|
|
15,419 |
|
|
1.33 |
% |
|
4,526,095 |
|
|
12,048 |
|
|
1.07 |
% |
Other liabilities |
|
|
129,866 |
|
|
|
|
|
|
|
101,908 |
|
|
|
|
|
|
Total liabilities |
|
|
4,742,957 |
|
|
|
|
|
|
|
4,628,003 |
|
|
|
|
|
|
Shareholders’ equity |
|
|
656,973 |
|
|
|
|
|
|
|
650,240 |
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
5,399,930 |
|
|
|
|
|
|
$ |
5,278,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(3) / margin |
|
|
|
|
|
45,433 |
|
|
3.57 |
% |
|
|
|
|
46,356 |
|
|
3.76 |
% |
Less tax equivalent adjustment
(3) |
|
|
|
|
|
(61 |
) |
|
|
|
|
|
|
|
(63 |
) |
|
|
|
Net interest income |
|
|
|
|
$ |
45,372 |
|
|
|
|
|
|
|
$ |
46,293 |
|
|
|
|
_____________________
(1) |
Includes loans held-for-sale. Nonaccrual loans are included
in average balances. |
(2) |
Yield amounts earned on loans
include fees and costs. The accretion of net deferred loan fees
into loan interest income was $201,000 for the third quarter of
2023, compared to $94,000 for the second quarter of 2023.
Prepayment fees totaled $182,000 for the third quarter of 2023,
compared to $73,000 for the second quarter of 2023. |
(3) |
Reflects the FTE adjustment for
Federal tax-exempt income based on a 21% tax rate. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
For the Nine Months Ended |
|
|
|
September 30, 2023 |
|
September 30, 2022 |
|
|
|
|
|
|
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)(2) |
|
$ |
3,255,375 |
|
$ |
132,993 |
|
|
5.46 |
% |
$ |
3,074,674 |
|
$ |
110,509 |
|
|
4.81 |
% |
Securities - taxable |
|
|
1,140,890 |
|
|
20,835 |
|
|
2.44 |
% |
|
924,694 |
|
|
13,725 |
|
|
1.98 |
% |
Securities - exempt from
Federal tax (3) |
|
|
34,332 |
|
|
908 |
|
|
3.54 |
% |
|
41,328 |
|
|
1,048 |
|
|
3.39 |
% |
Other investments,
interest-bearing deposits in other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financial institutions and
Federal funds sold |
|
|
535,016 |
|
|
20,860 |
|
|
5.21 |
% |
|
1,025,002 |
|
|
8,574 |
|
|
1.12 |
% |
Total interest earning assets (3) |
|
|
4,965,613 |
|
|
175,596 |
|
|
4.73 |
% |
|
5,065,698 |
|
|
133,856 |
|
|
3.53 |
% |
Cash and due from banks |
|
|
36,205 |
|
|
|
|
|
|
|
37,589 |
|
|
|
|
|
|
Premises and equipment,
net |
|
|
9,278 |
|
|
|
|
|
|
|
9,621 |
|
|
|
|
|
|
Goodwill and other intangible
assets |
|
|
177,837 |
|
|
|
|
|
|
|
180,393 |
|
|
|
|
|
|
Other assets |
|
|
127,514 |
|
|
|
|
|
|
|
121,519 |
|
|
|
|
|
|
Total assets |
|
$ |
5,316,447 |
|
|
|
|
|
|
$ |
5,414,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
shareholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand, noninterest-bearing |
|
$ |
1,444,744 |
|
|
|
|
|
|
$ |
1,868,283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand, interest-bearing |
|
|
1,117,140 |
|
|
4,994 |
|
|
0.60 |
% |
|
1,244,996 |
|
|
1,470 |
|
|
0.16 |
% |
Savings and money market |
|
|
1,159,894 |
|
|
13,641 |
|
|
1.57 |
% |
|
1,383,944 |
|
|
2,026 |
|
|
0.20 |
% |
Time deposits - under $100 |
|
|
11,951 |
|
|
60 |
|
|
0.67 |
% |
|
12,732 |
|
|
14 |
|
|
0.15 |
% |
Time deposits - $100 and over |
|
|
212,736 |
|
|
4,744 |
|
|
2.98 |
% |
|
122,615 |
|
|
341 |
|
|
0.37 |
% |
ICS/CDARS - interest-bearing demand, money market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and time deposits |
|
|
525,318 |
|
|
8,065 |
|
|
2.05 |
% |
|
30,356 |
|
|
4 |
|
|
0.02 |
% |
Total interest-bearing deposits |
|
|
3,027,039 |
|
|
31,504 |
|
|
1.39 |
% |
|
2,794,643 |
|
|
3,855 |
|
|
0.18 |
% |
Total deposits |
|
|
4,471,783 |
|
|
31,504 |
|
|
0.94 |
% |
|
4,662,926 |
|
|
3,855 |
|
|
0.11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings |
|
|
36,283 |
|
|
1,365 |
|
|
5.03 |
% |
|
24 |
|
|
— |
|
|
0.00 |
% |
Subordinated debt, net of
issuance costs |
|
|
39,401 |
|
|
1,614 |
|
|
5.48 |
% |
|
42,552 |
|
|
1,640 |
|
|
5.15 |
% |
Total interest-bearing liabilities |
|
|
3,102,723 |
|
|
34,483 |
|
|
1.49 |
% |
|
2,837,219 |
|
|
5,495 |
|
|
0.26 |
% |
Total interest-bearing liabilities and demand, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
noninterest-bearing / cost of funds |
|
|
4,547,467 |
|
|
34,483 |
|
|
1.01 |
% |
|
4,705,502 |
|
|
5,495 |
|
|
0.16 |
% |
Other liabilities |
|
|
120,639 |
|
|
|
|
|
|
|
104,524 |
|
|
|
|
|
|
Total liabilities |
|
|
4,668,106 |
|
|
|
|
|
|
|
4,810,026 |
|
|
|
|
|
|
Shareholders’ equity |
|
|
648,341 |
|
|
|
|
|
|
|
604,794 |
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
5,316,447 |
|
|
|
|
|
|
$ |
5,414,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(3) / margin |
|
|
|
|
|
141,113 |
|
|
3.80 |
% |
|
|
|
|
128,361 |
|
|
3.39 |
% |
Less tax equivalent adjustment
(3) |
|
|
|
|
|
(190 |
) |
|
|
|
|
|
|
|
(220 |
) |
|
|
|
Net interest income |
|
|
|
|
$ |
140,923 |
|
|
|
|
|
|
|
$ |
128,141 |
|
|
|
|
_____________________
(1) |
Includes loans held-for-sale. Nonaccrual loans are included
in average balances. |
(2) |
Yield amounts earned on loans
include fees and costs. The accretion of net deferred loan fees
into loan interest income was $595,000 for the first nine months of
2023, compared to $3,111,000 for the first nine months of
2022. Prepayment fees totaled $393,000 for the first nine
months of 2023, compared to $1,155,000 for the first nine months of
2022. |
(3) |
Reflects the FTE adjustment for
Federal tax-exempt income based on a 21% tax rate. |
Heritage Commerce (NASDAQ:HTBK)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Heritage Commerce (NASDAQ:HTBK)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024