SAN JOSE, Calif.–(GLOBE NEWSWIRE)–Heritage Commerce Corp (Nasdaq:HTBK), the holding company (the “Company”) for Heritage Bank of Commerce (the “Bank”), today reported net income of $2.8 million for the second quarter of 2013, or $0.09 per average diluted common share, driven by solid loan and deposit growth, stable net interest margin, and lower credit costs. Net income was $2.7 million, or $0.08 per average diluted common share, for the second quarter of 2012. There were no dividends or discount accretion on preferred stock in the second quarter of 2013 and 2012. For the six months ended June 30, 2013, net income available to common shareholders was $5.0 million, or $0.16 per average diluted common share, an increase of 40% from $3.5 million, or $0.11 per average diluted common share, for the six months ended June 30, 2012. All results are unaudited.
“Our improving earnings trend gained further momentum in the second quarter of 2013,” said Walter Kaczmarek, President and Chief Executive Officer. “The steady economy in the greater San Francisco Bay Area has increased loan demand from local small-to-medium sized businesses. Our total loans increased $40.0 million, or 5%, at June 30, 2013, compared to March 31, 2013, while our net interest margin remained stable. Additionally, our deposit growth continued and credit quality once again meaningfully improved. Both nonperforming assets and classified assets decreased substantially year-over-year, and we received net recoveries on loans in the second quarter totaling $270,000.”
“In June, we announced plans to redeem our floating-rate subordinated debt totaling $9 million during the third quarter of this year. We incurred charges of $167,000 related to the redemptions in the second quarter of 2013 and anticipate savings of $90,000 per quarter in interest expense starting in the fourth quarter. These redemptions eliminate all of the subordinated debt from our capital structure,” Mr. Kaczmarek added. “During the second quarter of 2013, we also completed the repurchase of the common stock warrant issued to the U.S. Department of the Treasury in 2008 for $140,000.”