Attached files
| file | filename |
|---|---|
| 8-K - PR01252013 - HERITAGE COMMERCE CORP | pr01252013.pdf |
| EX-99.1 - EXHIBIT99-1 - HERITAGE COMMERCE CORP | exhibit99-1.pdf |
| 8-K - PR01252013 - HERITAGE COMMERCE CORP | pr01252013.htm |
Exhibit 99.1
Heritage Commerce Corp Reports Net Income Available to Shareholders of $2.7 Million for the Fourth Quarter of 2012 and $8.7 Million for 2012
San Jose, CA – January 24, 2013 – Heritage Commerce Corp (Nasdaq: HTBK), the holding company (the “Company”) for Heritage Bank of Commerce (the “Bank”), today reported net income of $2.7 million for the fourth quarter of 2012, or $0.08 per average diluted common share, driven by strong deposit growth, increased loan demand and a lower provision for loan losses. There were no dividends and discount accretion on preferred stock in the fourth quarter of 2012. Net income for the fourth quarter of 2011 was $2.9 million, which included the elimination of a $700,000 partial valuation allowance on the Company’s deferred tax asset. After dividends and discount accretion on preferred stock of $601,000, net income available to common shareholders for the fourth quarter of 2011 was $2.3 million, or $0.07 per average diluted common share. Income before income taxes for the fourth quarter of 2012 increased 23% to $3.8 million, compared to $3.1 million for the fourth quarter of 2011.
For the year ended December 31, 2012, net income available to common shareholders was $8.7 million, or $0.27 per average diluted common share. For the year ended December 31, 2011, net income available to common shareholders was $9.0 million, or $0.28 per average diluted common share, which included the elimination of a $3.7 million partial valuation allowance on the Company’s deferred tax asset. Income before income taxes for the year ended December 31, 2012 increased 35% to $14.2 million, compared to $10.5 million for the year ended December 31, 2011. All results are unaudited.
“Throughout 2012, we remained focused on executing our capital management strategy, prudently managing our operations, investing in our franchise and producing steady growth and earnings. As a result, and thanks to the dedication and hard work of our Board of Directors and employees, we posted our tenth consecutive quarter of profitability,” said Walter Kaczmarek, President and Chief Executive Officer. “We significantly grew deposits both on a year-over-year and linked quarter basis. We increased loan balances by $12.9 million, or 2%, during the fourth quarter of 2012 and by $47.7 million, or 6%, for the year ended December 31, 2012 from the comparable periods in 2011. Our strategy of developing strong relationships with our customers has led to our growth and earnings improvement.”
2012 Highlights (as of, or for the period ended December 31, 2012, except as noted):
|
u
|
Net income was $2.7 million for the fourth quarter of 2012, marking the tenth consecutive profitable quarter.
|
|
u
|
Pre-tax income for the fourth quarter of 2012 increased 23% to $3.8 million, compared to $3.1 million for the fourth quarter of 2011. Pre-tax income for the year ended December 31, 2012 increased 35% to $14.2 million, compared to $10.5 million for the year ended December 31, 2011.
|
|
u
|
Net interest income, before provision for loan losses, increased 4% to $12.2 million for the fourth quarter of 2012, from the same period a year ago.
|
|
u
|
Late in the fourth quarter of 2012, the Company received significantly large demand deposits in the amount of $467.5 million from one customer, which were placed in the Bank on a temporary short-term basis. Of this amount, $195.6 million was withdrawn prior to year end, for a net outstanding balance of $271.9 million at December 31, 2012. An additional $233.7 million of these deposits were withdrawn in January 2013, as originally planned by the customer. As a result of the short term nature of the funds, that excess liquidity was placed in low interest earning deposits at the Federal Reserve Bank.
|
|
u
|
Deposits increased 15% at December 31, 2012, compared to December 31, 2011, and 7% from September 30, 2012, excluding the $271.9 million of short-term demand deposits from one customer.
|
|
●
|
Noninterest-bearing deposits, excluding $271.9 million of short-term demand deposits from one customer, increased 32% to $455.8 million at December 31, 2012, from $344.3 million at December 31, 2011.
|
|
●
|
Interest-bearing demand deposits increased 16% to $156.0 million at December 31, 2012, from $134.1 million at December 31, 2011.
|
|
u
|
The cost of deposits declined 6 basis points to 0.22% for the fourth quarter of 2012, compared to 0.28% for the fourth quarter of 2011, and declined 14 basis points to 0.25% for the year ended December 31, 2012, compared to 0.39% for the year ended December 31, 2011. The previously discussed large amount of short-term demand deposits from one customer reduced the cost of deposits by one basis point during the fourth quarter of 2012.
|
|
u
|
Total assets at December 31, 2012 increased 9% from December 31, 2011, excluding the short-term deposits of $271.9 million at the Federal Reserve Bank offsetting the short-term demand deposits from one customer.
|
|
u
|
Loans (excluding loans-held-for-sale) increased 6% to $812.3 million at December 31, 2012, compared to $764.6 million at December 31, 2011.
|
|
u
|
Nonperforming assets totaled $19.5 million at December 31, 2012, compared to $19.1 million at December 31, 2011, and $22.0 million, at September 30, 2012.
|
|
u
|
Classified assets, net of Small Business Administration (“SBA”) guarantees, decreased 38% to $36.8 million at December 31, 2012 from $59.5 million a year ago and decreased 20% from $46.0 million in the preceding quarter.
|
|
u
|
The allowance for loan losses was $19.0 million at December 31, 2012, a decline of 8% from $20.7 million at December 31, 2011, and relatively flat compared to the third quarter of 2012. The provision for loan losses for the fourth quarter of 2012 was $669,000, a decline of 46% from $1.2 million for the fourth quarter of 2011, and a decline of 44% from $1.2 million for the third quarter of 2012.
|
|
u
|
Net charge-offs declined to $766,000 for the fourth quarter of 2012, compared to $1.6 million for the fourth quarter of 2011, and $2.1 million for the third quarter of 2012.
|
“Asset quality continued to improve with net charge-offs and total classified assets declining meaningfully both for the year and the quarter,” added Mr. Kaczmarek. “Because of the continued improvement in our asset quality and the gradual strengthening of the Northern California regional economy, our provision for loan losses is significantly lower at $2.8 million for the year ended December 31, 2012, compared to $4.5 million a year ago.”
|
u
|
During the first quarter of 2012, the Company repurchased all of the $40 million Series A Preferred Stock issued to the U.S. Treasury Department under the TARP Capital Purchase Program. The Company used available cash and proceeds from a $30 million cash distribution from the Bank to the Company. The repurchase of the Series A Preferred Stock will save $2.0 million in annual dividends.
|
|
u
|
During the third quarter of 2012, the Company completed the redemption of $14 million fixed-rate subordinated debt, which will reduce approximately $1.5 million (pre-tax) of interest expense on an annual basis going forward. A $15 million distribution from the Bank to the Company provided the cash for the redemption. The Company incurred a charge of $601,300 in the third quarter of 2012, for the early payoff premium on the redemption of the subordinated debt.
|
|
u
|
Although the repurchase of the $40 million Series A Preferred Stock and the redemption of the $14 million fixed-rate subordinated debt reduced regulatory capital levels, capital ratios exceed regulatory requirements for a well-capitalized financial institution at the holding company and bank level at December 31, 2012.
|
|
Capital Ratios
|
Heritage Commerce Corp
|
Heritage Bank of Commerce
|
Well-Capitalized Financial Institution Regulatory Guidelines
|
|
Total Risk-Based
|
16.2% | 15.3% | 10.0% |
|
Tier 1 Risk-Based
|
15.0% | 14.0% | 6.0% |
|
Leverage
|
11.5% | 10.7% | 5.0% |
Operating Results
Net interest income, before the provision for loan losses, increased 4% to $12.2 million in the fourth quarter of 2012, from $11.8 million in the fourth quarter a year ago, and increased 3% from $11.8 million in the third quarter of 2012, primarily due to an increase in the average balance of loans and investment securities, and a decrease in the rates paid on interest-bearing liabilities. For the year ended December 31, 2012, net interest income was $48.4 million, compared to $46.2 million a year ago, primarily due to an increase in the average balance of investment securities, and a decrease in the average balance and rates paid on interest-bearing liabilities, partially offset by a decrease in the average balance of loans.
“As anticipated, the net interest margin continued to be impacted as a result of lower rates on loan renewals. Also impacting the net interest margin this quarter was our significantly increased short-term deposits at the Federal Reserve Bank which was a result of the aforementioned short-term demand deposits from one customer,” commented Mr. Kaczmarek. For the fourth quarter 2012, the net interest margin was 3.74%, down 3 basis points from 3.77% for the third quarter of 2012 and down 13 basis points from 3.87% a year ago. Excluding the impact of ten basis points to the net interest margin as a result of the large fluctuating short-term demand deposits from one customer, the net interest margin for the fourth quarter of 2012 was 3.85%. For the year ended December 31, 2012, the net interest margin was 3.88%, compared to 3.94% a year ago. The net interest margin for the quarter and year ended December 31, 2012 compared to the comparable period in 2011 also declined from lower yields on securities and loans, partially offset by a lower cost of funds.
The provision for loan losses declined to $669,000 for the fourth quarter of 2012, compared to $1.2 million for the same quarter a year ago and $1.2 million for the third quarter of 2012. For the year ended December 31, 2012, the provision for loan losses was $2.8 million, compared to $4.5 million a year ago.
Primarily due to lower gains on the sales of securities and SBA loans, noninterest income was $2.1 million for the fourth quarter of 2012, compared to $2.4 million for the fourth quarter a year ago, and $2.9 million for the third quarter of 2012. Noninterest income for the year ended December 31, 2012 was $8.9 million, compared to $8.4 million a year ago. The increase was primarily due to a higher gain on sales of securities, partially offset by a lower gain on sales of SBA loans.
The Company sold $14.2 million of agency mortgage-backed securities for a gain of $396,000 during the fourth quarter of 2012, compared to $459,000 gain on the sales of securities during the fourth quarter of 2011, and a $1.1 million gain on the sales of securities during the third quarter of 2012.
Noninterest expense was $9.8 million for the fourth quarter 2012, compared to $9.9 million for the fourth quarter of 2011, and $10.1 million for the third quarter of 2012. Noninterest expense for the year ended December 31, 2012 was $40.3 million, compared to $39.6 million a year ago. “The increase in expenses from year to year primarily resulted from the early payoff premium on the redemption of the $14 million fixed-rate subordinated debt, which resulted in a charge of $601,300 during the third quarter of 2012,” added Mr. Kaczmarek. The redemption of the fixed-rate subordinated debt will reduce approximately $1.5 million (pre-tax) of interest expense on an annual basis going forward.
Income tax expense for the fourth quarter of 2012 was $1.2 million, compared to $234,000 for the fourth quarter of 2011 (net of the elimination of a $700,000 partial valuation allowance on the Company’s deferred tax asset), and $939,000 for the third quarter of 2012. For the year ended December 31, 2012, income tax expense was $4.3 million, compared to a tax benefit of $834,000 a year ago. The income tax benefit for the year ended December 31, 2011 included the elimination of a $3.7 million partial valuation allowance on the Company’s deferred tax asset.
The efficiency ratio for the fourth quarter of 2012 was 68.45%, compared to 69.38% for the fourth quarter of 2011, and 68.69% for the third quarter of 2012. The efficiency ratio was 70.32% for the year ended December 31, 2012, compared to 72.51% for the year ended December 31, 2011.
Balance Sheet Review, Capital Management and Credit Quality
The Company’s total assets increased 30% to $1.69 billion at December 31, 2012, from $1.31 billion a year ago, and increased 25% from $1.36 billion at September 30, 2012. Excluding the short-term deposits of $271.9 million at the Federal Reserve Bank offsetting the short-term demand deposits from one customer, total assets at December 31, 2012 increased 9% from December 31, 2011, and increased 5% from September 30, 2012.
The investment securities available-for-sale portfolio totaled $367.9 million at December 31, 2012, a decrease of 3% from $380.5 million at December 31, 2011, and a decrease of 10% from $410.8 million at September 30, 2012. At December 31, 2012, the securities available-for-sale portfolio was comprised of $291.2 million agency mortgage-backed securities (all issued by U.S. Government sponsored entities), $55.6 million of corporate bonds, and $21.1 million of single entity issue trust preferred securities.
At December 31, 2012, investment securities held-to-maturity totaled $51.5 million, compared to no investment securities held-to-maturity at December 31, 2011 and $25.6 million at September 30, 2012. At December 31, 2012, the securities held-to-maturity portfolio, at amortized cost, was comprised of $34.9 million tax-exempt municipal bonds and $16.6 million agency mortgage-backed securities.
Loans, excluding loans held-for-sale, totaled $812.3 million at December 31, 2012, an increase of 6% from $764.6 million at December 31, 2011, and an increase of 2% from $799.4 million at September 30, 2012. The loan portfolio remains well-diversified with commercial and industrial (“C&I”) loans accounting for 46% of the portfolio at December 31, 2012. Commercial and residential real estate loans accounted for 44% of the total loan portfolio, of which 51% were owner-occupied by businesses. Consumer and home equity loans accounted for 7% of total loans, and land and construction loans accounted for the remaining 3% of total loans at December 31, 2012.
“With the continued improvement in the regional economy and the marketing efforts by our seasoned bankers, we are generating a consistent pipeline of lending opportunities,” said Mr. Kaczmarek. “With our recent hires at the end of 2012, we expect to expand our efforts in C&I, real estate, and SBA lending,” continued Mr. Kaczmarek.
The yield on the loan portfolio was 5.00% for the fourth quarter of 2012, compared to 5.39% for the same period in 2011, and 5.10% for the third quarter of 2012. The yield on the loan portfolio was 5.18% for the year ended December 31, 2012, compared to 5.32% for the same period in 2011. The decrease in the yield on the loan portfolio for the quarter and year ended December 31 2012, compared to the comparable period in 2011, was primarily a result of lower rates on loan renewals.
Nonperforming assets (“NPAs”) were $19.5 million, or 1.15% of total assets, at December 31, 2012, compared to $19.1 million, or 1.47% of total assets, a year ago. NPAs were 1.37% of total assets at December 31, 2012, excluding the short-term deposits of $271.9 million at the Federal Reserve Bank offsetting the short-term demand deposits from one customer. At September 30, 2012, NPAs totaled $22.0 million, or 1.62% of total assets. The following is a breakout of NPAs at December 31, 2012:
|
Balance
|
% of Total
|
||||
|
Commercial and industrial loans
|
$ | 4,870 | 25% | ||
|
Commercial real estate loans
|
4,676 | 24% | |||
|
SBA loans
|
2,982 | 15% | |||
|
Home equity and consumer loans
|
2,584 | 13% | |||
|
Land and construction loans
|
2,223 | 12% | |||
|
Foreclosed assets
|
1,270 | 7% | |||
|
Restructured and loans over 90 days past due and accruing
|
859 | 4% | |||
| $ | 19,464 | 100% | |||
At December 31, 2012, the $19.5 million of NPAs included $943,000 of loans guaranteed by the SBA and $859,000 of restructured loans still accruing interest income. Foreclosed assets were $1.3 million at December 31, 2012, compared to $2.3 million at December 31, 2011, and $2.9 million at September 30, 2012.
Classified assets (net of SBA guarantees) decreased to $36.8 million at December 31, 2012, from $59.5 million at December 31, 2011, and $46.0 million at September 30, 2012.
The following table summarizes the allowance for loan losses:
|
For the Quarter Ended:
|
|||||||||
|
December 31,
|
September 30,
|
December 31,
|
|||||||
|
2012
|
2012
|
2011
|
|||||||
|
ALLOWANCE FOR LOAN LOSSES
|
|||||||||
|
(in $000's, unaudited)
|
|||||||||
|
Balance at beginning of quarter
|
$ | 19,124 | $ | 20,023 | $ | 21,049 | |||
|
Provision for loan losses during the quarter
|
669 | 1,200 | 1,230 | ||||||
|
Net charge-offs during the quarter
|
(766) | (2,099) | (1,579) | ||||||
|
Balance at end of quarter
|
$ |
19,027
|
$ | 19,124 | $ | 20,700 | |||
|
Total loans
|
$ | 812,313 | $ | 799,393 | $ | 764,591 | |||
|
Total nonperforming loans
|
$ | 18,194 | $ | 19,118 | $ | 16,830 | |||
|
Allowance for loan losses to total loans
|
2.34% | 2.39% | 2.71% | ||||||
|
Allowance for loan losses to total nonperforming loans,
|
|||||||||
|
excluding nonaccrual loans - held-for-sale
|
104.58% | 100.03% | 124.37% | ||||||
The decrease in the allowance for loan losses at December 31, 2012, compared to December 31, 2011 and September 30, 2012, was primarily due to improved risk grading and credit metrics on non-impaired real estate loans, as well as a decline in historical charge-off levels.
Deposits totaled $1.48 billion at December 31, 2012, compared to $1.05 billion at December 31, 2011, and $1.14 billion at September 30, 2012. Total deposits, excluding brokered deposits and the short-term demand deposits of $271.9 million to one customer, were $1.1 billion at December 31, 2012, compared to $964.7 million at December 31, 2011, and $1.0 billion at September 30, 2012. At December 31, 2012, brokered deposits increased 15% to $97.8 million, from $84.7 million at December 31, 2011, and increased 10% from $89.2 million at September 30, 2012.
The total cost of deposits decreased 6 basis points to 0.22% during the fourth quarter of 2012, from 0.28% during the fourth quarter of 2011, and decreased 2 basis points from 0.24% during the third quarter of 2012, primarily as a result of an increase in noninterest-bearing demand deposits. The short-term demand deposits to one customer reduced the cost of deposits by one basis point during the fourth quarter of 2012.
Subordinated debt decreased to $9.3 million at December 31, 2012, compared to $23.7 million at December 31, 2011, as a result of the redemption of $14 million fixed-rate subordinated debt during the third quarter of 2012. Subordinated debt was also $9.3 million at September 30, 2012.
Largely due to the $40 million repurchase of the Series A Preferred Stock during the first quarter of 2012, tangible equity was $167.7 million at December 31, 2012, compared to $195.3 million at December 31, 2011. Tangible equity was $166.9 million at September 30, 2012. Tangible book value per common share was $5.63 at December 31, 2012, compared to $5.20 a year ago, and $5.60 at September 30, 2012. In the per common share data attached, the Company presents the pro forma tangible book value per share, assuming the Company’s outstanding Series C Preferred Stock issued in June 2010 is converted into common stock. There were 21,004 shares of Series C Preferred Stock outstanding at December 31, 2012 and the Series C Preferred Stock is convertible into an aggregate of 5.6 million shares of common stock at a conversion price of $3.75, upon a transfer of the Series C Preferred Stock in a widely dispersed offering.
Accumulated other comprehensive income was $2.7 million at December 31, 2012, compared to $955,000 a year ago, and $4.8 million at September 30, 2012. The components of other comprehensive income, net of taxes, at December 31, 2012 include the following: an unrealized gain on available-for-sale and held-to-maturity securities of $7.4 million; an unrealized loss on split dollar insurance contracts of ($2.3) million; an unrealized loss on the supplemental executive retirement plan of ($3.4) million; and an unrealized gain on interest-only strip from SBA loans of $1.0 million.
Heritage Commerce Corp,a bank holding company established in February 1998, is the parent company of Heritage Bank of Commerce, established in 1994 and headquartered in San Jose with full-service branches in Danville, Fremont, Gilroy, Los Altos, Los Gatos, Morgan Hill, Mountain View, Pleasanton, and Walnut Creek. Heritage Bank of Commerce is an SBA Preferred Lender with an additional Loan Production Office in Santa Rosa, California. For more information, please visit www.heritagecommercecorp.com.
Forward Looking Statement Disclaimer
Forward-looking statements are based on management’s knowledge and belief as of today and include information concerning the Company’s possible or assumed future financial condition, and its results of operations, business and earnings outlook. These forward-looking statements are subject to risks and uncertainties. A number of factors, some of which are beyond the Company’s ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. The forward-looking statements could be affected by many factors, including but not limited to: (1) competition for loans and deposits and failure to attract or retain deposits and loans; (2) local, regional, and national economic conditions and events and the impact they may have on us and our customers, and our assessment of that impact on our estimates including, the allowance for loan losses; (3) risks associated with concentrations in real estate related loans; (4) changes in the level of nonperforming assets and charge-offs and other credit quality measures, and their impact on the adequacy of the Company’s allowance for loan losses and the Company’s provision for loan losses; (5) the effects of and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Federal Open Market Committee of the Federal Reserve Board; (6) stability of funding sources and continued availability of borrowings; (7) our ability to raise capital or incur debt on reasonable terms; (8) regulatory limits on Heritage Bank of Commerce’s ability to pay dividends to the Company; (9) continued volatility in credit and equity markets and its effect on the global economy; (10) the impact of reputational risk on such matters as business generation and retention, funding and liquidity; (11) oversupply of inventory and continued deterioration in values of California commercial real estate; (12) a prolonged slowdown in construction activity; (13) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities, and executive compensation) which we must comply, including but not limited to, the Dodd-Frank Act of 2010; (14) the effects of security breaches and computer viruses that may affect our computer systems; (15) changes in consumer spending, borrowings and saving habits; (16) changes in the competitive environment among financial or bank holding companies and other financial service providers; (17) the 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; (18) the costs and effects of legal and regulatory developments, including resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; (19) the ability to increase market share and control expenses; and (20) our success in managing the risks involved in the foregoing items. For a discussion of factors which could cause results to differ, please see the Company’s reports on Forms 10-K and 10-Q as filed with the Securities and Exchange Commission and the Company’s press releases. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.
Member FDIC
|
For the Quarter Ended:
|
Percent Change From:
|
For the Year Ended:
|
|||||||||||||||||||
|
CONSOLIDATED STATEMENTS OF INCOME
|
Dec. 31,
|
Sep. 30,
|
Dec. 31,
|
Sep. 30,
|
Dec. 31,
|
Dec. 31,
|
Dec. 31,
|
Percent
|
|||||||||||||
|
(in $000's, unaudited)
|
2012
|
2012
|
2011
|
2012
|
2011
|
2012
|
2011
|
Change
|
|||||||||||||
|
Interest income
|
$ | 12,958 | $ | 12,862 | $ | 13,010 | 1% | 0% | $ | 52,565 | $ | 52,031 | 1% | ||||||||
|
Interest expense
|
747 | 1,038 | 1,222 | -28% | -39% | 4,187 | 5,875 | -29% | |||||||||||||
|
Net interest income before provision for loan losses
|
12,211 | 11,824 | 11,788 | 3% | 4% | 48,378 | 46,156 | 5% | |||||||||||||
|
Provision for loan losses
|
669 | 1,200 | 1,230 | -44% | -46% | 2,784 | 4,469 | -38% | |||||||||||||
|
Net interest income after provision for loan losses
|
11,542 | 10,624 | 10,558 | 9% | 9% | 45,594 | 41,687 | 9% | |||||||||||||
|
Noninterest income:
|
|||||||||||||||||||||
|
Service charges and fees on deposit accounts
|
567 | 575 | 597 | -1% | -5% | 2,333 | 2,355 | -1% | |||||||||||||
|
Servicing income
|
407 | 429 | 462 | -5% | -12% | 1,743 | 1,743 | 0% | |||||||||||||
|
Increase in cash surrender value of life insurance
|
428 | 434 | 436 | -1% | -2% | 1,720 | 1,706 | 1% | |||||||||||||
|
Gain on sales of securities
|
396 | 1,105 | 459 | -64% | -14% | 1,560 | 459 | 240% | |||||||||||||
|
Gain on sales of SBA loans
|
69 | 221 | 337 | -69% | -80% | 702 | 1,461 | -52% | |||||||||||||
|
Other
|
237 | 184 | 132 | 29% | 80% | 807 | 698 | 16% | |||||||||||||
|
Total noninterest income
|
2,104 | 2,948 | 2,423 | -29% | -13% | 8,865 | 8,422 | 5% | |||||||||||||
|
Noninterest expense:
|
|||||||||||||||||||||
|
Salaries and employee benefits
|
5,342 | 5,336 | 5,069 | 0% | 5% | 21,722 | 20,574 | 6% | |||||||||||||
|
Occupancy and equipment
|
993 | 1,041 | 1,002 | -5% | -1% | 3,997 | 4,083 | -2% | |||||||||||||
|
Professional fees
|
608 | 587 | 859 | 4% | -29% | 2,876 | 2,861 | 1% | |||||||||||||
|
Premium on redemption of subordinated debt
|
- | 601 | - | -100% | N/A | 601 | - | N/A | |||||||||||||
|
Other
|
2,856 | 2,582 | 2,930 | 11% | -3% | 11,060 | 12,054 | -8% | |||||||||||||
|
Total noninterest expense
|
9,799 | 10,147 | 9,860 | -3% | -1% | 40,256 | 39,572 | 2% | |||||||||||||
|
Income before income taxes
|
3,847 | 3,425 | 3,121 | 12% | 23% | 14,203 | 10,537 | 35% | |||||||||||||
|
Income tax expense (benefit)
|
1,178 | 939 | 234 | 25% | 403% | 4,294 | (834) | 615% | |||||||||||||
|
Net income
|
2,669 | 2,486 | 2,887 | 7% | -8% | 9,909 | 11,371 | -13% | |||||||||||||
|
Dividends and discount accretion on preferred stock
|
- | - | (601) | N/A | -100% | (1,206) | (2,333) | -48% | |||||||||||||
|
Net income available to common shareholders
|
$ | 2,669 | $ | 2,486 | $ | 2,286 | 7% | 17% | $ | 8,703 | $ | 9,038 | -4% | ||||||||
|
PER COMMON SHARE DATA
|
|||||||||||||||||||||
|
(unaudited)
|
|||||||||||||||||||||
|
Basic earnings per share
|
$ | 0.08 | $ | 0.08 | $ | 0.07 | 0% | 14% | $ | 0.27 | $ | 0.28 | -4% | ||||||||
|
Diluted earnings per share
|
$ | 0.08 | $ | 0.08 | $ | 0.07 | 0% | 14% | $ | 0.27 | $ | 0.28 | -4% | ||||||||
|
Common shares outstanding at period-end
|
26,322,147 | 26,320,184 | 26,295,001 | 0% | 0% | 26,322,147 | 26,295,001 | 0% | |||||||||||||
|
Pro forma common shares outstanding at period-end, assuming
|
|||||||||||||||||||||
|
Series C preferred stock was converted into common stock
|
31,923,147 | 31,921,184 | 31,896,001 | 0% | 0% | 31,923,147 | 31,896,001 | 0% | |||||||||||||
|
Book value per share
|
$ | 5.71 | $ | 5.68 | $ | 5.30 | 1% | 8% | $ | 5.71 | $ | 5.30 | 8% | ||||||||
|
Tangible book value per share
|
$ | 5.63 | $ | 5.60 | $ | 5.20 | 1% | 8% | $ | 5.63 | $ | 5.20 | 8% | ||||||||
|
Pro forma tangible book value per share, assuming Series C
|
|||||||||||||||||||||
|
preferred stock was converted into common stock
|
$ | 5.25 | $ | 5.23 | $ | 4.90 | 0% | 7% | $ | 5.25 | $ | 4.90 | 7% | ||||||||
|
KEY FINANCIAL RATIOS
|
|||||||||||||||||||||
|
(unaudited)
|
|||||||||||||||||||||
|
Annualized return on average equity
|
6.25% | 5.91% | 5.83% | 6% | 7% | 5.75% | 6.02% | -4% | |||||||||||||
|
Annualized return on average tangible equity
|
6.32% | 5.99% | 5.90% | 6% | 7% | 5.83% | 6.11% | -5% | |||||||||||||
|
Annualized return on average assets
|
0.75% | 0.73% | 0.86% | 3% | -13% | 0.73% | 0.89% | -18% | |||||||||||||
|
Annualized return on average tangible assets
|
0.75% | 0.73% | 0.86% | 3% | -13% | 0.73% | 0.89% | -18% | |||||||||||||
|
Net interest margin
|
3.74% | 3.77% | 3.87% | -1% | -3% | 3.88% | 3.94% | -2% | |||||||||||||
|
Efficiency ratio
|
68.45% | 68.69% | 69.38% | 0% | -1% | 70.32% | 72.51% | -3% | |||||||||||||
|
AVERAGE BALANCES
|
|||||||||||||||||||||
|
(in $000's, unaudited)
|
|||||||||||||||||||||
|
Average assets
|
$ | 1,409,298 | $ | 1,359,990 | $ | 1,327,597 | 4% | 6% | $ | 1,353,434 | $ | 1,275,210 | 6% | ||||||||
|
Average tangible assets
|
$ | 1,407,222 | $ | 1,357,789 | $ | 1,325,027 | 4% | 6% | $ | 1,351,176 | $ | 1,272,448 | 6% | ||||||||
|
Average earning assets
|
$ | 1,305,332 | $ | 1,247,309 | $ | 1,207,869 | 5% | 8% | $ | 1,249,020 | $ | 1,170,177 | 7% | ||||||||
|
Average loans held-for-sale
|
$ | 3,036 | $ | 3,036 | $ | 3,513 | 0% | -14% | $ | 2,735 | $ | 6,387 | -57% | ||||||||
|
Average total loans
|
$ | 796,045 | $ | 788,549 | $ | 773,658 | 1% | 3% | $ | 784,297 | $ | 797,681 | -2% | ||||||||
|
Average deposits
|
$ | 1,191,895 | $ | 1,125,283 | $ | 1,056,201 | 6% | 13% | $ | 1,123,762 | $ | 1,019,450 | 10% | ||||||||
|
Average demand deposits - noninterest-bearing
|
$ | 457,214 | $ | 393,204 | $ | 353,588 | 16% | 29% | $ | 392,131 | $ | 334,676 | 17% | ||||||||
|
Average interest-bearing deposits
|
$ | 734,681 | $ | 732,079 | $ | 702,613 | 0% | 5% | $ | 731,631 | $ | 684,774 | 7% | ||||||||
|
Average interest-bearing liabilities
|
$ | 745,067 | $ | 753,436 | $ | 726,341 | -1% | 3% | $ | 752,201 | $ | 710,121 | 6% | ||||||||
|
Average equity
|
$ | 170,004 | $ | 167,407 | $ | 196,587 | 2% | -14% | $ | 172,193 | $ | 188,940 | -9% | ||||||||
|
Average tangible equity
|
$ | 167,928 | $ | 165,206 | $ | 194,017 | 2% | -13% | $ | 169,935 | $ | 186,178 | -9% | ||||||||
|
End of Period:
|
Percent Change From:
|
||||||||||||
|
CONSOLIDATED BALANCE SHEETS
|
Dec. 31,
|
Sep. 30,
|
Dec. 31,
|
Sep. 30,
|
Dec. 31,
|
||||||||
|
(in $000's, unaudited)
|
2012
|
2012
|
2011
|
2012
|
2011
|
||||||||
|
ASSETS
|
|||||||||||||
|
Cash and due from banks
|
$ | 16,520 | $ | 23,345 | $ | 20,861 | -29% | -21% | |||||
|
Federal funds sold and interest-bearing
|
|||||||||||||
|
deposits in other financial institutions
|
357,045 | 8,165 | 52,011 | 4273% | 586% | ||||||||
|
Securities available-for-sale, at fair value
|
367,912 | 410,756 | 380,455 | -10% | -3% | ||||||||
|
Securities held-to-maturity, at amortized cost (fair value of $50,964 at December 31, 2012)
|
51,472 | 25,592 | - | 101% | N/A | ||||||||
|
Loans held-for-sale - SBA, including deferred costs
|
3,409 | 1,476 | 753 | 131% | 353% | ||||||||
|
Loans held-for-sale - other, including deferred costs
|
- | - | 413 | N/A | -100% | ||||||||
|
Loans:
|
|||||||||||||
|
Commercial
|
375,469 | 377,520 | 366,590 | -1% | 2% | ||||||||
|
Real estate:
|
|||||||||||||
|
Commercial and residential
|
354,934 | 336,573 | 311,479 | 5% | 14% | ||||||||
|
Land and construction
|
22,352 | 24,068 | 23,016 | -7% | -3% | ||||||||
|
Home equity
|
43,865 | 45,565 | 52,017 | -4% | -16% | ||||||||
|
Consumer
|
15,714 | 15,649 | 11,166 | 0% | 41% | ||||||||
|
Loans
|
812,334 | 799,375 | 764,268 | 2% | 6% | ||||||||
|
Deferred loan (fees) costs, net
|
(21) | 18 | 323 | -217% | -107% | ||||||||
|
Total loans, including deferred fees
|
812,313 | 799,393 | 764,591 | 2% | 6% | ||||||||
|
Allowance for loan losses
|
(19,027) | (19,124) | (20,700) | -1% | -8% | ||||||||
|
Loans, net
|
793,286 | 780,269 | 743,891 | 2% | 7% | ||||||||
|
Company owned life insurance
|
48,358 | 47,929 | 46,388 | 1% | 4% | ||||||||
|
Premises and equipment, net
|
7,469 | 7,627 | 7,980 | -2% | -6% | ||||||||
|
Intangible assets
|
2,000 | 2,123 | 2,491 | -6% | -20% | ||||||||
|
Accrued interest receivable and other assets
|
45,841 | 48,758 | 50,951 | -6% | -10% | ||||||||
|
Total assets
|
$ | 1,693,312 | $ | 1,356,040 | $ | 1,306,194 | 25% | 30% | |||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|||||||||||||
|
Liabilities:
|
|||||||||||||
|
Deposits:
|
|||||||||||||
|
Demand, noninterest-bearing
|
$ | 727,684 | $ | 405,880 | $ | 344,303 | 79% | 111% | |||||
|
Demand, interest-bearing
|
155,951 | 159,361 | 134,119 | -2% | 16% | ||||||||
|
Savings and money market
|
272,047 | 281,579 | 282,478 | -3% | -4% | ||||||||
|
Time deposits - under $100
|
25,157 | 26,513 | 28,557 | -5% | -12% | ||||||||
|
Time deposits - $100 and over
|
190,502 | 170,430 | 168,874 | 12% | 13% | ||||||||
|
Time deposits - brokered
|
97,807 | 89,172 | 84,726 | 10% | 15% | ||||||||
|
CDARS - money market and time deposits
|
10,220 | 5,098 | 6,371 | 100% | 60% | ||||||||
|
Total deposits
|
1,479,368 | 1,138,033 | 1,049,428 | 30% | 41% | ||||||||
|
Subordinated debt
|
9,279 | 9,279 | 23,702 | 0% | -61% | ||||||||
|
Accrued interest payable and other liabilities
|
34,924 | 39,727 | 35,233 | -12% | -1% | ||||||||
|
Total liabilities
|
1,523,571 | 1,187,039 | 1,108,363 | 28% | 37% | ||||||||
|
Shareholders' Equity:
|
|||||||||||||
|
Series A preferred stock, net
|
- | - | 39,013 | N/A | -100% | ||||||||
|
Series C preferred stock, net
|
19,519 | 19,519 | 19,519 | 0% | 0% | ||||||||
|
Common stock
|
131,820 | 131,615 | 131,172 | 0% | 0% | ||||||||
|
Retained earnings
|
15,721 | 13,052 | 7,172 | 20% | 119% | ||||||||
|
Accumulated other comprehensive income
|
2,681 | 4,815 | 955 | -44% | 181% | ||||||||
|
Total shareholders' equity
|
169,741 | 169,001 | 197,831 | 0% | -14% | ||||||||
|
Total liabilities and shareholders' equity
|
$ | 1,693,312 | $ | 1,356,040 | $ | 1,306,194 | 25% | 30% | |||||
|
End of Period:
|
Percent Change From:
|
||||||||||||
|
December 31,
|
September 30,
|
December 31,
|
September 30,
|
December 31,
|
|||||||||
|
2012
|
2012
|
2011
|
2012
|
2011
|
|||||||||
|
CREDIT QUALITY DATA
|
|||||||||||||
|
(in $000's, unaudited)
|
|||||||||||||
|
Nonaccrual loans - held-for-sale
|
$ | - | $ | - | $ | 186 | N/A | -100% | |||||
|
Nonaccrual loans - held-for-investment
|
17,335 | 17,396 | 14,353 | 0% | 21% | ||||||||
|
Restructured and loans over 90 days past due and still accruing
|
859 | 1,722 | 2,291 | -50% | -63% | ||||||||
|
Total nonperforming loans
|
18,194 | 19,118 | 16,830 | -5% | 8% | ||||||||
|
Foreclosed assets
|
1,270 | 2,889 | 2,312 | -56% | -45% | ||||||||
|
Total nonperforming assets
|
$ | 19,464 | $ | 22,007 | $ | 19,142 | -12% | 2% | |||||
|
Other restructured loans still accruing
|
$ | 1,450 | $ | 704 | $ | 1,270 | 106% | 14% | |||||
|
Net charge-offs during the quarter
|
$ | 766 | $ | 2,099 | $ | 1,579 | -64% | -51% | |||||
|
Provision for loan losses during the quarter
|
$ | 669 | $ | 1,200 | $ | 1,230 | -44% | -46% | |||||
|
Allowance for loan losses
|
$ | 19,027 | $ | 19,124 | $ | 20,700 | -1% | -8% | |||||
|
Classified assets*
|
$ | 36,810 | $ | 46,002 | $ | 59,539 | -20% | -38% | |||||
|
Allowance for loan losses to total loans
|
2.34% | 2.39% | 2.71% | -2% | -14% | ||||||||
|
Allowance for loan losses to total nonperforming loans
|
104.58% | 100.03% | 122.99% | 5% | -15% | ||||||||
|
Allowance for loan losses to total nonperforming loans,
|
|||||||||||||
|
excluding nonaccrual loans - held-for-sale
|
104.58% | 100.03% | 124.37% | 5% | -16% | ||||||||
|
Nonperforming assets to total assets
|
1.15% | 1.62% | 1.47% | -29% | -22% | ||||||||
|
Nonperforming loans to total loans plus
|
|||||||||||||
|
nonaccrual loans - held-for-sale
|
2.24% | 2.39% | 2.20% | -6% | 2% | ||||||||
|
Classified assets* to Heritage Commerce Corp Tier 1
|
|||||||||||||
|
capital plus allowance for loan losses
|
21% | 27% | 27% | -22% | -22% | ||||||||
|
Classified assets* to Heritage Bank of Commerce Tier 1
|
|||||||||||||
|
capital plus allowance for loan losses
|
22% | 28% | 30% | -21% | -27% | ||||||||
|
OTHER PERIOD-END STATISTICS
|
|||||||||||||
|
(in $000's, unaudited)
|
|||||||||||||
|
Heritage Commerce Corp:
|
|||||||||||||
|
Tangible equity
|
$ | 167,741 | $ | 166,878 | $ | 195,340 | 1% | -14% | |||||
|
Tangible common equity
|
$ | 148,222 | $ | 147,359 | $ | 136,808 | 1% | 8% | |||||
|
Shareholders' equity / total assets
|
10.02% | 12.46% | 15.15% | -20% | -34% | ||||||||
|
Tangible equity / tangible assets
|
9.92% | 12.33% | 14.98% | -20% | -34% | ||||||||
|
Tangible common equity / tangible assets
|
8.76% | 10.88% | 10.49% | -19% | -16% | ||||||||
|
Loan to deposit ratio
|
54.91% | 70.24% | 72.86% | -22% | -25% | ||||||||
|
Noninterest-bearing deposits / total deposits
|
49.19% | 35.67% | 32.81% | 38% | 50% | ||||||||
|
Total risk-based capital ratio
|
16.2% | 16.1% | 21.9% | 1% | -26% | ||||||||
|
Tier 1 risk-based capital ratio
|
15.0% | 14.8% | 20.6% | 1% | -27% | ||||||||
|
Leverage ratio
|
11.5% | 11.6% | 15.3% | -1% | -25% | ||||||||
|
Heritage Bank of Commerce:
|
|||||||||||||
|
Total risk-based capital ratio
|
15.3% | 15.1% | 19.7% | 1% | -22% | ||||||||
|
Tier 1 risk-based capital ratio
|
14.0% | 13.8% | 18.5% | 1% | -24% | ||||||||
|
Leverage ratio
|
10.7% | 10.9% | 13.7% | -2% | -22% | ||||||||
|
*Net of SBA guarantees
|
|||||||||||||
|
For the Quarter Ended
|
For the Quarter Ended
|
|||||||||||||||
|
December 31, 2012
|
December 31, 2011
|
|||||||||||||||
|
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)
|
$ | 799,081 | $ | 10,046 | 5.00% | $ | 777,171 | $ | 10,565 | 5.39% | ||||||
|
Securities - taxable
|
422,830 | 2,765 | 2.60% | 344,931 | 2,391 | 2.75% | ||||||||||
|
Securities - tax exempt(2)
|
16,878 | 165 | 3.88% | - | - | - | ||||||||||
|
Federal funds sold and interest-bearing
|
||||||||||||||||
|
deposits in other financial institutions
|
66,543 | 40 | 0.24% | 85,767 | 54 | 0.25% | ||||||||||
|
Total interest earning assets(2)
|
1,305,332 | 13,016 | 3.97% | 1,207,869 | 13,010 | 4.27% | ||||||||||
|
Cash and due from banks
|
22,341 | 21,154 | ||||||||||||||
|
Premises and equipment, net
|
7,569 | 7,551 | ||||||||||||||
|
Intangible assets
|
2,076 | 2,570 | ||||||||||||||
|
Other assets
|
71,980 | 88,453 | ||||||||||||||
|
Total assets
|
$ | 1,409,298 | $ | 1,327,597 | ||||||||||||
|
Liabilities and shareholders' equity:
|
||||||||||||||||
|
Deposits:
|
||||||||||||||||
|
Demand, noninterest-bearing
|
$ | 457,214 | $ | 353,588 | ||||||||||||
|
Demand, interest-bearing
|
156,638 | 56 | 0.14% | 134,683 | 50 | 0.15% | ||||||||||
|
Savings and money market
|
278,019 | 123 | 0.18% | 285,781 | 171 | 0.24% | ||||||||||
|
Time deposits - under $100
|
25,668 | 27 | 0.42% | 29,567 | 44 | 0.59% | ||||||||||
|
Time deposits - $100 and over
|
176,144 | 226 | 0.51% | 155,566 | 265 | 0.68% | ||||||||||
|
Time deposits - brokered
|
92,702 | 222 | 0.95% | 88,311 | 217 | 0.97% | ||||||||||
|
CDARS - money market and time deposits
|
5,510 | 1 | 0.07% | 8,705 | 4 | 0.18% | ||||||||||
|
Total interest-bearing deposits
|
734,681 | 655 | 0.35% | 702,613 | 751 | 0.42% | ||||||||||
|
Total deposits
|
1,191,895 | 655 | 0.22% | 1,056,201 | 751 | 0.28% | ||||||||||
|
Subordinated debt
|
9,279 | 91 | 3.90% | 23,702 | 471 | 7.88% | ||||||||||
|
Short-term borrowings
|
1,107 | 1 | 0.36% | 26 | - | N/A | ||||||||||
|
Total interest-bearing liabilities
|
745,067 | 747 | 0.40% | 726,341 | 1,222 | 0.67% | ||||||||||
|
Total interest-bearing liabilities and demand,
|
||||||||||||||||
|
noninterest-bearing / cost of funds
|
1,202,281 | 747 | 0.25% | 1,079,929 | 1,222 | 0.45% | ||||||||||
|
Other liabilities
|
37,013 | 51,081 | ||||||||||||||
|
Total liabilities
|
1,239,294 | 1,131,010 | ||||||||||||||
|
Shareholders' equity
|
170,004 | 196,587 | ||||||||||||||
|
Total liabilities and shareholders' equity
|
$ | 1,409,298 | $ | 1,327,597 | ||||||||||||
|
|
||||||||||||||||
|
Net interest income(2) / margin
|
12,269 | 3.74% | $ | 11,788 | 3.87% | |||||||||||
|
Less tax equivalent adjustment(2)
|
(58) | - | ||||||||||||||
|
Net interest income
|
$ | 12,211 | $ | 11,788 | ||||||||||||
|
(1)Includes loans held-for-sale. Yield amounts earned on loans include loan fees and costs. Nonaccrual loans are included in average balance.
|
||||||||||||||||
|
(2)Reflects tax equivalent adjustment for tax exempt income based on a 35% tax rate.
|
||||||||||||||||
|
For the Year Ended
|
For the Year Ended
|
|||||||||||||||
|
December 31, 2012
|
December 31, 2011
|
|||||||||||||||
|
Interest
|
Average
|
Interest
|
Average
|
|||||||||||||
|
Average
|
Income/
|
Yield/
|
Average
|
Income/
|
Yield/
|
|||||||||||
|
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
|||||||||||
|
Assets:
|
||||||||||||||||
|
Loans, gross(1)
|
$ | 787,032 | $ | 40,800 | 5.18% | $ | 804,068 | $ | 42,769 | 5.32% | ||||||
|
Securities - taxable
|
404,913 | 11,519 | 2.84% | 297,231 | 9,088 | 3.06% | ||||||||||
|
Securities - tax exempt(2)
|
4,575 | 172 | 3.77% | - | - | - | ||||||||||
|
Federal funds sold and interest-bearing
|
||||||||||||||||
|
deposits in other financial institutions
|
52,500 | 134 | 0.26% | 68,878 | 174 | 0.25% | ||||||||||
|
Total interest earning assets(2)
|
1,249,020 | 52,625 | 4.21% | 1,170,177 | 52,031 | 4.45% | ||||||||||
|
Cash and due from banks
|
21,583 | 21,077 | ||||||||||||||
|
Premises and equipment, net
|
7,774 | 8,022 | ||||||||||||||
|
Intangible assets
|
2,258 | 2,762 | ||||||||||||||
|
Other assets
|
72,799 | 73,172 | ||||||||||||||
|
Total assets
|
$ | 1,353,434 | $ | 1,275,210 | ||||||||||||
|
Liabilities and shareholders' equity:
|
||||||||||||||||
|
Deposits:
|
||||||||||||||||
|
Demand, noninterest-bearing
|
$ | 392,131 | $ | 334,676 | ||||||||||||
|
Demand, interest-bearing
|
150,476 | 223 | 0.15% | 133,538 | 238 | 0.18% | ||||||||||
|
Savings and money market
|
288,980 | 611 | 0.21% | 279,250 | 892 | 0.32% | ||||||||||
|
Time deposits - under $100
|
27,337 | 132 | 0.48% | 31,549 | 230 | 0.73% | ||||||||||
|
Time deposits - $100 and Over
|
167,804 | 958 | 0.57% | 131,756 | 1,298 | 0.99% | ||||||||||
|
Time deposits - brokered
|
91,278 | 867 | 0.95% | 92,278 | 1,217 | 1.32% | ||||||||||
|
CDARS - money market and time deposits
|
5,756 | 9 | 0.16% | 16,403 | 67 | 0.41% | ||||||||||
|
Total interest-bearing deposits
|
731,631 | 2,800 | 0.38% | 684,774 | 3,942 | 0.58% | ||||||||||
|
Total deposits
|
1,123,762 | 2,800 | 0.25% | 1,019,450 | 3,942 | 0.39% | ||||||||||
|
Subordinated debt
|
19,052 | 1,383 | 7.26% | 23,702 | 1,871 | 7.89% | ||||||||||
|
Securities sold under agreement to repurchase
|
- | - | N/A | 712 | 24 | 3.37% | ||||||||||
|
Short-term borrowings
|
1,518 | 4 | 0.26% | 933 | 38 | 4.07% | ||||||||||
|
Total interest-bearing liabilities
|
752,201 | 4,187 | 0.56% | 710,121 | 5,875 | 0.83% | ||||||||||
|
Total interest-bearing liabilities and demand,
|
||||||||||||||||
|
noninterest-bearing / cost of funds
|
1,144,332 | 4,187 | 0.37% | 1,044,797 | 5,875 | 0.56% | ||||||||||
|
Other liabilities
|
36,909 | 41,473 | ||||||||||||||
|
Total liabilities
|
1,181,241 | 1,086,270 | ||||||||||||||
|
Shareholders' equity
|
172,193 | 188,940 | ||||||||||||||
|
Total liabilities and shareholders' equity
|
$ | 1,353,434 | $ | 1,275,210 | ||||||||||||
|
|
||||||||||||||||
|
Net interest income(2) / margin
|
48,438 | 3.88% | 46,156 | 3.94% | ||||||||||||
|
Less tax equivalent adjustment(2)
|
(60) | - | ||||||||||||||
|
Net interest income
|
$ | 48,378 | $ | 46,156 | ||||||||||||
|
(1)Includes loans held-for-sale. Yield amounts earned on loans include loan fees and costs. Nonaccrual loans are included in average balance.
|
||||||||||||||||
|
(2)Reflects tax equivalent adjustment for tax exempt income based on a 35% tax rate.
|
||||||||||||||||