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Jun 30, 2020
Heritage Commerce Q2 2020 Earnings Report
Reported earnings with net income of $10.6 million and EPS of $0.18, but weighed down by the Coronavirus pandemic.
Key Takeaways
Heritage Commerce Corp reported a net income of $10.6 million for the second quarter of 2020, a decrease compared to the $11.4 million reported in the same quarter of the previous year. The company's EPS also decreased from $0.26 in Q2 2019 to $0.18 in Q2 2020. The results were impacted by the ongoing Coronavirus pandemic, but were improved from Q1 2020.
Net income for Q2 2020 was $10.6 million, or $0.18 per diluted share, compared to $11.4 million, or $0.26 per diluted share, for Q2 2019.
Loan balances grew by 5% sequentially, driven by $324.6 million in SBA PPP loans.
Total deposits increased by 16% due to $533.6 million growth, primarily from PPP loan customers.
Nonperforming assets decreased by $3.0 million, or 25%, to $9.1 million.
Forward Guidance
The company believes its robust capital base, elevated liquidity, diversified loan portfolio, and reserve for credit losses positions it to react quickly and decisively in addressing challenges related to the economic impact of the Coronavirus pandemic.
Positive Outlook
- Strong regulatory capital position.
- Healthy liquidity with $925.9 million in cash and cash equivalents.
- Available borrowing capacity of approximately $664.7 million.
- $610.6 million in unpledged securities available.
- Diversified loan portfolio
Challenges Ahead
- 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.
- 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.
- Our ability to anticipate interest rate changes and manage interest rate risk.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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