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Dec 31, 2020
Heritage Commerce Q4 2020 Earnings Report
Net income increased compared to the same period last year. Credit quality improved, and capital and liquidity positions remained strong.
Key Takeaways
Heritage Commerce Corp reported a net income of $11.6 million for Q4 2020, a significant increase from $5.7 million in Q4 2019. The increase was driven by solid earnings and improved credit quality. The company's capital and liquidity positions remained strong.
Net income for Q4 2020 was $11.6 million, or $0.19 per diluted share, compared to $5.7 million, or $0.10 per diluted share, for Q4 2019.
Nonperforming assets decreased (20%) year-over-year and (23%) on a linked quarter basis, to $7.9 million.
A credit of $1.3 million was made to the provision for credit losses on loans.
Total deposits increased $499.7 million, or 15%, to $3.91 billion.
Heritage Commerce
Heritage Commerce
Forward Guidance
This document contains forward-looking statements that are subject to various risks and uncertainties, which may cause the actual results and performance to differ significantly from expectations.
Positive Outlook
- Company's and the Bank’s consolidated capital ratios exceeded regulatory guidelines for a well-capitalized financial institution
- Company had a strong liquidity position with $1.13 billion in cash and cash equivalents
- Available borrowing capacity from sources including the Federal Home Loan Bank (“FHLB”), the Federal Reserve Bank of San Francisco (“FRB”), Federal funds facilities with several financial institutions, and a line of credit with a correspondent bank of $781.6 million
- Company also had $498.5 million (at fair market value) in unpledged securities available
- Loan to deposit ratio was 66.91%
Challenges Ahead
- Current and future economic and market conditions in the United States generally or in the communities we serve
- Volatility in credit and equity markets and its effect on the global economy
- Risks associated with concentrations in real estate related loans
- Changes in the level of NPAs and charge offs and other credit quality measures
- The effect of the COVID-19 pandemic