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Dec 31, 2023
Heritage Commerce Q4 2023 Earnings Report
Net income was $13.3 million, or $0.22 per average diluted common share.
Key Takeaways
Heritage Commerce Corp reported a net income of $13.3 million for Q4 2023, with diluted earnings per share of $0.22. The company's loan growth resulted in an increase of 2% year-over-year and from the prior quarter, while client deposits remained stable.
Net income for Q4 2023 was $13.3 million, or $0.22 per diluted share, compared to $20.8 million, or $0.34 per diluted share, for Q4 2022.
Loan growth increased 2% year-over-year and from the prior quarter.
Total deposits were relatively flat at $4.38 billion at December 31, 2023, compared to $4.39 billion at December 31, 2022.
Total liquidity and borrowing capacity was $2.87 billion at December 31, 2023.
Forward Guidance
Company anticipates stabilization in their cost of funds following the recent Fed guidance on expected rate reductions in 2024.
Positive Outlook
- Anticipate stabilization in our cost of funds following the recent Fed guidance on expected rate reductions in 2024.
- Focus remains on orderly organic growth.
- Avoiding borrowed funds and brokered deposits.
- Local community retail and commercial deposit relationships serve as a stable and lower-cost funding source, reflecting our disciplined management approach.
- Have a strong balance sheet, evidenced by robust capital, ample liquidity, and a diversified loan portfolio.
Challenges Ahead
- The pre-tax unrealized loss on the securities available-for-sale portfolio was ($9.9) million, or ($7.1) million net of taxes, which was 1.1% of total shareholders’ equity at December 31, 2023
- The pre-tax unrecognized loss on the securities held-to-maturity portfolio was ($86.5) million, or ($60.9) million net of taxes, which was 9.0% of total shareholders’ equity at December 31, 2023
Historical Earnings Impact
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Avg. Return Before/After Earnings
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