Heritage Oaks Bancorp has a market cap of $88.5 million; its shares were traded at around $3.53 with and P/S ratio of 1.4.
Highlight of Business Operations: At December 31, 2010, the Company had $982.6 million in consolidated assets, $650.8 million in net consolidated loans, $798.2 million in consolidated deposits, and $121.3 million in stockholders' equity.
The Order further requires the Bank to increase its Allowance for Loan Losses (ALLL), as of the date of the ROE, by $3.5 million and to review and revise its ALLL methodology. The Bank subsequently made provision of approximately $19.3 million for ALLL during the third and fourth quarters of 2009 increasing the allowance for loan losses to $14.4 million as of December 31, 2009 and to $24.9 million as of December 31, 2010. The Bank also revised its policy for determining the adequacy of the ALLL to include an assessment of market conditions and other qualitative factors. The Banks policy otherwise continues to provide for a comprehensive determination of the adequacy of its ALLL which is to be reviewed promptly and regularly at least once each calendar quarter and be properly reported, and any deficiency in the allowance must be remedied in the calendar quarter it is discovered, by a charge to current operating earnings.
With respect to classified assets which existed as of the date of the ROE, the Order also requires the Bank to charge-off or collect all assets classified as Loss and one-half of the assets classified as Doubtful, and within 180 days of the Order, to reduce its level of assets classified as Substandard to no more than the greater of $50.0 million or 50% of Tier 1 capital plus the ALLL. As of December 31, 2009, the Bank met the requirement to charge-off or collect all assets classified as Loss and one-half of the assets classified as Doubtful as of the date of the ROE. The Bank complied with the requirement of the 2009 ROE in this regard and reduced the specific group of classified assets identified during the 2009 ROE to less than $50 million or 50% of Tier 1 capital plus ALLL well before the 180 day deadline. However, due to the continued migration of loans to classified status during 2010; as of December 31, 2010 the Bank continues to have classified assets over $50 million and over 50% of Tier 1 capital plus ALLL.
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