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Heritage Oaks Bancorp Reports Operating Results (10-Q)

May 05, 2010 | About:
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10qk

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Heritage Oaks Bancorp (HEOP) filed Quarterly Report for the period ended 2010-03-31.

Heritage Oaks Bancorp has a market cap of $30.7 million; its shares were traded at around $3.96 with and P/S ratio of 0.6.

Highlight of Business Operations:

For the three months ended March 31, 2010, the Company reported a net loss of approximately $1.3 million. In the same period ended a year earlier, the Company reported net income of approximately $1.1 million. Net loss per diluted common share was ($0.22) for the first quarter of 2010, compared to net income of $0.14 per diluted common share in the same period ended a year earlier. Operating results for the first quarter of 2010 were negatively impacted by higher provisions for loan losses when compared to that reported in the same period a year earlier as well as increased non-interest expenses. Provisions for loan losses in the first quarter of 2010 totaled $5.2 million, an increase of approximately $3.1 million from that reported for the same period ended in 2009. Elevated levels of substandard and non-performing loans as well as continued weakened economic conditions contributed to the year over year increase in provisions for loan losses. Year over year, salaries and benefits increased $0.6 million, regulatory assessment costs increased $0.5 million and loan department expenses increased $0.2 million. Aside from an increase in FDIC insurance premiums, increases in the areas of non-interest expenses mentioned can be associated with the expansion of the Bank s management team and special assets department and an increase in costs associated with managing asset quality issues. Increases in these categories of non-interest expense contributed $1.2 million to the $1.4 million increase for the first quarter of 2010 when compared to that reported for the first quarter of 2009.

Although the Company reported a net loss for the quarter ended March 31, 2010, the Company was able to raise $56.0 million in capital through the sale of 52,088 shares of Series B Mandatorily Convertible Adjustable Cumulative Perpetual Preferred Stock ("Series B Preferred Stock") and 1,189,538 shares of its Series C Convertible Perpetual Preferred Stock. In addition, approximately $4.0 million was placed in escrow for a second closing of 4,072 shares of Series B Preferred Stock, pending receipt of regulatory approvals required for the particular investor purchasing such shares. The additional capital will allow the Company to not only continue to work through asset quality issues, but will allow the Bank to further focus on building its core franchise. For additional information regarding the Company s March 2010 private placement, please see Note 10. Preferred Stock, of the consolidated financial statements filed on this Form 10-Q.

On March 12, 2010 the Company announced that it completed a private placement of 52,088 shares of its Series B Mandatorily Convertible Adjustable Cumulative Perpetual Preferred Stock ("Series B Preferred Stock") and 1,189,538 shares of its Series C Convertible Perpetual Preferred Stock, raising gross proceeds of approximately $56.0 million. In addition, approximately $4.0 million was placed in escrow for a second closing of 4,072 shares of Series B Preferred Stock, pending receipt of regulatory approvals required for the particular investor purchasing such shares. For additional information regarding the Company s March 2010 private placement, please see Note 10. Preferred Stock, of the consolidated financial statements filed on this Form 10-Q.

Read the The complete Report

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10qk
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