Heritage Commerce Corp (HTBK, Financial) filed Quarterly Report for the period ended 2009-03-31.
Heritage Commerce Corp. is the holding company of Heritage Bank of Commerce Heritage Bank East Bay Heritage Bank South Valley and Bank of Los Altos. The company offers a range of loans primarily commercial including real estate construction Small Business Administration) inventory and accounts receivable and equipment loans. The company also accepts checking savings and time deposits; NOW and money market deposit accounts; and provides travelers' checks safe deposit and other customary non-deposit banking services. Heritage Commerce Corp has a market cap of $88.1 million; its shares were traded at around $7.45 with a P/E ratio of 21.9 and P/S ratio of 1.1. The dividend yield of Heritage Commerce Corp stocks is 1.1%. Heritage Commerce Corp had an annual average earning growth of 16.6% over the past 5 years.
The composition and cost of the Company s deposit base are important in analyzing the Company s net interest margin and balance sheet liquidity characteristics. Except for brokered time deposits, the Company s depositors are generally located in its primary market area. Depending on loan demand and other funding requirements, the Company also obtains deposits from wholesale sources including deposit brokers. The Company had $195.8 million in brokered deposits at March 31, 2009. The increase in brokered deposits of $129.9 million from March 31, 2008 was primarily to fund loan growth. The Company also seeks deposits from title insurance companies, escrow accounts and real estate exchange facilitators, which were $40.4 million at March 31, 2009. The Company has a policy to monitor all deposits that may be sensitive to interest rate changes to help assure that liquidity risk does not become excessive due to concentrations. Deposits for the first quarter of 2009 remained the same at $1.2 billion, compared to the first quarter of 2008. The Company has not experienced any increased demand outside its ordinary course of business from its customers to withdraw deposits as a result of recent developments in the financial institution industry.
Our capital position has been considerably strengthened. As of March 31, 2009, our consolidated total risk-based capital ratio was 12.7%, or $165.1 million, more than the 10% regulatory requirement for well-capitalized banks. Our Tier 1 risk-based capital ratio of 11.4% and our Tier 1 leverage ratio of 10.4% as of March 31, 2009 also significantly exceeded regulatory guidelines for well-capitalized banks. On November 21, 2008, the Company issued to the U.S. Treasury under its Capital Purchase Program 40,000 shares of Series A Preferred Stock and warrants to purchase 462,963 shares of common stock at an exercise price of $12.96 for $40 million. The terms of the U.S. Treasury TARP Capital Purchase Program could reduce investment returns to our shareholders by restricting dividends to common shareholders, diluting existing shareholders interests, and restricting capital management practices.
In July, 2007, the board of directors authorized the repurchase of up to $30 million of common stock through July, 2009. From August 13, 2007 through May 27, 2008, the Company purchased 1,645,607 shares for a total of $29.9 million to complete the repurchase plan.
Starting in 2006, the Company initiated the payment of quarterly cash dividends. The Company paid cash dividends of $3.8 million or $0.32 per common share in 2008 representing 217% of 2008 earnings. The Company accrued $500,000 of dividends in the first quarter of 2009 on the preferred stock issued to the U.S. Treasury under the TARP Capital Purchase Program. However, to preserve the capital of the Company in support of its banking activities during this challenging economy, the Board of Directors suspended common stock dividends, beginning in the second quarter of 2009.
In the first quarter of 2009, net interest income was $11.2 million, compared to $13.1 million in the first quarter of 2008. The level of net interest income depends on several factors in combination, including yields on earning assets, the cost of interest-bearing liabilities, the relative volumes of earning assets and interest-bearing liabilities, and the mix of products which comprise the Company s earning assets, deposits, and other interest-bearing liabilities. To maintain its net interest margin, the Company must manage the relationship between interest earned and paid.
Read the The complete Report
Heritage Commerce Corp. is the holding company of Heritage Bank of Commerce Heritage Bank East Bay Heritage Bank South Valley and Bank of Los Altos. The company offers a range of loans primarily commercial including real estate construction Small Business Administration) inventory and accounts receivable and equipment loans. The company also accepts checking savings and time deposits; NOW and money market deposit accounts; and provides travelers' checks safe deposit and other customary non-deposit banking services. Heritage Commerce Corp has a market cap of $88.1 million; its shares were traded at around $7.45 with a P/E ratio of 21.9 and P/S ratio of 1.1. The dividend yield of Heritage Commerce Corp stocks is 1.1%. Heritage Commerce Corp had an annual average earning growth of 16.6% over the past 5 years.
Highlight of Business Operations:
For the three months ended March 31, 2009, net loss was $4.0 million. Net loss available to common shareholders was $4.5 million, or $(0.38) per diluted common share for the first quarter ended March 31, 2009, which included a $10.4 million provision for loan losses and $585,000 in dividends and discount accretion on preferred stock. In the quarter ended March 31, 2008, net income was $1.7 million, or $0.14 per diluted common share, including a provision of $1.7 million and no dividends or discount accretion on preferred stock. The Company s return on average assets was -1.08% and return on average equity was -8.65% for the first quarter of 2009 compared to 0.50% and 4.33% a year ago.The composition and cost of the Company s deposit base are important in analyzing the Company s net interest margin and balance sheet liquidity characteristics. Except for brokered time deposits, the Company s depositors are generally located in its primary market area. Depending on loan demand and other funding requirements, the Company also obtains deposits from wholesale sources including deposit brokers. The Company had $195.8 million in brokered deposits at March 31, 2009. The increase in brokered deposits of $129.9 million from March 31, 2008 was primarily to fund loan growth. The Company also seeks deposits from title insurance companies, escrow accounts and real estate exchange facilitators, which were $40.4 million at March 31, 2009. The Company has a policy to monitor all deposits that may be sensitive to interest rate changes to help assure that liquidity risk does not become excessive due to concentrations. Deposits for the first quarter of 2009 remained the same at $1.2 billion, compared to the first quarter of 2008. The Company has not experienced any increased demand outside its ordinary course of business from its customers to withdraw deposits as a result of recent developments in the financial institution industry.
Our capital position has been considerably strengthened. As of March 31, 2009, our consolidated total risk-based capital ratio was 12.7%, or $165.1 million, more than the 10% regulatory requirement for well-capitalized banks. Our Tier 1 risk-based capital ratio of 11.4% and our Tier 1 leverage ratio of 10.4% as of March 31, 2009 also significantly exceeded regulatory guidelines for well-capitalized banks. On November 21, 2008, the Company issued to the U.S. Treasury under its Capital Purchase Program 40,000 shares of Series A Preferred Stock and warrants to purchase 462,963 shares of common stock at an exercise price of $12.96 for $40 million. The terms of the U.S. Treasury TARP Capital Purchase Program could reduce investment returns to our shareholders by restricting dividends to common shareholders, diluting existing shareholders interests, and restricting capital management practices.
In July, 2007, the board of directors authorized the repurchase of up to $30 million of common stock through July, 2009. From August 13, 2007 through May 27, 2008, the Company purchased 1,645,607 shares for a total of $29.9 million to complete the repurchase plan.
Starting in 2006, the Company initiated the payment of quarterly cash dividends. The Company paid cash dividends of $3.8 million or $0.32 per common share in 2008 representing 217% of 2008 earnings. The Company accrued $500,000 of dividends in the first quarter of 2009 on the preferred stock issued to the U.S. Treasury under the TARP Capital Purchase Program. However, to preserve the capital of the Company in support of its banking activities during this challenging economy, the Board of Directors suspended common stock dividends, beginning in the second quarter of 2009.
In the first quarter of 2009, net interest income was $11.2 million, compared to $13.1 million in the first quarter of 2008. The level of net interest income depends on several factors in combination, including yields on earning assets, the cost of interest-bearing liabilities, the relative volumes of earning assets and interest-bearing liabilities, and the mix of products which comprise the Company s earning assets, deposits, and other interest-bearing liabilities. To maintain its net interest margin, the Company must manage the relationship between interest earned and paid.
Read the The complete Report
