UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
|
Washington, D.C. 20549 |
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FORM 10-Q |
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(MARK ONE) |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended September 30, 2019 |
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OR |
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☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Commission file number 000‑23877
Heritage Commerce Corp
(Exact name of Registrant as Specified in its Charter)
California |
77‑0469558 |
150 Almaden Boulevard, San Jose, California |
95113 |
(408) 947‑6900
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: |
|
Trading Symbol: |
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Name of each exchange on which registered: |
Common Stock, No Par Value |
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HTBK |
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The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ |
Accelerated filer ☒ |
Non‑accelerated filer ☐ |
Smaller reporting company ☐ |
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|
|
Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). YES ☐ NO ☒
The Registrant had 59,200,262 shares of Common Stock outstanding on October 28, 2019.
HERITAGE COMMERCE CORP
QUARTERLY REPORT ON FORM 10‑Q
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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2
Cautionary Note Regarding Forward‑Looking Statements
This Report on Form 10‑Q contains various statements that may constitute forward‑looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, Rule 3b‑6 promulgated thereunder and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward‑looking. These forward‑looking statements often can be, but are not always, identified by the use of words such as “assume,” “expect,” “intend,” “plan,” “project,” “believe,” “estimate,” “predict,” “anticipate,” “may,” “might,” “should,” “could,” “goal,” “potential” and similar expressions. We base these forward‑looking statements on our current expectations and projections about future events, our assumptions regarding these events and our knowledge of facts at the time the statements are made. These statements include statements relating to our projected growth, anticipated future financial performance, and management’s long‑term performance goals, as well as statements relating to the anticipated effects on results of operations and financial condition.
These forward‑looking statements are subject to various risks and uncertainties that may be outside our control and our actual results could differ materially from our projected results. In addition, our past results of operations do not necessarily indicate our future results. The forward‑looking statements could be affected by many factors, including but not limited to:
· |
current and future economic and market conditions in the United States generally or in the communities we serve, including the effects of declines in property values and overall slowdowns in economic growth should these events occur; |
· |
effects of and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Federal Open Market Committee of the Federal Reserve Board; |
· |
our ability to anticipate interest rate changes and manage interest rate risk; |
· |
changes in inflation, interest rates, and market liquidity which may impact interest margins and impact funding sources; |
· |
volatility in credit and equity markets and its effect on the global economy; |
· |
our ability to effectively compete with other banks and financial services companies and the effects of competition in the financial services industry on our business; |
· |
our ability to achieve loan growth and attract deposits; |
· |
risks associated with concentrations in commercial and real estate related loans; |
· |
the relative strength or weakness of the commercial and real estate markets where our borrowers are located; |
· |
other than temporary impairment charges to our securities portfolio; |
· |
changes in the level of nonperforming assets and charge offs and other credit quality measures, and their impact on the adequacy of the Company’s allowance for loan losses and the Company’s provision for loan losses; |
· |
increased capital requirements for our continued growth or as imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms if at all; |
· |
regulatory limits on Heritage Bank of Commerce’s ability to pay dividends to the holding company; |
· |
changes in our capital management policies, including those regarding business combinations, dividends, and share repurchases; |
3
· |
operational issues stemming from, and/or capital spending necessitated by, the potential need to adapt to industry changes in information technology systems, on which we are highly dependent; |
· |
our inability to attract, recruit, and retain qualified officers and other personnel could harm our ability to implement our strategic plan, impair our relationships with customers and adversely affect our business, and results of operations; |
· |
the potential increase in reserves and allowance for loan loss as a result of the transition to the current expected credit loss standard (“CECL”) established by the Financial Accounting Standards Board to account for future expected credit losses; |
· |
possible impairment of our goodwill and other intangible assets; |
· |
possible adjustment of the valuation of our deferred tax assets; |
· |
our ability to keep pace with technological changes, including our ability to identify and address cyber-security risks such as data security breaches, “denial of service” attacks, “hacking” and identity theft; |
· |
inability of our framework to manage risks associated with our business, including operational risk and credit risk; |
· |
risks of loss of funding of Small Business Administration or SBA loan programs, or changes in those programs; |
· |
compliance with governmental and regulatory requirements, including the Dodd-Frank Act and others relating to banking, consumer protection, securities , accounting and tax matters; |
· |
significant changes in applicable laws and regulations, including those concerning taxes, banking and securities; |
· |
effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; |
· |
costs and effects of legal and regulatory developments, including resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; |
· |
availability and competition for acquisition opportunities; |
· |
risks resulting from domestic terrorism; |
· |
risks of natural disasters (including fires and earthquakes) and other events (including pervasive power outages) beyond our control; |
· |
the expected cost savings, synergies and other financial benefits from the Presidio Bank acquisition completed on October 11, 2019 might not be realized within the expected time frames or at all; the actual merger-related costs for the transaction may be higher than estimated; and |
· |
our success in managing the risks involved in the foregoing factors. |
Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made or to reflect the occurrence of unanticipated events. You should consider any forward looking statements in light of this explanation, and we caution you about relying on forward-looking statements.
4
ITEM 1—CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
HERITAGE COMMERCE CORP
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
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September 30, |
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December 31, |
||
|
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2019 |
|
2018 |
||
|
|
(Dollars in thousands) |
||||
Assets |
|
|
|
|
|
|
Cash and due from banks |
|
$ |
48,121 |
|
$ |
30,273 |
Other investments and interest-bearing deposits in other financial institutions |
|
|
367,662 |
|
|
134,295 |
Total cash and cash equivalents |
|
|
415,783 |
|
|
164,568 |
Securities available-for-sale, at fair value |
|
|
333,101 |
|
|
459,043 |
Securities held-to-maturity, at amortized cost (fair value of $343,129 at |
|
|
|
|
|
|
September 30, 2019 and $366,175 at December 31, 2018) |
|
|
342,033 |
|
|
377,198 |
Loans held-for-sale - SBA, at lower of cost or fair value, including deferred costs |
|
|
3,571 |
|
|
2,649 |
Loans, net of deferred fees |
|
|
1,875,387 |
|
|
1,886,405 |
Allowance for loan losses |
|
|
(25,895) |
|
|
(27,848) |
Loans, net |
|
|
1,849,492 |
|
|
1,858,557 |
Federal Home Loan Bank and Federal Reserve Bank stock and other investments, at cost |
|
|
25,231 |
|
|
25,216 |
Company-owned life insurance |
|
|
62,858 |
|
|
61,859 |
Premises and equipment, net |
|
|
6,849 |
|
|
7,137 |
Goodwill |
|
|
83,753 |
|
|
83,753 |
Other intangible assets |
|
|
10,346 |
|
|
12,007 |
Accrued interest receivable and other assets |
|
|
49,454 |
|
|
44,575 |
Total assets |
|
$ |
3,182,471 |
|
$ |
3,096,562 |
|
|
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|
|
Liabilities and Shareholders' Equity |
|
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|
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Liabilities: |
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|
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Deposits: |
|
|
|
|
|
|
Demand, noninterest-bearing |
|
$ |
1,094,953 |
|
$ |
1,021,582 |
Demand, interest-bearing |
|
|
666,054 |
|
|
702,000 |
Savings and money market |
|
|
761,471 |
|
|
754,277 |
Time deposits - under $250 |
|
|
53,560 |
|
|
58,661 |
Time deposits - $250 and over |
|
|
95,543 |
|
|
86,114 |
CDARS - interest-bearing demand, money market and time deposits |
|
|
17,409 |
|
|
14,898 |
Total deposits |
|
|
2,688,990 |
|
|
2,637,532 |
Subordinated debt, net of issuance costs |
|
|
39,507 |
|
|
39,369 |
Accrued interest payable and other liabilities |
|
|
58,628 |
|
|
52,195 |
Total liabilities |
|
|
2,787,125 |
|
|
2,729,096 |
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
Preferred stock, no par value; 10,000,000 shares authorized; none issued and outstanding |
|
|
|
|
|
|
at September 30, 2019 and December 31, 2018 |
|
|
— |
|
|
— |
Common stock, no par value; 100,000,000 shares authorized at September 30, 2019 and |
|
|
|
|
|
|
60,000,000 shares authorized at December 31, 2018; 43,509,406 shares issued |
|
|
|
|
|
|
and outstanding at September 30, 2019 and 43,288,750 shares issued and |
|
|
|
|
|
|
outstanding at December 31, 2018 |
|
|
302,983 |
|
|
300,844 |
Retained earnings |
|
|
98,161 |
|
|
79,003 |
Accumulated other comprehensive loss |
|
|
(5,798) |
|
|
(12,381) |
Total shareholders' equity |
|
|
395,346 |
|
|
367,466 |
Total liabilities and shareholders' equity |
|
$ |
3,182,471 |
|
$ |
3,096,562 |
See notes to unaudited consolidated financial statements
5
HERITAGE COMMERCE CORP
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
September 30, |
|
September 30, |
||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
|
|
(Dollars in thousands, except per share amounts) |
||||||||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
27,264 |
|
$ |
28,632 |
|
$ |
81,321 |
|
$ |
77,271 |
Securities, taxable |
|
|
3,504 |
|
|
3,483 |
|
|
12,149 |
|
|
11,112 |
Securities, exempt from Federal tax |
|
|
530 |
|
|
555 |
|
|
1,624 |
|
|
1,675 |
Other investments, interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
in other financial institutions and Federal funds sold |
|
|
1,952 |
|
|
1,940 |
|
|
5,094 |
|
|
4,409 |
Total interest income |
|
|
33,250 |
|
|
34,610 |
|
|
100,188 |
|
|
94,467 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
2,042 |
|
|
1,575 |
|
|
5,873 |
|
|
3,772 |
Subordinated debt |
|
|
583 |
|
|
583 |
|
|
1,731 |
|
|
1,731 |
Other borrowings |
|
|
— |
|
|
1 |
|
|
1 |
|
|
1 |
Total interest expense |
|
|
2,625 |
|
|
2,159 |
|
|
7,605 |
|
|
5,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income before provision for loan losses |
|
|
30,625 |
|
|
32,451 |
|
|
92,583 |
|
|
88,963 |
Provision (credit) for loan losses |
|
|
(576) |
|
|
(425) |
|
|
(2,377) |
|
|
7,279 |
Net interest income after provision for loan losses |
|
|
31,201 |
|
|
32,876 |
|
|
94,960 |
|
|
81,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Service charges and fees on deposit accounts |
|
|
1,032 |
|
|
1,107 |
|
|
3,370 |
|
|
2,981 |
Increase in cash surrender value of life insurance |
|
|
336 |
|
|
216 |
|
|
999 |
|
|
816 |
Gain on sales of securities |
|
|
330 |
|
|
— |
|
|
878 |
|
|
266 |
Gain on sales of SBA loans |
|
|
156 |
|
|
236 |
|
|
331 |
|
|
551 |
Servicing income |
|
|
139 |
|
|
163 |
|
|
480 |
|
|
533 |
Other |
|
|
625 |
|
|
484 |
|
|
1,793 |
|
|
2,034 |
Total noninterest income |
|
|
2,618 |
|
|
2,206 |
|
|
7,851 |
|
|
7,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
10,467 |
|
|
10,719 |
|
|
31,935 |
|
|
35,302 |
Occupancy and equipment |
|
|
1,550 |
|
|
1,559 |
|
|
4,634 |
|
|
3,927 |
Professional fees |
|
|
789 |
|
|
721 |
|
|
2,360 |
|
|
1,116 |
Other |
|
|
5,103 |
|
|
4,729 |
|
|
15,343 |
|
|
18,235 |
Total noninterest expense |
|
|
17,909 |
|
|
17,728 |
|
|
54,272 |
|
|
58,580 |
Income before income taxes |
|
|
15,910 |
|
|
17,354 |
|
|
48,539 |
|
|
30,285 |
Income tax expense |
|
|
4,633 |
|
|
4,979 |
|
|
13,763 |
|
|
8,186 |
Net income |
|
$ |
11,277 |
|
$ |
12,375 |
|
$ |
34,776 |
|
$ |
22,099 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.26 |
|
$ |
0.29 |
|
$ |
0.81 |
|
$ |
0.54 |
Diluted |
|
$ |
0.26 |
|
$ |
0.28 |
|
$ |
0.80 |
|
$ |
0.53 |
See notes to unaudited consolidated financial statements
6
HERITAGE COMMERCE CORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
||||
|
|
|
(Dollars in thousands) |
|
|||||||||
Net income |
|
$ |
11,277 |
|
$ |
12,375 |
|
$ |
34,776 |
|
$ |
22,099 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net unrealized holding (losses) gains on available-for-sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
securities and I/O strips |
|
|
1,041 |
|
|
(1,880) |
|
|
10,245 |
|
|
(11,009) |
|
Deferred income taxes |
|
|
(304) |
|
|
545 |
|
|
(3,032) |
|
|
3,192 |
|
Change in net unamortized unrealized gain on securities available-for- |
|
|
|
|
|
|
|
|
|
|
|
|
|
sale that were reclassified to securities held-to-maturity |
|
|
(13) |
|
|
(11) |
|
|
(52) |
|
|
(33) |
|
Deferred income taxes |
|
|
4 |
|
|
3 |
|
|
16 |
|
|
9 |
|
Reclassification adjustment for gains realized in income |
|
|
(330) |
|
|
— |
|
|
(878) |
|
|
(266) |
|
Deferred income taxes |
|
|
98 |
|
|
— |
|
|
260 |
|
|
79 |
|
Change in unrealized (losses) gains on securities and I/O strips, net of |
|
|
|
|
|
|
|
|
|
|
|
|
|
deferred income taxes |
|
|
496 |
|
|
(1,343) |
|
|
6,559 |
|
|
(8,028) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in net pension and other benefit plan liability adjustment |
|
|
11 |
|
|
51 |
|
|
34 |
|
|
152 |
|
Deferred income taxes |
|
|
(3) |
|
|
(15) |
|
|
(10) |
|
|
(45) |
|
Change in pension and other benefit plan liability, net of |
|
|
|
|
|
|
|
|
|
|
|
|
|
deferred income taxes |
|
|
8 |
|
|
36 |
|
|
24 |
|
|
107 |
|
Other comprehensive income (loss) |
|
|
504 |
|
|
(1,307) |
|
|
6,583 |
|
|
(7,921) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
$ |
11,781 |
|
$ |
11,068 |
|
$ |
41,359 |
|
$ |
14,178 |
|
See notes to unaudited consolidated financial statements
7
HERITAGE COMMERCE CORP
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
Total |
||
|
|
Common Stock |
|
Retained |
|
Comprehensive |
|
Shareholders’ |
||||||
|
|
Shares |
|
Amount |
|
Earnings |
|
Loss |
|
Equity |
||||
|
|
(Dollars in thousands) |
||||||||||||
Balance, January 1, 2018 |
|
38,200,883 |
|
$ |
218,355 |
|
$ |
62,136 |
|
$ |
(9,252) |
|
$ |
271,239 |
Net income |
|
— |
|
|
— |
|
|
8,809 |
|
|
— |
|
|
8,809 |
Other comprehensive loss |
|
— |
|
|
— |
|
|
— |
|
|
(5,704) |
|
|
(5,704) |
Amortization of restricted stock awards, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of forfeitures and taxes |
|
— |
|
|
228 |
|
|
— |
|
|
— |
|
|
228 |
Cash dividend declared $0.11 per share |
|
— |
|
|
— |
|
|
(4,206) |
|
|
— |
|
|
(4,206) |
Stock option expense, net of forfeitures and taxes |
|
— |
|
|
176 |
|
|
— |
|
|
— |
|
|
176 |
Stock options exercised |
|
68,906 |
|
|
449 |
|
|
— |
|
|
— |
|
|
449 |
Balance, March 31, 2018 |
|
38,269,789 |
|
|
219,208 |
|
|
66,739 |
|
|
(14,956) |
|
|
270,991 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
— |
|
|
— |
|
|
915 |
|
|
— |
|
|
915 |
Other comprehensive loss |
|
— |
|
|
— |
|
|
— |
|
|
(910) |
|
|
(910) |
Issuance of common shares to acquire |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tri-Valley Bank |
|
1,889,613 |
|
|
30,725 |
|
|
— |
|
|
— |
|
|
30,725 |
Issuance of common shares to acquire |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United American Bank |
|
2,826,032 |
|
|
47,280 |
|
|
— |
|
|
— |
|
|
47,280 |
Issuance of restricted stock awards, net |
|
97,818 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Amortization of restricted stock awards, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of forfeitures |
|
— |
|
|
283 |
|
|
— |
|
|
— |
|
|
283 |
Cash dividend declared $0.11 per share |
|
— |
|
|
— |
|
|
(4,743) |
|
|
— |
|
|
(4,743) |
Stock option expense, net of forfeitures and taxes |
|
— |
|
|
175 |
|
|
— |
|
|
— |
|
|
175 |
Stock options exercised |
|
138,932 |
|
|
1,553 |
|
|
— |
|
|
— |
|
|
1,553 |
Balance, June 30, 2018 |
|
43,222,184 |
|
|
299,224 |
|
|
62,911 |
|
|
(15,866) |
|
|
346,269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
— |
|
|
— |
|
|
12,375 |
|
|
— |
|
|
12,375 |
Other comprehensive loss |
|
— |
|
|
— |
|
|
— |
|
|
(1,307) |
|
|
(1,307) |
Forfeiture of restricted stock awards, net |
|
(2,440) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Amortization of restricted stock awards, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of forfeitures and taxes |
|
— |
|
|
303 |
|
|
— |
|
|
— |
|
|
303 |
Cash dividend declared $0.11 per share |
|
— |
|
|
— |
|
|
(4,755) |
|
|
— |
|
|
(4,755) |
Stock option expense, net of forfeitures and taxes |
|
— |
|
|
184 |
|
|
— |
|
|
— |
|
|
184 |
Stock options exercised |
|
51,932 |
|
|
497 |
|
|
— |
|
|
— |
|
|
497 |
Balance, September 30, 2018 |
|
43,271,676 |
|
$ |
300,208 |
|
$ |
70,531 |
|
$ |
(17,173) |
|
$ |
353,566 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
Total |
||
|
|
Common Stock |
|
Retained |
|
Comprehensive |
|
Shareholders’ |
||||||
|
|
Shares |
|
Amount |
|
Earnings |
|
Loss |
|
Equity |
||||
|
|
(Dollars in thousands) |
||||||||||||
Balance, January 1, 2019 |
|
43,288,750 |
|
$ |
300,844 |
|
$ |
79,003 |
|
$ |
(12,381) |
|
$ |
367,466 |
Net income |
|
— |
|
|
— |
|
|
12,146 |
|
|
— |
|
|
12,146 |
Other comprehensive income |
|
— |
|
|
— |
|
|
— |
|
|
3,394 |
|
|
3,394 |
Amortization of restricted stock awards, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of forfeitures and taxes |
|
— |
|
|
271 |
|
|
— |
|
|
— |
|
|
271 |
Cash dividend declared $0.12 per share |
|
— |
|
|
— |
|
|
(5,196) |
|
|
— |
|
|
(5,196) |
Stock option expense, net of forfeitures and taxes |
|
— |
|
|
166 |
|
|
— |
|
|
— |
|
|
166 |
Stock options exercised |
|
35,003 |
|
|
269 |
|
|
— |
|
|
— |
|
|
269 |
Balance, March 31, 2019 |
|
43,323,753 |
|
|
301,550 |
|
|
85,953 |
|
|
(8,987) |
|
|
378,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
— |
|
|
— |
|
|
11,353 |
|
|
— |
|
|
11,353 |
Other comprehensive income |
|
— |
|
|
— |
|
|
— |
|
|
2,685 |
|
|
2,685 |
Issuance of restricted stock awards, net |
|
134,653 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Amortization of restricted stock awards, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of forfeitures and taxes |
|
— |
|
|
303 |
|
|
— |
|
|
— |
|
|
303 |
Cash dividend declared $0.12 per share |
|
— |
|
|
— |
|
|
(5,201) |
|
|
— |
|
|
(5,201) |
Stock option expense, net of forfeitures and taxes |
|
— |
|
|
155 |
|
|
— |
|
|
— |
|
|
155 |
Stock options exercised |
|
40,000 |
|
|
297 |
|
|
— |
|
|
— |
|
|
297 |
Balance, June 30, 2019 |
|
43,498,406 |
|
|
302,305 |
|
|
92,105 |
|
$ |
(6,302) |
|
|
388,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
— |
|
|
— |
|
|
11,277 |
|
|
— |
|
|
11,277 |
Other comprehensive income |
|
— |
|
|
— |
|
|
— |
|
|
504 |
|
|
504 |
Forfeiture of restricted stock awards, net |
|
(6,000) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Amortization of restricted stock awards, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of forfeitures and taxes |
|
— |
|
|
358 |
|
|
— |
|
|
— |
|
|
358 |
Cash dividend declared $0.12 per share |
|
— |
|
|
— |
|
|
(5,221) |
|
|
— |
|
|
(5,221) |
Stock option expense, net of forfeitures and taxes |
|
— |
|
|
163 |
|
|
— |
|
|
— |
|
|
163 |
Stock options exercised |
|
17,000 |
|
|
157 |
|
|
— |
|
|
— |
|
|
157 |
Balance, September 30, 2019 |
|
43,509,406 |
|
$ |
302,983 |
|
$ |
98,161 |
|
$ |
(5,798) |
|
$ |
395,346 |
See notes to unaudited consolidated financial statements
9
HERITAGE COMMERCE CORP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
Nine Months Ended |
|
||||
|
|
September 30, |
|
||||
|
|
2019 |
|
2018 |
|
||
|
|
(Dollars in thousands) |
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Net income |
|
$ |
34,776 |
|
$ |
22,099 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
Amortization of discounts and premiums on securities |
|
|
1,821 |
|
|
3,093 |
|
(Gain) on sale of securities available-for-sale |
|
|
(878) |
|
|
(266) |
|
(Gain) on sale of SBA loans |
|
|
(331) |
|