Heritage Commerce Corp Reports Second Quarter and First Six Months of 2025 Financial Results
Date: July 24, 2025
Location: San Jose, CA
Company: Heritage Commerce Corp (Nasdaq: HTBK), holding company for Heritage Bank of Commerce
Source: www.heritagecommercecorp.com
Reported Second Quarter 2025 Highlights
| Metric | Value |
|---|---|
| Net Income | $6.4 million |
| Earnings Per Share | $0.10 |
| Pre-Provision Net Revenue (PPNR) | $9.4 million |
| Fully Tax Equivalent (FTE) Net Interest Margin | 3.54% |
| Efficiency Ratio | 80.23% |
| Tangible Book Value Per Share | $8.49 |
Adjusted Second Quarter 2025 Highlights
| Metric | Value |
|---|---|
| Net Income | $13.0 million |
| Earnings Per Share | $0.21 |
| Pre-Provision Net Revenue (PPNR) | $18.6 million |
| FTE Net Interest Margin | 3.54% |
| Efficiency Ratio | 61.01% |
| Tangible Book Value Per Share | $8.59 |
CEO Commentary
“We executed well in the second quarter, generating a higher level of net income and earnings per share, excluding significant charges primarily related to a legal settlement,” said Clay Jones, President and Chief Executive Officer.
“We had positive trends in loan growth, an expansion in our net interest margin, and stable asset quality, while deposits declined due to seasonal outflows. Our loan growth was well diversified across our portfolios. We continue to add new clients by offering a superior banking experience and generate loan growth while maintaining disciplined underwriting and pricing criteria.”
“We have a strong balance sheet with a high level of capital and liquidity and healthy asset quality, which provides a strong foundation to weather periods of economic volatility. We are well positioned to navigate the current environment and expect to see positive trends in loan growth, the net interest margin, and expense management,” added Mr. Jones.
Financial Highlights
Linked-Quarter Basis
- Total revenue of $47.8 million, up 4% or $1.7 million
- Noninterest expense of $38.3 million includes $9.2 million for legal settlement charges
- Reported net income: $6.4 million (down 45%), EPS: $0.10 (down 47%)
- Adjusted net income: $13.0 million (up 11%), EPS: $0.21 (up 11%)
Year-Over-Year
- Total revenue of $47.8 million, up 15% or $6.1 million
- Noninterest expense includes $9.2 million legal accrual
- Reported net income: $6.4 million (down 31%), EPS: $0.10 (down 33%)
- Adjusted net income: $13.0 million (up 40%), EPS: $0.21 (up 40%)
Financial Condition
- Loans held-for-investment (HFI): $3.5 billion, up $47.4 million (1%)
- Total deposits: $4.6 billion, down $55.9 million (1%)
- Loan to deposit ratio: 76.38%, up from 74.45%
- Total shareholders’ equity: $694.7 million, down $1.5 million
- Loans HFI increased $154.5 million YoY (5%)
- Total deposits increased $182.7 million YoY (4%)
- Loan to deposit ratio up from 76.04%
- Shareholders’ equity increased $15.5 million YoY
Credit Quality
- Nonperforming assets (NPAs) to total assets: 0.11% for both quarters
- Classified assets to total assets: 0.69% vs 0.73% (QoQ) and 0.64% (YoY)
Key Performance Metrics
| Metric | Quarter Change | Year Change |
|---|---|---|
| FTE Net Interest Margin | 3.54% (up from 3.39%) | Up from 3.26% |
| Common Equity Tier 1 Capital Ratio | 13.3% (down from 13.6%) | Down from 13.4% |
| Total Capital Ratio | 15.5% (down from 15.9%) | Down from 15.6% |
| Tangible Common Equity Ratio | 9.85% (up from 9.78%) | Down from 9.91% |
Note
(1) Non-GAAP financial measure. See reconciliation under “Non-GAAP Financial Measures” in the full press release.
