HERITAGE COMMERCE CORP (NASDAQ:HTBK) Files An 8-K Other Events

ME Staff 8-k
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HERITAGE COMMERCE CORP (NASDAQ:HTBK) Files An 8-K Other Events
ITEM 8.01 OTHER EVENTS

Subsequent to issuing a press release announcing preliminary unaudited results for the fourth quarter and the year ended December31, 2017, on January25, 2018, and the filing of the press release with the Securities and Exchange Commission on Form8-K on January29, 2018, Heritage Commerce Corp, the holding company of Heritage Bank of Commerce (collectively referred to as the “Company”), based on recently received information from borrowers, determined that loans associated with a lending relationship should be moved to classified assets, increasing classified assets from $12.6 million to $25.1 million. In addition, the Company determined that the change in risk rating on these loans required an increase of $202,000 to the allowance for loan losses which now equals $19.7 million at December31, 2017, compared to $19.5 million as previously reported. Based on this information, and additional information and analysis performed by management, the risk grades for the loans associated with this relationship were downgraded and identified as classified loans. As of December31, 2017, the total outstanding balance of this lending relationship was $12.5 million. In the normal course of the borrower’s cyclical operations, the outstanding balances associated with this relationship are expected to increase before decreasing through 2018. Total loan commitments associated with this relationship are $22.4 million, and the total outstanding balance on March1, 2018 was $17.8 million.

The Company’s provision for loan losses increased by $202,000 to a credit provision for loan losses of ($291,000) for the fourth quarter of 2017, compared to a credit provision for loan losses of ($493,000) as previously reported. Income tax expense was reduced by $77,000 to $12.7 million for the fourth quarter of 2017, compared to $12.8 million as previously reported. For the fourth quarter of 2017, net income was $1.3 million, or $0.03 per average diluted common share, compared to $1.4 million, or $0.04 per average diluted common share, as previously reported.

The Company’s provision for loan losses increased by $202,000 to $99,000 for the year ended December31, 2017, compared to a credit provision for loan losses of ($103,000) as previously reported. Income tax expense remained unchanged at $26.5 million for the year ended December31, 2017. For the year ended December31, 2017, net income was $23.8 million, compared to $24.0 million as previously reported. Earnings per average diluted common share remained unchanged at $0.62 for the year ended December31, 2017.


About HERITAGE COMMERCE CORP (NASDAQ:HTBK)

Heritage Commerce Corp is a bank holding company. The Company, through its subsidiary Heritage Bank of Commerce (the Bank), provides a range of banking services. The Bank is a California state-chartered multi-community independent bank that offers a range of commercial banking services to small and medium-sized businesses and their owners, managers and employees. The Company offers a multitude of other products and services to complement its lending and deposit services. These include cashier’s checks, traveler’s checks, bank-by-mail, automated teller machines (ATMs), night depositories, safe deposit boxes, direct deposit, automated payroll services, electronic funds transfers, online banking, online bill pay, homeowner association services and other customary banking services. In addition to the traditional financial services offered, the Bank offers remote deposit capture, automated clearing house origination, electronic data interchange and check imaging.