Heritage merce p-Heritage Commerce Corp Reports Robust Loan and Deposit Growth in 2024

Core Points - Heritage Commerce Corp reported a net income of $10.6 million for Q4 2024, slightly up from$ 10.5 million in Q3 2024, but down from $13.3 million in Q4 2023 [1] - For the full year 2024, net income was$ 40.5 million, a decrease from $64.4 million in 2023 [1] Group 1: Operating Results - Deposit balances grew by 2% quarter-over-quarter and 10% year-over-year, attributed to strong local community commercial deposit relationships [2] - Loan growth increased by 2% from the previous quarter and 4% year-over-year [2] - The net interest margin expanded to 3.34% in Q4 2024 from 3.17% in Q3 2024, primarily due to reduced costs of funds [2][4] Group 2: Financial Metrics - Return on average equity was 6.16% for Q4 2024, compared to 6.14% in Q3 2024 and 7.96% in Q4 2023 [4] - Return on average tangible common equity was 8.25% for Q4 2024, down from 10.84% in Q4 2023 [4] - Return on average assets was 0.75% for Q4 2024, compared to 1.00% in Q4 2023 [4] Group 3: Net Interest Income - Net interest income increased by 11% to$ 44.2 million in Q4 2024 from $39.9 million in Q3 2024 [7] - For the year ended December 31, 2024, net interest income decreased by 11% to$ 163.6 million compared to $183.2 million in 2023 [7] Group 4: Noninterest Income and Expense - Total noninterest income was flat at$ 2.2 million for both Q4 2024 and Q3 2024, but increased by 13% year-over-year [16] - Total noninterest expense rose to $30.3 million in Q4 2024, up from$ 27.6 million in Q3 2024, primarily due to one-time expenses [16] Group 5: Credit Quality - The provision for credit losses on loans was $1.3 million in Q4 2024, compared to$ 153,000 in Q3 2024 [16] - Nonperforming assets and net charge-offs remained low as of December 31, 2024 [2] Group 6: Liquidity and Capital Management - Total available liquidity and borrowing capacity was $3.3 billion at December 31, 2024, compared to$ 3.2 billion at September 30, 2024 [20] - The loan to deposit ratio was 72.45% at December 31, 2024, compared to 76.52% at December 31, 2023 [20] Group 7: Investment Securities - Investment securities totaled $846.3 million at December 31, 2024, with$ 256.3 million in available-for-sale and $590.0 million in held-to-maturity portfolios [20] - The pre-tax unrealized loss on the available-for-sale portfolio was ($ 5.1) million at December 31, 2024 [21]