Heritage Oaks Bancorp Reports Third Quarter 2009 Financial Results
- Press Release
- Source: Heritage Oaks Bancorp
- On 4:35 pm EDT, Thursday October 29, 2009
PASO ROBLES, Calif., Oct. 29, 2009 (GLOBE NEWSWIRE) -- Heritage Oaks Bancorp (the "Company"), (Nasdaq:HEOP - News), the parent company of Heritage Oaks Bank (the "Bank"), today reported a net loss of $5.6 million for the third quarter of 2009 or $0.70 per diluted common share compared to net income of $0.5 million or $0.07 per diluted common share for the third quarter of 2008. Third quarter 2009 results reflect a provision for loan losses of $9.8 million compared to $3.2 million for the third quarter of 2008. For the first nine months of 2009, the Company reported a net loss of $4.2 million or $0.53 per diluted common share compared to net income of $2.9 million or $0.37 per diluted common share for the first nine months of 2008.
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| HEOP | 4.75 | +0.69 |
Third quarter highlights: * Total revenue, consisting of net interest income and non interest income, was $10.9 million and $33.4 million for the three and nine months ended September 30, 2009, respectively compared to $11.0 million and $32.9 million in the same periods for 2008. * Net interest margin was 4.34% for the third quarter and 4.75% for the first nine months of 2009. * Total deposits, exclusive of brokered deposits, increased $71.0 million during the third quarter and $181.6 million for the first nine months of 2009. * Total gross loans increased $29.7 million year-to-date and $43.5 million from a year ago. * Non-performing assets totaled $42.4 million or 4.58% of total assets. * Allowance for loan losses totaled $15.9 million or 2.24% of total gross loans. * Provisions for loan losses totaled $9.8 million for the quarter and $14.6 million year-to-date. * OREO write-downs totaled approximately $1.4 million. * The Company remained well capitalized with Tier I Capital ratio at 10.52% and Total Risk-Based Capital ratio at 11.78%.
Commenting on the results for the quarter, Lawrence Ward, President and Chief Executive Officer, stated, "During the quarter we strengthened our loan loss reserve and realized appropriate write-downs to non-accrual loans and OREO while maintaining strong capital ratios. While we were not satisfied with reporting a loss for the quarter, we believe that our actions were prudent in the current environment. Even though the Bank has faced significant challenges with respect to asset quality, we are pleased that our core business remains solid with total revenue of $10.9 million for the third quarter compared to $11.0 million reported in the same period a year earlier. For the first nine months of 2009, total revenue totaled $33.4 million compared to $32.9 million for the same period a year earlier. Impacting total revenue was the reversal of interest for non-accrual loans of approximately $1.1 million and $1.2 million for the three and nine months ended September 30, 2009, respectively. Approximately $846 thousand of this amount has been recovered on a loan that returned to performing status subsequent to quarter end and will be reflected in the fourth quarter of 2009. This recovery and return to performing status results in non-performing assets being reduced by approximately 25%. Additionally, our franchise value in terms of core deposit relationships continues to be enhanced with quarterly growth of $57.6 million and year-to-date growth of $126.4 million in core deposits. The Company and Bank remain well-capitalized and are dedicated to prudent underwriting standards, and staying selective with respect to the types of new loans originated. The preservation of capital and commitment to our customers and the communities we serve remain of paramount importance. The strong core deposit growth realized year-to-date in 2009 demonstrates that we have capitalized on an opportunity for organic growth within our primary market area."
Asset Quality
Ward further stated, "The Bank devotes considerable resources to the monitoring of credit quality and management of problem assets. In July 2009, the Company announced that Ron Oliveira joined the Bank as Executive Vice President and Chief Operating Officer/Chief Credit Officer. Mr. Oliveira brings over 27 years of banking experience to our institution. The expansion of our Special Assets Department has also contributed significantly to the oversight of credit quality and the workout of problem credits. We are committed to the speedy resolution of problem assets and continue to work with borrowers where possible."
Ward went on to state, "In connection with the expansion of our credit management activities, we put in place a more vigorous internal and external loan review program. During the third quarter, an independent loan review firm completed a semi-annual loan portfolio examination to augment management's internal loan review. As a result of feedback from this review and in connection with our own effort to identify and reserve for perceived credit risks in the portfolio, we moved approximately $34.2 million in loan balances to non-accruing status. As of September 30, 2009, non-accruing loan balances totaled approximately $39.4 million or 5.61% of total gross loans, and non-performing assets totaled approximately $42.4 million and represented 4.58% of total assets. These totals include one loan of $10.7 million that was classified as non-accrual as of September 30, 2009, but has since been returned to accrual status. The return to accrual status will result in $846 thousand in interest income charged off in the third quarter being recognized in the fourth quarter of 2009."
Additionally, as part of the Bank's ongoing efforts to manage credit quality, the list of credits placed on watch status expanded in an effort to identify and monitor these credits and to mitigate future credit quality issues or minimize potential losses on a proactive basis. Management utilizes the watch list, among other things, to manage credit risk and monitor loans as they migrate through the credit cycle, from performing status to watch to non-accruing status and/or potential loss. As a result of the increased number of loans on our watch list, the increase in loans moved to non-accrual status and the loan charge-offs realized during the quarter, the Bank continues to take steps to build the loan loss reserve. Provisions for loan losses for the first nine months of 2009 totaled approximately $14.6 million. As of September 30, 2009, the allowance for loan losses stood at approximately $15.9 million or 2.24% of total gross loans.
"We are dedicated to diligent oversight of the loan portfolio. Recently, the loan portfolio has undergone a semi-annual review, performed by an independent asset quality review firm," said Ward. "The institution of a semi-annual review of the loan portfolio in addition to regular reviews performed internally has been instrumental in helping the Bank to more quickly identify and manage potential credit issues. Management continues to work with borrowers where possible and collateral is being actively marketed in an effort to mitigate potential losses to the Bank."
Loans charged-off in the third quarter totaled approximately $5.0 million, bringing the total of charged-off loans for the year to approximately $9.1 million. The majority of these charged-off loans occurred within the segments of land, construction, and commercial and industrial loans. Net charge-offs to average gross loans were 0.70% during the quarter and 1.29% during the first nine months of 2009.
The following provides a reconciliation of the change in non-accruing loans for the three months ended September 30, 2009:
Balance Additions to
June 30, Non-Accruing Net
(dollars in thousands) 2009 Balances Paydowns Charge-offs
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Real Estate Secured
Multi-family
residential $ -- $ -- $ -- $ --
Residential 1 to 4
family 392 1,184 -- (304)
Home equity line of
credit 320 -- -- --
Commercial 2,776 3,079 (67) (41)
Farmland --
Commercial
Commercial and
industrial 5,316 1,174 (29) (503)
Agriculture 384 4,922 (183) (1,909)
Other -- -- -- --
Construction
Single family
residential 678 642 (380) --
Single family
residential - Spec. 1,589 683 -- (397)
Tract -- 2,215 -- --
Multi-family -- -- -- --
Hospitality -- -- -- --
Commercial -- -- -- --
Land 511 20,294 (11) (1,801)
Installment loans to
individuals 132 48 (4) (42)
All other loans -- -- -- --
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Totals $ 12,098 $ 34,241 $ (674) $ (4,997)
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Transfers to Balance
Returns to Foreclosed Sept. 30,
(dollars in thousands) Accrual Collateral 2009
---------------------------------------------------------------------
Real Estate Secured
Multi-family residential $ -- $ -- $ --
Residential 1 to 4 family -- -- 1,272
Home equity line of credit -- -- 320
Commercial -- -- 5,747
Farmland --
Commercial
Commercial and industrial -- -- 5,958
Agriculture -- -- 3,214
Other -- -- --
Construction
Single family residential -- -- 940
Single family residential - Spec. -- (1,192) 683
Tract -- -- 2,215
Multi-family -- -- --
Hospitality -- -- --
Commercial -- -- --
Land -- -- 18,993
Installment loans to individuals -- (83) 51
All other loans -- -- --
---------------------------------------------------------------------
Totals $ -- $ (1,275) $ 39,393
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The following provides a reconciliation of the change in non-accruing loans for the nine months ended September 30, 2009:
Balance Additions to
Dec. 31, Non-Accruing Net
(dollars in thousands) 2008 Balances Paydowns Charge-offs
---------------------------------------------------------------------
Real Estate Secured
Multi-family
residential $ -- $ -- $ -- $ --
Residential 1 to 4
family 265 1,330 (19) (304)
Home equity line of
credit 320 -- -- --
Commercial 1,961 4,477 (615) (41)
Farmland -- -- -- --
Commercial
Commercial and
industrial 7,060 2,758 (376) (1,728)
Agriculture -- 5,307 (184) (1,909)
Other -- -- -- --
Construction
Single family
residential -- 1,465 (380) (145)
Single family
residential - Spec. 5,990 3,557 -- (2,073)
Tract -- 2,215 -- --
Multi-family -- -- -- --
Hospitality -- -- -- --
Commercial -- -- -- --
Land 2,720 21,715 (373) (2,792)
Installment loans to
individuals 11 272 (6) (143)
All other loans -- -- -- --
---------------------------------------------------------------------
Totals $ 18,327 $ 43,096 $ (1,953) $ (9,135)
---------------------------------------------------------------------
Transfers to Balance
Returns to Foreclosed Sept. 30,
(dollars in thousands) Accrual Collateral 2009
---------------------------------------------------------------------
Real Estate Secured
Multi-family residential $ -- $ -- $ --
Residential 1 to 4 family -- -- 1,272
Home equity line of credit -- -- 320
Commercial -- (35) 5,747
Farmland -- -- --
Commercial
Commercial and industrial (14) (1,742) 5,958
Agriculture -- -- 3,214
Other -- -- --
Construction
Single family residential -- -- 940
Single family residential - Spec. (1,250) (5,541) 683
Tract -- -- 2,215
Multi-family -- -- --
Hospitality -- -- --
Commercial -- -- --
Land -- (2,277) 18,993
Installment loans to individuals -- (83) 51
All other loans -- -- --
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Totals $ (1,264) $ (9,678) $ 39,393
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Non-Accruing Loans
Real Estate Secured - Commercial ("CRE")
Comprising a considerable portion of balances within this category are seven loans to four borrowers in the aggregate amount of $4.5 million. These seven loans represented 77% of total CRE balances and 17% of total non-accruing loans as of September 30, 2009. These loans are well secured and the Bank is working with the respective borrowers where possible to liquidate the collateral.
Commercial and Industrial ("C&I")
The majority of C&I balances can be attributed to one loan with a current book balance of approximately $3.6 million, comprising 61% of total non-accruing C&I balances and 14% of total non-accruing balances as of September 30, 2009. This loan is secured by property in the Bank's primary market area that has a current appraisal received October 13, 2009 that supports the amount carried on the balance sheet. Other significant balances within this category include two loans to two borrowers, totaling approximately $0.9 million, representing 16% of total C&I non-accruing balances.
With regard to agriculture loans, the linked quarter increase is the direct result of one particular credit that was written down to the fair value. The remaining balance is considered to be reflective of the current value of the collateral.
Construction
A significant portion of non-accruing construction balances can be attributed in large part to eight tract loans to one borrower totaling approximately $1.3 million. All eight loans have approved purchase contracts in place and have been sold under a state assisted low income housing program. Four of the loans are set to close prior to the end of October with the other four to close shortly thereafter.
Land
The largest credit within this category was the $10.7 million loan discussed above that has since returned to accrual status. The large majority of the remaining balances within this category can be attributed to five loans to three borrowers totaling approximately $7.3 million. These five loans represented 87% of total non-accruing land balances and 28% of all non-accruing balances. During the third quarter, the Bank placed seven loans within this segment of the portfolio on non-accruing status, including the five loans previously mentioned. The majority of the increase can be attributed to two loans to one borrower. Placing these loans on non-accrual status was the result of additional information obtained regarding the borrower's financial condition and management's evaluation of the independent review performed on these credits. As the result of receiving new appraisals, three loans to two borrowers were written-down by approximately $1.2 million during the third quarter of 2009. Management is in the process of obtaining updated appraisal information for the collateral securing the remaining loans and is working with the borrowers to bring about resolution.
Other Real Estate Owned ("OREO")
At September 30, 2009, OREO balances stood at approximately $2.6 million or $4.1 million lower than the $6.7 million reported at June 30, 2009. During the quarter, the Bank sold five properties previously booked in the aggregate amount of $3.9 million. In connection with these sales, the Bank recognized aggregate losses of approximately $0.2 million. Contributing further to the quarter-over-quarter decline in OREO balances was the write-down of two properties in the aggregate amount of $1.4 million, based on updated appraisal information. The larger of the two properties represents land for commercial development. Additions to OREO include one residential speculative property carried at $1.2 million that is currently in escrow and anticipated to close by the middle of November 2009.
The following provides a summary of the change in OREO balances for the three and nine months ended September 30, 2009:
For the three months ended For the nine months ended
(dollars in
thousands) September 30, 2009 September 30, 2009
---------------------------------------------------------------------
Beginning
Balance $ 6,669 $ 1,337
Additions 1,192 9,595
Dispositions (3,877) (6,876)
Write-downs (1,377) (1,449)
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Balance
September 30,
2009 $ 2,607 $ 2,607
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Capital Position
At September 30, 2009, the Company's Tier I and Total Risk-Based Capital totaled approximately $82.5 million and $92.4 million, respectively. The Tier I Capital ratio was 10.52%, while the total Risk-Based Capital ratio was 11.78% at quarter end. The Tier I and Total Risked Based totals reflect approximately $4.9 million in disallowed deferred tax assets. As of September 30, 2009, the Company was well capitalized by regulatory standards.
Shareholders' equity was approximately $87.8 million at September 30, 2009, compared to $91.3 million reported at June 30, 2009 and $70.0 million reported at December 31, 2008. Book value per common share was $8.82 at September 30, 2009, compared to the $9.03 per share reported at December 31, 2008.
Liquidity
The liquidity ratio was 19.65% at September 30, 2009, compared to 16.36% at June 30, 2009 and 6.79% at December 31, 2008. At September 30, 2009, the Bank had remaining borrowing capacity with the FHLB in the approximate amount of $117.7 million. During the quarter, the Bank established a new credit arrangement with a correspondent Bank totaling $15.0 million. With the addition of this new credit arrangement, the Bank has the ability to purchase Fed Funds in the aggregate amount of $35.0 million as of September 30, 2009, up from the $20.0 million reported at June 30, 2009.
Balance Sheet
Total deposits increased approximately $49.5 million during the quarter and approximately $150.0 million year-to-date. Exclusive of brokered deposits, total deposits increased approximately $71.0 million during the quarter and approximately $181.6 million during the first nine months of the year. Strong core deposit growth has allowed the Bank to pay down approximately $21.5 million in brokered funds during the quarter and approximately $31.6 million year-to-date. Promotions the Bank engaged in during the year have been instrumental in bringing new relationships to the Bank, further enhancing the Bank's core funding balances and keeping the cost of funds down. For the three and nine months ended September 30, 2009, the Bank's cost of deposits and cost of funds were both 1.28% and 1.27%, respectively. All 15 of our branch offices have experienced significant deposit growth with the growth balanced between non interest bearing demand, interest checking, money market, and time certificates. We attribute a portion of our deposit growth in 2009 to a new customer base, as we continue to see migration from larger institutions as well as troubled institutions within our market. Total deposits were approximately $753.5 million at September 30, 2009, compared to the $704.0 million and $603.5 million reported at June 30, 2009 and December 31, 2008, respectively. Core deposits totaled approximately $626.3 million or 83.1% of total deposits at quarter end. This compares to $568.7 million and $499.9 million for June 30, 2009 and December 31, 2008, respectively.
FHLB borrowings totaled $65.0 million as of September 30, 2009, unchanged from the prior quarter and down approximately $44.0 million from December 31, 2008. The cost of borrowings from the FHLB averaged 0.63% for the quarter and 0.81% year to date.
Loan growth continues to remain relatively solid in all of our primary markets. However, we remain cautious with all new loan originations. The Bank is seeing a more modest level of loan growth relative to prior periods, due primarily to weak economic conditions and our more stringent underwriting criteria. The Bank continues to remain very conservative with the loans we fund and we are requiring clients to commit more capital to certain projects, specifically construction. Gross loans increased $12.0 million during the third quarter and $29.7 million year-to-date. Loan growth during the third quarter can be attributed in large part to the funding of one $9.0 million credit in the commercial real estate segment to purchase professional office space, with three national tenants. This credit was originated with a 50% loan to value ratio and a debt coverage ratio of 2.4 times.
The securities portfolio increased by $27.1 million during the third quarter to $102.9 million. The Bank sought to take advantage of increased credit spreads available on investment securities and to invest excess liquidity in cash flow generating instruments in the absence of loan originations. Unrealized losses, net-of-tax, declined in the third quarter by approximately $1.9 million. More rational pricing of mortgage related securities as well as increases in the values of certain opportunistic purchases made during the first and second quarters of 2009 contributed significantly to the rise in the fair value of the portfolio. Management periodically evaluates investments in the portfolio for other than temporary impairment and more specifically when conditions warrant such an evaluation. As of September 30, 2009, the majority of unrealized losses in the portfolio were attributable to certain holdings of mortgage related securities. Based on pre-purchase cash flow analyses, cash flows on these securities are within a range of expectations. As of September 30, 2009, management does not believe unrealized losses in the portfolio are other than temporary. The investment portfolio contains no collateralized debt obligations.
Net Interest Margin
For the three and nine months ended September 30, 2009, the net interest margin was 4.34% and 4.75%, respectively. The net interest margin for the three and nine months ended September 30, 2008 was 5.18% and 5.26%, respectively. The margin declined 57 basis points on a quarter over quarter basis, primarily as the result of approximately $1.1 million in interest reversals for non-accrual loans and also a function of elevated levels of Fed Funds sold at an average rate of 25bps. Our core deposit growth, however, continues to aid us in keeping our margin above peer levels. The year over year decline can be attributed to lower earning asset yields, reversal of non-accrual loan interest and the result of the significant decline in the prime rate over the last two years.
Operating Results
Total revenue, consisting of net interest income before the provision for loan losses and non interest income, was $10.9 million in the third quarter, down $0.5 million from the second quarter and $0.2 million from that reported a year ago. For the first nine months of the year, total revenues consisting of net interest income and non interest income, were $33.4 million or approximately $0.5 million higher than that reported a year earlier. Net interest income was $9.3 million during the third quarter or $0.3 million and 2.7% less when compared to that reported a year earlier. Year-to-date, net interest income increased to $28.7 million, $0.4 million or 1.6% higher compared to that reported during the same period ended a year earlier. Total interest expense increased $0.2 million or 6.9% to $2.6 million in the third quarter when compared to the $2.4 million reported for the second quarter. Higher core deposit balances contributed to the quarter over quarter increase. When compared to the same quarter to date period ended a year earlier, interest expense fell approximately $0.4 million or 13.8%. For the first nine months of 2009, interest expense totaled approximately $7.4 million. When compared to the same period ended a year earlier, this represents a decline of approximately $2.3 million or 24.2%.
Non interest income totaled approximately $1.6 million for the third quarter. This represents increases of $0.1 million when compared to the same period ended a year earlier and approximately $0.1 million when compared to the second quarter of 2009. Impacting year over year results was a $0.1 million increase in mortgage origination fee income and gains on the sale of investment securities and SBA loans totaling approximately $0.2 million and $0.1 million, respectively. Offsetting these increases were losses the Bank incurred on the sale of OREO properties in the aggregate amount of $0.2 million as well as an approximate $0.1 million decline in service charge fee income.
Year-to-date non interest income totaled approximately $4.8 million, which represents an increase of approximately $45 thousand when compared to that reported in the same period ended a year earlier. A $0.5 million increase in mortgage origination fee income and gains the Bank recognized on the sale of investment securities and SBA loans, totaling approximately $0.3 million and $0.1 million, respectively, contributed to the year-over-year increase. However, the increase was offset by the absence of $0.3 million in income the Bank recognized in 2008 related to the Visa, Inc. IPO, losses the Bank incurred on the sale of OREO properties in the aggregate amount of $0.3 million and an approximate $0.3 million decline in service charge fee income.
Non interest expense totaled approximately $10.3 million for the third quarter. This represents increases of approximately $2.2 million over the second quarter and approximately $3.1 million over the same period ended a year earlier. During the quarter, the Bank wrote-down the value of one OREO property by $1.3 million, based on new appraisal information. This property represents land for commercial development. Other items impacting the year-over-year change in non interest expense were higher salaries and employee benefits, increased occupancy costs and higher regulatory assessment fees. Salaries and employee benefits increased $0.3 million during the third quarter when compared to the prior year, due in large part to additional staff added in response to year-over-year organic growth. The year-over-year $0.1 million increase in occupancy costs is due in large part to annual increases in rental expenses. Increases in regulatory assessment fees can be attributed to increases in FDIC assessment costs in general as well as a one-time charge in the approximate amount of $0.5 million to correct for the cumulative effect of an unintentional under accrual over a timeline that included ten reporting periods. After consulting with the Company's independent audit firm, Management determined that there was no material amount in any one reporting period and that the cumulative amount was processed in the third quarter of 2009.
Non interest expense for the first nine months of the year totaled approximately $25.7 million. When compared to the same period ended a year earlier, this represents an increase of approximately $3.5 million. The majority of the increase can be attributed to the write-down of and other expenses incurred associated with OREO properties. Additionally, significantly higher regulatory assessment premiums, including the one-time FDIC special assessment, contributed further to the year over year increase within this category.
The efficiency ratio was 95.12% in the third quarter of 2009 compared to 70.02% in the previous quarter and 64.40% in the third quarter a year ago. Net of these one-time expenses, such as write-downs on and other expenses incurred associated with OREO properties, the efficiency ratio would have been 73.81% for the third quarter. For the first nine months of the year the efficiency ratio was 77.02% compared to 67.55% in the first nine months of 2008. Net of the one-time items mentioned above, the efficiency ratio would have been 67.96% for the first nine months of the year. The efficiency ratio measures operating expenses as a percent of total net revenues.
About the Company
Heritage Oaks Bancorp is the holding company for Heritage Oaks Bank which operates as Heritage Oaks Bank and Business First, a division of Heritage Oaks Bank. Heritage Oaks Bank has its headquarters plus one branch office in Paso Robles, two branch offices in San Luis Obispo, single branch offices in Cambria, Arroyo Grande, Atascadero, Templeton, San Miguel and Morro Bay and three branch offices in Santa Maria. Heritage Oaks Bank conducts commercial banking business in San Luis Obispo County and Northern Santa Barbara County. The Business First division has two branch offices in Santa Barbara. Visit Heritage Oaks Bancorp on the Web at www.heritageoaksbancorp.com.
Statements concerning future performance, developments or events, expectations for growth, income forecasts, sales activity for collateral, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to the ongoing financial crisis in the United States, and the response of the federal and state government and our regulators thereto, increased profitability, continued growth, the Bank's beliefs as to the adequacy of its existing and anticipated allowances for loan losses, beliefs and expectations regarding actions that may be taken by regulatory authorities having oversight of the Bank's operations, interest rates and financial policies of the United States government, continued weakness in the real estate markets within which we operate and general economic conditions. Additional information on these and other factors that could affect financial results are included in Heritage Oaks Bancorp's Securities and Exchange Commission filings. If any of these risks or uncertainties materialize or if any of the assumptions underlying such forward-looking statements proves to be incorrect, Heritage Oaks Bancorp's results could differ materially from those expressed in, implied or projected by such forward-looking statements. Heritage Oaks Bancorp assumes no obligation to update such forward-looking statements.
Heritage Oaks Bancorp
Consolidated Balance Sheets
(unaudited) (unaudited) (audited) (unaudited)
(dollar amounts ---------------------------------------------
in thousands) 9/30/2009 6/30/2009 12/31/2008 9/30/2008
---------------------------------------------------------------------
Assets
Cash and due from
banks $ 18,155 $ 15,667 $ 17,921 $ 18,914
Federal funds sold 45,740 32,675 6,650 8,835
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Total cash and cash
equivalents 63,895 48,342 24,571 27,749
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Interest bearing
deposits with
other banks 119 119 119 119
Securities available
for sale 102,871 75,726 50,762 52,634
Federal Home Loan Bank
stock, at cost 5,828 5,828 5,123 5,006
Loans held for sale 7,778 11,692 7,939 2,955
Loans, net (1) 692,359 685,193 668,034 654,403
Property, premises
and equipment 6,984 6,848 6,827 6,769
Deferred tax assets 12,379 8,673 7,708 7,085
Bank owned life
insurance 11,432 10,949 10,737 10,631
Goodwill 11,049 11,049 11,049 11,541
Core deposit intangible 2,904 3,166 3,691 3,906
Other real estate owned 2,607 6,669 1,337 197
Other assets 6,600 7,101 7,691 4,940
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Total assets $ 926,805 $ 881,355 $ 805,588 $ 787,935
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Liabilities
Deposits
Non interest bearing
demand $ 181,670 $ 178,600 $ 147,044 $ 155,267
Savings, NOW, and
money market 329,186 290,178 296,488 269,744
Time deposits of $100K
or more 125,230 125,325 75,111 75,657
Time deposits under
$100K 117,443 109,886 84,878 88,583
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Total deposits 753,529 703,989 603,521 589,251
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Short term FHLB
borrowing 65,000 55,000 99,000 96,500
Long term FHLB
borrowing -- 10,000 10,000 10,000
Securities sold under
agreement to
repurchase -- -- 2,796 1,235
Junior subordinated
debentures 13,403 13,403 13,403 13,403
Other liabilities 7,087 7,649 6,836 6,592
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Total liabilities 839,019 790,041 735,556 716,981
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Stockholders' equity
Senior preferred stock,
no par value; $1,000
per share stated value
5,000,000 shares
authorized, 21,000
issued and outstanding 19,341 19,253 -- --
Common stock, no par
value; 20,000,000
shares authorized;
issued and
outstanding:
7,760,505; 7,761,554;
7,753,078 and
7,709,600 as of
September 30, 2009;
June 30, 2009;
December 31, 2008; and
September 30, 2008,
respectively. 48,695 48,695 48,649 48,456
Additional paid in
capital 3,172 3,087 1,055 947
Retained earnings 17,174 22,768 21,420 22,675
Accumulated other
comprehensive income (596) (2,489) (1,092) (1,124)
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Total stockholders'
equity 87,786 91,314 70,032 70,954
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Total liabilities and
stockholders' equity $ 926,805 $ 881,355 $ 805,588 $ 787,935
---------------------------------------------------------------------
Percentage Change Vs.
---------------------------------
(dollar amounts in thousands) 6/30/2009 12/31/2008 9/30/2008
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Assets
Cash and due from banks 15.9% 1.3% -4.0%
Federal funds sold 40.0% 587.8% 417.7%
---------------------------------------------------------------------
Total cash and cash equivalents 32.2% 160.0% 130.3%
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Interest bearing deposits with
other banks 0.0% 0.0% 0.0%
Securities available for sale 35.8% 102.7% 95.4%
Federal Home Loan Bank stock,
at cost 0.0% 13.8% 16.4%
Loans held for sale -33.5% -2.0% 163.2%
Loans, net (1) 1.0% 3.6% 5.8%
Property, premises and equipment 2.0% 2.3% 3.2%
Deferred tax assets 42.7% 60.6% 74.7%
Bank owned life insurance 4.4% 6.5% 7.5%
Goodwill 0.0% 0.0% -4.3%
Core deposit intangible -8.3% -21.3% -25.7%
Other real estate owned -60.9% 95.0% 1223.4%
Other assets -7.1% -14.2% 33.6%
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Total assets 5.2% 15.0% 17.6%
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Liabilities
Deposits
Non interest bearing demand 1.7% 23.5% 17.0%
Savings, NOW, and money market 13.4% 11.0% 22.0%
Time deposits of $100K or more -0.1% 66.7% 65.5%
Time deposits under $100K 6.9% 38.4% 32.6%
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Total deposits 7.0% 24.9% 27.9%
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Short term FHLB borrowing 18.2% -34.3% -32.6%
Long term FHLB borrowing -100.0% -100.0% -100.0%
Securities sold under agreement
to repurchase 0.0% -100.0% -100.0%
Junior subordinated debentures 0.0% 0.0% 0.0%
Other liabilities -7.3% 3.7% 7.5%
---------------------------------------------------------------------
Total liabilities 6.2% 14.1% 17.0%
---------------------------------------------------------------------
Stockholders' equity
Senior preferred stock, no par
value; $1,000 per share stated
value 5,000,000 shares authorized,
21,000 issued and outstanding 0.5% 100.0% 100.0%
Common stock, no par value;
20,000,000 shares authorized;
issued and outstanding: 7,760,505;
7,761,554; 7,753,078 and 7,709,600
as of September 30, 2009; June 30,
2009; December 31, 2008; and
September 30, 2008, respectively. 0.0% 0.1% 0.5%
Additional paid in capital 2.8% 200.7% 235.0%
Retained earnings -24.6% -19.8% -24.3%
Accumulated other comprehensive
income 76.1% 45.4% 47.0%
---------------------------------------------------------------------
Total stockholders' equity -3.9% 25.4% 23.7%
---------------------------------------------------------------------
Total liabilities and
stockholders' equity 5.2% 15.0% 17.6%
---------------------------------------------------------------------
(1) Loans are net of deferred loan fees of $1,635; $1,555; $1,701;
$1,647 and allowance for loan losses of $15,873; $11,106; $10,412;
$10,350 for September 30, 2009, June 30, 2009, December 31, 2008,
and September 30, 2008 respectively.
Heritage Oaks Bancorp
Consolidated Statements of Income
(dollar
amounts (unaudited)(unaudited)(unaudited)
in thousands For the Three Months Ended Percentage Change Vs.
except per -----------------------------------------------------
share data) 9/30/2009 6/30/2009 9/30/2008 6/30/2009 9/30/2008
---------------------------------------------------------------------
Interest Income
Interest and
fees on loans $ 10,703 $ 11,416 $ 11,731 -6.2% -8.8%
Interest on
investment
securities
Mortgage
backed
securities 871 625 515 39.4% 69.1%
Obligations
of state and
political
subdivisions 247 208 186 18.8% 32.8%
Interest on
time deposits
with other
banks 1 1 1 0.0% 0.0%
Interest on
federal funds
sold 21 10 18 110.0% 16.7%
Interest on
other
securities 17 9 85 88.9% -80.0%
---------------------------------------------------------------------
Total
interest
income 11,860 12,269 12,536 -3.3% -5.4%
---------------------------------------------------------------------
Interest Expense
Interest on
savings, NOW
and money
market
deposits 984 839 886 17.3% 11.1%
Interest on
time deposits
in
denominations
of $100K or
more 695 631 620 10.1% 12.1%
Interest on
time deposits
under $100K 675 664 702 1.7% -3.8%
Other
borrowings 241 293 803 -17.7% -70.0%
---------------------------------------------------------------------
Total
interest
expense 2,595 2,427 3,011 6.9% -13.8%
---------------------------------------------------------------------
Net interest
income before
provision for
loan losses 9,265 9,842 9,525 -5.9% -2.7%
Provision for
loan losses 9,756 2,700 3,200 261.3% 204.9%
---------------------------------------------------------------------
Net interest
income after
provision for
loan losses (491) 7,142 6,325 -106.9% -107.8%
---------------------------------------------------------------------
Non Interest
Income
Service charges
on deposit
accounts 750 752 878 -0.3% -14.6%
ATM/Debit and
credit card
transaction/
interchange
fees 253 254 220 -0.4% 15.0%
Bancard 48 55 69 -12.7% -30.4%
Mortgage
origination
fees 245 336 118 -27.1% 107.6%
Earnings on
bank owned
life
insurance 124 124 121 0.0% 2.5%
Other
commissions
and fees 92 83 107 10.8% -14.0%
Gain on sale of
investment
securities 211 -- -- 100.0% 100.0%
Loss on sale
of OREO
property (200) (104) -- -92.3% -100.0%
Gain on sale
of SBA loans 70 -- -- 100.0% 100.0%
---------------------------------------------------------------------
Total non
interest income 1,593 1,500 1,513 6.2% 5.3%
---------------------------------------------------------------------
Non Interest
Expense
Salaries and
employee
benefits 3,969 3,745 3,651 6.0% 8.7%
Occupancy 843 826 741 2.1% 13.8%
Equipment 365 376 336 -2.9% 8.6%
Promotional 191 225 199 -15.1% -4.0%
Data processing 687 691 672 -0.6% 2.2%
Stationary and
supplies 111 99 99 12.1% 12.1%
Regulatory fees 851 537 116 58.5% 633.6%
Audit and
tax costs 182 147 114 23.8% 59.6%
Amortization of
core deposit
intangible 262 262 215 0.0% 21.9%
Director fees 80 80 80 0.0% 0.0%
Communication 76 61 87 24.6% -12.6%
Other 2,634 965 798 173.0% 230.1%
---------------------------------------------------------------------
Total non
interest
expense 10,251 8,014 7,108 27.9% 44.2%
---------------------------------------------------------------------
(Loss) / income
before
provision for
income taxes (9,149) 628 730 -1556.8% -1353.3%
Provision for
income taxes (3,907) 121 196 -3328.9% -2093.4%
---------------------------------------------------------------------
Net (loss) /
income (5,242) 507 534 -1133.9% -1081.6%
---------------------------------------------------------------------
Dividends and
accretion on
preferred
stock 352 250 -- 40.8% 100.0%
---------------------------------------------------------------------
Net (loss) /
income
available to
common
shareholders $ (5,594) $ 257 $ 534 -2276.7% -1147.6%
---------------------------------------------------------------------
Shares
Outstanding
Basic 7,699,377 7,696,027 7,709,600
Diluted 7,945,382 7,866,962 7,798,321
(Loss) /
Earnings Per
Common Share
Basic $ (0.73) $ 0.03 $ 0.07
Diluted $ (0.70) $ 0.03 $ 0.07
Heritage Oaks Bancorp
Consolidated Statements of Income
(unaudited) (unaudited) Percentage
For the Nine Months Ended Change Vs.
-------------------------------------
(dollar amounts in thousands
except per share data) 9/30/2009 9/30/2008 9/30/2008
---------------------------------------------------------------------
Interest Income
Interest and fees on loans $ 33,266 $ 35,554 -6.44%
Interest on investment
securities
Mortgage backed securities 2,044 1,481 38.0%
Obligations of state and
political subdivisions 641 555 15.5%
Interest on time deposits
with other banks 3 7 -57.1%
Interest on federal funds sold 38 130 -70.8%
Interest on other securities 33 200 -83.5%
---------------------------------------------------------------------
Total interest income 36,025 37,927 -5.0%
---------------------------------------------------------------------
Interest Expense
Interest on savings, NOW and
money market deposits 2,640 3,412 -22.6%
Interest on time deposits in
denominations of $100K or
more 1,870 1,825 2.5%
Interest on time deposits
under $100K 1,903 2,276 -16.4%
Other borrowings 938 2,180 -57.0%
---------------------------------------------------------------------
Total interest expense 7,351 9,693 -24.2%
---------------------------------------------------------------------
Net interest income before
provision for loan losses 28,674 28,234 1.6%
Provision for loan losses 14,566 6,215 134.4%
---------------------------------------------------------------------
Net interest income after
provision for loan losses 14,108 22,019 -35.9%
---------------------------------------------------------------------
Non Interest Income
Service charges on deposit
accounts 2,214 2,487 -11.0%
ATM/Debit Card transaction/
interchange fees 723 672 7.6%
Bancard 140 183 -23.5%
Mortgage origination fees 910 367 148.0%
Earnings on bank owned life
insurance 369 352 4.8%
Other commissions and fees 325 610 -46.7%
Gain on sale of investment
securities 333 37 800.0%
Loss on sale of OREO property (331) -- -100.0%
Gain on sale of SBA loans 70 -- 100.0%
---------------------------------------------------------------------
Total non interest income 4,753 4,708 1.0%
---------------------------------------------------------------------
Non Interest Expense
Salaries and employee benefits 11,517 11,897 -3.2%
Occupancy 2,521 2,291 10.0%
Equipment 1,066 1,053 1.2%
Promotional 517 681 -24.1%
Data processing 2,049 1,998 2.6%
Stationary and supplies 314 323 -2.8%
Regulatory fees 1,531 340 350.3%
Audit and tax costs 477 342 39.5%
Amortization of core deposit
intangible 787 646 21.8%
Director fees 243 238 2.1%
Communication 199 239 -16.7%
Other 4,469 2,178 105.2%
---------------------------------------------------------------------
Total non interest expenses 25,690 22,226 15.6%
---------------------------------------------------------------------
(Loss) / income before provision
for income taxes (6,829) 4,501 -251.7%
Provision for income taxes (3,196) 1,601 -299.6%
---------------------------------------------------------------------
Net (loss) / income (3,633) 2,900 -225.3%
---------------------------------------------------------------------
Dividends and accretion on
preferred stock 613 -- 100.0%
---------------------------------------------------------------------
Net (loss) / income available
to common shareholders $ (4,246) $ 2,900 -246.4%
=====================================================================
Shares Outstanding
Basic 7,694,969 7,703,107
Diluted 7,839,014 7,832,815
(Loss) / Earnings Per Common
Share
Basic $ (0.56) $ 0.38
Diluted $ (0.53) $ 0.37
Three Months Ended
AVERAGE BALANCES -------------------------------------------------
AND RATES 9/30/2009 12/31/2008 9/30/2008
-------------------------------------------------
(dollars in Yield/ Yield/ Yield/
thousands) Balance Rate Balance Rate Balance Rate
---------------------------------------------------------------------
Interest Earning
Assets
Investments with
other banks $ 119 3.33% $ 119 3.34% $ 128 3.11%
Federal funds sold 33,895 0.25% 5,774 0.69% 3,342 2.14%
Investment
securities
- taxable 75,563 4.66% 40,366 5.34% 43,221 5.52%
Investment
securities
- non taxable 22,653 4.33% 16,650 4.44% 17,125 4.32%
Loans 713,810 5.95% 675,742 6.76% 667,441 6.99%
---------------------------------------------------------------------
Total earning assets 846,040 5.56% 738,651 6.58% 731,257 6.82%
---------------------------------------------------------------------
Allowance for
loan losses (11,969) (10,002) (8,664)
Other assets 71,976 66,340 65,230
--------------------------------------------------------------
Total assets 906,047 $794,989 $787,823
--------------------------------------------------------------
Interest Bearing
Liabilities
Interest bearing
demand 67,825 0.92% $ 72,038 0.57% $ 74,042 0.47%
Savings 25,619 0.28% 22,236 0.30% 23,272 0.43%
Money market 209,634 1.52% 179,009 1.69% 175,968 1.75%
Time deposits 219,253 2.32% 139,753 2.90% 144,490 3.06%
Brokered money
market 2,826 0.70% 26,218 1.24% -- 0.00%
Brokered time
deposits 23,426 1.46% 21,908 3.76% 25,027 3.35%
---------------------------------------------------------------------
Total interest
bearing deposits 548,583 1.70% 461,162 1.89% 442,799 1.98%
---------------------------------------------------------------------
Federal funds
purchased -- 0.00% 1,402 1.42% 4,583 2.26%
Securities sold
under agreement
to repurchase -- 0.00% 2,642 1.20% 2,327 1.88%
Federal Home Loan
Bank borrowings 65,000 0.63% 83,565 2.19% 89,408 2.59%
Junior subordinated
debentures 13,403 4.08% 13,403 6.14% 13,403 5.46%
---------------------------------------------------------------------
Total borrowed funds 78,403 1.22% 101,012 2.68% 109,721 2.91%
---------------------------------------------------------------------
Total interest
bearing liabilities 626,986 1.64% 562,174 2.03% 552,520 2.17%
---------------------------------------------------------------------
Non interest
bearing demand 178,293 0.00% 153,432 0.00% 155,582 0.00%
---------------------------------------------------------------------
Total funding 805,279 1.28% 715,606 1.60% 708,102 1.69%
---------------------------------------------------------------------
Other liabilities 8,490 7,388 7,585
--------------------------------------------------------------
Total liabilities 813,769 722,994 715,687
--------------------------------------------------------------
Total shareholders'
equity 92,278 71,995 72,136
--------------------------------------------------------------
Total liabilities
and shareholders'
equity 906,047 $794,989 $787,823
--------------------------------------------------------------
Net interest
margin 4.34% 5.04% 5.18%
----- ----- -----
Nine Months Ended
------------------------------------------
AVERAGE BALANCES AND RATES 9/30/2009 9/30/2008
------------------------------------------
(dollars in thousands) Balance Yield/Rate Balance Yield/Rate
---------------------------------------------------------------------
Interest Earning Assets
Investments with other
banks $ 119 3.37% $ 246 3.80%
Federal funds sold 22,596 0.22% 6,855 2.53%
Investment securities -
taxable 59,614 4.66% 42,656 5.26%
Investment securities -
non taxable 19,763 4.34% 17,223 4.30%
Loans 705,187 6.31% 649,511 7.31%
---------------------------------------------------------------------
Total earning assets 807,279 5.97% 716,491 7.07%
---------------------------------------------------------------------
Allowance for loan losses (10,909) (7,120)
Other assets 70,288 65,028
----------------------------------------------------------
Total assets $ 866,658 $ 774,399
==========================================================
Interest Bearing
Liabilities
Interest bearing demand 64,524 0.72% $ 74,886 0.61%
Savings 23,849 0.21% 26,834 0.95%
Money market 186,921 1.51% 189,181 2.03%
Time deposits 182,771 2.49% 142,919 3.43%
Brokered money market 25,387 0.72% -- 0.00%
Brokered time deposits 29,886 1.67% 15,849 3.62%
---------------------------------------------------------------------
Total interest bearing
deposits 513,338 1.67% 449,669 2.23%
---------------------------------------------------------------------
Federal funds purchased 251 1.07% 4,079 2.69%
Securities sold under
agreement to repurchase 870 0.15% 2,163 2.35%
Federal Home Loan Bank
borrowings 80,982 0.81% 74,637 2.64%
Junior subordinated
debentures 13,403 4.42% 13,403 5.85%
---------------------------------------------------------------------
Total borrowed funds 95,506 1.31% 94,282 3.09%
---------------------------------------------------------------------
Total interest bearing
liabilities 608,844 1.61% 543,951 2.38%
---------------------------------------------------------------------
Non interest bearing
demand 162,830 0.00% 150,890 0.00%
---------------------------------------------------------------------
Total funding 771,674 1.27% 694,841 1.86%
---------------------------------------------------------------------
Other liabilities 8,650 7,894
---------------------------------------------------------------------
Total liabilities 780,324 702,735
Total shareholders' equity 86,334 71,664
---------------------------------------------------------------------
Total liabilities and
shareholders' equity $ 866,658 $ 774,399
==========================================================
Net interest margin 4.75% 5.26%
========= =========
Additional Financial
Information
(dollar amounts in
thousands) For the Quarters Ended
-------------------------------------------
LOANS 9/30/2009 6/30/2009 12/31/2009 9/30/2008
---------------------------------------------------------------------
Real Estate Secured
Multi-family residential $ 17,323 $ 17,414 $ 16,206 $ 13,997
Residential 1 to 4 family 24,580 23,626 23,910 29,031
Home equity lines of
credit 29,189 29,049 26,409 22,247
Commercial 317,811 302,735 285,631 281,269
Farmland 9,842 9,639 10,723 10,630
Commercial
Commercial and industrial 166,618 171,208 157,674 151,323
Agriculture 14,819 14,231 13,744 13,059
Other 368 491 620 662
Construction
Single family residential 14,669 14,710 11,414 12,897
Single family residential
- Spec. 5,757 10,338 15,395 17,469
Tract 2,215 3,202 2,431 1,999
Multi-family 5,575 5,648 5,808 7,803
Hospitality 14,252 12,388 18,630 14,177
Commercial 22,997 17,215 21,484 25,624
Land 54,619 57,149 61,681 55,704
Installment loans to
individuals 8,863 8,428 7,851 7,889
All other loans (including
overdrafts) 370 383 536 620
---------------------------------------------------------------------
Total gross loans $ 709,867 $ 697,854 $ 680,147 $ 666,400
---------------------------------------------------------------------
Deferred loan fees 1,635 1,555 1,701 1,647
Allowance for loan losses 15,873 11,106 10,412 10,350
---------------------------------------------------------------------
Net loans $ 692,359 $ 685,193 $ 668,034 $ 654,403
---------------------------------------------------------------------
Loans held for sale $ 7,778 $ 11,692 $ 7,939 $ 2,955
Percentage Change Vs.
----------------------------------
LOANS 6/30/2009 12/31/2008 9/30/2008
---------------------------------------------------------------------
Real Estate Secured
Multi-family residential -0.5% 6.9% 23.8%
Residential 1 to 4 family 4.0% 2.8% -15.3%
Home equity lines of credit 0.5% 10.5% 31.2%
Commercial 5.0% 11.3% 13.0%
Farmland 2.1% -8.2% -7.4%
Commercial
Commercial and industrial -2.7% 5.7% 10.1%
Agriculture 4.1% 7.8% 13.5%
Other -25.0% -40.6% -44.3%
Construction
Single family residential -0.3% 28.5% 13.7%
Single family residential - Spec. -44.3% -62.6% -67.0%
Tract -30.8% -8.9% 10.8%
Multi-family -1.3% -4.0% -28.6%
Hospitality 15.0% -23.5% 0.5%
Commercial 33.6% 7.0% -10.3%
Land -4.4% -11.4% -1.9%
Installment loans to individuals 5.2% 12.9% 12.3%
All other loans (including
overdrafts) -3.5% -31.0% -40.4%
---------------------------------------------------------------------
Total gross loans 1.7% 4.4% 6.5%
---------------------------------------------------------------------
Deferred loan fees 5.2% -3.9% -0.7%
Allowance for loan losses 42.9% 52.4% 53.4%
---------------------------------------------------------------------
Net loans 1.0% 3.6% 5.8%
---------------------------------------------------------------------
Loans held for sale -33.5% -2.0% 163.2%
For the Quarters Ended
-------------------------------------------
ALLOWANCE FOR LOAN LOSSES 9/30/2009 6/30/2009 12/31/2009 9/30/2008
---------------------------------------------------------------------
Balance, beginning of
period $ 11,106 $ 10,429 $ 10,350 $ 8,128
Provision expense 9,756 2,700 6,000 3,200
Loans charged off
Commercial real estate 41 -- 35 --
Residential 1 to 4
family 304 -- 555 --
Commercial and industrial 503 942 2,998 282
Agriculture 1,909 -- -- --
Construction 397 415 914 717
Land 1,801 681 1,434 --
Other 42 4 5 34
---------------------------------------------------------------------
Total charge offs 4,997 2,042 5,941 1,033
---------------------------------------------------------------------
Recoveries of loans
previously charged off 8 19 3 55
---------------------------------------------------------------------
Balance, end of period $ 15,873 $ 11,106 $ 10,412 $ 10,350
---------------------------------------------------------------------
Net charge-offs $ 4,989 $ 2,023 $ 5,938 $ 978
Percentage Change Vs.
----------------------------------
ALLOWANCE FOR LOAN LOSSES 6/30/2009 12/31/2008 6/30/2008
---------------------------------------------------------------------
Balance, beginning of period 6.5% 7.3% 36.6%
Provision expense 261.3% 62.6% 204.9%
Loans charged off
Commercial real estate 100.0% 17.1% 100.0%
Residential 1 to 4 family -- -45.2% --
Commercial and industrial -46.6% -83.2% 78.4%
Agriculture 100.0% 100.0% 100.0%
Construction -4.3% -56.6% -44.6%
Land 164.5% 25.6% --
Other 950.0% 740.0% 23.5%
---------------------------------------------------------------------
Total charge offs 144.7% -15.9% 383.7%
---------------------------------------------------------------------
Recoveries of loans previously
charged off -57.9% 166.7% -85.5%
---------------------------------------------------------------------
Balance, end of period 42.9% 52.4% 53.4%
---------------------------------------------------------------------
Net charge-offs 146.6% -16.0% 410.1%
For the Quarters Ended
-------------------------------------------
NON-PERFORMING ASSETS 9/30/2009 6/30/2009 12/31/2009 9/30/2008
----------------------------------------------------------------------
Loans on non-accrual
status
Commercial real estate $ 5,747 $ 2,776 $ 1,961 $ 1,814
Residential 1-4 family 1,272 392 265 709
Home equity lines of
credit 320 320 320 --
Commercial 5,958 5,316 7,060 7,954
Agriculture 3,214 384 -- --
Construction 3,838 2,267 5,990 11,311
Land 18,993 511 2,720 590
Installment 51 132 11 12
---------------------------------------------------------------------
Total non-accruing
loans $ 39,393 $ 12,098 $ 18,327 $ 22,390
---------------------------------------------------------------------
Loans more than 90 days
delinquent, still
accruing 445 140 348 --
---------------------------------------------------------------------
Total non-performing
loans 39,838 12,238 18,675 22,390
---------------------------------------------------------------------
Other real estate owned
(OREO) 2,607 6,669 1,337 197
---------------------------------------------------------------------
Total non-performing
assets $ 42,445 $ 18,907 $ 20,012 $ 22,587
---------------------------------------------------------------------
Percentage Change Vs
----------------------------------
NON-PERFORMING ASSETS 6/30/2009 12/31/2008 6/30/2008
---------------------------------------------------------------------
Loans on non-accrual status
Commercial real estate 107.0% 193.1% 216.8%
Residential 1-4 family 224.5% 380.0% 79.4%
Home equity lines of credit 0.0% 0.0% 100.0%
Commercial 12.1% -15.6% -25.1%
Agriculture 737.0% 100.0% 100.0%
Construction 69.3% -35.9% -66.1%
Land 3616.8% 598.3% 3119.2%
Installment -61.4% 363.6% 325.0%
---------------------------------------------------------------------
Total non-accruing loans 225.6% 114.9% 75.9%
---------------------------------------------------------------------
Loans more than 90 days delinquent,
still accruing 217.9% 27.9% 100.0%
---------------------------------------------------------------------
Total non-performing loans 225.5% 113.3% 77.9%
---------------------------------------------------------------------
Other real estate owned (OREO) -60.9% 95.0% 1223.4%
---------------------------------------------------------------------
Total non-performing assets 124.5% 112.1% 87.9%
---------------------------------------------------------------------
For the Quarters Ended
-------------------------------------------
DEPOSITS 9/30/2009 6/30/2009 12/31/2009 9/30/2008
---------------------------------------------------------------------
Non-interest bearing
demand $ 181,670 $ 178,600 $ 147,044 $ 155,267
---------------------------------------------------------------------
Interest-bearing demand 70,092 64,723 72,952 71,601
Regular savings accounts 26,088 24,792 21,835 22,484
Money market accounts 231,005 190,661 173,199 175,659
Brokered money market
funds 2,001 10,002 28,502 --
---------------------------------------------------------------------
Total interest-bearing
transaction & savings
accounts 329,186 290,178 296,488 269,744
---------------------------------------------------------------------
Time deposits 227,670 206,708 139,872 144,011
Brokered time deposits 15,003 28,503 20,117 20,229
---------------------------------------------------------------------
Total deposits $ 753,529 $ 703,989 $ 603,521 $ 589,251
---------------------------------------------------------------------
Percentage Change Vs.
----------------------------------
DEPOSITS 6/30/2009 12/31/2008 6/30/2008
---------------------------------------------------------------------
Non-interest bearing demand 1.7% 23.5% 17.0%
---------------------------------------------------------------------
Interest-bearing demand 8.3% -3.9% -2.1%
Regular savings accounts 5.2% 19.5% 16.0%
Money market accounts 21.2% 33.4% 31.5%
Brokered money market funds -80.0% -93.0% 100.0%
---------------------------------------------------------------------
Total interest-bearing
transaction & savings accounts 13.4% 11.0% 22.0%
---------------------------------------------------------------------
Time deposits 10.1% 62.8% 58.1%
Brokered time deposits -47.4% -25.4% -25.8%
---------------------------------------------------------------------
Total deposits 7.0% 24.9% 27.9%
---------------------------------------------------------------------
Nine Months
Three Months Ended Ended
------------------------------- ---------------
PROFITABILITY/ 9/30/ 6/30/ 12/31/ 9/30/ 9/30/ 9/30/
PERFORMANCE RATIOS 2009 2009 2008 2008 2009 2008
---------------------------------------------------------------------
Operating efficiency 95.12% 70.02% 66.43% 64.40% 77.02% 67.55%
Operating
efficiency(1) 73.81% 64.94% 66.03% 64.40% 67.96% 67.55%
Return on average
equity -22.54% 2.20% -6.93% 2.94% -5.63% 5.41%
Return on average
common equity -30.41% 1.41% -6.93% 2.94% -7.82% 5.41%
Return on average
tangible equity -25.93% 2.54% -8.65% 3.71% -6.59% 6.90%
Return on average
tangible common
equity -36.44% 1.69% -8.65% 3.71% -9.46% 6.90%
Return on average
assets -2.30% 0.23% -0.63% 0.27% -0.56% 0.50%
Non interest income
to average assets 0.70% 0.69% 0.75% 0.76% 0.73% 0.81%
Non interest expense
to average assets 4.49% 3.71% 3.61% 3.59% 3.96% 3.83%
Net interest income
to average assets 4.06% 4.56% 4.68% 4.81% 4.42% 4.87%
Non interest income
to total net revenue 12.79% 13.23% 13.81% 13.71% 12.45% 14.29%
Interest rate yield
on interest earnings
assets 5.56% 6.12% 6.58% 6.82% 5.97% 7.07%
Cost of interest
bearing liabilities 1.70% 1.65% 2.03% 2.17% 1.67% 2.38%
Cost of funds 1.28% 1.27% 1.60% 1.69% 1.27% 1.86%
Net interest margin 4.34% 4.91% 5.04% 5.18% 4.75% 5.26%
ASSET QUALITY RATIOS
Non-performing loans
to total gross loans 5.61% 1.75% 2.75% 3.36%
Non-performing loans
as a % of ALLL 250.98% 110.19% 179.36% 216.33%
Non-performing loans
as a % of total
assets 4.30% 1.39% 2.32% 2.84%
Non-performing loans
to primary capital 45.38% 13.40% 26.67% 31.56%
Non-performing assets
to total assets 4.58% 2.15% 2.48% 2.87%
Allowance for loan
losses to total
gross loans 2.24% 1.59% 1.53% 1.55%
Net charge-offs to
average loans
outstanding 0.70% 0.29% 0.88% 0.15%
CAPITAL RATIOS
Company
Leverage ratio 9.30% 10.87% 8.90% 9.01%
Tier I Risk-Based
Capital Ratio 10.52% 11.95% 9.37% 9.67%
Total Risk-Based
Capital Ratio 11.78% 13.20% 10.62% 10.92%
Bank
Leverage ratio 8.76% 10.33% 8.66% 8.78%
Tier I Risk-Based
Capital Ratio 9.86% 11.23% 9.10% 9.41%
Total Risk-Based
Capital Ratio 11.12% 12.49% 10.36% 10.66%
(1) Ratio does not include the following one time items; OREO related
expenses of $1,702 and $2,039 for the three and nine month periods
ending September 30, 2009, $193 for the three months ending June 30,
2009 and $44 for the three months ending December 31, 2008, loss on
sale of OREO properties of $200 and $331 for the three and nine month
periods ending September 30, 2009, $104 for the three months ending
June 30, 2009 and FDIC special assessment fee of $594 and $982 for the
three and nine month periods ending September 30, 2009 and $388 for
the three months ending June 30, 2009.
Contact:
Heritage Oaks Bancorp
Lawrence P. Ward, CEO
Margaret Torres, CFO
805-369-5200
Related Headlines
- HERITAGE OAKS BANCORP Financials - EDGAR Online Financials
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- Heritage Oaks Bancorp Reports Third Quarter 2009 Financial Results - GlobeNewswire
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