Heritage Commerce Corp Reports First Quarter 2025 Financial Results

Core Viewpoint - Heritage Commerce Corp reported a solid financial performance for Q1 2025, with a 9% increase in profitability compared to the previous quarter, driven by improved net interest margins and strong expense control [3][4]. Financial Highlights - Net income for Q1 2025 was $11.6 million, or $0.19 per share, representing a 9% increase from $10.6 million and $0.17 per share in Q4 2024, and a 14% increase from $10.2 million and $0.17 per share in Q1 2024 [2][4][16]. - Total revenue was $46.1 million, a decrease of 1% from the previous quarter but an increase of 9% year-over-year [4][11]. - Pre-Provision Net Revenue (PPNR) was $16.6 million, up from $16.1 million in Q4 2024 and $14.6 million in Q1 2024 [4][17]. - The efficiency ratio improved to 63.96% from 65.35% in Q4 2024, indicating better cost management [4][18]. Financial Condition - Total assets decreased by 2% to $5.5 billion compared to $5.6 billion at the end of Q4 2024, but increased by 5% from $5.3 billion year-over-year [20]. - Loans held-for-investment remained flat at $3.5 billion, with a year-over-year increase of 5% [25]. - Total deposits decreased by 3% to $4.7 billion from $4.8 billion at the end of Q4 2024, but increased by 5% from $4.4 billion year-over-year [28]. - Total shareholders' equity increased to $696 million, up from $689.7 million at the end of Q4 2024 [30]. Credit Quality - The provision for credit losses on loans was $274,000, significantly lower than $1.3 million in Q4 2024 [10][34]. - Nonperforming assets (NPAs) decreased to $6.3 million, down from $7.7 million at the end of Q4 2024 [37]. - The allowance for credit losses on loans was $48.3 million, representing 1.38% of total loans [35]. Investment Activities - The company purchased $151.8 million in investment securities during Q1 2025, with a book yield of 4.86% [22]. - Investment securities available-for-sale totaled $371 million, compared to $256.3 million at the end of Q4 2024 [21]. Key Performance Metrics - The FTE net interest margin was 3.39%, an increase from 3.32% in Q4 2024 [9][13]. - Return on average tangible assets and on tangible common equity were 0.88% and 9.09%, respectively, compared to 0.78% and 8.25% in the previous quarter [13][14].