Heritage Oaks Bancorp Reports Second Quarter 2013 Results - 7/29/13

(PASO ROBLES, CA) -- Heritage Oaks Bancorp ("Heritage Oaks" or the "Company") (Nasdaq:HEOP), a bank holding company and parent of Heritage Oaks Bank (the "Bank"), reported net income of $2.7 million for the second quarter of 2013, compared with $1.9 million for the second quarter of 2012, and $3.7 million for the first quarter of 2013. For the first six months of 2013, net income was $6.4 million compared with $3.5 million for the same period in 2012.

Highlights

  • Period end loans grew to $746.6 million, up 12.5% compared with June 30, 2012. This growth was the direct result of the strategy implemented in 2012 to hire additional relationship managers to expand the agribusiness, commercial, and residential business lines.
  • Total deposits grew to $883.3 million at June 30, 2013, an increase of 5.9% compared with a year earlier. Non-interest bearing demand deposits grew 15% year-over-year, representing 32.5% of total deposits at June 30, 2013, resulting from our focus on building new and expanding existing client relationships.
  • Credit quality continued to improve as a result of ongoing enhancements to credit administration. Classified assets declined $11.9 million, or 19%, to $50.4 million, and non-performing assets declined $8.0 million, or 36%, at June 30, 2013 compared with a year earlier. Annualized net loan charge-offs for the second quarter of 2013 declined 296 basis points to a net recovery of 0.10% compared with net charge-offs of 2.86% for the second quarter of 2012. The Company had no other real estate owned at June 30, 2013.
  • Regulatory capital ratios improved to 12.6% and 17.0% for Tier 1 Leverage and Total Risk-Based Capital at June 30, 2013, respectively from 11.9% and 15.8% a year ago.
  • The Series A Preferred Stock that was issued to the U.S. Department of the Treasury as part of the Troubled Asset Relief Program—Capital Purchase Program ("TARP CPP") was repurchased on July 17, 2013, at par plus accrued dividends, or $21.2 million, through a one-time dividend from the Bank to the Company.
  • The Bank purchased a strategically located branch office building from Union Bank, N.A. in downtown San Luis Obispo, California in an effort to better serve our customers.

"We are pleased with our strong financial performance for the first half of 2013," said Simone Lagomarsino, President and Chief Executive Officer of Heritage Oaks Bancorp. "We believe our strong performance, in particular our loan and deposit growth, is reflective of our strategic decision to restructure our organization in 2012 by reducing back office costs and redeploying a portion of these cost savings to hire additional relationship bankers. These new team members are supporting our expansion into new geographic markets in Ventura County and deepening our penetration in existing markets, as well as expanding our product lines including agribusinesses and mortgage lending."

"We are excited to announce the purchase of a branch office building in downtown San Luis Obispo," said Ms. Lagomarsino. "Heritage Oaks Bank is the largest community bank in San Luis Obispo County and has the fifth largest market share overall in the County. Acquiring this branch location provides us with an outstanding location from which to serve our customers in the City of San Luis Obispo."

 "We are also pleased to have repurchased all of the Preferred Stock held by the U.S. Department of the Treasury," said Ms. Lagomarsino. "Our ability to repurchase these shares with internal resources reflects our overall financial strength and marks another major milestone in our return to financial health. The repurchase of the Preferred Stock will eliminate the dilutive effect of preferred dividends on our common shareholders."

Read the full press release on our Investor Relations website.