- Net income for Heritage Commerce Corp (HTBK, Financial) increased by 9% quarter-over-quarter and 14% year-over-year to $11.6 million in Q1 2025.
- The net interest margin improved to 3.39% from 3.32% in the previous quarter.
- Despite a 3% quarter-over-quarter decrease in total deposits to $4.7 billion, the efficiency ratio improved to 63.96%.
Heritage Commerce Corp (HTBK) reported a net income of $11.6 million, or $0.19 per share, for the first quarter of 2025, marking a 9% increase over the previous quarter and a 14% rise from the same period last year. The company's strong performance is attributed to an improved net interest margin and enhanced asset quality.
The bank's total revenue for the quarter was $46.1 million, and it achieved a pre-provision net revenue of $16.6 million. The efficiency ratio saw a notable improvement, falling to 63.96% from 65.35% in the prior quarter, showcasing effective expense management.
Total assets stood at $5.5 billion, while loans held-for-investment were stable at $3.5 billion. However, total deposits saw a 3% decrease, amounting to $4.7 billion. Despite the seasonal decline in deposits, the company maintained robust capital ratios, with a common equity tier 1 ratio of 13.6% and a total capital ratio of 15.9%.
Asset quality continued to improve, as evidenced by a decrease in nonperforming assets, which accounted for 0.11% of total assets compared to 0.14% in the previous quarter. The provision for credit losses was significantly reduced to $274,000 from the earlier $1.3 million.
Looking forward, Heritage Commerce Corp anticipates continued positive trends in net interest margin, loan and deposit growth, and expense management, positioning the company for sustained strong financial performance throughout the year 2025.
