Heritage Commerce Corp. of San Jose, Calif., recorded an increase in its classified assets — to $25.1 million from $12.6 million — in light of new information about a lending relationship.
The company also accordingly raised its allowance for loan losses by $202,000. For the fourth quarter of 2017, it is now recording a $291,000 credit provision for loan losses, instead of the previously reported $493,000. Net income for the period was $1.3 million, or 3 cents per share, instead of the $1.4 million, or 4 cents per share, earlier calculated.
The lending relationship in question had a total outstanding balance of $12.5 million at the end of 2017, and of $17.8 million as of March 1. Total loan commitments associated with the relationship amount to $22.4 million. The outstanding balances are expected to increase, before eventually decreasing this year.
Heritage Commerce is the holding company of Heritage Bank of Commerce, which had $2.84 billion in assets at the end of 2017. The company has a pending $44.2 million deal to acquire San Mateo, Calif.-based United American Bank.
