Heritage Oaks Bancorp (HEOP) has reported 4.52 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $4.18 million, or $0.12 a share in the quarter, compared with $4 million, or $0.12 a share for the same period last year. Revenue during the quarter grew 7.54 percent to $19.57 million from $18.20 million in the previous year period. Net interest income for the quarter rose 5.42 percent over the prior year period to $16.23 million. Non-interest income for the quarter rose 19.17 percent over the last year period to $3.34 million.
Net interest margin contracted 8 basis points to 3.50 percent in the quarter from 3.58 percent in the last year period. Efficiency ratio for the quarter improved to 64.44 percent from 67.81 percent in the previous year period. A decline in efficiency ratio indicates a rise in profitability.
“Our earnings for the third quarter were supported by an increase in non-interest income attributable to strong levels of customer swap fee income, and mortgage banking revenue, as our customers took advantage of the decline in long-term interest rates,” stated Simone Lagomarsino, President and Chief Executive Officer of Heritage Oaks Bancorp. Ms. Lagomarsino continued, “We also continued to grow the deposit and loan portfolios, although loan growth was subdued from the pay-off of two large construction loans due to the early completion of projects, and due to the seasonal decline in agribusiness line utilization. Our loan pipeline remains strong going into the fourth quarter, and we continue to anticipate long-term annual loan growth in the low double digits.”
Liabilities outpace assets growth
Total assets stood at $1,988.31 million as on Sep. 30, 2016, up 6.10 percent compared with $1,873.92 million on Sep. 30, 2015. On the other hand, total liabilities stood at $1,773.02 million as on Sep. 30, 2016, up 6.27 percent from $1,668.47 million on Sep. 30, 2015. Loans outpace deposit growth
Net loans stood at $1,323.91 million as on Sep. 30, 2016, up 11.40 percent compared with $1,188.39 million on Sep. 30, 2015. Deposits stood at $1,631.35 million as on Sep. 30, 2016, up 3.79 percent compared with $1,571.77 million on Sep. 30, 2015.
Investments stood at $456.46 million as on Sep. 30, 2016, up 5.48 percent or $23.71 million from year-ago. Shareholders equity stood at $215.28 million as on Sep. 30, 2016, up 4.78 percent or $9.82 million from year-ago.
Return on average assets moved down 2 basis points to 0.84 percent in the quarter from 0.86 percent in the last year period. At the same time, return on average equity decreased 4 basis points to 7.74 percent in the quarter from 7.78 percent in the last year period.
Credit quality improves
Heritage Oaks Bancorp recorded an improvement in credit quality during the quarter. Nonperforming assets moved down 51.03 percent or $5.28 million to $5.06 million on Sep. 30, 2016 from $10.34 million on Sep. 30, 2015. Nonperforming assets to total loans was 0.36 percent in the quarter, down from 0.83 percent in the last year period. Meanwhile, nonperforming assets to total assets was 0.25 percent in the quarter, down from 0.55 percent in the last year period. Book value per share was $6.29 for the quarter, up 5.18 percent or $0.31 compared to $5.98 for the same period last year.
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