Heritage Commerce Corp Files 2023 Annual Report on Form 10-K

TL;DR

<b>Heritage Commerce Corp has filed its 2023 10-K report detailing its financial performance and operations for the fiscal year ending December 31, 2023.</b>

AI Summary

HERITAGE COMMERCE CORP (HTBK) filed a Annual Report (10-K) with the SEC on March 11, 2024. Heritage Commerce Corp filed its 2023 Form 10-K on March 11, 2024. The filing covers the fiscal year ending December 31, 2023. The company's principal business is commercial banking. Its principal executive offices are located at 224 Airport Parkway, San Jose, CA. The filing includes detailed financial information and risk factors.

Why It Matters

For investors and stakeholders tracking HERITAGE COMMERCE CORP, this filing contains several important signals. The 10-K filing provides a comprehensive overview of Heritage Commerce Corp's financial health, operational activities, and strategic direction for the past fiscal year, crucial for investors and stakeholders to assess performance and future prospects. This annual report is a key regulatory requirement, offering transparency into the company's financial position, risks, and management's outlook, which influences investor confidence and market valuation.

Risk Assessment

Risk Level: — HERITAGE COMMERCE CORP shows moderate risk based on this filing. The company operates in the commercial banking sector, which is subject to significant regulatory oversight and economic fluctuations that can impact profitability and asset quality.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to understand Heritage Commerce Corp's performance and outlook for the upcoming fiscal year.

Key Numbers

• 2023 — Fiscal Year End (CONFORMED PERIOD OF REPORT)
• 2024-03-11 — Filing Date (FILED AS OF DATE)
• 6022 — SIC Code (STANDARD INDUSTRIAL CLASSIFICATION)
• CA — State of Incorporation (STATE OF INCORPORATION)
• 770469558 — IRS Number (IRS NUMBER)

Key Players & Entities

• HERITAGE COMMERCE CORP (company) — FILER
• 2023 (date) — CONFORMED PERIOD OF REPORT
• 2024-03-11 (date) — FILED AS OF DATE
• 2023-12-31 (date) — FISCAL YEAR END
• 224 AIRPORT PARKWAY (address) — BUSINESS ADDRESS
• SAN JOSE (city) — BUSINESS ADDRESS
• CA (state) — BUSINESS ADDRESS
• 95110 (zip) — BUSINESS ADDRESS

FAQ

Risk Factors

• Regulatory Compliance [medium — regulatory]: The company is subject to extensive regulation by federal and state banking authorities, which can impact its operations and profitability.
• Economic Conditions [medium — market]: Changes in economic conditions, including interest rate fluctuations and the overall economic climate, can affect the company's financial performance and the credit quality of its loan portfolio.
• Cybersecurity Risks [medium — operational]: The company faces risks related to data security and cyberattacks, which could disrupt operations and lead to financial losses.
• Credit Risk [medium — financial]: The company is exposed to credit risk through its lending activities, and adverse changes in borrower creditworthiness could lead to loan losses.
• Litigation and Legal Proceedings [low — legal]: The company may be subject to various legal proceedings that could result in significant financial liabilities.

Industry Context

Heritage Commerce Corp operates within the commercial banking industry, a sector characterized by its sensitivity to interest rate changes, regulatory scrutiny, and economic cycles.

Regulatory Implications

As a commercial bank, Heritage Commerce Corp is subject to regulations from entities such as the Federal Reserve, the FDIC, and state banking authorities, which govern its capital requirements, lending practices, and overall operations.

What Investors Should Do

1. Review the company's financial statements for detailed revenue, net income, and asset/liability figures.
2. Analyze the risk factors section to understand potential challenges and their impact on the company's operations.
3. Compare key financial metrics from this 10-K with previous filings to identify trends and performance changes.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.
• 2024-03-11: Filing Date — Date the 10-K was officially filed with the SEC.

Year-Over-Year Comparison

This filing represents the annual report for the fiscal year ending December 31, 2023, providing updated financial data and disclosures compared to previous filings.

Key Financial Figures

• $8.28 — upon the closing price on that date of $8.28 per share as reported on the Nasdaq Glo
• $5.19 b — 31, 2023, we had consolidated assets of $5.19 billion, loans of $3.35 billion, deposits
• $3.35 b — dated assets of $5.19 billion, loans of $3.35 billion, deposits of $4.38 billion and sh
• $4.38 billion — on, loans of $3.35 billion, deposits of $4.38 billion and shareholders' equity of $672.9 mill
• $672.9 million — .38 billion and shareholders' equity of $672.9 million. When we use "we", "us", "our" or the

Filing Documents

• htbk-20231231x10k.htm (10-K) — 8930KB
• htbk-20231231xex10d8.htm (EX-10.8) — 300KB
• htbk-20231231xex10d9.htm (EX-10.9) — 310KB
• htbk-20231231xex10d10.htm (EX-10.10) — 302KB
• htbk-20231231xex10d11.htm (EX-10.11) — 299KB
• htbk-20231231xex23d1.htm (EX-23.1) — 5KB
• htbk-20231231xex31d1.htm (EX-31.1) — 12KB
• htbk-20231231xex31d2.htm (EX-31.2) — 12KB
• htbk-20231231xex32d1.htm (EX-32.1) — 8KB
• htbk-20231231xex32d2.htm (EX-32.2) — 8KB
• htbk-20231231xex97d1.htm (EX-97.1) — 37KB
• htbk-20231231x10k005.jpg (GRAPHIC) — 10KB
• htbk-20231231x10k006.jpg (GRAPHIC) — 8KB
• htbk-20231231x10k007.jpg (GRAPHIC) — 18KB
• htbk-20231231x10k008.jpg (GRAPHIC) — 80KB
• htbk-20231231x10k009.jpg (GRAPHIC) — 14KB
• htbk-20231231x10k010.jpg (GRAPHIC) — 55KB
• 0001558370-24-002846.txt (&nbsp;) — 34776KB
• htbk-20231231.xsd (EX-101.SCH) — 121KB
• htbk-20231231_cal.xml (EX-101.CAL) — 160KB
• htbk-20231231_def.xml (EX-101.DEF) — 551KB
• htbk-20231231_lab.xml (EX-101.LAB) — 1034KB
• htbk-20231231_pre.xml (EX-101.PRE) — 900KB
• htbk-20231231x10k_htm.xml (XML) — 8774KB

Business

Business 6 Item 1A.

Risk Factors

Risk Factors 28 Item 1B. Unresolved Staff Comments 55 Item 1C. Cybersecurity 55 Item 2.

Properties

Properties 57 Item 3.

Legal Proceedings

Legal Proceedings 60 Item 4. Mine Safety Disclosures 60 PART II. Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 60 Item 6. [RESERVED] 61 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 62 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 98 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 98 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 98 Item 9A.

Controls and Procedures

Controls and Procedures 98 Item 9B. Other Information 99 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 99 PART III. Item 10. Directors, Executive Officers and Corporate Governance 100 Item 11.

Executive Compensation

Executive Compensation 100 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 100 Item 13. Certain Relationships and Related Transactions and Director Independence 100 Item 14. Principal Accountant Fees and Services 101 PART IV. Item 15. Exhibits and Financial Statement Schedules 101 Item 16. Form 10-K Summary 103

Financial Statements

Financial Statements 105 2 Table of Contents Cautionary Note Regarding Forward-Looking Statements This Annual Report on Form 10-K contains various statements that may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, Rule 3b-6 promulgated thereunder and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These forward-looking statements often can be, but are not always, identified by the use of words such as "assume," "expect," "intend," "plan," "project," "believe," "estimate," "predict," "anticipate," "may," "might," "should," "could," "goal," "potential" and similar expressions. We base these forward-looking statements on our current expectations and projections about future events, our assumptions regarding these events and our knowledge of facts at the time the statements are made. Forward-looking statements may include, among other things, statements relating to our projected growth, anticipated future financial performance, management's long-term performance goals and operational strategies, the performance of our loan and investment portfolios, as well as statements relating to the anticipated effects of those conditions, events and developments on the Company's financial condition and results of operations. These forward looking statements are subject to various risks and uncertainties that may be outside our control and our actual results could differ materially from our projected results. Risks and uncertainties that could cause our financial performance to differ materially from our goals, plans, expectations and projections expressed in forward-looking stateme

BUSINESS

ITEM 1. BUSINESS General Heritage Commerce Corp, a California corporation organized in 1997, is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. We provide a wide range of banking services through Heritage Bank of Commerce, our wholly-owned subsidiary, which is a California state-chartered bank headquartered in San Jose, California and has been conducting business since 1994. Heritage Bank of Commerce is a multi-community independent bank that offers a full range of commercial banking services to small and medium-sized businesses and their owners, managers and employees. We operate through seventeen full service branch offices located entirely in the general San Francisco Bay Area of California in the counties of Alameda, Contra Costa, Marin, San Benito, San Francisco, San Mateo, and Santa Clara. Our market includes the headquarters of a number of technology based companies in the region commonly known as "Silicon Valley." Our lending activities are diversified and include commercial, real estate, construction and land development, consumer and Small Business Administration ("SBA") guaranteed loans. We generally lend in markets where we have a physical presence through our branch offices. We attract deposits throughout our market area with a customer-oriented product mix, competitive pricing, and convenient locations. We offer a wide range of deposit products for business banking and retail markets. We offer a multitude of other products and services to complement our lending and deposit services. In addition, Bay View Funding provides factoring financing throughout the United States. As a bank holding company, Heritage Commerce Corp is subject to the supervision of the Board of Governors of the Federal Reserve System (the "Federal Reserve"). We are required to file with the Federal Reserve reports and other information regarding our business operations and the business operations of our subsidiaries. As a California c

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View this 10-K filing on SEC EDGAR