Kroll Bond Rating Agency Assigns BBB/K3 Senior Unsecured Debt & Short-Term Ratings to Heritage Commerce Corp

NEW YORK--()--Kroll Bond Rating Agency (KBRA) has assigned a senior unsecured debt rating of BBB, subordinated debt rating of BBB- and short-term rating of K3 to Heritage Commerce Corp (NASDAQ: HTBK, “Heritage”), a bank holding company headquartered in San Jose, California. In addition, KBRA has assigned a deposit rating of BBB+, senior unsecured debt rating of BBB+, and a short-term rating of K2 to its subsidiary, Heritage Bank of Commerce (“the Bank”). The outlook on all ratings is stable.

The ratings are supported by Heritage’s financial fundamentals as indicated by strong asset quality and healthy reserve coverage, above peer TCE ratio, stable returns and high net interest margin. In addition, Heritage’s steady revenue growth, improving efficiency and low cost of funds underpin the ratings. Ratings are constrained by Heritage’s spread-reliant earnings streams, earnings losses following the peak of the 2008 financial crisis, and relatively low overall market share, although market share is strong among community banks within Heritage’s footprint.

The ratings are based on KBRA’s Global Bank and Bank Holding Company Rating Methodology published on January 28, 2015.

Please use the following link to view the report: www.krollbondratings.com/show_report/3228

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Contacts

Analytical:
Kroll Bond Rating Agency
Ashley Phillips, 240-394-4150
Associate
aphillips@kbra.com
or
Christopher Whalen, 646-731-2366
Senior Managing Director
cwhalen@kbra.com
or
Joseph Scott, 646-731-2438
Senior Director
jscott@kbra.com
or
Follow us on Twitter!
@KrollBondRating

Contacts

Analytical:
Kroll Bond Rating Agency
Ashley Phillips, 240-394-4150
Associate
aphillips@kbra.com
or
Christopher Whalen, 646-731-2366
Senior Managing Director
cwhalen@kbra.com
or
Joseph Scott, 646-731-2438
Senior Director
jscott@kbra.com
or
Follow us on Twitter!
@KrollBondRating