Heritage Commerce Corp (NASDAQ: HTBK) has reported its financial results for the fourth quarter of 2024, showcasing robust loan and deposit growth. The company announced that its net income for the fourth quarter of 2024 was $10.6 million, compared to $10.5 million for the third quarter of 2024 and $13.3 million for the fourth quarter of 2023. For the year ended December 31, 2024, net income was $40.5 million, compared to $64.4 million for the year ended December 31, 2023.
The deposit balances grew by 2% over the prior quarter and 10% year-over-year. Additionally, the loan growth picked up during the fourth quarter, resulting in a 2% increase from the prior quarter and a 4% increase year-over-year.
The net interest income increased 11% to $44.2 million for the fourth quarter of 2024 compared to $39.9 million for the third quarter of 2024. The fully tax equivalent net interest margin also improved to 3.34% for the fourth quarter of 2024 from 3.17% for the third quarter of 2024. However, for the year ended December 31, 2024, the net interest income decreased 11% to $163.6 million, compared to $183.2 million for the year ended December 31, 2023.
The provision for credit losses on loans increased significantly to $1.3 million for the fourth quarter of 2024, compared to a $153,000 provision for credit losses on loans for the third quarter of 2024, and a provision for credit losses on loans of $289,000 for the fourth quarter of 2023. For the year ended December 31, 2024, there was a provision for credit losses on loans of $2.1 million, compared to a $749,000 provision for credit losses on loans for the year ended December 31, 2023.
Total noninterest expense for the fourth quarter of 2024 increased to $30.3 million, compared to $27.6 million for the third quarter of 2024, primarily due to one-time personnel related expenses and legal fees of approximately $1.1 million, higher professional fees, homeowner association vendor payments, and information technology related expenses. The efficiency ratio was 65.35% for the fourth quarter of 2024, compared to 65.37% for the third quarter of 2024, and 57.62% for the fourth quarter of 2023. The full-time equivalent employees were 355 at December 31, 2024, compared to 353 at September 30, 2024, and 349 at December 31, 2023.
Income tax expense was $4.1 million for the fourth quarter of 2024, compared to $3.9 million for the third quarter of 2024, and $5.1 million for the fourth quarter of 2023. The effective tax rate for the fourth quarter of 2024 was 27.9%, compared to 27.3% for the third quarter of 2024, and 27.8% for the fourth quarter of 2023. For the year ended December 31, 2024, income tax expense was $16.1 million, compared to $26.0 million for the year ended December 31, 2023. The effective tax rate for the year ended December 31, 2024, was 28.5%. Following these announcements, the company's shares moved 4.9%, and are now trading at a price of $9.64. Check out the company's full 8-K submission here.
