Parent Company only Condensed Financial Information

12 Months Ended

Dec. 31, 2018

Parent Company only Condensed Financial Information

Parent Company only Condensed Financial Information

22) Parent Company only Condensed Financial Information

The condensed financial statements of Heritage Commerce Corp (parent company only) are as follows:

Condensed Balance Sheets

	December 31,
	2018		2017
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	21,358	$	22,940
Investment in subsidiary bank		384,516		286,770
Other assets		1,194		916
Total assets	$	407,068	$	310,626
Liabilities and Shareholders' Equity
Subordinated debt, net of issuance costs		39,369		39,183
Other liabilities		233		204
Shareholders' equity		367,466		271,239
Total liabilities and shareholders' equity	$	407,068	$	310,626

Condensed Statements of Operations

	Year Ended December 31,
	2018		2017		2016
	(Dollars in thousands)
Dividend from subsidiary bank	$	17,000	$	16,000	$	18,000
Other income		—		114		—
Interest expense		(2,315)		(1,394)		(11)
Other expenses		(3,030)		(2,270)		(2,568)
Income before income taxes and equity in net income of subsidiary bank		11,655		12,450		15,421
Equity in undistributed net income of subsidiary bank:
Undistributed net income of subsidiary bank		22,161		10,078		10,897
Income tax benefit		1,515		1,300		1,063
Net income		35,331		23,828		27,381
Dividends and discount accretion on preferred stock		—		—		(1,512)
Net income available to common shareholders	$	35,331	$	23,828	$	25,869

Condensed Statements of Cash Flows

	Year Ended December 31,
	2018		2017		2016
	(Dollars in thousands)
Cash flows from operating activities:
Net Income	$	35,331	$	23,828	$	27,381
Adjustments to reconcile net income to net cash provided by operations:
Amortization of restricted stock award, net		1,109		912		479
Equity in undistributed net income of subsidiary bank		(22,161)		(10,078)		(10,897)
Net change in other assets and liabilities		(64)		224		(109)
Net cash provided by operating activities		14,215		14,886		16,854
Cash flows from financing activities:
Net change in purchased funds and other short-term borrowings		—		—		(3,000)
Equity investment in subsidiary bank		—		(20,000)		—
Payment of cash dividends		(18,464)		(15,238)		(13,627)
Proceeds from issuance of subordinated debt, net of issuance costs		—		39,073		—
Proceeds from exercise of stock options		2,667		1,368		938
Net cash provided by (used in) financing activities		(15,797)		5,203		(15,689)
Net increase (decrease) in cash and cash equivalents		(1,582)		20,089		1,165
Cash and cash equivalents, beginning of year		22,940		2,851		1,686
Cash and cash equivalents, end of year	$	21,358	$	22,940	$	2,851