Heritage Oaks Bancorp this announced its results for the third quarter of 2012.
Third-quarter net income was $6.4 million, $4.5 million more than the second quarter of 2012 and $4.3 million higher than the third quarter of 2011. Included in third-quarter earnings is the reversal of the company’s remaining deferred tax asset valuation reserve of $4.1 million.
Total deposits grew $21.1 million from the second quarter, of which $17.5 million was growth in non-interest bearing demand deposits. Total deposits grew $68.8 million or 11.6 percent from the fourth quarter of 2011.
Gross loans increased $14.7 million from the second quarter, marking the second consecutive quarter of loan growth for the company.
Provision for loan losses was $1.3 million in the third quarter, down $1.8 million from the second quarter. The allowance for loan losses was 2.65 percent of total loans at Sept. 30.
On Sept. 27, the company announced it entered into a definitive agreement to acquire the Morro Bay branch of Coast National Bank and approximately $30 million of related branch deposits. This transaction is expected to close by year-end 2012, pending regulatory approval.
In early October, a $5 million payoff was received against a loan that was included in classified and non-accrual loans as of Sept. 30. This transaction will be reflected as a $3.9 million reduction in classified and non-accrual loans and a $1.1 million recovery to the allowance for loan losses in the fourth quarter of 2012.
— Scott Hanning is an internal communications writer for Heritage Oaks Bank.