Shareholder Announcements

Annual Shareholders Meeting

May 4, 2017

Heritage Bank Main Branch, 2330 S. Virginia St. Reno

Message to Shareholders

We are happy to say that Heritage Bank of Nevada continues to be Northern Nevada’s premier and only community bank headquartered in our market. With over 21 years of providing service to businesses in the area, Heritage Bank continues to assist our customers with the personalized service that only a locally-based community bank can provide. As a community bank, we remain involved in and supportive of the activities and organizations that support our community. 

This year Heritage Bank has once again been awarded the prestigious honor of being named the SBA Lender of the Year in Northern Nevada.  This is the sixth year in a row that the Nevada State Development Corporation has named Heritage Bank the number one SBA 504 lender in Northern Nevada. This award reflects Heritage Bank’s continued support of businesses in our market. 

As the largest state chartered bank in all of Nevada, we continue to build on our excellent reputation. Our customers know that we will respond to their banking needs with fair and accurate information delivered by knowledgeable and professional staff. In 2016, we continued to build on our excellent team of banking professionals with the addition of highly experienced lenders, as well as branch and sales development managers.  The new additions to the Heritage team were selected based on their ability to build relationships and increase sales while providing outstanding customer service to every customer. 

Refreshed customer service training, along with customer feedback, has improved our service levels throughout the bank to extraordinary levels. We want to continue to improve our customers’ experience when visiting our branches. In addition, we have continued to offer new and innovative products and services to help our customers, and to offer new ways to increase their protection against fraud attempts. 

The bank had an outstanding year in 2016. It proved to be another year of record profit as we continued to manage our overhead expense. As a result, we were able to increase our profitability by 12%, improving our basic earnings per share from $8.51 per share in 2015 to $9.74 in 2016.  

Our credit quality continued to improve along with the Northern Nevada’s strengthening economy.  In 2016, we saw recoveries net of charge offs of $153,000. In addition, we were able to maintain a 1.7% allowance for future loan losses for year-end 2016, well above the peer level of 1.3%. 

Total deposits grew by 22% from $534 million at year-end 2015, to $652 million at year-end 2016 with the growth continuing to be in core deposits. Net loan growth continues to be strong at 13%, increasing from $449 million at year-end 2015 to $506 million at year-end 2016. 

Our increased profitability enabled us to continue our stock buy-back program. In 2016, the Board of Directors authorized $4 million for the program. The stock buy-back program has been in existence since 2006 and enables the bank to provide liquidity for shareholders. During 2016, we were able to repurchase 49,139 shares, bringing the total repurchased to-date at 481,585 shares or approximately 28% of the shares issued. With our current capital levels exceeding regulatory requirements, we anticipate continuing the stock repurchase program in 2017. 

Looking forward, we are very optimistic about what the future of Northern Nevada holds for Heritage Bank, our customers and our community. We are well positioned to take full advantage of the tremendous economic growth that is forecast for Northern Nevada. With the area’s current surge in growth of new businesses and industries, we are ready to embrace and support that growth in the market areas we serve. 

As we continue to grow, we will remain focused on providing an outstanding banking experience for our customers and a work environment in which our employees can be proud. 

As always, we appreciate our team of employees, our customers, our stockholders, and our Board of Directors who continue to support the goals of Heritage Bancorp and our subsidiary Heritage Bank of Nevada.

Stanley Wilmoth                                              Robert Cashell, Jr.
President and CEO                                              Chairman of the Board