Heritage Oaks Bancorp Reports Third Quarter Profits; Sets Aside $3.2 Million Into Allowance for Loan Loss Provision; Remains Well Capitalized

Heritage Oaks Bancorp (HEOP:6.75, -0.50, -6.9%) , the parent company of Heritage Oaks Bank, today reported that following a $3.2 million provision for loan losses, it earned $534,000, or $0.07 per diluted share for the third quarter of 2008, compared to $1.6 million, or $0.23 per diluted share, in the third quarter a year ago. For the first nine months of 2008, net income was $2.9 million, or $0.37 per diluted share, compared to $4.9 million, or $0.70 per diluted share, in the first nine months of 2007. Earnings per share was impacted by the October 2007 acquisition of Business First National Bank of Santa Barbara, in which Heritage Oaks Bank issued 850,213 shares, resulting in an 12% increase in the number of average diluted shares outstanding compared to the third quarter of 2007.

"Our core business remains sound as is evidenced by our improving efficiency ratio," stated Lawrence P. Ward, President and CEO. "Although our increased provision for loan losses put a drag on earnings, our strong operating results allowed us to take a large provision while still remaining profitable. We will continue to move away from balance sheet growth and focus on asset quality and capital preservation, as we work through these credit quality issues." read more
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