Unassociated Document

Exhibit 99.1

Heritage Commerce Corp Earns $3.2 Million in Third Quarter 2007

San Jose, CA – November 1, 2007 — Heritage Commerce Corp (Nasdaq: HTBK), parent company of Heritage Bank of Commerce, today reported that improving asset quality and strong growth in loans and deposits contributed to a profit for the third quarter of 2007. Net income was $3.2 million, or $0.24 per diluted share, for the three months ended September 30, 2007, compared to $4.4 million, or $0.36 per diluted share, for the same quarter a year ago. For the first nine months of 2007, net income was $11.3 million, or $0.91 per diluted share, compared to $12.9 million, or $1.08 per diluted share, for the same period a year ago. The quarterly results reflect costs related to the acquisition of Diablo Valley Bank (DVB), costs associated with hiring new senior bankers, and the Company’s strategic shift from loan sales to retention of SBA loan production, which it announced last quarter.

“There was a lot of activity reflected in the quarterly results due to our expansion in the East Bay, which included opening a new branch office in Walnut Creek, hiring a number of senior bankers, and integrating Diablo Valley Bank. Additionally, we implemented our SBA lending division strategy change and rebuilt the SBA lending team,” said Walter Kaczmarek, President and Chief Executive Officer. “The continued improvement in asset quality is another highlight for the quarter, with a decline in non-performing loans and a sizable loan recovery in the quarter.”

The following items impacted the third quarter and year-to-date results:

¨	The DVB acquisition increased total common shares outstanding by 1.7 million compared to June 30, 2006, a 15% increase.

¨	The DVB acquisition resulted in a charge of $184,000 pre-tax, for the amortization of the mark-to-market purchase accounting adjustments of the loan and deposit portfolios. This cost is reflected in net interest income and reduced the net interest margin in the quarter by 6 basis points.

The DVB acquistion also resulted in an aggregate charge of $382,000 pre-tax, which included the core deposit intangible (CDI) amortization of $167,000, consulting agreement expense of $192,000, which expires on December 31, 2007, non-compete agreement expense of $20,000 and amortization of mark-to-market purchase accounting adjustments of the DVB building of $3,000.

¨	Compensation expense inccreased due to the DVB acquistion and front end costs associated with the addition of senior bankers for the Company's East Bay expansion and SBA team.

·	Third quarter one-time compensation expense for DVB employees who are no longer with the Company totaled $419,000 pre-tax.

·	Up front expenses associated with the hiring of new bankers for the East Bay expansion and SBA team totaled $467,000 in the third quarter of 2007.

¨	Gains from sale of loans dropped substantially, reflecting the strategic shift to retain SBA loan production. In the third quarter of 2007, gains on sale generated $60,000 in operating income. In the third quarter a year ago, the Company generated gains on sale of loans of $832,000.

¨	The tax provision for the third quarter included additional income tax expense of $181,000, due to preliminary findings from an audit by the State of California Franchise Tax Board.

Strong asset quality and a sizeable recovery from a previously charged-off loan produced a reverse provision for loan losses of $500,000 in the third quarter and $736,000 in the first nine months of 2007, compared to no provision in the third quarter and a reverse provision of $603,000 in the first nine months a year ago.

Third Quarter 2007 Financial Highlights:

¨	Credit quality improved on several metrrics

·	Nonperforming loans dropped to $2.9 million, or 0.30% of total loans, at September 30, 2007, compared to $5.8 million or 0.62% of total loans at June 30, 2007, and $3.0 million, or 0.42% of total loans a year ago.

·	Nonperforming assets totaled $3.4 million, or 0.25% of total assets at September 30, 2007, compared to $6.3 million, or 0.47% of total assets at June 30, 2007, and $3.0 million, or 0.28% of total assets a year ago.

·	Recoveries were $868,000, or 0.37% of average loans, for the third quarter of 2007, compared to net recoveries of $281,000, or 0.16% of average loans, for the third quarter of 2006.

¨	Commericial loans increased 6% in the quarter and 35% year-over-year, and now account for 40% of total loans.

¨	Deposits grew 26% year-over-year to $1.10 billion, reflecting the strong core deposit base acquired with DVB.

¨	The conversion of DVB's operating systems into Heritage Bank of Commerce's platform was sucessfully accomplished in August 2007.

Operating Results

Net interest income increased 8% to $13.8 million for the third quarter of 2007. Year to date net interest income grew 1% to $37.9 million. The Company’s mark-to-market purchase accounting adjustments on loan and deposit portfolios acquired from DVB reduced quarterly net interest income by $184,000. The amortization expense is expected to decline significantly, beginning in the fourth quarter of 2007.

The third quarter of 2007 net interest margin was 4.65%, down 46 basis points compared to 5.11% for the second quarter this year and 57 basis points from 5.22% in the third quarter a year ago. The Company’s net interest margin was reduced 6 basis points as a result of the mark-to-market purchase accounting adjustments on loan and deposit portfolios due to the DVB acquisition. 2007 year-to-date, the net interest margin decreased 11 basis points to 4.92% from 5.03% for the first nine months of 2006. The decrease in net interest margin was due to the higher yield on deposit accounts. As a result, the average interest rate on savings and money market deposits increased 43 basis points to 3.43% for the third quarter of 2007, from 3.00% for the second quarter of 2007.

Noninterest income was $1.6 million for the third quarter of 2007, compared to $2.3 million for both the immediate prior quarter and the third quarter of 2006. In the first nine months of 2007, noninterest income was $6.4 million, compared to $7.5 million in the first nine months a year ago. The net gain on sale of SBA loans was $60,000 in the third quarter of 2007, compared to $832,000 in the third quarter of 2006. The loans sold in the third quarter of 2007 were in the held for sale portfolio at June 30, 2007. Total gain on sale of loans was $1.8 million in the first nine months of 2007, compared to $3.2 million a year ago, which included $672,000 from the sale of specialty loans in January 2006.

Noninterest expense increased to $10.5 million for the third quarter of 2007, compared to $8.3 million for the third quarter of 2006 and $8.5 million for the second quarter of 2007. In the first nine months of 2007, noninterest expense increased to $27.3 million from $25.6 million for the first nine months a year ago. DVB related charges accounted for $382,000, including $167,000 for core deposit amortization, $192,000 for consulting agreement, $20,000 for non-compete agreement and $3,000 for mark-to-market purchase accounting adjustments for the DVB building. Compensation expense increased 25% from the second quarter to the third quarter and increased 18% compared to the third quarter a year ago. Compensation expense increased 5% for the first nine months of 2007 compared to a year ago. The increase in compensation expense was primarily due to the acquisition of DVB and the addition of senior bankers during the third quarter of 2007.

The tax provision for the third quarter of 2007 was 40% of pre-tax income, compared to approximately 35% for the second quarter of 2007. The increase in 2007 was primarily due to adjustments resulting from an audit of the Company’s California state tax returns by the State of California Franchise Tax Board.

The efficiency ratio was 68.2% in the third quarter of 2007, compared to 58.0% in the second quarter of 2007, and 55.0% in the third quarter of 2006. The efficiency ratio for the first nine months of 2007 increased to 61.6% from 56.7% a year ago.

The annualized returns on average assets (ROAA) and average equity (ROAE) for the third quarter of 2007 were 0.96% and 7.56%, compared to 1.61% and 14.43% for the quarter ended September 30, 2006, respectively. ROAA and ROAE for the first nine months of 2007 were 1.31% and 10.60%, compared to 1.57% and 14.76% for the first nine months of 2006, respectively. The annualized returns on average tangible assets (ROATA) and average tangible equity (ROATE) for the third quarter of 2007 were 1.00% and 10.55%, compared to 1.61% and 14.43% for the quarter ended September 30, 2006, respectively. ROATA and ROATE for the first nine months of 2007 were 1.33% and 12.12%, compared to 1.57% and 14.76% for the first nine months of 2006, respectively.

Balance Sheet, Capital Management and Credit Quality

At September 30, 2007, total assets were $1.33 billion, compared to $1.06 billion a year ago, and $1.35 billion at June 30, 2007. Total deposits were $1.10 billion at September 30, 2007, compared to $876 million at September 30, 2006, and $1.12 billion at June 30, 2007. Total loans were $955 million at September 30, 2007, compared to $714 million a year ago and $940 million at June 30, 2007. The Company had $6.1 million in SBA loans held for sale as of June 30, 2007, of which $2.5 million were sold in the third quarter of 2007 and the balance reclassified to the loan portfolio because the loans either no longer qualified for sale or did not have an acceptable premium for sale. The Company did not have any subprime loans or subprime exposure in the securities portfolio at September 30, 2007.

Nonperforming assets totaled $3.4 million, or 0.25% of total assets, at September 30, 2007, compared to $3.0 million, or 0.28% of total assets, a year ago, and $6.3 million, or 0.47% of total assets, at June 30, 2007.

The allowance for loan losses was $11.5 million at September 30, 2007, representing 1.20% of total loans and 398% of nonperforming loans compared to $9.4 million at September 30, 2006, representing 1.31% of total loans and 317% of nonperforming loans. At June 30, 2007, the allowance for loan losses was $11.1 million or 1.18% of total loans and 192% of nonperforming loans. Net recoveries in the third quarter of 2007 were $868,000, or 0.37% of average loans, compared to net recoveries of $281,000, or 0.16% of average loans, in the third quarter of 2006. Net charge-offs were $35,000, or 0.02% of average loans, in the quarter ended June 30, 2007.

Shareholders’ equity increased 41% to $168 million, or $9.18 tangible book value per share, at September 30, 2007, compared to $119 million, or $10.22 tangible book value per share, a year ago, and $170 million, or $9.12 tangible book value per share, at June 30, 2007. Capital ratios continue to be above the well-capitalized guidelines established by regulatory agencies. The leverage ratio at September 30, 2007 was 11.19%, compared to 13.24% at September 30, 2006, and 14.29% at June 30, 2007.

During the third quarter of 2007, the Company repurchased 279,500 shares of its common stock at an average price of $21.39 under the previously announced common stock repurchase program. The Company’s Board of Directors has authorized the purchase of up to $30 million of its common stock over two years. The repurchase program expires in July 2009. Shares were purchased on the open market using available cash. The repurchase program may be modified, suspended or terminated by the Board of Directors at any time without notice. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations.

Heritage Commerce Corp, a bank holding company established in February 1998, is the parent company of Heritage Bank of Commerce, established in 1994 and headquartered in San Jose with full-service branches in Los Gatos, Fremont, Danville, Pleasanton, Walnut Creek, Morgan Hill, Gilroy, Mountain View, and Los Altos. Heritage Bank of Commerce is also an SBA Preferred Lender ranked the fourth largest SBA lender in Northern California and fourteenth in the State of California, with Loan Production Offices in San Jose, Chico, Fremont, Fresno, Sacramento and Santa Rosa, California. For more information, please visit www.heritagecommercecorp.com.

Forward Looking Statement Disclaimer

This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include, but are not necessarily limited to, the Company’s ability to sustain dividend payments, fluctuations in interest rates and monetary policy established by the Federal Reserve, inflation, government regulations, general economic conditions, competition within the business areas in which the Company is conducting its operations, including the real estate market in California, the ability to recognize identified cost savings, and other factors beyond the Company's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. For a discussion of factors which could cause results to differ, please see the Company's reports on Forms 10-K and 10-Q as filed with the Securities and Exchange Commission and the Company's press releases. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

Member FDIC

	For the Three Months Ended:									Percent Change From:						For the Nine Months Ended:
CONSOLIDATED INCOME STATEMENTS	Sept. 30,			June 30,			Sept. 30,			June 30,			Sept. 30,			Sept. 30,			Sept. 30,			Percent
(in $000's, unaudited)		2007			2007			2006			2007			2006			2007			2006			Change
Interest Income	$	22,105		$	18,317		$	18,568			21	%		19	%	$	57,656		$	54,220			6	%
Interest Expense		8,324			5,924			5,754			41	%		45	%		19,751			16,589			19	%
Net Interest Income		13,781			12,393			12,814			11	%		8	%		37,905			37,631			1	%
Provision for Loan Losses		(500)			0			0			N/	A		N/	A		(736)			(603)			22	%
Net Interest income after Provision for Loan Losses		14,281			12,393			12,814			15	%		11	%		38,641			38,234			1	%
Noninterest Income:
Gain on Sale of SBA Loans		60			695			832			-91	%		-93	%		1,766			2,499			-29	%
Gain on Sale of Capital Group Loan Portfolio		0			0			0			N/	A		N/	A		-			672			-100	%
Servicing Income		546			534			412			2	%		33	%		1,596			1,321			21	%
Increase in Cash Surrender Value of Life Insurance		374			353			363			6	%		3	%		1,071			1,070			0	%
Service Charges and Other Fees on Deposit Accounts		344			336			354			2	%		-3	%		954			1,008			-5	%
Other		315			344			338			-8	%		-7	%		1,028			880			17	%
Total Noninterest Income		1,639			2,262			2,299			-28	%		-29	%		6,415			7,450			-14	%

Noninterest Expense:
Salaries & Employee Benefits		5,840			4,685			4,941			25	%		18	%		15,413			14,703			5	%
Occupancy & Equipment		1,168			889			913			31	%		28	%		2,933			2,721			8	%
Other		3,510			2,926			2,458			20	%		43	%		8,972			8,141			10	%
Total Noninterest Expense		10,518			8,500			8,312			24	%		27	%		27,318			25,565			7	%
Income Before Income Taxes		5,402			6,155			6,801			-12	%		-21	%		17,738			20,119			-12	%
Provision for Income Taxes		2,162			2,140			2,448			1	%		-12	%		6,450			7,201			-10	%
Net Income	$	3,240		$	4,015		$	4,353			-19	%		-26	%	$	11,288		$	12,918			-13	%

PER SHARE DATA
(unaudited)
Basic Earnings Per Share	$	0.24		$	0.34		$	0.37			-29	%		-35	%	$	0.92		$	1.09			-16	%
Diluted Earnings Per Share	$	0.24		$	0.33		$	0.36			-27	%		-33	%	$	0.91		$	1.08			-16	%
Common Shares Outstanding at Period-End		13,123,396			13,375,163			11,681,297			-2	%		12	%		13,123,396			11,681,297			12	%
Book Value Per Share	$	12.83		$	12.72		$	10.22			1	%		26	%	$	12.83		$	10.22			26	%
Tangible Book Value Per Share	$	9.18		$	9.12		$	10.22			1	%		-10	%	$	9.18		$	10.22			-10	%

KEY FINANCIAL RATIOS
(unaudited)
Annualized Return on Average Equity		7.56	%		12.17	%		14.43	%		-38	%		-48	%		10.60	%		14.76	%		-28	%
Annualized Return on Average Tangible Equity		10.55	%		12.66	%		14.43	%		-17	%		-27	%		12.12	%		14.76	%		-18	%
Annualized Return on Average Assets		0.96	%		1.50	%		1.61	%		-36	%		-40	%		1.31	%		1.57	%		-17	%
Annualized Return on Average Tangible Assets		1.00	%		1.50	%		1.61	%		-33	%		-38	%		1.33	%		1.57	%		-15	%
Net Interest Margin		4.65	%		5.11	%		5.22	%		-9	%		-11	%		4.92	%		5.03	%		-2	%
Efficiency Ratio		68.21	%		58.00	%		55.00	%		18	%		24	%		61.64	%		56.71	%		9	%

AVERAGE BALANCES
(in $000's, unaudited)
Average Assets	$	1,336,195		$	1,075,271		$	1,074,903			24	%		24	%	$	1,150,486		$	1,102,942			4	%
Tangilble Average Assets	$	1,287,936		$	1,070,251		$	1,074,903			20	%		20	%	$	1,132,664		$	1,102,942			3	%
Average Earning Asset	$	1,175,396		$	972,016		$	973,556			21	%		21	%	$	1,029,042		$	1,000,106			3	%
Average Total Loans	$	933,675		$	730,337		$	706,857			28	%		32	%	$	788,180		$	703,795			12	%
Average Loans Held For Sale	$	5,348		$	12,823		$	32,534			-58	%		-84	%	$	12,288		$	34,477			-64	%
Average Deposits	$	1,107,662		$	880,079		$	886,976			26	%		25	%	$	944,822		$	911,852			4	%
Average Demand Deposits - Noninterest Bearing	$	263,465		$	223,415		$	218,766			18	%		20	%	$	234,943		$	227,588			3	%
Average Interest Bearing Deposits	$	844,197		$	656,664		$	668,210			29	%		26	%	$	709,879		$	684,264			4	%
Average Interest Bearing Liabilities	$	878,799		$	696,773		$	713,712			26	%		23	%	$	749,847		$	734,619			2	%
Average Equity	$	170,136		$	132,347		$	119,690			29	%		42	%	$	142,377		$	117,048			22	%
Tangible Average Equity	$	121,877		$	127,196		$	119,690			-4	%		2	%	$	124,555		$	117,048			6	%

	End of Period:									Percent Change From:
CONSOLIDATED BALANCE SHEETS	Sept. 30,			June 30,			Sept. 30,			June 30,			Sept. 30,
(in $000's, unaudited)	2007			2007			2006			2007			2006
ASSETS
Cash and Due from Banks	$	51,627		$	45,881		$	41,438			13	%		25	%
Federal Funds Sold		42,600			57,810			41,000			-26	%		4	%
Securities Available-for-Sale, at Fair Value		150,116			169,498			173,723			-11	%		-14	%
Loans Held For Sale		0			6,095			23,108			-100	%		-100	%
Loans:
Commercial Loans		378,777			358,095			281,488			6	%		35	%
Real Estate-Mortgage		325,327			330,422			227,732			-2	%		43	%
Real Estate-Land and Construction		205,925			203,457			160,137			1	%		29	%
Home Equity		39,771			42,474			41,784			-6	%		-5	%
Consumer Loans		4,131			4,715			1,387			-12	%		198	%
Total Loans		953,931			939,163			712,528			2	%		34	%
Deferred Loan Costs, net		727			504			1,172			44	%		-38	%
Loans, Net of Deferred Costs		954,658			939,667			713,700			2	%		34	%
Allowance for Loan Losses		(11,472	)		(11,104	)		(9,379	)		3	%		22	%
Net Loans		943,186			928,563			704,321			2	%		34	%
Company Owned Life Insurance		38,270			37,900			35,805			1	%		7	%
Premises & Equipment, Net		9,441			9,186			2,494			3	%		279	%
Goodwill		42,996			43,172			0		0		%	N/		A
Intangible Assets		4,863			5,049			0		-4		%	N/		A
Accrued Interest Receivable and Other Assets		43,320			43,777			40,939			-1	%		6	%
Total Assets	$	1,326,419		$	1,346,931		$	1,062,828			-2	%		25	%

LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities:
Deposits
Demand Deposits-Noninterest Bearing	$	263,244		$	266,404		$	226,297			-1	%		16	%
Demand Deposits-Interest Bearing		146,410			162,003			133,636			-10	%		10	%
Savings and Money Market		468,263			448,528			349,436			4	%		34	%
Time Deposits, Under $100		32,341			33,735			31,522			-4	%		3	%
Time Deposits, $100 and Over		138,327			143,544			101,198			-4	%		37	%
Brokered Deposits, $100 and Over		52,179			65,439			34,009			-20	%		53	%
Total Deposits		1,100,764			1,119,653			876,098			-2	%		26	%
Securities Sold under Agreement to Repurchase		10,900			10,900			21,800			0	%		-50	%
Notes Payable To Subsidiary Grantor Trusts		23,702			23,702			23,702			0	%		0	%
Accrued Interest Payable and Other Liabilities		22,678			22,522			21,892			1	%		4	%
Total Liabilities		1,158,044			1,176,777			943,492			-2	%		23	%

Shareholders' Equity:
Common Stock		98,093			103,498			62,959			-5	%		56	%
Accumulated Other Comprehensive Loss		(1,258	)		(2,446	)		(2,306	)		-49	%		-45	%
Retained Earnings		71,540			69,102			58,683			4	%		22	%
Total Shareholders' Equity		168,375			170,154			119,336			-1	%		41	%
Total Liabilities & Shareholders' Equity	$	1,326,419		$	1,346,931		$	1,062,828			-2	%		25	%

CREDIT QUALITY DATA
(in $000's, unaudited)
Nonaccrual Loans	$	2,862		$	3,192		$	2,083			-10	%		37	%
Loans Over 90 Days Past Due and Still Accruing		18			2,604			879		-99		%	-98		%
Total Nonperforming Loans		2,880			5,796			2,962			-50	%		-3	%
Other Real Estate Owned		487			487			0		0		%	N/		A
Total Nonperforming Assets	$	3,367		$	6,283		$	2,962			-46	%		14	%
Net Charge-offs (Recoveries)	$	(868	)	$	35		$	(281	)		2580	%		209	%
Net Charge-offs (Recoveries) as Percent of Average Loans		-0.37	%		0.02	%		-0.16	%		1950	%		131	%
Allowance for Loan Losses to Total Loans		1.20	%		1.18	%		1.31	%		2	%		-8	%
Allowance for Loan Losses to Nonperforming Loans		398.33	%		191.58	%		316.64	%		108	%		26	%
Nonperforming Assets to Total Assets		0.25	%		0.47	%		0.28	%		-47	%		-11	%
Nonperforming Loans to Total Loans		0.30	%		0.62	%		0.42	%		-52	%		-29	%

OTHER PERIOD-END STATISTICS
(unaudited)
Shareholders' Equity / Total Assets		12.69	%		12.63	%		11.23	%		0	%		13	%
Loan to Deposit Ratio		86.73	%		83.92	%		81.46	%		3	%		6	%
Noninterest Bearing Deposits / Total Deposits		23.91	%		23.79	%		25.83	%		1	%		-7	%
Leverage Ratio		11.19	%		14.29	%		13.24	%		-22	%		-15	%

	For the Three Months Ended							For the Three Months Ended
	September 30, 2007							September 30, 2006
			Interest		Average					Interest		Average
NET INTEREST INCOME AND NET INTEREST MARGIN	Average		Income/		Yield/			Average		Income/		Yield/
(in $000's unaudited)	Balance		Expense		Rate			Balance		Expense		Rate
Assets:
Loans, gross	$	939,023	$	19,282		8.15	%	$	739,121	$	15,958		8.57	%
Securities		166,782		1,919		4.56	%		189,491		2,013		4.21	%
Interest bearing deposits in other financial institutions		2,908		31		4.23	%		2,849		36		5.01	%
Federal funds sold		66,683		873		5.19	%		42,095		561		5.29	%
Total interest earning assets		1,175,396	$	22,105		7.46	%	$	973,556	$	18,568		7.57	%
Cash and due from banks		40,334							36,575
Premises and equipment, net		9,430							2,450
Other assets		111,035							62,322
Total assets	$	1,336,195						$	1,074,903

Liabilities and shareholders' equity:
Deposits:
Demand, interest bearing	$	153,352	$	863		2.23	%	$	140,205	$	783		2.22	%
Savings and money market		460,596		3,981		3.43	%		357,003		2,676		2.97	%
Time deposits, under $100		33,379		327		3.89	%		30,987		264		3.38	%
Time deposits, $100 and over		137,605		1,786		5.15	%		105,984		979		3.66	%
Brokered time deposits, $100 and over		59,265		706		4.73	%		34,031		325		3.79	%
Notes payable to subsidiary grantor trusts		23,702		585		9.79	%		23,702		587		9.83	%
Securities sold under agreement to repurchase		10,900		76		2.77	%		21,800		140		2.55	%
Total interest bearing liabilities		878,799	$	8,324		3.76	%		713,712	$	5,754		3.20	%
Demand, noninterest bearing		263,465							218,766
Other liabilities		23,795							22,735
Total liabilities		1,166,059							955,213
Shareholders' equity:		170,136							119,690
Total liabilities and shareholders' equity	$	1,336,195						$	1,074,903

Net interest income / margin			$	13,781		4.65	%			$	12,814		5.22	%

	For the Nine Months Ended							For the Nine Months Ended
	September 30, 2007							September 30, 2006
			Interest		Average					Interest		Average
NET INTEREST INCOME AND NET INTEREST MARGIN	Average		Income/		Yield/			Average		Income/		Yield/
(in $000's unaudited)	Balance		Expense		Rate			Balance		Expense		Rate
Assets:
Loans, gross	$	800,468	$	49,541		8.27	%	$	738,272	$	46,023		8.33	%
Securities		170,650		5,853		4.59	%		195,394		5,782		3.96	%
Interest bearing deposits in other financial institutions		2,928		104		4.75	%		2,805		96		4.58	%
Federal funds sold		54,996		2,158		5.25	%		63,635		2,319		4.87	%
Total interest earning assets		1,029,042	$	57,656		7.49	%	$	1,000,106	$	54,220		7.25	%
Cash and due from banks		36,299							36,584
Premises and equipment, net		5,116							2,439
Other assets		80,029							63,813
Total assets	$	1,150,486						$	1,012,942

Liabilities and shareholders' equity:
Deposits:
Demand, interest bearing	$	143,685	$	2,409		2.24	%	$	148,879	$	2,451		2.20	%
Savings and money market		369,268		8,721		3.16	%		359,642		7,455		2.77	%
Time deposits, under $100		31,873		917		3.85	%		32,475		761		3.13	%
Time deposits, $100 and over		113,694		3,865		4.55	%		108,419		2,729		3.37	%
Brokered time deposits, $100 and over		51,359		1,757		4.57	%		34,849		983		3.77	%
Notes payable to subsidiary grantor trusts		23,702		1,749		9.87	%		23,702		1,724		9.72	%
Securities sold under agreement to repurchase		16,266		333		2.74	%		26,653		486		2.44	%
Total interest bearing liabilities		749,847	$	19,751		3.52	%		734,619	$	16,589		3.02	%
Demand, noninterest bearing		234,943							227,588
Other liabilities		23,319							23,687
Total liabilities		1,008,109							985,894
Shareholders' equity:		142,377							117,048
Total liabilities and shareholders' equity	$	1,150,486						$	1,102,942

Net interest income / margin			$	37,905		4.92	%			$	37,631		5.03	%