Heritage Oaks Bancorp, the holding company of Paso Robles-based Heritage Oaks Bank, beat analyst estimates in both year-over-year revenue and net income.

The bank reported $20.3 million in revenue in 2016, a 12 percent increase from 2015, outpacing analyst expectations by more than $1 million. Net income reached $16.9 million, or 49 cents per diluted common share, up from $15.3 million in 2015, or 44 cents per share.

Heritage Oaks reported net income of $4.6 million in the fourth quarter of 2016, or 13 cents per diluted common share, beating analyst estimates by a cent. Net income was up from $3.5 million, or 10 cents per share, in the fourth quarter of 2015.

Heritage Oaks saw double-digit growth in loans and non-interest bearing deposits in 2016, introduced its new interest rate swap product that generated $1.2 million-plus in fee income, terminated its consent order, and announced merger plans with Irvine-based Pacific Premier Bank, said Heritage Oaks President and CEO Simone Lagomarsino.

Pacific Premier announced plans to acquire Heritage Oaks in December for $405.6 million or $11.68 per share, continuing the banking consolidation trend throughout the Tri-Counties.

Paso Robles-based Heritage Oaks, the region’s largest bank with $2 billion in assets and 12 branches, will join forces via an all-stock deal with Pacific Premier, a $3.8 billion-asset bank with 16 branches in Southern California.

“(The merger) will create a more attractive commercial banking franchise,” Lagomarsino said in a news release. “Once the two organizations are combined we will offer a broader array of products and services, increased lending capacity, and an expanded geographic footprint.  All of this should position us to better serve our customers and provide stronger returns to our shareholders.”

Gross loans increased by $138.2 million, or 11.1 percent, to $1.39 billion in 2016 compared to $1.25 billion a year earlier.

Total deposits increased by $118.9 million, or 7.6 percent, to $1.68 billion in 2016 up from $1.56 billion in 2015.

Regulatory capital ratios were 9.47 percent for tier one leverage capital, 13.35 percent for total risk based capital and 12.19 percent for common equity tier one capital.

Heritage Oaks shares traded down 30 cents, or 2.2 percent, to $13.37 on Jan. 30.

• Contact Alex Kacik at akacik@pacbiztimes.com.