Magazine article American Banker

Heritage of Calif. Sheds Tech Focus

Magazine article American Banker

Heritage of Calif. Sheds Tech Focus

Article excerpt

A Silicon Valley community bank that once stood out as a technology pioneer is remaking itself under a new chief executive officer as a more conventional institution.

Heritage Bank of Commerce in San Jose, Calif., was founded in 1994 by John Rossell, who quickly led it into some leading-edge projects. In 1997 there was the deal to issue Visa cards for NextCard Inc., which was then a marketing firm that had come up with an idea for a credit card that people could apply for through the Internet only. In 2000, Heritage became one of the first community banks to offer account aggregation to customers through the Internet.

But the bank's strategy has shifted. Mr. Rossell, who had been chief executive officer of the bank and of Heritage Commerce Corp., a holding company formed in 1998, resigned in June 2000. He was succeeded by Brad L. Smith, who had been CEO of a subsidiary, Heritage Bank South Valley.

Now, instead of striving for fast growth and a position at the vanguard, Heritage is emphasizing profitability.

"As the company has gotten critical mass, we've put more focus on earnings," said Richard Conniff, the chief operating officer of Heritage Commerce Corp. in San Jose. "We still consider it imperative to grow the bank, but not necessarily at the rates of growth we experienced in the first seven years."

Since its founding, Heritage has expanded from a single bank with $14.1 million of capital, to a holding company with four banks and $868 million of assets as of June 30.

Mr. Conniff said, "We're a more conventional-looking bank now, and probably less inclined to take on those leading-edge projects" like the partnership with NextCard. …

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