Heritage Commerce Corp. in San Jose said it no longer intends to buy two branches from Wells Fargo & Co.

The $1.5 billion-asset Heritage — which has had a spike in loan trouble lately — said in a Securities and Exchange Commission filing Tuesday that the two sides mutually agreed to call off the deal. The filing did not cite a reason.

Heritage had announced April 6 that it would buy branches in Santa Cruz and Monterey, Calif., from Wells Fargo's Wachovia Bank. The price was not disclosed.

The deal, which had been expected to close next quarter, included $463 million of deposits but no loans.

Heritage reported April 30 that it swung to a loss of $4.5 million in the first quarter, from a $1.7 million profit a year earlier. Nonperforming loans ballooned to 4.63% of its total, from 0.4%.

Still, Heritage remained well capitalized. It received $40 million of capital through the Treasury Department's Troubled Asset Relief Program in November.

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