Heritage Commerce discloses CRE exposure to energy firm's bankruptcy
Heritage Commerce in San Jose, Calif., is the latest bank to disclose exposure to the clean energy firm DC Solar.
DC Solar filed for bankruptcy protection on Feb. 4. An FBI agent has alleged that the company was operating an investor scheme by booking revenue on equipment that may not have existed.
The $3.1 billion-asset Heritage disclosed in its annual report that its bank has two secured commercial real estate loans too entities affiliated with DC Solar. The nonaccrual loans have an aggregate balance of about $3.3 million.
Heritage said it did not invest in DC Solar tax credit investments.
At least five banks — East West Bancorp, Hancock Whitney, Meta Financial Group, United Financial Bancorp and Valley National Bancorp — have issued warnings about potential exposure to tax credits tied to DC Solar.