NasdaqGS:HTBK

Stock Analysis Report

Executive Summary

Heritage Commerce Corp operates as the bank holding company for Heritage Bank of Commerce that provides various commercial and personal banking services to residents and the business/professional community in California.

Snowflake

Fundamentals

Flawless balance sheet with solid track record and pays a dividend.


Similar Companies

Share Price & News

How has Heritage Commerce's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HTBK has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.4%

HTBK

-1.0%

US Banks

0.7%

US Market


1 Year Return

-13.7%

HTBK

8.9%

US Banks

12.9%

US Market

Return vs Industry: HTBK underperformed the US Banks industry which returned 8.9% over the past year.

Return vs Market: HTBK underperformed the US Market which returned 12.9% over the past year.


Shareholder returns

HTBKIndustryMarket
7 Day1.4%-1.0%0.7%
30 Day8.2%6.9%4.4%
90 Day9.1%16.7%7.0%
1 Year-10.3%-13.7%12.2%8.9%15.4%12.9%
3 Year10.6%0.6%39.2%29.5%49.1%39.5%
5 Year77.8%51.0%72.7%53.6%62.7%44.7%

Price Volatility Vs. Market

How volatile is Heritage Commerce's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Heritage Commerce undervalued compared to its fair value and its price relative to the market?

23.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HTBK ($12.5) is trading below our estimate of fair value ($16.33)

Significantly Below Fair Value: HTBK is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: HTBK is good value based on its PE Ratio (11.2x) compared to the Banks industry average (12.7x).

PE vs Market: HTBK is good value based on its PE Ratio (11.2x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: HTBK is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: HTBK is overvalued based on its PB Ratio (1.4x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is Heritage Commerce forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

17.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HTBK's forecast earnings growth (17.8% per year) is above the savings rate (2.7%).

Earnings vs Market: HTBK's earnings (17.8% per year) are forecast to grow faster than the US market (14.4% per year).

High Growth Earnings: HTBK's earnings are forecast to grow, but not significantly.

Revenue vs Market: HTBK's revenue (11.1% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: HTBK's revenue (11.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HTBK's Return on Equity is forecast to be low in 3 years time (10.6%).


Next Steps

Past Performance

How has Heritage Commerce performed over the past 5 years?

27.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HTBK has high quality earnings.

Growing Profit Margin: HTBK's current net profit margins (34.8%) are higher than last year (19.8%).


Past Earnings Growth Analysis

Earnings Trend: HTBK's earnings have grown significantly by 27.4% per year over the past 5 years.

Accelerating Growth: HTBK's earnings growth over the past year (105.5%) exceeds its 5-year average (27.4% per year).

Earnings vs Industry: HTBK earnings growth over the past year (105.5%) exceeded the Banks industry 27.5%.


Return on Equity

High ROE: HTBK's Return on Equity (12.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Heritage Commerce's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: HTBK has a low level of unsold assets or inventory.

Debt Coverage by Assets: HTBK's debt is covered by short term assets (assets are 10.8x debt).


Financial Institutions Analysis

Asset Level: HTBK's level of assets compared to its equity is low.

Allowance for Bad Loans: HTBK has a sufficient allowance for bad loans.

Low Risk Liabilities: HTBK's liabilities are made up of primarily low risk sources of funding.

Loan Level: HTBK has an acceptable proportion of non-loan assets held.

Low Risk Deposits: HTBK's loans are broadly funded by customer deposits.

Level of Bad Loans: HTBK has an appropriate level of bad loans (0.76%)


Next Steps

Dividend

What is Heritage Commerce's current dividend yield, its reliability and sustainability?

3.84%

Current Dividend Yield


Dividend Yield vs Market

company3.8%marketbottom25%1.4%markettop25%3.6%industryaverage2.8%forecastin3Years4.0%

Current dividend yield vs market & industry

Notable Dividend: HTBK's dividend (3.84%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: HTBK's dividend (3.84%) is in the top 25% of dividend payers in the US market (3.65%)


Stability and Growth of Payments

Stable Dividend: HTBK's dividend payments have been volatile in the past 10 years.

Growing Dividend: HTBK's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (42.1%), HTBK's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HTBK's dividends in 3 years are forecast to be well covered by earnings (48.1% payout ratio).


Next Steps

Management

What is the CEO of Heritage Commerce's salary, the management and board of directors tenure and is there insider trading?

5.6yrs

Average management tenure


CEO

Keith Wilton (61yo)

0.3yrs

Tenure

US$681,879

Compensation

Mr. Keith A. Wilton has been the Chief Executive Officer and President at Heritage Commerce Corp. since August 8, 2019. Mr. Wilton has been the President of Heritage Bank of Commerce, a subsidiary of Herit ...


CEO Compensation Analysis

Compensation vs Market: Keith's total compensation ($USD681.88K) is below average for companies of similar size in the US market ($USD2.62M).

Compensation vs Earnings: Keith's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.6yrs

Average Tenure

65.5yo

Average Age

Experienced Management: HTBK's management team is seasoned and experienced (5.6 years average tenure).


Board Age and Tenure

10.9yrs

Average Tenure

65.5yo

Average Age

Experienced Board: HTBK's board of directors are seasoned and experienced ( 10.9 years average tenure).


Insider Trading

Insider Buying: HTBK insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$62,18513 Nov 19
Jason Dinapoli
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceUS$12.44
BuyUS$11,96031 Oct 19
Steven Hallgrimson
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$11.96
BuyUS$60,03911 Jun 19
Jason Dinapoli
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceUS$12.01
BuyUS$107,95103 Jun 19
Jack Conner
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares9,020
Max PriceUS$11.97
BuyUS$60,48203 Jun 19
Jason Dinapoli
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceUS$12.10
SellUS$68,09728 May 19
Keith Wilton
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares5,575
Max PriceUS$12.21
BuyUS$12,16428 May 19
Steven Hallgrimson
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$12.17
BuyUS$96,45423 May 19
Jack Conner
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares7,879
Max PriceUS$12.29
SellUS$669,43520 Feb 19
Robert Moles
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares49,900
Max PriceUS$13.54
SellUS$546,70513 Feb 19
Walter Kaczmarek
EntityIndividual
Role
Member of the Board of Directors
Director
Shares40,500
Max PriceUS$13.50
BuyUS$45,46601 Feb 19
Jack Conner
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares3,500
Max PriceUS$12.99
BuyUS$140,63631 Jan 19
Jack Conner
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares10,500
Max PriceUS$13.46
BuyUS$90,93714 Dec 18
Steven Hallgrimson
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares7,000
Max PriceUS$12.99
BuyUS$38,65606 Dec 18
Jack Conner
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares2,828
Max PriceUS$13.67
SellUS$81,11429 Nov 18
Keith Wilton
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares5,649
Max PriceUS$14.36
BuyUS$50,00526 Nov 18
Jack Conner
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares3,513
Max PriceUS$14.27

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6.5%.


Management Team

  • Larry McGovern (64yo)

    Executive VP & CFO

    • Tenure: 21.3yrs
    • Compensation: US$563.07k
  • Bob Gionfriddo (73yo)

    Executive VP & Director of Business Development

    • Tenure: 4.3yrs
    • Compensation: US$201.93k
  • May K. Wong

    Executive VP & Controller

    • Tenure: 2.6yrs
  • Walt Kaczmarek (67yo)

    Director

    • Tenure: 14.7yrs
    • Compensation: US$1.11m
  • Keith Wilton (61yo)

    CEO, President & Director

    • Tenure: 0.3yrs
    • Compensation: US$681.88k
  • Mike Hansen

    Senior Vice President of Corporate Finance Division

    • Tenure: 5.6yrs
  • Diana Olveira

    Vice President and Marketing Director

    • Tenure: 0yrs
  • Debbie Reuter

    Executive VP

    • Tenure: 9.8yrs
  • Jeff Perkins

    Senior VP & Central Coast Regional Manager

    • Tenure: 0yrs
  • Larry St. Regis

    Executive VP & CTO

    • Tenure: 0yrs

Board Members

  • Jason Dinapoli (50yo)

    Independent Director

    • Tenure: 1.3yrs
    • Compensation: US$25.00k
  • Frank Bisceglia (73yo)

    Independent Director

    • Tenure: 25.8yrs
    • Compensation: US$77.44k
  • Robert Moles (64yo)

    Independent Director

    • Tenure: 15.1yrs
    • Compensation: US$70.78k
  • Ranson Webster (74yo)

    Independent Director

    • Tenure: 15.4yrs
    • Compensation: US$77.56k
  • Jack Conner (79yo)

    Chairman of the Board

    • Tenure: 13.3yrs
    • Compensation: US$100.79k
  • Walt Kaczmarek (67yo)

    Director

    • Tenure: 14.7yrs
    • Compensation: US$1.11m
  • Laura Roden (60yo)

    Independent Director

    • Tenure: 8.3yrs
    • Compensation: US$76.78k
  • Keith Wilton (61yo)

    CEO, President & Director

    • Tenure: 0.3yrs
    • Compensation: US$681.88k
  • Steve Hallgrimson (76yo)

    Independent Director

    • Tenure: 8.4yrs
    • Compensation: US$76.78k
  • Julianne Biagini-Komas (56yo)

    Independent Director

    • Tenure: 4.3yrs
    • Compensation: US$76.54k

Company Information

Heritage Commerce Corp's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Heritage Commerce Corp
  • Ticker: HTBK
  • Exchange: NasdaqGS
  • Founded: 1997
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$740.003m
  • Shares outstanding: 59.20m
  • Website: https://www.heritagecommercecorp.com

Number of Employees


Location

  • Heritage Commerce Corp
  • 150 Almaden Boulevard
  • San Jose
  • California
  • 95113
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HTBKNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJul 1998

Biography

Heritage Commerce Corp operates as the bank holding company for Heritage Bank of Commerce that provides various commercial and personal banking services to residents and the business/professional community ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/16 23:36
End of Day Share Price2019/11/15 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.