NasdaqGS:HTBK

Stock Analysis Report

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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. More Details


Snowflake Analysis

Flawless balance sheet and undervalued.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-4.2%

HTBK

-2.5%

US Banks

-1.5%

US Market


1 Year Return

-46.5%

HTBK

-26.7%

US Banks

12.9%

US Market

Return vs Industry: HTBK underperformed the US Banks industry which returned -26.7% over the past year.

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


Shareholder returns

HTBKIndustryMarket
7 Day-4.2%-2.5%-1.5%
30 Day-5.8%0.7%-1.8%
90 Day-9.4%-2.8%6.6%
1 Year-43.4%-46.5%-24.1%-26.7%15.4%12.9%
3 Year-48.8%-54.6%-15.2%-22.2%39.6%30.2%
5 Year-34.2%-45.3%23.6%8.4%93.4%71.7%

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?

23.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HTBK ($6.35) is trading below our estimate of fair value ($8.31)

Significantly Below Fair Value: HTBK is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HTBK is poor value based on its PE Ratio (11.8x) compared to the US Banks industry average (9.7x).

PE vs Market: HTBK is good value based on its PE Ratio (11.8x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: HTBK is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: HTBK is good value based on its PB Ratio (0.7x) compared to the US Banks industry average (0.8x).


Next Steps

Future Growth

How is Heritage Commerce forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

13.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HTBK's forecast earnings growth (13.6% per year) is above the savings rate (2.2%).

Earnings vs Market: HTBK's earnings (13.6% per year) are forecast to grow slower than the US market (23.1% per year).

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

Revenue vs Market: HTBK's revenue (1.1% per year) is forecast to grow slower than the US market (9.8% per year).

High Growth Revenue: HTBK's revenue (1.1% 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 (6.8%).


Next Steps

Past Performance

How has Heritage Commerce performed over the past 5 years?

20.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HTBK has a large one-off loss of $13.0M impacting its June 30 2020 financial results.

Growing Profit Margin: HTBK's current net profit margins (21.5%) are lower than last year (35.2%).


Past Earnings Growth Analysis

Earnings Trend: HTBK's earnings have grown significantly by 20.2% per year over the past 5 years.

Accelerating Growth: HTBK's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: HTBK had negative earnings growth (-40%) over the past year, making it difficult to compare to the Banks industry average (-3%).


Return on Equity

High ROE: HTBK's Return on Equity (5.1%) is considered low.


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


Financial Institutions Analysis

Asset Level: HTBK's Assets to Equity ratio (8x) is low.

Allowance for Bad Loans: HTBK has a sufficient allowance for bad loans (498%).

Low Risk Liabilities: 97% of HTBK's liabilities are made up of primarily low risk sources of funding.

Loan Level: HTBK has an appropriate level of Loans to Assets ratio (57%).

Low Risk Deposits: HTBK's Loans to Deposits ratio (68%) is appropriate.

Level of Bad Loans: HTBK has an appropriate level of bad loans (0.3%).


Next Steps

Dividend

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

8.19%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: HTBK's dividend (8.19%) is higher than the bottom 25% of dividend payers in the US market (1.66%).

High Dividend: HTBK's dividend (8.19%) is in the top 25% of dividend payers in the US market (4.7%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, HTBK has been paying a dividend for less than 10 years.

Growing Dividend: HTBK's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (93%), HTBK's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HTBK's dividends in 3 years are forecast to be covered by earnings (78.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.8yrs

Average management tenure


CEO

Keith Wilton (62 yo)

1.08yrs

Tenure

US$855,606

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 ($USD855.61K) is below average for companies of similar size in the US market ($USD1.98M).

Compensation vs Earnings: Keith's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Keith Wilton
CEO, President & Director1.08yrsUS$855.61k0.23%
$ 883.2k
Walter Kaczmarek
Director15.5yrsUS$1.63m0.22%
$ 823.5k
Lawrence McGovern
Executive VP & CFO22.17yrsUS$1.00m0.17%
$ 650.2k
Robertson Jones
Executive VP & President of Community Business Banking0.92yrUS$499.29k0.17%
$ 632.3k
Michael Hansen
Senior Vice President of Corporate Finance Division6.42yrsno datano data
Jeffrey Javits
EVP & Chief Information Officerno datano datano data
Deborah Reuter
Executive VP10.67yrsno datano data
Diana Olveira
Vice President and Marketing Directorno datano datano data
May K. Wong
Executive VP & Controller3.42yrsno datano data
Jeffrey Perkins
Senior VP & Central Coast Regional Managerno datano datano data
Teresa Powell
Executive Vice President of HOA & Deposit Services5.08yrsno datano data
Glen Shu
Executive VP & President of Specialty Finance Groupno datano datano data

5.8yrs

Average Tenure

63.5yo

Average Age

Experienced Management: HTBK's management team is seasoned and experienced (5.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Keith Wilton
CEO, President & Director1.08yrsUS$855.61k0.23%
$ 883.2k
Walter Kaczmarek
Director15.5yrsUS$1.63m0.22%
$ 823.5k
Jason DiNapoli
Independent Director2.17yrsUS$78.04k0.56%
$ 2.1m
Frank Bisceglia
Independent Director26.67yrsUS$110.11k0.21%
$ 780.2k
Robert Moles
Independent Director15.92yrsUS$124.03k0.099%
$ 374.8k
Stephen Heitel
Independent Director0.92yrUS$12.24k0.28%
$ 1.1m
Bruce Cabral
Independent Director0.92yrUS$11.16k0.16%
$ 590.5k
Ranson Webster
Independent Vice Chairmanno dataUS$101.27k1.04%
$ 3.9m
Jack Conner
Independent Chairman of the Board14.17yrsUS$130.42k0.24%
$ 898.7k
Marina H. Sutton
Independent Director0.92yrUS$11.16k0.12%
$ 441.8k
Laura Roden
Independent Director9.17yrsUS$84.23k0.038%
$ 145.5k
Julianne Biagini-Komas
Independent Director5.08yrsUS$84.18k0.049%
$ 185.1k

5.1yrs

Average Tenure

63.5yo

Average Age

Experienced Board: HTBK's board of directors are considered experienced (5.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: HTBK insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 37.7%.


Top Shareholders

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$380.212m
  • Shares outstanding: 59.88m
  • Website: https://www.heritagecommercecorp.com

Number of Employees


Location

  • Heritage Commerce Corp
  • 224 Airport Parkway
  • San Jose
  • California
  • 95110
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HTBKNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJul 1998
XHCDB (Deutsche Boerse AG)YesCommon StockDEEURJul 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 Analysis2020/09/22 07:57
End of Day Share Price2020/09/21 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.