Heritage Commerce (HTBK) AI Stock Analysis

• Market Cap: $609.18M
• Dividend Yield: 5.43%
• Average Volume (3M): 473.67K
• Price to Earnings (P/E): 15.6
• Beta (1Y): 0.80
• Revenue Growth: 6.54%
• EPS Growth: -19.64%
• Country: US
• Employees: 350
• Sector: Financial
• Sector Strength: 73
• Industry: Banks - Regional
• EPS (TTM): 0.10
• Shares Outstanding: 61,595,516
• 10 Day Avg. Volume: 497,548
• 30 Day Avg. Volume: 473,669
• PEG Ratio: 0.30
• Price to Book (P/B): 1.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.41
• Enterprise Value/Market Cap: 0.30
• Enterprise Value/Revenue: 0.24
• Enterprise Value/Gross Profit: 1.05
• Enterprise Value/Ebitda: 1.79
• 1Y Price Target: $10.67
• Price Target Upside: 11.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 70 Outperform
• Price Target: $10.50 ▲(9.60%Upside)

Heritage Commerce benefits from strong financial performance and a solid valuation profile, appealing to dividend-focused investors. However, technical indicators suggest bearish momentum, requiring cautious optimism.

Heritage Commerce Business Overview & Revenue Model

Company Description

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. Its deposit products for business banking and retail markets include interest and non-interest bearing demand, savings, and money market accounts, as well as certificates of deposit and time deposits. The company's loan portfolio comprises commercial loans, such as operating secured and unsecured loans advanced for working capital, equipment purchases, and other business purposes; commercial real estate loans; commercial construction loans for rental properties, commercial buildings, and homes; small business administration loans; home equity lines of credit; multifamily loans on residential properties; residential mortgage loans; and consumer loans consisting of loans for financing automobiles, various consumer goods, and other personal purposes. In addition, it offers other banking services, including cashier's checks, bank by mail, night depositories, safe deposit boxes, direct deposit, automated payroll, electronic funds transfer, online bill pay, homeowner association, remote deposit capture, automated clearing house origination, electronic data interchange, and check imaging services, as well as other customary banking, factoring financing, and electronic banking services. The company operates through 17 full-service branch offices located in the general San Francisco Bay Area of California. Heritage Commerce Corp was founded in 1994 and is headquartered in San Jose, California.

How the Company Makes Money

Heritage Commerce Corp generates revenue primarily through the interest income earned on its loan portfolio, which includes commercial loans, real estate loans, and consumer loans. The company also earns income from fees and service charges related to deposit accounts and treasury management services. Additionally, Heritage Commerce benefits from non-interest income streams, such as loan servicing fees, gains on the sale of loans, and other banking-related services. The bank's strategic focus on the San Francisco Bay Area allows it to leverage its local expertise and relationships to maintain a strong customer base and sustain its earnings growth.

Heritage Commerce Financial Statement Overview

Summary

Heritage Commerce exhibits strong gross profit margins and a solid balance sheet with zero debt, bolstering financial stability. However, the decline in revenue, net income, and cash flow generation are areas of concern, indicating potential challenges ahead in maintaining profitability and cash reserves. The company should focus on reversing the revenue decline and enhancing cash flow efficiency.

Income Statement

The TTM (Trailing-Twelve-Months) gross profit margin stands at 100%, reflecting a strong capacity to manage direct costs. However, the TTM revenue of $170.26M shows a decline from $191.47M in the previous year, indicating a negative revenue growth trend, which is a concern. Net profit margin for TTM is 23.8%, down from 33.7% in 2023, suggesting reduced profitability. EBIT margin remains relatively stable at 53.2% for TTM, but the absence of EBITDA in TTM raises concerns about operational efficiency.

Balance Sheet

The company demonstrates financial stability with a debt-free TTM balance sheet, enhancing its risk profile. The equity ratio is 12.2%, indicating moderate leverage. ROE for TTM is 5.9%, down from 9.6%, reflecting a decreased return on equity, though still positive. The increase in stockholders' equity to $689.73M suggests strength in capitalization.

Cash Flow

Operating cash flow to net income ratio for TTM is 0.56, showing reasonable cash generation relative to profits. TTM free cash flow is $21.07M, a decline from $71.34M in 2023, indicating potential challenges in cash generation. Free cash flow to net income ratio is 0.52, suggesting adequate but declining cash flow relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	191.95M	170.26M	191.47M	189.99M	155.81M	151.81M
Gross Profit	173.21M	170.26M	191.47M	189.99M	155.81M	151.81M
EBITDA	17.13M	0.00	93.94M	98.12M	69.94M	53.77M
Net Income	41.99M	40.53M	64.44M	66.56M	47.70M	35.30M
Balance Sheet
Total Assets	5.51B	5.65B	5.19B	5.15B	5.50B	4.63B
Cash, Cash Equivalents and Short-Term Investments	31.87M	29.86M	850.76M	796.20M	1.41B	1.37B
Total Debt	39.69M	39.65M	39.50M	39.35M	39.92M	39.74M
Total Liabilities	4.82B	4.96B	4.52B	4.52B	4.90B	4.06B
Stockholders Equity	696.19M	689.73M	672.90M	632.46M	598.03M	577.89M
Cash Flow
Free Cash Flow	45.15M	37.35M	71.34M	69.07M	56.60M	54.93M
Operating Cash Flow	46.34M	38.97M	73.01M	69.85M	56.85M	58.09M
Investing Cash Flow	-51.22M	110.62M	70.18M	-669.49M	-696.83M	145.59M
Financing Cash Flow	208.01M	410.40M	-41.67M	-399.98M	815.13M	470.02M

Heritage Commerce Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.58
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTBK, the sentiment is Negative. The current price of 9.58 is below the 20-day moving average (MA) of 10.27, below the 50-day MA of 9.73, and above the 200-day MA of 9.57, indicating a neutral trend. The MACD of 0.07 indicates Positive momentum. The RSI at 36.58 is Neutral, neither overbought nor oversold. The STOCH value of 11.93 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HTBK.

Heritage Commerce Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRST	83 Outperform	$663.60M	12.42	7.93%	4.15%	5.39%	8.80%
ORRF	76 Outperform	$687.09M	15.73	13.01%	2.84%	89.36%	-29.07%
SPFI	74 Outperform	$647.32M	12.89	12.52%	1.48%	6.07%	20.59%
THFF	73 Outperform	$656.64M	10.58	11.08%	3.59%	20.07%	21.46%
HTBK	70 Outperform	$609.18M	15.57	5.70%	5.43%	6.54%	-19.64%
Sector *	64 Neutral	$6.67B	10.26	7.22%	190.98%	24.07%	5.12%
WASH	53 Neutral	$534.75M	12.16	-4.88%	8.13%	-24.85%	-156.55%

Heritage Commerce Corporate Events

Heritage Commerce Announces Executive Addition and Dividend

On July 24, 2025, Heritage Commerce Corp announced the addition of Mr. Fonti to its executive leadership team and declared a $0.13 per share quarterly cash dividend, payable on August 21, 2025. The company reported financial results for the second quarter of 2025, highlighting a net income of $6.4 million, a 45% decrease from the previous quarter due to a significant legal settlement charge. Despite this, adjusted net income rose by 11% to $13.0 million, reflecting positive trends in loan growth and net interest margin expansion. The company remains well-capitalized, with a strong balance sheet poised to navigate economic volatility.

The most recent analyst rating on (HTBK) stock is a Buy with a $12.00 price target. To see the full list of analyst forecasts on Heritage Commerce stock, see the HTBK Stock Forecast page.