Heritage Commerce (HTBK) AI Stock Analysis

• Market Cap: $623.07M
• Dividend Yield: 5.16%
• Average Volume (3M): 431.16K
• Price to Earnings (P/E): 16.0
• Beta (1Y): 0.79
• Revenue Growth: 6.63%
• EPS Growth: -19.64%
• Country: US
• Employees: 350
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.10
• Shares Outstanding: 61,446,762
• 10 Day Avg. Volume: 366,645
• 30 Day Avg. Volume: 431,159
• PEG Ratio: -0.38
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 2.29
• P/FCF Ratio: 15.39
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 2.40
• Enterprise Value/Gross Profit: 3.48
• Enterprise Value/Ebitda: 10.83
• 1Y Price Target: $11.00
• Price Target Upside: 9.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 76 Outperform
• Price Target: $11.50 ▲(13.97% Upside)

Heritage Commerce's strong technical indicators and reasonable valuation are the primary drivers of its overall score. The company's stable financial position is offset by challenges in profitability and cash flow growth. The strategic board appointment and positive financial results further support the company's growth potential.

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 generates revenue primarily through interest income earned from loans and fees associated with its banking services. The main revenue streams include interest from commercial loans, which are extended to businesses for various purposes such as working capital and equipment purchases, as well as interest from residential mortgages and consumer loans. Additionally, the company earns non-interest income from service fees on deposit accounts, transaction fees, and wealth management services. Strategic partnerships with local businesses and community organizations also enhance customer acquisition and retention, further contributing to its earnings. Overall, the bank's focus on relationship banking allows for a steady flow of income from its diverse portfolio of clients.

Heritage Commerce Financial Statement Overview

Summary

Heritage Commerce demonstrates consistent revenue growth and solid profitability margins. The balance sheet reflects prudent debt management and a strong equity base. Cash flow metrics indicate efficient cash management, though monitoring of net profit margins and return on equity is advisable.

Income Statement

Heritage Commerce has demonstrated consistent revenue growth from $198.9M in 2022 to $256.3M in TTM 2025, with a notable 28.8% increase. The gross profit margin is strong at 67.9% for TTM, reflecting efficient core operations. However, the net profit margin decreased from 33.5% in 2023 to 16.4% in TTM 2025, indicating increased expenses or other cost pressures. EBIT and EBITDA margins remain solid but show a declining trend.

Balance Sheet

Heritage Commerce maintains a healthy balance sheet with a low debt-to-equity ratio of 0.06, indicating prudent leverage management. The equity ratio is stable at 12.6% for TTM 2025, suggesting a strong equity base relative to assets. Return on equity is lower at 6.0% for TTM 2025, down from 9.6% in 2023, highlighting some challenges in generating returns for shareholders.

Cash Flow

The company shows robust free cash flow generation with a 21.2% growth from 2024 to TTM 2025. The operating cash flow to net income ratio is favorable at 1.11, demonstrating efficient conversion of earnings into cash. While free cash flow to net income ratio remains strong at 1.08, indicating consistent cash flow management, fluctuations in financing cash flow may present potential liquidity challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	260.88M	251.45M	243.30M	198.94M	162.94M	160.39M
Gross Profit	179.94M	170.26M	191.47M	189.22M	158.95M	138.58M
EBITDA	57.80M	60.20M	93.94M	98.12M	69.94M	53.77M
Net Income	21.15M	40.53M	64.44M	66.56M	47.70M	35.30M
Balance Sheet
Total Assets	5.47B	5.65B	5.19B	5.15B	5.50B	4.63B
Cash, Cash Equivalents and Short-Term Investments	362.39K	1.22B	850.76M	796.20M	1.41B	1.37B
Total Debt	39.73M	39.65M	39.50M	39.35M	39.92M	39.74M
Total Liabilities	4.77B	4.96B	4.52B	4.52B	4.90B	4.06B
Stockholders Equity	694.70M	689.73M	672.90M	632.46M	598.03M	577.89M
Cash Flow
Free Cash Flow	43.42M	37.35M	71.34M	69.07M	56.60M	54.13M
Operating Cash Flow	43.96M	38.97M	73.01M	69.85M	56.85M	57.30M
Investing Cash Flow	-120.58M	110.62M	70.18M	-669.49M	-696.83M	145.59M
Financing Cash Flow	150.15M	410.40M	-41.67M	-399.98M	815.13M	470.02M

Heritage Commerce Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 10.09
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTBK, the sentiment is Neutral. The current price of 10.09 is below the 20-day moving average (MA) of 10.24, above the 50-day MA of 9.92, and above the 200-day MA of 9.49, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 48.85 is Neutral, neither overbought nor oversold. The STOCH value of 47.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HTBK.

Heritage Commerce Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HTBK	76 Outperform	$623.07M	15.97	5.70%	5.16%	6.63%	-19.64%
SPFI	76 Outperform	636.97M	12.24	12.03%	1.55%	6.07%	20.59%
THFF	73 Outperform	691.49M	11.14	8.61%	3.38%	20.07%	21.46%
ORRF	73 Outperform	683.16M	15.69	4.27%	2.92%	89.40%	-29.07%
TRST	72 Outperform	729.53M	13.77	7.72%	3.77%	5.39%	8.80%
WASH	58 Neutral	567.76M	-19.16	-4.62%	7.64%	-24.82%	-156.55%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Heritage Commerce Corporate Events

Heritage Commerce Appoints Christopher Abate to Board

On August 18, 2025, Heritage Commerce Corp announced the appointment of Christopher J. Abate to its Board of Directors, expanding the board from eight to nine members. Mr. Abate, a seasoned executive with over 20 years of experience in the financial services industry, is expected to bring valuable expertise in real estate and finance to the company. His appointment is seen as a strategic move to enhance the board’s capabilities and support the company’s growth plans.

Heritage Commerce Reports Q2 2025 Financial Results

Heritage Commerce Corp’s management team attended an investor conference from July 28 to July 30, 2025, presenting their second quarter 2025 financial results. The company reported a slight increase in loans and improved loan yields, although total deposits decreased slightly. The bank maintained strong credit quality and liquidity, positioning itself well for continued growth and market share expansion.

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.