7. Heritage Commerce Corp.
Shares of Heritage Commerce Corp. (HTBK) of San Jose, Calif., closed at $4.54 Monday, returning 1% year-to-date. The shares were 14% higher than the consensus price target of $4.00 at the end of 2010.
The company had $1.3 billion in total assets as of Sept. 30, with 10 branches.The company owes $40 million in TARP money. Third-quarter net income available to common shareholders was $4.3 million, or 13 cents a share, increasing from $458,000, or a penny a share, in the third quarter of 2010. The prior-year results included a $1.1 million write-down loan loans held-for-sale, as well as 849,000 in Federal Deposit Insurance Corp. premiums. FDIC premiums in the third quarter of 2011 totaled $167,000. Third-quarter results were boosted by a $3.0 million reduction in deferred tax assets, resulting in a $2.5 million tax benefit. Third-quarter net interest income increased 8% year-over-year to $11.7 million. The net interest margin improved to 4.01% in the third quarter, from 3.52% a year earlier, "as a result of higher yields on earning assets and lower cost of deposits compared to the third quarter of 2010," according to CEO Walt Kaczmarek." The provision for loan losses was $1.5 million in the third quarter, declining from $2.1 million a year earlier. Nonperforming assets made up 1.64% of total assets as of Sept. 30, improving from 3.73% in September 2010. The third-quarter ROA was 1.53%, according to SNL. FIG Partners analyst Timothy Coffey rates Heritage Commerce a buy, reiterating his "Outperform" rating on Nov. 7, with a price target of $5.50, saying that "management has done a substantial number of things right in the last year and investors should start paying attention," since "in order to reverse the (deferred tax asset) valuation allowance, the company had to show it had the ability to maintain profitability." The shares trade for just under 16 times the consensus 2012 EPS estimate of 27 cents among analysts polled by FactSet, and for 0.9 times tangible book value, according to SNL. Two out of five analysts covering Heritage Commerce rate the shares a buy, while the remaining analysts all have neutral ratings.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV