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.