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Heritage Commerce: A Commercial Real Estate Lender With Limited Growth Opportunities

Apr. 07, 2021 8:00 AM ETHeritage Commerce Corp (HTBK)
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ALG Research


  • Continued margin compression and a shrinking loan portfolio is likely to limit profitability upside.
  • An above peer valuation leaves minimal upside appreciation potential.
  • While credit does look healthy today, HTBK had a rather poor performance in the last recession.

Aerial view of downtown San Jose in the evening; Silicon Valley, South San Francisco Bay Area, California
Photo by Sundry Photography/iStock via Getty Images

Investment Thesis

In terms of relative asset size, San Jose, California-based Heritage Commerce Corp. (NASDAQ:HTBK) is in a sweet spot. Heritage is $4.6 billion asset bank, which is large enough to garner cost efficiencies

This article was written by

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Passionate about the banking space and capital markets. Worked at multiple banks throughout the United States for a long time, specializing in credit and portfolio management.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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