Reviewing Heritage Commerce (NASDAQ:HTBK) & First Republic Bank (OTCMKTS:FRCB)

Heritage Commerce (NASDAQ:HTBK) and First Republic Bank (OTCMKTS:FRCB) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Heritage Commerce and First Republic Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heritage Commerce	16.31%	7.18%	0.90%
First Republic Bank	N/A	N/A	N/A

Valuation & Earnings

This table compares Heritage Commerce and First Republic Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Commerce	$251.45 million	3.06	$40.53 million	$0.70	17.91
First Republic Bank	$6.75 billion	N/A	$1.67 billion	$5.32	0.00

First Republic Bank has higher revenue and earnings than Heritage Commerce. First Republic Bank is trading at a lower price-to-earnings ratio than Heritage Commerce, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Heritage Commerce has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500. Comparatively, First Republic Bank has a beta of 2.39, suggesting that its share price is 139% more volatile than the S&P 500.

Insider and Institutional Ownership

75.6% of Heritage Commerce shares are owned by institutional investors. Comparatively, 0.0% of First Republic Bank shares are owned by institutional investors. 2.7% of Heritage Commerce shares are owned by insiders. Comparatively, 0.7% of First Republic Bank shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Heritage Commerce and First Republic Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Commerce	0	3	3	1	2.71
First Republic Bank	0	0	0	0	0.00

Heritage Commerce currently has a consensus price target of $12.25, suggesting a potential downside of 2.31%. Given Heritage Commerce’s stronger consensus rating and higher probable upside, equities analysts plainly believe Heritage Commerce is more favorable than First Republic Bank.

Summary

Heritage Commerce beats First Republic Bank on 10 of the 14 factors compared between the two stocks.

About Heritage Commerce

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. Heritage Commerce Corp was founded in 1994 and is headquartered in San Jose, California.

About First Republic Bank

As of May 1, 2023, First Republic Bank went out of business. Previously, First Republic Bank provided private banking, private business banking, and private wealth management services to clients in metropolitan areas in the United States. The company was founded in 1985 and was headquartered in San Francisco, California. First Republic Bank now trades on OTCPK.