Summit State Bank (NASDAQ:SSBI) & Heritage Commerce (NASDAQ:HTBK) Head-To-Head Contrast

Heritage Commerce (NASDAQ:HTBK) and Summit State Bank (NASDAQ:SSBI) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.

Institutional and Insider Ownership

75.6% of Heritage Commerce shares are held by institutional investors. 2.7% of Heritage Commerce shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Heritage Commerce and Summit State 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
Summit State Bank	1	0	0	0	1.00

Heritage Commerce currently has a consensus target price of $12.25, indicating a potential upside of 1.07%. Given Heritage Commerce’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Heritage Commerce is more favorable than Summit State Bank.

Risk and Volatility

Heritage Commerce has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500. Comparatively, Summit State Bank has a beta of 0.2, suggesting that its share price is 80% less volatile than the S&P 500.

Profitability

This table compares Heritage Commerce and Summit State 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%
Summit State Bank	-1.41%	N/A	N/A

Earnings and Valuation

This table compares Heritage Commerce and Summit State Bank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Commerce	$251.45 million	2.95	$40.53 million	$0.70	17.31
Summit State Bank	$62.91 million	1.25	-$3.66 million	($0.13)	-89.00

Heritage Commerce has higher revenue and earnings than Summit State Bank. Summit State 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.

Summary

Heritage Commerce beats Summit State Bank on 15 of the 15 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 Summit State Bank

Summit State Bank engages in providing an array of financial services to small and medium-sized businesses, their owners and employees, entrepreneurs, high net worth families, foundations, estates, and individual consumers. It specializes in business services, personal accounts, nonprofit programs, and mobile banking ranging from lending, checking, merchant, eBanking, automated teller machines, equity loans, and others. The company was founded on December 20, 1982 and is headquartered in Santa Rosa, CA.