UPDATE: Stifel Nicolaus Initiates Hold Heritage Commerce; Valuation Full

Stifel Nicolaus initiates its coverage on Heritage Commerce

with a Hold rating on shares. Stifel Nicolaus notes, "HTBK shares trade at the highest P/E multiple in our West Banks coverage group at 16.8x based on our 2013 EPS estimate compared to the peer average of 12.3x. However, the shares trade at a discount on a tangible book basis compared to the peer average of 1.4x. With a limited number of banks with assets greater than $1 billion in assets in the San Francisco Bay Area, the tangible book multiple is a more important factor in consideration in our valuation of the shares. Our fair value for the shares is $6.50, and we are initiating coverage with a Hold rating." HTBK closed at $6.06 on Thursday.