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FALSE000105335200010533522025-10-232025-10-23

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K    

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 23, 2025

HERITAGE COMMERCE CORP
(Exact name of registrant as specified in its charter)

California 000-23877 77-0469558
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
224 Airport Parkway, San Jose, California
 95110
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (408) 947-6900

Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
  
Trading Symbol(s)
  
Name of each exchange on which registered
Common Stock, No Par Value
  
HTBK
  
The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Exchange Act. ☐



On October 23, 2025, Heritage Commerce Corp (the “Company”), the holding company for Heritage Bank of Commerce (the “Bank”), issued a press release announcing its preliminary unaudited financial results for the third quarter of 2025 and the nine months ended September 30, 2025. Copies of the press release and the Investor Presentation for the Third Quarter 2025 are attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K.

The information in this report set forth under this Item 2.02 and in Exhibits 99.1 and 99.2 is being furnished pursuant to Item 2.02 of Form 8-K and shall not be treated as “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other filing pursuant to the Securities Act of 1933, as amended (the "Securities Act), or the Exchange Act, except as expressly stated by specific reference in such filing.

ITEM 7.01    REGULATION FD DISCLOSURE

Copies of the Company’s press releases announcing the amendments to its share repurchase program and the quarterly dividend described below are attached as Exhibits 99.1 and 99.3, respectively, to this Current Report on Form 8-K. In accordance with General Instruction B.2 of Form 8-K, these press releases are deemed to be “furnished” and shall not be deemed “filed” for the purpose of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall either press release be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

ITEM 8.01    OTHER EVENTS

QUARTERLY DIVIDEND

On October 23, 2025, the Company announced that its Board of Directors (the "Board") declared a $0.13 per share quarterly cash dividend to holders of its common stock. The dividend will be paid on November 20, 2025, to shareholders of record at the close of the business day on November 6, 2025.

SHARE REPURCHASE PROGRAM

On October 23, 2025, the Company announced that the Board approved an increase in the maximum total value of shares authorized for repurchase under the Company's existing share repurchase program, initially approved by the Board in July 2024 (the “Repurchase Program”), from $15 million to $30 million. The term of the Repurchase Program was also extended by the Board to October 31, 2026. During the second and third quarters of 2025, the Company repurchased 439,187 shares of its common stock with a weighted average price of $9.22 per share for a total of $4.0 million. The remaining capacity under the Program after giving effect to the amendment described above is $26.0 million.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

(d) Exhibits.

2

99.1
99.2
99.3
104 Cover Page Interactive Data File (embedded within XBRL document)


3

SIGNATURES


Date: October 23, 2025

Heritage Commerce Corp


By: /s/ Seth Fonti
Seth Fonti
Executive Vice President and Chief Financial Officer

4
EX-99.1 2 htbkearningsrelease.htm EX-99.1 HTBK Earnings Release
1
Exhibit 99.1
Heritage Commerce Corp                                                                           
224 Airport Parkway
San Jose, CA 95110
www.heritagecommercecorp.com                                                                                                                                       
Heritage Commerce Corp Reports Third Quarter and First Nine Months of 2025 Financial Results
Core Business Momentum and Operating Leverage Drive Double-Digit EPS Growth in Third Quarter
San Jose, CA – October 23, 2025 – Heritage Commerce Corp (Nasdaq: HTBK), (the “Company”), the holding company for Heritage Bank of Commerce (the “Bank”)
today announced its financial results for the third quarter and first nine months of 2025. All data are unaudited.
REPORTED THIRD QUARTER 2025 HIGHLIGHTS:
Net Income
Diluted Earnings Per
Share ("EPS")
Pre-Provision Net Revenue
("PPNR")
Fully Tax Equivalent
("FTE") Net Interest
Margin(1)
Efficiency Ratio
Return on Average
Tangible Common
Equity(1)
$14.7 Million
$0.24
$21.0 Million
3.60%
58.05%
11.14%
CEO COMMENTARY:
“We executed well in the third quarter, generating double digit EPS growth and positive operating leverage,” said Clay Jones, President and Chief Executive
Officer. “We had positive trends in loan and deposit growth, an expansion in our net interest margin, disciplined expense management, and an improvement in
our asset quality. Loan and deposit growth was 1% and 3%, respectively, over the linked quarter, and we continue to add clients in key markets across our
footprint, while maintaining our underwriting and pricing.”
“Our financial foundation is solid — marked by high capital reserves, strong liquidity, and sound asset quality.  These fundamentals position us to continue to
execute on our strategy, which is focused on increasing market share, growing our client franchise, and generating profitable growth, as we continue to
support our community, colleagues, and shareholders. We are strengthening our platform to perform and position ourselves to deliver sustained, high-quality
financial results for our shareholders.” said Mr. Jones.
LINKED-QUARTER BASIS
YEAR-OVER-YEAR
FINANCIAL HIGHLIGHTS:
•Total revenue of $50.0 million, an increase of 5%, or $2.2 million
•Cost of funds decreased to 1.54% from 1.57%
•Reported net income of $14.7 million and reported EPS of $0.24, up 130% and
140%, from $6.4 million and $0.10, respectively
•Adjusted net income(1) of $14.7 million and adjusted EPS(1) of $0.24, up 13% and
14%, from $13.0 million and $0.21, respectively
•Total revenue of $50.0 million, an increase of 19%, or $7.9 million
•Cost of funds decreased to 1.54% from 1.88%
•PPNR of $21.0 million, an increase of 44% from $14.6 million
•Net income of $14.7 million and EPS of $0.24, up 40% and 41%,
respectively
BALANCE SHEET HIGHLIGHTS:
•Loans held-for-investment (“HFI”) of $3.6 billion, up $47.3 million, or 1%
•Total deposits of $4.8 billion, up $149.2 million, or 3%
•Loan to deposit ratio of 74.99%, a decrease of 2% from 76.38%
•Total shareholders’ equity of $700.0 million, up $5.3 million
•Increase in loans HFI of $171.4 million, or 5%
•Increase in total deposits of $47.0 million, or 1%
•Loan to deposit ratio of 74.99%, an increase of 4% from 72.11%
•Total shareholders’ equity of $700.0 million, up $14.7 million
ASSET QUALITY:
•Nonperforming assets (“NPAs”) to total assets of 0.07%, compared to 0.11%
•Classified assets to total assets of 0.62%, compared to 0.69%
•NPAs to total assets of 0.07%, compared to 0.13%
•Classified assets to total assets of 0.62%, compared to 0.59%
KEY PERFORMANCE METRICS:
•FTE net interest margin(1) of 3.60%, an increase of 6 basis points from 3.54%
•Efficiency ratio of 58.05%, a decrease of 5% from adjusted efficiency ratio(1) of
61.01%
•Return on average assets of 1.05%, an increase of 11% over adjusted return on
average assets(1)
•Return on average tangible common equity(1) of 11.14%, an increase of 12% over
adjusted return on average tangible common equity(1)
•FTE net interest margin(1) of 3.60%, an increase of 45 basis points from
3.15%
•Efficiency ratio of 58.05%, a decrease of 11% from 65.37%
•Return on average assets of 1.05%, an increase of 35%
•Return on average tangible common equity(1) of 11.14%, an increase of
35% 
CAPITAL MANAGEMENT:
•Common stock net repurchases of $2.2 million, compared to $1.9 million
•Total capital ratio of 15.4%, compared to 15.5%
•Common equity tier 1 capital ratio of 13.2%, compared to 13.3%
•Tangible common equity ratio(1) of 9.67%, compared to 9.85%
•Last twelve months ("LTM") common dividend of $31.9 million and
dividend payout ratio of 74%
•LTM common stock net repurchases of $4.0 million
•Total capital ratio of 15.4%, compared to 15.6%
•Common equity tier 1 capital ratio of 13.2%, compared to 13.4%
•Tangible common equity ratio(1) of 9.67%, compared to 9.50%
(1)This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release. All references to “adjusted” operating metrics exclude the $9.2
million of pre-tax charges primarily related to a legal settlement in the second quarter and first nine months of 2025 as presented in the reconciliation of non-GAAP financial measures at the end
of this press release.
2
Results of Operations:
Net income was $14.7 million, or $0.24 per average diluted common share, for the third quarter of 2025, compared to $6.4 million, or
$0.10 for the second quarter of 2025, and $10.5 million, or $0.17 per average diluted common share for the third quarter of 2024.
Adjusted net income(2) was $13.0 million, or $0.21 per average diluted common share, for the second quarter of 2025. The annualized
return on average assets was 1.05%, the annualized return on average equity was 8.37%, and the annualized return on average tangible
common equity(2) was 11.14% for the third quarter of 2025, compared to 0.47%, 3.68%, and 4.89%, respectively, for the second
quarter of 2025, and 0.78%, 6.14%, and 8.27%, respectively, for the third quarter of 2024. The adjusted annualized return on average
assets(2) was 0.95%, the adjusted annualized return on average equity(2) was 7.45%, and the adjusted annualized return on average
tangible common equity(2) was 9.92%, for the second quarter of 2025.
Net income was $32.7 million, or $0.53 per average diluted common share, for the first nine months of 2025. Adjusted net income(2)
was $39.3 million, or $0.64 per average diluted common share, for the first nine months of 2025, compared to $29.9 million, or $0.49
per average diluted common share, for the first nine months of 2024. EPS increased 8% and adjusted EPS(2) increased 31% for the first
nine months of 2025, compared to the first nine months of 2024. The annualized return on average assets was 0.79%, the annualized
return on average equity was 6.29%, and the annualized return on average tangible common equity(2) was 8.38% for the nine months
ended September 30, 2025, compared to 0.76%, 5.91%, and 7.98%, respectively, for the nine months ended September 30, 2024. The
adjusted annualized return on average assets(2) was 0.95%, the adjusted annualized return on average equity(2) was 7.55%, and the
adjusted annualized return on average tangible common equity(2) was 10.06%, for the nine months ended September 30, 2025.
Total revenue, which is defined as net interest income before provision for credit losses on loans plus noninterest income, increased
$2.2 million, or 5%, to $50.0 million for the third quarter of 2025, compared to $47.8 million for the second quarter of 2025, and
increased $7.9 million, or 19%, from $42.2 million for the third quarter of 2024.  Total revenue increased $17.8 million, or 14%, to
$143.8 million for the first nine months of 2025, compared to $126.0 million for the first nine months of 2024.
Net interest income totaled $46.8 million for the third quarter of 2025, representing an increase of $2.0 million, or 4%, compared to
$44.8 million for the second quarter of 2025. The FTE net interest margin(2) was 3.60% for the third quarter of 2025, compared to
3.54% for the second quarter of 2025. The increase in the net interest margin is primarily attributable to higher average balances of
loans and overnight funds, a higher average yield on securities, and a decrease in the average cost of deposits. The cost of deposits was
down 4 basis points, driven by proactive management of exception based deposit pricing and favorable noninterest-bearing deposit
mix shift. These factors were partially offset by a decrease in the average balances of securities due to maturities and paydowns.
Net interest income increased $7.5 million, or 19%, to $46.8 million, compared to $39.3 million for the third quarter of 2024. The FTE
net interest margin(2) increased from 3.15% for the third quarter of 2024 primarily due to lower rates paid on customer deposits, an
increase in the average yields on loans and securities, a higher average balance of loans, and an increase in the average balance of
deposits resulting in a higher average balance of overnight funds, partially offset by a lower average yield on overnight funds. 
For the first nine months of 2025, net interest income increased $17.3 million, or 15% to $135.0 million, compared to $117.7 million
for the first nine months of 2024.  The FTE net interest margin(2) increased 28 basis points to 3.51% for the first nine months of 2025,
from 3.23% for the first nine months of 2024, primarily due to decrease in rates paid on client deposits, an increase in the average
balances of average interest earning assets, and an increase in the average yields on loans and securities, partially offset by a lower
yield on overnight funds.
Total noninterest income increased 8% to $3.2 million for the third quarter of 2025, compared to $3.0 million for the second quarter of
2025, and increased 14% from $2.8 million for the third quarter of 2024. Total noninterest income increased 7% to $8.9 million for the
first nine months of 2025, compared to $8.3 million for the first nine months of 2024. The increase in noninterest income for the third
quarter and first nine months of 2025 was primarily driven by a $386,000 recovery on an acquired loan that had been previously
charged off and by higher facility fees. For the first nine months of 2025, the increase was partially offset by a $219,000 gain on
proceeds from company-owned life insurance recorded in the same period of 2024. 
(2)This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.
3
Noninterest expense for the third quarter of 2025 totaled $29.0 million, compared to $38.3 million(3) for the second quarter of 2025,
and $27.6 million for the third quarter of 2024. Adjusted noninterest expense(4) was $29.1 million for the second quarter of 2025.
Noninterest expense totaled $96.8 million(3) for the first nine months of 2025, compared to $83.3 million for the first nine months of
2024. Adjusted noninterest expense(4) for the first nine months of 2025 increased to $87.6 million, compared to $83.3 million for the
first nine months of 2024. The increase in adjusted noninterest expense(4) for the third quarter and first nine months of 2025 compared
to the respective periods in 2024 was primarily due to higher salaries and employee benefits as a result of annual salary increases. The
first nine months of 2025 was also impacted by higher professional fees and information technology related expenses as the Company
invested in enhancing its infrastructure.
For the third quarter the Company’s PPNR, which is defined as total revenue less adjusted noninterest expense was $21.0 million,
compared to $9.4 million for the second quarter of 2025, and $14.6 million for the third quarter of 2024. For the third quarter the
Company’s adjusted PPNR(4) increased 13% to $21.0 million from $18.6 million for the second quarter of 2025, and increased 44%
from $14.6 million for the third quarter of 2024. For the first nine months of 2025, the Company’s PPNR was $47.0 million, compared
to $42.7 million for the first nine months of 2024. For the first nine months of 2025, the Company’s adjusted PPNR(4) increased 31%
to $56.2 million from $42.7 million for the first nine months of 2024.
The provision for credit losses on loans totaled $416,000 for the third quarter of 2025, compared to a $516,000 provision for credit
losses on loans for the second quarter of 2025 and a provision for credit losses on loans of $153,000 for the third quarter of 2024. Net
recoveries totaled $378,000 for the third quarter of 2025, compared to net charge-offs of $145,000 for the second quarter of 2025, and
net charge-offs of $288,000 for the third quarter of 2024. 
The provision for credit losses on loans totaled $1.2 million for the first nine months of 2025, compared to a $808,000 provision for
credit losses on loans for the first nine months of 2024. Net charge-offs totaled $732,000 for the first nine months of 2025, compared
to $947,000 for the first nine months of 2024.
Income tax expense increased to $5.9 million for the third quarter of 2025, compared to $2.5 million for the second quarter of 2025,
and $3.9 million for the third quarter of 2024, primarily due to higher pre-tax income. The effective tax rate for the third quarter of
2025 was 28.5% for both the third and second quarters of 2025, and 27.3% for the third quarter of 2024. 
Income tax expense for the nine months ended September 30, 2025 was $13.1 million, compared to $12.0 million for the nine months
ended September 30, 2024.  The effective tax rate for nine months ended September 30, 2025 was 28.6%, compared to 28.7% for the
nine months ended September 30, 2024.
The efficiency ratio was 58.05% for the third quarter of 2025, compared to 80.23% for the second quarter of 2025, and 65.37% for the
third quarter of 2024. The adjusted efficiency ratio(4) improved to 58.05% for the third quarter of 2025, from 61.01% for the second
quarter of 2025, and 65.37% for the third quarter of 2024, primarily due to higher total revenue. The reported efficiency ratio was
67.31% for the first nine months of 2025. The adjusted efficiency ratio(4) improved to 60.92% for the first nine months of 2025 from
66.08% for the first nine months of 2024, primarily due to higher total revenue, partially offset by higher noninterest expense. 
Full time equivalent employees were 350 at both September 30, 2025 and June 30, 2025, and 353 at September 30, 2024.
(3)During the second quarter of 2025, the Company recorded expenses of $9.2 million, primarily due to pre-tax charges related to the settlement of certain litigation matters, including the
anticipated settlement of a previously disclosed class action and California Private Attorneys General Act (“PAGA”) lawsuit that alleged the violation of certain California wage-and-hour and
related laws and regulations, and charges related to the planned closure of a Bank branch.
(4)This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.
Balance Sheet, Liquidity and Capital Management:
Total assets increased 3% to $5.6 billion at September 30, 2025, compared to $5.5 billion at June 30, 2025, primarily due to an
increase in deposits resulting in an increase in overnight funds, purchases of investment securities, and an increase in loans. Total
assets were relatively flat from $5.6 billion at September 30, 2024.
Investment securities available-for-sale (at fair value) increased to $408.5 million at September 30, 2025, compared to $307.0 million
at June 30, 2025, primarily due to purchases, partially offset by maturities and paydowns. At September 30, 2024, these securities
totaled $237.6 million. The pre-tax unrealized loss on the securities available-for-sale portfolio was $652,000, or $540,000 net of
taxes, which equaled less than 1% of total shareholders’ equity at September 30, 2025.
4
During the first nine months of 2025, the Company purchased $174.2 million of agency mortgage-backed securities, $129.8 million of
collateralized mortgage obligations, and $44.8 million of U.S. Treasury securities, for total purchases of $348.8 million in the
available-for-sale portfolio. Securities purchased had a book yield of 4.92% and an average life of 5.42 years.
Investment securities held-to-maturity (at amortized cost, net of an $11,000 allowance for credit losses), totaled $544.8 million at
September 30, 2025, compared to $561.2 million at June 30, 2025, and $604.2 million at September 30, 2024. The fair value of the
securities held-to-maturity portfolio was $476.8 million at September 30, 2025. The pre-tax unrecognized loss on the securities held-
to-maturity portfolio was $68.0 million, or $47.9 million net of taxes, which equaled 7% of total shareholders’ equity at September 30,
2025.
The unrealized and unrecognized losses in both the available-for-sale and held-to-maturity portfolios resulted from higher interest
rates at September 30, 2025, compared to when the securities were purchased.  The issuers are of high credit quality, and all principal
amounts are expected to be repaid at maturity. Fair values are expected to recover as the securities approach maturity and/or if market
rates decline.
Loans HFI, net of deferred costs and fees, increased $47.3 million, or 1% to $3.6 billion at September 30, 2025, compared to $3.5
billion at June 30, 2025, and increased $171.4 million, or 5%, from $3.4 billion at September 30, 2024.  Loans HFI, excluding
residential mortgages, increased $58.6 million, or 2% to $3.14 billion at September 30, 2025, compared to $3.08 billion at June 30
2025, and increased $207.8 million, or 7%, from $2.93 billion at September 30, 2024. 
Commercial and industrial line utilization was 35% at September 30, 2025, compared to 32% at June 30, 2025, and 31% at September
30, 2024. Commercial real estate (“CRE”) loans totaled $2.0 billion at September 30, 2025, of which 31% were owner occupied and
69% were investor CRE loans. Owner occupied CRE loans also totaled 31% at both June 30, 2025 and September 30, 2024.
Approximately 23% of the Company’s loan portfolio consisted of floating interest rate loans at September 30, 2025, compared to 24%
at June 30, 2025, and 25% at September 30, 2024.
At September 30, 2025, paydowns and maturities of investment securities and fixed interest rate loans maturing within one year
totaled $343.8 million.
Total deposits increased $149.2 million, or 3%, to $4.8 billion at September 30, 2025, compared to $4.6 billion at June 30, 2025, and
increased $47.0 million, or 1% from $4.7 billion at September 30, 2024. 
The following table shows the Company’s deposit types as a percentage of total deposits at the dates indicated:
September 30,
June 30,
September 30,
DEPOSITS TYPE % TO TOTAL DEPOSITS
2025
  
2025
  
2024
 
Demand, noninterest-bearing
26
%  
25
%  
27
%  
Demand, interest-bearing
19
%  
21
%  
19
%  
Savings and money market
28
%  
28
%  
28
%  
Time deposits — under $250
1
%  
1
%  
1
%  
Time deposits — $250 and over
5
%  
4
%  
4
%  
Insured Cash Sweep ("ICS")/Certificate of Deposit Registry
  Service ("CDARS") - interest-bearing demand, money
      market and time deposits
21
%
21
%
21
%
  Total deposits
100
%  
100
%  
100
%  
The loan to deposit ratio was 74.99% at September 30, 2025, compared to 76.38% at June 30, 2025, and 72.11% at September 30,
2024.
The Company’s total available liquidity and borrowing capacity was $3.3 billion at September 30, 2025, compared to $3.1 billion at
June 30, 2025, and $3.2 billion at September 30, 2024.
Total shareholders’ equity was $700.0 million at September 30, 2025, compared to $694.7 million at June 30, 2025, and $685.4
million at September 30, 2024.
5
Total accumulated other comprehensive loss of $5.2 million at September 30, 2025 was comprised of $2.5 million in actuarial losses
associated with split dollar insurance contracts, $2.1 million in actuarial losses associated with the supplemental executive retirement
plan, unrealized losses on securities available-for-sale of $540,000, and a $40,000 unrealized gain on interest-only strip from SBA
loans.
Capital at September 30, 2025 was above well capitalized regulatory thresholds.
The reported tangible book value per share(5) was $8.61 at September 30, 2025, compared to $8.49 at June 30, 2025, and $8.33 at
September 30, 2024. The adjusted tangible book value per share(5) was $8.71, compared to $8.59 at June 30, 2025, and $8.33 at
September 30, 2024.
Asset Quality:
The allowance for credit losses on loans (“ACLL”) at September 30, 2025 was $49.4 million, or 1.38% of total loans. The ACLL at
June 30, 2025 was $48.6 million, or 1.38% of total loans. The ACLL at September 30, 2024 was $47.8 million, or 1.40% of total
loans. The increase in the ACLL year-over-year is due to loan growth.
NPAs were $3.7 million at September 30, 2025, compared to $6.2 million at June 30, 2025, and $7.2 million at September 30, 2024.
There were no Shared National Credits (“SNCs”) in NPAs or total loans at September 30, 2025, June 30, 2025, or September 30,
2024.
Classified assets totaled $34.6 million, or 0.62% of total assets, at September 30, 2025, compared to $37.5 million, or 0.69% of total
assets, at June 30, 2025, and $32.6 million, or 0.59% of total assets, at September 30, 2024.
Announcing An Increase to the Company's Share Repurchase Program:
Today, the Board of Directors (the "Board") of the Company approved an increase in the maximum total value of shares authorized for
repurchase under the Company’s share repurchase program, initially approved by the Board in July 2024 (the “Repurchase Program”),
doubling the authorization from $15 million to $30 million. The term of the Repurchase Program was also extended by the Board to
October 31, 2026. During the second and third quarters of 2025, the Company repurchased 439,187 shares of its common stock with a
weighted average price of $9.22 per share for a total of $4.0 million. The remaining capacity under the Program after giving effect to
the amendment as described above is $26 million at September 30, 2025.
(5)This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.
***
Heritage Commerce Corp, a bank holding company established in October 1997, is the parent company of Heritage Bank of
Commerce, established in 1994 and headquartered in San Jose, CA with full-service branches in Danville, Fremont, Hollister,
Livermore, Los Altos, Los Gatos, Morgan Hill, Oakland, Palo Alto, Pleasanton, Redwood City, San Francisco, San Jose, San Mateo,
San Rafael, and Walnut Creek.  Heritage Bank of Commerce is an SBA Preferred Lender.  Bay View Funding, a subsidiary of
Heritage Bank of Commerce, is based in San Jose, CA and provides business-essential working capital factoring financing to various
industries throughout the United States.  For more information, please visit www.heritagecommercecorp.com.  The contents of our
website are not incorporated into, and do not form a part of, this release or of our filings with the Securities and Exchange
Commission.
Reclassifications
During the first quarter of 2025, we reclassified Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) stock
dividends from interest income to noninterest income and the related average asset balances were reclassified from interest earning
assets to other assets on the “Net Interest Income and Net Interest Margin” tables. The amounts for the prior periods were reclassified
to conform to the current presentation. These reclassifications did not affect previously reported net income or shareholders’ equity.
Non-GAAP Financial Measures
Financial results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) 
and prevailing practices in the banking industry. However, certain non-GAAP performance measures and ratios are used by
management to evaluate and measure the Company’s performance. These measures include “adjusted” operating metrics that have
been adjusted to exclude notable expenses incurred in the second quarter of 2025 as well as other performance measures and ratios
adjusted for notable items. Management believes these non-GAAP financial measures enhance comparability between periods and in
some instances are common in the banking industry. These non-GAAP financial measures should be supplemental to primary GAAP
financial measures and should not be read in isolation or relied upon as a substitute for primary GAAP financial measures. A
6
reconciliation of GAAP to non-GAAP financial measures is presented in the tables at the end of this press release under
“Reconciliation of Non-GAAP Financial Measures.”
Forward-Looking Statement Disclaimer
Certain matters discussed in this press release constitute forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking statements are inherently uncertain in that they reflect plans and
expectations for future events. These statements may include, among other things, those relating to the Company’s future financial
performance, plans and objectives regarding future events, expectations regarding changes in interest rates and market conditions,
projected cash flows of our investment securities portfolio, the performance of our loan portfolio, loan growth, expenses, net interest
margin, estimated net interest income resulting from a shift in interest rates, expectation of high credit quality issuers ability to repay,
as well as statements relating to the anticipated effects on the Company’s financial condition and results of operations from expected
developments or events. Any statements that reflect our belief about, confidence in, or expectations for future events, performance or
condition should be considered forward-looking statements. Readers should not construe these statements as assurances of a given
level of performance, nor as promises that we will take actions that we currently expect to take. All statements are subject to various
risks and uncertainties, many of which are outside our control and some of which may fall outside our ability to predict or anticipate.
Accordingly, our actual results may differ materially from our projected results, and we may take actions or experience events that we
do not currently expect. Risks and uncertainties that could cause our financial performance to differ materially from our goals, plans,
expectations and projections expressed in forward-looking statements include those set forth in our filings with the Securities and
Exchange Commission, Item 1A of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31,2025, and include:
(i) cybersecurity risks that may affect us directly or may impact us indirectly by virtue of their effects on our clients, markets or
vendors, including our ability to identify and address cybersecurity risks, including those posed by the increasing use of artificial
intelligence (such as, but not limited to, ransomware, data security breaches, “denial of service” attacks, “hacking” and identity theft)
affecting us, our clients, and our third-party vendors and service providers; (ii) events that affect our ability to attract, recruit, and
retain qualified officers and other personnel to implement our strategic plan, and that enable current and future personnel to protect
and develop our relationships with clients, and to promote our business, results of operations and growth prospects; (iii) media items
and consumer confidence as those factors affect our clients’ confidence in the banking system generally and in our bank specifically;
(iv) adequacy of our risk management framework, disclosure controls and procedures and internal control over financial reporting;
(v) market, geographic and sociopolitical factors that arise by virtue of the fact that we operate primarily in the general San Francisco
Bay Area of Northern California; (vi) risks of geographic concentration of our client base, our loans, and the collateral securing our
loans, as those clients and assets may be particularly subject to natural disasters and to events and conditions that directly or indirectly
affect those regions, including the particular risks of natural disasters (including earthquakes, fires, and flooding) and other events that
disproportionately affect that region; (vii) political events that have accompanied or that may in the future accompany or result from
recent political changes, particularly including the imposition of tariffs, sociopolitical events and conditions that result from political
conflicts and law enforcement activities that may adversely affect our markets or our clients; (viii) our ability to estimate accurately,
and to establish adequate reserves against, the risk of loss associated with our loan and lease portfolios and our factoring business;
(ix) inflationary pressures and changes in the interest rate environment that reduce our margins and yields, the fair value of financial
instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans to clients, whether held
in the portfolio or in the secondary market; (x) factors that affect the value and liquidity of our investment portfolios, particularly the
values of securities available-for-sale; (xi) factors that affect our liquidity and our ability to meet client demands for withdrawals from
deposit accounts and undrawn lines of credit, including our cash on hand and the availability of funds from our own lines of credit;
(xii) increased capital requirements for our continual growth or as imposed by banking regulators, which may require us to raise
capital at a time when capital is not available on favorable terms or at all; (xiii) the expense and uncertain resolution of litigation
matters whether occurring in the ordinary course of business or otherwise, particularly including but not limited to the effects of recent
and ongoing developments in California labor and employment laws, regulations and court decisions; (xiv) operational issues
stemming from, and/or capital spending necessitated by, the potential need to adapt to industry changes in information technology
systems, on which we are highly dependent; and (xv) our success in managing the risks involved in the foregoing factors.
Member FDIC
For additional information, email:
InvestorRelations@herbank.com
7
For the Quarter Ended:
Percent Change From:
For the Nine Months Ended:
CONSOLIDATED INCOME STATEMENTS
September 30,
June 30,
September 30,
 
 
 
 
June 30,
September 30,
 
 
 
 
September 30,
 
 
 
 
September 30,
 
 
 
 
Percent
(in $000’s, unaudited)
2025
2025
2024
2025
2024
2025
2024
Change
Interest income
$
65,094
$
63,025
$
60,852
 
3%
7%
$
189,951
$
176,301
8%
Interest expense
 
18,306
 
18,220
 
21,523
 
0%
(15)%
 
54,998
 
58,603
(6)%
        Net interest income before provision
    for credit losses on loans
 
46,788
 
44,805
 
39,329
 
4%
19%
 
134,953
 
117,698
15%
Provision for credit losses on loans
 
416
 
516
 
153
 
(19)%
172%
 
1,206
 
808
49%
Net interest income after provision
  for credit losses on loans
 
46,372
 
44,289
 
39,176
 
5%
18%
 
133,747
 
116,890
14%
Noninterest income:
 
 
 
 
 
  
 
  
  
Service charges and fees on deposit
  accounts
 
898
 
929
 
908
 
(3)%
(1)%
 
2,719
 
2,676
2%
FHLB and FRB stock dividends
587
584
586
1%
0%
1,761
1,765
0%
Increase in cash surrender value of
  life insurance
 
564
 
548
 
530
 
3%
6%
 
1,650
 
1,569
5%
Servicing income
77
61
108
26%
(29)%
220
348
-37%
Gain on sales of SBA loans
 
—
 
87
 
94
 
(100)%
(100)%
 
185
 
288
-36%
Termination fees
—
 
227
 
46
 
(100)%
(100)%
 
314
 
159
97%
Gain on proceeds from company-owned
  life insurance
—
—
—
N/A
N/A
—
219
-100%
Other
 
1,091
 
541
 
554
 
102%
97%
 
2,041
 
1,304
57%
  Total noninterest income
 
3,217
 
2,977
 
2,826
 
8%
14%
 
8,890
 
8,328
7%
Noninterest expense:
 
  
 
 
  
 
 
  
 
  
  
Salaries and employee benefits
 
16,948
 
16,227
 
15,673
 
4%
8%
 
49,750
 
46,976
6%
Occupancy and equipment
 
2,528
 
2,525
 
2,599
 
0%
(3)%
 
7,587
 
7,731
-2%
Professional fees
 
1,175
 
1,819
 
1,306
 
(35)%
(10)%
 
4,574
 
3,705
23%
Other
 
8,375
 
17,764
 
7,977
 
(53)%
5%
 
34,906
 
24,867
40%
  Total noninterest expense
 
29,026
 
38,335
 
27,555
 
(24)%
5%
 
96,817
 
83,279
16%
Income before income taxes
 
20,563
 
8,931
 
14,447
 
130%
42%
 
45,820
 
41,939
9%
Income tax expense
 
5,865
 
2,542
 
3,940
 
131%
49%
 
13,107
 
12,032
9%
  Net income
$
14,698
$
6,389
$
10,507
 
130%
40%
$
32,713
$
29,907
9%
PER COMMON SHARE DATA
(unaudited)
 
 
 
 
 
 
  
Basic earnings per share
$
0.24
$
0.10
$
0.17
 
140%
41%
$
0.53
$
0.49
8%
Diluted earnings per share
$
0.24
$
0.10
$
0.17
 
140%
41%
$
0.53
$
0.49
8%
Weighted average shares outstanding - basic
 
61,333,951
 
61,508,180
 
61,295,877
 
0%
0%
 
61,440,570
 
61,254,138
0%
Weighted average shares outstanding - diluted
 
61,616,785
 
61,624,600
 
61,546,157
 
0%
0%
 
61,687,616
 
61,497,927
0%
Common shares outstanding at period-end
 
61,277,541
 
61,446,763
 
61,297,344
 
0%
0%
 
61,277,541
 
61,297,344
0%
Dividend per share
$
0.13
$
0.13
$
0.13
 
0%
0%
$
0.39
$
0.39
0%
Book value per share
$
11.42
$
11.31
$
11.18
 
1%
2%
$
11.42
$
11.18
2%
Tangible book value per share(1)
$
8.61
$
8.49
$
8.33
 
1%
3%
$
8.61
$
8.33
3%
KEY PERFORMANCE METRICS
 
 
 
 
  
 
  
  
(in $000's, unaudited)
 
  
 
 
 
 
  
 
  
  
Annualized return on average equity
 
8.37%
 
3.68%
 
6.14%
%
 
 
127%
36%
 
6.29%
%
 
 
 
5.91%
%
 
 
6%
Annualized return on average tangible
        common equity(1)
 
11.14%
 
4.89%
 
8.27%
%
 
 
128%
35%
 
8.38%
%
 
 
 
7.98%
%
 
 
5%
Annualized return on average assets
 
1.05%
 
0.47%
 
0.78%
%
 
 
123%
35%
 
0.79%
%
 
 
 
0.76%
%
 
 
4%
Annualized return on average tangible assets(1)
 
1.08%
 
0.48%
 
0.81%
%
 
 
125%
33%
 
0.82%
%
 
 
 
0.79%
%
 
 
4%
Net interest margin (FTE)(1)
 
3.60%
 
3.54%
 
3.15%
%
 
 
2%
14%
 
3.51%
%
 
 
 
3.23%
%
 
 
9%
Total revenue
$
50,005
$
47,782
$
42,155
5%
19%
$
143,843
$
126,026
14%
Pre-provision net revenue
$
20,979
$
9,447
$
14,600
122%
44%
$
47,026
$
42,747
10%
Efficiency ratio
 
58.05%
 
80.23%
 
65.37%
%
 
 
(28)%
(11)%
 
67.31%
%
 
 
 
66.08%
%
 
 
2%
AVERAGE BALANCES
 
  
 
 
  
 
 
  
 
  
  
(in $000’s, unaudited)
 
  
 
 
  
 
 
  
 
  
  
Average assets
$
5,551,457
$
5,458,420
$
5,352,067
 
2%
4%
$
5,523,227
$
5,248,338
5%
Average tangible assets(1)
$
5,378,468
$
5,284,972
$
5,177,114
 
2%
4%
$
5,349,786
$
5,072,843
5%
Average earning assets
$
5,167,710
$
5,087,089
$
5,011,865
 
2%
3%
$
5,147,630
$
4,909,240
5%
Average loans held-for-sale
$
1,230
$
2,250
$
1,493
 
(45)%
(18)%
$
1,919
$
1,913
0%
Average loans held-for-investment
$
3,519,775
$
3,504,518
$
3,359,647
 
0%
5%
$
3,484,769
$
3,328,529
5%
Average deposits
$
4,687,294
$
4,618,007
$
4,525,946
 
2%
4%
$
4,674,162
$
4,427,242
6%
Average demand deposits - noninterest-bearing
$
1,187,357
$
1,146,494
$
1,172,304
 
4%
1%
$
1,167,134
$
1,158,891
1%
Average interest-bearing deposits
$
3,499,937
$
3,471,513
$
3,353,642
 
1%
4%
$
3,507,028
$
3,268,351
7%
Average interest-bearing liabilities
$
3,539,706
$
3,511,237
$
3,393,264
 
1%
4%
$
3,546,754
$
3,307,926
7%
Average equity
$
696,385
$
697,016
$
680,404
 
0%
2%
$
695,391
$
675,951
3%
Average tangible common equity(1)
$
523,396
$
523,568
$
505,451
 
0%
4%
$
521,950
$
500,456
4%
(1)This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.
8
For the Quarter Ended:
CONSOLIDATED INCOME STATEMENTS
 
September 30,
 
June 30,
 
March 31,
 
December 31,
    
September 30,
(in $000’s, unaudited)
2025
2025
2025
2024
2024
Interest income
$
65,094
$
63,025
$
61,832
$
64,043
$
60,852
Interest expense
 
18,306
 
18,220
 
18,472
 
20,448
 
21,523
        Net interest income before provision
    for credit losses on loans
 
46,788
 
44,805
 
43,360
 
43,595
 
39,329
Provision for credit losses on loans
 
416
 
516
 
274
 
1,331
 
153
Net interest income after provision
  for credit losses on loans
 
46,372
 
44,289
 
43,086
 
42,264
 
39,176
Noninterest income:
 
 
 
 
 
Service charges and fees on deposit
  accounts
 
898
 
929
 
892
 
885
 
908
FHLB and FRB stock dividends
587
584
590
590
586
Increase in cash surrender value of
  life insurance
 
564
 
548
 
538
 
528
 
530
Servicing income
 
77
 
87
 
98
 
125
 
94
Gain on sales of SBA loans
 
—
 
61
 
82
 
77
 
108
Termination fees
 
—
 
227
 
87
 
18
 
46
Other
1,091
541
409
552
554
  Total noninterest income
 
3,217
 
2,977
 
2,696
 
2,775
 
2,826
Noninterest expense:
 
 
 
 
 
Salaries and employee benefits
 
16,948
 
16,227
 
16,575
 
16,976
 
15,673
Occupancy and equipment
 
2,528
 
2,525
 
2,534
 
2,495
 
2,599
Professional fees
 
1,175
 
1,819
 
1,580
 
1,711
 
1,306
Other
 
8,375
 
17,764
 
8,767
 
9,122
 
7,977
  Total noninterest expense
 
29,026
 
38,335
 
29,456
 
30,304
 
27,555
Income before income taxes
 
20,563
 
8,931
 
16,326
 
14,735
 
14,447
Income tax expense
 
5,865
 
2,542
 
4,700
 
4,114
 
3,940
  Net income
$
14,698
$
6,389
$
11,626
$
10,621
$
10,507
PER COMMON SHARE DATA
 
 
 
 
 
(unaudited)
 
 
 
 
 
Basic earnings per share
$
0.24
$
0.10
$
0.19
$
0.17
$
0.17
Diluted earnings per share
$
0.24
$
0.10
$
0.19
$
0.17
$
0.17
Weighted average shares outstanding - basic
 
61,333,951
 
61,508,180
 
61,479,579
 
61,320,505
 
61,295,877
Weighted average shares outstanding - diluted
 
61,616,785
 
61,624,600
 
61,708,361
 
61,679,735
 
61,546,157
Common shares outstanding at period-end
 
61,277,541
 
61,446,763
 
61,611,121
 
61,348,095
 
61,297,344
Dividend per share
$
0.13
$
0.13
$
0.13
$
0.13
$
0.13
Book value per share
$
11.42
$
11.31
$
11.30
$
11.24
$
11.18
Tangible book value per share(1)
$
8.61
$
8.49
$
8.48
$
8.41
$
8.33
KEY PERFORMANCE METRICS
 
 
 
 
 
(in $000's, unaudited)
 
 
 
 
 
Annualized return on average equity
 
8.37%
 
 
3.68%
 
 
6.81%
 
6.16%
 
6.14%
Annualized return on average tangible
        common equity(1)
 
11.14%
 
 
4.89%
 
 
9.09%
 
8.25%
 
8.27%
Annualized return on average assets
 
1.05%
 
 
0.47%
 
 
0.85%
 
0.75%
 
0.78%
Annualized return on average tangible assets(1)
 
1.08%
 
 
0.48%
 
 
0.88%
 
0.78%
 
0.81%
Net interest margin (FTE)(1)
 
3.60%
 
 
3.54%
 
 
3.39%
 
3.32%
 
3.15%
Total revenue
$
50,005
$
47,782
$
46,056
$
46,370
$
42,155
Pre-provision net revenue
$
20,979
$
9,447
$
16,600
$
16,066
$
14,600
Efficiency ratio
 
58.05%
 
 
80.23%
 
 
63.96%
 
65.35%
 
65.37%
AVERAGE BALANCES
 
 
 
 
 
(in $000’s, unaudited)
 
 
 
 
 
Average assets
$
5,551,457
$
5,458,420
$
5,559,896
$
5,607,840
$
5,352,067
Average tangible assets(1)
$
5,378,468
$
5,284,972
$
5,386,001
$
5,433,439
$
5,177,114
Average earning assets
$
5,167,710
$
5,087,089
$
5,188,317
$
5,235,986
$
4,980,082
Average loans held-for-sale
$
1,230
$
2,250
$
2,290
$
2,260
$
1,493
Average loans held-for-investment
$
3,519,775
$
3,504,518
$
3,429,014
$
3,388,729
$
3,359,647
Average deposits
$
4,687,294
$
4,618,007
$
4,717,517
$
4,771,491
$
4,525,946
Average demand deposits - noninterest-bearing
$
1,187,357
$
1,146,494
$
1,167,330
$
1,222,393
$
1,172,304
Average interest-bearing deposits
$
3,499,937
$
3,471,513
$
3,550,187
$
3,549,098
$
3,353,642
Average interest-bearing liabilities
$
3,539,706
$
3,511,237
$
3,589,872
$
3,588,755
$
3,393,264
Average equity
$
696,385
$
697,016
$
692,733
$
686,263
$
680,404
Average tangible common equity(1)
$
523,396
$
523,568
$
518,838
$
511,862
$
505,451
(1)This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.
9
End of Period:
Percent Change From:
 
CONSOLIDATED BALANCE SHEETS
September 30,
June 30,
September 30,
June 30,
September 30,
(in $000’s, unaudited)
2025
2025
2024
2025
2024
ASSETS
  
  
  
  
 
  
Cash and due from banks
$
42,442
$
55,360
$
49,722
(23)
%
(15)
%
Other investments and interest-bearing deposits
  in other financial institutions
 
705,300
 
666,432
 
906,588
6
%
(22)
%
Securities available-for-sale, at fair value
 
408,456
 
307,035
 
237,612
33
%
72
%
Securities held-to-maturity, at amortized cost
 
544,806
 
561,205
 
604,193
(3)
%
(10)
%
Loans - held-for-sale - SBA, including deferred costs
 
1,325
 
1,156
 
1,649
15
%
(20)
%
Loans - held-for-investment:
 
 
 
  
Commercial
 
523,110
 
492,231
 
481,266
6
%
9
%
Real estate:
 
 
 
  
CRE - owner occupied
 
629,855
 
627,810
 
602,062
0
%
5
%
CRE - non-owner occupied
1,416,987
1,390,419
1,310,578
2
%
8
%
Land and construction
 
137,170
 
149,460
 
125,761
(8)
%
9
%
Home equity
 
125,742
 
120,763
 
124,090
4
%
1
%
Multifamily
290,077
285,016
273,103
2
%
6
%
Residential mortgages
 
443,143
 
454,419
 
479,524
(2)
%
(8)
%
Consumer and other
 
15,938
 
14,661
 
14,179
9
%
12
%
Loans
 
3,582,022
 
3,534,779
 
3,410,563
1
%
5
%
Deferred loan fees, net
 
(344)
 
(446)
 
(327)
(23)
%
5
%
Total loans - held-for-investment, net of deferred fees
3,581,678
3,534,333
3,410,236
1
%
5
%
Allowance for credit losses on loans
 
(49,427)
 
(48,633)
 
(47,819)
2
%
3
%
Loans, net
 
3,532,251
 
3,485,700
 
3,362,417
1
%
5
%
Company-owned life insurance
 
82,861
 
82,296
 
80,682
1
%
3
%
Premises and equipment, net
 
9,429
 
9,765
 
10,398
(3)
%
(9)
%
Goodwill
 
167,631
 
167,631
 
167,631
0
%
0
%
Other intangible assets
 
5,078
 
5,532
 
6,966
(8)
%
(27)
%
Accrued interest receivable and other assets
 
124,141
 
125,125
 
123,738
(1)
%
0
%
Total assets
$
5,623,720
$
5,467,237
$
5,551,596
3
%
1
%
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
  
  
Liabilities:
 
 
 
  
  
Deposits:
 
 
 
  
Demand, noninterest-bearing
$
1,241,603
$
1,151,242
$
1,272,139
8
%
(2)
%
Demand, interest-bearing
 
922,077
 
955,504
 
913,910
(3)
%
1
%
Savings and money market
 
1,366,905
 
1,320,142
 
1,309,676
4
%
4
%
Time deposits - under $250
 
32,462
 
35,356
 
39,060
(8)
%
(17)
%
Time deposits - $250 and over
 
223,496
 
210,818
 
196,945
6
%
13
%
ICS/CDARS - interest-bearing demand, money market
and time deposits
 
990,003
 
954,272
 
997,803
4
%
(1)
%
  Total deposits
 
4,776,546
 
4,627,334
 
4,729,533
3
%
1
%
Subordinated debt, net of issuance costs
39,767
39,728
39,615
0
%
0
%
Accrued interest payable and other liabilities
 
107,397
 
105,471
 
97,096
2
%
11
%
Total liabilities
 
4,923,710
 
4,772,533
 
4,866,244
3
%
1
%
Shareholders’ Equity:
 
  
 
 
  
  
Common stock
 
508,664
 
509,888
 
509,134
0
%
0
%
Retained earnings
 
196,526
 
189,794
 
185,110
4
%
6
%
Accumulated other comprehensive loss
 
(5,180)
 
(4,978)
 
(8,892)
4
%
(42)
%
        Total shareholders' equity
 
700,010
 
694,704
 
685,352
1
%
2
%
      Total liabilities and shareholders’ equity
$
5,623,720
$
5,467,237
$
5,551,596
3
%
1
%
10
End of Period:
CONSOLIDATED BALANCE SHEETS
September 30,
June 30,
March 31,
December 31,
September 30,
(in $000’s, unaudited)
2025
2025
2025
2024
2024
ASSETS
  
  
  
  
  
Cash and due from banks
$
42,442
$
55,360
$
44,281
$
29,864
$
49,722
Other investments and interest-bearing deposits
  in other financial institutions
 
705,300
 
666,432
 
700,769
 
938,259
 
906,588
Securities available-for-sale, at fair value
 
408,456
 
307,035
 
370,976
 
256,274
 
237,612
Securities held-to-maturity, at amortized cost
 
544,806
 
561,205
 
576,718
 
590,016
 
604,193
Loans - held-for-sale - SBA, including deferred costs
 
1,325
 
1,156
 
1,884
 
2,375
 
1,649
Loans - held-for-investment:
 
 
 
 
 
Commercial
 
523,110
 
492,231
 
489,241
 
531,350
 
481,266
Real estate:
 
 
 
 
 
CRE - owner occupied
629,855
627,810
616,825
601,636
602,062
CRE - non-owner occupied
 
1,416,987
 
1,390,419
 
1,363,275
 
1,341,266
 
1,310,578
Land and construction
 
137,170
 
149,460
 
136,106
 
127,848
 
125,761
Home equity
 
125,742
 
120,763
 
119,138
 
127,963
 
124,090
Multifamily
 
290,077
 
285,016
 
284,510
 
275,490
 
273,103
Residential mortgages
443,143
454,419
465,330
471,730
479,524
Consumer and other
 
15,938
 
14,661
 
12,741
 
14,837
 
14,179
Loans
 
3,582,022
 
3,534,779
 
3,487,166
 
3,492,120
 
3,410,563
Deferred loan fees, net
 
(344)
 
(446)
 
(268)
 
(183)
 
(327)
Total loans - held-for-investment, net of deferred fees
 
3,581,678
 
3,534,333
 
3,486,898
 
3,491,937
 
3,410,236
Allowance for credit losses on loans
 
(49,427)
 
(48,633)
 
(48,262)
 
(48,953)
 
(47,819)
Loans, net
 
3,532,251
 
3,485,700
 
3,438,636
 
3,442,984
 
3,362,417
Company-owned life insurance
 
82,861
 
82,296
 
81,749
 
81,211
 
80,682
Premises and equipment, net
 
9,429
 
9,765
 
9,772
 
10,140
 
10,398
Goodwill
 
167,631
 
167,631
 
167,631
 
167,631
 
167,631
Other intangible assets
 
5,078
 
5,532
 
5,986
 
6,439
 
6,966
Accrued interest receivable and other assets
 
124,141
 
125,125
 
115,853
 
119,813
 
123,738
Total assets
$
5,623,720
$
5,467,237
$
5,514,255
$
5,645,006
$
5,551,596
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
Liabilities:
 
  
 
 
 
 
Deposits:
 
  
 
 
 
 
Demand, noninterest-bearing
$
1,241,603
$
1,151,242
$
1,128,593
$
1,214,192
$
1,272,139
Demand, interest-bearing
 
922,077
 
955,504
 
949,068
 
936,587
 
913,910
Savings and money market
 
1,366,905
 
1,320,142
 
1,353,293
 
1,325,923
 
1,309,676
Time deposits - under $250
 
32,462
 
35,356
 
37,592
 
38,988
 
39,060
Time deposits - $250 and over
 
223,496
 
210,818
 
213,357
 
206,755
 
196,945
ICS/CDARS - interest-bearing demand, money market
and time deposits
 
990,003
 
954,272
 
1,001,365
 
1,097,586
 
997,803
  Total deposits
 
4,776,546
 
4,627,334
 
4,683,268
 
4,820,031
 
4,729,533
Subordinated debt, net of issuance costs
39,767
39,728
39,691
39,653
39,615
Accrued interest payable and other liabilities
 
107,397
 
105,471
 
95,106
 
95,595
 
97,096
Total liabilities
 
4,923,710
 
4,772,533
 
4,818,065
 
4,955,279
 
4,866,244
Shareholders’ Equity:
 
  
 
 
 
 
Common stock
 
508,664
 
509,888
 
511,596
 
510,070
 
509,134
Retained earnings
 
196,526
 
189,794
 
191,401
 
187,762
 
185,110
Accumulated other comprehensive loss
 
(5,180)
 
(4,978)
 
(6,807)
 
(8,105)
 
(8,892)
        Total shareholders' equity
 
700,010
 
694,704
 
696,190
 
689,727
 
685,352
      Total liabilities and shareholders’ equity
$
5,623,720
$
5,467,237
$
5,514,255
$
5,645,006
$
5,551,596
11
At or For the Quarter Ended:
Percent Change From:
ASSET QUALITY DATA
September 30,
    
June 30,
    
September 30,
    
June 30,
September 30,
(in $000’s, unaudited)
2025
2025
2024
2025
2024
Nonaccrual loans - held-for-investment:
Land and construction loans
$
2,346
$
4,198
$
5,862
 
(44)%
(60)%
Home equity
655
728
84
(10)%
680%
Residential mortgages
—
607
—
(100)%
N/A
Commercial loans
467
491
752
(5)%
(38)%
CRE loans
 
—
 
31
 
—
 
(100)%
N/A
      Total nonaccrual loans - held-for-investment:
 
3,468
 
6,055
 
6,698
 
(43)%
(48)%
Loans over 90 days past due
      and still accruing
 
194
 
123
 
460
 
58%
(58)%
      Total nonperforming loans
3,662
6,178
7,158
(41)%
(49)%
Foreclosed assets
 
—
 
—
 
—
 
N/A
N/A
Total nonperforming assets
$
3,662
$
6,178
$
7,158
(41)%
(49)%
Net (recoveries) charge-offs during the quarter
$
(378)
$
145
$
288
 
(361)%
(231)%
Provision for credit losses on loans during the quarter
$
416
$
516
$
153
 
(19)%
172%
Allowance for credit losses on loans
$
49,427
$
48,633
$
47,819
 
2%
3%
Classified assets
$
34,633
$
37,525
$
32,609
 
(8)%
6%
Allowance for credit losses on loans to total loans
 
1.38
%  
 
1.38
%  
 
1.40
%  
0%
(1)%
Allowance for credit losses on loans to total nonperforming loans
 
1,349.73
%  
 
787.20
%  
 
668.05
%  
71%
102%
Nonperforming assets to total assets
 
0.07
%  
 
0.11
%  
 
0.13
%  
(36)%
(46)%
Nonperforming loans to total loans
 
0.10
%  
 
0.17
%  
 
0.21
%  
(41)%
(52)%
Classified assets to total assets
0.62
%
0.69
%
0.59
%
(10)%
5%
Classified assets to Heritage Commerce Corp
  Tier 1 capital plus allowance for credit losses on loans
 
6
%  
 
7
%  
 
6
%  
(14)%
0%
Classified assets to Heritage Bank of Commerce
  Tier 1 capital plus allowance for credit losses on loans
 
6
%  
 
6
%  
 
6
%  
0%
0%
OTHER PERIOD-END STATISTICS
 
  
 
 
  
 
  
 
  
(in $000’s, unaudited)
 
  
 
 
  
 
  
 
  
Heritage Commerce Corp:
 
 
 
  
 
  
 
  
Tangible common equity (1)
$
527,301
$
521,541
$
510,755
 
1%
3%
Shareholders’ equity / total assets
 
12.45
%  
 
12.71
%  
 
12.35
%  
(2)%
1%
Tangible common equity / tangible assets (1)
 
9.67
%  
 
9.85
%  
 
9.50
%  
(2)%
2%
Loan to deposit ratio
 
74.99
%  
 
76.38
%  
 
72.11
%  
(2)%
4%
Noninterest-bearing deposits / total deposits
 
25.99
%  
 
24.88
%  
 
26.90
%  
4%
(3)%
Total capital ratio
 
15.4
%  
 
15.5
%  
 
15.6
%  
(1)%
(1)%
Tier 1 capital ratio
13.2
%  
 
13.3
%  
 
13.4
%  
(1)%
(1)%
Common Equity Tier 1 capital ratio
 
13.2
%  
 
13.3
%  
 
13.4
%  
(1)%
(1)%
Tier 1 leverage ratio
 
9.9
%  
 
9.9
%  
 
10.0
%  
0%
(1)%
Heritage Bank of Commerce:
Tangible common equity / tangible assets (1)
10.13
%  
 
10.28
%  
 
9.86
%  
(1)%
3%
Total capital ratio
 
15.1
%  
 
15.1
%  
 
15.1
%  
0%
0%
Tier 1 capital ratio
 
13.8
%  
 
13.8
%  
 
13.9
%  
0%
(1)%
Common Equity Tier 1 capital ratio
 
13.8
%  
 
13.8
%  
 
13.9
%  
0%
(1)%
Tier 1 leverage ratio
 
10.3
%  
 
10.4
%  
 
10.4
%  
(1)%
(1)%
(1)This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.
12
At or For the Quarter Ended:
ASSET QUALITY DATA
September 30,
    
June 30,
    
March 31,
    
December 31,
    
September 30,
(in $000’s, unaudited)
2025
2025
2025
2024
2024
Nonaccrual loans - held-for-investment:
 
Land and construction loans
$
2,346
$
4,198
$
4,793
$
5,874
$
5,862
Home equity
655
728
927
290
84
Residential mortgages
—
607
—
—
—
Commercial loans
467
491
324
1,014
752
CRE loans
—
31
—
—
—
      Total nonaccrual loans - held-for-investment:
3,468
6,055
6,044
7,178
6,698
Loans over 90 days past due
      and still accruing
 
194
 
 
123
 
 
268
 
 
489
 
 
460
 
      Total nonperforming loans
 
3,662
 
6,178
 
6,312
 
7,667
 
7,158
 
Foreclosed assets
 
—
 
—
 
—
 
—
 
—
 
Total nonperforming assets
$
3,662
$
6,178
$
6,312
$
7,667
$
7,158
 
Net (recoveries) charge-offs during the quarter
$
(378)
$
145
$
965
$
197
$
288
 
Provision for credit losses on loans during the quarter
$
416
$
516
$
274
$
1,331
$
153
 
Allowance for credit losses on loans
$
49,427
$
48,633
$
48,262
$
48,953
$
47,819
 
Classified assets
$
34,633
$
37,525
$
40,034
$
41,661
$
32,609
 
Allowance for credit losses on loans to total loans
 
1.38
%  
 
1.38
%  
 
1.38
%  
 
1.40
%  
1.40
%  
Allowance for credit losses on loans to total nonperforming loans
 
1,349.73
%  
 
787.20
%  
 
764.61
%  
 
638.49
%  
 
668.05
%  
Nonperforming assets to total assets
 
0.07
%  
 
0.11
%  
 
0.11
%  
 
0.14
%  
 
0.13
%  
Nonperforming loans to total loans
 
0.10
%  
 
0.17
%  
 
0.18
%  
 
0.22
%  
 
0.21
%  
Classified assets to total assets
0.62
%
0.69
%
0.73
%
0.74
%
0.59
%
Classified assets to Heritage Commerce Corp
  Tier 1 capital plus allowance for credit losses on loans
 
6
%  
 
7
%  
 
7
%  
 
7
%  
 
6
%  
Classified assets to Heritage Bank of Commerce
  Tier 1 capital plus allowance for credit losses on loans
 
6
%  
 
6
%  
 
7
%  
 
7
%  
 
6
%  
OTHER PERIOD-END STATISTICS
 
  
 
 
 
 
 
(in $000’s, unaudited)
 
 
 
 
 
 
Heritage Commerce Corp:
 
 
 
 
 
 
Tangible common equity (1)
$
527,301
$
521,541
$
522,573
$
515,657
$
510,755
 
Shareholders’ equity / total assets
 
12.45
%  
 
12.71
%  
 
12.63
%  
 
12.22
%  
 
12.35
%  
Tangible common equity / tangible assets (1)
 
9.67
%  
 
9.85
%  
 
9.78
%  
 
9.43
%  
 
9.50
%  
Loan to deposit ratio
 
74.99
%  
 
76.38
%  
 
74.45
%  
 
72.45
%  
 
72.11
%  
Noninterest-bearing deposits / total deposits
 
25.99
%  
 
24.88
%  
 
24.10
%  
 
25.19
%  
 
26.90
%  
Total capital ratio
 
15.4
%  
 
15.5
%  
 
15.9
%  
 
15.6
%  
 
15.6
%  
Tier 1 capital ratio
 
13.2
%  
 
13.3
%  
 
13.6
%  
 
13.4
%  
 
13.4
%  
Common Equity Tier 1 capital ratio
 
13.2
%  
 
13.3
%  
 
13.6
%  
 
13.4
%  
 
13.4
%  
Tier 1 leverage ratio
 
9.9
%  
 
9.9
%  
 
9.8
%  
 
9.6
%  
 
10.0
%  
Heritage Bank of Commerce:
Tangible common equity / tangible assets (1)
10.13
%  
10.28
%  
10.15
%  
9.79
%  
9.86
%  
Total capital ratio
 
15.1
%  
 
15.1
%  
 
15.4
%  
 
15.1
%  
 
15.1
%  
Tier 1 capital ratio
 
13.8
%  
 
13.8
%  
 
14.1
%  
 
13.9
%  
 
13.9
%  
Common Equity Tier 1 capital ratio
 
13.8
%  
 
13.8
%  
 
14.1
%  
 
13.9
%  
 
13.9
%  
Tier 1 leverage ratio
 
10.3
%  
 
10.4
%  
 
10.2
%  
 
10.0
%  
 
10.4
%  
      (1)This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in this press release.
13
For the Quarter Ended
For the Quarter Ended
 
September 30, 2025
June 30, 2025
 
Interest
Average
    
Interest
Average
 
NET INTEREST INCOME AND NET INTEREST MARGIN
Average
Income/
Yield/
Average
Income/
Yield/
 
(in $000’s, unaudited)
Balance
Expense
Rate
Balance
Expense
Rate
 
Assets:
  
  
  
 
  
  
  
Loans, core bank
$
3,039,478
$
42,655
5.57
%  
$
3,020,534
$
41,738
5.54
%  
Prepayment fees
—
 
185
0.02
%  
—
473
0.06
%  
Bay View Funding factored receivables
74,353
 
3,654
19.50
%  
67,756
3,347
19.81
%  
Purchased residential mortgages
408,810
 
3,472
3.37
%  
420,280
3,548
3.39
%  
Loan fair value mark / accretion
(1,636)
 
164
0.02
%  
(1,802)
172
0.02
%  
Loans, gross (1)(2)
3,521,005
50,130
5.65
%  
3,506,768
49,278
 
5.64
%  
Securities - taxable
 
842,998
 
6,146
2.89
%  
 
902,642
6,346
 
2.82
%  
Securities - exempt from Federal tax (3)
 
28,683
 
256
3.54
%  
 
30,259
272
 
3.61
%  
Other investments and interest-bearing deposits
  in other financial institutions
 
775,024
 
8,615
4.41
%  
 
647,420
7,186
 
4.45
%  
Total interest earning assets (3)
 
5,167,710
 
65,147
5.00
%  
 
5,087,089
 
63,082
 
4.97
%  
Cash and due from banks
 
30,764
 
  
 
31,044
 
  
Premises and equipment, net
 
9,651
 
  
 
9,958
 
  
Goodwill and other intangible assets
 
172,989
 
  
 
173,448
 
  
Other assets
 
170,343
 
  
 
156,881
 
  
Total assets
$
5,551,457
 
  
$
5,458,420
 
  
Liabilities and shareholders’ equity:
 
 
  
 
 
  
Deposits:
 
 
  
 
 
  
Demand, noninterest-bearing
$
1,187,357
 
  
$
1,146,494
 
  
Demand, interest-bearing
 
932,996
 
1,463
0.62
%  
 
949,867
1,484
 
0.63
%  
Savings and money market
 
1,340,419
 
8,452
2.50
%  
 
1,313,054
8,205
 
2.51
%  
Time deposits - under $100
 
10,620
 
40
1.49
%  
 
11,456
49
 
1.72
%  
Time deposits - $100 and over
 
233,145
 
1,977
3.36
%  
 
231,644
1,995
 
3.45
%  
ICS/CDARS - interest-bearing demand, money market
and time deposits
 
982,757
 
5,837
2.36
%  
 
965,492
5,949
 
2.47
%  
Total interest-bearing deposits
 
3,499,937
 
17,769
2.01
%  
 
3,471,513
 
17,682
 
2.04
%  
    Total deposits
 
4,687,294
 
17,769
1.50
%  
 
4,618,007
 
17,682
 
1.54
%  
Short-term borrowings
 
26
—
0.00
%  
 
19
—
 
0.00
%  
Subordinated debt, net of issuance costs
39,743
537
5.36
%  
39,705
538
5.43
%  
Total interest-bearing liabilities
 
3,539,706
 
18,306
2.05
%  
 
3,511,237
 
18,220
 
2.08
%  
Total interest-bearing liabilities and demand, 
  noninterest-bearing / cost of funds
 
4,727,063
 
18,306
1.54
%  
 
4,657,731
 
18,220
 
1.57
%  
Other liabilities
 
128,009
 
  
 
103,673
 
 
  
Total liabilities
 
4,855,072
 
  
 
4,761,404
 
 
  
Shareholders’ equity
 
696,385
 
  
 
697,016
 
 
  
Total liabilities and shareholders’ equity
$
5,551,457
 
  
$
5,458,420
 
 
  
Net interest income / margin (3)
 
  
 
46,841
3.60
%  
 
  
 
44,862
 
3.54
%  
Less tax equivalent adjustment (3)
 
  
 
(53)
  
 
  
 
(57)
 
  
Net interest income
 
  
$
46,788
3.59
%  
 
  
$
44,805
 
3.53
%  
(1)Includes loans held-for-sale.  Nonaccrual loans are included in average balances.
(2)Yield amounts earned on loans include fees and costs. The accretion of net deferred loan fees into loan interest income was $246,000 for the third quarter of 2025, compared to $253,000
  for the second quarter of 2025.  Prepayment fees totaled $185,000 for the third quarter of 2025, compared to $473,000 for the second quarter of 2025.
(3)Reflects the FTE adjustment for Federal tax-exempt income based on a 21% tax rate. This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial
  Measures” in this press release.
14
For the Quarter Ended
For the Quarter Ended
 
September 30, 2025
September 30, 2024
 
Interest
Average
    
Interest
Average
 
NET INTEREST INCOME AND NET INTEREST MARGIN
Average
Income/
Yield/
Average
Income/
Yield/
 
(in $000’s, unaudited)
Balance
Expense
Rate
Balance
Expense
Rate
 
Assets:
  
  
  
 
  
  
  
Loans, core bank
$
3,039,478
$
42,655
5.57
%  
$
2,867,076
$
39,621
5.50
%  
Prepayment fees
—
185
0.02
%  
—
4
0.00
%  
Bay View Funding factored receivables
74,353
3,654
19.50
%  
55,391
2,144
15.40
%  
Purchased residential mortgages
408,810
3,472
3.37
%  
441,294
3,779
3.41
%  
Loan fair value mark / accretion
(1,636)
164
0.02
%  
(2,621)
233
0.03
%  
Loans, gross (1)(2)
3,521,005
50,130
5.65
%  
3,361,140
45,781
5.42
%  
Securities - taxable
 
842,998
6,146
2.89
%  
 
838,375
4,676
2.22
%  
Securities - exempt from Federal tax (3)
 
28,683
256
3.54
%  
 
31,311
282
3.58
%  
Other investments and interest-bearing deposits
  in other financial institutions
 
775,024
8,615
4.41
%  
 
749,256
10,172
5.40
%  
Total interest earning assets (3)
 
5,167,710
 
65,147
5.00
%  
 
4,980,082
 
60,911
4.87
%  
Cash and due from banks
 
30,764
 
  
 
33,425
 
  
Premises and equipment, net
 
9,651
 
  
 
10,471
 
  
Goodwill and other intangible assets
 
172,989
 
  
 
174,953
 
  
Other assets
170,343
 
  
 
153,136
 
  
Total assets
$
5,551,457
 
  
$
5,352,067
 
  
Liabilities and shareholders’ equity:
 
 
  
 
 
  
Deposits:
 
 
  
 
 
  
Demand, noninterest-bearing
$
1,187,357
  
$
1,172,304
  
Demand, interest-bearing
 
932,996
1,463
0.62
%  
 
907,346
1,714
0.75
%  
Savings and money market
 
1,340,419
8,452
2.50
%  
 
1,188,057
9,128
3.06
%  
Time deposits - under $100
 
10,620
40
1.49
%  
 
11,133
47
1.68
%  
Time deposits - $100 and over
 
233,145
1,977
3.36
%  
 
229,565
2,349
4.07
%  
ICS/CDARS - interest-bearing demand, money market
and time deposits
 
982,757
5,837
2.36
%  
 
1,017,541
7,747
3.03
%  
Total interest-bearing deposits
 
3,499,937
 
17,769
2.01
%  
 
3,353,642
 
20,985
2.49
%  
    Total deposits
 
4,687,294
 
17,769
1.50
%  
 
4,525,946
 
20,985
1.84
%  
Short-term borrowings
 
26
—
0.00
%  
 
32
—
0.00
%  
Subordinated debt, net of issuance costs
39,743
537
5.36
%  
39,590
538
5.41
%  
Total interest-bearing liabilities
 
3,539,706
 
18,306
2.05
%  
 
3,393,264
 
21,523
2.52
%  
Total interest-bearing liabilities and demand, 
  noninterest-bearing / cost of funds
 
4,727,063
 
18,306
1.54
%  
 
4,565,568
 
21,523
1.88
%  
Other liabilities
 
128,009
 
  
 
106,095
 
Total liabilities
 
4,855,072
 
  
 
4,671,663
 
Shareholders’ equity
 
696,385
 
  
 
680,404
 
Total liabilities and shareholders’ equity
$
5,551,457
 
  
$
5,352,067
 
Net interest income / margin (3)
 
  
 
46,841
3.60
%  
 
  
 
39,388
3.15
%  
Less tax equivalent adjustment (3)
 
  
 
(53)
  
 
  
 
(59)
Net interest income
 
  
$
46,788
3.59
%  
 
  
$
39,329
3.14
%  
(1)Includes loans held-for-sale.  Nonaccrual loans are included in average balances.
(2)Yield amounts earned on loans include fees and costs. The accretion of net deferred loan fees into loan interest income was $246,000 for the third quarter of 2025, compared to $184,000
  for the third quarter of 2024.  Prepayment fees totaled $185,000 for the third quarter of 2025, compared to $4,000 for the third quarter of 2024.
(3)Reflects the FTE adjustment for Federal tax-exempt income based on a 21% tax rate. This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial
  Measures” in this press release.
15
For the Nine Months Ended
For the Nine Months Ended
 
September 30, 2025
September 30, 2024
 
 
 
 
 
 
 
 
 
Interest
 
 
 
 
Average
    
 
 
 
 
Interest
 
 
 
 
Average
 
NET INTEREST INCOME AND NET INTEREST MARGIN
Average
Income/
Yield/
Average
Income/
Yield/
 
(in $000’s, unaudited)
Balance
Expense
Rate
Balance
Expense
Rate
 
Assets:
 
  
 
  
 
  
 
  
 
  
 
  
Loans, core bank
$
3,002,040
$
124,151
5.53
%  
$
2,831,035
$
115,838
5.47
%  
Prepayment fees
—
882
0.04
%  
—
82
0.00
%  
Bay View Funding factored receivables
67,505
9,943
19.69
%  
54,563
7,896
19.33
%  
Purchased residential mortgages
418,948
10,617
3.39
%  
447,709
11,306
3.37
%  
Loan fair value mark / accretion
(1,805)
517
0.02
%  
(2,865)
729
0.03
%  
Loans, gross (1)(2)
3,486,688
146,110
5.60
%  
3,330,442
135,851
5.45
%  
Securities - taxable
 
873,789
18,051
2.76
%  
 
940,755
16,342
2.32
%  
Securities - exempt from Federal tax (3)
 
29,801
803
3.60
%  
 
31,683
853
3.60
%  
Other investments, interest-bearing deposits in other
  financial institutions and Federal funds sold
 
757,352
25,155
4.44
%  
 
574,581
23,434
5.45
%  
Total interest earning assets (3)
 
5,147,630
 
190,119
 
4.94
%  
 
4,877,461
 
176,480
 
4.85
%  
Cash and due from banks
 
31,222
 
 
 
33,353
 
 
Premises and equipment, net
 
9,870
 
 
 
10,235
 
 
Goodwill and other intangible assets
 
173,441
 
 
 
175,495
 
 
Other assets
 
161,064
 
 
 
151,794
 
 
  
Total assets
$
5,523,227
 
 
$
5,248,338
 
 
  
Liabilities and shareholders’ equity:
 
 
 
 
  
 
 
  
Deposits:
 
 
 
 
  
 
 
  
Demand, noninterest-bearing
$
1,167,134
$
1,158,891
  
Demand, interest-bearing
 
942,371
4,385
0.62
%  
 
919,786
4,987
0.72
%  
Savings and money market
 
1,325,567
24,730
2.49
%  
 
1,120,324
23,644
2.82
%  
Time deposits - under $100
 
11,150
135
1.62
%  
 
11,020
135
1.64
%  
Time deposits - $100 and over
 
233,065
6,101
3.50
%  
 
226,353
6,658
3.93
%  
ICS/CDARS - interest-bearing demand, money market
and time deposits
 
994,875
18,034
2.42
%  
 
990,868
21,565
2.91
%  
Total interest-bearing deposits
 
3,507,028
 
53,385
 
2.04
%  
 
3,268,351
 
56,989
 
2.33
%  
    Total deposits
 
4,674,162
 
53,385
 
1.53
%  
 
4,427,242
 
56,989
 
1.72
%  
Short-term borrowings
 
21
—
0.00
%  
 
22
—
0.00
%  
Subordinated debt, net of issuance costs
39,705
1,613
5.43
%  
39,553
1,614
5.45
%  
Total interest-bearing liabilities
 
3,546,754
 
54,998
 
2.07
%  
 
3,307,926
 
58,603
 
2.37
%  
Total interest-bearing liabilities and demand, 
  noninterest-bearing / cost of funds
 
4,713,888
 
54,998
 
1.56
%  
 
4,466,817
 
58,603
 
1.75
%  
Other liabilities
 
113,948
 
 
 
105,570
 
 
Total liabilities
 
4,827,836
 
 
 
4,572,387
 
 
  
Shareholders’ equity
 
695,391
 
 
 
675,951
 
 
  
Total liabilities and shareholders’ equity
$
5,523,227
 
 
$
5,248,338
 
 
  
  
Net interest income / margin (3)
 
  
 
135,121
 
3.51
%  
 
  
 
117,877
 
3.23
%  
Less tax equivalent adjustment (3)
 
  
 
(168)
 
 
  
 
(179)
 
Net interest income
 
  
$
134,953
 
3.51
%  
 
  
$
117,698
 
3.22
%  
(1)Includes loans held-for-sale.  Nonaccrual loans are included in average balances.
(2)Yield amounts earned on loans include fees and costs. The accretion of net deferred loan fees into loan interest income was $713,000 for the first nine months of 2025, compared to $461,000
  for the first nine months of 2024.  Prepayment fees totaled $882,000 for the first nine months of 2025, compared to $82,000 for the first nine months of 2024.
(3)Reflects the FTE adjustment for Federal tax-exempt income based on a 21% tax rate. This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial
  Measures” in this press release.
16
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Management considers adjusted net income and adjusted earnings per share, which excludes the $9.2 million of charges primarily
related to a legal settlement in the second quarter of 2025 and first nine months of 2025 as a useful measurement of the Company’s
profitability compared to other periods presented.
The following table summarizes components of net income and diluted earnings per share for the periods indicated:
NET INCOME AND
For the Quarter Ended:
    DILUTED EARNINGS PER SHARE
September 30,
June 30,
March 31,
December 31,
September 30,
(in $000’s, unaudited)
 
2025
2025
 
2025
 
2024
2024
Reported net income (GAAP)
$
14,698
$
6,389
$
11,626
$
10,621
$
10,507
Add: pre-tax legal settlement and other charges
—
9,184
—
—
—
Less: related income taxes
—
(2,618)
—
—
—
        Adjusted net income (non-GAAP)
$
14,698
$
12,955
$
11,626
$
10,621
$
10,507
Weighted average shares outstanding - diluted
61,616,785
61,624,600
 
61,708,361
 
61,679,735
 
61,546,157
Reported diluted earnings per share (GAAP)
$
0.24
$
0.10
$
0.19
$
0.17
$
0.17
Adjusted diluted earnings per share (non-GAAP)
$
0.24
$
0.21
$
0.19
$
0.17
$
0.17
NET INCOME AND
For the Nine Months Ended:
    DILUTED EARNINGS PER SHARE
September 30,
September 30,
(in $000’s, except per share amounts, unaudited)
 
2025
2024
Reported net income (GAAP)
$
32,713
$
29,907
Add: pre-tax legal settlement and other charges
9,184
—
Less: related income taxes
(2,618)
—
      Adjusted net income (non-GAAP)
$
39,279
$
29,907
Weighted average shares outstanding - diluted
61,687,616
61,497,927
Reported diluted earnings per share (GAAP)
$
0.53
$
0.49
Adjusted diluted earnings per share (non-GAAP)
$
0.64
$
0.49
17
Management considers tangible book value per share as a useful measurement of the Company’s equity. The Company references the
return on average tangible common equity and the return on average tangible assets as measurements of profitability.
The following table summarizes components of the tangible book value per share at the dates indicated:
TANGIBLE BOOK VALUE PER SHARE
September 30,
June 30,
March 31,
December 31,
September 30,
(in $000’s, unaudited)
2025
2025
2025
2024
2024
Capital components:
Total equity (GAAP)
$
700,010
$
694,704
$
696,190
$
689,727
$
685,352
Less: preferred stock
—
—
—
—
—
  Total common equity
700,010
694,704
696,190
689,727
685,352
      Less: goodwill
(167,631)
(167,631)
(167,631)
(167,631)
(167,631)
      Less: other intangible assets
(5,078)
(5,532)
(5,986)
(6,439)
(6,966)
        Reported tangible common equity (non-GAAP)
527,301
521,541
522,573
515,657
510,755
Add: pre-tax legal settlement and other charges
9,184
9,184
—
—
—
Less: related income taxes
(2,618)
(2,618)
—
—
—
      Adjusted tangible common equity (non-GAAP)
$
533,867
$
528,107
$
522,573
$
515,657
$
510,755
Common shares outstanding at period-end
61,277,541
61,446,763
61,611,121
61,348,095
61,297,344
Reported tangible book value per share (non-GAAP)
$
8.61
$
8.49
$
8.48
$
8.41
$
8.33
Adjusted tangible book value per share (non-GAAP)
$
8.71
$
8.59
$
8.48
$
8.41
$
8.33
The following tables summarize components of the annualized return on average tangible common equity and the annualized return on
average tangible assets for the periods indicated:
18
RETURN ON AVERAGE TANGIBLE COMMON
For the Quarter Ended:
    EQUITY AND AVERAGE ASSETS
September 30,
June 30,
March 31,
December 31,
September 30,
(in $000’s, unaudited)
2025
2025
    
2025
 
2024
2024
   
 
Reported net income (GAAP)
$
14,698
$
6,389
$
11,626
$
10,621
$
10,507
Add: pre-tax legal settlement and other charges
—
9,184
—
—
—
Less: related income taxes
—
(2,618)
—
—
—
      Adjusted net income (non-GAAP)
$
14,698
$
12,955
$
11,626
$
10,621
$
10,507
Average tangible common equity components:
Average equity (GAAP)
$
696,385
$
697,016
$
692,733
$
686,263
$
680,404
Less: goodwill
(167,631)
(167,631)
(167,631)
(167,631)
(167,631)
Less: other intangible assets
(5,358)
(5,817)
(6,264)
(6,770)
(7,322)
    Total average tangible common equity (non-GAAP)
$
523,396
$
523,568
$
518,838
$
511,862
$
505,451
Reported annualized return on average equity (GAAP)
8.37
%
3.68
%
6.81
%
6.16
%
6.14
%
Adjusted annualized return on average equity (non-GAAP)
8.37
%
7.45
%
6.81
%
6.16
%
6.14
%
Reported annualized return on average
      tangible common equity (non-GAAP)
11.14
%
4.89
%
9.09
%
8.25
%
8.27
%
Adjusted annualized return on average
      tangible common equity (non-GAAP)
11.14
%
9.92
%
9.09
%
8.25
%
8.27
%
Average Assets (GAAP)
$
5,551,457
$
5,458,420
$
5,559,896
$
5,607,840
$
5,352,067
Reported annualized return on average assets (GAAP)
1.05
%
0.47
%
0.85
%
0.75
%
0.78
%
Adjusted annualized return on average assets (non-GAAP)
1.05
%
0.95
%
0.85
%
0.75
%
0.78
%
19
RETURN ON AVERAGE TANGIBLE COMMON
For the Nine Months Ended:
    EQUITY AND AVERAGE ASSETS
September 30,
September 30,
(in $000’s, unaudited)
2025
2024
    
Reported net income (GAAP)
$
32,713
$
29,907
Add: pre-tax legal settlement and other charges
9,184
—
Less: related income taxes
(2,618)
—
        Adjusted net income (non-GAAP)
$
39,279
$
29,907
Average tangible common equity components:
Average equity (GAAP)
$
695,391
$
675,951
Less: goodwill
(167,631)
(167,631)
Less: other intangible assets
(5,810)
(7,864)
    Total average tangible common equity (non-GAAP)
$
521,950
$
500,456
Reported annualized return on average equity (GAAP)
6.29
%
5.91
%
Adjusted annualized return on average equity (non-GAAP)
7.55
%
5.91
%
Reported annualized return on average
      tangible common equity (non-GAAP)
8.38
%
7.98
%
Adjusted annualized return on average
      tangible common equity (non-GAAP)
10.06
%
7.98
%
Average Assets (GAAP)
$
5,523,227
$
5,248,338
Reported annualized return on average assets (GAAP)
0.79
%
0.76
%
Adjusted annualized return on average assets (non-GAAP)
0.95
%
0.76
%
Management reviews yields on certain asset categories and the net interest margin of the Company on an FTE basis. In this non-
GAAP presentation, net interest income is adjusted to reflect tax-exempt interest income on an equivalent before-tax basis using tax
rates effective as of the end of the period. This measure ensures comparability of net interest income arising from both taxable and tax-
exempt sources. The following tables summarize components of FTE net interest income of the Company for the periods indicated:
NET INTEREST INCOME
For the Quarter Ended:
      AND NET INTEREST MARGIN
September 30,
June 30,
March 31,
December 31,
September 30,
(in $000’s, unaudited)
2025
2025
2025
2024
2024
Net interest income before
credit losses on loans (GAAP)
$
46,788
$
44,805
$
43,360
$
43,595
$
39,329
Tax-equivalent adjustment on securities -
exempt from Federal tax
53
57
58
58
59
      Net interest income, FTE (non-GAAP)
$
46,841
$
44,862
$
43,418
$
43,653
$
39,388
Average balance of total interest earning assets
$
5,167,710
$
5,087,089
$
5,188,317
$
5,235,986
$
4,980,082
Net interest margin (annualized net interest income divided by the
average balance of total interest earnings assets) (GAAP)
3.59
%
3.53
%
3.39
%
3.31
%
3.14
%
Net interest margin, FTE (annualized net interest income, FTE,
divided by the average balance of total
      earnings assets) (non-GAAP)
3.60
%
3.54
%
3.39
%
3.32
%
3.15
%
20
NET INTEREST INCOME
For the Nine Months Ended:
      AND NET INTEREST MARGIN
September 30,
September 30,
(in $000’s, unaudited)
  
2025
2024
Net interest income before
credit losses on loans (GAAP)
$
134,953
$
117,698
Tax-equivalent adjustment on securities - exempt from Federal tax
168
179
Net interest income, FTE (non-GAAP)
$
135,121
$
117,877
Average balance of total interest earning assets
$
5,147,630
$
4,909,240
Net interest margin (annualized net interest income divided by the
average balance of total interest earnings assets) (GAAP)
3.51
%
3.22
%
Net interest margin, FTE (annualized net interest income, FTE, divided by the
average balance of total interest earnings assets) (non-GAAP)
3.51
%
3.23
%
Management views its PPNR as a key metric for assessing the Company’s earnings power. The following table summarizes the
components of PPNR for the periods indicated:
For the Quarter Ended:
PRE-PROVISION NET REVENUE
September 30,
June 30,
March 31,
December 31,
September 30,
(in $000’s, unaudited)
2025
2025
2025
2024
2024
Net interest income before credit losses on loans
$
46,788
$
44,805
$
43,360
$
43,595
$
39,329
Noninterest income
3,217
2,977
2,696
2,775
2,826
Total revenue
50,005
47,782
46,056
46,370
42,155
Less: Noninterest expense
(29,026)
(38,335)
(29,456)
(30,304)
(27,555)
    Reported PPNR (GAAP)
20,979
9,447
16,600
16,066
14,600
Add: pre-tax legal settlement and other charges
—
9,184
—
—
—
  Adjusted PPNR (non-GAAP)
$
20,979
$
18,631
$
16,600
$
16,066
$
14,600
For the Nine Months Ended:
PRE-PROVISION NET REVENUE
September 30,
September 30,
(in $000’s, unaudited)
2025
2024
Net interest income before credit losses on loans
$
134,953
$
117,698
Noninterest income
8,890
8,328
Total revenue
143,843
126,026
Less: Noninterest expense
(96,817)
(83,279)
    Reported PPNR (GAAP)
47,026
42,747
Add: pre-tax legal settlement and other charges
9,184
—
    Adjusted PPNR (non-GAAP)
$
56,210
$
42,747
21
The efficiency ratio, which is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest
income), measures how much it costs to produce one dollar of revenue. The following tables summarize components of the efficiency
ratio of the Company for the periods indicated:
NONINTEREST EXPENSE AND
For the Quarter Ended:
    EFFICIENCY RATIO
September 30,
June 30,
March 31,
December 31,
September 30,
(in $000’s, unaudited)
  
  
2025
2025
2025
2024
2024
Reported noninterest expense (GAAP)
$
29,026
$
38,335
$
29,456
$
30,304
$
27,555
Less: pre-tax legal settlement and other charges
—
(9,184)
—
—
—
        Adjusted noninterest expense (non-GAAP)
$
29,026
$
29,151
$
29,456
$
30,304
$
27,555
Net interest income before credit losses on loans
$
46,788
$
44,805
$
43,360
$
43,595
$
39,329
Noninterest income
3,217
2,977
2,696
2,775
2,826
Total revenue
$
50,005
$
47,782
$
46,056
$
46,370
$
42,155
Reported efficiency ratio (noninterest expense divided
  by total revenue) (GAAP)
58.05
%
80.23
%
63.96
%
65.35
%
65.37
%
Adjusted efficiency ratio (adjusted noninterest expense
  divided by total revenue) (non-GAAP)
58.05
%
61.01
%
63.96
%
65.35
%
65.37
%
NONINTEREST EXPENSE AND
For the Nine Months Ended:
    EFFICIENCY RATIO
September 30,
September 30,
(in $000’s, unaudited)
  
  
2025
2024
Reported noninterest expense (GAAP)
$
96,817
$
83,279
Less: pre-tax legal settlement and other charges
(9,184)
—
      Adjusted noninterest expense (non-GAAP)
$
87,633
$
83,279
Net interest income before credit losses on loans
$
134,953
$
117,698
Noninterest income
8,890
8,328
Total revenue
$
143,843
$
126,026
Reported efficiency ratio (noninterest expense divided
    by total revenue) (GAAP)
67.31
%
66.08
%
Adjusted efficiency ratio (adjusted noninterest expense
    divided by total revenue) (non-GAAP)
60.92
%
66.08
%
22
Management considers the tangible common equity ratio as a useful measurement of the Company’s and the Bank’s equity. The
following table summarizes components of the tangible common equity to tangible assets ratio of the Company at the dates indicated:
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS
September 30,
June 30,
March 31,
December 31,
September 30,
(in $000’s, unaudited)
2025
2025
2025
2024
2024
 
Heritage Commerce Corp:
  Capital components:
Total equity (GAAP)
$
700,010
$
694,704
$
696,190
$
689,727
$
685,352
Less: preferred stock
—
—
—
—
—
  Total common equity
700,010
694,704
696,190
689,727
685,352
      Less: goodwill
(167,631)
(167,631)
(167,631)
(167,631)
(167,631)
      Less: other intangible assets
(5,078)
(5,532)
(5,986)
(6,439)
(6,966)
        Total tangible common equity (non-GAAP)
$
527,301
$
521,541
$
522,573
$
515,657
$
510,755
  Asset components:
Total assets (GAAP)
$
5,623,720
$
5,467,237
$
5,514,255
$
5,645,006
$
5,551,596
Less: goodwill
(167,631)
(167,631)
(167,631)
(167,631)
(167,631)
Less: other intangible assets
(5,078)
(5,532)
(5,986)
(6,439)
(6,966)
  Total tangible assets (non-GAAP)
$
5,451,011
$
5,294,074
$
5,340,638
$
5,470,936
$
5,376,999
  Tangible common equity / tangible assets (non-GAAP)
9.67
%
9.85
%
9.78
%
9.43
%
9.50
%
The following table summarizes components of the tangible common equity to tangible assets ratio of the Bank at the dates indicated:
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS
September 30,
June 30,
March 31,
December 31,
September 30,
(in $000’s, unaudited)
2025
2025
2025
2024
2024
 
Heritage Bank of Commerce:
  Capital components:
Total Equity (GAAP)
$
724,780
$
717,103
$
715,605
$
709,379
$
704,585
Less: Preferred Stock
—
—
—
—
—
  Total Common Equity
724,780
717,103
715,605
709,379
704,585
      Less: Goodwill
(167,631)
(167,631)
(167,631)
(167,631)
(167,631)
      Less: Other Intangible Assets
(5,078)
(5,532)
(5,986)
(6,439)
(6,966)
        Total Tangible Common Equity (non-GAAP)
$
552,071
$
543,940
$
541,988
$
535,309
$
529,988
  Asset components:
Total Assets (GAAP)
$
5,620,681
$
5,464,618
$
5,512,160
$
5,641,646
$
5,548,576
Less: Goodwill
(167,631)
(167,631)
(167,631)
(167,631)
(167,631)
Less: Other Intangible Assets
(5,078)
(5,532)
(5,986)
(6,439)
(6,966)
  Total Tangible Assets (non-GAAP)
$
5,447,972
$
5,291,455
$
5,338,543
$
5,467,576
$
5,373,979
  Tangible common equity / tangible assets (non-GAAP)
10.13
%
10.28
%
10.15
%
9.79
%
9.86
%
EX-99.2 3 a3q2025investorslides.htm EX-99.2 a3q2025investorslides
Investor Presentation Third Quarter 2025 Exhibit 99.2

 
Forward Looking Statement Disclaimer and Basis of Presentation • This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Heritage Bank (the "Bank") and its holding company, Heritage Commerce Corp (the "Company"). Forward-looking statements are based on management’s knowledge, assumptions and beliefs as of today and include information concerning the possible or assumed future financial condition, results of operations, business and earnings outlook for the Company and the Bank. These forward-looking statements are subject to risks and uncertainties. For a discussion of risk factors which could cause results to differ, please see the Company’s reports on Forms 10-K and 10-Q as filed with the Securities and Exchange Commission and the Company’s press releases. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. • Financial results are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and prevailing practices in the banking industry. However, certain non-GAAP performance measures and ratios are used by management to evaluate and measure the Company’s performance. These measures include “adjusted” operating metrics that have been adjusted to exclude notable expenses incurred in the second quarter of 2025 as well as other performance measures and ratios adjusted for notable items. Management believes these non-GAAP financial measures enhance comparability between periods and in some instances are common in the banking industry. These non-GAAP financial measures should be supplemental to primary GAAP financial measures and should not be read in isolation or relied upon as a substitute for primary GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures are also presented in the Company’s third quarter earnings release, which is available on the Company’s website at https://heritagecommercecorp.com. 2

 
Overview of Heritage Commerce Bank 3 • Northern California’s premier relationship-focused business bank • Offering a wide range of tailored financial solutions including business loans, treasury management and online banking • Specialty businesses focused on HOAs, non-profits, SBA and factoring • Low-cost deposit base, well diversified loan portfolio, strong asset quality, and high levels of capital and liquidity • Strong management team with deep experience from “best-in- class” financial institutions • Well positioned to continue increasing market share, adding clients, and generating profitable growth

 
Heritage Commerce Corp Profile • History: • Heritage Bank of Commerce, recently celebrated its 30th anniversary as a community business bank headquartered in San Jose, California. The bank was founded in 1994. • Relationship Banking: • We offer a full range of banking using a “consultative” relationship banking approach. • Customer Clientele: • Small to medium-sized closely held businesses (and their principals and key employees) • Professional organizations • High net worth individuals • Non-profits • Specialty Expertise: • Cash Management • Construction Lending • Corporate Finance/Asset-Based Lending • Factoring • Homeowner Association Services (“HOA”) • Non-profit organizations, schools, and churches • Small Business Administration (“SBA”) Lending Honors / Awards: • Recognized on Forbes’ List of World’s Best Banks 2024 • Ranked 25th on S&P Global Market Intelligence’s Top 50 list of best- performing community banks 2024 • In May 2024, Kroll Bond Rating Agency, LLC (“KBRA”) affirmed the Company’s senior unsecured debt rating of BBB+, the subordinated debt rating of BBB, and the short-term debt rating of K2 • Earned the Raymond James Community Bankers Cup for 2022-2024, which recognizes the top 10% of community banks in the nation based on profitability, operational efficiency and balance sheet metrics 4

 
Management Team Robertson Clay Jones President and Chief Executive Officer Chris Edmonds-Waters Executive Vice President Chief People & Culture Deborah K. Reuter Executive Vice President Chief Risk Officer Janisha Sabnani Executive Vice President General Counsel Sachin Vaidya Executive Vice President Chief Information Officer Karol Watson Executive Vice President Branch Operations Tom Sa Executive Vice President Chief Operating Officer Glen E. Shu Executive Vice President President, Specialty Finance Group Dustin Warford Executive Vice President Chief Banking Officer Mr. Jones, Mr. Fonti, Ms. Reuter, Mr. Sa, and Ms. Sabnani are officers of the Company and the Bank 5 Seth Fonti Executive Vice President Chief Financial Officer Susan Just Executive Vice President Chief Credit Officer

 
Our community market is one of the most robust and liquid in the US… 6 Nation Leading Demographics Lowest unemployment in nation; AI stimulus expanding in region Deep and liquid markets Remains one of the most liquid markets in the nation; with ongoing backdrop of growth and expansion As the Big get Bigger Significant white space to grow business given lack of “Pure Regional” and growth of Big 5 148,036 130,730 72,275 2023 San Jose-Sunnyvale-Santa Clara CA (MSA) (1) San Francisco-Oakland-Berkeley CA (MSA) (2) United States (Metro) (4) Per Capita Income Employment Unemployment Rate, as of August 2025 (3) Santa Clara County 4.6% San Francisco County 4.3% San Mateo County 4.1% Alameda County 5.1% Contra Costa County 5.2% State of California 5.8% Economic and Demographic data footnotes: (1) Source: U.S. Bureau of Economic Analysis. Data for the year ended December 31, 2023 (2) Source: U.S. Bureau of Economic Analysis. Data for the year ended December 31, 2023 (3) Source: California Employment Development Department (data not seasonally adjusted) (4) Source: U.S. Bureau of Economic Analysis. Data for the year ended December 31, 2023 (5) Source: S&P Capital IQ (5)

 
• Loans held-for-investment (“HFI”) were $3.6 billion at September 30, 2025, up $47.3 million or 1%. Loan yields increased 1 basis points on a linked quarter basis. • New securities purchases combined with maturities of low-yield Treasurys increased the securities portfolio yield by 6 basis points for the quarter. • Fully Tax Equivalent (“FTE”) net interest margin(1) of 3.60%, an increase from 3.54%, on positive trends in both loan yields and deposit costs. • Total deposits of $4.8 billion, up $149.2 million, or 3%. The Bank’s loan-to-deposit ratio decreased to 74.99% from 76.38% on a linked quarter basis. • Asset quality was strong and improving with nonperforming loans at $3.66 million, or 0.10% of total loans, while the allowance for credit losses on loans to total loans was 1.38% at quarter-end. • Liquidity and available lines of credit remain robust at $3.3 billion. Third Quarter 2025 Operating Highlights (1) This is a non-GAAP financial measure as defined and discussed under “Non-GAAP Financial Measures” in our third quarter 2025 earnings press release. 7 Operating Highlights $14.7 million Net income $21.0 million Pre-Provision Net Revenue $0.24 Diluted Earnings per Share 1.05% Return on Average Assets 11.14% Return on Avg. Tangible Common Equity (1)

 
Diversified Loan Portfolio – as of September 30, 2025 Industrial, 23% (9% of loans) Retail, 31% (12% of Loans) Office, 28% (11% of loans) Mixed-Use, Special Purpose, 18% (7% of loans) Non-Owner Commercial Real Estate (“CRE”) Loans $1.4 Billion $523 M Commercial 15% $1,417 M CRE Non-Owner Occupied 39% $630 M CRE Owner Occupied 18% $137 M Land & Construction 4% $859 M Residential RE 24% $15 M Consumer and other Less than 1% $3.6 Billion 8

 
Credit Quality at a Glance – as of September 30, 2025 ✓ACLL of $49.4 million represents 8x NPAs and 1.4x of Classified Assets ✓ ACLL 1.38% of gross loans ✓ NPAs totaled $3.7 million on 9 loans and 6 relationships ✓ Classified assets totaled $34.6 million, or 0.62% of total assets ✓ No Owner-Occupied CRE loans in NPAs ✓ No foreclosed assets on the balance sheet 6% Classified Assets / Tier 1 Capital & Allowance for Credit Losses on Loans (“ACLL”) 0.07% Nonperforming Assets ("NPAs") / Total Assets 0.04% Net Recoveries / Average Loans For the Quarter 9

 
Credit Quality Key Trends ($ in thousands) 10 0 5,000 10,000 15,000 20,000 25,000 2020 2021 2022 2023 2024 2025Q2 2025Q3 Delinquent Loans Commercial Loans Consumer Loans Const Develop Loans Real Estate Loans 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 2020 2021 2022 2023 2024 2025Q2 2025Q3 Nonaccrual Loans Commercial Loans Consumer Loans Const Develop Loans Real Estate Loans

 
Allowance for Credit Losses ACLL as of September 30, 2025 Total: $49.4M Percent of Loans: 1.38% Percent of NPAs: 1,350% Percent of Classified: 143% 11 7,158 7,667 6,312 6,178 3,662 25,451 33,994 33,722 31,347 30,971 0 % 200 % 400 % 600 % 800 % 1,000 % 1,200 % 1,400 % 0 10,000 20,000 30,000 40,000 50,000 60,000 3Q2024 4Q2024 1Q2025 2Q2025 3Q2025 Allowance Coverage Trend Total nonperforming assets Other classified assets Allowance for credit losses on loans Allowance to nonperforming loans (right axis)

 
Demand, noninterest- bearing 26% Demand, interest-bearing 19% Savings and money market 28% ICS and CDARS * 21% Time 6% Total Cost of Deposits of 1.50% Total Deposits – as of September 30, 2025 • Total deposits were $4.8 billion, compared to $4.6 billion at June 30, 2025, an increase of 3% • Noninterest bearing deposits represent 26% of total deposits, compared to 25% last quarter • Deposit accounts numbered 25,337 at September 30, 2025, with an average balance of $188,521 Total Deposits: $4.8 Billion * ICS is Client Reciprocal Insured Cash Sweep; CDARS = Client Reciprocal Certificate of Deposit Account Registry Service 12 Deposit Costs - 3rd Quarter 2025 Average Average Balance Rate    Demand, noninterest-bearing $ 1,187 Demand, interest-bearing 933 0.62 %   Savings and money market 1,340 2.50 %   Time deposits 244 3.28 %   ICS/CDARS - NMD and Time 983 2.36 %   Total interest-bearing 3,500 2.01 %   Total deposits 4,687 1.50 %  

 
Net Interest Drivers $3,336 $3,380 $3,410 $3,492 $3,487 $3,535 $3,582 5.44% 5.49% 5.42% 5.53% 5.52% 5.64% 5.65% Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Loans Held for Investment and Yield Loans HFI Yield $1,041 $894 $842 $846 $948 $868 $953 2.42% 2.38% 2.27% 2.27% 2.58% 2.85% 2.91% Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Securities Portfolio and FTE Yield Total Investments FTE Yield $4,445 $4,445 $4,730 $4,820 $4,683 $4,627 $4,777 1.56% 1.75% 1.84% 1.66% 1.54% 1.54% 1.50% Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Deposits and Cost Total Deposits Cost $3,203 $3,259 $3,457 $3,606 $3,555 $3,476 $3,535 2.00% 2.00% 2.00% 2.00% 2.05% 2.04% 2.01% Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Interest Bearing Deposits and Cost Interest Bearing Deposits Cost Balances period-end, dollars in millions 13 Earning asset yields continue to rise against the favorable deposit cost backdrop. This, combined with stabilizing levels of non- interest bearing deposits has helped bolster the NIM inflection

 
Consistent Returns to Shareholders Strong Dividends Stabilize Returns for Equity Holders Dividend Yield as of October 14, 2025: 5.2% $6.54 $6.57 $6.91 $7.46 $8.12 $8.41 $8.61 $0.52 $0.52 $0.52 $0.52 $0.52 $0.39 2020 YTD Q3 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 YTD Q3 Tangible Book Value Per Share (1) and Dividends Tangible Book Value Per Share (1) Dividends 14 (1) This is a non-GAAP financial measure 5 years: TBV add - $2.07 Dividends - $2.60

 
Positioned for Continued Growth • Small to medium-sized business customer relationship focus in vibrant economic geography • Competitive loan and deposit/cash management products catering to businesses • Diversified specialty business units • Highly experienced management team throughout the company • Solid capital and liquidity management • 15.1% total capital ratio calculated using Basel III regulatory requirements at September 30, 2025 • 75% loan-to-deposit ratio at September 30, 2025 • Quarterly common dividend of $0.13 per share in the third quarter of 2025 • Excellent locations and markets with solid market share among community banks • 16 branch locations • San Jose-Sunnyvale-Santa Clara and San Francisco-Oakland-Berkeley MSA’s are first and second in the state of California with highest median household income and per capita income • The Bay Area counties the Bank operates in are ranked the highest in California for personal income 15

 
Long-Term Strategic Goals Drive Operating Leverage to enhance profitability Focus on high-quality loan and deposit growth Scale via organic growth and acquisitions to gain efficiency Grow non-interest income through best-in-class service levels Invest in talent and emerging technology A disciplined and strategic approach to delivering value long-term 16

 
For more information email: InvestorRelations@herbank.com 17

 
EX-99.3 4 dividendrelease.htm EX-99.3 Dividend Release
1
Exhibit 99.3
Heritage Commerce Corp                                                                           
224 Airport Parkway
San Jose, CA 95110
www.heritagecommercecorp.com                             
Heritage Commerce Corp Declares Regular Quarterly Cash Dividend of $0.13 Per Share
San Jose, CA — October 23, 2025 — Heritage Commerce Corp (Nasdaq: HTBK), the holding company for Heritage Bank of
Commerce, today announced that its Board of Directors had declared its regular quarterly cash dividend of $0.13 per share to holders
of its common stock.  The dividend will be payable on November 20, 2025, to shareholders of record at the close of the business day
on November 6, 2025.  Heritage Commerce Corp has paid a cash dividend each quarter since 2013.
***
Heritage Commerce Corp, a bank holding company established in October 1997, is the parent company of Heritage Bank of
Commerce, established in 1994 and headquartered in San Jose, CA with full-service branches in Danville, Fremont, Hollister,
Livermore, Los Altos, Los Gatos, Morgan Hill, Oakland, Palo Alto, Pleasanton, Redwood City, San Francisco, San Jose, San Mateo,
San Rafael, and Walnut Creek.  Heritage Bank of Commerce is an SBA Preferred Lender.  Bay View Funding, a subsidiary of
Heritage Bank of Commerce, is based in San Jose, CA and provides business-essential working capital factoring financing to various
industries throughout the United States.  For more information, please visit www.heritagecommercecorp.com.  The contents of our
website are not incorporated into, and do not form a part of, this release or of our filings with the Securities and Exchange
Commission.
Member FDIC
For additional information, email:
InvestorRelations@herbank.com