Financial Performance - For the three months ended September 30, 2019, net income was $11.3 million, or $0.26 per average diluted common share, a decrease from $12.4 million, or $0.28 per share, for the same period in 2018[145]. - For the nine months ended September 30, 2019, net income increased to $34.8 million, or $0.80 per average diluted common share, compared to $22.1 million, or $0.53 per share, for the same period in 2018[146]. - The banking segment's net income for Q3 2019 was $11.0 million, a slight decrease from $11.2 million in Q3 2018[222]. - For the nine months ended September 30, 2019, net income increased to $32.9 million from $19.1 million in the same period of 2018[222]. Net Interest Income - Net interest income for the third quarter of 2019 decreased by 6% to $30.6 million, while for the first nine months of 2019, it increased by 4% to $92.6 million compared to the same periods in 2018[156]. - Net interest income before provision for loan losses decreased 6% to $30.6 million for Q3 2019, compared to $32.5 million for Q3 2018[197]. - Net interest income for Q3 2019 was $30.6 million, down from $32.5 million in Q3 2018, primarily due to a decrease in the average balance of loans and an increase in the cost of deposits[222]. Interest Margin - The fully tax equivalent net interest margin contracted by 12 basis points to 4.24% for the third quarter of 2019, but expanded by 6 basis points to 4.33% for the first nine months of 2019[156]. - The net interest margin (FTE) contracted 12 basis points to 4.24% for Q3 2019, from 4.36% for Q3 2018[192]. - For the nine months ended September 30, 2019, net interest margin expanded 6 basis points to 4.33% compared to the same period in 2018[193]. Noninterest Income and Expenses - Total noninterest income increased to $2.6 million for the third quarter of 2019, compared to $2.2 million for the same period in 2018, primarily due to a $330,000 net gain on sales of securities[156]. - Total noninterest income for the nine months ended September 30, 2019, increased to $7.9 million, compared to $7.2 million for the same period in 2018[201]. - Total noninterest expense for the third quarter of 2019 increased to $17.9 million, primarily due to higher merger-related costs[156]. - Noninterest expense for the nine months ended September 30, 2019 decreased to $54.3 million, down from $58.6 million for the same period in 2018, primarily due to lower merger-related costs[160]. Merger Activity - The Company completed the merger with Presidio Bank on October 11, 2019, with Presidio having approximately $877.4 million in assets at the time of the merger[148][150]. - Merger-related costs for the third quarter of 2019 amounted to $661,000, compared to $199,000 for the third quarter of 2018[147][156]. - The banking segment incurred merger-related costs of $661,000 in Q3 2019 and $1.2 million for the first nine months of 2019 due to the merger with Presidio[222]. Asset Quality - Nonperforming assets were $14.2 million, or 0.45% of total assets, at September 30, 2019, down from $24.7 million, or 0.77% of total assets, at September 30, 2018[160]. - Classified assets decreased to $20.2 million, or 0.64% of total assets, at September 30, 2019, compared to $30.5 million, or 0.95% of total assets, at September 30, 2018[160]. - The allowance for loan losses at September 30, 2019 was $25.9 million, or 1.38% of total loans, representing 181.76% of total nonperforming loans[171]. Loans and Deposits - Total loans, excluding loans held-for-sale, decreased $24.0 million, or 1%, to $1.88 billion at September 30, 2019, compared to $1.90 billion at September 30, 2018[167]. - Total deposits decreased $56.3 million, or 2%, to $2.69 billion at September 30, 2019, compared to $2.75 billion at September 30, 2018[165]. - The loan to deposit ratio was 69.74% at September 30, 2019, compared to 69.19% at September 30, 2018[165]. Capital and Equity - As of September 30, 2019, the Company had total shareholders' equity of $395.3 million, an increase from $353.6 million at September 30, 2018, and $367.5 million at December 31, 2018[312]. - Common equity Tier 1 capital was $301,444 thousand at September 30, 2019, up from $266,654 thousand at September 30, 2018[307]. - Total risk-based capital ratio was 16.2% at September 30, 2019, compared to 14.4% at September 30, 2018[307]. Interest Rate Risk Management - The Company has established policies to monitor and limit earnings and balance sheet exposure to interest rate changes, primarily focusing on interest rate risk management[316]. - As of September 30, 2019, a 400 basis point increase in interest rates would result in an estimated net interest income increase of $28,723 thousand, representing a 24.3% rise[323]. - A 200 basis point decrease in interest rates would lead to an estimated net interest income decrease of $23,573 thousand, equating to a 19.9% decline[323]. Tax and Regulatory Compliance - The effective income tax rate for Q3 2019 was 29.1%, compared to 28.7% for Q3 2018[213]. - Income tax expense for Q3 2019 was $4.6 million, a decrease from $5.0 million in Q3 2018[213]. - The Company maintained a capital ratio exceeding regulatory guidelines as of September 30, 2019[311].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10‑Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000‑23877 Heritage Commerce Corp (Exact name of Registrant as Specified in its Charter) (State or Other Jurisdictio ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10‑Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000‑23877 Heritage Commerce Corp (Exact name of Registrant as Specified in its Charter) California 77‑0469558 (I.R ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10‑K (MARK ONE) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or the fiscal year ended December 31, 2018 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number 000‑23877 Heritage Commerce Corp (Exact name of Registrant as Specified in its Charter) California (State or Other Juris ...