# EDGAR Filing Document

**Accession Number:** 0001053352
**File Stem:** 0001558370-25-009564
**Filing Date:** 2025-7
**Character Count:** 200157
**Document Hash:** e572cf64a1fe95f3c5253bcb8e3659e9
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001558370-25-009564.hdr.sgml**: 20250724

**ACCESSION NUMBER**: 0001558370-25-009564

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 18

**CONFORMED PERIOD OF REPORT**: 20250724

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20250724

**DATE AS OF CHANGE**: 20250724

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** HERITAGE COMMERCE CORP
- **CENTRAL INDEX KEY:** 0001053352
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 770469558
- **STATE OF INCORPORATION:** CA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-23877
- **FILM NUMBER:** 251147992

**BUSINESS ADDRESS:**
- **STREET 1:** 224 AIRPORT PARKWAY
- **CITY:** SAN JOSE
- **STATE:** CA
- **ZIP:** 95110
- **BUSINESS PHONE:** 4089476900

**MAIL ADDRESS:**
- **STREET 1:** 224 AIRPORT PARKWAY
- **CITY:** SAN JOSE
- **STATE:** CA
- **ZIP:** 95110

?xml version='1.0' encoding='ASCII'? HERITAGE COMMERCE CORP_July 24, 2025

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**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): July 24**,** 2025

**HERITAGE COMMERCE CORP**

(Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| **California** | **000-23877** | **77-0469558** |
| (State or other jurisdiction of<br>incorporation) | (Commission File Number) | (IRS Employer Identification No.) |

---

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| | |
|:---|:---|
| **224 Airport Parkway, San Jose, California** | **95110** |
| (Address of principal executive offices) | (Zip Code) |

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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:

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| &nbsp;&nbsp;&nbsp;Common Stock, No Par Value | HTBK | The Nasdaq Stock Market LLC |

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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

Exchange Act. ☐

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**ITEM 2.02** **RESULTS OF OPERATIONS AND FINANCIAL CONDITION**

On July 24, 2025, Heritage Commerce Corp (the "Company"), the holding company for Heritage Bank of Commerce, issued a press release announcing preliminary unaudited financial results for the second quarter and six months ended June 30, 2025. A copy of the press release is attached as Exhibit 99.1 to this Current Report and is incorporated herein by reference.

The information in this report set forth under this Item 2.02 shall not be treated as "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference into any registration statement or other filing pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as expressly stated by specific reference in such filing.

**ITEM 5.02** **APPOINTMENT OF CERTAIN OFFICERS**

On July 24, 2025, the Company announced the appointment of Seth Fonti as Executive Vice President and Chief Financial Officer of the Company and the Bank effective July 24, 2024 ("Effective Date"). As of the Effective Date, Tom Sa will cease serving as Interim Chief Financial Officer of the Bank and will continue to serve as Chief Operating Officer and Executive Vice President of the Company and the Bank.

Mr. Fonti, age 45, brings more than two decades of financial leadership experience across global and domestic banking institutions. Most recently, he served as Managing Director and Head of Strategy, Corporate Development, and Strategic Finance for MUFG Americas Holding Corporation ("MUFG Americas"). Mr. Fonti joined MUFG Americas in 2012 and previously served as Director of Strategy and Strategic Finance and Director of Finance, Planning and Analysis and Strategic Finance.

In connection with his appointment, Mr. Fonti entered into an at-will employment agreement, effective July 24, 2025 (the "Employment Agreement") providing for a base salary of $425,000 per year and a one-time restricted stock award with an initial value of $300,000 vesting over three years. Mr. Fonti will participate in bonus and benefit plans commensurate with those made available to the Company's other senior executive officers, including 401(k), group life, health, accident and disability insurance coverage; his target bonus for 2025 will be 50% of salary, and any earned amount will be prorated based on his start date. Mr. Fonti will receive an automobile allowance in the amount of $750 per month and the Company will pay for up to $100,000 in relocation expenses (subject to repayment upon a voluntary termination of employment within twelve months of his start date).

If Mr. Fonti's employment is terminated without cause (as defined in the Employment Agreement), he is entitled to a lump sum payment equal to either (a) if employed for one year or less, three months base salary or (b) if employed for more than one year, one times base salary and average annual bonus in the last three years, as well as a continuation of certain employee benefits including payments for COBRA continuation coverage for a period of 12 months, which benefits are contingent upon his execution of a standard waiver and release of claims. If Mr. Fonti's employment is terminated under certain circumstances in connection with a change of control (as defined in the Employment Agreement), he will be entitled to a lump sum payment equal to two times base salary and average annual bonus in the last three years, as well as a continuation of certain employee benefits including payments for COBRA continuation coverage for a period of 24 months.

The foregoing is only a summary of Mr. Fonti's Employment Agreement. A copy of the Employment Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

On July 24, 2025, the Company appointed Jeannie Tam as Senior Vice President and Chief Accounting Officer of the Company and the Bank effective July 24, 2025.

Ms. Tam, age 44, brings more than 15 years of financial leadership experience in accounting operations, financial close, and finance transformation within Financial Services. Most recently, she served as Managing Director and Controller at JP Morgan Chase Bank, N.A. where she led the First Republic Bank and JPMorgan finance integration managing accounting operations, financial reporting and SOX compliance. Ms. Tam previously served in various accounting roles

at First Republic Bank from 2004 through 2023, and she was appointed Senior Vice President and Controller at First Republic Bank in 2022.

In connection with her appointment, Ms. Tam will receive a base salary of $270,000 per year, a $20,000 new hire signing bonus, and a one-time restricted stock award with an initial value of $60,000 vesting over three years. Ms. Tam will participate in bonus and benefit plans commensurate with those made available to the Company's other senior executive officers, including 401(k), group life, health, accident and disability insurance coverage.

**ITEM 7.01** **REGULATION FD DISCLOSURE** 

On July 24, 2025, the Company issued a press release announcing Mr. Fonti's accession to the Company's and the Bank's executive leadership team. A copy of the press release is attached as Exhibit 99.2 to this Current Report. In accordance with General Instruction B.2 of Form 8-K, the press release is deemed to be "furnished" and shall not be deemed "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall the press release be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

**ITEM 8.01** **OTHER EVENTS**

QUARTERLY DIVIDEND

On July 24, 2025, the Company announced that its Board of Directors declared a $0.13 per share quarterly cash dividend to holders of its common stock. The dividend will be paid on August 21, 2025, to shareholders of record at the close of the business day on August 7, 2025. A copy of the press release is attached as Exhibit 99.3 to this Current Report and is incorporated herein by reference.

**ITEM 9.01** **FINANCIAL STATEMENTS AND EXHIBITS**

(d) Exhibits.

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| | |
|:---|:---|
| &nbsp;&nbsp;10.1 | &nbsp;&nbsp;[Employment Agreement with Seth Fonti, dated July 24, 2025, filed herewith](htbk-20250724xex10d1.htm) |
| &nbsp;&nbsp;99.1 | &nbsp;&nbsp;[Press Release, dated July 24, 2025, entitled "Heritage Commerce Corp Reports Second Quarter 2025 Financial Results"](htbk-20250724xex99d1.htm) |
| &nbsp;&nbsp;99.2 | &nbsp;&nbsp;[Press Release, dated July 24, 2025, entitled "Heritage Commerce Corp and Heritage Bank of Commerce Appoints Seth Fonti as Chief Financial Officer"](htbk-20250724xex99d2.htm) |
| &nbsp;&nbsp;99.3 | &nbsp;&nbsp;[Press Release, dated July 24, 2025, entitled "Heritage Commerce Corp Declares Regular Quarterly Cash Dividend of $0.13 Per Share"](htbk-20250724xex99d3.htm) |
| &nbsp;&nbsp;104 | &nbsp;&nbsp;Cover Page Interactive Data File (embedded within XBRL document) |

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**SIGNATURES**

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.

Date: July 24, 2025

Heritage Commerce Corp

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| |
|:---|
| By: /s/ ROBERTSON CLAY JONES |
| Robertson Clay Jones |
| *Chief Executive Officer* (Duly Authorized Officer) |

---

## Exhibit 10.1

Exhibit 10.1

**EMPLOYMENT AGREEMENT**

This Employment Agreement (the **"Agreement"**) is entered into by and between HERITAGE COMMERCE CORP, a California bank holding company (the **"Company"**), HERITAGE BANK OF COMMERCE, a California banking corporation (the **"Bank"**), and SETH FONTI, an individual (the **"Executive"**) as of July 24, 2025 (the **"Effective Date"**). This Agreement supersedes any previous offer letters, employment agreements or other arrangements or understandings between the parties regarding Executive's employment.

<u>RECITALS</u>

WHEREAS, the Company is a California corporation and a bank holding Company registered under the Bank Holding Company Act of 1956, as amended, subject to the supervision and regulation of the Board of Governors of the Federal Reserve System;

WHEREAS, the Company is the parent holding company for the Bank, which is a California banking association, subject to the supervision and regulation of the California Department of Financial Protection and Innovation and the Federal Reserve Board;

WHEREAS, the Board of Directors of the Company (the "**Board**") (by virtue of the actions of the Personnel & Compensation Committee thereof) has approved and authorized the entry into this Agreement with the Executive; and

WHEREAS, the parties desire to enter into this Agreement to set forth the terms and conditions for the employment relationship of the Executive with the Company and the Bank, it being understood and agreed that Executive is to be employed by the Company but will exercise their rights and obligations hereunder by means of actions with respect to the Bank.

<u>AGREEMENT</u>

NOW, THEREFORE, in consideration of the promises and mutual covenants and agreements herein contained and intending to be legally bound hereby, the Company, the Bank and the Executive hereby agree as follows:

1.<u>Employment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1<u>Title</u>. As of the Effective Date, the Executive shall be employed as an Executive Vice President, Chief Financial Officer of the Company. In this capacity, the Executive shall have such duties and responsibilities as may be designated to the Executive by the Chief Executive Officer of the Bank and in accordance with the objectives or policies of the Board of Directors of the Bank, from time to time, in connection with the business activities and the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2<u>Devotion to Company Business</u>. The Executive shall devote their full business time, ability, and attention to the business of the Company (either directly or by virtue of their services to and on behalf of the Bank) during the term of this Agreement and shall not during the term of this Agreement engage in any other business activities, duties, or pursuits whatsoever, or directly or indirectly render any services of a business, commercial, or professional nature to any other person or organization, whether for compensation or otherwise, without the prior written consent of the Board of Directors of the Company. It shall not be a violation of this Agreement for the Executive to (a) serve on corporate, civic or charitable boards or committees, (b) deliver lectures, fulfill speaking engagements or teach at educational institutions and (c) manage personal investments, so long as the activities identified in the foregoing clauses (a) through (c) do not significantly interfere with the performance of the Executive's responsibilities as an employee of the Bank in accordance with this Agreement. Nothing in this Agreement shall be interpreted to prohibit the Executive from making passive personal investments. However, the Executive shall not directly or indirectly acquire, hold, or retain any interest in any business

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competing with or similar in nature to the business of the Bank and the Company, except as permitted by the Company's policies or authorized by the Chief Executive Officer of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3<u>Standard</u>. The Executive will set a high standard of professional conduct given the Executive's role with the Company and the Bank and the Executive's responsibility relative to the Company's and the Bank's presence and stature in the community. The Executive will, at all times, emulate this high professional standard of conduct in order to develop and enhance the Company's reputation and image. The Executive will comply with all applicable rules, policies and procedures of the Bank (and as applicable, the Company) and any of their subsidiaries and all pertinent regulatory standards as may directly or indirectly affect the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4<u>Location</u>. The Executive shall provide services for the Company at its principal executive offices located in San Jose, California. The Executive agrees that they will be regularly present at the Company's principal executive offices and acknowledges that they may be required to travel from time to time in the course of performing the Executive's duties for the Company or the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5<u>No Breach of Contract.</u> The Executive hereby represents to the Company and the Bank that: (a) the execution and delivery of this Agreement by the Executive and the performance by the Executive of their duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or by which the Executive is otherwise bound; (b) that the Executive has no information (including, without limitation, confidential information or trade secrets) of any other person or entity which the Executive is not legally and contractually free to disclose to the Company and the Bank; and (c) that except as disclosed in writing (accompanied by copies) the Executive is not bound by any confidentiality, trade secret or similar agreement (other than this Agreement) with any other person or entity other than the Company and the Bank.

2.<u>Term</u>. Executive's employment pursuant to this Agreement will be at-will, terminable by either the Executive or the Company in accordance with the provisions of <u>Section 6</u>. Nothing in this Agreement or in any oral or written statement, express or implied, or any course of conduct or course of dealing, shall be construed to convey a specified term of employment.

3.<u>Compensation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1<u>Salary</u>. The Executive shall receive a salary at an annual rate of four hundred twenty-five thousand dollars ($425,000), which will be paid ratably in accordance with the Company's normal payroll procedures including applicable deductions for withholding taxes and employee benefits. The Executive shall receive such annual increases in salary, if any, as may be determined by, and at the sole discretion of, the Company's Board of Directors' annual review of the Executive's compensation each year during the term of this Agreement. Participation in deferred compensation, discretionary or performance bonus, retirement, stock option and other employee benefit plans and in fringe benefits shall not reduce the annual rate except to the extent the terms of such plans call for the payment or deferral of amounts deducted in accordance with the Company's standard payroll practices. In connection with and in addition to the annual compensation, bonuses and benefits described in this paragraph and in Section 3.2 and 3.3 below, the Company agrees to pay up to $50,000 to assist with moving, lease cancellation, and temporary lodging expenses. This allowance will be administered through the accounts payable reimbursement process and is subject to applicable documentation. Additionally, the Company will provide an additional relocation allowance up to $50,000, administered through the Accounts Payable reimbursement process and subject to appropriate receipts, following six months of employment provided you are an employee in good standing at that time. All relocation-related expenses must be submitted within six (6) months of your start date. Any unused portion of the allowance will not be paid out as cash. If you voluntarily terminate your employment within twelve (12) months of your start date, you agree to repay the full amount of the relocation allowance received, unless otherwise agreed to in writing.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2<u>Incentive Compensation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Bonus and Incentive Plan</u>. The Executive shall be eligible to receive an annual incentive compensation payment, beginning with and prorated for the fiscal year ended 2025, pursuant to the terms of the Company's Executive Officer Cash Incentive Program in effect at the date of this Agreement, and as amended at any future date or pursuant to any successor incentive program or arrangement adopted by the Company or the Bank for its officers (the **"Incentive Program"**). Notwithstanding any contrary terms of the Incentive Program, an annual payment if earned under the Incentive Program for a fiscal year shall be paid to the Executive no later than the 15th day of the third month following the end of the calendar year in which the annual incentive compensation payment is no longer subject to a substantial risk of forfeiture, provided that the Executive must still be an active employee with the Company on the date the incentive compensation payment is made by the Company to earn and receive the incentive compensation payment. If the Executive is not actively employed on the date the incentive compensation payment is made by the Company, Executive has not earned, and is not entitled to, such payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Restricted Stock Grant</u>. Following the Effective Date and subject to Board approval, the Company shall grant Executive a number of shares of restricted common stock of the Company (the "**Restricted Stock Grant**") determined by dividing three hundred thousand dollars ($300,000.00) by the Fair Market Value of one share of the Company's common stock as determined in accordance with the Company's 2023 Equity Incentive Plan, as amended ("**Plan**") Defined terms used in this paragraph and not herein defined shall have the meanings ascribed in the Plan. The Restricted Stock Grant shall be (i) subject to all applicable Company and Bank policies, including any policies that limit the granting of securities during blackout periods , (ii) governed by the Plan, except as expressly set forth in this paragraph, (iii) vested annually pro rata over a three-year period following the grant date, and (iv) subject to acceleration of vesting on a Change of Control. The definitive terms of the Restricted Stock Grant will be memorialized in a restricted stock agreement in accordance with the Plan, and the award of the restricted common stock contemplated herein shall be subject, in all respects, to Executive accepting the terms of the Company's Incentive Program and the applicable restricted stock agreement and executing the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Incentive Compensation Recovery</u>. Without limiting the general applicability of the Company's policies and procedures regarding employee and executive compensation, any and all compensation paid or payable to the Executive hereunder shall be subject to the Company's Incentive Compensation Recovery Policy as in effect from time to time. Any amendments to or modifications of the Incentive Compensation Recovery Policy made subsequent to the date of this Agreement shall be deemed to amend this Agreement in accordance with the terms of such amendments or modifications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3<u>Other Benefits</u>. The Executive shall be entitled to those benefits adopted by the Company and the Bank for all executive officers of the Company and or Bank, subject to applicable qualification requirements and regulatory approval requirements, if any. To the extent that the level of such benefits is based on seniority or compensation levels, the Company and the Bank shall make appropriate and proportionate adjustments to the Executive's benefits based on their seniority and compensation. The Executive shall be further entitled to the following additional benefits which shall supplement or replace, to the extent duplicative of any part or all of the general officer benefits, the benefits otherwise provided to the Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Vacation</u>. The Executive shall be entitled to thirty (30) paid vacation days for each calendar year (reduced pro rata for any partial year), of which at least five (5) (reduced pro rata for any partial year) must be taken consecutively. Vacation may be accrued in accordance with the Company's policy. The date or dates of vacation shall be determined by the Executive and the Company's

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Chief Executive Officer and will be subject to the business requirements of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Insurance</u>. Effective the first day of the first full calendar month of employment, the Company shall provide during the term of this Agreement at no cost to the Executive group life, health (including medical, dental, vision and hospitalization for Executive and Executive's dependents), accident and disability insurance coverage for the Executive and the Executive's dependents, as applicable, through a policy or policies provided by the insurer(s) selected by the Company in its sole discretion on the same basis as all other executives in comparable positions with the Company. Any such insurance coverage shall be subject to the terms and conditions set forth in the policies and plan documents, which may be modified, amended or replaced from time to time, in the Company's sole and absolute discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>401(k)</u>. The Company maintains a 401(k) plan for its eligible employees. Subject to the terms and conditions set forth in the official plan documents, the Executive will be eligible to participate in the 401(k) plan, and shall receive a matching contribution in accordance with the terms of the 40l(k) plan from the Company, which such plan may be modified, amended or replaced from time to time, in the Company's sole and absolute discretion; provided, however, that such changes are effective with respect to all employees whose titles or responsibilities are equivalent or subordinate to yours.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Automobile Allowance and Insurance</u>. The Company shall pay to the Executive an automobile allowance in the amount of seven hundred and fifty dollars ($750) per month during the term of this Agreement. The Executive shall obtain and maintain public liability insurance and property damage insurance policies with insurer(s) acceptable to the Company with such coverages in such amounts as may be acceptable to the Company from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4<u>Business Expenses</u>. The Executive shall be entitled to incur and be reimbursed for all reasonable and necessary business expenses. The Company will reimburse the Executive for all such expenses upon the presentation by the Executive, from time to time, of an itemized account of such expenditures setting forth the date, the purposes for which incurred, and the amounts thereof, together with such receipts showing payments in conformity with the Company's established policies. Reimbursement shall be made within a reasonable period after the Executive's submission of an itemized account in accordance with the Company's policies.

4.<u>Indemnity</u>. The Company shall indemnify and hold the Executive harmless from any cost, expense or liability arising out of or relating to any acts or decisions made by the Executive on behalf of or in the course of performing services for the Company and the Bank to the same extent the Bank and the Company indemnifies and holds harmless other executive officers and directors of the Bank and in accordance with the articles of incorporation, bylaws and established policies of the Bank.as well as California Labor Code section 2802. The rights conferred by this Section 4 shall be in addition to, and not in limitation or derogation of, rights arising under the California Corporations Code, under the governing documents of the Company or the Bank (as the case may be), or under any contract or agreement providing for indemnification of the Executive.

5.<u>Certain Terms Defined</u>. For purposes of this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1**"Accrued Obligations"** means the sum of the Executive's Base Salary and accrued vacation through the Date of Termination to the extent not theretofore paid, outstanding expense reimbursements and any compensation previously deferred by the Executive to the extent not theretofore paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2**"Average Annual Bonus"** shall mean the average bonus or incentive compensation amount paid to (or earned by) the Executive during the three (3) fiscal years immediately preceding the termination (including periods of employment with the Company and the Bank prior to the Effective

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Date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3**"Base Salary"** means, as of any Date of Termination of employment, the current annual salary of the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4**"Cause"** shall mean (a) the Executive willfully breaches or habitually neglects the duties which the Executive is required to perform under Executive's employment with the Company or the Bank; (b) the Executive commits an intentional act of moral turpitude that has a material detrimental effect on the reputation or business of the Company or the Bank ; (c) the Executive is convicted of a felony or commits any material and actionable act of dishonesty, fraud, or intentional material misrepresentation in the performance of the Executive's employment with the Company and the Bank; (d) the Executive engages in repetitive or substantial misconduct, including material breach of any term of this Agreement; (e) the Executive engages in inappropriate or disruptive conduct which the Company determines is detrimental or harmful to employees, customers staff, or visitors or negatively affects the operations, financial performance, or reputation of the Company or the Bank; (f) the Executive engages in any type of workplace intimidation, bullying or harassment, regardless of form or frequency; (g) the Executive engages in an unauthorized disclosure or use of inside information, trade secrets or other confidential information of the Company or the Bank; (h) the Executive willfully breaches a fiduciary duty, or violates any law, rule or regulation, which breach or violation results in a material adverse effect on the Company or the Bank (taken as a whole) ; or (i) Executive has committed any other action or inaction that warrants the immediate termination of an employee for cause pursuant to the policies and procedures of the Company .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5**"Change of Control"** means, subject to the limitations of Section 409A of the Code, set forth in <u>Section 7</u> of this Agreement, the earliest occurrence of one of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)the acquisition (or acquisition during the 12 month period ending on the date of the most recent acquisition) by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the **"Exchange Act") (a "Person")** of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (i) the then outstanding shares of common stock of the Company (the **"Outstanding Company Common Stock"**) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors **("Outstanding Company Voting Securities"**); provided, however, that for purposes of this <u>subsection (a)</u>, the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company that reduces the number of shares issued and outstanding through a stock repurchase program or otherwise, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or the Bank or any corporation controlled by the Company or the Bank or (iv) any acquisition by any corporation pursuant to a transaction which complies with <u>clauses (i)</u>, <u>(ii)</u> and <u>(iii)</u> of <u>subsection (c)</u> of this <u>Section 5.5</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)individuals who, as of the Effective Date, constitute the Board of Directors of the Company (the **"Incumbent Board")** cease for any reason other than resignation, death or disability to constitute at least a majority of the Company's Board of Directors during any 12 month period; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Company's Board of Directors; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)consummation of a reorganization, merger or consolidation of the Company or the Bank, or sale or other disposition (in one transaction or a series of transactions) of any assets of the Bank or the Company having a total fair market value equal to, or more than, 40% of the total gross fair market value of all of the assets of the Bank or the Company immediately prior to such acquisition or acquisitions (a **"Business Combination"),** in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns all or substantially all of the Company's or Bank's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or the Bank or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, of the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Company's Board of Directors at the time of the execution of the initial agreement, or of the action of the Company's Board of Directors, providing for such Business Combination; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6**"Change of Control Period"** means the period of time (a) commencing on the earlier of (i) 120 days before the date the Change of Control occurs, or if earlier, 120 days before a definitive agreement is executed by the Company or the Bank for a transaction described in <u>Section 5.4(c)</u> (provided, however, that in the event of this <u>subsection (a)(i)</u> the Executive reasonably demonstrates that the Executive's termination of employment should it occur was either (x) at the request of a third party who has taken steps reasonably calculated to effect a Change of Control, or (y) otherwise arose in connection with a Change of Control), or (ii) the date the Change of Control occurs, and (b) ending on the last day of the 24th calendar month immediately following the month the Change of Control occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7**"Code"** means the Internal Revenue Code of 1986, as amended and any successor provisions to such sections.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8**"Date of Termination"** means (a) if the Executive's employment is terminated due to the Executive's death, the Date of Termination shall be the date of death; (b) if the Executive's employment is terminated due to Disability, the Date of Termination is the Disability Effective Date; (c) if the Executive's employment is terminated by the Company for Cause or without Cause, or voluntarily by the Executive, or for any other reason, the Date of Termination shall be the Executive's final date of employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9**"Disability"** means a physical or mental condition of the Executive which occurs and persists and which, in the written opinion of a physician selected by the Company or its insurers and acceptable to the Executive or the Executive's legal representative, and, in the written opinion of such physician, the condition will render the Executive unable to return to the Executive's duties for an indefinite period of not less than 180 days.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10**"Release Agreement"** means a written agreement executed by the Company, the Bank and the Executive substantially in the form of <u>Exhibit A</u>, attached to this Agreement.

6.<u>Termination</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1This Agreement may be terminated for the following reasons:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Death</u>. This Agreement shall terminate automatically upon the Executive's death.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Disability</u>. In the event of the Executive's Disability, the Company may give the Executive a notice of termination. In such event, the Executive's employment with the Company and this Agreement shall terminate without further act of the parties effective on the 30th day after the Company provides such notice to the Executive (the **"Disability Effective Date")** provided, however, that within the 30 days after such notice is provided, the Executive shall not have returned to full-time performance of the Executive's duties. Unless otherwise agreed in writing between the Executive and the Company, upon receipt of such notice, the Executive shall immediately cease performing and discharging the duties and responsibilities of the Executive's positions and remove the Executive's personal belongings from the Company's premises. All rights and obligations accruing to the Executive under this Agreement shall cease as of the Disability Effective Date, except that such termination shall not prejudice the Executive's rights regarding employment benefits which shall have accrued prior to such termination, and any other remedy which the Executive may have at law, in equity or under this Agreement, which remedy accrued prior to such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Cause</u>. The Company may terminate the Executive's employment and this Agreement for Cause. Unless otherwise agreed in writing between the Executive and the Company upon receipt of notice of termination for Cause, the Executive shall immediately cease performing and discharging the duties and responsibilities of the Executive's positions and remove the Executive's personal belongings from the Company's premises. All rights and obligations accruing to the Executive under this Agreement shall cease at such termination, except that such termination shall not prejudice the Executive's rights regarding employment benefits which shall have accrued prior to such termination, and any other remedy which the Executive may have at law, in equity or under this Agreement, which remedy accrued prior to such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Termination by Bank without Cause</u>. The Company may, at its election and in its sole discretion, terminate the Executive's employment and this Agreement without notice and for any reason or no reason within the first year from the commencement of Executive's employment, without prejudice to any other remedy to which the Company may be entitled either at law, in equity or under this Agreement. Subject to the last sentence of this Section 6.l(d), the Company may, at its election and in its sole discretion, terminate the Executive's employment and this Agreement at any time after one year from the commencement of Executive's employment and for any reason or for no reason, upon 30 days prior written notice to the Executive, without prejudice to any other remedy to which the Company may be entitled either at law, in equity or under this Agreement. Unless otherwise agreed in writing between the Executive and the Company, upon the Executive's receipt of notice of termination without Cause, the Executive shall immediately cease performing and discharging the duties and responsibilities of the Executive's positions and remove the Executive's personal belongings from the Company's premises. All rights and obligations accruing to the Executive under this Agreement shall cease at such termination, except that such termination shall not prejudice the Executive's rights regarding employment benefits which shall have accrued prior to such termination, including the right to receive the severance benefits specified in <u>Section 6.2(a)</u> or <u>Section 6.2(b)</u> below, and any other remedy which the Executive may have at law, in equity or under this Agreement, which remedy accrued prior to such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Voluntary Termination by Executive</u>. The Executive may terminate the Executive's employment and this Agreement at any time and for any reason or no reason, upon 30 days

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prior written notice to the Company. Unless otherwise agreed in writing between the Executive and the Company, upon the Company's receipt of the Executive's written notice of voluntary termination the Executive shall immediately cease performing and discharging the duties and responsibilities of the Executives positions and remove the Executive's personal belongings from the Company's premises. All rights and obligations accruing to the Executive under this Agreement shall cease at such termination, except that such termination shall not prejudice the Executive's rights regarding employment benefits which shall have accrued prior to such termination and any other remedy which the Executive may have at law, in equity or under this Agreement, which remedy accrued prior to the date of such termination.

6.2<u>Certain Benefits upon Termination</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Termination without Cause</u>. In the event the Company terminates this Agreement pursuant to <u>Section 6.l(d)</u> (termination without Cause) and subject to (i) the execution of the Release Agreement by the Executive, and (ii) such Release Agreement becoming effective and irrevocable within 60 days of the Date of Termination, then in such case, the Executive shall receive the Accrued Obligations on the Date of Termination, and severance benefits constituting of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)For Termination without Cause within one year from Executive's commencement of employment, cash payment in the amount equal to three (3) months of Executive's Base Salary, payable in a lump sum within thirty (30) days following the Date of Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)For Termination without Cause after one year from Executive's commencement of employment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)cash payment in the amount equal to one (1) times the sum of the Executive's (A) Base Salary and (B) Average Annual Bonus, payable in a lump sum within thirty (30) days following the Date of Termination, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)if the Executive timely elects continuation of group insurance coverage pursuant to The Consolidated Omnibus Budget Reconciliation Act of 1985 (**"COBRA"**), or under applicable California law pursuant to Assembly Bill No. 1401 (**"Cal COBRA"**), the Company will pay to Executive an amount equal to one hundred percent (100%) of the COBRA premiums for a period of 12 months from the Date of Termination, which amount shall be included in Executive's income for tax purposes to the extent required by applicable law. After expiration of the 12-month period, the Executive and the Executive's dependents shall have such rights to continue to participate under the Company's group insurance coverage specified in <u>Section 3.3(b)</u> of this Agreement at the Executive's expense to the extent available under the terms of the plan or benefit and applicable law. The Executive agrees to notify the Company as soon as practicable, but not less than 10 business days in advance of the commencement of comparable insurance coverage with another employer. The Company's obligation for the 12 month period specified herein with respect to the foregoing benefits shall be limited to the extent that the Executive obtains any such benefits pursuant to a subsequent employer's benefit plans, in which case the Company may reduce the coverage of any benefits it is required to provide the Executive hereunder so long as the aggregate coverage and benefits of the combined benefit plans of the new employer are not substantially less favorable to the Executive than the coverage and benefits required to be provided hereunder.

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Notwithstanding the foregoing or any other provision of this Agreement, if any part or all of the severance benefits is subject to taxation under Section 409A of the Code, as determined by the Company, with the advice of its independent accounting firm or other tax advisors, then the severance benefits shall be subject to modification as set forth in <u>Section 7</u> of this Agreement.

Notwithstanding the foregoing, when the Executive is entitled to the severance benefits provided in <u>Section 6.2(b)</u>, then Executive shall not be entitled to the severance benefits pursuant to this <u>Section 6.2(a)</u>.

The Executive acknowledges and agrees that severance benefits pursuant to this <u>Section 6.2(a)</u> are in lieu of all damages, payments and liabilities on account of the early termination of this Agreement and are the sole and exclusive remedy for the Executive for a termination specified in <u>Section 6.l(d)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Termination and Change of Control.</u> In the event of a Change of Control and at any time during the Change of Control Period (x) the Executive's employment is terminated, or (y) without Executive's written consent there occurs any material adverse change in the nature and scope of the Executive's position, responsibilities, duties, or a change in the Executive's location of employment outside the counties of Alameda, Contra Costa, Marin, San Francisco, San Mateo or Santa Clara, or any material reduction in Executive's compensation or benefits and Executive voluntarily terminates the Executive's employment, and subject to (i) the execution of the Release Agreement by the Executive, and (ii) such Release Agreement becoming effective and irrevocable within 60 days of the Date of Termination, then the Executive shall receive the Accrued Obligations on the Date of Termination, and the severance benefits consisting of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)a cash payment in an amount which shall equal two (2) times the sum of (x) the Executive's Base Salary, *plus* (y) the Executive's Average Annual Bonus, which shall be payable in a lump sum within sixty (60) days following the Date of Termination; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)if the Executive timely elects continuation of group insurance coverage pursuant to COBRA, or under Cal COBRA, the Company will pay to Executive an amount equal to one hundred percent (100%) of the COBRA premiums for a period of 24 months from the Date of Termination, which amount shall be included in Executive's income for tax purposes to the extent required by applicable law. After such expiration of the 24 month period, the Executive and the Executive's dependents shall have such rights to continue to participate under the Company's group insurance coverage specified in <u>Section 3.3(b)</u> of this Agreement at the Executive's expense to the extent available under the terms of the plan or benefit and applicable law. The Executive agrees to notify the Company as soon as practicable, but not less than 10 business days in advance of the commencement of comparable insurance coverage with another insurance carrier. The Company's obligation for the 24 month period specified herein with respect to the foregoing benefits shall be limited to the extent that the Executive obtains any such benefits pursuant to a subsequent employer's benefit plans, in which case the Company may reduce the coverage of any benefits it is required to provide the Executive hereunder so long as the aggregate coverage and benefits of the combined benefit plans of the new employer are not substantially less favorable to the Executive than the coverage and benefits required to be provided hereunder.

Notwithstanding the foregoing or any other provision of this Agreement, if any part or all of the severance benefits is subject to taxation under Section 409A of the Code, as determined by the Company, with the advice of its independent accounting firm or other tax advisors, then the severance payment shall be subject to modification as set forth hereafter in <u>Section 7</u> of this Agreement.

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The Executive acknowledges and agrees that severance benefits pursuant to this <u>Section 6.2(b)</u> are in lieu of all damages, payments and liabilities on account of the events described above for which such severance benefits may be due the Executive under <u>Section 6.2(b)</u> of this Agreement. This <u>Section 6.2(b)</u> shall be binding upon and inure to the benefit of the Company and the Company and their respective successors and assigns.

Notwithstanding the foregoing, the Executive shall not be entitled to receive severance benefits pursuant to this <u>Section 6.2(b)</u> in the event the Executive's termination of employment results from an occurrence described in <u>Section 6.1(a)</u>, <u>Section 6.1(b)</u> or <u>Section 6.1(c)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Death</u>. If the Executive's employment terminates by reason of the Executive's death, this Agreement shall terminate without further obligations to the Executive's legal representatives under this Agreement, other than for payment of Accrued Obligations and any incentive compensation for the year in which the death occurred prorated through the Date of Termination. Accrued Obligations shall be paid to the Executive's estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination; provided, however, that payment may be deferred until the Executive's executor or personal representative has been appointed and qualified pursuant to the laws in effect in the Executive's jurisdiction of residence at the time of the Executive's death. The Executive's estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company to the estate and beneficiaries of other executives in comparable positions with the Company under such plans, programs, practices and policies relating to death benefits, if any, as in effect on the date of the Executive's death.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Disability</u>. If the Executive's employment terminates during the Term by reason of the Executive's Disability, this Agreement shall terminate without further obligations to the Executive under this Agreement, other than for payment of Accrued Obligations, and any incentive compensation for the year in which the termination occurs prorated through the Date of Termination and any benefits under such plans, programs, practices and policies relating to disability benefits, if any, as in effect on the Date of Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Cause/Voluntary Termination</u>. If the Executive's employment terminates for Cause, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive the Accrued Obligations. If the Executive's employment terminates due to the Executive's voluntarily termination of this Agreement, except as provided in clause (y) of the first paragraph of <u>Section 6.2(b)</u>, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive the Accrued Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Single Trigger Event</u>. The provisions for payments contained in this <u>Section 6.2</u> may be triggered only once during the term of this Agreement, so that, for example, should the Executive be terminated without Cause and should there thereafter be a Change of Control, then the Executive would be entitled to be paid only under <u>Section 6.2(a)</u> and not under <u>Section 6.2(b)</u> as well. In addition, the Executive shall not be entitled to receive severance benefits of any kind from any parent, subsidiary or other affiliated entity of the Company if in connection with the same event or series of events the payments provided for in this <u>Section 6.2</u> has been triggered.

7.<u>Section 409A Limitation</u>. It is the intention of the Company and the Executive that the severance benefits payable to the Executive under <u>Section 6.2</u> either be exempt from, or otherwise comply with, Section 409A (**"Section 409A"**) of the Code.

Notwithstanding any other term or provision of this Agreement, to the extent that any provision of this Agreement is determined by the Company or the Company, with the advice of its independent accounting firm or other tax advisors, to be subject to and not in compliance with Section 409A,

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including, without limitation, the definition of Change of Control or the timing of commencement and completion of severance benefits and/or other benefit payments to the Executive hereunder, or the amount of any such payments, such provisions shall be interpreted in the manner required to exempt the benefit from or to comply with Section 409A. The Company, the Bank and the Executive acknowledge and agree that such interpretation could, among other matters, (i) limit the circumstances or events that constitute a "change in control;" (ii) delay for a period of 6 months or more, or otherwise modify the commencement of severance and/or other benefit payments; (iii) modify the completion date of severance and/or (iv) other benefit payments and/or reduce the amount of the benefit otherwise provided.

The Company, Bank and the Executive further acknowledge and agree that if, in the judgment of the Company, with the advice of its independent accounting firm or other tax advisors, amendment of this Agreement is necessary to exempt the benefits from or to comply with Section 409A, the Company and the Executive will negotiate reasonably and in good faith to amend the terms of this Agreement to the extent necessary so that it exempts the benefits from or to comply with Section 409A (with the most limited possible economic effect on the Bank, the Company and the Executive). A termination of employment will not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a "separation from service" within the meaning of Section 409A, and for purposes of any such provision of this Agreement, references to a "termination," "termination of employment" or like terms will mean "separation from service." Notwithstanding anything to the contrary in this Agreement, if Executive is deemed on the date of termination to be a "specified employee" within the meaning under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered deferred compensation under Section 409A payable on account of a "separation from service," such payment or benefit will not be made or provided until the date that is the earlier of (A) the expiration of the six-month period measured from the date of such "separation from service" of Executive, and (B) the date of Executive's death, to the extent required under Section 409A. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) will be paid or reimbursed to Executive in a lump sum, and any remaining payments and benefits due under this Agreement will be paid or provided in accordance with the normal payment dates specified for them herein. Notwithstanding the foregoing, (a) the Executive and the Executive's dependents shall not be denied access to and participation in any health or medical insurance coverage and benefits, for any period of time the Executive and the Executive's dependents are otherwise eligible, and (b) the Executive acknowledges and agrees that the Company or the Bank shall have the exclusive authority to determine whether the Executive is a "specified employee" within the meaning of Section 409A(a)(2)(B)(i). To the extent that reimbursements or other in-kind benefits under this Agreement constitute "nonqualified deferred compensation" for purposes of Section 409A, (A) all expenses or other reimbursements hereunder will be made on or before the last day of the taxable year following the taxable year in which such expenses were incurred by Executive, (B) any right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for another benefit, and (C) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year will in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year. For the purposes of Section 409A, the Executive's right to receive any installment payments pursuant to this Agreement is treated as a right to receive a series of separate and distinct payments.

8.<u>Assignment</u>. This Agreement will inure to the benefit of and be binding upon the Bank and the Company and any of their respective successors and assigns. In view of the personal nature of the services to be performed under this Agreement by the Executive, the Executive will not have the right to assign or transfer any of Executive's rights, obligations or benefits under this Agreement. The Bank and the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Bank or the Company to assume

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expressly and agree to perform this Agreement in the same manner and to the same extent that the Bank and the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Bank" or "the Company" shall mean the Bank or the Company, as applicable, as hereinbefore defined and any successor to the Company's or Bank's business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

9.<u>Specific Performance</u>. The Executive hereby represents and agrees that the services to be performed under the terms of this Agreement are of a special, unique, unusual, extraordinary, and intellectual character that gives them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in an action at law. The Executive therefore expressly agrees that the Bank and the Company, in addition to any other rights or remedies that the Bank and the Company may possess, shall be entitled to injunctive and other equitable relief to prevent or remedy a breach of this Agreement by the Executive.

10.<u>Loyalty, Confidentiality and Non-Solicitation by the Executive</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Definitions</u>. The term **"Trade Secrets"** shall be given its broadest possible interpretation and shall mean any information, including formulas, patterns, compilations, financial reports, customer records, marketing or financial programs, devices, methods, know how, negative know-how, techniques, , discoveries, ideas, concepts, designs, technical information, drawings, data, customer and supplier lists, information regarding customers, buyers and suppliers, distribution techniques, production processes, research and development projects, marketing plans, general financial information and financial information concerning customers, the Company's or the Bank's legal, business and financial structure and operations, and other confidential and proprietary information or processes which (i) derive independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use and (ii) are the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

The term **"Proprietary Information"** shall also be given its broadest possible interpretation and shall mean any and all information disclosed or made available by the Company or the Bank to the Executive including, without limitation, any information upon which the Company's or the Bank's business or success depends, and including any and all information constituting, incorporating, referencing or derived from the financial, personal or business information of the Bank's customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Executive shall not, during the term of this Agreement, directly or indirectly, either as an employee, employer, consultant, agent, principal, stockholder (except as permitted in <u>Section 1.2</u> of this Agreement), officer, director, or in any other individual or representative capacity, engage or participate in any competitive banking or financial services business without the prior written consent of the Board of Directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Following termination of this Agreement and the Executive's employment hereunder, the Executive shall not use any Trade Secret or Proprietary Information of the Bank or the Company or their affiliates and subsidiaries to solicit, directly, indirectly or in any manner whatsoever, (i) any employee of the Bank, the Company or their affiliates and subsidiaries (including any former employee who voluntarily terminated employment with the Bank or the Company within a 12 month period prior to the Executive's termination of employment) to resign or to apply for or accept employment with any other competitive banking or financial services business within the counties in California in which the Bank has located its headquarters or branch offices; or (ii) any customer, person or entity that has a business relationship with the Bank during the 12 month period prior to the Executive's termination of employment with the Company, to terminate such business relationship and engage in a business relationship with any other competitive banking or financial services business within

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the counties in California in which the Bank has located its headquarters or branch offices.

11.<u>Disclosure of Information</u>. The Executive shall not, at any time or in any manner, directly or indirectly, either before or after termination of this Agreement, without the prior written consent of the Board of Directors of the Company or except as required by law to comply with legal process including, without limitation, by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process, use for the Executive's own benefit or the benefit of any other person or entity, or otherwise disclose or communicate to any person or entity including, without limitation, the media or by way of the World Wide Web, any information concerning any Trade Secret or Proprietary Information of the Company or the Bank. The Executive further recognizes and acknowledges that any Trade Secrets concerning any customers of the Bank or the Company and their respective affiliates and subsidiaries, as it may exist from time to time, is strictly confidential and is a valuable, special and unique asset of the Bank's and the Company's business. In the event the Executive is required by law to disclose Trade Secrets or Proprietary Information, the Executive will provide the Bank and the Company, and their counsel with immediate notice of such request so that they may consider seeking a protective order. If, in the absence of a protective order or the receipt of a waiver hereunder, the Executive is nonetheless, in the written opinion of knowledgeable counsel, compelled to disclose Trade Secrets or Proprietary Information to any tribunal or any other party or else stand liable for contempt or suffer other material censure or material penalty, then the Executive may disclose (on an "as needed" basis only) such information to such tribunal or other party without liability hereunder. Notwithstanding the foregoing, the Executive may disclose Trade Secrets or Proprietary Information as may be required by any regulatory agency having jurisdiction over the operations of the Bank or the Company in connection with an examination of the Bank or the Company or other proceeding conducted by such regulatory agency. Under the Defend Trade Secrets Act of 2016 (**"DTSA"**) an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (a) is made (i) in confidence to a federal, state or local government official, either directly or indirectly to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, the DTSA provides that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney for the individual and the use of trade secret information in the court proceeding, if the individual (y) files any document containing the trade secret under seal; and (z) does not disclosure the trade secret, except pursuant to court order.

12.<u>Written, Printed or Electronic Material</u>. All written, printed or electronic material, notebooks and records including, without limitation, computer disks, cloud-based storage, smartphone, iPhone, iPad (or similar devices) or lap top used by the Executive in performing duties for the Company, other than the Executive's personal address lists, telephone lists, notes and diaries, are and shall remain the sole property of the Company. Upon termination of employment, the Executive shall promptly return all such material (including all copies, extracts and summaries thereof) to the Company. Following any termination of this Agreement, the Company may require Executive to submit to a review of electronic devices and email, messaging and social media accounts remaining in Executive's possession or accessible to them , which may, in the reasonable opinion of the Company, contain or incorporate Proprietary Information. Any such review shall be conducted by a reputable forensic information technology specialist selected by the Company with the consent of Executive, which consent shall not be unreasonably withheld, conditioned or delayed. The costs of any such review shall be borne solely by the Company. In connection with such a review, the forensic information technology specialist shall be instructed (i) to locate and securely delete any and all Proprietary Information, (ii) to report to the Company on the nature of any such information, and (iii) to preserve and avoid the deletion or disclosure of any information located on such devices which is not clearly Proprietary Information.

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13.<u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1<u>Notice</u>. For the purposes of this Agreement, all notices, requests, consents, claims, demands, waivers, and other communications hereunder (each, a **"Notice")** shall be in writing and addressed to the parties at the addresses set forth below (or to such other address that may be designated by the receiving party from time to time in accordance with this Section). All Notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees pre-paid), or email (with confirmation of transmission), or certified or registered mail (in each case, return receipt requested, postage pre-paid). Except as otherwise provided in this Agreement, a Notice is effective only (a) upon receipt by the receiving party, and (b) if the party giving the Notice has complied with the requirements of this Section.

Company: HERITAGE COMMERCE CORP<br>224 Airport Parkway<br>San Jose, CA 95110<br>Attn: Chief Executive Officer <br>Clay.Jones@herbank.com

Bank: HERITAGE BANK OF COMMERCE<br>224 Airport Parkway <br>San Jose, CA 95110<br>Attn: Chief Executive Officer <br>Clay.Jones@herbank.com

Executive: Seth Fonti<br>224 Airport Parkway <br>San Jose, CA 95110<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2<u>Amendments or Additions</u>. Except as expressly provided in Section 3.2(c), no amendment, modification or additions to this Agreement shall be binding unless in writing and signed by the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3<u>Section Headings</u>. The section headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4<u>Severability</u>. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5<u>Counterparts</u>. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but both of which together will constitute one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.6<u>Mediation</u>. Prior to engaging in any legal or equitable litigation or other dispute resolution process, regarding any of the terms and conditions of this Agreement between the parties, or concerning the subject matter of the Agreement between the parties, or concerning Executive's employment with the Company, each party specifically agrees to engage in good faith, in a mediation process at the expense of the Bank or the Company, complying with the procedures provided for under California Evidence Code Sections 1115 through and including 1125, as then currently in effect. The parties further and specifically agree to use their best efforts to reach a mutually agreeable resolution of the matter. The parties understand and specifically agree that should any party to this Agreement refuse to participate in mediation for any reason, the other party will be entitled to seek a court order to enforce this provision in any court of appropriate jurisdiction requiring the dissenting party to attend, participate, and to make a good faith effort in the mediation process to reach a mutually agreeable resolution of the matter.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.7<u>Arbitration</u>. To the extent not resolved through mediation as provided in <u>Section 13.6</u>, all claims, disputes and other matters in question arising out of or relating to this Agreement, the employment of Executive, any termination of the Executive's employment, the enforcement or interpretation of this Agreement, or because of an alleged breach, default, or misrepresentation in connection with any of the provisions of this Agreement, including (without limitation) any state or federal statutory claims, shall be resolved by binding arbitration in accordance with the Company's and the Bank's Agreement to Binding Arbitration, the terms and conditions of which are incorporated herein by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.8<u>Attorneys' Fees</u>. In the event of litigation, arbitration or any other action or proceeding between the parties to interpret or enforce this Agreement, or any part thereof or relating to this Agreement, the prevailing party shall be entitled to recover its costs related to such action or proceeding and its reasonable fees of attorneys, accountants and expert witnesses incurred by such party in connection with any such action or proceedings. The prevailing party shall be deemed to be the party which obtains substantially the relief sought by final resolution, compromise or settlement, or as may otherwise be determined by order of a court of competent jurisdiction in the event of litigation, an award or decision of an arbitrator in the event of arbitration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.9<u>Entire Agreement</u>. This Agreement and the Company's and Bank's Agreement to binding Arbitration supersedes any and all agreements, either oral or in writing, between the parties with respect to the employment of the Executive by the Company and the Bank and contains all of the covenants and agreements between the parties with respect to the employment of the Executive by the Company. Each party to this Agreement acknowledges that no other representations, inducements, promises, or agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not set forth herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding on either party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.10<u>Waiver</u>. The failure of a party to insist on strict compliance with any of the terms, provisions, covenants, or conditions of this Agreement by another party shall not be deemed a waiver of any term, provision, covenant, or condition, individually or in the aggregate, unless such waiver is in writing, nor shall any waiver or relinquishment of any right or power at any one time or times be deemed a waiver or relinquishment of that right or power for all or any other times.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.11<u>Severability</u>. If any provision in this Agreement is held by a court of competent jurisdiction or arbitrator to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated in any way. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.12<u>Interpretation</u>. This Agreement shall be construed without regard to the party responsible for the preparation of the Agreement and shall be deemed to have been prepared jointly by the parties. Any ambiguity or uncertainty existing in this Agreement shall not be interpreted against any party, but according to the application of other rules of contract interpretation, if an ambiguity or uncertainty exists.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.13<u>Governing Law, Jurisdiction and Venue</u>. The laws of the State of California, other than those laws denominated choice of law rules, shall govern the validity, construction and effect of this Agreement. Any action which in any way involves the rights, duties and obligations of the parties hereunder and is not resolved by binding arbitration as provided for in this Agreement shall be brought in the courts of the State of California and venue for any action or proceeding shall be in Santa Clara County or in the United States District Court for the Northern District of California, and the parties hereby submit to the personal jurisdiction of said courts. Such jurisdiction is mandatory and not elective, and each of the parties hereby irrevocably waives the right to bring any such action in any other forum or to seek removal of such action to another forum on the grounds of *forum non conveniens* or otherwise; however, nothing herein is intended to supersede the Company's and the Company's Agreement to Binding Arbitration.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.14<u>Payments Due to Deceased Executive</u>. If the Executive dies prior to the expiration of the term of the Executive's employment (except termination resulting from such death), any payments that may be due the Executive from the Bank or the Company under this Agreement as of the date of death shall be paid to the Executive's heirs, beneficiaries, successors, permitted assigns or transferees, executors, administrators, trustees, or any other legal or personal representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.15<u>Effect of Termination on Certain Provisions</u>*.* Upon the termination of this Agreement, the obligations of the Bank, the Company and the Executive hereunder shall cease except to the extent of the Bank's or the Company's obligation to make payments, if any, to or for the benefit of the Executive following termination, and provided that this <u>Section 13.15</u> and <u>Section 4</u>, <u>Section 6.2</u>, <u>Section 7</u>, <u>Section 8</u>, <u>Section 9</u>, <u>Section 10</u>, <u>Section 11</u>, <u>Section 13.7</u>, <u>Section 13.13</u> and <u>Section 13.14</u> shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.16<u>Advice of Counsel and Advisors</u>. The Executive acknowledges and agrees that they have read and understand the terms and provisions of this Agreement and prior to signing this Agreement, they have had the advice of counsel and/or such other advisors as they deemed appropriate in connection with their review and analysis of such terms and provisions of this Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement on the date first indicated above.

**"COMPANY"**

**HERITAGE COMMERCE CORP,**<br> a California bank holding company

By: <u>/s/ ROBERTSON CLAY JONES</u><br>Name: Robertson Clay Jones<br>Title: Chief Executive Officer <br>Chief Executive Officer

**"BANK"**

**HERITAGE BANK OF COMMERCE,**<br> a California banking corporation

By: <u>/s/ ROBERTSON CLAY JONES</u><br>Name: Robertson Clay Jones<br>Title: Chief Executive Officer <br>Chief Executive Officer

**"EXECUTIVE"**

By: <u>/s/ SETH FONTI</u> <br> Seth Fonti

[*Signature Page to Employment Agreement*]

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**EXHIBIT A**

**RELEASE AGREEMENT**

This Release Agreement (the **"Release Agreement"**) is entered into by and between ______________________ (**"Employee"**), on the one hand, and HERITAGE BANK OF COMMERCE, a California banking corporation (the **"Bank"**) and HERITAGE COMMERCE CORP., a California bank holding company (the **"Company"**), on the other hand.

**RECITALS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.Employee, the Company and the Bank entered into an Employment Agreement dated as of , and any amendments thereto (the **"Employment Agreement").**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.Employee's employment with the Company and the Bank is terminated effective (**"Termination Date"**).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.A condition precedent to certain of the Company's and the Bank's obligations under Section 6.2(a) or Section 6.2(b), as applicable, of the Employment Agreement is the execution of this Release Agreement by Employee.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, and for other good and valuable consideration, the adequacy of which is hereby acknowledged, the parties, intending to be legally bound, agree and covenant as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.General Release.**

In consideration for the payments and benefits specified in Section 6.2(a) or Section 6.2(b), as applicable of the Employment Agreement, Employee agrees to unconditionally, irrevocably, and forever fully release, waive, and discharge the Bank and the Company, and each and all of their past, present, and future parent companies, subsidiaries, related entities, affiliates, predecessors, successors, assigns, officers, directors, managers, employees, members, shareholders, owners, representatives, attorneys, insurers, reinsurers, and agents (and the past, present, and future officers, directors, managers, employees, members, shareholders, owners, representatives, attorneys, insurers, reinsurers, and agents of any such parent companies, subsidiaries, related entities, affiliates, predecessors, successors, and assigns) (collectively the **"Released Parties"**) from and against any and all claims, actions, causes of action, suits, demands, contracts, agreements, obligations, losses, compensation, wages, penalties, liabilities, rights, and damages of any kind or nature whatsoever, whether known or unknown, foreseen or unforeseen, which Employee ever had, now has or may claim to have against any or all of the Released Parties for, upon or by reason of any fact, matter, injury, incident, circumstance, cause or thing whatsoever, from the beginning of time up to and including the date of Employee's execution of this Release Agreement, including, without limitation, any claim or obligation arising from or in any way related to Employee's employment with the Bank or the Company, the termination of that employment, or an alleged breach of the Employment Agreement.

This General Release specifically includes, but is not limited to, any claim for discrimination or violation of any statutes, rules, regulations or ordinances, whether federal, state or local, including, but not limited to, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Reconstruction Era Civil Rights Act, the California Fair Employment and Housing Act, the California Labor Code, the California Business and Professions Code, the California constitution, and any claims at common law.

Employee further knowingly and willingly agrees to waive the provisions and protections of Section 1542 of the California Civil Code, which reads:

**"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO** 

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**EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, AND THAT IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY."**

This General Release covers not only any and all claims by Employee against the Bank and the Company, and the other persons and entities released in this General Release, but, to the extent permitted by applicable law, it also covers any claim for damages or reinstatement asserted on Employee's behalf by any other person or entity, including, without limitation, any government agency, and Employee expressly waives the right to any such damages or reinstatement. This General Release does not include any claims that cannot lawfully be waived or released by Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.Revocation Period.** Employee, the Bank and the Company acknowledge and agree that (i) Employee has twenty-one (21) days from Employee's receipt of this Release Agreement in which to consider its terms (including, without limitation, Employee's release and waiver of any and all claims under the Age Discrimination in Employment Act) before executing it, although Employee may execute this Release Agreement earlier if Employee chooses **(but not earlier than Employee's Termination Date),** (ii) Employee will have seven (7) days after Employee's execution of this Release Agreement in which to revoke this Release Agreement (including, without limitation, Employee's release and waiver of any and all claims under the Age Discrimination in Employment Act), in which event a written notice of revocation must be received by the Chief Executive Officer of the Company before the expiration of this seven (7) day revocation period, and (iii) this Release Agreement will not become effective and enforceable until this seven (7) day period has expired without revocation by Employee.

Employee and the Bank and the Company further acknowledge and agree that the payments and benefits specified in Section 6.2(a) or Section 6.2(b), as applicable of the Agreement will not be made, the Release Agreement will become null and void, unless and until each of the following four conditions are satisfied: (a) Employee executes the Release Agreement within twenty-one (21) days after receiving it, (b) Employee returns the executed Release Agreement to the Company no later than five (5) working days after executing it, (c) the Release Agreement by its terms becomes effective and enforceable after the seven (7) day revocation period specified in the preceding paragraph has expired without revocation by Employee, and (d) Employee returns all materials (pursuant to Section 12 of the Employment Agreement) to the Company no later than five (5) days after the Termination Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.Representations By Employee**.

Employee represents and agrees that, prior to Employee's execution of this Release Agreement, Employee has been informed by the Bank and the Company of Employee's right to consult with legal counsel regarding the terms of this Release Agreement during the 21 day review period in Paragraph B above, that Employee has had the opportunity to discuss the terms of this Release Agreement with legal counsel of Employee's choosing, and that the Bank and the Company by this writing is encouraging Employee to seek this advice of legal counsel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.Miscellaneous**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Entire Agreement</u>. Except for the Employment Agreement, this Release Agreement sets forth the entire agreement between Employee, on the one hand, and the Bank and the Company, on the other hand, regarding the subject matter hereof and supersedes any and all agreements, either oral or in writing, between the parties with respect to the subject matter hereof. Each party to this Release Agreement acknowledges that no other representations, inducements, promises, or agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not set

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forth herein, and that no other agreement, statement, or promise not contained in this Release Agreement shall be valid or binding on either party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Severability</u>. If any provision in this Release Agreement is held by a court of competent jurisdiction or arbitrator to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated in any way. Any provision of this Release Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Attorneys' Fees</u>. In the event of litigation, arbitration or any other action or proceeding between the parties to interpret or enforce this Agreement, or any part thereof or relating to this Agreement, the prevailing party shall be entitled to recover its costs related to such action or proceeding and its reasonable fees of attorneys, accountants and expert witnesses incurred by such party in connection with any such action or proceedings. The prevailing party shall be deemed to be the party which obtains substantially the relief sought by final resolution, compromise or settlement, or as may otherwise be determined by order of a court of competent jurisdiction in the event of litigation, an award or decision of an arbitrator in the event of arbitration.

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The undersigned agree to the terms of this Release Agreement and voluntarily enter into it with the intent to be bound hereby.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**EMPLOYEE** |  | &nbsp;&nbsp;**HERITAGE COMMERCE CORP.** |
|  | &nbsp;&nbsp;By: |  |
|  |  | &nbsp;&nbsp;Name:  |
|  |  | &nbsp;&nbsp;Title:  |
|  |  | &nbsp;&nbsp;**HERITAGE COMMERCE CORP.** |
|  | &nbsp;&nbsp;By: |  |
|  |  | &nbsp;&nbsp;Name:  |
|  |  | &nbsp;&nbsp;Title:  |

---

[Signature Page to Release Agreement]

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## Exhibit 99.1

**Exhibit 99.1**

Heritage Commerce Corp

224 Airport Parkway

San Jose, CA 95110

www.heritagecommercecorp.com

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**Heritage Commerce Corp Reports Second Quarter and First Six Months of 2025 Financial Results**

San Jose, CA – July 24, 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 second quarter and six months ended June 30, 2025. All data are unaudited.

**REPORTED SECOND QUARTER 2025 HIGHLIGHTS:**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Income** | **Earnings Per Share** | **Pre-Provision Net Revenue ("PPNR")**<sup>(1)</sup> | **Fully Tax Equivalent ("FTE") Net Interest Margin**<sup>(1)</sup> | **Efficiency Ratio**<sup>(1)</sup> | **Tangible Book Value Per Share**<sup>(1)</sup> |
| **$6.4 million** | **$0.10**  | **$9.4 million** | **3.54%** | **80.23%** | **$8.49**  |

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**ADJUSTED SECOND QUARTER 2025 HIGHLIGHTS:**<sup>(1)</sup>

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Net Income** | **Earnings Per Share** | **PPNR**<sup>(1)</sup> | **FTE Net Interest Margin**<sup>(1)</sup> | **Efficiency Ratio**<sup>(1)</sup> | **Tangible Book Value Per Share**<sup>(1)</sup> |
| **$13.0 million** | **$0.21**  | **$18.6 million** | **3.54%** | **61.01%** | **$8.59**  |

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**CEO COMMENTARY:**

"We executed well in the second quarter, generating a higher level of net income and earnings per share, excluding significant charges primarily related to a legal settlement," said Clay Jones, President and Chief Executive Officer. "We had positive trends in loan growth, an expansion in our net interest margin, and stable asset quality, while deposits declined due to seasonal outflows that we typically see in the second quarter. Our loan growth was well diversified across our portfolios. We continue to successfully add new clients by offering a superior banking experience and generate loan growth while maintaining our disciplined underwriting and pricing criteria."

"We have a strong balance sheet with a high level of capital and liquidity and healthy asset quality, which provides a strong foundation to weather periods of economic volatility. We are well positioned to navigate the current environment and expect to see positive trends in loan growth, the net interest margin, and expense management," said Mr. Jones.

---

| | |
|:---|:---|
| &nbsp;&nbsp;**LINKED-QUARTER BASIS** | &nbsp;&nbsp;**YEAR-OVER-YEAR** |

---

**FINANCIAL HIGHLIGHTS:**

&nbsp;&nbsp;&nbsp;&nbsp;● Total revenue of $47.8 million, an increase of 4%, or $1.7 million

&nbsp;&nbsp;&nbsp;&nbsp;● Noninterest expense of $38.3 million includes an accrual of $9.2 million for pre-tax charges primarily related to a legal settlement

&nbsp;&nbsp;&nbsp;&nbsp;● Reported net income of $6.4 million and earnings per share of $0.10, down 45% and 47%, from $11.6 million and $0.19, respectively

&nbsp;&nbsp;&nbsp;&nbsp;● Adjusted net income <sup>(1)</sup> of $13.0 million and adjusted earnings per share <sup>(1)</sup> of $0.21, both metrics up 11% from $11.6 million and $0.19, respectively

&nbsp;&nbsp;&nbsp;&nbsp;● Total revenue of $47.8 million, an increase of 15%, or $6.1 million

&nbsp;&nbsp;&nbsp;&nbsp;● Noninterest expense of $38.3 million includes an accrual of $9.2 million for pre-tax charges primarily related to a legal settlement

&nbsp;&nbsp;&nbsp;&nbsp;● Reported net income of $6.4 million and earnings per share of $0.10, down 31% and 33%, from $9.2 million and $0.15, respectively

&nbsp;&nbsp;&nbsp;&nbsp;● Adjusted net income <sup>(1)</sup> of $13.0 million and adjusted earnings per share <sup>(1)</sup> of $0.21, both metrics up 40% from $9.2 million and $0.15, respectively

**FINANCIAL CONDITION:**

&nbsp;&nbsp;&nbsp;&nbsp;● Loans held-for-investment ("HFI") of $3.5 billion, up $47.4 million or 1%

&nbsp;&nbsp;&nbsp;&nbsp;● Total deposits of $4.6 billion, down $55.9 million, or 1%

&nbsp;&nbsp;&nbsp;&nbsp;● Loan to deposit ratio of 76.38%, up from 74.45%

&nbsp;&nbsp;&nbsp;&nbsp;● Total shareholders' equity of $694.7 million, down $1.5 million

&nbsp;&nbsp;&nbsp;&nbsp;● Increase in loans HFI of $154.5 million, or 5%

&nbsp;&nbsp;&nbsp;&nbsp;● Increase in total deposits of $182.7 million, or 4%

&nbsp;&nbsp;&nbsp;&nbsp;● Loan to deposit ratio of 76.38%, up from 76.04%

&nbsp;&nbsp;&nbsp;&nbsp;● Increase in total shareholders' equity of $15.5 million

**CREDIT QUALITY:**

&nbsp;&nbsp;&nbsp;&nbsp;● Nonperforming assets ("NPAs") to total assets of 0.11% for both quarters

&nbsp;&nbsp;&nbsp;&nbsp;● NPAs to total assets of 0.11% for both quarters

&nbsp;&nbsp;&nbsp;&nbsp;● Classified assets to total assets of 0.69%, compared to 0.73%

&nbsp;&nbsp;&nbsp;&nbsp;● Classified assets to total assets of 0.69%, compared to 0.64%

**KEY PERFORMANCE METRICS:**

&nbsp;&nbsp;&nbsp;&nbsp;● FTE net interest margin <sup>(1)</sup> of 3.54%, an increase from 3.39%

&nbsp;&nbsp;&nbsp;&nbsp;● Common equity tier 1 capital ratio of 13.3%, compared to 13.6%

&nbsp;&nbsp;&nbsp;&nbsp;● Total capital ratio of 15.5%, compared to 15.9%

&nbsp;&nbsp;&nbsp;&nbsp;● Tangible common equity ratio <sup>(1)</sup> of 9.85%, an increase of 1% from 9.78%

&nbsp;&nbsp;&nbsp;&nbsp;● FTE net interest margin <sup>(1)</sup> of 3.54%, an increase from 3.26%

&nbsp;&nbsp;&nbsp;&nbsp;● Common equity tier 1 capital ratio of 13.3%, compared to 13.4%

&nbsp;&nbsp;&nbsp;&nbsp;● Total capital ratio of 15.5%, compared to 15.6%

&nbsp;&nbsp;&nbsp;&nbsp;● Tangible common equity ratio <sup>(1)</sup> of 9.85%, a decrease of 1% from 9.91%

<sup>(1)</sup> 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 charges primarily related to a legal settlement in the second quarter and first six months of 2025 as presented in the reconciliation of non-GAAP financial measures at the end of this press release.

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**Results of Operations:**

Reported net income was $6.4 million, or $0.10 per average diluted common share, for the second quarter of 2025. Adjusted net income<sup>(2)</sup> was $13.0 million, or $0.21 per average diluted common share, for the second quarter of 2025, compared to $11.6 million, or $0.19 per average diluted common share, for the first quarter of 2025, and $9.2 million, or $0.15 per average diluted common share, for the second quarter of 2024. The annualized return on average assets was 0.47% and annualized return on average equity was 3.68% for the second quarter of 2025, compared to 0.85% and 6.81%, respectively, for the first quarter of 2025, and 0.71% and 5.50%, respectively, for the second quarter of 2024. The adjusted annualized return on average assets<sup>(2)</sup> was 0.95% and adjusted annualized return on average tangible common equity<sup>(2)</sup> was 9.92% for the second quarter of 2025, compared to 0.85% and 9.09%, respectively, for the first quarter ended of 2025, and 0.71% and 7.43%, respectively, for the second quarter of 2024.

Reported net income was $18.0 million, or $0.29 per average diluted common share, for the first six months of 2025. Adjusted net income<sup>(2)</sup> was $24.6 million, or $0.40 per average diluted common share, for the first six months of 2025, compared to $19.4 million, or $0.32 per average diluted common share, for the first six months of 2024. The annualized return on average assets was 0.66% and annualized return on average equity was 5.23% for the six months ended June 30, 2025, compared to 0.75% and 5.79%, respectively, for the six months ended June 30, 2024. The adjusted annualized return on average assets<sup>(2)</sup> was 0.90% and annualized return on average tangible common equity<sup>(2)</sup> was 9.51% for the six months ended June 30, 2025, compared to 0.75% and 7.84%, respectively, for the six months ended June 30, 2024.

Total revenue, which is defined as net interest income before provision for credit losses on loans plus noninterest income, increased $1.7 million, or 4%, to $47.8 million for the second quarter of 2025, compared to $46.1 million for the first quarter of 2025, and increased $6.1 million, or 15%, from $41.7 million for the second quarter of 2024. Total revenue increased $9.9 million, or 12%, to $93.8 million for the first six months of 2025, compared to $83.9 million for the first six months of 2024.

For the second quarter and first six months of 2025, the Company's reported PPNR<sup>(2)</sup>, which is defined as total revenue less adjusted noninterest expense<sup>(2)</sup> was $9.4 million and $26.0 million, respectively. The adjusted PPNR<sup>(2)</sup> was $18.6 million for the second quarter of 2025, compared to $16.6 million for the first quarter of 2025, and $13.5 million for the second quarter of 2024. For the six months of 2025, the Company's adjusted PPNR<sup>(2)</sup> was $35.2 million, compared to $28.1 million for the six months of 2024.

Net interest income totaled $44.8 million for the second quarter of 2025, an increase of $1.4 million, or 3%, compared to $43.4 million for the first quarter of 2025. The FTE net interest margin<sup>(2)</sup> was 3.54% for the second quarter of 2025, an increase over 3.39% for the first quarter of 2025 primarily due to an increase in the average yields and average balances of loans and securities, partially offset by a decrease in the average balances of deposits resulting in a lower average balance of overnight funds.

Net interest income increased $5.9 million, or 15%, to $44.8 million, compared to $38.9 million for the second quarter of 2024. The FTE net interest margin<sup>(2)</sup> increased from 3.23% for the second quarter of 2024 primarily due to lower rates paid on customer deposits, an increase in the average yields and average balances of loans and securities, 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 six months of 2025, net interest income increased $9.8 million, or 12% to $88.2 million, compared to $78.4 million for the first six months of 2024. The FTE net interest margin<sup>(2)</sup> increased 20 basis points to 3.47% for the first six months of 2025, from 3.27% for the first six months of 2024, primarily due to 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 higher rates paid on client deposits and a lower yield on overnight funds.

We recorded a provision for credit losses on loans of $516,000 for the second quarter of 2025, compared to $274,000 for the first quarter of 2025, and $471,000 for the second quarter of 2024. There was a provision for credit losses on loans of $790,000 for the six months ended June 30, 2025, compared to $655,000 for the six months ended June 30, 2024. The increase in the provision for credit losses on loans for the second quarter and first six months of 2025 was primarily due to loan growth.

Total noninterest income increased to $3.0 million for the second quarter of 2025, compared to $2.7 million for the first quarter of 2025, and $2.9 million for the second quarter of 2024, primarily due to higher termination and facility fees. The increase in noninterest income in the second quarter of 2025 was partially offset by a $219,000 gain on proceeds from company-owned life insurance in the second quarter of 2024.

Total noninterest income increased 3% to $5.7 million for the first six months of 2025, compared to $5.5 million for the first six months of 2024, primarily due to higher termination and facility fees, partially offset by a $219,000 gain on proceeds from company-owned life insurance in the first six months of 2024.

<sup>(2)</sup> This is a non-GAAP financial measure as defined and discussed under *"Non-GAAP Financial Measures"* in this press release.

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Reported noninterest expense for the second quarter of 2025 and first six months of 2025 totaled $38.3 million and $67.8 million, respectively. 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. Adjusted noninterest expense<sup>(3)</sup> was $29.1 million, compared to $29.5 million for the first quarter of 2025, and $28.2 million for the second quarter of 2024. Adjusted noninterest expense<sup>(3)</sup> for the first six months of 2025 was $58.6 million, compared to $55.7 million for the first six months of 2024.

Income tax expense decreased to $2.5 million for the second quarter of 2025, compared to $4.7 million for the first quarter of 2025, and $3.8 million for the second quarter of 2024, primarily due to lower pre-tax income. The effective tax rate for the second quarter of 2025 was 28.5%, compared to 28.8% for the first quarter of 2025, and 29.4% for the second quarter of 2024.

Income tax expense for the six months ended June 30, 2025 was $7.2 million, compared to $8.1 million for the six months ended June 30, 2024. The effective tax rate for six months ended June 30, 2025 was 28.7%, compared to 29.4% for the six months ended June 30, 2024.

The reported efficiency ratio<sup>(3)</sup> for the second quarter and first six month of 2025 was 80.23% and 72.24%, respectively. The adjusted efficiency ratio<sup>(3)</sup> improved to 61.01% for the second quarter of 2025, compared to 63.96% for the first quarter of 2025, as a result of higher total revenue. The adjusted efficiency ratio<sup>(3)</sup> improved from 67.55% for the second quarter of 2024, primarily due to higher total revenue, partially offset by higher noninterest expense. The adjusted efficiency ratio<sup>(3)</sup> improved to 62.45% for the first six months of 2025 from 66.44% for the first six months of 2024, primarily due to higher total revenue, partially offset by higher noninterest expense.

Full time equivalent employees were 350 at both June 30, 2025 and March 31, 2025, and 353 at June 30, 2024.

**Financial Condition and Capital Management:**

Total assets remained relatively flat at $5.5 billion at both June 30, 2025 and March 31, 2025. Total assets increased 4% from $5.3 billion at June 30, 2024, primarily due to an increase in deposits resulting in an increase in overnight funds, and an increase in loans.

Investment securities available-for-sale (at fair value) decreased to $307.0 million at June 30, 2025, compared to $371.0 million at March 31, 2025, primarily due to maturities and paydowns, partially offset by purchases. Investment securities available-for-sale totaled $273.0 million at June 30, 2024. The pre-tax unrealized loss on the securities available-for-sale portfolio was $448,000, or $396,000 net of taxes, which equaled less than 1% of total shareholders' equity at June 30, 2025.

During the first six months of 2025, the Company purchased $87.2 million of agency mortgage-backed securities, $79.8 million of collateralized mortgage obligations, and $44.8 million of U.S. Treasury securities, for total purchases of $211.8 million in the available-for-sale portfolio. Securities purchased had a book yield of 4.82% and an average life of 4.55 years.

Investment securities held-to-maturity (at amortized cost, net of allowance for credit losses of ($16,000), totaled $561.2 million at June 30, 2025, compared to $576.7 million at March 31, 2025, and $621.2 million at June 30, 2024. The fair value of the securities held-to-maturity portfolio was $486.5 million at June 30, 2025. The pre-tax unrecognized loss on the securities held-to-maturity portfolio was $74.7 million, or $52.7 million net of taxes, which equaled 7.6% of total shareholders' equity at June 30, 2025.

The unrealized and unrecognized losses in both the available-for-sale and held-to-maturity portfolios were due to higher interest rates at June 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 when the securities mature. The fair value is expected to recover as the securities approach their maturity date and/or market rates decline.

Loans HFI, net of deferred costs and fees, increased $47.4 million, or 1% to $3.5 billion at June 30, 2025, compared to $3.5 billion at March 31, 2025, and increased $154.5 million, or 5%, from $3.4 billion at June 30, 2024. Loans HFI, excluding residential mortgages, increased $58.3 million, or 2% to $3.1 billion at June 30, 2025, compared to $3.0 billion at March 31, 2025, and increased $184.9 million, or 6%, from $2.9 billion at June 30, 2024.

Commercial and industrial line utilization was 32% at June 30, 2025, compared to 31% at both March 31, 2025, and June 30, 2024. Commercial real estate ("CRE") loans totaled $2.0 billion at June 30, 2025, of which 31% were owner occupied and 31% were investor CRE loans. Owner occupied CRE loans totaled 31% at March 31, 2025 and 32% at June 30, 2024. Approximately 24% of the Company's loan portfolio consisted of floating interest rate loans at both June 30, 2025 and March 31, 2025, compared to 27% at June 30, 2024.

At June 30, 2025, paydowns and maturities of investment securities and fixed interest rate loans maturing within one year totaled $311.0 million.

<sup>(3)</sup> This is a non-GAAP financial measure as defined and discussed under *"Non-GAAP Financial Measures"* in this press release.

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Total deposits decreased $55.9 million, or 1%, to $4.6 billion at June 30, 2025, compared to $4.7 billion at March 31, 2025, primarily due to season outflows. Total deposits increased $182.7 million, or 4% from $4.4 billion at June 30, 2024.

The following table shows the Company's deposit types as a percentage of total deposits at the dates indicated:

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| | | | |
|:---|:---|:---|:---|
|  | **June 30,**  | **March 31,** | **June 30,**  |
| **DEPOSITS TYPE % TO TOTAL DEPOSITS** | **2025** | **2025** | **2024** |
| Demand, noninterest-bearing | 25% | 24% | 27% |
| Demand, interest-bearing | 21% | 20% | 21% |
| Savings and money market | 28% | 29% | 25% |
| Time deposits — under $250 | 1% | 1% | 1% |
| Time deposits — $250 and over | 4% | 5% | 4% |
| Insured Cash Sweep ("ICS")/Certificate of Deposit Registry |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Service ("CDARS") - interest-bearing demand, money |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;market and time deposits | 21% | 21% | 22% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | 100% | 100% | 100% |

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The loan to deposit ratio was 76.38% at June 30, 2025, compared to 74.45% at March 31, 2025, and 76.04% at June 30, 2024.

The Company's total available liquidity and borrowing capacity was $3.1 billion at June 30, 2025, compared to $3.2 billion at March 31, 2025, and $3.0 billion at June 30, 2024.

Total shareholders' equity was $694.7 million at June 30, 2025, compared to $696.2 million at March 31, 2025, and $679.2 million at June 30, 2024. The change in shareholders' equity at June 30, 2025 is primarily a function of net income and the decrease in the total accumulated other comprehensive loss, partially offset by dividends to stockholders.

Total accumulated other comprehensive loss of $5.0 million at June 30, 2025 was comprised of $2.5 million in actuarial losses associated with split dollar insurance contracts, $2.2 million in actuarial losses associated with the supplemental executive retirement plan, unrealized losses on securities available-for-sale of $396,000, and a $42,000 unrealized gain on interest-only strip from SBA loans.

The Company's consolidated capital ratios exceeded regulatory guidelines and the Bank's capital ratios exceeded regulatory guidelines under the prompt corrective action ("PCA") regulatory guidelines for a well-capitalized financial institution, and the Basel III minimum regulatory requirements at June 30, 2025.

Reported tangible book value per share<sup>(4)</sup> was $8.49 at June 30, 2025. Adjusted tangible book value per share<sup>(4)</sup> was $8.59 at June 30, 2025, compared to $8.48 at March 31, 2025, and $8.22 at June 30, 2024.

The Company is authorized to repurchase up to $15.0 million of the Company's shares of its issued and outstanding common stock under its share repurchase program authorized by the Board of Directors in July 2024. During the second quarter of 2025, the Company repurchased 207,989 shares of its common stock with a weighted average price of $9.19 for a total of $1.9 million. The remaining capacity under this share repurchase program was $13.1 million at June 30, 2025. In July 2025, the Company's Board of Directors extended the program for one year, expiring on July 31, 2026.

**Credit Quality:**

The provision for credit losses on loans totaled $516,000 for the second quarter of 2025, compared to a $274,000 provision for credit losses on loans for the first quarter of 2025 and a provision for credit losses on loans of $471,000 for the second quarter of 2024. Net charge-offs totaled $145,000 for the second quarter of 2025, compared to $965,000 for the first quarter of 2025, and $405,000 for the second quarter of 2024.

The provision for credit losses on loans totaled $790,000 for the first six months of 2025, compared to a $655,000 provision for credit losses on loans for the first six months of 2024. Net charge-offs totaled $1.1 million for the first six months of 2025, compared to $659,000 for the first six months of 2024.

The allowance for credit losses on loans ("ACLL") at June 30, 2025 was $48.6 million, or 1.38% of total loans, representing 787% of total nonperforming loans. The ACLL at March 31, 2025 was $48.3 million, or 1.38% of total loans, representing 765% of total nonperforming loans. The ACLL at June 30, 2024 was $48.0 million, or 1.42% of total loans, representing 795% of total nonperforming loans. The reduction to the allowance for credit on losses on loans reflects our credit assessment and economic factors.

NPAs were $6.2 million at June 30, 2025, compared to $6.3 million at March 31, 2025, and $6.0 million at June 30, 2024. There were no foreclosed assets on the balance sheet at June 30, 2025, March 31, 2025, or June 30, 2024. There were no Shared National Credits ("SNCs") or material purchased participations included in NPAs or total loans at June 30, 2025, March 31, 2025, or June 30, 2024.

Classified assets totaled $37.5 million, or 0.69% of total assets, at June 30, 2025, compared to $40.0 million, or 0.73% of total assets, at March 31, 2025, and $33.6 million, or 0.64% of total assets, at June 30, 2024.

<sup>(4)</sup> This is a non-GAAP financial measure as defined and discussed under *"Non-GAAP Financial Measures"* in this press release.

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**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, Gilroy, 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 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 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) the effects of recent wildfires affecting Southern California, which have affected certain clients and certain loans secured by mortgages in Los Angeles County, and which are affecting or may, in the future, affect other clients in those and other markets throughout California; (vi) 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; (vii) 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; (viii) political events that have accompanied or that may in the future accompany or result from recent political changes, particularly including sociopolitical events and conditions that result from political conflicts and law enforcement activities that may adversely affect our markets or our clients; (ix) our ability to estimate

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accurately, and to establish adequate reserves against, the risk of loss associated with our loan and lease portfolios and our factoring business; (x) 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; (xi) factors that affect the value and liquidity of our investment portfolios, particularly the values of securities available-for-sale; (xii) 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; (xiii) 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; (xiv) 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; (xv) 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 (xvi) our success in managing the risks involved in the foregoing factors.

Member FDIC

**For additional information, email:**

InvestorRelations@herbank.com

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **Percent Change From:** | **Percent Change From:** | **For the Six Months Ended:** | **For the Six Months Ended:** | **For the Six Months Ended:** |
| <br>**CONSOLIDATED INCOME STATEMENTS**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **June 30,** <br>**2024** | **March 31,** <br>**2025** | **June 30,** <br>**2024** | **June 30,** <br>**2025** | **June 30,** <br>**2024** | **Percent**<br>**Change** |
| Interest income | $63025 | $61832 | $58489 | 2% | 8% | $124857 | $115450 | 8% |
| Interest expense | 18220 | 18472 | 19622 | (1)% | (7)% | 36692 | 37080 | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income before provision |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for credit losses on loans | 44805 | 43360 | 38867 | 3% | 15% | 88165 | 78370 | 12% |
| Provision for credit losses on loans | 516 | 274 | 471 | 88% | 10% | 790 | 655 | 21% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income after provision  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for credit losses on loans | 44289 | 43086 | 38396 | 3% | 15% | 87375 | 77715 | 12% |
| Noninterest income: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Service charges and fees on deposit |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;accounts | 929 | 892 | 891 | 4% | 4% | 1821 | 1768 | 3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FHLB and FRB stock dividends | 584 | 590 | 588 | (1)% | (1)% | 1174 | 1178 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in cash surrender value of |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;life insurance | 548 | 538 | 521 | 2% | 5% | 1086 | 1039 | 5% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination fees | 227 | 87 | 100 | 161% | 127% | 314 | 113 | 178% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sales of SBA loans | 87 | 98 | 76 | (11)% | 14% | 185 | 254 | (27)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Servicing income | 61 | 82 | 90 | (26)% | (32)% | 143 | 180 | (21)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on proceeds from company-owned |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;life insurance |  |  | 219 | N/A | (100)% |  | 219 | (100)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 541 | 409 | 379 | 32% | 43% | 950 | 750 | 27% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | 2977 | 2696 | 2864 | 10% | 4% | 5673 | 5501 | 3% |
| Noninterest expense: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salaries and employee benefits | 16227 | 16575 | 15794 | (2)% | 3% | 32802 | 31303 | 5% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Occupancy and equipment | 2525 | 2534 | 2689 | 0% | (6)% | 5059 | 5132 | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professional fees | 1819 | 1580 | 1072 | 15% | 70% | 3399 | 2399 | 42% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 17764 | 8767 | 8633 | 103% | 106% | 26531 | 16890 | 57% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expense | 38335 | 29456 | 28188 | 30% | 36% | 67791 | 55724 | 22% |
| Income before income taxes | 8931 | 16326 | 13072 | (45)% | (32)% | 25257 | 27492 | (8)% |
| Income tax expense | 2542 | 4700 | 3838 | (46)% | (34)% | 7242 | 8092 | (11)% |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net income** | $**6389** | $**11626** | $**9234** | (45)% | (31)% | $**18015** | $**19400** | (7)% |
| **PER COMMON SHARE DATA** |  |  |  |  |  |  |  |  |
| **(unaudited)** |  |  |  |  |  |  |  |  |
| Basic earnings per share | $0.10 | $0.19 | $0.15 | (47)% | (33)% | $0.29 | $0.32 | (9)% |
| Diluted earnings per share | $0.10 | $0.19 | $0.15 | (47)% | (33)% | $0.29 | $0.32 | (9)% |
| Weighted average shares outstanding - basic | 61508180 | 61479579 | 61279914 | 0% | 0% | 61493880 | 61233269 | 0% |
| Weighted average shares outstanding - diluted | 61624600 | 61708361 | 61438088 | 0% | 0% | 61664942 | 61446484 | 0% |
| Common shares outstanding at period-end | 61446763 | 61611121 | 61292094 | 0% | 0% | 61446763 | 61292094 | 0% |
| Dividend per share | $0.13 | $0.13 | $0.13 | 0% | 0% | $0.26 | $0.26 | 0% |
| Book value per share | $11.31 | $11.30 | $11.08 | 0% | 2% | $11.31 | $11.08 | 2% |
| Tangible book value per share<sup>(1)</sup> | $8.49 | $8.48 | $8.22 | 0% | 3% | $8.49 | $8.22 | 3% |
| **KEY PERFORMANCE METRICS** |  |  |  |  |  |  |  |  |
| **(in $000's, unaudited)** |  |  |  |  |  |  |  |  |
| Annualized return on average equity | 3.68% | 6.81% | 5.50% | (46)% | (33)% | 5.23% | 5.79% | (10)% |
| Annualized return on average tangible  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;common equity<sup>(1)</sup> | 4.89% | 9.09% | 7.43% | (46)% | (34)% | 6.97% | 7.84% | (11)% |
| Annualized return on average assets | 0.47% | 0.85% | 0.71% | (45)% | (34)% | 0.66% | 0.75% | (12)% |
| Annualized return on average tangible assets<sup>(1)</sup> | 0.48% | 0.88% | 0.74% | (45)% | (35)% | 0.68% | 0.78% | (13)% |
| Net interest margin (FTE)<sup>(1)</sup> | 3.54% | 3.39% | 3.23% | 4% | 10% | 3.47% | 3.27% | 6% |
| Total revenue | $47782 | $46056 | $41731 | 4% | 15% | 93838 | 83871 | 12% |
| Pre-provision net revenue<sup>(1)</sup> | $9447 | $16600 | $13543 | (43)% | (30)% | 26047 | 28147 | (7)% |
| Efficiency ratio<sup>(1)</sup> | 80.23% | 63.96% | 67.55% | 25% | 19% | 72.24% | 66.44% | 9% |
| **AVERAGE BALANCES** |  |  |  |  |  |  |  |  |
| **(in $000's, unaudited)** |  |  |  |  |  |  |  |  |
| Average assets | $5458420 | $5559896 | $5213171 | (2)% | 5% | $5508878 | $5195903 | 6% |
| Average tangible assets<sup>(1)</sup> | $5284972 | $5386001 | $5037673 | (2)% | 5% | $5335207 | $5020134 | 6% |
| Average earning assets | $5087089 | $5188317 | $4840670 | (2)% | 5% | $5137424 | $4825587 | 6% |
| Average loans held-for-sale | $2250 | $2290 | $1503 | (2)% | 50% | $2270 | $2126 | 7% |
| Average loans held-for-investment | $3504518 | $3429014 | $3328358 | 2% | 5% | $3466975 | $3312799 | 5% |
| Average deposits | $4618007 | $4717517 | $4394545 | (2)% | 5% | $4667487 | $4377347 | 7% |
| Average demand deposits - noninterest-bearing | $1146494 | $1167330 | $1127145 | (2)% | 2% | $1156854 | $1152111 | 0% |
| Average interest-bearing deposits | $3471513 | $3550187 | $3267400 | (2)% | 6% | $3510633 | $3225236 | 9% |
| Average interest-bearing liabilities | $3511237 | $3589872 | $3306972 | (2)% | 6% | $3550338 | $3264788 | 9% |
| Average equity | $697016 | $692733 | $675108 | 1% | 3% | $694886 | $673700 | 3% |
| Average tangible common equity<sup>(1)</sup> | $523568 | $518838 | $499610 | 1% | 5% | $521215 | $497931 | 5% |

---

------

<sup>(1)</sup> This is a non-GAAP financial measure as defined and discussed under *"Non-GAAP Financial Measures"* in this press release.

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** |
| <br>**CONSOLIDATED INCOME STATEMENTS**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **December 31,** <br>**2024** | **September 30,**<br>**2024** | **June 30,** <br>**2024** |
| Interest income | $63025 | $61832 | $64043 | $60852 | $58489 |
| Interest expense | 18220 | 18472 | 20448 | 21523 | 19622 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income before provision |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for credit losses on loans | 44805 | 43360 | 43595 | 39329 | 38867 |
| Provision for credit losses on loans | 516 | 274 | 1331 | 153 | 471 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income after provision  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for credit losses on loans | 44289 | 43086 | 42264 | 39176 | 38396 |
| Noninterest income: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Service charges and fees on deposit |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;accounts | 929 | 892 | 885 | 908 | 891 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FHLB and FRB stock dividends | 584 | 590 | 590 | 586 | 588 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in cash surrender value of |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;life insurance | 548 | 538 | 528 | 530 | 521 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination fees | 227 | 87 | 18 | 46 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sales of SBA loans | 87 | 98 | 125 | 94 | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Servicing income | 61 | 82 | 77 | 108 | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on proceeds from company-owned |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;life insurance |  |  |  |  | 219 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 541 | 409 | 552 | 554 | 379 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | 2977 | 2696 | 2775 | 2826 | 2864 |
| Noninterest expense: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salaries and employee benefits | 16227 | 16575 | 16976 | 15673 | 15794 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Occupancy and equipment | 2525 | 2534 | 2495 | 2599 | 2689 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professional fees | 1819 | 1580 | 1711 | 1306 | 1072 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 17764 | 8767 | 9122 | 7977 | 8633 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expense | 38335 | 29456 | 30304 | 27555 | 28188 |
| Income before income taxes | 8931 | 16326 | 14735 | 14447 | 13072 |
| Income tax expense | 2542 | 4700 | 4114 | 3940 | 3838 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net income** | $**6389** | $**11626** | $**10621** | $**10507** | $**9234** |
| **PER COMMON SHARE DATA** |  |  |  |  |  |
| **(unaudited)** |  |  |  |  |  |
| Basic earnings per share | $0.10 | $0.19 | $0.17 | $0.17 | $0.15 |
| Diluted earnings per share | $0.10 | $0.19 | $0.17 | $0.17 | $0.15 |
| Weighted average shares outstanding - basic | 61508180 | 61479579 | 61320505 | 61295877 | 61279914 |
| Weighted average shares outstanding - diluted | 61624600 | 61708361 | 61679735 | 61546157 | 61438088 |
| Common shares outstanding at period-end | 61446763 | 61611121 | 61348095 | 61297344 | 61292094 |
| Dividend per share | $0.13 | $0.13 | $0.13 | $0.13 | $0.13 |
| Book value per share | $11.31 | $11.30 | $11.24 | $11.18 | $11.08 |
| Tangible book value per share<sup>(1)</sup> | $8.49 | $8.48 | $8.41 | $8.33 | $8.22 |
| **KEY PERFORMANCE METRICS** |  |  |  |  |  |
| **(in $000's, unaudited)** |  |  |  |  |  |
| Annualized return on average equity | 3.68% | 6.81% | 6.16% | 6.14% | 5.50% |
| Annualized return on average tangible  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;common equity<sup>(1)</sup> | 4.89% | 9.09% | 8.25% | 8.27% | 7.43% |
| Annualized return on average assets | 0.47% | 0.85% | 0.75% | 0.78% | 0.71% |
| Annualized return on average tangible assets<sup>(1)</sup> | 0.48% | 0.88% | 0.78% | 0.81% | 0.74% |
| Net interest margin (FTE)<sup>(1)</sup> | 3.54% | 3.39% | 3.32% | 3.15% | 3.23% |
| Total revenue | $47782 | $46056 | $46370 | $42155 | $41731 |
| Pre-provision net revenue<sup>(1)</sup> | $9447 | $16600 | $16066 | $14600 | $13543 |
| Efficiency ratio<sup>(1)</sup> | 80.23% | 63.96% | 65.35% | 65.37% | 67.55% |
| **AVERAGE BALANCES** |  |  |  |  |  |
| **(in $000's, unaudited)** |  |  |  |  |  |
| Average assets | $5458420 | $5559896 | $5607840 | $5352067 | $5213171 |
| Average tangible assets<sup>(1)</sup> | $5284972 | $5386001 | $5433439 | $5177114 | $5037673 |
| Average earning assets | $5087089 | $5188317 | $5235986 | $4980082 | $4840670 |
| Average loans held-for-sale | $2250 | $2290 | $2260 | $1493 | $1503 |
| Average loans held-for-investment | $3504518 | $3429014 | $3388729 | $3359647 | $3328358 |
| Average deposits | $4618007 | $4717517 | $4771491 | $4525946 | $4394545 |
| Average demand deposits - noninterest-bearing | $1146494 | $1167330 | $1222393 | $1172304 | $1127145 |
| Average interest-bearing deposits | $3471513 | $3550187 | $3549098 | $3353642 | $3267400 |
| Average interest-bearing liabilities | $3511237 | $3589872 | $3588755 | $3393264 | $3306972 |
| Average equity | $697016 | $692733 | $686263 | $680404 | $675108 |
| Average tangible common equity<sup>(1)</sup> | $523568 | $518838 | $511862 | $505451 | $499610 |

---

------

<sup>(1)</sup> This is a non-GAAP financial measure as defined and discussed under *"Non-GAAP Financial Measures"* in this press release.

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **End of Period:** | **End of Period:** | **End of Period:** | **Percent Change From:** | **Percent Change From:** |
| <br>**CONSOLIDATED BALANCE SHEETS**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **June 30,** <br>**2024** | **March 31,** <br>**2025** | **June 30,** <br>**2024** |
| **ASSETS** |  |  |  |  |  |
| Cash and due from banks | $55360 | $44281 | $37497 | 25% | 48% |
| Other investments and interest-bearing deposits |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;in other financial institutions | 666432 | 700769 | 610763 | (5)% | 9% |
| Securities available-for-sale, at fair value | 307035 | 370976 | 273043 | (17)% | 12% |
| Securities held-to-maturity, at amortized cost | 561205 | 576718 | 621178 | (3)% | (10)% |
| Loans - held-for-sale - SBA, including deferred costs | 1156 | 1884 | 1899 | (39)% | (39)% |
| Loans - held-for-investment: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial | 492231 | 489241 | 477929 | 1% | 3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CRE - owner occupied | 627810 | 616825 | 594504 | 2% | 6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CRE - non-owner occupied | 1390419 | 1363275 | 1283323 | 2% | 8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Land and construction | 149460 | 136106 | 125374 | 10% | 19% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Home equity | 120763 | 119138 | 126562 | 1% | (5)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Multifamily | 285016 | 284510 | 268968 | 0% | 6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential mortgages | 454419 | 465330 | 484809 | (2)% | (6)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer and other | 14661 | 12741 | 18758 | 15% | (22)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans | 3534779 | 3487166 | 3380227 | 1% | 5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred loan fees, net | (446) | (268) | (434) | 66% | 3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans - held-for-investment, net of deferred fees | 3534333 | 3486898 | 3379793 | 1% | 5% |
| Allowance for credit losses on loans | (48633) | (48262) | (47954) | 1% | 1% |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, net | 3485700 | 3438636 | 3331839 | 1% | 5% |
| Company-owned life insurance | 82296 | 81749 | 80153 | 1% | 3% |
| Premises and equipment, net | 9765 | 9772 | 10310 | 0% | (5)% |
| Goodwill | 167631 | 167631 | 167631 | 0% | 0% |
| Other intangible assets | 5532 | 5986 | 7521 | (8)% | (26)% |
| Accrued interest receivable and other assets | 125125 | 115853 | 121190 | 8% | 3% |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $**5467237** | $**5514255** | $**5263024** | (1)% | 4% |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |  |  |
| **Liabilities:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand, noninterest-bearing | $1151242 | $1128593 | $1187320 | 2% | (3)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand, interest-bearing | 955504 | 949068 | 928246 | 1% | 3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Savings and money market | 1320142 | 1353293 | 1126520 | (2)% | 17% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits - under $250 | 35356 | 37592 | 39046 | (6)% | (9)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits - $250 and over | 210818 | 213357 | 203886 | (1)% | 3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ICS/CDARS - interest-bearing demand, money market |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and time deposits | 954272 | 1001365 | 959592 | (5)% | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | 4627334 | 4683268 | 4444610 | (1)% | 4% |
| &nbsp;&nbsp;&nbsp;&nbsp;Subordinated debt, net of issuance costs | 39728 | 39691 | 39577 | 0% | 0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable and other liabilities | 105471 | 95106 | 99638 | 11% | 6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 4772533 | 4818065 | 4583825 | (1)% | 4% |
| **Shareholders' Equity:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock | 509888 | 511596 | 508343 | 0% | 0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 189794 | 191401 | 182571 | (1)% | 4% |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (4978) | (6807) | (11715) | (27)% | (58)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity | 694704 | 696190 | 679199 | 0% | 2% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and shareholders' equity** | $**5467237** | $**5514255** | $**5263024** | (1)% | 4% |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **End of Period:** | **End of Period:** | **End of Period:** | **End of Period:** | **End of Period:** |
| <br>**CONSOLIDATED BALANCE SHEETS**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **December 31,** <br>**2024** | **September 30,**<br>**2024** | **June 30,** <br>**2024** |
| **ASSETS** |  |  |  |  |  |
| Cash and due from banks | $55360 | $44281 | $29864 | $49722 | $37497 |
| Other investments and interest-bearing deposits |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;in other financial institutions | 666432 | 700769 | 938259 | 906588 | 610763 |
| Securities available-for-sale, at fair value | 307035 | 370976 | 256274 | 237612 | 273043 |
| Securities held-to-maturity, at amortized cost | 561205 | 576718 | 590016 | 604193 | 621178 |
| Loans - held-for-sale - SBA, including deferred costs | 1156 | 1884 | 2375 | 1649 | 1899 |
| Loans - held-for-investment: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial | 492231 | 489241 | 531350 | 481266 | 477929 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CRE - owner occupied | 627810 | 616825 | 601636 | 602062 | 594504 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CRE - non-owner occupied | 1390419 | 1363275 | 1341266 | 1310578 | 1283323 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Land and construction | 149460 | 136106 | 127848 | 125761 | 125374 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Home equity | 120763 | 119138 | 127963 | 124090 | 126562 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Multifamily | 285016 | 284510 | 275490 | 273103 | 268968 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential mortgages | 454419 | 465330 | 471730 | 479524 | 484809 |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer and other | 14661 | 12741 | 14837 | 14179 | 18758 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans | 3534779 | 3487166 | 3492120 | 3410563 | 3380227 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred loan fees, net | (446) | (268) | (183) | (327) | (434) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans - held-for-investment, net of deferred fees | 3534333 | 3486898 | 3491937 | 3410236 | 3379793 |
| Allowance for credit losses on loans | (48633) | (48262) | (48953) | (47819) | (47954) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, net | 3485700 | 3438636 | 3442984 | 3362417 | 3331839 |
| Company-owned life insurance | 82296 | 81749 | 81211 | 80682 | 80153 |
| Premises and equipment, net | 9765 | 9772 | 10140 | 10398 | 10310 |
| Goodwill | 167631 | 167631 | 167631 | 167631 | 167631 |
| Other intangible assets | 5532 | 5986 | 6439 | 6966 | 7521 |
| Accrued interest receivable and other assets | 125125 | 115853 | 119813 | 123738 | 121190 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $**5467237** | $**5514255** | $**5645006** | $**5551596** | $**5263024** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |  |  |
| **Liabilities:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand, noninterest-bearing | $1151242 | $1128593 | $1214192 | $1272139 | $1187320 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand, interest-bearing | 955504 | 949068 | 936587 | 913910 | 928246 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Savings and money market | 1320142 | 1353293 | 1325923 | 1309676 | 1126520 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits - under $250 | 35356 | 37592 | 38988 | 39060 | 39046 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time deposits - $250 and over | 210818 | 213357 | 206755 | 196945 | 203886 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ICS/CDARS - interest-bearing demand, money market |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and time deposits | 954272 | 1001365 | 1097586 | 997803 | 959592 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | 4627334 | 4683268 | 4820031 | 4729533 | 4444610 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subordinated debt, net of issuance costs | 39728 | 39691 | 39653 | 39615 | 39577 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable and other liabilities | 105471 | 95106 | 95595 | 97096 | 99638 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 4772533 | 4818065 | 4955279 | 4866244 | 4583825 |
| **Shareholders' Equity:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock | 509888 | 511596 | 510070 | 509134 | 508343 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 189794 | 191401 | 187762 | 185110 | 182571 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (4978) | (6807) | (8105) | (8892) | (11715) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity | 694704 | 696190 | 689727 | 685352 | 679199 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and shareholders' equity** | $**5467237** | $**5514255** | $**5645006** | $**5551596** | $**5263024** |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **At or For the Quarter Ended:** | **At or For the Quarter Ended:** | **At or For the Quarter Ended:** | **Percent Change From:** | **Percent Change From:** |
| <br>**CREDIT QUALITY DATA**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **June 30,** <br>**2024** | **March 31,** <br>**2025** | **June 30,** <br>**2024** |
| Nonaccrual loans - held-for-investment: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Land and construction loans | $4198 | $4793 | $4774 | (12)% | (12)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Home equity and other loans | 728 | 927 | 108 | (21)% | 574% |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgages | 607 |  |  | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial loans | 491 | 324 | 900 | 52% | (45)% |
| &nbsp;&nbsp;&nbsp;&nbsp;CRE loans | 31 |  |  | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total nonaccrual loans - held-for-investment: | 6055 | 6044 | 5782 | 0% | 5% |
| Loans over 90 days past due |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and still accruing | 123 | 268 | 248 | (54)% | (50)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total nonperforming loans | 6178 | 6312 | 6030 | (2)% | 2% |
| Foreclosed assets |  |  |  | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;Total nonperforming assets | $6178 | $6312 | $6030 | (2)% | 2% |
| Net charge-offs during the quarter | $145 | $965 | $405 | (85)% | (64)% |
| Provision for credit losses on loans during the quarter | $516 | $274 | $471 | 88% | 10% |
| Allowance for credit losses on loans | $48633 | $48262 | $47954 | 1% | 1% |
| Classified assets | $37525 | $40034 | $33605 | (6)% | 12% |
| Allowance for credit losses on loans to total loans | 1.38% | 1.38% | 1.42% | 0% | (3)% |
| Allowance for credit losses on loans to total nonperforming loans | 787.20% | 764.61% | 795.26% | 3% | (1)% |
| Nonperforming assets to total assets | 0.11% | 0.11% | 0.11% | 0% | 0% |
| Nonperforming loans to total loans | 0.17% | 0.18% | 0.18% | (6)% | (6)% |
| Classified assets to Heritage Commerce Corp |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 capital plus allowance for credit losses on loans | 7% | 7% | 6% | 0% | 17% |
| Classified assets to Heritage Bank of Commerce |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 capital plus allowance for credit losses on loans | 6% | 7% | 6% | (14)% | 0% |
| **OTHER PERIOD-END STATISTICS** |  |  |  |  |  |
| **(in $000's, unaudited)** |  |  |  |  |  |
| **Heritage Commerce Corp:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity <sup>(1)</sup> | $521541 | $522573 | $504047 | 0% | 3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders' equity / total assets | 12.71% | 12.63% | 12.91% | 1% | (2)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity / tangible assets <sup>(1)</sup> | 9.85% | 9.78% | 9.91% | 1% | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan to deposit ratio | 76.38% | 74.45% | 76.04% | 3% | 0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noninterest-bearing deposits / total deposits | 24.88% | 24.10% | 26.71% | 3% | (7)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total capital ratio | 15.5% | 15.9% | 15.6% | (3)% | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tier 1 capital ratio | 13.3% | 13.6% | 13.4% | (2)% | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Equity Tier 1 capital ratio | 13.3% | 13.6% | 13.4% | (2)% | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tier 1 leverage ratio | 9.9% | 9.8% | 10.2% | 1% | (3)% |
| **Heritage Bank of Commerce:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity / tangible assets <sup>(1)</sup> | 10.28% | 10.15% | 10.28% | 1% | 0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total capital ratio | 15.1% | 15.4% | 15.1% | (2)% | 0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tier 1 capital ratio | 13.8% | 14.1% | 13.9% | (2)% | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Equity Tier 1 capital ratio | 13.8% | 14.1% | 13.9% | (2)% | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tier 1 leverage ratio | 10.4% | 10.2% | 10.6% | 2% | (2)% |

---

------

<sup>(1)</sup> This is a non-GAAP financial measure as defined and discussed under *"Non-GAAP Financial Measures"* in this press release.

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **At or For the Quarter Ended:** | **At or For the Quarter Ended:** | **At or For the Quarter Ended:** | **At or For the Quarter Ended:** | **At or For the Quarter Ended:** |
| <br>**CREDIT QUALITY DATA**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **December 31,** <br>**2024** | **September 30,**<br>**2024** | **June 30,** <br>**2024** |
| Nonaccrual loans - held-for-investment: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Land and construction loans | $4198 | $4793 | $5874 | $5862 | $4774 |
| &nbsp;&nbsp;&nbsp;&nbsp;Home equity and other loans | 728 | 927 | 290 | 84 | 108 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential mortgages | 607 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial loans | 491 | 324 | 1014 | 752 | 900 |
| &nbsp;&nbsp;&nbsp;&nbsp;CRE loans | 31 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total nonaccrual loans - held-for-investment: | 6055 | 6044 | 7178 | 6698 | 5782 |
| Loans over 90 days past due |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and still accruing | 123 | 268 | 489 | 460 | 248 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total nonperforming loans | 6178 | 6312 | 7667 | 7158 | 6030 |
| Foreclosed assets |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total nonperforming assets | $6178 | $6312 | $7667 | $7158 | $6030 |
| Net charge-offs during the quarter | $145 | $965 | $197 | $288 | $405 |
| Provision for credit losses on loans during the quarter | $516 | $274 | $1331 | $153 | $471 |
| Allowance for credit losses on loans | $48633 | $48262 | $48953 | $47819 | $47954 |
| Classified assets | $37525 | $40034 | $41661 | $32609 | $33605 |
| Allowance for credit losses on loans to total loans | 1.38% | 1.38% | 1.40% | 1.40% | 1.42% |
| Allowance for credit losses on loans to total nonperforming loans | 787.20% | 764.61% | 638.49% | 668.05% | 795.26% |
| Nonperforming assets to total assets | 0.11% | 0.11% | 0.14% | 0.13% | 0.11% |
| Nonperforming loans to total loans | 0.17% | 0.18% | 0.22% | 0.21% | 0.18% |
| Classified assets to Heritage Commerce Corp |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 capital plus allowance for credit losses on loans | 7% | 7% | 7% | 6% | 6% |
| Classified assets to Heritage Bank of Commerce |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 capital plus allowance for credit losses on loans | 6% | 7% | 7% | 6% | 6% |
| **OTHER PERIOD-END STATISTICS** |  |  |  |  |  |
| **(in $000's, unaudited)** |  |  |  |  |  |
| **Heritage Commerce Corp:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity <sup>(1)</sup> | $521541 | $522573 | $515657 | $510755 | $504047 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders' equity / total assets | 12.71% | 12.63% | 12.22% | 12.35% | 12.91% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity / tangible assets <sup>(1)</sup> | 9.85% | 9.78% | 9.43% | 9.50% | 9.91% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan to deposit ratio | 76.38% | 74.45% | 72.45% | 72.11% | 76.04% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noninterest-bearing deposits / total deposits | 24.88% | 24.10% | 25.19% | 26.90% | 26.71% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total capital ratio | 15.5% | 15.9% | 15.6% | 15.6% | 15.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tier 1 capital ratio | 13.3% | 13.6% | 13.4% | 13.4% | 13.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Equity Tier 1 capital ratio | 13.3% | 13.6% | 13.4% | 13.4% | 13.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tier 1 leverage ratio | 9.9% | 9.8% | 9.6% | 10.0% | 10.2% |
| **Heritage Bank of Commerce:** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity / tangible assets <sup>(1)</sup> | 10.28% | 10.15% | 9.79% | 9.86% | 10.28% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total capital ratio | 15.1% | 15.4% | 15.1% | 15.1% | 15.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tier 1 capital ratio | 13.8% | 14.1% | 13.9% | 13.9% | 13.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Equity Tier 1 capital ratio | 13.8% | 14.1% | 13.9% | 13.9% | 13.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tier 1 leverage ratio | 10.4% | 10.2% | 10.0% | 10.4% | 10.6% |

---

------

<sup>(1)</sup> This is a non-GAAP financial measure as defined and discussed under *"Non-GAAP Financial Measures"* in this press release.

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** |
| | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **March 31, 2025** | **March 31, 2025** | **March 31, 2025** |
| <br>**NET INTEREST INCOME AND NET INTEREST MARGIN**<br>**(in $000's, unaudited)** | <br>**Average**<br>**Balance** | **Interest**<br>**Income/**<br>**Expense** | **Average**<br>**Yield/**<br>**Rate** | <br>**Average**<br>**Balance** | **Interest**<br>**Income/**<br>**Expense** | **Average**<br>**Yield/**<br>**Rate** |
| **Assets:** |  |  |  |  |  |  |
| Loans, core bank | $3020534 | 41738 | 5.54% | $2945072 | $39758 | 5.47% |
| Prepayment fees |  | 473 | 0.06% |  | 224 | 0.03% |
| Bay View Funding factored receivables | 67756 | 3347 | 19.81% | 60250 | 2942 | 19.80% |
| Purchased residential mortgages | 420280 | 3548 | 3.39% | 427963 | 3597 | 3.41% |
| Loan fair value mark / accretion | (1802) | 172 | 0.02% | (1981) | 181 | 0.02% |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, gross <sup>(1)(2)</sup> | 3506768 | 49278 | 5.64% | 3431304 | 46702 | 5.52% |
| Securities - taxable | 902642 | 6346 | 2.82% | 876092 | 5559 | 2.57% |
| Securities - exempt from Federal tax <sup>(3)</sup> | 30259 | 272 | 3.61% | 30480 | 275 | 3.66% |
| Other investments and interest-bearing deposits |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;in other financial institutions | 647420 | 7186 | 4.45% | 850441 | 9354 | 4.46% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest earning assets <sup>(3)</sup> | 5087089 | 63082 | 4.97% | 5188317 | 61890 | 4.84% |
| Cash and due from banks | 31044 |  |  | 31869 |  |  |
| Premises and equipment, net | 9958 |  |  | 10007 |  |  |
| Goodwill and other intangible assets | 173448 |  |  | 173895 |  |  |
| Other assets | 156881 |  |  | 155808 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $5458420 |  |  | $5559896 |  |  |
| **Liabilities and shareholders' equity:** |  |  |  |  |  |  |
| Deposits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Demand, noninterest-bearing | $1146494 |  |  | $1167330 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Demand, interest-bearing | 949867 | 1484 | 0.63% | 944375 | 1438 | 0.62% |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings and money market | 1313054 | 8205 | 2.51% | 1323038 | 8073 | 2.47% |
| &nbsp;&nbsp;&nbsp;&nbsp;Time deposits - under $100 | 11456 | 49 | 1.72% | 11383 | 47 | 1.67% |
| &nbsp;&nbsp;&nbsp;&nbsp;Time deposits - $100 and over | 231644 | 1995 | 3.45% | 234421 | 2129 | 3.68% |
| &nbsp;&nbsp;&nbsp;&nbsp;ICS/CDARS - interest-bearing demand, money market |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and time deposits | 965492 | 5949 | 2.47% | 1036970 | 6248 | 2.44% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing deposits | 3471513 | 17682 | 2.04% | 3550187 | 17935 | 2.05% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | 4618007 | 17682 | 1.54% | 4717517 | 17935 | 1.54% |
| Short-term borrowings | 19 |  | 0.00% | 18 |  | 0.00% |
| Subordinated debt, net of issuance costs | 39705 | 538 | 5.43% | 39667 | 537 | 5.49% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing liabilities | 3511237 | 18220 | 2.08% | 3589872 | 18472 | 2.09% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing liabilities and demand,  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;noninterest-bearing / cost of funds | 4657731 | 18220 | 1.57% | 4757202 | 18472 | 1.57% |
| Other liabilities | 103673 |  |  | 109961 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 4761404 |  |  | 4867163 |  |  |
| Shareholders' equity | 697016 |  |  | 692733 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $5458420 |  |  | $5559896 |  |  |
| Net interest income / margin <sup>(3)</sup> |  | 44862 | 3.54% |  | 43418 | 3.39% |
| Less tax equivalent adjustment <sup>(3)</sup> |  | (57) |  |  | (58) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest income |  | $44805 | 3.53% |  | $43360 | 3.39% |

---

------

<sup>(1)</sup> Includes loans held-for-sale. Nonaccrual loans are included in average balances.

<sup>(2)</sup> Yield amounts earned on loans include fees and costs. The accretion of net deferred loan fees into loan interest income was $253,000 for the second quarter of 2025, compared to $214,000

&nbsp;&nbsp;&nbsp;&nbsp;for the first quarter of 2025. Prepayment fees totaled $473,000 for the second quarter of 2025, compared to $224,000 for the first quarter of 2025.

<sup>(3)</sup> 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*

&nbsp;&nbsp;&nbsp;&nbsp;*Measures"* in this press release.

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** |
| | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2024** | **June 30, 2024** | **June 30, 2024** |
| <br>**NET INTEREST INCOME AND NET INTEREST MARGIN**<br>**(in $000's, unaudited)** | <br>**Average**<br>**Balance** | **Interest**<br>**Income/**<br>**Expense** | **Average**<br>**Yield/**<br>**Rate** | <br>**Average**<br>**Balance** | **Interest**<br>**Income/**<br>**Expense** | **Average**<br>**Yield/**<br>**Rate** |
| **Assets:** |  |  |  |  |  |  |
| Loans, core bank | $3020534 | $41738 | 5.54% | $2830260 | $38496 | 5.47% |
| Prepayment fees |  | 473 | 0.06% |  | 54 | 0.01% |
| Bay View Funding factored receivables | 67756 | 3347 | 19.81% | 54777 | 2914 | 21.40% |
| Purchased residential mortgages | 420280 | 3548 | 3.39% | 447687 | 3739 | 3.36% |
| Loan fair value mark / accretion | (1802) | 172 | 0.02% | (2863) | 267 | 0.04% |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, gross <sup>(1)(2)</sup> | 3506768 | 49278 | 5.64% | 3329861 | 45470 | 5.49% |
| Securities - taxable | 902642 | 6346 | 2.82% | 942532 | 5483 | 2.34% |
| Securities - exempt from Federal tax <sup>(3)</sup> | 30259 | 272 | 3.61% | 31803 | 285 | 3.60% |
| Other investments and interest-bearing deposits |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;in other financial institutions | 647420 | 7186 | 4.45% | 536474 | 7311 | 5.48% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest earning assets <sup>(3)</sup> | 5087089 | 63082 | 4.97% | 4840670 | 58549 | 4.86% |
| Cash and due from banks | 31044 |  |  | 33419 |  |  |
| Premises and equipment, net | 9958 |  |  | 10216 |  |  |
| Goodwill and other intangible assets | 173448 |  |  | 175498 |  |  |
| Other assets | 156881 |  |  | 153368 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $5458420 |  |  | $5213171 |  |  |
| **Liabilities and shareholders' equity:** |  |  |  |  |  |  |
| Deposits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Demand, noninterest-bearing | $1146494 |  |  | $1127145 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Demand, interest-bearing | 949867 | 1484 | 0.63% | 932100 | 1719 | 0.74% |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings and money market | 1313054 | 8205 | 2.51% | 1104589 | 7867 | 2.86% |
| &nbsp;&nbsp;&nbsp;&nbsp;Time deposits - under $100 | 11456 | 49 | 1.72% | 10980 | 46 | 1.68% |
| &nbsp;&nbsp;&nbsp;&nbsp;Time deposits - $100 and over | 231644 | 1995 | 3.45% | 228248 | 2245 | 3.96% |
| &nbsp;&nbsp;&nbsp;&nbsp;ICS/CDARS - interest-bearing demand, money market |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and time deposits | 965492 | 5949 | 2.47% | 991483 | 7207 | 2.92% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing deposits | 3471513 | 17682 | 2.04% | 3267400 | 19084 | 2.35% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | 4618007 | 17682 | 1.54% | 4394545 | 19084 | 1.75% |
| Short-term borrowings | 19 |  | 0.00% | 19 |  | 0.00% |
| Subordinated debt, net of issuance costs | 39705 | 538 | 5.43% | 39553 | 538 | 5.47% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing liabilities | 3511237 | 18220 | 2.08% | 3306972 | 19622 | 2.39% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing liabilities and demand,  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;noninterest-bearing / cost of funds | 4657731 | 18220 | 1.57% | 4434117 | 19622 | 1.78% |
| Other liabilities | 103673 |  |  | 103946 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 4761404 |  |  | 4538063 |  |  |
| Shareholders' equity | 697016 |  |  | 675108 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $5458420 |  |  | $5213171 |  |  |
| Net interest income / margin <sup>(3)</sup> |  | 44862 | 3.54% |  | 38927 | 3.23% |
| Less tax equivalent adjustment <sup>(3)</sup> |  | (57) |  |  | (60) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest income |  | $44805 | 3.53% |  | $38867 | 3.23% |

---

------

<sup>(</sup><sup>1)</sup>Includes loans held-for-sale. Nonaccrual loans are included in average balances.

<sup>(2)</sup> Yield amounts earned on loans include fees and costs. The accretion of net deferred loan fees into loan interest income was $253,000 for the second quarter of 2025, compared to $117,000

&nbsp;&nbsp;&nbsp;&nbsp;for the second quarter of 2024. Prepayment fees totaled $473,000 for the second quarter of 2025, compared to $54,000 for the second quarter of 2024.

<sup>(3)</sup> 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* 

&nbsp;&nbsp;&nbsp;&nbsp;*Measures"* in this press release.

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the Six Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** |
| | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2024** | **June 30, 2024** | **June 30, 2024** |
| <br>**NET INTEREST INCOME AND NET INTEREST MARGIN**<br>**(in $000's, unaudited)** | <br>**Average**<br>**Balance** | **Interest**<br>**Income/**<br>**Expense** | **Average**<br>**Yield/**<br>**Rate** | <br>**Average**<br>**Balance** | **Interest**<br>**Income/**<br>**Expense** | **Average**<br>**Yield/**<br>**Rate** |
| **Assets:** |  |  |  |  |  |  |
| Loans, core bank | $2983011 | $81496 | 5.51% | $2812805 | $76217 | 5.45% |
| Prepayment fees |  | 697 | 0.05% |  | 78 | 0.01% |
| Bay View Funding factored receivables | 64024 | 6289 | 19.81% | 54144 | 5752 | 21.36% |
| Purchased residential mortgages | 424101 | 7145 | 3.40% | 450964 | 7527 | 3.36% |
| Loan fair value mark / accretion | (1891) | 353 | 0.02% | (2988) | 496 | 0.04% |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, gross <sup>(1)(2)</sup> | 3469245 | 95980 | 5.58% | 3314925 | 90070 | 5.46% |
| Securities - taxable | 889440 | 11905 | 2.70% | 992508 | 11666 | 2.36% |
| Securities - exempt from Federal tax <sup>(3)</sup> | 30369 | 547 | 3.63% | 31871 | 571 | 3.60% |
| Other investments, interest-bearing deposits in other |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;financial institutions and Federal funds sold | 748370 | 16540 | 4.46% | 486283 | 13263 | 5.48% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest earning assets <sup>(3)</sup> | 5137424 | 124972 | 4.91% | 4825587 | 115570 | 4.82% |
| Cash and due from banks | 31454 |  |  | 33316 |  |  |
| Premises and equipment, net | 9982 |  |  | 10115 |  |  |
| Goodwill and other intangible assets | 173671 |  |  | 175769 |  |  |
| Other assets | 156347 |  |  | 151116 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $5508878 |  |  | $5195903 |  |  |
| **Liabilities and shareholders' equity:** |  |  |  |  |  |  |
| Deposits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Demand, noninterest-bearing | $1156854 |  |  | $1152111 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Demand, interest-bearing | 947137 | 2922 | 0.62% | 926074 | 3273 | 0.71% |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings and money market | 1318018 | 16278 | 2.49% | 1086085 | 14516 | 2.69% |
| &nbsp;&nbsp;&nbsp;&nbsp;Time deposits - under $100 | 11420 | 96 | 1.70% | 10962 | 88 | 1.61% |
| &nbsp;&nbsp;&nbsp;&nbsp;Time deposits - $100 and over | 233025 | 4124 | 3.57% | 224730 | 4309 | 3.86% |
| &nbsp;&nbsp;&nbsp;&nbsp;ICS/CDARS - interest-bearing demand, money market |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and time deposits | 1001033 | 12197 | 2.46% | 977385 | 13818 | 2.84% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing deposits | 3510633 | 35617 | 2.05% | 3225236 | 36004 | 2.24% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | 4667487 | 35617 | 1.54% | 4377347 | 36004 | 1.65% |
| Short-term borrowings | 19 |  | 0.00% | 17 |  | 0.00% |
| Subordinated debt, net of issuance costs | 39686 | 1075 | 5.46% | 39535 | 1076 | 5.47% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing liabilities | 3550338 | 36692 | 2.08% | 3264788 | 37080 | 2.28% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing liabilities and demand,  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;noninterest-bearing / cost of funds | 4707192 | 36692 | 1.57% | 4416899 | 37080 | 1.69% |
| Other liabilities | 106800 |  |  | 105304 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 4813992 |  |  | 4522203 |  |  |
| Shareholders' equity | 694886 |  |  | 673700 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $5508878 |  |  | $5195903 |  |  |
| Net interest income / margin <sup>(3)</sup> |  | 88280 | 3.47% |  | 78490 | 3.27% |
| Less tax equivalent adjustment <sup>(3)</sup> |  | (115) |  |  | (120) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest income |  | $88165 | 3.46% |  | $78370 | 3.27% |

---

------

<sup>(</sup><sup>1)</sup>Includes loans held-for-sale. Nonaccrual loans are included in average balances.

<sup>(2)</sup> Yield amounts earned on loans include fees and costs. The accretion of net deferred loan fees into loan interest income was $467,000 for the first six months of 2025, compared to $277,000

&nbsp;&nbsp;&nbsp;&nbsp;for the six months of 2024. Prepayment fees totaled $697,000 for the first six months of 2025, compared to $78,000 for the first six months of 2024.

<sup>(3)</sup> 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* 

&nbsp;&nbsp;&nbsp;&nbsp;*Measures"* in this press release.

------

**RECONCILIATION OF NON-GAAP FINANCIAL MEASURES**

Management considers net income and earnings per share adjusted to exclude the $9.2 million of charges primarily related to a legal settlement in the second quarter and first six months of 2025 as a useful measurement of the Company's profitability compared to prior periods.

The following table summarizes components of net income and diluted earnings per share for the periods indicated:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** |
| **NET INCOME AND**<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DILUTED EARNINGS PER SHARE**<br>**(in $000's, except per share amounts, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **December 31,**<br>**2024** | **September 30,**<br>**2024** | **June 30,** <br>**2024** |
| Reported net income (GAAP) | $6389 | $11626 | $10621 | $10507 | $9234 |
| Add: pre-tax legal settlement and other charges | 9184 |  |  |  |  |
| Less: related income taxes | (2618) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted net income (non-GAAP) | $12955 | $11626 | $10621 | $10507 | $9234 |
| Weighted average shares outstanding - diluted | 61624600 | 61708361 | 61679735 | 61546157 | 61438088 |
| Reported diluted earnings per share | $0.10 | $0.19 | $0.17 | $0.17 | $0.15 |
| Adjusted diluted earnings per share | $0.21 | $0.19 | $0.17 | $0.17 | $0.15 |

---

---

| | | |
|:---|:---|:---|
| | **For the Six Months Ended:** | **For the Six Months Ended:** |
| **NET INCOME AND**<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**DILUTED EARNINGS PER SHARE**<br>**(in $000's, except per share amounts, unaudited)** | **June 30,** <br>**2025** | **June 30,** <br>**2024** |
| Reported net income (GAAP) | $18015 | $19400 |
| Add: pre-tax legal settlement and other charges | 9184 |  |
| Less: related income taxes | (2618) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted net income (non-GAAP) | $24581 | $19400 |
| Weighted average shares outstanding - diluted | 61664942 | 61446484 |
| Reported diluted earnings per share | $0.29 | $0.32 |
| Adjusted diluted earnings per share | $0.40 | $0.32 |

---

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**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **December 31,**<br>**2025** | **September 30,**<br>**2024** | **June 30,** <br>**2024** |
| Capital components: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity (GAAP) | $694704 | $696190 | $689727 | $685352 | $679199 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: preferred stock |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total common equity | 694704 | 696190 | 689727 | 685352 | 679199 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: goodwill | (167631) | (167631) | (167631) | (167631) | (167631) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: other intangible assets | (5532) | (5986) | (6439) | (6966) | (7521) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reported tangible common equity (non-GAAP) | 521541 | 522573 | 515657 | 510755 | 504047 |
| Add: pre-tax legal settlement and other charges | 9184 |  |  |  |  |
| Less: related income taxes | (2618) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted tangible common equity (non-GAAP) | $528107 | $522573 | $515657 | $510755 | $504047 |
| Common shares outstanding at period-end | 61446763 | 61611121 | 61348095 | 61297344 | 61292094 |
| Reported tangible book value per share (non-GAAP) | $8.49 | $8.48 | $8.41 | $8.33 | $8.22 |
| Adjusted tangible book value per share (non-GAAP) | $8.59 | $8.48 | $8.41 | $8.33 | $8.22 |

---

------

The following tables summarize components of the annualized return on average equity, annualized return on average tangible common equity and the annualized return on average assets for the periods indicated:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** |
| **RETURN ON AVERAGE TANGIBLE COMMON** <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**EQUITY AND AVERAGE ASSETS**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **December 31,**<br>**2024** | **September 30,**<br>**2024** | **June 30,** <br>**2024** |
| Reported net income (GAAP) | $6389 | $11626 | $10621 | $10507 | $9234 |
| Add: pre-tax legal settlement and other charges | 9184 |  |  |  |  |
| Less: related income taxes | (2618) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted net income (non-GAAP) | $12955 | $11626 | $10621 | $10507 | $9234 |
| Average tangible common equity components: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Average equity (GAAP) | $697016 | $692733 | $686263 | $680404 | $675108 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: goodwill | (167631) | (167631) | (167631) | (167631) | (167631) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: other intangible assets | (5817) | (6264) | (6770) | (7322) | (7867) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total average tangible common equity (non-GAAP) | $523568 | $518838 | $511862 | $505451 | $499610 |
| Annualized return on average equity (GAAP) | 3.68% | 6.81% | 6.16% | 6.14% | 5.50% |
| Reported annualized return on average |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;tangible common equity (non-GAAP) | 4.89% | 9.09% | 8.25% | 8.27% | 7.43% |
| Adjusted annualized return on average |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;tangible common equity (non-GAAP) | 9.92% | 9.09% | 8.25% | 8.27% | 7.43% |
| Average assets (GAAP) | $5458420 | $5559896 | $5607840 | $5352067 | $5213171 |
| Reported annualized return on average assets (GAAP) | 0.47% | 0.85% | 0.75% | 0.78% | 0.71% |
| Adjusted annualized return on average assets (non-GAAP) | 0.95% | 0.85% | 0.75% | 0.78% | 0.71% |

---

---

| | | |
|:---|:---|:---|
| | **For the Six Months Ended:** | **For the Six Months Ended:** |
| **RETURN ON AVERAGE TANGIBLE COMMON** <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**EQUITY AND AVERAGE ASSETS**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **June 30,** <br>**2024** |
| Reported net income (GAAP) | $18015 | $19400 |
| Add: pre-tax legal settlement and other charges | 9184 |  |
| Less: related income taxes | (2618) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted net income (non-GAAP) | $24581 | $19400 |
| Average tangible common equity components: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Average equity (GAAP) | $694886 | $673700 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: goodwill | (167631) | (167631) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: other intangible assets | (6040) | (8138) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total average tangible common equity (non-GAAP) | $521215 | $497931 |
| Annualized return on average equity (GAAP) | 5.23% | 5.79% |
| Reported annualized return on average |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;tangible common equity (non-GAAP) | 6.97% | 7.84% |
| Adjusted annualized return on average |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;tangible common equity (non-GAAP) | 9.51% | 7.84% |
| Average assets (GAAP) | $5508878 | $5195903 |
| Reported annualized return on average assets (GAAP) | 0.66% | 0.75% |
| Adjusted annualized return on average assets (non-GAAP) | 0.90% | 0.75% |

---

------

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:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** |
| <br>**NET INTEREST INCOME AND NET INTEREST MARGIN**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **December 31,** <br>**2024** | **September 30,** <br>**2024** | **June 30,** <br>**2024** |
| Net interest income before |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;credit losses on loans (GAAP) | $44805 | $43360 | $43595 | $39329 | $38867 |
| Tax-equivalent adjustment on securities -  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;exempt from Federal tax | 57 | 58 | 58 | 59 | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income, FTE (non-GAAP) | $44862 | $43418 | $43653 | $39388 | $38927 |
| Average balance of total interest earning assets | $5087089 | $5188317 | $5235986 | $4980082 | $4840670 |
| Net interest margin (annualized net interest income divided by the |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;average balance of total interest earnings assets) (GAAP) | 3.53% | 3.39% | 3.31% | 3.14% | 3.23% |
| Net interest margin, FTE (annualized net interest income, FTE,  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;divided by the average balance of total |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;earnings assets) (non-GAAP) | 3.54% | 3.39% | 3.32% | 3.15% | 3.23% |

---

---

| | | |
|:---|:---|:---|
| | **For the Six Months Ended:** | **For the Six Months Ended:** |
| <br>**NET INTEREST INCOME AND NET INTEREST MARGIN**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **June 30,** <br>**2024** |
| Net interest income before |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;credit losses on loans (GAAP) | $88165 | $78370 |
| Tax-equivalent adjustment on securities - exempt from Federal tax | 115 | 120 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest income, FTE (non-GAAP) | $88280 | $78490 |
| Average balance of total interest earning assets | $5137424 | $4825587 |
| Net interest margin (annualized net interest income divided by the |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;average balance of total interest earnings assets) (GAAP) | 3.46% | 3.27% |
| Net interest margin, FTE (annualized net interest income, FTE, divided by the |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;average balance of total interest earnings assets) (non-GAAP) | 3.47% | 3.27% |

---

Management views its non-GAAP 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:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** |
| <br>**PRE-PROVISION NET REVENUE**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **December 31,**<br>**2024** | **September 30,**<br>**2025** | **June 30,** <br>**2024** |
| Net interest income before credit losses on loans | $44805 | $43360 | $43595 | $39329 | $38867 |
| Noninterest income | 2977 | 2696 | 2775 | 2826 | 2864 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 47782 | 46056 | 46370 | $42155 | $41731 |
| Less: Noninterest expense | (38335) | (29456) | (30304) | (27555) | (28188) |
| &nbsp;&nbsp;&nbsp;&nbsp;Reported PPNR (non-GAAP) | 9447 | 16600 | 16066 | $14600 | $13543 |
| Add: pre-tax legal settlement and other charges | 9184 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjusted PPNR (non-GAAP) | $18631 | $16600 | $16066 | $14600 | $13543 |

---

---

| | | |
|:---|:---|:---|
| | **For the Six Months Ended:** | **For the Six Months Ended:** |
| <br>**PRE-PROVISION NET REVENUE**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **June 30,** <br>**2024** |
| Net interest income before credit losses on loans | $88165 | $78370 |
| Noninterest income | 5673 | 5501 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue | 93838 | 83871 |
| Less: Noninterest expense | (67791) | (55724) |
| &nbsp;&nbsp;&nbsp;&nbsp;Reported PPNR (non-GAAP) | 26047 | 28147 |
| Add: pre-tax legal settlement and other charges | 9184 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjusted PPNR (non-GAAP) | $35231 | $28147 |

---

------

The efficiency ratio is a non-GAAP financial measure, which is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income), and measures how much it costs to produce one dollar of revenue. The following tables summarize components of noninterest expense and the efficiency ratio of the Company for the periods indicated:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** | **For the Quarter Ended:** |
| **NONINTEREST EXPENSE AND**<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**EFFICIENCY RATIO**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **December 31,**<br>**2024** | **September 30,**<br>**2024** | **June 30,** <br>**2024** |
| Reported noninterest expense (GAAP) | $38335 | $29456 | $30304 | $27555 | $28188 |
| Less: pre-tax legal settlement and other charges | (9184) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted noninterest expense (non-GAAP) | $29151 | $29456 | $30304 | $27555 | $28188 |
| Net interest income before credit losses on loans | $44805 | $43360 | $43595 | $39329 | $38867 |
| Noninterest income | 2977 | 2696 | 2775 | 2826 | 2864 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue | $47782 | $46056 | $46370 | $42155 | $41731 |
| Reported efficiency ratio (noninterest expense divided |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;by total revenue) (non-GAAP) | 80.23% | 63.96% | 65.35% | 65.37% | 67.55% |
| Adjusted efficiency ratio (adjusted noninterest expense  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;divided by total revenue) (non-GAAP) | 61.01% | 63.96% | 65.35% | 65.37% | 67.55% |

---

---

| | | |
|:---|:---|:---|
| | **For the Six Months Ended:** | **For the Six Months Ended:** |
| **NONINTEREST EXPENSE AND**<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**EFFICIENCY RATIO**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **June 30,** <br>**2024** |
| Reported noninterest expense (GAAP) | $67791 | $55724 |
| Less: pre-tax legal settlement and other charges | (9184) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted noninterest expense (non-GAAP) | $58607 | $55724 |
| Net interest income before credit losses on loans | $88165 | $79548 |
| Noninterest income | 5673 | 4323 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue | $93838 | $83871 |
| Reported efficiency ratio (noninterest expense divided |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;by total revenue) (non-GAAP) | 72.24% | 66.44% |
| Adjusted efficiency ratio (adjusted noninterest expense  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;divided by total revenue) (non-GAAP) | 62.46% | 66.44% |

---

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**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **December 31,** <br>**2024** | **September 30,**<br>**2024** | **June 30,** <br>**2024** |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital components: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity (GAAP) | $694704 | $696190 | $689727 | $685352 | $679199 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: preferred stock |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total common equity | 694704 | 696190 | 689727 | 685352 | 679199 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: goodwill | (167631) | (167631) | (167631) | (167631) | (167631) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: other intangible assets | (5532) | (5986) | (6439) | (6966) | (7521) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total tangible common equity (non-GAAP) | $521541 | $522573 | $515657 | $510755 | $504047 |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset components: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets (GAAP) | $5467237 | $5514255 | $5645006 | $5551596 | $5263024 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: goodwill | (167631) | (167631) | (167631) | (167631) | (167631) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: other intangible assets | (5532) | (5986) | (6439) | (6966) | (7521) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total tangible assets (non-GAAP) | $5294074 | $5340638 | $5470936 | $5376999 | $5087872 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity / tangible assets (non-GAAP) | 9.85% | 9.78% | 9.43% | 9.50% | 9.91% |

---

------

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**<br>**(in $000's, unaudited)** | **June 30,** <br>**2025** | **March 31,** <br>**2025** | **December 31,** <br>**2024** | **September 30,**<br>**2024** | **June 30,** <br>**2024** |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital components: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity (GAAP) | $717103 | $715605 | $709379 | $704585 | $697964 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: preferred stock |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total common equity | 717103 | 715605 | 709379 | 704585 | 697964 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: goodwill | (167631) | (167631) | (167631) | (167631) | (167631) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: other intangible assets | (5532) | (5986) | (6439) | (6966) | (7521) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total tangible common equity (non-GAAP) | $543940 | $541988 | $535309 | $529988 | $522812 |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset components: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets (GAAP) | $5464618 | $5512160 | $5641646 | $5548576 | $5260500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: goodwill | (167631) | (167631) | (167631) | (167631) | (167631) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: other intangible assets | (5532) | (5986) | (6439) | (6966) | (7521) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total tangible assets (non-GAAP) | $5291455 | $5338543 | $5467576 | $5373979 | $5085348 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tangible common equity / tangible assets (non-GAAP) | 10.28% | 10.15% | 9.79% | 9.86% | 10.28% |

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## Exhibit 99.2

**Exhibit 99.2**

Heritage Commerce Corp

224 Airport Parkway

San Jose, CA 95110

www.heritagecommercecorp.com

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**Heritage Commerce Corp and Heritage Bank of Commerce Appoints Seth Fonti as** 

**Chief Financial Officer**

San Jose, California – July 24, 2025 – **Heritage Commerce Corp (NASDAQ: HTBK)** (the "Company"), parent company of Heritage Bank of Commerce (the "Bank"), today announced the appointment of Seth Fonti as Executive Vice President and Chief Financial Officer of the Company and the Bank, effective July 24, 2025.

Mr. Fonti brings more than two decades of financial and strategic leadership experience across global and domestic banking institutions. Most recently, he served as Managing Director and Head of Strategy, Corporate Development, and Strategic Finance for MUFG Americas Holding Corporation ("MUFG Americas"), the regional arm of one of the world's top ten global banks. In this role, he developed and led transformative initiatives across strategy, enterprise-wide financial planning, organizational effectiveness, balance sheet optimization, risk management, and capital planning, positioning him well to add immediate value to the Heritage team.

"Seth is a forward-thinking and trusted financial leader with an impressive record of driving growth, increasing efficiency, and leading through complex transformations," said Clay Jones, President and Chief Executive Officer of Heritage Bank of Commerce. "His depth of experience and integrity-based approach make him an excellent fit for Heritage as we continue our focus on sustainable growth and strong financial performance."

"I'm thrilled to be joining Heritage Bank of Commerce during such a dynamic time for the organization," said Mr. Fonti. "I look forward to working with the talented leadership team to build on the bank's legacy of client-centered service and strong financial stewardship."

During his tenure at MUFG Americas, Mr. Fonti established proven agility in setting and executing enterprise strategy, driving enhanced financial performance via growth and efficiency initiatives, enhanced core business profitability, and shaping a simplified, technology-oriented operating model, enabling improved client service and execution. He was hand-selected for MUFG Americas' Global Leaders Forum as a top 0.1% manager and is widely recognized for his collaborative leadership with a focus on building and developing high performing teams and culture. Prior to MUFG Americas, Mr. Fonti was a financial institutions investment banker with Macquarie Capital, Fox-Pitt Kelton, and JP Morgan, advising on significant M&A, capital markets, and strategic transactions. He holds an M.B.A. in Finance from Georgetown University and a B.A. from Rollins College.

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**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, Gilroy, 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.

Member FDIC

**For additional information, email:**

InvestorRelations@herbank.com

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## Exhibit 99.3

**Exhibit 99.3**

Heritage Commerce Corp

224 Airport Parkway

San Jose, CA 95110

www.heritagecommercecorp.com

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**Heritage Commerce Corp Declares Regular Quarterly Cash Dividend of $0.13 Per Share**

San Jose, CA — July 24, 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 August 21, 2025, to shareholders of record at the close of the business day on August 7, 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, Gilroy, 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.

Member FDIC

**For additional information, email:**

InvestorRelations@herbank.com

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