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• Like a regional version of Bank of America, specifically for the San Francisco Bay Area.
• A community-focused Wells Fargo, serving businesses and individuals across the San Francisco Bay Area.

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• Deposit Accounts: Provides various deposit products including checking, savings, money market, and certificates of deposit for both businesses and individuals.
• Commercial Loans: Offers a range of commercial loans for working capital, equipment, commercial real estate, and construction purposes.
• Real Estate Loans: Extends financing for residential mortgages, multifamily properties, and home equity lines of credit.
• Consumer Loans: Provides personal loans for financing automobiles, various consumer goods, and other individual needs.
• Banking Services: Delivers a suite of supporting services including electronic banking, bill pay, remote deposit capture, and factoring financing.

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Major Customers of Heritage Commerce (HTBK)

Heritage Commerce (HTBK) primarily serves a diverse customer base of both businesses and individuals within the general San Francisco Bay Area of California. Its major customer categories include:

• Commercial Businesses and Professionals: This category includes various businesses seeking operating loans for working capital, equipment purchases, and other business purposes. It also encompasses clients requiring commercial real estate loans, commercial construction loans for rental properties and commercial buildings, and Small Business Administration (SBA) loans. These customers utilize a range of business banking services and deposit products, including automated payroll, remote deposit capture, and electronic funds transfer.
• Individual Residents: This category comprises residents requiring personal banking services such as interest and non-interest bearing demand, savings, and money market accounts, as well as certificates of deposit and time deposits. It also includes individuals seeking residential mortgage loans, home equity lines of credit, and various consumer loans for financing automobiles, consumer goods, and other personal purposes.
• Real Estate Developers and Investors: While often falling under the broader commercial umbrella, this is a significant and distinct customer segment for HTBK. These customers are engaged in commercial real estate development and investment, utilizing specific offerings such as commercial real estate loans, commercial construction loans for properties like rental units and commercial buildings, and multifamily loans on residential properties.

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Robertson "Clay" Jones, President and Chief Executive Officer

Clay Jones became President and Chief Executive Officer of Heritage Commerce Corp and Heritage Bank of Commerce on September 15, 2022. He joined the Bank in 2019 as Executive Vice President, President of Community Business Banking, and was later named President and Chief Operating Officer in 2021. Before joining Heritage, Mr. Jones served for nearly a decade at Presidio Bank, becoming President in 2018. He was also the organizing and initial President and CEO of New Resource Bank.

Seth Fonti, Executive Vice President and Chief Financial Officer

Seth Fonti was appointed Executive Vice President and Chief Financial Officer of Heritage Commerce Corp and Heritage Bank of Commerce, effective July 24, 2025. He brings over two decades of financial and strategic leadership experience from global and domestic banking institutions. Most recently, Mr. Fonti served as Managing Director and Head of Strategy, Corporate Development, and Strategic Finance for MUFG Americas Holding Corporation. In this role, he was responsible for developing and leading transformative initiatives across strategy, financial planning, organizational effectiveness, balance sheet optimization, risk management, and capital planning.

Thomas A. Sa, Executive Vice President and Chief Operating Officer

Thomas A. Sa joined Heritage Commerce Corp and Heritage Bank of Commerce in 2024 as Executive Vice President and Chief Operating Officer. He also served as Interim Chief Financial Officer as of November 2024. Prior to Heritage, Mr. Sa held roles as Chief Financial Officer and Chief Operating Officer at California BanCorp and California Bank of Commerce, eventually becoming President of both in 2023. He also had a career at Bridge Capital Holdings and Bridge Bank, N.A., holding various executive roles from the company's inception in 2001 through its merger with Western Alliance Bank in 2015.

Janisha Sabnani, Executive Vice President and General Counsel and Corporate Secretary

Janisha Sabnani brings over fifteen years of experience in financial services and corporate law to Heritage Commerce Corp and Heritage Bank of Commerce. Before joining Heritage, Ms. Sabnani held a progression of roles at First Republic Bank, culminating as Senior Vice President, Deputy General Counsel & Assistant Secretary.

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The key risks to Heritage Commerce (HTBK) primarily revolve around its proposed merger, its concentration in commercial real estate, and exposure to interest rate fluctuations.

1. Risks Related to the Proposed Merger with CVB Financial Corp.
   Heritage Commerce Corp has entered into a definitive agreement to merge with CVB Financial Corp. This proposed merger introduces several significant risks. These include potential difficulties and delays in integrating the businesses, key personnel, and customer bases of both entities, as well as challenges in achieving anticipated synergies, cost savings, and other expected benefits from the transaction. The company also faces the risk of higher than anticipated transaction costs, deposit and customer attrition following the merger, and uncertainties regarding obtaining regulatory and shareholder approvals. There is also the potential for the merger to be delayed, fail, or be subject to conditions that could adversely affect the combined company.
2. Commercial Real Estate Concentration and Credit Quality Risks
   Heritage Commerce's loan portfolio has a significant concentration in commercial real estate (CRE) loans, with exposures reported as high as 319% of the bank's total risk-based capital as of December 31, 2025. The company's operations are also geographically concentrated in the Greater San Francisco Bay Area, making it vulnerable to local economic downturns, particularly those affecting real estate values. Negative changes in real estate values, increased regulatory scrutiny of commercial real estate concentrations, and the inherent unreliability of loan appraisals pose substantial risks to the company's profitability and asset quality.
3. Interest Rate Volatility and Liquidity Risks
   As a financial institution, Heritage Commerce is significantly exposed to fluctuations in interest rates. Adverse changes in interest rates could reduce its net interest income, impact asset yields, and affect the availability and cost of funding sources. Furthermore, the company faces liquidity risks, which refer to its ability to meet client demands for deposit withdrawals and funding requirements, including the availability of funds from its lines of credit. The value and liquidity of securities in its investment portfolio are also sensitive to market changes and could be subject to impairment charges.

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The clear emerging threats for Heritage Commerce (HTBK) are primarily driven by shifts in how banking services are delivered and consumed, echoing the disruptive patterns seen in other industries:

1. Digital-Only Banks and Neobanks: These financial institutions operate without physical branches, leveraging technology to offer a full suite of banking services (deposits, loans, payments) with lower overheads and often a superior, mobile-first user experience. This directly threatens HTBK's branch-centric model and its ability to attract and retain customers for core deposit and loan products, particularly as consumers and businesses increasingly prefer digital channels.
2. Specialized Fintech Lenders and Platforms: Technology-driven companies focusing on specific lending segments (e.g., small business loans, commercial real estate, or consumer loans) can offer faster application processes, more flexible terms, and highly tailored solutions. These platforms can cherry-pick profitable lending opportunities, directly competing with and potentially siphoning off segments of HTBK's diverse loan portfolio.

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Heritage Commerce (HTBK) operates within the financial services sector, primarily offering commercial and personal banking services in the San Francisco Bay Area of California. The addressable markets for its main products and services are primarily within California, with some broader U.S. market data providing additional context where specific regional data is unavailable.

Addressable Markets for Main Products and Services:

• Commercial Banking: The market size for the Commercial Banking industry in California is projected to be $143.0 billion in 2026. For the broader U.S. market, the commercial banking market was valued at approximately $231.9 billion in 2024 and is expected to reach $351.8 billion by 2033. This market encompasses commercial loans, operating capital, equipment purchases, and other business purposes offered by Heritage Commerce.
• Real Estate Loans (Commercial Real Estate, Residential Mortgage, Multifamily, Commercial Construction, Home Equity Lines of Credit): The Real Estate Loans & Collateralized Debt industry in California is estimated to have a market size of $62.3 billion in 2026. This figure includes various real estate-backed lending activities relevant to Heritage Commerce. On a national level, the U.S. commercial real estate (CRE) mortgage market for income-producing properties was approximately $4.5 trillion, with an additional $470 billion in construction loans, as of March 2023. Multifamily properties alone saw an estimated $326 billion in total lending in the U.S. in 2024.
• Personal and Consumer Loans (including automobile, various consumer goods, and other personal purposes): Californians held approximately $30 billion in personal loan debt by late 2024. Excluding consumer loans secured by real estate and "buy now, pay later" loans, finance lenders in California originated consumer loans with a total principal amount of $9.1 billion in 2021.
• Deposit Products (Interest and Non-Interest Bearing Demand, Savings, Money Market Accounts, Certificates of Deposit, Time Deposits): Total deposits in California experienced an 18.0% decline between June 30, 2022, and June 30, 2025. As an indicator of the scale within the region, Wells Fargo held $36.6 billion in deposits in the Bay Area as of June 30, 2024. The "accepting deposits" segment constituted approximately 47% of the U.S. commercial banking industry size in 2023. The broader U.S. retail banking market, which includes various deposit products, generated $454.3 billion in revenue in 2024 and is projected to reach $678.3 billion by 2033.

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1. Loan Portfolio Growth: Heritage Commerce is expected to experience continued growth in its lending operations. Analysts project low-to-mid single-digit loan growth through 2027. The company has demonstrated robust growth in its end-of-period (EOP) loans, with an 8.0% increase, and an uptick in line of credit utilization from 32% to 35%, contributing to its financial health. The CEO has also highlighted "meaningful balance-sheet growth" as a factor in performance.
2. Net Interest Margin (NIM) Expansion: The expansion of the net interest margin is a significant driver for revenue growth. The bank's financial health is bolstered by an expansion in net interest margin (NIM) to 3.60% and strengthening loan and securities yields, indicating a positive trajectory for profitability. The fourth quarter of 2025 saw an FTE net interest margin of 3.72%, an increase from 3.60%. Improvements in net interest margin have contributed to higher profitability and increased adjusted earnings.
3. Favorable Deposit Mix: An increasing proportion of non-interest bearing demand deposits (DDA), which grew from 26.0% to 26.7% of total deposits, supports stable deposit growth and can lead to lower funding costs, thereby boosting net interest income. Total deposits were also up 3% in the fourth quarter of 2025.
4. Strategic Merger with CVB Financial Corp: The announced merger with CVB Financial Corp (Citizens Business Bank), expected to close in Q2 2026, is a key driver for future growth. This all-stock transaction will create a larger business bank with $22 billion in assets and significantly expand Heritage Commerce's market presence across California, enhancing long-term growth opportunities.

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Share Repurchases

• In July 2024, Heritage Commerce Corp's Board of Directors authorized a share repurchase program for up to $15 million, set to expire on July 31, 2025.
• This program was expanded and extended in October 2025, increasing the authorization from $15 million to $30 million, with the new term expiring on October 31, 2026.
• During the second and third quarters of 2025, the company repurchased 439,187 shares for a total of $4.0 million at a weighted average price of $9.22 per share.

Share Issuance

• Heritage Commerce Corp is undergoing an all-stock merger with CVB Financial Corp., where Heritage shareholders will receive 0.6500 shares of CVBF common stock for each HTBK share.
• As of the end of 2025, the company had 61,333,951 shares outstanding.

Outbound Investments

• In December 2025, Heritage Commerce Corp entered a definitive merger agreement to be acquired by CVB Financial Corp. (CVBF) in an all-stock transaction.
• The transaction was valued at approximately $811 million, or $13.00 per HTBK share, based on CVBF's closing stock price on December 16, 2025.
• The merger is anticipated to close in the second quarter of 2026, pending regulatory and shareholder approvals.

Capital Expenditures

• In the fourth quarter of 2025, Heritage Commerce Corp reported capital expenditures of $119,000, representing a 525.0% increase from the prior quarter.