2024 Sustainability Report

A Message to Our Shareholders

We are pleased to present Heritage’s latest Sustainability Report, which reflects our ongoing commitment to corporate responsibility and our unwavering dedication to meaningful impacts on our communities. This Report is not just about fulfilling business obligations; it represents our desire to accelerate our progress and deepen our connection to all our stakeholders. It’s also a testament to our commitment to being the premier business bank in the Bay Area.

In 2023 and 2024, we aligned our sustainability strategy with our broader vision, emphasizing resilient relationships and strong risk management. As we celebrated 30 years of operation, we successfully integrated sustainability into our business strategy while adapting to rising regulatory demands and stakeholder expectations. Key achievements include earning the Raymond James Community Bankers Cup for 2023, placing us among the top 10% of community banks nationwide.

Our Board of Directors and cross-functional executive team oversee these initiatives, ensuring sustainability is embedded in all aspects of our operations. We remain focused on four key pillars: Environmental Responsibility, Our People, Our Community, and Governance. Looking forward to 2024, Heritage aims to deliver long-term value to our shareholders, strengthen relationships with clients and communities, and support our dedicated team.

Vision Statement

At Heritage Commerce Corp and Heritage Bank of Commerce, our vision is to stand out as the business bank of choice for enterprises in our markets, while simultaneously being recognized as an employer where everyone has the opportunity to excel. We aspire to be a leader in fostering business growth, community development, and innovation in financial services. By cultivating a workplace that values diversity, inclusivity, and collaboration, we aim to empower both our employees and our clients to achieve their greatest potential.

Through continuous improvement, we strive to anticipate and meet the needs of our clients, ensuring that our services remain relevant and valuable in a rapidly changing financial landscape. We envision a future where Heritage Bank of Commerce becomes synonymous with trust, excellence, and opportunity.

Our Mission

Our mission is to deliver exceptional relationship-driven and community-focused banking services that address the unique needs of businesses, professional organizations, non-profits, and community groups. By leveraging trusted values and customer-centric approaches, combined with innovative technology, we provide solutions that empower our clients and enhance the well-being of the communities we serve.

We are dedicated to creating lasting value for all stakeholders—clients, employees, and shareholders alike. Treating every stakeholder with fairness, urgency, and respect is central to our philosophy. We aim to serve as a reliable financial partner, offering products and services that adapt to the evolving needs of our communities while upholding the highest standards of integrity and accountability.

At the heart of our mission is a commitment to building meaningful relationships, fostering sustainability, and promoting economic growth. By staying true to our core principles, we ensure the long-term success and prosperity of those we serve.

Who We Are

Banking for Businesspeople by Businesspeople

Heritage Bank of Commerce (HBC) is a community business bank founded in 1994, headquartered in San Jose, California. Heritage Commerce Corp was organized in 1997 as the holding company for Heritage Bank of Commerce.

Relationship Banking

HBC offers a full range of banking services to small and medium-sized businesses, professional organizations, non-profits, and community groups using a “consultative” relationship banking approach.

Specialty Expertise

• Small Business Administration (SBA) Lending
• Construction Lending
• Treasury Management
• Non-profit organizations, education, and churches
• Homeowner Association (HOA) Services
• Factoring (via subsidiary Bay View Funding)

Environmental Responsibility

Heritage Bank of Commerce has undertaken several initiatives designed to reduce environmental impact and promote sustainability. Key highlights include:

• 61.5% of office space is Leadership in Energy and Environmental Design (LEED) certified.
• 72% of office spaces use LED lighting.
• Phased out daily interbranch courier service, reducing 70,950 miles driven annually.
• Increased the use of e-records and digital solutions, significantly reducing paper waste and carbon emissions.

Our People

Our greatest differentiator is our nearly 400 employees. We prioritize inclusion and belonging, diversity, and equal opportunity. Highlights from 2023 include:

• Females represent 60% of the workforce and earned 66% of promotions.
• Racially and ethnically diverse individuals represent 55% of the workforce and accounted for 41% of promotions.
• Launched a “Core Values Champions” recognition program to celebrate exemplary employees.
• Hosted diversity workshops and cultural events throughout the year.

Our Community

Heritage Bank of Commerce is deeply committed to building relationships and making a difference in local communities. In 2023, we:

• Donated $750,000 to over 380 nonprofit organizations.
• Volunteered over 2,550 hours through employee engagement initiatives.
• Supported financial literacy and educational programs for underserved communities.
• Hosted Small Business Toolbox Events for minority-owned businesses in Oakland.

Governance

Sound governance and risk management practices are integral to our operations. The Board of Directors oversees:

• Enterprise risk management, cybersecurity, and data privacy.
• Ethical business practices and whistleblower protection policies.
• Inclusion and belonging programs, ensuring an equitable workplace.

We are committed to maintaining transparency, accountability, and integrity in all our operations.

Invitation to Learn More

We invite you to explore the full 2024 Sustainability Report to learn more about our achievements, initiatives, and commitment to creating a sustainable and inclusive future.