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Exhibit 99.1 Heritage Commerce Corp Earns $ 8.8 Million for the Second Quarter of 2021 , and $ 20.0 Million for the First Six Months of 2021 San Jose , CA — July 22 , 2021 — Heritage Commerce Corp ( Nasdaq : HTBK ) , the holding company ( the " Company " ) for Heritage Bank of Commerce ( the " Bank ” ) , today announced second quarter 2021 net income of $ 8.8 million , or $ 0.15 per average diluted common share , compared to $ 10.6 million , or $ 0.18 per average diluted common share , for the second quarter of 2020 , and $ 11.2 million , or $ 0.19 per average diluted common share , for the first quarter of 2021. For the six months ended June 30 , 2021 , net income was $ 20.0 million , or $ 0.33 per average diluted common share , compared to $ 12.5 million , or $ 0.21 per average diluted common share , for the six months ended June 30 , 2020. Earnings for the second quarter and first six months of 2021 included a $ 4.0 million reserve for a legal settlement as noninterest expense , which was previously disclosed in the Company's Current Report on Form 8 - K filed with the Securities and Exchange Commission on July 7 , 2021. Earnings for the first six months of 2020 were impacted by the effect of $ 14.4 million in pre - tax current expected credit losses ( “ CECL " ) related provision for credit losses on loans , driven by forecasted effects on economic activity from the Coronavirus pandemic and $ 2.5 million of pre - tax merger - related costs in the first six months of 2020. All results are unaudited . " Reflective of an improving local economy , we delivered solid second quarter earnings , supported by higher levels of loans on both a year - over - year and linked quarter basis . Core loans , excluding Small Business Administration ( “ SBA " ) Paycheck Protection Program ( " PPP " ) loans and residential mortgage loans , increased by $ 65.6 million , or 3 % , from a year ago , and increased by $ 59.6 million , or 3 % , from the first quarter of 2021. Total loans increased by $ 138.4 million , or 5 % , from a year ago , and increased by $ 120.1 million , or 4 % , from the first quarter of 2021 , while total deposits were higher by $ 444.2 million , or 11 % , year - over - year , and increased $ 65.4 million , or 2 % , from the first quarter of 2021. Our disciplined approach to managing core operating expenses also contributed to profitability during the second quarter of 2021 , " said Mr. Walter Kaczmarek , President and Chief Executive Officer . " In addition , second quarter results benefitted from the recapture of ( $ 493,000 ) in credit losses on loans , compared to a provision for credit losses on loans of $ 1.1 million taken in the second quarter of 2020. " " From the onset of the pandemic , we have been an active participant in the SBA PPP loan program , " said Mr. Kaczmarek . " PPP loans generated interest and fee income of $ 2.7 million during the second quarter of 2021 , and $ 6.9 million for the first six months of 2021. " As of June 30 , 2021 , the Company had a total of $ 286.5 million in PPP loans outstanding and $ 6.9 million of remaining net deferred fees outstanding . " Our credit quality remained strong , as nonperforming assets ( “ NPAs " ) declined ( $ 2.9 ) million , or ( 32 % ) , at June 30 , 2021 to $ 6.2 million , from $ 9.1 million at June 30 , 2020 , and increased $ 587,000 from $ 5.6 million at March 31 , 2021. In addition , net recoveries totaled $ 153,000 for the current quarter , compared to $ 373,000 in net charge - offs for the second quarter of 2020 , and net recoveries of $ 1.4 million for the first quarter of 2021 , " said Mr. Kaczmarek . " We believe that with our healthy capital and liquidity positions , strong earnings power , conservative credit culture , and dedicated employees , we remain well positioned for growth as we head into the second half of the year . ” SBA PPP Loan Program : In response to economic stimulus laws passed by Congress in 2020 and 2021 , the Bank has now funded two rounds of PPP loans . At June 30 , 2021 , after accounting for loan payoffs and SBA loan forgiveness , “ Round 1 ” PPP loans were $ 91.9 million and “ Round 2 ” PPP loans were $ 194.6 million . In total the Bank had $ 286.5 million in outstanding PPP loan balances at June 30 , 2021. The following table shows interest income , fee income and deferred origination costs generated by the PPP loans , and the PPP loan outstanding balances and related deferred fees and costs for the periods indicated : 1