| Parent Company only Condensed Financial Information |
Parent Company only Condensed Financial Information The condensed financial statements of Heritage Commerce Corp (parent company only) are as follows: Condensed Balance Sheets | | | | | | | | | | | | | December 31, | | 2025 | | 2024 | | | | | | (Dollars in thousands) | | Assets | | | | | Cash and cash equivalents | $ | 11,481 | | | $ | 16,903 | | | Investment in subsidiary bank | 733,625 | | | 709,379 | | | Other assets | 3,526 | | | 3,360 | | | Total assets | $ | 748,632 | | | $ | 729,642 | | | Liabilities and Shareholders' Equity | | | | | Subordinated debt, net of issuance costs | $ | 39,805 | | | $ | 39,653 | | | Other liabilities | 261 | | | 262 | | | Shareholders' equity | 708,566 | | | 689,727 | | | Total liabilities and shareholders' equity | $ | 748,632 | | | $ | 729,642 | |
Condensed Statements of Income | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2025 | | 2024 | | 2023 | | | | | | | | (Dollars in thousands) | | Dividend from subsidiary bank | $ | 32,000 | | | $ | 32,000 | | | $ | 32,000 | | | Interest expense | (2,151) | | | (2,152) | | | (2,152) | | | Other expenses | (4,456) | | | (4,608) | | | (3,771) | | | Income before income taxes and equity in net income of subsidiary bank | 25,393 | | | 25,240 | | | 26,077 | | | Equity in undistributed net income of subsidiary bank | 20,514 | | | 13,320 | | | 36,648 | | | Income tax benefit | 1,923 | | | 1,968 | | | 1,718 | | | Net income | $ | 47,830 | | | $ | 40,528 | | | $ | 64,443 | |
Condensed Statements of Cash Flows | | | | | | | | | | | | | | | Year Ended December 31, | | 2025 | | 2024 | | 2023 | | | | | | | | (Dollars in thousands) | | Cash flows from operating activities: | | | | | | | Net Income | $ | 47,830 | | | $ | 40,528 | | | $ | 64,443 | | | Adjustments to reconcile net income to net cash provided by operations: | | | | | | Amortization of restricted stock awards, net | 621 | | | 916 | | | 1,404 | | Equity in undistributed net income of subsidiary bank | (20,514) | | | (13,320) | | | (36,648) | | Net change in other assets and liabilities | 234 | | | 1,468 | | | (1,174) | | Net cash provided by operating activities | 28,171 | | | 29,592 | | | 28,025 | | | Cash flows from financing activities: | | | | | | | | | | | | | | | | | | Payment of cash dividends | (31,917) | | | (31,858) | | | (31,740) | | Proceeds from exercise of stock options | 2,373 | | | 690 | | | 1,220 | | Payment to repurchase common stock | (4,049) | | | — | | | — | | Net cash used in financing activities: | (33,593) | | | (31,168) | | | (30,520) | | Net decrease in cash and cash equivalents | (5,422) | | | (1,576) | | | (2,495) | | | Cash and cash equivalents, beginning of year | 16,903 | | | 18,479 | | | 20,974 | | Cash and cash equivalents, end of year | $ | 11,481 | | | $ | 16,903 | | | $ | 18,479 | |
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