Exhibit 99.1

Heritage Commerce Corp Reports Record Results in 2006

San Jose, CA - February 6, 2007 —Heritage Commerce Corp (NASDAQ: HTBK), parent company of Heritage Bank of Commerce, today reported record results for 2006, driven by improved operating efficiencies and an increase in net interest margin. Net income in 2006 increased 20% to $17.3 million, or $1.44 per diluted share, compared to $14.4 million, or $1.19 per diluted share, for the year ended December 31, 2005. Fourth quarter net income rose 2% to $4.4 million, or $0.37 per diluted share, from $4.3 million, or $0.35 per diluted share for the same period in 2005.

The return on average assets (ROAA) for 2006 increased to 1.57% from 1.27% a year ago, and return on average equity (ROAE) was 14.6%, compared to 13.7% for 2005. Annualized returns on average assets and average equity for the fourth quarter of 2006 were 1.59% and 14.3%, respectively, compared with 1.46% and 15.4%, respectively, for the fourth quarter of 2005.

Financial Highlights:

2006

l        Diluted earnings per share of $1.44 were up 21% from the previous year.

l        Profitability ratios all improved over 2005 levels:

n   Net interest margin increased 48 basis points to 5.06%.

n   ROAA grew 30 basis points to 1.57%.

n   ROAE improved 89 basis points to 14.6%

n   The efficiency ratio improved 466 basis points to 56.9 %.

Fourth Quarter 2006

l        Net income grew to $4.4 million, up 2% from 4Q05 and remained at the same record level achieved in 3Q06.

l        Diluted earnings per share of $0.37 were up 6% from 4Q05 and 3% from 3Q06.

l        Book value per share of $10.54 was up 11% from 4Q05 and 3% from 3Q06.

“The record profitability in 2006 reflects the focus of all our team members on building strong, profitable relationships with our customers,” said Walter T. Kaczmarek, President and Chief Executive Officer. “Interest margin improvement, coupled with solid gains in productivity, generated excellent results for our shareholders. As we look forward to 2007, we believe the economic growth in the local region will provide excellent opportunities for further advances.”

Operating Results

“We remain asset sensitive, which has helped us throughout this period of rising short-term interest rates,” Mr. Kaczmarek continued. Net interest income increased 5% to $50.4 million in 2006, compared to $47.8 million a year ago. Net interest income for the fourth quarter of 2006 was $12.8 million, which remained at the same level as the fourth quarter of 2005. The net interest margin was 5.06% in 2006, compared with 4.58% in 2005. The net interest margin improved to 5.16% in the fourth quarter of 2006 from 4.82% in the fourth quarter a year ago.

Noninterest income increased 4% to $9.8 million in 2006, from $9.4 million in the preceding year. Noninterest income is primarily comprised of gain on sale of SBA and other government guaranteed business loans, servicing fee income, deposit service charges, and increases in the cash surrender value of life insurance. In addition, the first quarter gain on sale of specialty loans contributed $671,000 to 2006 noninterest income and more than offset the $430,000 generated last year from leasing activities, a business Heritage exited in 2005. Fourth quarter noninterest income was $2.39 million, up 8% from the fourth quarter of 2005, and up 4% from the third quarter of 2006.

The efficiency ratio, a measure of operating expenses relative to revenues, improved to 56.9% in 2006 from 61.5% a year ago. The efficiency ratio was 57.3% in the fourth quarter of 2006, compared to 57.0% in the fourth quarter of 2005 and 55.0% in the third quarter of 2006.

In 2006, noninterest expense declined 3% to $34.3 million from $35.2 million a year ago, including a 2% decline in compensation expense. Fourth quarter noninterest expense increased 2% to $8.70 million, compared to $8.57 million in the fourth quarter of 2005 and was up 5% over the third quarter of 2006. The Bank recognized $120,000 of expenses associated with the conversion of the online banking system during the fourth quarter of 2006. Compensation expense decreased 4% and 5%, respectively, from the fourth quarter of 2005 and the third quarter of 2006. Stock option expense was $230,000 in the fourth quarter of 2006 and totaled $780,000 for the full year. In 2005, stock option expense was not included in the compensation expense, but rather footnoted in the financial statements as a pro forma disclosure.

Balance Sheet, Capital Management and Credit Quality

At December 31, 2006, total assets were $1.0 billion, down 8% from December 31, 2005. “We continue to carefully manage our assets and liabilities to improve profitability and manage interest rate and credit risk,” Mr. Kaczmarek noted. “Our focus will remain on building profitable relationships.” In 2006, total loans (excluding loans held for sale) increased 5% from a year ago level to $725.8 million, with commercial loans increasing 17% to $300.6 million, or 41% of the portfolio.

Total deposits decreased 10% to $847 million at December 31, 2006, from $940 million at December 31, 2005, primarily due to reductions in real estate exchange company and title companty accounts of $67 million as of December 31, 2006.

Asset quality remained strong with nonperforming assets (NPAs) totaling $4.3 million, or 0.42% of total assets at December 31, 2006, compared to $3.7 million, or 0.32% of total assets, at December 31, 2005, and $3.0 million, or 0.28% of total assets, at September 30, 2006. Net charge-offs in the fourth quarter of 2006 were $200,000, or 0.11% of average loans, compared to net charge-offs of $176,000, or 0.10% of average loans in the fourth quarter of 2005, and net recoveries of $281,000, or 0.16%, of average loans, in the third quarter of 2006. The allowance for loan losses at December 31, 2006, was $9.3 million, or 1.28% of total loans, and represented 215% of nonperforming loans. The allowance for loan losses at December 31, 2005, was $10.2 million, or 1.48% of total loans, and represented 278% of nonperforming loans. The allowance for loan losses at September 30, 2006, was $9.4 million, or 1.31% of total loans, and represented 317% of nonperforming loans.

Shareholders’ equity increased 10% to $123 million, or $10.54 book value per share, at December 31, 2006, compared to $112 million, or $9.45 book value per share, a year earlier, and $119 million, or $10.22 book value per share at September 30, 2006. Capital ratios continue to be significantly above the well-capitalized guidelines established by regulatory agencies. The Company’s leverage ratio at December 31, 2006 was 13.47%, compared to 11.55% at December 31, 2005 and 13.24% at September 30, 2006.

Heritage Commerce Corp repurchased 47,400 shares of common stock in the fourth quarter of 2006, bringing the total shares repurchased in the year to 330,300 with an average price of $25.93 for the quarter and $23.88 for the full year. The $10 million common stock repurchase program was approved by the Board of Directors in February, 2006 and expires on June 30, 2007. Shares were purchased on the open market using available cash. The repurchase program, which is financed by available cash, may be modified, suspended or terminated by the Board of Directors at any time without notice. The extent to which the Company repurchases its shares and the timing of such repurchases will depend upon market conditions and other corporate considerations.

Heritage Commerce Corp, a bank holding company established in February 1998, is the parent company of Heritage Bank of Commerce, established in 1994 and headquartered in San Jose with offices in Los Gatos, Fremont, Danville, Morgan Hill, Gilroy, Mountain View and Los Altos. Heritage Bank of Commerce is also an SBA Preferred Lender operating from offices in San Jose, Chico, Fremont, Fresno, Jackson, Elk Grove, Santa Cruz and Watsonville, California.

Forward Looking Statement Disclaimer

This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include, but are not necessarily limited to, the Company’s ability to sustain dividend payments, fluctuations in interest rates and monetary policy established by the Federal Reserve, inflation, government regulations, general economic conditions, competition within the business areas in which the Company is conducting its operations, including the real estate market in California, the ability to recognize identified cost savings, and other factors beyond the Company's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. For a discussion of factors which could cause results to differ, please see the Company's reports on Forms 10-K and 10-Q as filed with the Securities and Exchange Commission and the Company's press releases. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

Member FDIC

	At and For the Three Months Ended:									Percent Change From:					At and For the Year Ended:
CONSOLIDATED INCOME STATEMENTS	December 31,			September 30,			December 31,			September 30,			December 31,		December 31,			December 31,		Percent
(in $000's, unaudited)	2006			2006			2005			2006			2005		2006			2005		Change
Interest Income	$	18,737		$	18,568		$	17,588			1	%		7%	$	72,957		$	63,756		14%
Interest Expense		5,936			5,754			4,773			3	%		24%		22,525			15,907		42%
Net Interest Income		12,801			12,814			12,815			0	%		0%		50,432			47,849		5%
Provision for Loan Losses		100			0			0			N/	A		N/A		(503	)		313		-261%
Net Interest income after Provision for Loan  Losses		12,701			12,814			12,815			-1	%		-1%		50,935			47,536		7%
Noninterest Income:
Gain on Sale of Loans		837			832			711			1	%		18%		4,008			2,871		40%
Servicing Income		539			412			470			31	%		15%		1,860			1,838		1%
Increase in Cash Surrender Value of Life Insurance		369			363			349			2	%		6%		1,439			1,236		16%
Service Charges and Other Fees on Deposit       Accounts		327			354			348			-8	%		-6%		1,335			1,468		-9%
Gain on Sale of Leased Equipment		0			0			0			N/	A		N/A		0			299		-100%
Equipment Leasing		0			0			0			N/	A		N/A		0			131		-100%
Other		318			338			326			-6	%		-2%		1,198			1,580		-24%
Total Noninterest Income		2,390			2,299			2,204			4	%		8%		9,840			9,423		4%
Noninterest Expense:
Salaries & Employee Benefits		4,711			4,941			4,932			-5	%		-4%		19,414			19,845		-2%
Occupancy & Equipment		907			913			933			-1	%		-3%		3,627			3,988		-9%
Other		3,085			2,458			2,702			26	%		14%		11,227			11,400		-2%
Total Noninterest Expense		8,703			8,312			8,567			5	%		2%		34,268			35,233		-3%
Income Before Income Taxes		6,388			6,801			6,452			-6	%		-1%		26,507			21,726		22%
Income Tax Expense		2,036			2,448			2,194			-17	%		-7%		9,237			7,280		27%
Net Income	$	4,352		$	4,353		$	4,258			0	%		2%	$	17,270		$	14,446		20%
PER SHARE DATA
(unaudited)
Basic Earnings Per Share	$	0.37		$	0.37		$	0.36			0	%		3%	$	1.47		$	1.22		20%
Diluted Earnings Per Share	$	0.37		$	0.36		$	0.35			3	%		6%	$	1.44		$	1.19		21%
Common Shares Outstanding at Period End		11,656,943			11,681,297			11,807,649			0	%		-1%		11,656,943			11,807,649		-1%
Book Value Per Share	$	10.54		$	10.22		$	9.45			3	%		11%	$	10.54		$	9.45		11%
Tangible Book Value Per Share	$	10.54		$	10.22		$	9.45			3	%		11%	$	10.54		$	9.45		11%
KEY FINANCIAL RATIOS
(unaudited)
Annualized Return on Average Equity		14.25	%		14.43	%		15.41	%		-1	%		-8%		14.62%			13.73%		6%
Annualized Return on Average Assets		1.59	%		1.61	%		1.46	%		-1	%		9%		1.57%			1.27%		24%
Net Interest Margin		5.16	%		5.22	%		4.82	%		-1	%		7%		5.06%			4.58%		10%
Efficiency Ratio		57.29	%		55.00	%		57.04	%		4	%		0%		56.86%			61.52%		-8%
AVERAGE BALANCES
(in $000's, unaudited)
Average Assets	$	1,084,440		$	1,074,903		$	1,155,178			1	%		-6%	$	1,098,278		$	1,137,185		-3%
Average Earning Assets	$	984,146		$	973,556		$	1,053,901			1	%		-7%	$	996,082		$	1,044,043		-5%
Average Total Loans	$	715,257		$	706,587		$	697,231			1	%		3%	$	704,009		$	695,769		1%
Average Loans Held For Sale	$	23,115		$	32,534		$	71,789			-29	%		-68%	$	34,288		$	66,559		-48%
Average Deposits	$	892,983		$	886,976		$	965,574			1	%		-8%	$	907,095		$	945,991		-4%
Average Demand Deposits - Noninterest Bearing	$	233,945		$	218,766		$	258,374			7	%		-9%	$	229,190		$	259,881		-12%
Average Interest Bearing Deposits	$	659,038		$	668,210		$	707,200			-1	%		-7%	$	677,905		$	686,110		-1%
Average Interest Bearing Liabilities	$	704,540		$	713,712		$	763,602			-1	%		-8%	$	727,036		$	750,560		-3%
Average Equity	$	121,202		$	119,690		$	109,636			1	%		11%	$	118,095		$	105,208		12%

	End of Period:									Percent Change From:
CONSOLIDATED BALANCE SHEETS	December 31,			September 30,			December 31,			September 30,			December 31,
(in $000's, unaudited)	2006			2006			2005			2006			2005
ASSETS
Cash and Due from Banks	$	34,285		$	41,438		$	35,560			-17	%		-4	%
Federal Funds Sold		15,100			41,000			62,900			-63	%		-76	%
Securities Available-for-Sale, at Fair Value		172,298			173,723			198,495			-1	%		-13	%
Loans Held For Sale		17,234			23,108			70,147			-25	%		-75	%
Loans:
Commercial		300,611			281,488			256,713			7	%		17	%
Real Estate-Mortgage		239,041			227,732			237,566			5	%		1	%
Real Estate-Land and Construction		143,834			160,137			149,851			-10	%		-4	%
Home Equity		38,976			41,784			41,772			-7	%		-7	%
Consumer		2,422			1,387			1,721			75	%		41	%
Total Loans		724,884			712,528			687,623			2	%		5	%
Deferred Loan Costs		870			1,172			1,155			-26	%		-25	%
Loans, Net of Deferred Costs		725,754			713,700			688,778			2	%		5	%
Allowance for Loan Losses		(9,279)			(9,379)			(10,224)			-1	%		-9	%
Net Loans		716,475			704,321			678,554			2	%		6	%
Company Owned Life Insurance		36,174			35,805			34,735			1	%		4	%
Premises & Equipment, Net		2,539			2,494			2,541			2	%		0	%
Accrued Interest Receivable and Other Assets		43,033			40,939			47,577			5	%		-10	%
Total Assets	$	1,037,138		$	1,062,828		$	1,130,509			-2	%		-8	%
LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand Deposits-Noninterest Bearing	$	231,841		$	226,297		$	248,009			2	%		-7	%
Demand Deposits-Interest Bearing		133,413			133,636			157,330			0	%		-15	%
Savings and Money Market		307,266			349,436			353,798			-12	%		-13	%
Time Deposits, Under $100		31,097			31,522			35,209			-1	%		-12	%
Time Deposits, $100 and Over		111,017			101,198			109,373			10	%		2	%
Brokered Deposits, $100 and Over		31,959			34,009			36,040			-6	%		-11	%
Total Deposits		846,593			876,098			939,759			-3	%		-10	%
Securities Sold Under Agreement to Repurchase		21,800			21,800			32,700			0	%		-33	%
Notes Payable To Subsidiary Grantor Trusts		23,702			23,702			23,702			0	%		0	%
Accrued Interest Payable and Other Liabilities		22,223			21,892			22,731			2	%		-2	%
Total Liabilities		914,318			943,492			1,018,892			-3	%		-10	%
Shareholders' Equity:
Common Stock		62,363			62,959			66,799			-1	%		-7	%
Accumulated Other Comprehensive Loss		(1,995)			(2,306)			(2,721)			-13	%		-27	%
Retained Earnings		62,452			58,683			47,539			6	%		31	%
Total Shareholders' Equity		122,820			119,336			111,617			3	%		10	%
Total Liabilities & Shareholders' Equity	$	1,037,138		$	1,062,828		$	1,130,509			-2	%		-8	%
CREDIT QUALITY DATA
(in $000's, unaudited)
Nonaccrual Loans	$	3,866		$	2,083		$	3,672			86	%		5	%
Loans Past Due 90 Days or More and Still Accruing		451			879			0			-49	%		N/	A
Total Nonperforming Loans		4,317			2,962			3,672			46	%		18	%
Other Real Estate Owned		0			0			0			N/	A		N/	A
Total Nonperforming Assets	$	4,317		$	2,962		$	3,672			46	%		18	%
Net Charge-offs (Recoveries)	$	200		$	(281)		$	176			171	%		14	%
Net Charge-offs (Recoveries) as Percent of Average Loans		0.11	%		-0.16	%		0.10	%		169	%		10	%
Allowance for Loan Losses to Total Loans		1.28	%		1.31	%		1.48	%		-2	%		-14	%
Allowance for Loan Losses to Nonperforming Loans		214.94	%		316.64	%		278.43	%		-32	%		-23	%
Nonperforming Assets to Total Assets		0.42	%		0.28	%		0.32	%		50	%		31	%
Nonperforming Loans to Total Loans		0.60	%		0.42	%		0.53	%		43	%		13	%
OTHER PERIOD-END STATISTICS
(unaudited)
Shareholders Equity / Total Assets		11.84	%		11.23	%		9.87	%		5	%		20	%
Loan to Deposit Ratio		85.73	%		81.46	%		73.29	%		5	%		17	%
Noninterest Bearing Deposits / Total Deposits		27.39	%		25.83	%		26.39	%		6	%		4	%
Leverage Ratio		13.47	%		13.24	%		11.55	%		2	%		17	%

	For the Three Months Ended December 31, 2006						For the Three Months Ended December 31, 2005
			Interest		Average				Interest		Average
NET INTEREST INCOME AND NET INTEREST MARGIN	Average		Income/		Yield/		Average		Income/		Yield/
(in $000's, unaudited)	Balance		Expense		Rate		Balance		Expense		Rate
Assets:
Loans, gross	$	738,372	$	15,836		8.51%	$	769,020	$	15,109		7.79	%
Securities		178,835		2,014		4.47%		214,123		1,773		3.29	%
Interest bearing deposits in other financial institutions		2,890		36		4.94%		4,258		39		3.63	%
Federal funds sold		64,049		851		5.27%		66,500		667		3.98	%
Total interest earning assets		984,146	$	18,737		7.55%		1,053,901	$	17,588		6.62	%
Cash and due from banks		29,545						39,611
Premises and equipment, net		2,607						2,641
Other assets		68,142						59,025
Total assets	$	1,084,440					$	1,155,178
Liabilities and shareholders' equity:
Deposits:
Demand, interest bearing	$	135,356	$	769		2.25%	$	146,244	$	622		1.69	%
Savings and money market		356,489		2,819		3.14%		376,613		2,013		2.12	%
Time deposits, under $100		30,460		276		3.59%		36,147		243		2.67	%
Time deposits, $100 and over		104,325		1,033		3.93%		111,586		804		2.86	%
Brokered time deposits, $100 and over		32,408		312		3.82%		36,610		344		3.73	%
Notes payable to subsidiary grantor trusts		23,702		586		9.81%		23,702		555		9.29	%
Securities sold under agreement to repurchase		21,800		141		2.57%		32,700		192		2.33	%
Total interest bearing liabilities		704,540	$	5,936		3.34%		763,602	$	4,773		2.48	%
Demand, noninterest bearing		233,945						258,374
Other liabilities		24,753						23,566
Total liabilities		963,238						1,045,542
Shareholders' equity:		121,202						109,636
Total liabilities and shareholders' equity	$	1,084,440					$	1,155,178
Net interest income / margin			$	12,801		5.16%			$	12,815		4.82	%

	For the Year Ended December 31, 2006						For the Year Ended December 31, 2005
			Interest		Average				Interest		Average
NET INTEREST INCOME AND NET INTEREST MARGIN	Average		Income/		Yield/		Average		Income/		Yield/
(in $000's, unaudited)	Balance		Expense		Rate		Balance		Expense		Rate
Assets:
Loans, gross	$	738,297	$	61,859		8.38%	$	762,328	$	54,643		7.17	%
Securities		191,220		7,796		4.08%		226,043		7,247		3.21	%
Interest bearing deposits in other financial institutions		2,826		132		4.67%		3,234		97		3.00	%
Federal funds sold		63,739		3,170		4.97%		52,438		1,769		3.37	%
Total interest earning assets		996,082	$	72,957		7.32%		1,044,043	$	63,756		6.11	%
Cash and due from banks		34,810						38,670
Premises and equipment, net		2,482						2,879
Other assets		64,904						51,593
Total assets	$	1,098,278					$	1,137,185
Liabilities and shareholders' equity:
Deposits:
Demand, interest bearing	$	145,471	$	3,220		2.21%	$	134,412	$	1,749		1.30	%
Savings and money market		358,846		10,274		2.86%		363,570		6,058		1.67	%
Time deposits, under $100		31,967		1,037		3.24%		37,260		862		2.31	%
Time deposits, $100 and over		107,387		3,762		3.50%		115,104		2,867		2.49	%
Brokered time deposits, $100 and over		34,234		1,295		3.78%		35,764		1,313		3.67	%
Notes payable to subsidiary grantor trusts		23,702		2,310		9.75%		23,702		2,136		9.01	%
Securities sold under agreement to repurchase		25,429		627		2.47%		40,748		922		2.26	%
Total interest bearing liabilities		727,036	$	22,525		3.10%		750,560	$	15,907		2.12	%
Demand, noninterest bearing		229,190						259,881
Other liabilities		23,957						21,536
Total liabilities		980,183						1,031,977
Shareholders' equity:		118,095						105,208
Total liabilities and shareholders' equity	$	1,098,278					$	1,137,185
Net interest income / margin			$	50,432		5.06%			$	47,849		4.58	%