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Heartland State Bank

Storden, MN · Cert 10961

FDIC

Q2 2008

$43.9MAssets
$26.3MLoans
$38.8MDeposits
$4.9MEquity
Loan mix
63%RE $9.0M36%C&I $5.1M1%Consumer $0.1MQ2 2007Q2 2008
Deposit mix
67%Interest-bearing $26.0M33%Noninterest $12.9MQ2 2007Q2 2008

NIM

6.07%Q2 ’065.11%Q2 ’075.05%Q2 ’08-29%+30%

Non-interest income vs. expense

3.22%Q2 ’063.12%Q2 ’072.66%Q2 ’08-8%-4%

Executive Summary

  • Earnings: ROA of 1.31%, up 318 bps year over year; NIM at 3.42%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net recoveries of 0.39%.
  • Funding: loans stand at 67.81% of deposits as of Q2 2008.

Financial Results

Return on Assets (YTD, annualized)

1.31%+318 bps YoY

Net Interest Margin (YTD, annualized)

3.42%+80 bps YoY

Efficiency Ratio (YTD, annualized)

66.21%-2,037 bps YoY

Tier 1 Leverage Ratio

n/a

Year to date, annualized, through each quarter.

MetricQ2 2007Q3 2007Q4 2007Q1 2008Q2 2008YoY ΔTrend
Earnings
Return on Assets-1.86%-1.10%-1.38%1.16%1.31%+318 bps
Return on Equity-16.49%-9.56%-12.38%11.05%12.24%+2,873 bps
Net Interest Margin2.62%2.71%2.72%2.88%3.42%+80 bps
Efficiency Ratio86.58%86.73%81.24%69.18%66.21%-2,037 bps
Non-Interest Burden2.14%2.21%2.01%1.62%2.06%-8 bps
Growth
Asset Growth (YoY)-6.32%-9.80%5.34%4.01%7.96%+1,428 bps
Loan Growth (YoY)-12.75%-9.98%6.25%6.53%8.31%+2,106 bps
Deposit Growth (YoY)8.09%9.11%12.51%8.17%11.69%+360 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans5.57%3.65%2.67%-0.76%-0.39%-596 bps
Allowance / Loans2.25%2.25%3.49%3.61%3.68%+143 bps
Allowance Coverage of NPLsn/an/an/an/an/an/an/a
Capital
Tier 1 Leverage Ration/an/an/an/an/an/an/a
Total Risk-Based Capital13.40%14.09%11.70%12.61%12.89%-51 bps
Equity / Assets11.50%12.33%9.70%11.37%11.23%-27 bps
Liquidity & Funding
Loans / Deposits69.92%71.96%60.89%73.78%67.81%-212 bps
Liquid Assets / Assets0.49%2.02%8.24%17.27%16.47%+1,598 bps
CRE / Total Capitaln/an/an/an/an/an/an/a