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Heritage Bank

Chicago Heights, IL · Cert 17917

FDIC

Q4 2007

$343.5MAssets
$286.3MLoans
$293.2MDeposits
$30.1MEquity
Loan mix
82%RE $221.5M18%C&I $49.8M0%Consumer $0.1MQ4 2006Q4 2007
Deposit mix
81%Interest-bearing $238.0M19%Noninterest $55.2MQ4 2006Q4 2007

NIM

5.37%Q4 ’056.15%Q4 ’066.60%Q4 ’070%-3%

Non-interest income vs. expense

2.76%Q4 ’052.68%Q4 ’062.70%Q4 ’07-3%+1%

Executive Summary

  • Earnings: ROA of 1.77%, down 9 bps year over year; NIM at 3.87%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.01%.
  • Funding: loans stand at 97.63% of deposits as of Q4 2007.

Financial Results

Return on Assets (YTD, annualized)

1.77%-9 bps YoY

Net Interest Margin (YTD, annualized)

3.87%-12 bps YoY

Efficiency Ratio (YTD, annualized)

59.79%+192 bps YoY

Tier 1 Leverage Ratio

n/a

Year to date, annualized, through each quarter.

MetricQ4 2006Q1 2007Q2 2007Q3 2007Q4 2007YoY ΔTrend
Earnings
Return on Assets1.86%1.58%1.67%1.75%1.77%-9 bps
Return on Equity23.72%19.94%21.28%22.05%21.87%-185 bps
Net Interest Margin3.99%3.97%3.88%3.87%3.87%-12 bps
Efficiency Ratio57.87%62.82%61.11%60.10%59.79%+192 bps
Non-Interest Burden2.04%2.24%2.13%2.07%2.05%+1 bps
Growth
Asset Growth (YoY)11.38%14.66%13.25%6.65%7.50%-388 bps
Loan Growth (YoY)14.53%13.51%19.70%17.52%13.57%-96 bps
Deposit Growth (YoY)10.25%10.89%11.73%4.57%4.48%-578 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans-0.01%0.00%0.02%0.01%0.01%+1 bps
Allowance / Loans1.09%1.08%1.07%1.06%1.05%-4 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 Capital10.84%10.60%10.47%10.60%11.16%+32 bps
Equity / Assets7.98%7.91%7.63%8.18%8.75%+77 bps
Liquidity & Funding
Loans / Deposits89.81%94.06%88.19%92.93%97.63%+782 bps
Liquid Assets / Assets0.02%0.02%0.01%0.01%0.02%0 bps
CRE / Total Capitaln/an/an/an/an/an/an/a