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Heritage Bank, National Association

Spicer, MN · Cert 19254 · Heritage Bancshares Group Employee STK Ownership PLAN&TR

National charter · OCC · 5 branches

Q2 2026

Board Package

Performance Trends and Peer Comparison

Part 1Performance Trends, own institution only2
Part 2Peer Comparison, banks under $1B in assets operating regionally3

Basis

Quarter: Q2 2026, the quarter ended June 30, 2026, on both parts.

Income statement: year to date as filed, annualized, on both parts.

Balance sheet: as filed at quarter end.

Peer group

Banks under $1B in assets operating regionally (n=94). Each measure ranks only the institutions that reported it, so n varies by measure.

Peer groups below the disclosure floor are suppressed.

Peer standing

Capital

70

Q2 2024Q2 2026peer median (50)

Asset Quality

11

Q2 2024Q2 2026peer median (50)

Profitability

13

Q2 2024Q2 2026peer median (50)

Liquidity

0

Q2 2024Q2 2026peer median

Efficiency

3

Q2 2024Q2 2026peer median (50)

Growth

No peer data yet

Capital, Asset Quality, Profitability, Efficiency: higher is always a stronger peer standing (▲ better, ▼ worse). Liquidity, Growth: the score reflects closeness to the peer median -- 100 is sitting exactly at the median, falling the same way whether the bank runs above or below it.

Source: FFIEC Call Report (031/041/051), as filed. Dollar figures derived from reported amounts in thousands. Ratios computed by CallReports.ai using published regulatory formulas.

CallReports · callreports.ai · Board PackageGenerated 2026-10-11

Heritage Bank, National Association

Spicer, MN · Cert 19254 · Heritage Bancshares Group Employee STK Ownership PLAN&TR

National charter · OCC · 5 branches

Q2 2026

$361.1MAssets
$308.2MLoans
$286.3MDeposits
$37.9MEquity
Loan mix
89%RE $268.7M9%C&I $27.2M2%Consumer $4.6MQ2 2025Q2 2026
Deposit mix
80%Interest-bearing $227.9M20%Noninterest $58.3MQ2 2025Q2 2026

NIM

6.03%Q2 ’245.85%Q2 ’255.48%Q2 ’26+10%+6%

Non-interest income vs. expense

2.86%Q2 ’244.47%Q2 ’254.71%Q2 ’26+32%+23%

Market Position · Sioux Falls, SD-MN · 2026 SOD (annual) · 0.0% share · #42 of 42 inst. · $0.0B of $1127.8B

16.6% Kandiyohi
0.0% Minnehaha

Executive Summary

  • Earnings: ROA of -0.02%, down 17 bps year over year; NIM at 3.62%.
  • Asset quality: problem loans at 3.84% of loans (+180 bps YoY), with net charge-offs at 0.05%.
  • Capital: tier 1 leverage ratio of 10.81%, up 96 bps from a year ago.
  • Funding: loans stand at 107.66% of deposits as of Q2 2026.

Financial Results

Return on Assets (YTD, annualized)

-0.02%-17 bps YoY

Net Interest Margin (YTD, annualized)

3.62%+20 bps YoY

Efficiency Ratio (YTD, annualized)

106.18%+1,147 bps YoY

Tier 1 Leverage Ratio

10.81%+96 bps YoY

Year to date, annualized, through each quarter.

MetricQ2 2025Q3 2025Q4 2025Q1 2026Q2 2026YoY ΔTrend
Earnings
Return on Assets0.15%0.14%0.15%-0.52%-0.02%-17 bps
Return on Equity1.68%1.59%1.63%-5.14%-0.17%-185 bps
Net Interest Margin3.42%3.54%3.53%3.46%3.62%+20 bps
Efficiency Ratio94.71%94.89%94.98%113.29%106.18%+1,147 bps
Non-Interest Burden3.17%3.30%3.31%4.01%3.90%+72 bps
Growth
Asset Growth (YoY)-22.37%-20.94%-18.91%-17.35%-13.12%+926 bps
Loan Growth (YoY)-19.97%-19.20%-20.79%-15.86%-12.98%+700 bps
Deposit Growth (YoY)-16.53%-16.61%-17.89%-18.26%-19.85%-332 bps
Asset Quality
Nonperforming Loans / Loans2.05%2.15%3.36%3.47%3.84%+180 bps
Net Charge-Offs / Loans0.44%0.37%0.33%0.10%0.05%-39 bps
Allowance / Loans1.85%1.89%1.95%2.03%1.86%+1 bps
Allowance Coverage of NPLs0.9x0.9x0.6x0.6x0.5x-0.4x
Capital
Tier 1 Leverage Ratio9.84%9.77%10.02%10.60%10.81%+96 bps
Total Risk-Based Capital15.60%15.46%15.95%16.87%16.59%+99 bps
Equity / Assets9.56%9.58%9.81%10.48%10.49%+93 bps
Liquidity & Funding
Loans / Deposits99.15%98.83%95.78%99.82%107.66%+850 bps
Liquid Assets / Assets4.07%4.34%7.62%4.42%3.66%-41 bps
CRE / Total Capitaln/a219%204%191.93%n/an/a

Source: FFIEC Call Report (031/041/051), as filed. Dollar figures derived from reported amounts in thousands. Ratios computed by CallReports.ai using published regulatory formulas. Income-statement figures are year-to-date as filed, annualized (the UBPR convention). Each quarter includes the ones before it.

CallReports · callreports.ai· Performance TrendsGenerated 2026-10-11

Heritage Bank, National Association

Spicer, MN · Cert 19254 · Peer group: banks under $1B in assets operating regionally (n=94) · Heritage Bancshares Group Employee STK Ownership PLAN&TR

National charter · OCC · 5 branches

Q2 2026

$361.1MAssets
$308.2MLoans
$286.3MDeposits
$37.9MEquity

Executive Summary

  • Strongest standing: total risk-based capital ratio outperforms 78% of banks under $1B in assets operating regionally (rank 21 of 94).
  • Widest gap: return on equity trails 98% of banks under $1B in assets operating regionally (rank 92 of 94).
  • Overall: at or above the peer median on 3 of 9 directional measures.

Return on Assets

-0.02%

Rank 92 of 94

Net Interest Margin

3.62%

Rank 61 of 94

Efficiency Ratio

106.18%

Rank 92 of 94

Equity / Assets

10.49%

Rank 42 of 94

Non-interest income vs. expense

$3.0M$17.1MINCOMEEXPENSE
Unfavorable gap of $14.2M · efficiency ratio beats 3% of banks under $1B in assets operating regionally
Bank 106.18%Peer median 62.4%Q2 2024Q2 2026Shaded: peer 25th to 75th percentile
MetricYour BankPeer 25thPeer MedianPeer 75thStandingRankPeer Position
Earnings
Return on Assets-0.02%0.82%1.19%1.46%Beats 2%92 / 94
Return on Equity-0.17%7.85%11.84%14.03%Beats 2%92 / 94
Net Interest Margin3.62%3.42%3.81%4.18%Beats 35%61 / 94
Efficiency Ratio106.18%55.99%62.41%73.02%Beats 3%92 / 94
Asset Quality
Nonperforming Loans / Loans3.84%0.19%0.47%1.14%Beats 4%91 / 94
Net Charge-Offs / Loans0.08%0.00%0.02%0.05%Beats 18%78 / 94
Capital
Tier 1 Capital Ratio15.33%10.28%11.95%15.07%Beats 77%22 / 94
Total Risk-Based Capital Ratio16.59%10.31%12.59%15.88%Beats 78%21 / 94
Equity / Assets10.49%8.98%10.21%11.41%Beats 55%42 / 94
Liquidity & Funding
Loans / Deposits107.66%72.62%84.44%94.55%95th pctl5 / 94
Loans / Assets85.36%62.50%72.84%78.99%88th pctl11 / 94
Brokered Deposits / Depositsn/aNot reported for this institution