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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

$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