Heritage Bank and Trust

Norfolk, VA · Cert 22411

FDIC · 5 branches

Q4 2015

$313.0MAssets

$211.7MLoans

$269.9MDeposits

$34.9MEquity

Loan mix

Deposit mix

NIM

Market Position · Virginia Beach-Norfolk-Newport News, VA-NC · 2015 SOD (annual) · 1.2% share · #12 of 30 inst. · $0.3B of $22.8B

2.4% Norfolk (City)

2.0% Virginia Beach (City)

1.2% Chesapeake (City)

Earnings: ROA of 0.87%, up 17 bps year over year; NIM at 2.83%.
Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.03%.

Return on Assets (quarter, annualized)

0.87%+17 bps YoY

Net Interest Margin (quarter, annualized)

2.83%-1 bps YoY

Efficiency Ratio (quarter, annualized)

62.63%-475 bps YoY

Tier 1 Leverage Ratio

10.56%

Discrete quarter, annualized.

Metric	Q4 2014	Q1 2015	Q2 2015	Q3 2015	Q4 2015	YoY Δ	Trend
Earnings
Return on Assets	0.70%	0.65%	0.59%	0.74%	0.87%	+17 bps
Return on Equity	6.75%	6.17%	5.47%	6.95%	8.11%	+136 bps
Net Interest Margin	2.84%	2.77%	2.90%	2.88%	2.83%	-1 bps
Efficiency Ratio	67.38%	75.97%	73.23%	67.02%	62.63%	-475 bps
Non-Interest Burden	1.85%	2.07%	2.08%	1.87%	1.56%	-29 bps
Growth
Asset Growth (YoY)	10.57%	-2.16%	-3.93%	-0.12%	-7.35%	-1,792 bps
Loan Growth (YoY)	3.78%	7.33%	-2.16%	-2.30%	-6.58%	-1,036 bps
Deposit Growth (YoY)	1.01%	1.35%	4.03%	9.23%	0.98%	-3 bps
Asset Quality
Nonperforming Loans / Loans	0.00%	0.00%	0.00%	0.00%	0.00%	0 bps
Net Charge-Offs / Loans	-0.01%	-0.01%	0.00%	0.00%	0.03%	+4 bps
Allowance / Loans	0.86%	0.83%	0.88%	0.89%	0.91%	+5 bps
Allowance Coverage of NPLs	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Capital
Tier 1 Leverage Ratio	n/a	10.27%	10.91%	10.93%	10.56%	n/a
Total Risk-Based Capital	14.08%	13.74%	14.03%	14.17%	14.71%	+63 bps
Equity / Assets	10.37%	10.84%	10.82%	10.44%	11.15%	+78 bps
Liquidity & Funding
Loans / Deposits	84.79%	84.56%	77.79%	73.48%	78.43%	-635 bps
Liquid Assets / Assets	18.32%	15.18%	17.33%	20.68%	16.95%	-137 bps
CRE / Total Capital	n/a	n/a	n/a	n/a	n/a	n/a	n/a