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Heritage Bank, National Association

Holstein, IA · Cert 25243

FDIC

Q2 2011

$136.8MAssets
$98.0MLoans
$114.0MDeposits
$13.9MEquity
Loan mix
72%RE $50.9M22%C&I $15.4M7%Consumer $4.8MQ2 2010Q2 2011
Deposit mix
79%Interest-bearing $89.8M21%Noninterest $24.1MQ2 2010Q2 2011

NIM

5.42%Q2 ’095.24%Q2 ’105.15%Q2 ’11+8%+7%

Non-interest income vs. expense

3.46%Q2 ’093.62%Q2 ’103.99%Q2 ’11-24%+26%

Executive Summary

  • Earnings: ROA of 0.77%, up 12 bps year over year; NIM at 4.28%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 1.16%.
  • Funding: loans stand at 85.95% of deposits as of Q2 2011.

Financial Results

Return on Assets (YTD, annualized)

0.77%+12 bps YoY

Net Interest Margin (YTD, annualized)

4.28%+30 bps YoY

Efficiency Ratio (YTD, annualized)

74.21%+604 bps YoY

Tier 1 Leverage Ratio

n/a

Year to date, annualized, through each quarter.

MetricQ2 2010Q3 2010Q4 2010Q1 2011Q2 2011YoY ΔTrend
Earnings
Return on Assets0.65%-0.02%0.32%1.16%0.77%+12 bps
Return on Equity6.79%-0.22%3.30%11.91%7.80%+101 bps
Net Interest Margin3.98%4.15%4.14%4.41%4.28%+30 bps
Efficiency Ratio68.18%69.56%69.66%76.59%74.21%+604 bps
Non-Interest Burden2.29%2.50%2.49%3.20%2.89%+60 bps
Growth
Asset Growth (YoY)1.27%-2.27%0.36%0.96%-1.66%-292 bps
Loan Growth (YoY)-3.83%-2.39%-0.27%-4.26%-7.73%-390 bps
Deposit Growth (YoY)-1.33%-1.05%0.85%3.49%1.58%+291 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans1.07%2.00%1.63%0.66%1.16%+9 bps
Allowance / Loans1.98%2.03%1.92%1.88%1.92%-7 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 Capital13.54%13.45%13.58%14.80%14.99%+145 bps
Equity / Assets9.72%9.87%9.56%9.85%10.18%+46 bps
Liquidity & Funding
Loans / Deposits94.61%93.92%94.42%86.89%85.95%-867 bps
Liquid Assets / Assets0.00%0.00%0.71%0.72%2.41%+241 bps
CRE / Total Capitaln/an/an/an/an/an/an/a