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Heritage Co-operative Bank

Salem, MA · Cert 26514

FDIC

Q4 2005

$270.8MAssets
$193.9MLoans
$230.0MDeposits
$26.6MEquity
Deposit mix
93%Interest-bearing $213.6M7%Noninterest $16.4MQ4 2004Q4 2005

NIM

5.14%Q4 ’035.20%Q4 ’045.53%Q4 ’05+7%-8%

Non-interest income vs. expense

2.15%Q4 ’032.52%Q4 ’046.75%Q4 ’05+565%+182%

Executive Summary

  • Earnings: ROA of -3.10%, down 386 bps year over year; NIM at 3.17%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.01%.
  • Funding: loans stand at 84.27% of deposits as of Q4 2005.

Financial Results

Return on Assets (quarter, annualized)

-3.10%-386 bps YoY

Net Interest Margin (quarter, annualized)

3.17%-26 bps YoY

Efficiency Ratio (quarter, annualized)

185.49%+11,792 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ4 2004Q1 2005Q2 2005Q3 2005Q4 2005YoY ΔTrend
Earnings
Return on Assets0.76%0.82%0.97%0.77%-3.10%-386 bps
Return on Equity7.12%7.84%9.30%7.36%-30.56%-3,768 bps
Net Interest Margin3.44%3.49%3.50%3.34%3.17%-26 bps
Efficiency Ratio67.57%66.89%60.17%70.99%185.49%+11,792 bps
Non-Interest Burden2.23%2.22%1.95%2.27%6.29%+406 bps
Growth
Asset Growth (YoY)4.59%4.58%5.35%8.26%7.62%+303 bps
Loan Growth (YoY)5.75%13.36%13.62%15.71%14.56%+881 bps
Deposit Growth (YoY)4.61%4.73%5.07%5.65%3.48%-113 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.01%0.00%0.01%0.01%0.01%0 bps
Allowance / Loans1.02%0.99%0.98%0.94%0.92%-10 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 Capital17.92%18.17%18.20%17.83%16.32%-160 bps
Equity / Assets10.59%10.42%10.53%10.48%9.82%-77 bps
Liquidity & Funding
Loans / Deposits76.12%76.80%78.30%82.37%84.27%+815 bps
Liquid Assets / Assets0.00%0.00%0.00%0.00%0.00%0 bps
CRE / Total Capitaln/an/an/an/an/an/an/a