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Virginia Heartland Bank

Fredericksburg, VA · Cert 27281

FDIC

Q4 2006

$291.1MAssets
$244.5MLoans
$234.5MDeposits
$26.0MEquity
Loan mix
71%RE $51.2M29%C&I $20.5M0%Consumer $0.1MQ4 2005Q4 2006
Deposit mix
93%Interest-bearing $217.5M7%Noninterest $17.1MQ4 2005Q4 2006

NIM

5.56%Q4 ’045.72%Q4 ’056.40%Q4 ’06+5%-2%

Non-interest income vs. expense

2.82%Q4 ’042.70%Q4 ’052.71%Q4 ’06+3%-1%

Executive Summary

  • Earnings: ROA of 1.41%, down 9 bps year over year; NIM at 4.04%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.00%.
  • Funding: loans stand at 104.26% of deposits as of Q4 2006.

Financial Results

Return on Assets (YTD, annualized)

1.41%-9 bps YoY

Net Interest Margin (YTD, annualized)

4.04%-7 bps YoY

Efficiency Ratio (YTD, annualized)

56.58%+84 bps YoY

Tier 1 Leverage Ratio

n/a

Year to date, annualized, through each quarter.

MetricQ4 2005Q1 2006Q2 2006Q3 2006Q4 2006YoY ΔTrend
Earnings
Return on Assets1.50%1.39%1.44%1.43%1.41%-9 bps
Return on Equity18.00%16.27%16.80%16.69%16.33%-167 bps
Net Interest Margin4.12%4.19%4.27%4.14%4.04%-7 bps
Efficiency Ratio55.74%57.29%56.80%56.32%56.58%+84 bps
Non-Interest Burden1.97%2.09%2.08%2.00%1.96%-1 bps
Growth
Asset Growth (YoY)15.08%11.32%12.07%6.59%4.34%-1,074 bps
Loan Growth (YoY)17.31%10.73%11.07%4.52%3.12%-1,420 bps
Deposit Growth (YoY)5.04%2.23%3.35%5.30%2.28%-276 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans-0.02%0.01%0.00%0.00%0.00%+2 bps
Allowance / Loans1.04%1.07%1.05%1.04%1.06%+1 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 Capital10.98%11.12%11.50%11.20%11.65%+67 bps
Equity / Assets8.38%8.64%8.74%8.47%8.92%+54 bps
Liquidity & Funding
Loans / Deposits103.42%101.89%100.13%100.06%104.26%+84 bps
Liquid Assets / Assets0.01%0.01%0.04%0.02%0.01%0 bps
CRE / Total Capitaln/an/an/an/an/an/an/a