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Hanover Bank

Mechanicsville, VA · Cert 35515

FDIC

Q1 2006

$138.5MAssets
$119.6MLoans
$98.4MDeposits
$10.5MEquity
Loan mix
69%RE $31.7M31%C&I $14.3M1%Consumer $0.3MQ1 2005Q1 2006
Deposit mix
84%Interest-bearing $82.9M16%Noninterest $15.5MQ1 2005Q1 2006

NIM

6.07%Q1 ’045.87%Q1 ’056.38%Q1 ’06-3%-3%

Non-interest income vs. expense

3.60%Q1 ’043.83%Q1 ’052.89%Q1 ’06+8%-28%

Executive Summary

  • Earnings: ROA of 0.66%, up 10 bps year over year; NIM at 3.67%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.08%.
  • Funding: loans stand at 121.54% of deposits as of Q1 2006.

Financial Results

Return on Assets (quarter, annualized)

0.66%+10 bps YoY

Net Interest Margin (quarter, annualized)

3.67%-11 bps YoY

Efficiency Ratio (quarter, annualized)

72.17%-2,244 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ1 2005Q2 2005Q3 2005Q4 2005Q1 2006YoY ΔTrend
Earnings
Return on Assets0.56%0.31%0.62%0.71%0.66%+10 bps
Return on Equity7.04%3.60%7.47%8.79%8.34%+130 bps
Net Interest Margin3.78%3.97%3.73%3.85%3.67%-11 bps
Efficiency Ratio94.61%81.03%72.41%70.34%72.17%-2,244 bps
Non-Interest Burden3.56%3.15%2.59%2.63%2.55%-100 bps
Growth
Asset Growth (YoY)0.30%3.07%13.86%15.78%26.07%+2,576 bps
Loan Growth (YoY)6.02%11.08%17.53%22.73%29.70%+2,367 bps
Deposit Growth (YoY)0.80%-2.25%-0.47%5.12%2.99%+218 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.11%0.08%-0.05%0.05%0.08%-4 bps
Allowance / Loans1.06%1.03%1.06%1.09%1.00%-6 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 Capital12.00%11.24%10.88%10.84%10.09%-191 bps
Equity / Assets8.89%8.50%8.07%8.18%7.56%-133 bps
Liquidity & Funding
Loans / Deposits96.52%106.44%110.01%107.07%121.54%+2,503 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