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Heritage Bank, National Association

New York, NY · Cert 58858

FDIC

Q4 2012

$490.5MAssets
$269.9MLoans
$387.3MDeposits
$100.6MEquity
Loan mix
56%RE $115.2M40%C&I $82.2M4%Consumer $7.8MQ4 2011Q4 2012
Deposit mix
70%Interest-bearing $270.3M30%Noninterest $116.9MQ4 2011Q4 2012

NIM

4.79%Q4 ’104.19%Q4 ’113.48%Q4 ’12-9%-16%

Non-interest income vs. expense

3.71%Q4 ’103.81%Q4 ’112.89%Q4 ’12-6%-20%

Executive Summary

  • Earnings: ROA of 0.23%, up 1 bps year over year; NIM at 3.05%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net recoveries of 0.09%.
  • Funding: loans stand at 69.70% of deposits as of Q4 2012.

Financial Results

Return on Assets (quarter, annualized)

0.23%+1 bps YoY

Net Interest Margin (quarter, annualized)

3.05%-57 bps YoY

Efficiency Ratio (quarter, annualized)

86.41%-740 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ4 2011Q1 2012Q2 2012Q3 2012Q4 2012YoY ΔTrend
Earnings
Return on Assets0.22%-0.18%-0.58%-0.14%0.23%+1 bps
Return on Equity2.08%-1.41%-3.70%-0.77%1.11%-97 bps
Net Interest Margin3.62%1.08%3.33%3.31%3.05%-57 bps
Efficiency Ratio93.81%120.52%109.84%78.55%86.41%-740 bps
Non-Interest Burden3.36%1.34%3.76%2.64%2.69%-68 bps
Growth
Asset Growth (YoY)3.86%2.20%4.90%-1.51%-6.43%-1,029 bps
Loan Growth (YoY)-8.53%-2.77%-0.78%-4.02%-11.36%-282 bps
Deposit Growth (YoY)8.17%-3.67%-10.16%-9.12%-16.85%-2,501 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans-0.02%0.00%0.00%0.08%-0.09%-7 bps
Allowance / Loans1.95%0.01%0.21%0.55%0.65%-130 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 Capital17.23%21.06%20.50%29.21%32.28%+1,505 bps
Equity / Assets10.34%15.61%15.61%20.91%20.50%+1,017 bps
Liquidity & Funding
Loans / Deposits65.38%74.35%81.82%81.27%69.70%+432 bps
Liquid Assets / Assets3.73%1.61%2.95%4.32%16.44%+1,272 bps
CRE / Total Capitaln/an/an/an/an/an/an/a