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Heritage Bank

Louisville, CO · Cert 90579

FDIC

Q4 2006

$435.1MAssets
$313.7MLoans
$370.9MDeposits
$34.3MEquity
Loan mix
65%RE $52.8M33%C&I $26.8M2%Consumer $1.9MQ4 2005Q4 2006
Deposit mix
84%Interest-bearing $310.1M16%Noninterest $60.8MQ4 2005Q4 2006

NIM

5.69%Q4 ’046.03%Q4 ’057.12%Q4 ’06-7%+3%

Non-interest income vs. expense

4.07%Q4 ’043.87%Q4 ’053.97%Q4 ’06+5%+13%

Executive Summary

  • Earnings: ROA of -0.07%, down 48 bps year over year; NIM at 4.05%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.47%.
  • Funding: loans stand at 84.58% of deposits as of Q4 2006.

Financial Results

Return on Assets (YTD, annualized)

-0.07%-48 bps YoY

Net Interest Margin (YTD, annualized)

4.05%+11 bps YoY

Efficiency Ratio (YTD, annualized)

93.61%+711 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 Assets0.41%0.45%0.49%0.02%1-0.07%-48 bps
Return on Equity5.49%5.95%6.41%0.27%-0.88%-637 bps
Net Interest Margin3.94%3.80%3.92%3.94%4.05%+11 bps
Efficiency Ratio86.50%85.59%82.97%97.46%93.61%+711 bps
Non-Interest Burden3.33%3.14%3.12%3.84%3.78%+45 bps
Growth
Asset Growth (YoY)8.86%3.74%2.22%-1.85%-4.67%-1,353 bps
Loan Growth (YoY)12.13%7.06%5.42%1.41%-3.54%-1,567 bps
Deposit Growth (YoY)2.53%8.15%10.08%9.19%5.09%+257 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.44%0.27%0.41%0.42%0.47%+3 bps
Allowance / Loans0.95%0.97%0.90%0.89%1.30%+35 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 Capital10.18%10.38%10.33%10.15%10.75%+57 bps
Equity / Assets7.48%7.68%7.64%7.65%7.89%+41 bps
Liquidity & Funding
Loans / Deposits92.15%87.09%86.97%88.21%84.58%-757 bps
Liquid Assets / Assets0.17%0.17%0.17%0.17%0.18%+1 bps
CRE / Total Capitaln/an/an/an/an/an/an/a