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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

5.85%Q4 ’046.59%Q4 ’057.26%Q4 ’06-4%+1%

Non-interest income vs. expense

4.14%Q4 ’043.98%Q4 ’054.00%Q4 ’06+12%-11%

Executive Summary

  • Earnings: ROA of -0.34%, down 57 bps year over year; NIM at 4.11%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.53%.
  • Funding: loans stand at 84.58% of deposits as of Q4 2006.

Financial Results

Return on Assets (quarter, annualized)

-0.34%-57 bps YoY

Net Interest Margin (quarter, annualized)

4.11%+3 bps YoY

Efficiency Ratio (quarter, annualized)

83.78%-868 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ4 2005Q1 2006Q2 2006Q3 2006Q4 2006YoY ΔTrend
Earnings
Return on Assets0.23%0.45%0.52%-0.92%-0.34%-57 bps
Return on Equity3.10%5.95%6.85%-12.01%-4.36%-746 bps
Net Interest Margin4.07%3.80%4.00%4.00%4.11%+3 bps
Efficiency Ratio92.47%85.59%80.43%151.45%83.78%-868 bps
Non-Interest Burden3.75%3.14%3.07%5.30%3.33%-42 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 / Loans0.59%0.27%0.56%0.44%0.53%-6 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