HNB Herald National Bank Common Stock

Herald National Bank (NYSE AMEX: HNB), a New York-based full-service commercial bank, announced today financial results for its third quarter ending September 30, 2009, its fourth operating quarter since opening in November 2008.

Key highlights for the quarter ended September 30, 2009 include:

• Total assets increased 40% to $366 million from $261 million.
• Loan originations of $126 million drove asset growth during the quarter. Total loans increased 128% from $99 million to $225 million.
• Deposits increased 51% during the quarter, to $326 million from $216 million, of which 90% are core deposits.
• Tier 1 capital ratios currently stand at 10.36%, maintaining a level well in excess of the 5% benchmark necessary to be designated a "well capitalized" institution by the FDIC.

• Net interest margin increased to 2.58%, up from 1.82% at June 30, 2009.
• Net loss prior to the provision for loan losses was $4MM for the quarter, an improvement of $2.4MM or 37% against the $6.4MM loss for the period ended June 30, 2009, which is due to lower operating expenses and an increase in net interest income.

According to third quarter data presently available from SNL Financial, Herald National Bank’s asset growth for the year to date ranks highest among all commercial banks headquartered in New York as well as all de novo banks having started in the nation since 2006.

“The significant increase in our net interest margin stemming from our loan and deposit growth as well as our decreased quarterly loss is a clear indication that we are executing on our business plan," said David S. Bagatelle, President and CEO of Herald National Bank. "We look forward to continuing our present rate of growth, as we drive toward profitability by maintaining the high level of dedicated one-on-one service that our clients have come to expect from all of our private client teams."

Consistent with the Bank’s business plan and as approved by our shareholders at the Bank’s Annual Meeting on September 22, 2009, the Bank expects to complete its previously announced capital raise during the 4th quarter 2009.

About Herald National Bank

Herald National Bank is a relationship-based banking institution dedicated to serving the commercial and private banking needs of small to mid-size businesses, their owners, executives and senior managers, as well as high net worth individuals in the New York metropolitan area. Herald National Bank presently has three offices located in Manhattan (623 Fifth Avenue), Brooklyn (1333 60th Street), and Melville, Long Island (58 South Service Road).

For more information, visit www.heraldnb.com.

Forward Looking Statements Disclaimer

Certain matters in this press release constitute forward-looking statements that involve assumptions and potential risks and uncertainties, which are made in a manner consistent with the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance and achievements of Herald National Bank to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. These factors include: general economic, capital market and business conditions; risks arising from litigation or similar proceedings; interest rate fluctuations; levels of delinquent loans; employee turnover; government regulation; and those other factors discussed in the filings of Herald National Bank with the Office of the Comptroller of the Currency. Herald National Bank undertakes no obligation, and expressly disclaims any obligation, to update publicly or revise any forward looking statement, which speaks only as of the date it is made, whether as a result of new information, future events or otherwise.

   

Herald National Bank

Financial Highlights

(unaudited)

(dollars in thousands, except per share data)

  Three months ended Nine months ended September 30, September 30,

Statement of Operations (1)

2009

 

2008

2009

 

2008

Interest income $ 2,773 $ 46 $ 4,848 $ 126 Interest expense   1,026     -     1,978     -   Net interest income 1,747 46 2,870 126 Provision for loan losses 1,454 - 2,441 - Noninterest income 77 - 169 - Noninterest expense, net   5,844     2,529     20,814     5,161   Pretax loss (5,474 ) (2,483 ) (20,216 ) (5,035 ) Tax expense   26     14     34     78   Net loss $ (5,500 ) $ (2,497 ) $ (20,250 ) $ (5,113 )   (1) During the three and nine month periods ending September 30, 2008, the Bank was a development stage corporation and the Bank was in formation.   Basic earnings per share $ (0.89 ) n/a $ (3.27 ) n/a Weighted average shares - basic 6,201 n/a 6,201 n/a   Selected Financial Highlights

Data at End of Period

9/30/2009

6/30/2009

3/31/2009

12/31/2008

Total loans $ 225,418 $ 98,876 $ 42,927 $ 10,249 Allowance for loan losses 2,546 1,092 459 105 Securities available for sale 78,693 90,042 70,714 28,885 Securities held to maturity 32,635 30,713 - - Total assets 366,095 261,475 160,097 74,817 Total deposits 326,278 216,147 114,686 22,069 Stockholders' equity 31,317 36,176 42,998 50,430 Net loss before provision for loan losses (4,045 ) (6,379 ) (7,383 ) n/a Net interest margin 2.58 % 1.82 % 1.36 % n/a  

Capital Ratios

Equity to Assets 8.55 % 13.84 % 26.86 % 67.40 % Tier 1 Leverage Ratio 10.36 % 16.90 % 37.73 % 189.75 % Tier 1 Risk-based Capital Ratio 12.06 % 24.34 % 53.00 % 139.24 % Total Risk-based Capital Ratio 13.05 % 25.07 % 53.56 % 139.53 %