Herald National Bank (NYSE AMEX: HNB), a full-service commercial
bank, today reported results for the third quarter of 2011, ended
September 30. The profitability trend over the prior 12 months
continued in the third quarter for Herald, which opened as a de
novo bank in November 2008.
“Herald National Bank successfully achieved its fifth
consecutive quarter of profitability in less than three years of
operation. We continue to operate from a foundation of strong asset
quality and sound risk management, as we pursue our
relationship-based business banking model serving small and
middle-market customers across the greater New York metropolitan
area,” said Chairman and Chief Executive Officer Raymond A.
Nielsen.
Key third quarter highlights included the following:
- As of September 30, Herald recorded net
income of $466,000 for the first nine months of the year, reversing
a loss of $5.5 million in the same period in 2010. For the quarter,
net income was $184,000, versus $321,000 last year.
- Total assets as of September 30
increased to $486.7 million, up 10.80% from $439.3 million a year
ago and up 0.03% from $486.6 million in the previous quarter.
- Deposits at quarter’s end were $414.1
million, of which 90% were core deposits and 34% were checking
accounts. This represents an increase of 10.23% from $375.7 million
a year ago and a moderate decline of 3.92% from $431.0 million at
June 30, 2011.
- Net interest margin in the third
quarter improved to 4.11% from 4.02% in the second quarter. This
compares to a margin of 4.10% in the third quarter last year.
- Reflecting the continuing tight credit
market, total loans declined incrementally by 0.22%, to $318.9
million at September 30, versus $319.6 million in the prior
quarter. As compared to a year ago, loans decreased 8.85% from
$349.8 million.
- Tier 1 leverage ratio improved to
10.94% as of September 30 from 10.58% at June 30 and 10.73% in the
third quarter last year. This level continues to exceed the minimum
regulatory capital ratios applicable to the bank.
- Nonperforming loans in the third
quarter declined by 20.19% to $1.15 million from $1.44 million in
the second quarter. The Bank did not set aside a provision for loan
and lease losses for the quarter ended September 30, 2011 as there
was no loan growth during the quarter and asset quality improved.
The Bank believes it is adequately reserved with a loan loss
allowance to loan ratio of 1.86%
“We are very encouraged by the bank’s continued profitability
and sustained operating performance during this ongoing cycle of
economic uncertainty. Our anticipated merger with Bank United later
this year will bring significant additional resources that will
strengthen Herald’s ability to expand its market penetration and
support the continued delivery of top quality relationship banking
services to small and midsized customers,” Mr. Nielsen said.
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
This Press Release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that reflect the current views of Herald National Bank with respect
to, among other things, future events and financial
performance. Herald National Bank generally identifies
forward-looking statements by terminology such as “outlook”,
“believes,” “expects,” “potential,” “continues,” “may,” “will,”
“could,” “should,” “seeks,” “approximately,” “predicts,” “intends,”
“plans,” “estimates,” “anticipates” or the negative version of
those words or other comparable words. Any forward-looking
statements contained in this Press Release are based on the current
plans, estimates and expectations of Herald National Bank. The
inclusion of this forward-looking information should not be
regarded as a representation by Herald National Bank that the
future plans, estimates or expectations contemplated herein will be
achieved. Such forward-looking statements are subject to various
risks and uncertainties and assumptions relating to Herald National
Bank’s respective operations, financial results, financial
condition, business prospects, ability to complete the merger,
growth, strategy and liquidity. If one or more of these or other
risks or uncertainties materialize, or if the underlying
assumptions prove to be incorrect, actual results may vary
materially from those indicated in these statements. These factors
should not be construed as exhaustive. Herald National Bank
undertakes no obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments or otherwise. A number of important factors
could cause actual results to differ materially from those
indicated by the forward-looking statements. Information on these
factors can be found in the 2010 Annual Reports on Form 10-K
Herald National Bank, and in the Quarterly Reports on
Form 10-Q Herald National Bank, filed with the Office of the
Comptroller of the Currency and available at Herald National’s
website (www.heraldnb.com).
Additional Information for Stockholders
In connection with the proposed merger, BankUnited has filed
with the SEC a Registration Statement on Form S-4 that will
include a Proxy Statement of Herald National Bank and a Prospectus
of BankUnited, as well as other relevant documents concerning the
proposed transaction. INVESTORS ARE URGED TO READ THE REGISTRATION
STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER
WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED BY
BANKUNITED WITH THE SEC AND BY HNB WITH THE OCC, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION.
Investors will be able to obtain a free copy of the Proxy
Statement/Prospectus, as well as other filings containing
information about BankUnited and Herald National Bank at the SEC’s
website (http://www.sec.gov), and with respect to Herald National
Bank, its website (www.Heraldnb.com). You will also be able to
obtain these documents, free of charge, at
http://www.bankunited.com under the tab “About Us” and then under
the heading “Investor Relations” and then under “SEC Filings.”
Copies of the Proxy Statement/Prospectus and the SEC and OCC
filings that will be incorporated by reference in the Proxy
Statement/Prospectus can also be obtained, free of charge, by
directing a request to Douglas J. Pauls, 14817 Oak Lane, Miami
Lakes, FL 33016, (305) 461-6841.
BankUnited and Herald National Bank and their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the stockholders of Herald
National Bank in connection with the proposed merger. Information
about the directors and executive officers of BankUnited is set
forth in the Annual Report on Form 10-K of BankUnited for the
year ended December 31, 2010, as filed with the SEC on
March 31, 2011. Information about the directors and executive
officers of Herald National Bank is set forth in the proxy
statement for Herald National Bank’s 2011 annual meeting of
stockholders, as filed with the OCC and posted on Herald National
Bank’s website and dated April 22, 2011. Additional
information regarding the interests of those persons and other
persons who may be deemed participants in the transaction may be
obtained by reading the Proxy Statement/Prospectus regarding the
proposed merger when it becomes available. You may obtain free
copies of this document as described in the preceding
paragraph.
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
2011
2010
2011
2010
Interest income $ 5,393 $ 5,576 $ 16,393 $ 16,748 Interest expense
792 1,019
2,724 3,473
Net interest income 4,601 4,557 13,669 13,275 Provision for loan
losses - 293 100 4,034 Noninterest income 556 478 1,290 701
Noninterest expense
4,944
4,395 14,304
15,368 Pretax income (loss) 213 347 555 (5,426
) Tax expense
29 26
89 77
Net income (loss)
$ 184
$ 321 $
466 $ (5,503
) Basic earnings (loss) per share $ 0.02 $ 0.03
$ 0.04 $ (0.53 ) Weighted average shares - basic 12,218 12,201
12,218 10,352
Selected Financial Highlights
Data at End of
Period
9/30/2011
6/30/2011
3/31/2011
12/31/2010
9/30/2010
Total loans $ 318,854 $ 319,570 $ 321,990 $ 332,909 $ 349,555
Allowance for loan losses 5,924 6,112 6,265 6,404 5,554
Nonperforming assets 1,151 1,442 1,666 433 494 Securities available
for sale 137,129 107,397 108,200 132,076 59,334 Securities held to
maturity 12,989 16,203 16,347 16,657 10,215 Total assets 486,718
486,551 501,114 504,690 439,265 Total deposits 414,087 430,974
437,145 430,569 375,672 Stockholders' equity 53,776 52,313 51,066
50,679 52,300 Net interest margin 4.11 % 4.02 % 3.87 % 4.10 % 4.10
% Cost of funds 1.08 % 1.22 % 1.25 % 1.14 % 1.26 %
Capital
Ratios
Equity to Assets 11.05 % 10.75 % 10.19 % 10.04 % 11.91 % Tier 1
Leverage Ratio 10.94 % 10.58 % 10.61 % 10.97 % 10.98 % Tier 1
Risk-based Capital Ratio 15.87 % 15.86 % 15.53 % 15.10 % 14.96 %
Total Risk-based Capital Ratio 17.12 % 17.11 % 16.78 % 16.36 %
16.21 %
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