Herald National Bank (NYSE AMEX: HNB), a full-service commercial
bank, today reported results for the second quarter of 2011, ended
June 30. It was the fourth consecutive quarter of sustained
profitability for Herald, which opened as a de novo bank in
November 2008.
“Herald National Bank successfully achieved a full 12 months of
uninterrupted profitability in less than three years of operation.
This was the direct outcome of the bank’s consistent focus on
superior asset quality as we continued to pursue our unique
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 highlights for the quarter included the following:
- Net income for the quarter was $76,000,
versus a loss of $3.9 million in the same period a year ago. Second
quarter results reflected expenses of $280,000 related to the
bank’s previously disclosed pending merger with BankUnited, Inc.
(NYSE:BKU). For the first six months of the year, 2011 net income
was $282,000 as compared to a loss of $5.8 million in 2010.
- Total assets as of June 30 were $486.6
million, down 2.9% from $501.1 million in the first quarter. As
compared to the second quarter of 2010, assets increased 4.8 % from
$464.1 million.
- Deposits as of June 30, 2011 were
$431.0 million, of which 90.4% were core deposits and 30.8% were
checking accounts. This represents an increase of 5.6% from $408.0
million a year ago and a slight decline of 1.4% from $437.1 million
at March 31, 2011.
- Net interest margin in the second
quarter improved to 4.02% from 3.87% in the first quarter of 2011.
This compares to 4.10% in the same period of 2010.
- Reflecting the continuing tight credit
market, total loans declined to $319.6 million at March 31, 2011
from $322.0 million the prior quarter and $343.2 million at June
30, 2010.
- Tier 1 leverage ratio was 10.58% at
June 30, 2011, compared to 10.61% in the prior period and 10.73% in
the second quarter last year. This level continues to exceed the
minimum regulatory capital ratios applicable to the bank.
- Nonperforming loans totaled $1.4
million at June 30, 2011. The bank did not set aside a provision
for loan and lease losses as its nonperforming asset ratio to total
assets is 0.30% and its nonperforming assets to loans is 0.45%. The
Bank believes it is adequately reserved with a loan loss allowance
to loan ratio of 1.91%
“The second quarter of 2011 produced our highest operating
profit to date and, excepting the expenses associated with our
pending merger transaction, would have been our most profitable
reporting period on record. Our anticipated merger with BankUnited
later this year will further enhance stockholder value by bringing
additional resources that will strengthen Herald’s ability to
expand its market reach and support the continued delivery of
top-quality relationship banking services to small and mid-sized
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 Six months
ended June 30, June 30,
Statement of
Operations
2011
2010
2011
2010
Interest income $ 5,490 $ 5,708 $ 11,000 $ 11,172 Interest expense
944 1,166
1,932 2,454 Net interest income
4,546 4,542 9,068 8,718 Provision for loan losses - 3,053 100 3,740
Noninterest income 392 116 734 223 Noninterest expense
4,834 5,504
9,360 10,974 Pretax income (loss)
104 (3,899 ) 342 (5,773 ) Tax expense
28
27 60 51 Net
income (loss)
$ 76 $
(3,926 ) $ 282
$ (5,824 ) Basic
earnings (loss) per share $ 0.01 $ (0.32 ) $ 0.02 $ (0.62 )
Weighted average shares - basic 12,218 12,185 12,218 9,412
Selected Financial Highlights
Data at End of
Period
6/30/2011 3/31/2011
12/31/2010 9/30/2010
6/30/2010 Total loans $ 319,570 $ 321,990 $
332,909 $ 349,555 $ 343,162 Allowance for loan losses 6,112 6,265
6,404 5,554 6,837 Nonperforming assets 1,442 1,666 433 494 2,166
Securities available for sale 107,397 108,200 132,076 59,334 69,080
Securities held to maturity 16,203 16,347 16,657 10,215 23,449
Total assets 486,551 501,114 504,690 439,265 464,104 Total deposits
430,974 437,145 430,569 375,672 407,950 Stockholders' equity 52,313
51,066 50,679 52,300 52,288 Net interest margin 4.02 % 3.87 % 4.10
% 4.10 % 4.10 % Cost of funds 1.22 % 1.25 % 1.14 % 1.26 % 1.49 %
Capital
Ratios
Equity to Assets 10.75 % 10.19 % 10.04 % 11.91 % 11.27 % Tier 1
Leverage Ratio 10.58 % 10.61 % 10.97 % 10.98 % 10.73 % Tier 1
Risk-based Capital Ratio 15.86 % 15.53 % 15.10 % 14.96 % 14.25 %
Total Risk-based Capital Ratio 17.11 % 16.78 % 16.36 % 16.21 %
15.51 %
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