Herald National Bank Reports Q3 2009 Financial Results

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Continued Loan growth drives increases in net interest margin and assets
NEW YORK--(Business Wire)--
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 %

Press Inquiries:
KDJ Communications
Jenna Focarino, 212-461-2158
jenna@kdjcommunications.com

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