NEW YORK–(Business Wire)–
Herald National Bank (NYSE AMEX: HNB), a New York-based full-service commercial
bank, announced today the completion of a private placement of 10.7 million
shares of its common stock and Series A preferred stock at $3.00 per share. The
private placement was completed in two tranches, with the first tranche of $7.5
million closing December 30, 2009 and the second tranche of $24.5 million
closing on March 31, 2010. The gross proceeds to Herald National Bank from the
offering were approximately $32 million, prior to the deduction of placement
fees and offering expenses. The offering was lead by Sandler O’Neill + Partners,
LP with participation from Freeman & Co. Securities LLC.

Key highlights of the offering include:

* Approximately $29 million in additional tier one capital, net of estimated
offering related expenses
* Chairman of the Board, Raymond A. Nielsen elected to the additional position
of Chief Executive Officer

“The capital raise enhances Herald National Bank`s capital position and
increases our pro-forma tier one capital ratio to a level considerably in excess
of that required of de novo banks, which is significantly higher than the ratio
required of older more established banks,” stated Herald National Bank
President, David S. Bagatelle. “We are pleased to have the support of our
institutional investors and look forward to working with them as we continue to
build our relationship based franchise in the New York metropolitan area,” he
concluded.

“The investors in this offering have reaffirmed their confidence in our business
plan and our ability to execute. Unlike many offerings in the financial services
sector these days, our offering was not about balance sheet repair, rather the
capital we raised strengthens our bank`s ability to work with and lend to many
of the premier middle market businesses in our market area,” added Chairman of
the Board and CEO, Raymond A. Nielsen.

New York-based, Clinton Group was the lead investor in the offering with a 24.9%
investment in the Bank. In total five new institutional investors participated
in the offering including: The Clinton Group, Blue Atlantic Capital, Triumph
Investment Funds, and ALDA Capital, LLC. In addition to the new investors, four
of Herald National Bank`s initial institutional investors and Raymond A. Nielsen
also participated in the private placement.

“Our investment in Herald is based on our confidence in this management team and
the capacity to capitalize on the many opportunities that exist for a locally
managed, middle market bank in the New York metropolitan area,” stated George
Hall, President and CEO, of The Clinton Group. “We were attracted to the clean
balance sheet, core deposit growth, and recent measures taken to improve their
operational efficiency,” he continued.

David Perez, of Palladium Equity Partners, an initial investor in the bank and
participant in this offering commented, “Our team at Palladium contributed to
the recapitalization of Herald National Bank because of a continued belief in
the fundamentals of this business plan and its long-term potential in this
marketplace and the ability of management to execute on that plan.”

Immediately following the offering, Herald National Bank also made several
changes to its management and board structure designed to enhance the oversight
and operations of the bank. First, the bank has separated the offices of Chief
Executive Officer and President, with current Chairman of the Board Raymond A.
Nielsen assuming the office of Chief Executive Officer, subject to regulatory
non-objection. David S. Bagatelle has retained the office of President – a move
that allows Bagatelle to focus on day-to-day management and direct support of
the bank`s business development efforts. Second, the Board of Directors has
reduced in size from 15 persons to 10 persons, resulting in resignations from
five directors to accommodate the reduction in size. As a result of significant
investments by The Clinton Group and ALDA Capital, LLC the Board of Directors
expects to nominate representatives of each entity to serve on the Board of
Directors, subject to regulatory non-objection, which will be expected to result
in two additional director resignations.

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). As of
December 31, 2009 the bank had $443 million in assets of which $301 million were
loans. Deposits at December 31, 2009 were $405 million, of which 93% were core
deposits and 35% of which were checking accounts, largely the operating accounts
of the businesses served by the bank.

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.

Photos/Multimedia Gallery Available:

http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6236592〈=en

Press Inquiries:
Herald National Bank
Adam Moskowitz, 646-521-6234

Copyright Business Wire 2010