ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced unaudited financial results for the quarter ended June 30, 2011. Key aspects of the Company's results for the second quarter of 2011 include:
- A net loss of $481,000 or $0.06 per diluted share, which compared with net income of $128,000 or $0.02 per diluted share in the year-earlier quarter;
- Organic loan growth, excluding loans acquired in FDIC-assisted acquisitions, of $10.6 million or 3% on a linked-quarter basis;
- Core deposit growth, excluding certificates of deposit and brokered deposits, of $18.9 million or 4% on a linked-quarter basis;
- An increase in the allowance for loan losses to 1.58% of period-end loans, excluding loans acquired in FDIC-assisted acquisitions, from 1.51% of loans at March 31, 2011;
- A decline in annualized net charge-offs to 0.26% for the second quarter of 2011 from 2.80% on a linked-quarter basis; and
- A decline in nonperforming assets (NPAs), excluding loans acquired in FDIC-assisted acquisitions, to 1.17% from 1.66% on a linked-quarter basis.
Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "During the second quarter of 2011, we experienced significant costs and dedicated substantial Company resources to convert our second FDIC-assisted transaction, Citizens Bank of Effingham ("Citizens"), onto our core operating system. After the successful integration of Citizens, we have refocused our attention on strategic expansion to build our brand and branch footprint by seizing on other attractive opportunities to deploy our capital and position the Company for future growth.
"At the same time, the credit quality of our non-FDIC-assisted loan portfolio also improved in the second quarter," Dorminey continued. "We continue to manage our FDIC-acquired loan portfolios prudently, and have hired an experienced team to handle the workout of our FDIC-acquired assets and the complex requirements of loss-share agreements."
Additionally, the Company announced that its Board of Directors has authorized a new stock repurchase program in connection with the restricted shares issued under the 2011 equity incentive plan. Under the new program, the Company may purchase during the coming year up to 163,852 shares, or approximately 2% of its currently outstanding publicly held shares of common stock. The repurchases will be made from time to time in open-market or negotiated transactions as deemed appropriate by the Company and will depend on market conditions. The new program will expire in July 2012 unless completed sooner or otherwise extended.
Results of Operations
The Company reported a net loss of $481,000 or $0.06 per diluted share for the three months ended June 30, 2011, compared with net income of $128,000 or $0.02 per diluted share for the three months ended June 30, 2010. This $609,000 change in earnings was primarily the result of the following items:
- Increased non-interest expense of $4.0 million, reflecting $2.0 million in additional employee salaries and benefits directly linked to the hiring of 101 full-time equivalent employees in connection with the Company's recent expansion by acquisition;
- Higher write-downs for other real estate owned (OREO) of $647,000, excluding OREO acquired in FDIC-assisted acquisitions;
- Increased provision expense of $50,000, driven by growth in the non-FDIC-assisted loan portfolio, offset by:
- Improved net interest income of $1.7 million due to growth in interest-earning assets; and
- Improved non-interest income of $1.6 million, reflecting increases in service charges and mortgage-related fees of $240,000 and $553,000, respectively, coupled with an increase in gains on the sale of investment securities of $445,000.
The Company's results for the second quarter ended June 30, 2011, included acquisition-related expenses of $474,000 and a reduction in the pre-tax bargain purchase gain of $117,000. This reduction reflected the availability of updated information at June 30, 2011, concerning the intangible value of Citizens' core deposits acquired on February 18, 2011. Excluding the acquisition-related expenses and adjustment to the bargain purchase gain net of tax, the Company would have incurred a net loss of $96,000 or $0.01 per diluted share for the first quarter of 2011 (see reconciliation of non-GAAP items).
Net interest income for the first quarter increased 37% to $6.4 million from $4.7 million in the year-earlier quarter, primarily reflecting an increase in interest-earning assets related to both acquisitions and organic growth. The Company's net interest margin for the second quarter of 2011 decreased six basis points to 3.36% on a linked-quarter basis from 3.42% in the first quarter of 2011, and declined 19 basis points from 3.55% in the year-earlier period, reflecting excess liquidity related to the Company's capital raise in the fourth quarter of 2010 and acquisition activity, as those funds are currently deployed in lower-yielding investments.
The Company's total risk-based capital ratio at June 30, 2011, was 23.4%, significantly exceeding the required minimum of 10% to be considered a well-capitalized institution. This reflected, in part, the Company's second-step conversion and offering that was completed in November 2010, raising net proceeds of $61.4 million. The ratio of tangible common equity to total tangible assets was 12.3% as of June 30, 2011.
In the second quarter of 2011, the Company continued to post loan and deposit growth, with both increasing on a linked-quarter basis and rising significantly compared with the year-earlier quarter in all of its markets except Ocala. Ocala has been disproportionately affected by the real estate downturn and higher unemployment. Still, bank acquisitions, including the Company's second whole-bank acquisition in February 2011, accounted for much of the growth in loans and deposits over the past 12 months. At June 30, 2011, the Company's loan portfolio totaled $500.7 million, including loans acquired through FDIC-assisted acquisitions, up 1% from $496.1 million at March 31, 2011, including loans acquired through FDIC-assisted acquisitions. Total deposits stood at $763.7 million at the end of the second quarter of 2011, up 4% from $731.1 million at March 31, 2011.
Accounting for FDIC-Assisted Loans
The Company performs ongoing assessments of the estimated cash flows of its acquired FDIC-assisted loan portfolios. The FDIC-assisted loan portfolios consist of $60.4 million in covered and $24.2 million in non-covered loans as of June 30, 2011. The details of the accounting for the FDIC-assisted loan portfolios for the second quarter of 2011 are as follows:
- Covered loans acquired in FDIC-assisted acquisitions decreased $1.9 million from the first quarter of 2011;
- Non-covered loans acquired in FDIC-assisted acquisitions declined $4.0 million during the quarter;
- The FDIC indemnification asset associated with covered loans acquired in FDIC-assisted acquisitions remained unchanged at $58.2 million;
- The non-accretable discount decreased $3.7 million to $67.3 million; and
- The accretable discount increased $1.4 million to $4.1 million, and $224,000 was transferred to income.
At June 30, 2011, covered and non-covered loans acquired in FDIC-assisted acquisitions decreased to $60.4 million and $24.2 million, respectively, on a linked-quarter basis from $62.3 million and $28.3 million, respectively, driven by a combination of net charge-offs, principal reductions, and balance transfers from non-covered to covered. The net charge-offs for both the covered and non-covered loans were fully provided for by the associated loan discounts and expected reimbursement from the FDIC and did not affect the Company's loan loss reserve. Although the FDIC indemnification asset associated with covered FDIC-assisted loans remained unchanged at $58.2 million, $1.5 million of net charge-offs and another $158,000 in expenses associated with covered FDIC-assisted loans were set aside for FDIC reimbursement as of June 30, 2011.
The non-accretable discount decreased to $67.3 million at the end of the second quarter of 2011 from $71.0 million on a linked-quarter basis, due primarily to net charge-offs for the FDIC-assisted loan portfolios and a transfer to accretable discount. The accretable discount increased to $4.1 million for the current quarter from $2.7 million for the first quarter of 2011, reflecting a transfer from non-accretable, while $224,000 in accretable discount was recognized as interest income for the current quarter.
Asset Quality
Total nonperforming loans, excluding loans acquired in FDIC-assisted acquisitions, were $8.6 million at June 30, 2011, down from $9.1 million at March 31, 2011. OREO and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, were $2.7 million at June 30, 2011, down from $3.2 million at March 31, 2011, reflecting primarily one OREO write-down of $490,000. Nonperforming loans to total loans, excluding loans acquired in FDIC-assisted acquisitions, decreased to 2.06% as of June 30, 2011, from 2.24% as of March 31, 2011. Net charge-offs to average outstanding loans, excluding loans acquired in FDIC-assisted acquisitions, on an annualized basis, were 0.26% for the second quarter of 2011 versus 2.80% for the first quarter of 2011. Although improvement was noted in nonperforming assets and net charge-offs, management believes nonperforming assets will likely remain at elevated levels, at least in the near term, as a result of the continued weakness in the economy.
On a linked-quarter basis, the provision for loan losses increased to $700,000 for the second quarter of 2011 from $600,000 for the first quarter of 2011, driven primarily by growth in the non-FDIC-assisted loan portfolio. At June 30, 2011, the allowance for loan losses represented 1.58% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.51% at March 31, 2011.
About Heritage Financial Group, Inc. and HeritageBank of the South
Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving primarily South Georgia and North Central Florida through 21 full-service branch locations and 10 mortgage offices. As of June 30, 2011, the Company reported total assets of approximately $964 million and total stockholders' equity of approximately $122 million. For more information about the Company, visit HeritageBank of the South on the Web at www.eheritagebank.com and see Investor Relations under About Us.
Cautionary Note Regarding Forward Looking Statements
Except for historical information contained herein, the matters included in this news release and other information in the Company's filings with the Securities and Exchange Commission may contain certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995 and include this statement for purposes of these safe harbor provisions. Further information concerning the Company and its business, including additional factors that could materially affect our financial results, is included in our other filings with the SEC.
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HERITAGE FINANCIAL GROUP, INC. |
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Unaudited Reconciliation of Non-GAAP Measures Presented in Earnings Release |
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(In thousands, except per share amounts) |
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Three Months Ended
June 30, |
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| 2011 | 2010 | ||||||||
| Total noninterest income | $ | 3,560 | $ | 1,955 | |||||
| Bargain purchase gain adjustment | 117 | -- | |||||||
| Adjusted noninterest income | $ | 3,677 | $ | 1,955 | |||||
| Total noninterest expense | $ | 10,040 | $ | 6,026 | |||||
| Acquisition related expense | (474 | ) | -- | ||||||
| Adjusted noninterest expense | $ | 9,566 | $ | 6,026 | |||||
| Net income (loss) as reported | $ | (481 | ) | $ | 128 | ||||
| Bargain purchase gain & acquisition related expense, net of tax | 385 | -- | |||||||
| Adjusted net income (loss) | $ | (96 | ) | $ | 128 | ||||
| Diluted earnings (loss) per share | $ | (0.06 | ) | $ | 0.02 | ||||
| Bargain purchase gain & acquisition related expense, net of tax | 0.05 | -- | |||||||
| Adjusted diluted earnings (loss) per share | $ | (0.01 | ) | $ | 0.02 | ||||
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Net Income (Loss) and Diluted Earnings (Loss) Per Share are presented in accordance with Generally Accepted Accounting Principles (GAAP). Adjusted Noninterest Income, Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share are non-GAAP financial measures. The Company believes that these non-GAAP measures aid in understanding and comparing current-year and prior-year results, both of which include unusual items of different natures. These non-GAAP measures should be viewed in addition to, and not as a substitute for, the Company's reported results. |
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HERITAGE FINANCIAL GROUP, INC. |
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Unaudited Financial Highlights |
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(In thousands, except per share amounts) |
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Second Quarter Ended June 30, |
Six Months Ended
June 30, |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||||
| Interest income | $ | 9,109 | $ | 6,855 | $ | 17,733 | $ | 13,303 | ||||||||||
| Interest expense | 2,667 | 2,159 | 5,258 | 4,197 | ||||||||||||||
| Net interest income | 6,442 | 4,696 | 12,475 | 9,106 | ||||||||||||||
| Provision for loan losses | 700 | 650 | 1,300 | 1,150 | ||||||||||||||
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Net interest income after provision for loan losses |
5,742 | 4,046 | 11,175 | 7,956 | ||||||||||||||
| Noninterest income | 3,560 | 1,955 | 8,401 | 3,767 | ||||||||||||||
| Noninterest expense | 10,040 | 6,026 | 18,438 | 10,730 | ||||||||||||||
| Income (loss) before income taxes | (738 | ) | (25 | ) | 1,138 | 993 | ||||||||||||
| Income tax (benefit) expense | (257 | ) | (153 | ) | 404 | 66 | ||||||||||||
| Net income (loss) | $ | (481 | ) | $ | 128 | $ | 734 | $ | 927 | |||||||||
| Net income (loss) per share: | ||||||||||||||||||
| Basic* | $ | (0.06 | ) | $ | 0.02 | $ | 0.09 | $ | 0.11 | |||||||||
| Diluted* | $ | (0.06 | ) | $ | 0.02 | $ | 0.09 | $ | 0.11 | |||||||||
| Weighted average shares outstanding: | ||||||||||||||||||
| Basic | 8,214 | 8,469 | 8,200 | 10,151 | ||||||||||||||
| Diluted | 8,215 | 8,471 | 8,202 | 10,153 | ||||||||||||||
| Dividends declared per share* | $ | 0.03 | $ | 0.10 | $ | 0.03 | $ | 0.18 | ||||||||||
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June 30,
2011 |
December 31,
2010 |
June 30,
2010 |
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| Total assets | $ | 963,571 | $ | 755,436 | $ | 661,876 | ||||||||||||
| Cash and cash equivalents | 15,225 | 28,803 | 28,142 | |||||||||||||||
| Interest-bearing deposits in banks | 100,309 | 10,911 | 21,008 | |||||||||||||||
| Securities available for sale | 186,867 | 238,377 | 156,359 | |||||||||||||||
| Loans | 500,725 | 418,997 | 388,737 | |||||||||||||||
| Allowance for loan losses | 6,585 | 8,101 | 6,027 | |||||||||||||||
| Total deposits | 763,673 | 534,243 | 515,712 | |||||||||||||||
| Federal Home Loan Bank advances | 35,000 | 62,500 | 42,500 | |||||||||||||||
| Stockholders' equity | 122,038 | 119,340 | 62,359 | |||||||||||||||
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* Prior-period share and per share data have been adjusted throughout this press release to reflect the 0.8377:1 conversion ratio used in conjunction with the completion of the Company's second-step offering on November 30, 2010. |
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| Heritage Financial Group, Inc. | ||||||||||||||||||||
| Second Quarter 2011 Earnings Release Supplement | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||||
| Income Statement Data | ||||||||||||||||||||
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Interest income |
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| Loans | $ | 7,564 | $ | 5,763 | $ | 14,709 | $ | 11,083 | ||||||||||||
| Loans held for sale | 46 | - | 54 | - | ||||||||||||||||
| Securities - taxable | 1,221 | 790 | 2,428 | 1,566 | ||||||||||||||||
| Securities - nontaxable | 211 | 239 | 422 | 537 | ||||||||||||||||
| Federal funds sold | 16 | 18 | 29 | 27 | ||||||||||||||||
| Interest-bearing deposits in banks | 51 | 45 | 91 | 90 | ||||||||||||||||
| Total interest income | 9,109 | 6,855 | 17,733 | 13,303 | ||||||||||||||||
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Interest expense |
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| Deposits | 1,983 | 1,512 | 3,831 | 3,036 | ||||||||||||||||
| Other borrowings | 684 | 647 | 1,427 | 1,161 | ||||||||||||||||
| Total interest expense | 2,667 | 2,159 | 5,258 | 4,197 | ||||||||||||||||
| Net interest income | 6,442 | 4,696 | 12,475 | 9,106 | ||||||||||||||||
| Provision for loan losses | 700 | 650 | 1,300 | 1,150 | ||||||||||||||||
| Net interest income after provision for loan losses | 5,742 | 4,046 | 11,175 | 7,956 | ||||||||||||||||
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Non-interest income |
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| Service charges on deposit accounts | 1,222 | 982 | 2,273 | 1,806 | ||||||||||||||||
| Other service charges, fees & commissions | 749 | 466 | 1,409 | 868 | ||||||||||||||||
| Brokerage fees | 406 | 257 | 760 | 479 | ||||||||||||||||
| Mortgage origination fees | 624 | 71 | 892 | 110 | ||||||||||||||||
| Bank owned life insurance | 149 | 154 | 294 | 306 | ||||||||||||||||
| Gain on sale of securities | 453 | 8 | 453 | 160 | ||||||||||||||||
| Bargain purchase gain | (117 | ) | - | 2,217 | - | |||||||||||||||
| Other | 42 | 17 | 71 | 38 | ||||||||||||||||
| Total non-interest income | 3,560 | 1,955 | 8,401 | 3,767 | ||||||||||||||||
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Non-interest expense |
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| Salaries and employee benefits | 4,923 | 2,974 | 9,251 | 5,539 | ||||||||||||||||
| Equipment | 428 | 252 | 779 | 507 | ||||||||||||||||
| Occupancy | 536 | 329 | 981 | 636 | ||||||||||||||||
| Advertising & marketing | 220 | 124 | 384 | 244 | ||||||||||||||||
| Legal & accounting | 167 | 179 | 377 | 328 | ||||||||||||||||
| Consulting & other professional fees | 198 | 66 | 377 | 137 | ||||||||||||||||
| Director fees & retirement | 161 | 139 | 388 | 277 | ||||||||||||||||
| Telecommunications | 204 | 103 | 349 | 173 | ||||||||||||||||
| Supplies | 145 | 96 | 240 | 153 | ||||||||||||||||
| Data processing fees | 615 | 511 | 1,133 | 991 | ||||||||||||||||
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(Gain) loss on sale and write-downs of other real estate owned |
535 | (112 | ) | 937 | (344 | ) | ||||||||||||||
| Foreclosed asset expenses | 245 | 427 | 415 | 598 | ||||||||||||||||
| FDIC insurance and other regulatory fees | 354 | 228 | 647 | 399 | ||||||||||||||||
| Acquisition related expenses | 474 | 267 | 757 | 267 | ||||||||||||||||
| Other operating | 835 | 443 | 1,423 | 825 | ||||||||||||||||
| Total non-interest expense | 10,040 | 6,026 | 18,438 | 10,730 | ||||||||||||||||
| Income before taxes | (738 | ) | (25 | ) | 1,138 | 993 | ||||||||||||||
| Applicable income tax | (257 | ) | (153 | ) | 404 | 66 | ||||||||||||||
| Net income | $ | (481 | ) | $ | 128 | $ | 734 | $ | 927 | |||||||||||
| Weighted average shares - basic | 8,214 | 8,469 | 8,200 | 8,457 | ||||||||||||||||
| Weighted average shares - diluted | 8,215 | 8,471 | 8,202 | 8,458 | ||||||||||||||||
| Basic earnings per share | $ | (0.06 | ) | $ | 0.02 | $ | 0.09 | $ | 0.11 | |||||||||||
| Diluted earnings per share | (0.06 | ) | 0.02 | 0.09 | 0.11 | |||||||||||||||
| Cash dividend declared per share | 0.03 | 0.10 | 0.03 | 0.11 | ||||||||||||||||
| Heritage Financial Group, Inc. | ||||||||||||||||||||
| Second Quarter 2011 Earnings Release Supplement | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| June 30, | ||||||||||||||||||||
| 2011 | 2010 | |||||||||||||||||||
| Balance Sheet Data (Ending Balance) | ||||||||||||||||||||
| Total loans | $ | 500,724 | $ | 388,737 | ||||||||||||||||
| Loans held for sale | 5,579 | 448 | ||||||||||||||||||
| Covered loans | 60,427 | - | ||||||||||||||||||
| Allowance for loan losses | 6,585 | 6,027 | ||||||||||||||||||
| Total foreclosed assets | 9,693 | 3,019 | ||||||||||||||||||
| Covered other real estate owned | 6,968 | - | ||||||||||||||||||
| FDIC loss-share receivable | 58,152 | - | ||||||||||||||||||
| Intangible assets | 4,388 | 2,604 | ||||||||||||||||||
| Total assets | 963,571 | 661,876 | ||||||||||||||||||
| Non-interest-bearing deposits | 73,382 | 46,221 | ||||||||||||||||||
| Interest-bearing deposits | 690,291 | 469,491 | ||||||||||||||||||
| Federal Home Loan Bank advances | 35,000 | 42,500 | ||||||||||||||||||
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Federal funds purchased and securities sold under agreement to repurchase |
31,989 |
- 33,954 |
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| Stockholders' equity | 122,038 | 62,359 | ||||||||||||||||||
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| Total shares outstanding | 8,713 | 9,595 | ||||||||||||||||||
| Less treasury shares | - | 885 | ||||||||||||||||||
| Net shares outstanding | 8,713 | 8,710 | ||||||||||||||||||
| Shares held by Heritage, MHC | - | 6,592 | ||||||||||||||||||
| Unearned ESOP shares | 465 | 184 | ||||||||||||||||||
| Book value per share | $ | 14.80 | $ | 7.31 | ||||||||||||||||
| Tangible book value per share (non-GAAP) | 14.26 | 7.01 | ||||||||||||||||||
| Market value per share | 11.92 | 12.92 | ||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||||
| Average Balance Sheet Data | ||||||||||||||||||||
| Average interest-bearing deposits in banks | $ | 44,525 | $ | 40,967 | $ | 30,338 | $ | 37,193 | ||||||||||||
| Average federal funds sold | 20,447 | 27,384 | 22,279 | 20,693 | ||||||||||||||||
| Average investment securities | 210,261 | 112,447 | 219,396 | 115,370 | ||||||||||||||||
| Average loans | 501,929 | 364,052 | 479,390 | 350,426 | ||||||||||||||||
| Average mortgage loans held for sale | 3,878 | 30 | 2,307 | 15 | ||||||||||||||||
| Average FDIC loss-share receivable | 58,149 | - | 42,733 | - | ||||||||||||||||
| Average earning assets | 781,040 | 544,880 | 753,710 | 523,697 | ||||||||||||||||
| Average assets | 966,962 | 617,472 | 912,680 | 593,685 | ||||||||||||||||
| Average noninterest-bearing deposits | 70,346 | 38,743 | 61,380 | 33,957 | ||||||||||||||||
| Average interest-bearing deposits | 680,424 | 430,983 | 633,277 | 413,008 | ||||||||||||||||
| Average total deposits | 750,770 | 469,726 | 694,657 | 446,965 | ||||||||||||||||
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Average federal funds purchased and securities sold under agreement to repurchase |
31,664 | 33,498 | 31,616 | 33,273 | ||||||||||||||||
| Average Federal Home Loan Bank advances | 54,143 | 42,500 | 57,946 | 42,500 | ||||||||||||||||
| Average interest-bearing liabilities | 766,231 | 506,981 | 722,839 | 488,781 | ||||||||||||||||
| Average stockholders' equity | 122,528 | 62,251 | 121,388 | 61,698 | ||||||||||||||||
| Performance Ratios | ||||||||||||||||||||
| Annualized return on average assets | -0.20 | % | 0.08 | % | 0.16 | % | 0.31 | % | ||||||||||||
| Annualized return on average equity | -1.57 | % | 0.82 | % | 1.21 | % | 3.00 | % | ||||||||||||
| Net interest margin | 3.36 | % | 3.55 | % | 3.39 | % | 3.61 | % | ||||||||||||
| Net interest spread | 3.34 | % | 3.43 | % | 3.33 | % | 3.50 | % | ||||||||||||
| Efficiency ratio | 100.38 | % | 90.60 | % | 88.32 | % | 83.35 | % | ||||||||||||
| Capital Ratios | ||||||||||||||||||||
| Average stockholders' equity to average assets | 12.67 | % | 10.08 | % | 13.30 | % | 10.39 | % | ||||||||||||
| Tangible equity to tangible assets (non-GAAP) | 12.27 | % | 9.06 | % | 12.27 | % | 9.06 | % | ||||||||||||
| Tier 1 leverage ratio | 12.4 | % | 9.4 | % | 12.4 | % | 9.4 | % | ||||||||||||
| Tier 1 risk-based capital ratio | 22.2 | % | 13.6 | % | 22.2 | % | 13.6 | % | ||||||||||||
| Total risk-based capital ratio | 23.4 | % | 14.9 | % | 23.4 | % | 14.9 | % | ||||||||||||
| Other Information | ||||||||||||||||||||
| Full-time equivalent employees | 295 | 194 | 295 | 194 | ||||||||||||||||
| Number of full-service offices | 21 | 16 | 21 | 16 | ||||||||||||||||
| Mortgage loan offices | 10 | 1 | 10 | 1 | ||||||||||||||||
| Heritage Financial Group, Inc. | ||||||||||||||||||||
| Second Quarter 2011 Earnings Release Supplement | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Five Quarter Comparison for the Three Months Ended | ||||||||||||||||||||
| 6/30/11 | 3/31/11 | 12/31/10 | 9/30/10 | 6/30/10 | ||||||||||||||||
| Income Statement Data | ||||||||||||||||||||
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Interest income |
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| Loans | $ | 7,564 | $ | 7,145 | $ | 6,584 | $ | 6,136 | $ | 5,763 | ||||||||||
| Loans held for sale | 46 | 8 | 4 | 6 | - | |||||||||||||||
| Securities - taxable | 1,221 | 1,207 | 923 | 1,006 | 790 | |||||||||||||||
| Securities - nontaxable | 211 | 211 | 211 | 212 | 239 | |||||||||||||||
| Federal funds sold | 16 | 13 | 7 | 11 | 18 | |||||||||||||||
| Interest-bearing deposits in banks | 51 | 40 | 15 | 25 | 45 | |||||||||||||||
| Total interest income | 9,109 | 8,624 | 7,740 | 7,396 | 6,855 | |||||||||||||||
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Interest expense |
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| Deposits | 1,983 | 1,848 | 1,092 | 1,631 | 1,512 | |||||||||||||||
| Other borrowings | 684 | 743 | 695 | 659 | 647 | |||||||||||||||
| Total interest expense | 2,667 | 2,591 | 1,787 | 2,290 | 2,159 | |||||||||||||||
| Net interest income | 6,442 | 6,033 | 5,953 | 5,106 | 4,696 | |||||||||||||||
| Provision for loan losses | 700 | 600 | 3,400 | 950 | 650 | |||||||||||||||
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Net interest income after provision for loan losses |
5,742 | 5,433 | 2,553 | 4,156 | 4,046 | |||||||||||||||
|
Non-interest income |
||||||||||||||||||||
| Service charges on deposit accounts | 1,222 | 1,051 | 1,194 | 1,112 | 982 | |||||||||||||||
| Other service charges, fees & commissions | 749 | 660 | 553 | 643 | 466 | |||||||||||||||
| Brokerage fees | 406 | 354 | 337 | 253 | 257 | |||||||||||||||
| Mortgage origination fees | 624 | 268 | 270 | 227 | 71 | |||||||||||||||
| Bank owned life insurance | 149 | 145 | 151 | 153 | 154 | |||||||||||||||
| Life insurance proceeds | 32 | - | 916 | - | - | |||||||||||||||
| Gain on sale of securities | 453 | - | 63 | 71 | 8 | |||||||||||||||
| Bargain purchase gain | (117 | ) | 2,334 | 2,722 | - | - | ||||||||||||||
| Other | 42 | 29 | 32 | 19 | 17 | |||||||||||||||
| Total non-interest income | 3,560 | 4,841 | 6,238 | 2,478 | 1,955 | |||||||||||||||
|
Non-interest expense |
||||||||||||||||||||
| Salaries and employee benefits | 4,923 | 4,328 | 3,691 | 3,446 | 2,974 | |||||||||||||||
| Equipment | 428 | 351 | 320 | 304 | 252 | |||||||||||||||
| Occupancy | 536 | 445 | 452 | 424 | 329 | |||||||||||||||
| Advertising & marketing | 220 | 164 | 183 | 166 | 124 | |||||||||||||||
| Legal & accounting | 167 | 210 | 176 | 112 | 179 | |||||||||||||||
| Consulting & other professional fees | 198 | 179 | 156 | 71 | 66 | |||||||||||||||
| Director fees & retirement | 161 | 227 | 144 | 142 | 139 | |||||||||||||||
| Telecommunications | 204 | 145 | 213 | 132 | 103 | |||||||||||||||
| Supplies | 145 | 95 | 99 | 98 | 96 | |||||||||||||||
| Data processing fees | 615 | 518 | 594 | 604 | 511 | |||||||||||||||
|
(Gain) loss on sale and write-downs of other real estate owned |
535 | 402 | 326 | - | (112 | ) | ||||||||||||||
| Foreclosed asset expenses | 245 | 170 | 234 | 181 | 427 | |||||||||||||||
| FDIC insurance and other regulatory fees | 354 | 293 | 242 | 283 | 228 | |||||||||||||||
| Impairment loss on premises held for sale | - | - | - | - | - | |||||||||||||||
| Impairment loss on intangible assets | - | - | - | 1,000 | - | |||||||||||||||
| Acquisition related expenses | 474 | 282 | 103 | 256 | 267 | |||||||||||||||
| Other operating | 835 | 589 | 607 | 560 | 443 | |||||||||||||||
| Total non-interest expense | 10,040 | 8,398 | 7,540 | 7,779 | 6,026 | |||||||||||||||
| Income (loss) before taxes | (738 | ) | 1,876 | 1,251 | (1,145 | ) | (25 | ) | ||||||||||||
| Applicable income tax (benefit) | (257 | ) | 661 | 329 | (702 | ) | (153 | ) | ||||||||||||
| Net income (loss) | $ | (481 | ) | $ | 1,215 | $ | 922 | $ | (443 | ) | $ | 128 | ||||||||
| Weighted average shares - basic | 8,214 | 8,186 | 8,485 | 8,493 | 8,469 | |||||||||||||||
| Weighted average shares - diluted | 8,215 | 8,187 | 8,486 | 8,495 | 8,471 | |||||||||||||||
| Basic earnings (loss) per share | $ | (0.06 | ) | $ | 0.15 | $ | 0.11 | $ | (0.05 | ) | $ | 0.02 | ||||||||
| Diluted earnings (loss) per share | (0.06 | ) | 0.15 | 0.11 | (0.05 | ) | 0.02 | |||||||||||||
| Cash dividend declared per share | 0.03 | 0.03 | 0.11 | 0.11 | 0.11 | |||||||||||||||
|
|
||||||||||||||||||||
|
Heritage Financial Group, Inc. |
||||||||||||||||||||
| Second Quarter 2011 Earnings Release Supplement | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Five Quarter Comparison | ||||||||||||||||||||
| 6/30/11 | 3/31/11 | 12/31/10 | 9/30/10 | 6/30/10 | ||||||||||||||||
| Balance Sheet Data (at period end) | ||||||||||||||||||||
| Total loans | $ | 500,724 | $ | 496,067 | $ | 418,997 | $ | 413,980 | $ | 388,737 | ||||||||||
| Loans held for sale | 5,579 | 2,642 | 225 | 700 | 448 | |||||||||||||||
| Covered loans | 60,427 | 62,372 | - | - | - | |||||||||||||||
| Allowance for loan losses | 6,585 | 6,138 | 8,101 | 6,534 | 6,027 | |||||||||||||||
| Total foreclosed assets | 9,693 | 10,577 | 3,689 | 2,787 | 3,019 | |||||||||||||||
| Covered other real estate owned | 6,968 | 7,361 | - | - | - | |||||||||||||||
| FDIC loss-share receivable | 58,152 | 58,174 | - | - | - | |||||||||||||||
| Intangible assets | 4,388 | 4,713 | 2,912 | 1,489 | 2,604 | |||||||||||||||
| Total assets | 963,571 | 951,918 | 755,436 | 683,324 | 661,876 | |||||||||||||||
| Non-interest-bearing deposits | 73,382 | 63,134 | 44,769 | 48,014 | 46,221 | |||||||||||||||
| interest-bearing deposits | 690,291 | 667,954 | 489,474 | 487,378 | 469,491 | |||||||||||||||
| Federal home loan bank advances | 35,000 | 60,000 | 62,500 | 42,500 | 42,500 | |||||||||||||||
|
Federal funds purchased and securities sold under agreement to repurchase |
31,989 | 31,509 | 32,421 | 35,092 | 33,954 | |||||||||||||||
| Stockholders' equity | 122,038 | 121,331 | 119,340 | 63,085 | 62,359 | |||||||||||||||
| Total shares outstanding | 8,713 | 8,713 | 8,711 | 9,595 | 9,595 | |||||||||||||||
| Less treasury shares | - | - | - | 885 | 885 | |||||||||||||||
| Net shares outstanding | 8,713 | 8,713 | 8,711 | 8,710 | 8,710 | |||||||||||||||
| Unearned ESOP shares | 465 | 479 | 492 | 175 | 184 | |||||||||||||||
| Book value per share | $ | 14.80 | $ | 14.74 | $ | 14.52 | $ | 7.39 | $ | 7.31 | ||||||||||
| Tangible book value per share (non-GAAP) | 14.26 | 14.16 | 14.17 | 7.22 | 7.01 | |||||||||||||||
| Market value per share | 11.92 | 12.73 | 12.42 | 10.05 | 12.92 | |||||||||||||||
| Five Quarter Comparison | ||||||||||||||||||||
| 6/30/11 | 3/31/11 | 12/31/10 | 9/30/10 | 6/30/10 | ||||||||||||||||
| Average Balance Sheet Data | ||||||||||||||||||||
| Average interest-bearing deposits in banks | $ | 44,525 | $ | 16,150 | $ | 10,910 | $ | 19,003 | $ | 40,967 | ||||||||||
| Average federal funds sold | 20,447 | 24,111 | 11,181 | 17,320 | 27,384 | |||||||||||||||
| Average investment securities | 210,261 | 228,530 | 179,682 | 158,781 | 112,447 | |||||||||||||||
| Average loans | 501,929 | 456,851 | 419,572 | 397,421 | 364,052 | |||||||||||||||
| Average mortgage loans held for sale | 3,878 | 737 | 315 | 595 | 30 | |||||||||||||||
| Average FDIC Loss-Share Receivable | 58,149 | 58,174 | - | - | - | |||||||||||||||
| Average earning assets | 777,162 | 725,642 | 621,345 | 593,120 | 544,880 | |||||||||||||||
| Average assets | 966,962 | 858,398 | 712,689 | 676,789 | 617,472 | |||||||||||||||
| Average noninterest-bearing deposits | 70,346 | 52,414 | 49,612 | 48,258 | 38,743 | |||||||||||||||
| Average interest-bearing deposits | 680,424 | 586,129 | 491,903 | 480,785 | 430,983 | |||||||||||||||
| Average total deposits | 750,770 | 638,543 | 541,515 | 529,043 | 469,726 | |||||||||||||||
|
Average federal funds purchased and securities sold under agreement to repurchase |
31,664 | 31,568 | 35,234 | 34,607 | 33,498 | |||||||||||||||
| Average Federal Home Loan Bank advances | 54,143 | 61,749 | 44,435 | 42,500 | 42,500 | |||||||||||||||
| Average interest-bearing liabilities | 766,231 | 679,446 | 571,572 | 557,892 | 506,981 | |||||||||||||||
| Average stockholders' equity | 122,528 | 120,248 | 83,154 | 62,983 | 62,251 | |||||||||||||||
| Performance Ratios | ||||||||||||||||||||
| Annualized return on average assets | -0.20 | % | 0.57 | % | 0.52 | % | -0.26 | % | 0.08 | % | ||||||||||
| Annualized return on average equity | -1.57 | % | 4.04 | % | 4.44 | % | -2.81 | % | 0.82 | % | ||||||||||
| Net interest margin | 3.36 | % | 3.42 | % | 3.88 | % | 3.50 | % | 3.55 | % | ||||||||||
| Net interest spread | 3.34 | % | 3.32 | % | 3.78 | % | 3.40 | % | 3.43 | % | ||||||||||
| Efficiency ratio | 100.38 | % | 77.23 | % | 61.85 | % | 102.57 | % | 90.60 | % | ||||||||||
| Capital Ratios | ||||||||||||||||||||
| Average stockholders' equity to average assets | 12.67 | % | 14.01 | % | 11.67 | % | 9.31 | % | 10.08 | % | ||||||||||
| Tangible equity to tangible assets (non-GAAP) | 12.27 | % | 12.31 | % | 15.47 | % | 9.03 | % | 9.06 | % | ||||||||||
| Tier 1 leverage ratio | 12.4 | % | 13.4 | % | 16.1 | % | 8.7 | % | 9.4 | % | ||||||||||
| Tier 1 risk-based capital ratio | 22.2 | % | 23.3 | % | 25.1 | % | 13.4 | % | 13.6 | % | ||||||||||
| Total risk-based capital ratio | 23.4 | % | 24.5 | % | 26.4 | % | 14.7 | % | 14.9 | % | ||||||||||
| Other Information | ||||||||||||||||||||
| Full-time equivalent employees | 295 | 273 | 217 | 206 | 194 | |||||||||||||||
| Number of full-service offices | 21 | 20 | 16 | 16 | 16 | |||||||||||||||
| Mortgage loan offices | 10 | 5 | 1 | 1 | 1 | |||||||||||||||
| Heritage Financial Group, Inc. | ||||||||||||||||||||
| Second Quarter 2011 Earnings Release Supplement | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Six Months Ended | ||||||||||||||||||||
| June 30, | ||||||||||||||||||||
| 6/30/11 | 6/30/10 | |||||||||||||||||||
| Loans by Type | ||||||||||||||||||||
| Construction and land loans | $ | 26,688 | $ | 23,637 | ||||||||||||||||
| Farmland loans | 13,276 | 14,702 | ||||||||||||||||||
| Permanent 1 - 4 | 131,596 | 110,325 | ||||||||||||||||||
| Permanent 1 - 4 - junior liens and revolving | 26,140 | 27,178 | ||||||||||||||||||
| Multifamily | 12,755 | 12,601 | ||||||||||||||||||
| Nonresidential | 131,027 | 98,353 | ||||||||||||||||||
| Commercial business loans | 50,997 | 46,603 | ||||||||||||||||||
| Consumer and other loans | 23,592 | 32,684 | ||||||||||||||||||
| 416,071 | 366,083 | |||||||||||||||||||
| Loans acquired through FDIC-assisted acquisitions: | ||||||||||||||||||||
| Non covered loans | 24,227 | 22,654 | ||||||||||||||||||
| Covered loans | 60,427 | - | ||||||||||||||||||
| 500,725 | 388,737 | |||||||||||||||||||
| Asset Quality Data (excluding Loans acquired through FDIC-assisted acquisitions): | ||||||||||||||||||||
| Allowance for loan losses to total loans | 1.58 | % | 1.65 | % | ||||||||||||||||
| Allowance for loan losses to average loans | 1.48 | % | 1.77 | % | ||||||||||||||||
| Allowance for loan losses to non-performing loans | 76.67 | % | 80.21 | % | ||||||||||||||||
| Accruing past due loans | $ | 727 | $ | 2,498 | ||||||||||||||||
| Nonaccrual loans | 8,589 | 7,514 | ||||||||||||||||||
| Loans - 90 days past due & still accruing | - | - | ||||||||||||||||||
| Total non-performing loans | 8,589 | 7,514 | ||||||||||||||||||
| OREO and repossessed assets | 2,725 | 3,019 | ||||||||||||||||||
| Total non-performing assets | 11,314 | 10,533 | ||||||||||||||||||
| Non-performing loans to total loans | 2.06 | % | 2.05 | % | ||||||||||||||||
| Non-performing assets to total assets | 1.17 | % | 1.59 | % | ||||||||||||||||
| QTD Net charge-offs to average loans (annualized) | 0.26 | % | 0.51 | % | ||||||||||||||||
| Net charge-offs QTD | $ | 253 | $ | 439 | ||||||||||||||||
| YTD Net charge-offs to average loans (annualized) | 1.43 | % | 0.69 | % | ||||||||||||||||
| Net charge-offs YTD | $ | 2,816 | $ | 1,184 | ||||||||||||||||
| Heritage Financial Group, Inc. | ||||||||||||||||||||
| Second Quarter 2011 Earnings Release Supplement | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Five Quarter Comparison for the Quarter Ended | ||||||||||||||||||||
| 6/30/11 | 3/31/11 | 12/31/10 | 9/30/10 | 6/30/10 | ||||||||||||||||
| Loans by Type | ||||||||||||||||||||
| Construction and land loans | $ | 26,688 | $ | 27,580 | $ | 24,522 | $ | 24,263 | $ | 23,637 | ||||||||||
| Farmland loans | 13,276 | 13,707 | 12,339 | 14,658 | 14,702 | |||||||||||||||
| Permanent 1 - 4 | 131,596 | 129,371 | 131,293 | 123,275 | 110,325 | |||||||||||||||
| Permanent 1 - 4 - junior liens and revolving | 26,140 | 25,642 | 26,091 | 26,922 | 27,178 | |||||||||||||||
| Multifamily | 12,755 | 12,110 | 13,598 | 13,737 | 12,601 | |||||||||||||||
| Nonresidential | 131,027 | 119,325 | 110,079 | 108,440 | 98,353 | |||||||||||||||
| Commercial business loans | 50,997 | 52,662 | 52,589 | 50,230 | 46,603 | |||||||||||||||
| Consumer and other loans | 23,592 | 25,046 | 27,115 | 31,168 | 32,684 | |||||||||||||||
| 416,071 | 405,443 | 397,626 | 392,693 | 366,083 | ||||||||||||||||
| Loans acquired through FDIC-assisted acquisitions: | ||||||||||||||||||||
| Non covered | 24,227 | 28,252 | 21,371 | 21,287 | 22,654 | |||||||||||||||
| Covered loans | 60,427 | 62,372 | - | - | - | |||||||||||||||
| 500,725 | 496,067 | 418,997 | 413,980 | 388,737 | ||||||||||||||||
| Asset Quality Data (excluding Loans acquired through FDIC-assisted acquisitions): | ||||||||||||||||||||
| Allowance for loan losses to total loans | 1.58 | % | 1.51 | % | 2.04 | % | 1.66 | % | 1.65 | % | ||||||||||
| Allowance for loan losses to average loans | 1.48 | % | 1.59 | % | 2.03 | % | 1.74 | % | 1.77 | % | ||||||||||
| Allowance for loan losses to non-performing loans | 76.67 | % | 67.63 | % | 81.79 | % | 53.56 | % | 80.21 | % | ||||||||||
| Accruing past due loans | $ | 727 | $ | 1,245 | $ | 1,879 | $ | 899 | $ | 2,498 | ||||||||||
| Nonaccrual loans | 8,589 | 9,077 | 9,905 | 12,199 | 7,514 | |||||||||||||||
| Loans - 90 days past due & still accruing | - | - | - | - | - | |||||||||||||||
| Total non-performing loans | 8,589 | 9,077 | 9,905 | 12,199 | 7,514 | |||||||||||||||
| OREO and repossessed assets | 2,725 | 3,215 | 3,689 | 2,787 | 3,019 | |||||||||||||||
| Total non-performing assets | 11,314 | 12,292 | 13,594 | 14,986 | 10,533 | |||||||||||||||
| Non-performing loans to total loans | 2.06 | % | 2.24 | % | 2.49 | % | 3.11 | % | 2.05 | % | ||||||||||
| Non-performing assets to total assets | 1.17 | % | 1.29 | % | 1.80 | % | 2.19 | % | 1.59 | % | ||||||||||
| Net charge-offs to average loans (annualized) | 0.26 | % | 2.80 | % | 1.84 | % | 0.47 | % | 0.51 | % | ||||||||||
| Net charge-offs | $ | 253 | $ | 2,563 | $ | 1,833 | $ | 443 | $ | 439 | ||||||||||
|
Note: |
||||||||||||||||||||
| Certain prior-period amounts have been reclassified to conform with current presentation. | ||||||||||||||||||||
| Prior period share and per share data have been adjusted for the 0.8377:1 conversion ratio in conjunction with the completion of the second step stock offering on November 30, 2010. | ||||||||||||||||||||
| Loans acquired through FDIC-assisted acquisitions include loans acquired in the acquisition of The Tattnall Bank in December of 2009 and the acquisition of Citizens Bank of Effingham in February 2011. The acquisition of The Tattnall Bank did not involve a loss-share agreement with the FDIC. The acquisition of Citizens Bank of Effingham involved a loss-share agreement in which the FDIC will, for a specified number of years, reimburse the Bank for 80% of all losses and related expenses on covered assets. | ||||||||||||||||||||