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 and year ended December 31, 2011. Key aspects of the Company's results for the year ended 2011 include:
- Net income of $3.8 million, or $0.47 per diluted share, compared with net income of $1.4 million or $0.17 per diluted share for the year ended 2010;
- Excluding special items for each year, net income was $1.6 million or $0.19 per diluted share versus a net loss of $434,000 or $0.05 per diluted share for 2010 (see reconciliation of non-GAAP items);
- Organic loan growth, excluding loans acquired in FDIC-assisted acquisitions, of $36.8 million or 9% from 2010;
- Loans acquired through FDIC-assisted acquisitions increased $104.8 million or 490% from 2010, driven primarily by two FDIC-assisted acquisitions completed during 2011;
- A decrease in the allowance for loan losses to 1.72% of period-end loans, excluding loans acquired in FDIC-assisted acquisitions, from 2.04% of period-end loans, excluding loans acquired in FDIC-assisted acquisitions, for 2010;
- A slight increase in annualized net charge-offs to 0.91% for 2011 from 0.87% for 2010; and
- A decline in nonperforming assets (NPAs) to total assets, excluding loans acquired in FDIC-assisted acquisitions, to 0.95% at year-end 2011 from 1.80% at year-end 2010.
Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "This past year marked a period of historic growth for our company as we completed two strategic FDIC-assisted acquisitions that vastly expanded our branch network and increased our market share in Southeast Georgia. We have fully integrated these acquisitions and continue to explore other opportunities for strategic expansion.
"During 2011, we saw a dramatic decrease in our provision expense as we continue to experience improvement in the credit quality in our loan portfolio, excluding loans acquired through FDIC-assisted acquisitions," Dorminey continued. "We are optimistic about the prospects for continued improvement in our financial performance in 2012."
Fourth Quarter 2011 Results of Operations
The Company reported net income of $1.4 million, or $0.16 per diluted share, for the three months ended December 31, 2011, compared with net income of $922,000 or $0.11 per diluted share for the three months ended December 31, 2010. This $430,000 improvement in earnings was primarily the result of the following items:
- Improved net interest income of $3.3 million due to growth in interest-earning assets;
- Lower provision expense of $2.8 million reflecting lower net charge-offs compared with the 2010 quarter; offset by
- Reduced noninterest income of $3.1 million, reflecting a $2.7 million bargain purchase gain associated with the Tattnall FDIC-assisted acquisition and $916,000 of life insurance proceeds on a former key employee recorded during the 2010 quarter, partially offset by improvement in mortgage banking fees of $404,000; and
- Increased non-interest expense of $3.0 million due to increased salaries and employment benefits of $2.1 million driven by the acquisition-related hiring of an additional 121 full-time equivalent employees, on top of growth in most other noninterest expense categories.
The Company's results for the three months ended December 31, 2011, included acquisition-related expenses, net of tax, of $177,000 and a $477,000 income tax benefit for state tax credits recorded as the Company returned to core profitability. Excluding special items, the Company would have reported net income of $1.1 million or $0.13 per diluted share for the fourth quarter of 2011 compared with a net loss of $1.6 million or $0.19 per diluted share in the fourth quarter of 2010 (see reconciliation of non-GAAP items).
Net interest income for the fourth quarter increased 55% to $9.2 million from $5.9 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 fourth quarter of 2011 increased 75 basis points to 4.19% on a linked-quarter basis from 3.44% in the third quarter of 2011 and increased 31 basis points from 3.88% in the year-earlier period. The improvement in the fourth quarter of 2011 net interest margin on a linked-quarter basis was driven by an increase in loan yields on the Company's FDIC-assisted loan portfolios, coupled with a decline in the cost of interest bearing deposits as rates continue to reset to lower levels.
The Company's estimated total risk-based capital ratio at December 31, 2011, was 19.2%, significantly exceeding the required minimum of 10% to be considered a well-capitalized institution. The ratio of tangible common equity to total tangible assets was 11.0% as of December 31, 2011.
In the fourth quarter of 2011, the Company continued to post organic and acquisition-related loan growth, increasing on a linked-quarter basis and advancing significantly compared with the year-earlier quarter. Still, bank acquisitions, including the Company's second and third whole-bank acquisitions in February 2011 and August 2011, respectively, accounted for much of the growth in loans and deposits over the past 12 months. At December 31, 2011, the Company's loan portfolio, including loans acquired through FDIC-assisted acquisitions, totaled $560.6 million, which was flat on a linked-quarter basis as a result of organic loan growth of $14.4 million, which offset loan pay-downs in the FDIC-assisted portfolios. Total deposits stood at $884.2 million at the end of the fourth quarter of 2011, down $15.9 million or 2% from $900.1 million at September 30, 2011, driven primarily by planned time deposit runoff.
Accounting for FDIC-Assisted Loans
The Company performs ongoing assessments of the estimated cash flows of its acquired FDIC-assisted loan portfolios. The fair value of the FDIC-assisted loan portfolios consist of $107.5 million in covered and $18.7 million in non-covered loans as of December 31, 2011, compared with $116.2 million in covered and $24.7 million in non-covered loans as of September 30, 2011. The principal balance of the FDIC-assisted loan portfolios totaled $228.4 million as of December 31, 2011, compared with $248.6 million as of September 30, 2011. The details of the accounting for the FDIC-assisted loan portfolios for the fourth quarter of 2011 are as follows:
- Covered loans acquired in FDIC-assisted acquisitions decreased $8.7 million to $107.5 million;
- Non-covered loans acquired in FDIC-assisted acquisitions decreased $6.0 million to $18.7 million;
- The FDIC loss-share receivable associated with covered loans acquired in FDIC-assisted acquisitions decreased $3.9 million to $83.9 million;
- The accretion for the FDIC loss-share receivable turned negative $72,000;
- The non-accretable discount decreased $9.3 million to $89.5 million; and
- The accretable discount increased $4.0 million to $12.8 million.
At December 31, 2011, covered and non-covered loans acquired in FDIC-assisted acquisitions decreased to $107.5 million and $18.7 million, respectively, on a linked-quarter basis from $116.2 million and $24.7 million, respectively, primarily driven by loan pay-downs. 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. The FDIC loss-share receivable associated with covered FDIC-assisted loans decreased $3.9 million from $87.8 million in the prior quarter to $83.9 million, driven by $3.2 million of reimbursements received from the FDIC.
The non-accretable discount decreased to $89.5 million at the end of the fourth quarter of 2011 from $98.8 million on a linked-quarter basis, primarily driven by net charge-offs in the FDIC-assisted loan portfolios and transfers to accretable discount. The accretable discount increased to $12.8 million for the current quarter from $8.8 million on a linked-quarter basis, primarily driven by transfers from accretable discount as a result of the improvement in cash flows received from the Company's FDIC-assisted loan portfolios. Moreover, the improvement in cash flows received also negatively affected the accretion for the loss-share receivable and turned it negative $72,000.
Asset Quality
Total nonperforming loans, excluding loans acquired in FDIC-assisted acquisitions, were $7.0 million at December 31, 2011, down from $8.0 million at September 30, 2011. Other real estate owned and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, were $3.4 million at December 31, 2011, up from $1.8 million at September 30, 2011, and primarily driven by the resolution process of moving nonperforming loans to foreclosure. Nonperforming loans to total loans, excluding loans acquired in FDIC-assisted acquisitions, decreased to 1.62% as of December 31, 2011, from 1.90% as of September 30, 2011. Net charge-offs to average outstanding loans, excluding loans acquired in FDIC-assisted acquisitions, on an annualized basis, were 0.04% for the fourth quarter of 2011 versus 0.73% for the third quarter of 2011, while the year-to-date net charge-offs were 0.91% as of December 31, 2011, versus 0.87% as of December 31, 2010.
The provision for loan losses decreased to $595,000 for the fourth quarter of 2011 from $1.0 million for the third quarter of 2011, driven primarily by a decrease in annualized net charge-offs. At December 31, 2011, the allowance for loan losses represented 1.72% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.65% at September 30, 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 22 full-service branch locations, 11 mortgage offices, and 3 investment offices. As of December 31, 2011, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $124 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. These statements can be identified by the fact that they do not relate strictly to historical or current facts and often use words or phrases "opportunities," "prospects," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions. The forward-looking statements made herein represent the current expectations, plans or forecasts of the Company's future results and revenues. The Company intends 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. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and are often beyond the Company's control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements. Investors should not place undue reliance on any forward-looking statement and should consider the uncertainties and risks, discussed under Item 1A. "Risk Factors" of the Company's 2010 Annual Report on Form 10-K and in any of the Company's subsequent SEC filings. Further information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in its 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 |
Twelve Months Ended |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Total noninterest income | $ | 3,172 | $ | 6,238 | $ | 17,467 | $ | 12,483 | ||||||||
|
Bargain purchase gain |
-- |
(2,722 |
) |
(4,217 |
) |
(2,722 |
) |
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|
Life insurance proceeds |
-- |
(916 |
) |
-- |
(916 |
) |
||||||||||
| Adjusted noninterest income | $ | 3,172 | $ | 2,600 | $ | 13,250 | $ | 8,845 | ||||||||
| Total noninterest expense | $ | 10,528 | $ | 7,540 | $ | 38,746 | $ | 26,049 | ||||||||
| Acquisition related expense | (254 | ) | (103 | ) | (1,309 | ) | (627 | ) | ||||||||
|
Impairment of intangible asset (Florida bank charter) |
-- | -- | -- | (1,000 | ) | |||||||||||
| Adjusted noninterest expense | $ | 10,274 | $ | 7,437 | $ | 37,437 | $ | 24,422 | ||||||||
| Net income as reported | $ | 1,352 | $ | 922 | $ | 3,825 | $ | 1,406 | ||||||||
|
Bargain purchase gain and acquisition related expense, net of tax* |
177 | (1,633 | ) | (2,259 | ) | (1,633 | ) | |||||||||
| Life insurance proceeds, net of tax* | -- | (916 | ) | -- | (916 | ) | ||||||||||
|
Impairment of intangible asset (Florida bank charter), net of tax* |
-- | -- | -- | 709 | ||||||||||||
| Adjustment for state tax credits | (477 | ) | -- | -- | -- | |||||||||||
| Adjusted net income (loss) | $ | 1,052 | $ | (1,627 | ) | $ | 1,566 | $ | (434 | ) | ||||||
| Diluted earnings per share | $ | 0.16 | $ | 0.11 | $ | 0.47 | $ | 0.17 | ||||||||
| Bargain purchase gain and acquisition related expense, net of tax* | 0.02 | (0.19 | ) | (0.28 | ) | (0.19 | ) | |||||||||
|
Life insurance proceeds, net of tax * |
-- | (0.11 | ) | -- | (0.11 | ) | ||||||||||
|
Impairment of intangible asset (Florida bank charter), net of tax* |
|
-- |
|
-- |
-- |
0.08 |
||||||||||
| Adjustment for state tax credits | (0.05 | ) | -- | -- | -- | |||||||||||
| Adjusted diluted earnings (loss) per share | $ | 0.13 | $ | (0.19 | ) | $ | 0.19 | $ | (0.05 | ) | ||||||
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* The effective tax rate is used for the period presented to determine net of tax amounts. |
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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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Three Months Ended |
Twelve Months Ended |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||
| Interest income | $ | 11,569 | $ | 7,740 | $ | 39,449 | $ | 28,439 | ||||||
| Interest expense | 2,357 | 1,787 | 10,350 | 8,274 | ||||||||||
| Net interest income | 9,212 | 5,953 | 29,099 | 20,165 | ||||||||||
| Provision for loan losses | 595 | 3,400 | 2,895 | 5,500 | ||||||||||
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Net interest income after provision for loan losses |
8,617 | 2,553 | 26,204 | 14,665 | ||||||||||
| Noninterest income | 3,172 | 6,238 | 17,467 | 12,484 | ||||||||||
| Noninterest expense | 10,528 | 7,540 | 38,746 | 26,050 | ||||||||||
| Income before income taxes | 1,261 | 1,251 | 4,925 | 1,099 | ||||||||||
| Income tax (benefit) expense | (91 | ) | 329 | 1,100 | (307 | ) | ||||||||
| Net income | $ | 1,352 | $ | 922 | $ | 3,825 | $ | 1,406 | ||||||
| Net income per share: | ||||||||||||||
| Basic* | $ | 0.16 | $ | 0.11 | $ | 0.47 | $ | 0.17 | ||||||
| Diluted* | $ | 0.16 | $ | 0.11 | $ | 0.47 | $ | 0.17 | ||||||
| Weighted average shares outstanding: | ||||||||||||||
| Basic | 8,229,293 | 8,485,215 | 8,211,302 | 8,424,394 | ||||||||||
| Diluted | 8,230,206 | 8,485,733 | 8,212,521 | 8,432,282 | ||||||||||
| Dividends declared per share* | $ | 0.03 | $ | 0.11 | $ | 0.12 | $ | 0.43 | ||||||
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Dec. 31, |
Sept 30, |
Dec. 31, |
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| Total assets | $ | 1,089,852 | $ | 1,102,504 | $ | 755,436 | ||||||||
| Cash and cash equivalents | 34,521 | 23,292 | 28,803 | |||||||||||
| Interest-bearing deposits in banks | 43,101 | 99,211 | 10,911 | |||||||||||
| Securities available for sale | 259,017 | 218,384 | 238,377 | |||||||||||
| Loans | 560,620 | 560,940 | 418,997 | |||||||||||
| Allowance for loan losses | 7,494 | 6,936 | 8,101 | |||||||||||
| Total deposits | 884,187 | 900,103 | 534,243 | |||||||||||
| Federal Home Loan Bank advances | 35,000 | 35,000 | 62,500 | |||||||||||
| Stockholders' equity | 124,136 | 123,638 | 119,340 | |||||||||||
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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. | |||||||||||||||
| Fourth Quarter 2011 Earnings Release Supplement | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||
| Income Statement Data | |||||||||||||||
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Interest income |
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| Loans | $ | 9,945 | $ | 6,581 | $ | 33,428 | $ | 23,800 | |||||||
| Loans held for sale | 198 | 3 | 297 | 10 | |||||||||||
| Securities - taxable | 1,095 | 923 | 4,536 | 3,495 | |||||||||||
| Securities - nontaxable | 251 | 211 | 880 | 960 | |||||||||||
| Federal funds sold | 15 | 7 | 60 | 45 | |||||||||||
| interest-bearing deposits in banks | 65 | 15 | 248 | 129 | |||||||||||
| Total interest income | 11,569 | 7,740 | 39,449 | 28,439 | |||||||||||
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Interest expense |
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| Deposits | 1,671 | 1,092 | 7,550 | 5,759 | |||||||||||
| Other borrowings | 686 | 695 | 2,800 | 2,515 | |||||||||||
| Total interest expense | 2,357 | 1,787 | 10,350 | 8,274 | |||||||||||
| Net interest income | 9,212 | 5,953 | 29,099 | 20,165 | |||||||||||
| Provision for loan losses | 595 | 3,400 | 2,895 | 5,500 | |||||||||||
| Net interest income after provision for loan losses | 8,617 | 2,553 | 26,204 | 14,665 | |||||||||||
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Non-interest income |
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| Service charges on deposit accounts | 1,237 | 1,194 | 4,777 | 4,113 | |||||||||||
| Other service charges, fees & commissions | 879 | 553 | 3,034 | 2,064 | |||||||||||
| Brokerage fees | 298 | 337 | 1,386 | 1,070 | |||||||||||
| Mortgage banking fees | 674 | 270 | 2,285 | 606 | |||||||||||
| Bank owned life insurance | 148 | 151 | 588 | 610 | |||||||||||
| Life insurance proceeds | - | 916 | 32 | 916 | |||||||||||
| Impairment loss on securities available for sale | (43 | ) | - | (43 | ) | - | |||||||||
| Gain on sale of securities | 18 | 63 | 684 | 294 | |||||||||||
| Bargain purchase gain | - | 2,722 | 4,217 | 2,722 | |||||||||||
| Accretion of FDIC loss share receivable | (72 | ) | - | 381 | - | ||||||||||
| Other | 33 | 32 | 126 | 88 | |||||||||||
| Total non-interest income | 3,172 | 6,238 | 17,467 | 12,483 | |||||||||||
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Non-interest expense |
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| Salaries and employee benefits | 5,758 | 3,691 | 20,393 | 12,676 | |||||||||||
| Equipment | 701 | 320 | 1,996 | 1,131 | |||||||||||
| Occupancy | 613 | 452 | 2,279 | 1,512 | |||||||||||
| Advertising & marketing | 233 | 183 | 785 | 593 | |||||||||||
| Legal & accounting | 93 | 176 | 588 | 616 | |||||||||||
| Consulting & other professional fees | 131 | 156 | 716 | 364 | |||||||||||
| Director fees & retirement | 151 | 144 | 699 | 563 | |||||||||||
| Telecommunications | 274 | 213 | 829 | 517 | |||||||||||
| Supplies | 151 | 99 | 547 | 350 | |||||||||||
| Data processing fees | 856 | 594 | 2,846 | 2,190 | |||||||||||
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(Gain) loss on sale and write-downs of other real estate owned |
(119 | ) | 326 | 388 | (18 | ) | |||||||||
| Foreclosed asset expenses | 22 | 234 | 725 | 1,013 | |||||||||||
| FDIC insurance and other regulatory fees | 179 | 242 | 954 | 924 | |||||||||||
| Impairment loss on intangible assets | - | - | - | 1,000 | |||||||||||
| Acquisition related expenses | 254 | 103 | 1,309 | 627 | |||||||||||
| Deposit Intangible expense | 207 | 55 | 692 | 276 | |||||||||||
| Other operating | 1,024 | 552 | 3,000 | 1,715 | |||||||||||
| Total non-interest expense | 10,528 | 7,540 | 38,746 | 26,049 | |||||||||||
| Income before taxes | 1,261 | 1,251 | 4,925 | 1,099 | |||||||||||
| Applicable income tax | (91 | ) | 329 | 1,100 | (307 | ) | |||||||||
| Net income | $ | 1,352 | $ | 922 | $ | 3,825 | $ | 1,406 | |||||||
| Weighted average shares - basic | 8,229,293 | 8,485,215 | 8,211,302 | 8,424,394 | |||||||||||
| Weighted average shares - diluted | 8,230,206 | 8,485,733 | 8,212,521 | 8,432,282 | |||||||||||
| Basic earnings per share | $ | 0.16 | $ | 0.11 | $ | 0.47 | $ | 0.17 | |||||||
| Diluted earnings per share | 0.16 | 0.11 | 0.47 | 0.17 | |||||||||||
| Cash dividend declared per share | 0.03 | 0.11 | 0.12 | 0.43 | |||||||||||
| Heritage Financial Group, Inc. | ||||||||||||||||
| Fourth Quarter 2011 Earnings Release Supplement | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||
| December 31, | ||||||||||||||||
| 2011 | 2010 | |||||||||||||||
| Balance Sheet Data (Ending Balance) | ||||||||||||||||
| Total loans | $ | 560,620 | $ | 418,997 | ||||||||||||
| Loans held for sale | 7,471 | 225 | ||||||||||||||
| Covered loans | 107,457 | - | ||||||||||||||
| Allowance for loan losses | 7,494 | 8,101 | ||||||||||||||
| Total foreclosed assets | 13,441 | 3,689 | ||||||||||||||
| Covered other real estate owned | 10,084 | - | ||||||||||||||
| FDIC loss-share receivable | 83,901 | - | ||||||||||||||
| Intangible assets | 4,848 | 2,912 | ||||||||||||||
| Total assets | 1,089,852 | 755,436 | ||||||||||||||
| Non-interest-bearing deposits | 78,823 | 44,769 | ||||||||||||||
| Interest-bearing deposits | 805,364 | 489,474 | ||||||||||||||
| Federal Home Loan Bank advances | 35,000 | 62,500 | ||||||||||||||
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Federal funds purchased and securities sold under agreement to repurchase |
35,049 | 32,421 | ||||||||||||||
| Stockholders' equity | 124,136 | 119,340 | ||||||||||||||
| Total shares outstanding | 8,712,031 | 8,710,640 | ||||||||||||||
| Unearned ESOP shares | 439,138 | 492,320 | ||||||||||||||
| Book value per share | $ | 15.01 | $ | 14.52 | ||||||||||||
| Tangible book value per share (non-GAAP) | 14.42 | 14.17 | ||||||||||||||
| Market value per share | 11.80 | 12.42 | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Average Balance Sheet Data | ||||||||||||||||
| Average interest-bearing deposits in banks | $ | 56,025 | $ | 10,910 | $ | 54,867 | $ | 26,075 | ||||||||
| Average federal funds sold | 22,805 | 11,181 | 23,563 | 17,472 | ||||||||||||
| Average investment securities | 240,101 | 179,682 | 220,164 | 142,301 | ||||||||||||
| Average loans | 559,556 | 419,572 | 512,956 | 379,461 | ||||||||||||
| Average mortgage loans held for sale | 7,599 | 315 | 4,137 | 235 | ||||||||||||
| Average FDIC loss-share receivable | 86,544 | - | 71,942 | - | ||||||||||||
| Average earning assets | 886,086 | 621,660 | 815,687 | 565,544 | ||||||||||||
| Average assets | 1,085,490 | 712,686 | 987,853 | 644,211 | ||||||||||||
| Average noninterest-bearing deposits | 80,376 | 49,612 | 70,019 | 41,446 | ||||||||||||
| Average interest-bearing deposits | 801,246 | 491,903 | 707,286 | 449,676 | ||||||||||||
| Average total deposits | 881,622 | 541,515 | 777,305 | 491,122 | ||||||||||||
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Average federal funds purchased and securities sold under agreement to repurchase |
36,621 | 35,234 | 33,383 | 34,097 | ||||||||||||
| Average Federal Home Loan Bank advances | 35,000 | 44,435 | 46,473 | 42,984 | ||||||||||||
| Average interest-bearing liabilities | 872,867 | 571,572 | 787,142 | 526,757 | ||||||||||||
| Average stockholders' equity | 124,257 | 83,154 | 122,719 | 67,383 | ||||||||||||
| Performance Ratios | ||||||||||||||||
| Annualized return on average assets | 0.50 | % | 0.52 | % | 0.39 | % | 0.22 | % | ||||||||
| Annualized return on average equity | 4.35 | % | 4.44 | % | 1.04 | % | 2.09 | % | ||||||||
| Net interest margin | 4.19 | % | 3.88 | % | 3.62 | % | 3.66 | % | ||||||||
| Net interest spread | 4.17 | % | 3.78 | % | 3.58 | % | 3.55 | % | ||||||||
| Efficiency ratio | 85.01 | % | 61.85 | % | 83.21 | % | 79.79 | % | ||||||||
| Capital Ratios | ||||||||||||||||
| Average stockholders' equity to average assets | 11.4 | % | 11.7 | % | 12.4 | % | 10.5 | % | ||||||||
| Tangible equity to tangible assets (non-GAAP) | 11.0 | % | 15.5 | % | 11.0 | % | 15.5 | % | ||||||||
| Tier 1 leverage ratio (1) | 10.9 | % | 16.1 | % | 10.9 | % | 16.1 | % | ||||||||
| Tier 1 risk-based capital ratio (1) | 18.0 | % | 25.1 | % | 18.0 | % | 25.1 | % | ||||||||
| Total risk-based capital ratio (1) | 19.2 | % | 26.4 | % | 19.2 | % | 26.4 | % | ||||||||
| Other Information | ||||||||||||||||
| Full-time equivalent employees | 327 | 206 | 327 | 206 | ||||||||||||
| Number of full-service offices | 22 | 16 | 22 | 16 | ||||||||||||
| Mortgage loan offices | 11 | 1 | 11 | 1 | ||||||||||||
|
(1) December 31, 2011, consolidated ratios are estimated and may be subject to change pending the filing of the call report; all other periods are presented as filed. |
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| Heritage Financial Group, Inc. | ||||||||||||||||||
| Fourth Quarter 2011 Earnings Release Supplement | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||
| Five Quarter Comparison for the Three Months Ended | ||||||||||||||||||
| 12/31/11 | 9/30/11 | 6/30/11 | 3/31/11 | 12/31/10 | ||||||||||||||
| Income Statement Data | ||||||||||||||||||
|
Interest income |
||||||||||||||||||
| Loans | $ | 9,945 | $ | 8,774 | $ | 7,564 | $ | 7,145 | $ | 6,584 | ||||||||
| Loans held for sale | 198 | 45 | 46 | 8 | 4 | |||||||||||||
| Securities - taxable | 1,095 | 1,013 | 1,221 | 1,207 | 923 | |||||||||||||
| Securities - nontaxable | 251 | 207 | 211 | 211 | 211 | |||||||||||||
| Federal funds sold | 15 | 16 | 16 | 13 | 7 | |||||||||||||
| Interest-bearing deposits in banks | 65 | 93 | 51 | 40 | 15 | |||||||||||||
| Total interest income | 11,569 | 10,148 | 9,109 | 8,624 | 7,740 | |||||||||||||
|
Interest expense |
||||||||||||||||||
| Deposits | 1,671 | 2,048 | 1,983 | 1,848 | 1,092 | |||||||||||||
| Other borrowings | 686 | 687 | 684 | 743 | 695 | |||||||||||||
| Total interest expense | 2,357 | 2,735 | 2,667 | 2,591 | 1,787 | |||||||||||||
| Net interest income | 9,212 | 7,413 | 6,442 | 6,033 | 5,953 | |||||||||||||
| Provision for loan losses | 595 | 1,000 | 700 | 600 | 3,400 | |||||||||||||
| Net interest income after provision for loan losses | 8,617 | 6,413 | 5,742 | 5,433 | 2,553 | |||||||||||||
|
Non-interest income |
||||||||||||||||||
| Service charges on deposit accounts | 1,237 | 1,267 | 1,222 | 1,051 | 1,194 | |||||||||||||
| Other service charges, fees & commissions | 879 | 746 | 749 | 660 | 553 | |||||||||||||
| Brokerage fees | 298 | 328 | 406 | 354 | 337 | |||||||||||||
| Mortgage banking fees | 674 | 719 | 624 | 268 | 270 | |||||||||||||
| Bank owned life insurance | 148 | 146 | 149 | 145 | 151 | |||||||||||||
| Life insurance proceeds | - | - | 32 | - | 916 | |||||||||||||
| Gain on sale of securities | 18 | 213 | 453 | - | 63 | |||||||||||||
| Bargain purchase gain | - | 2,000 | (117 | ) | 2,334 | 2,722 | ||||||||||||
| Accretion of FDIC loss share receivable | (72 | ) | 448 | 5 | - | - | ||||||||||||
| Other | 33 | 25 | 37 | 29 | 32 | |||||||||||||
| Total non-interest income | 3,215 | 5,892 | 3,560 | 4,841 | 6,238 | |||||||||||||
|
Non-interest expense |
||||||||||||||||||
| Salaries and employee benefits | 5,758 | 5,384 | 4,923 | 4,328 | 3,691 | |||||||||||||
| Equipment | 701 | 516 | 428 | 351 | 320 | |||||||||||||
| Occupancy | 613 | 685 | 536 | 445 | 452 | |||||||||||||
| Advertising & marketing | 233 | 167 | 220 | 164 | 183 | |||||||||||||
| Legal & accounting | 93 | 118 | 167 | 210 | 176 | |||||||||||||
| Consulting & other professional fees | 131 | 208 | 198 | 179 | 156 | |||||||||||||
| Director fees & retirement | 151 | 160 | 161 | 227 | 144 | |||||||||||||
| Telecommunications | 274 | 206 | 204 | 145 | 213 | |||||||||||||
| Supplies | 151 | 156 | 145 | 95 | 99 | |||||||||||||
| Data processing fees | 856 | 857 | 615 | 518 | 594 | |||||||||||||
|
(Gain) loss on sale and write-downs of other real estate owned |
(119 | ) | (385 | ) | 490 | 402 | 326 | |||||||||||
| Foreclosed asset expenses | 22 | 288 | 245 | 170 | 234 | |||||||||||||
| FDIC insurance and other regulatory fees | 179 | 128 | 354 | 293 | 242 | |||||||||||||
| Impairment loss on intangible assets | - | - | - | - | - | |||||||||||||
| Acquisition related expenses | 254 | 299 | 474 | 282 | 103 | |||||||||||||
| Deposit intangible expense | 207 | 183 | 207 | 95 | 55 | |||||||||||||
| Other operating | 1,024 | 809 | 673 | 494 | 552 | |||||||||||||
| Total non-interest expense | 10,528 | 9,779 | 10,040 | 8,398 | 7,540 | |||||||||||||
| Income (loss) before taxes | 1,304 | 2,526 | (738 | ) | 1,876 | 1,251 | ||||||||||||
| Applicable income tax (benefit) | (91 | ) | 786 | (257 | ) | 661 | 329 | |||||||||||
| Net income (loss) | $ | 1,395 | 1,740 | (481 | ) | $ | 1,215 | $ | 922 | |||||||||
| Weighted average shares - basic | 8,229,293 | 8,215,077 | 8,213,761 | 8,186,502 | 8,485,215 | |||||||||||||
| Weighted average shares - diluted | 8,230,206 | 8,216,472 | 8,215,090 | 8,187,835 | 8,485,733 | |||||||||||||
| Basic earnings (loss) per share | $ | 0.17 | $ | 0.21 | $ | (0.05 | ) | $ | 0.15 | $ | 0.11 | |||||||
| Diluted earnings (loss) per share | 0.17 | 0.21 | (0.05 | ) | 0.15 | 0.11 | ||||||||||||
| Cash dividend declared per share | 0.03 | 0.03 | 0.03 | 0.03 | 0.11 | |||||||||||||
| Heritage Financial Group, Inc. | ||||||||||||||||||||
| Fourth Quarter 2011 Earnings Release Supplement | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
| Five Quarter Comparison | ||||||||||||||||||||
| 12/31/11 | 9/30/11 | 6/30/11 | 3/31/11 | 12/31/10 | ||||||||||||||||
| Balance Sheet Data (at period end) | ||||||||||||||||||||
| Total loans | $ | 560,620 | 560,940 | 500,724 | $ | 496,067 | $ | 418,997 | ||||||||||||
| Loans held for sale | 7,471 | 5,538 | 5,579 | 2,642 | 225 | |||||||||||||||
| Covered loans | 107,457 | 116,206 | 60,426 | 62,372 | - | |||||||||||||||
| Allowance for loan losses | 7,494 | 6,936 | 6,585 | 6,138 | 8,101 | |||||||||||||||
| Total foreclosed assets | 13,441 | 12,355 | 9,693 | 10,577 | 3,689 | |||||||||||||||
| Covered other real estate owned | 10,084 | 10,514 | 6,968 | 7,361 | - | |||||||||||||||
| FDIC loss-share receivable | 83,901 | 87,757 | 58,152 | 58,174 | - | |||||||||||||||
| Intangible assets | 4,848 | 5,056 | 4,388 | 4,713 | 2,912 | |||||||||||||||
| Total assets | 1,089,852 | 1,102,504 | 963,571 | 951,918 | 755,436 | |||||||||||||||
| Non-interest-bearing deposits | 78,823 | 84,716 | 73,382 | 63,134 | 44,769 | |||||||||||||||
| Interest-bearing deposits | 805,364 | 815,387 | 690,291 | 667,954 | 489,474 | |||||||||||||||
| Federal home loan bank advances | 35,000 | 35,000 | 35,000 | 60,000 | 62,500 | |||||||||||||||
|
Federal funds purchased and securities sold under agreement to repurchase |
35,049 | 36,118 | 31,989 | 31,509 | 32,421 | |||||||||||||||
| Stockholders' equity | 124,136 | 123,638 | 122,038 | 121,331 | 119,340 | |||||||||||||||
| Total shares outstanding | 8,712,031 | 8,712,140 | 8,712,750 | 8,712,750 | 8,710,640 | |||||||||||||||
| Unearned ESOP shares | 439,138 | 452,348 | 465,673 | 478,996 | 492,320 | |||||||||||||||
| Book value per share | $ | 15.01 | $ | 14.97 | $ | 14.80 | $ | 14.74 | $ | 14.52 | ||||||||||
| Tangible book value per share (non-GAAP) | 14.42 | 14.36 | 14.26 | 14.16 | 14.17 | |||||||||||||||
| Market value per share | 11.80 | 10.36 | 11.92 | 12.73 | 12.42 | |||||||||||||||
| Five Quarter Comparison | ||||||||||||||||||||
| 12/31/11 | 9/30/11 | 6/30/11 | 3/31/11 | 12/31/10 | ||||||||||||||||
| Average Balance Sheet Data | ||||||||||||||||||||
| Average interest-bearing deposits in banks | $ | 56,025 | $ | 102,769 | $ | 44,525 | $ | 16,150 | $ | 10,910 | ||||||||||
| Average federal funds sold | 22,805 | 26,889 | 20,447 | 24,111 | 11,181 | |||||||||||||||
| Average investment securities | 240,101 | 201,762 | 210,261 | 228,530 | 179,682 | |||||||||||||||
| Average loans | 559,556 | 533,487 | 501,929 | 456,851 | 419,572 | |||||||||||||||
| Average mortgage loans held for sale | 7,599 | 4,336 | 3,878 | 737 | 315 | |||||||||||||||
| Average FDIC Loss-Share Receivable | 86,544 | 71,942 | 58,149 | 58,174 | - | |||||||||||||||
| Average earning assets | 878,487 | 864,907 | 777,162 | 725,642 | 621,345 | |||||||||||||||
| Average assets | 1,085,490 | 1,040,575 | 966,962 | 858,398 | 712,689 | |||||||||||||||
| Average noninterest-bearing deposits | 80,376 | 76,940 | 70,346 | 52,414 | 49,612 | |||||||||||||||
| Average interest-bearing deposits | 801,246 | 761,344 | 680,424 | 586,129 | 491,903 | |||||||||||||||
| Average total deposits | 881,622 | 838,284 | 750,770 | 638,543 | 541,515 | |||||||||||||||
|
Average federal funds purchased and securities sold under agreement to repurchase |
36,621 | 33,678 | 31,664 | 31,568 | 35,234 | |||||||||||||||
| Average Federal Home Loan Bank advances | 35,000 | 35,000 | 54,143 | 61,749 | 44,435 | |||||||||||||||
| Average interest-bearing liabilities | 872,867 | 830,022 | 766,231 | 679,446 | 571,572 | |||||||||||||||
| Average stockholders' equity | 124,257 | 123,844 | 122,528 | 120,248 | 83,154 | |||||||||||||||
| Performance Ratios | ||||||||||||||||||||
| Annualized return on average assets | 0.51 | % | 0.67 | % | -0.20 | % | 0.57 | % | 0.52 | % | ||||||||||
| Annualized return on average equity | 4.49 | % | 5.62 | % | -1.57 | % | 4.04 | % | 4.44 | % | ||||||||||
| Net interest margin | 4.19 | % | 3.44 | % | 3.36 | % | 3.42 | % | 3.88 | % | ||||||||||
| Net interest spread | 4.17 | % | 3.38 | % | 3.34 | % | 3.32 | % | 3.78 | % | ||||||||||
| Efficiency ratio | 85.01 | % | 73.50 | % | 100.38 | % | 77.23 | % | 61.85 | % | ||||||||||
| Capital Ratios | ||||||||||||||||||||
| Average stockholders' equity to average assets | 11.4 | % | 11.9 | % | 12.7 | % | 14.0 | % | 11.7 | % | ||||||||||
| Tangible equity to tangible assets (non-GAAP) | 11.0 | % | 10.8 | % | 12.3 | % | 12.3 | % | 15.5 | % | ||||||||||
| Tier 1 leverage ratio | 10.9 | % | 11.3 | % | 12.1 | % | 13.4 | % | 16.1 | % | ||||||||||
| Tier 1 risk-based capital ratio | 18.0 | % | 21.2 | % | 22.2 | % | 23.3 | % | 25.1 | % | ||||||||||
| Total risk-based capital ratio | 19.2 | % | 22.4 | % | 23.4 | % | 24.5 | % | 26.4 | % | ||||||||||
| Other Information | ||||||||||||||||||||
| Full-time equivalent employees | 327 | 313 | 295 | 273 | 217 | |||||||||||||||
| Number of full-service offices | 22 | 23 | 21 | 20 | 16 | |||||||||||||||
| Mortgage loan offices | 11 | 11 | 10 | 5 | 1 | |||||||||||||||
| Heritage Financial Group, Inc. | ||||||||
| Fourth Quarter 2011 Earnings Release Supplement | ||||||||
| (Dollars in thousands) | ||||||||
| Twelve Months Ended | ||||||||
| December 31, | ||||||||
| 12/31/11 | 12/31/10 | |||||||
| Loans by Type | ||||||||
| Construction and land loans | $ | 26,804 | $ | 24,522 | ||||
| Farmland loans | 17,921 | 12,339 | ||||||
| Permanent 1 - 4 | 129,745 | 131,293 | ||||||
| Permanent 1 - 4 - junior liens and revolving | 26,154 | 26,091 | ||||||
| Multifamily | 15,797 | 13,598 | ||||||
| Nonresidential | 138,970 | 110,079 | ||||||
| Commercial business loans | 55,178 | 52,589 | ||||||
| Consumer and other loans | 23,872 | 27,115 | ||||||
| 434,442 | 397,626 | |||||||
| Loans acquired through FDIC-assisted acquisitions: | ||||||||
| Non covered loans | 18,721 | 21,371 | ||||||
| Covered loans | 107,457 | - | ||||||
| 560,620 | 418,997 | |||||||
| Asset Quality Data (excluding Loans acquired through FDIC-assisted acquisitions): | ||||||||
| Allowance for loan losses to total loans | 1.72 | % | 2.04 | % | ||||
| Allowance for loan losses to average loans | 1.32 | % | 2.03 | % | ||||
| Allowance for loan losses to non-performing loans | 106 | % | 81.79 | % | ||||
| Accruing past due loans | $ | 371 | $ | 1,879 | ||||
| Nonaccrual loans | 7,043 | 9,905 | ||||||
| Loans - 90 days past due & still accruing | - | - | ||||||
| Total non-performing loans | 7,043 | 9,905 | ||||||
| OREO and repossessed assets | 3,356 | 3,689 | ||||||
| Total non-performing assets | 10,399 | 13,594 | ||||||
| Non-performing loans to total loans | 1.62 | % | 2.49 | % | ||||
| Non-performing assets to total assets | 0.95 | % | 1.80 | % | ||||
| QTD Net charge-offs to average loans (annualized) | 0.04 | % | 1.84 | % | ||||
| Net charge-offs QTD | $ | 37 | $ | 1,833 | ||||
| YTD Net charge-offs to average loans (annualized) | 0.91 | % | 0.87 | % | ||||
| Net charge-offs YTD | $ | 3,502 | $ | 3,459 | ||||
| Heritage Financial Group, Inc. | ||||||||||||||||||||
| Fourth Quarter 2011 Earnings Release Supplement | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Five Quarter Comparison for the Quarter Ended | ||||||||||||||||||||
| 12/31/11 | 9/30/11 | 6/30/11 | 3/31/11 | 12/31/10 | ||||||||||||||||
| Loans by Type | ||||||||||||||||||||
| Construction and land loans | $ | 26,804 | $ | 28,115 | $ | 26,688 | $ | 27,580 | $ | 24,522 | ||||||||||
| Farmland loans | 17,921 | 18,272 | 13,276 | 13,707 | 12,339 | |||||||||||||||
| Permanent 1 - 4 | 129,745 | 134,269 | 131,596 | 129,371 | 131,293 | |||||||||||||||
| Permanent 1 - 4 - junior liens and revolving | 26,154 | 26,071 | 26,140 | 25,642 | 26,091 | |||||||||||||||
| Multifamily | 15,797 | 13,754 | 12,755 | 12,110 | 13,598 | |||||||||||||||
| Nonresidential | 138,970 | 129,730 | 131,027 | 119,325 | 110,079 | |||||||||||||||
| Commercial business loans | 55,178 | 47,854 | 50,997 | 52,662 | 52,589 | |||||||||||||||
| Consumer and other loans | 23,872 | 21,955 | 23,592 | 25,046 | 27,115 | |||||||||||||||
| 434,442 | 420,020 | 416,071 | 405,443 | 397,626 | ||||||||||||||||
| Loans acquired through FDIC-assisted acquisitions: | ||||||||||||||||||||
| Non covered | 18,721 | 24,713 | 24,227 | 28,252 | 21,371 | |||||||||||||||
| Covered loans | 107,457 | 116,206 | 60,427 | 62,372 | - | |||||||||||||||
| 560,620 | 560,939 | 500,725 | 496,067 | 418,997 | ||||||||||||||||
| Asset Quality Data (excluding Loans acquired through FDIC-assisted acquisitions): | ||||||||||||||||||||
| Allowance for loan losses to total loans | 1.72 | % | 1.65 | % | 1.58 | % | 1.51 | % | 2.04 | % | ||||||||||
| Allowance for loan losses to average loans | 1.32 | % | 1.29 | % | 1.48 | % | 1.59 | % | 2.03 | % | ||||||||||
| Allowance for loan losses to non-performing loans | 106.40 | % | 86.76 | % | 76.67 | % | 67.63 | % | 81.79 | % | ||||||||||
| Accruing past due loans | $ | 371 | $ | 1,487 | $ | 727 | $ | 1,245 | $ | 1,879 | ||||||||||
| Nonaccrual loans | 7,043 | 7,994 | 8,589 | 9,077 | 9,905 | |||||||||||||||
| Loans - 90 days past due & still accruing | - | - | - | - | - | |||||||||||||||
| Total non-performing loans | 7,043 | 7,994 | 8,589 | 9,077 | 9,905 | |||||||||||||||
| OREO and repossessed assets | 3,356 | 1,841 | 2,725 | 3,215 | 3,689 | |||||||||||||||
| Total non-performing assets | 10,399 | 9,835 | 11,314 | 12,292 | 13,594 | |||||||||||||||
| Non-performing loans to total loans | 1.62 | % | 1.90 | % | 2.06 | % | 2.24 | % | 2.49 | % | ||||||||||
| Non-performing assets to total assets | 0.95 | % | 0.89 | % | 1.17 | % | 1.29 | % | 1.80 | % | ||||||||||
| Net charge-offs to average loans (annualized) | 0.04 | % | 0.73 | % | 0.26 | % | 2.80 | % | 1.84 | % | ||||||||||
| Net charge-offs | $ | 37 | $ | 650 | $ | 253 | $ | 2,563 | $ | 1,833 | ||||||||||
| 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 and First Southern National Bank in August 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. | ||||||||||||||||||||