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 March 31, 2013. Highlights of the Company's results for the first quarter of 2013 include:
- Net income of $3.9 million or $0.52 per diluted share, up threefold from net income of $971,000 or $0.12 per diluted share for the year-earlier quarter and up 62% from $2.4 million or $0.31 per diluted share for the linked quarter;
- Excluding special items for each quarter, net income was $2.0 million or $0.27 per diluted share, up 67% from net income of $1.2 million or $0.15 per diluted share for the year-earlier quarter and $1.2 million or $0.16 per diluted share for the linked quarter (see reconciliation of non-GAAP items);
- Successful completion of the Company's fourth FDIC-assisted acquisition, Frontier Bank ("Frontier") on March 8, 2013, resulting in a $2.5 million bargain purchase gain, net of tax;
- Loan growth, excluding loans acquired through FDIC-assisted acquisitions, of $18.0 million or 3% on a linked-quarter basis;
- An increase in loans acquired through FDIC-assisted acquisitions of $64.9 million or 77% on a linked-quarter basis;
- An increase in the provision for loan losses, excluding FDIC-acquired loans, to $450,000 compared with $400,000 for the year-earlier quarter, but a reduction from $600,000 for the linked quarter;
- Provision for loan losses of $35,000 for FDIC-acquired loans with approximately 80% of the losses reimbursable by the FDIC versus no provision expense on such loans for the year-earlier quarter and a reduction from $1.9 million for the linked quarter; and
- Non-performing assets to total assets declined to 1.15% for the first quarter of 2013 compared with 1.75% for the year-earlier quarter and 1.58% for the linked quarter.
Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "We are pleased to report another quarter of improved financial results. The positive results of our focus on efficiency and expense management are coming to fruition. In addition, the investments we made in our mortgage division and commercial banking network are paying dividends, as evidenced by increased fee income and continued organic loan growth.
"We are also excited about the acquisition of Frontier in an FDIC-assisted transaction completed in the first quarter," Dorminey continued. "This marks our fourth FDIC-assisted transaction and further demonstrates our ability to successfully execute our expansion strategy and prudently deploy our strong capital base. We are optimistic about the opportunities for loan growth both in the Birmingham market area as well as the Western Georgia / Eastern Alabama corridor."
Expense Management Initiatives
In connection with the Frontier FDIC-assisted acquisition, the Company plans to close the Vincent, Alabama, branch later in 2013, subject to regulatory approval. The Company does not expect to experience a significant reduction in customer relationships and will serve these customers from other nearby locations. Separately, the Company implemented staff reductions related to the Frontier acquisition that will occur during the second and third quarters, resulting in a decrease of approximately $1.6 million from Frontier's pre-acquisition level of personnel expenses.
Commenting on the expense management initiatives in the Frontier acquisition, Heath Fountain, Chief Financial Officer and Chief Administrative Officer, said, "We are confident in our ability to operate the acquired branch network in an efficient and profitable manner. While we are early in the transition, we believe we will be able to achieve all of our cost-saving targets identified prior to the acquisition."
Capital Management Initiatives
During the first quarter of 2013, the Company repurchased approximately 291,000 shares of common stock at an average price of $14.02 under its stock repurchase program. With remaining authorization to repurchase approximately 33,000 shares under the current program, which was set to expire in October 2013, unless extended or otherwise completed, the Company's Board of Directors has increased the program by adding 394,000 shares, or 5% of the Company's currently outstanding common stock, and has extended the program for an additional year. As a result, the Company has a total authorization to repurchase up to approximately 427,000 shares that expires in April 2014, unless the program is extended or completed earlier.
The Company's estimated total risk-based capital ratio at March 31, 2013, was 16.4%, 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 8.5% as of March 31, 2013.
Looking ahead, the Company intends to maintain its capital strength at the current level to support growth and its acquisition activities. Accordingly, future stock buybacks and future dividends will be premised largely on the Company's future earnings power rather than a return of capital to stockholders. As previously announced, it is not currently anticipated that any quarterly dividends will be paid in 2013, but that regular quarterly dividends will be reinstated in 2014.
First Quarter 2013 Results of Operations
The $3.0 million improvement in reported quarterly earnings for the first quarter of 2013 compared with the year-earlier quarter primarily resulted from the following items:
- Improved net interest income of $3.5 million;
- Increased non-interest income of $3.0 million; offset by
- Increased non-interest expense of $2.0 million.
Net interest income for the first quarter of 2013 increased 36% to $13.2 million from $9.7 million in the year-earlier quarter, primarily reflecting an increase in interest-earning assets related to both acquisitions and organic growth and a reduction in the cost of interest-bearing liabilities. The Company's net interest margin was 5.51% for the first quarter of 2013, a decrease of 86 basis points from 6.37% on a linked-quarter basis, but an increase of 102 basis points over 4.49% in the year-earlier period. The reduction in the first quarter of 2013 net interest margin on a linked-quarter basis was driven by a decline in the loan yields on the Company's FDIC-assisted loan portfolio, offset in part by a decline in the cost of interest-bearing liabilities as rates continue to reset to lower levels and the Company takes advantage of historically low non-deposit funding. Excluding purchase accounting adjustments, which include FDIC-assisted loan discount accretion from the net interest margin, the core net interest margin was 3.35% for the first quarter of 2013, an increase of 16 basis points from 3.19% on a linked-quarter basis and 42 basis points from 2.93% for the year-earlier quarter.
In the first quarter of 2013, the Company continued to achieve loan growth, with its loan portfolio increasing $18.0 million organically on a linked-quarter basis and advancing $154.1 million overall compared with the year-earlier quarter. For the first quarter of 2013, the Company's loan portfolio, including loans acquired through FDIC-assisted acquisitions, totaled $752.9 million, increasing $82.9 million on a linked-quarter basis from $670.0 million and from $562.5 million compared with the year-earlier quarter. Total deposits stood at $1.1 billion at the end of the first quarter of 2013, up 26% or $226.0 million on a linked-quarter basis from $869.6 million and from $868.7 million compared with the year-earlier quarter. The linked-quarter increase in deposits was primarily driven by the Frontier acquisition, which accounted for $212.1 million, and the remaining growth resulted in core deposit growth of $34.0 million and wholesale deposit growth of $23.8 million, which was offset in part by $24.5 million in planned time deposit runoff associated with Frontier internet and single service customers and $19.4 million in planned runoff of retail time deposits.
Non-interest income for the first quarter of 2013 increased 109% to $5.8 million from $2.8 million in the year-earlier quarter, primarily driven by a bargain purchase gain recorded on the Frontier FDIC-assisted acquisition of $4.2 million, coupled with solid growth in mortgage banking fees of $1.1 million, which was partially offset by an increase in negative accretion for the FDIC loss-share receivable of $2.5 million. Non-interest expense for the first quarter of 2013 increased 18% to $12.8 million from $10.8 million in the year-earlier quarter, primarily driven by increased salaries and employment benefits of $894,000 associated with the hiring of 30 employees for the mortgage division, increased acquisition-related expenses of $461,000 related to Frontier, increased equipment and occupancy expense of $342,000 related to the Company's continued efforts to expand the mortgage division, and increased foreclosure expense on FDIC-acquired assets of $259,000.
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 consisted of $65.8 million in covered and $83.3 million in non-covered loans at the end of the first quarter of 2013 compared with $72.4 million in covered and $11.9 million in non-covered loans for the linked quarter. The principal balance of the FDIC-assisted loan portfolios totaled $234.8 million at the end of the first quarter of 2013 compared with $152.1 million for the linked quarter. The details of the accounting for the FDIC-assisted loan portfolios for the first quarter of 2013 are as follows:
- Covered loans acquired in FDIC-assisted acquisitions decreased $6.6 million to $65.8 million;
- Non-covered loans acquired in FDIC-assisted acquisitions increased $71.5 million to $83.3 million, driven by the Frontier acquisition;
- The FDIC loss-share receivable associated with covered assets acquired in FDIC-assisted acquisitions decreased $8.7 million to $52.0 million;
- The negative accretion for the FDIC loss-share receivable was $3.0 million;
- Provision expense for individually assessed loans acquired in FDIC-assisted acquisitions was $35,000;
- The non-accretable discount increased $13.6 million to $59.6 million; and
- The accretable discount increased $4.3 million to $26.1 million.
During the first quarter of 2013, the Company completed the FDIC-assisted acquisition of Frontier without a loss-sharing agreement. The acquisition added non-covered loans at a principal balance of $98.0 million with a $23.0 million non-accretable discount and a $1.7 million accretable discount for a fair value balance of $73.3 million as of the acquisition date.
For the first quarter of 2013, provision expense of $35,000 was recorded for loan charge-offs on individually assessed loans acquired in FDIC-assisted acquisitions not provided for by the discount, with approximately 80% of the charge-offs reimbursable by the FDIC. The provision expense for these loans did not affect the Company's loan loss reserve. The FDIC loss-share receivable associated with covered FDIC-assisted assets decreased $8.7 million from $60.7 million for the prior quarter to $52.0 million, primarily driven by reimbursements received from the FDIC of $5.6 million and negative accretion of $3.5 million affecting the loss-share receivable asset associated with the improvement in expected cash flows of the loss-share performing portfolios. A FDIC true-up (clawback) liability was recorded as an expense, which reduced non-interest income for the current quarter by $566,000. This true-up was driven by an improvement in estimates of expected cash flows for both FDIC-assisted acquisitions covered under loss-sharing agreements.
The non-accretable discount increased to $59.6 million at the end of the first quarter of 2013 from $46.0 million on a linked-quarter basis, primarily driven by the addition of $23.0 million for the Frontier acquired loans, offset by the clearing of $2.2 million of discount in conjunction with the resolution of FDIC-assisted loans and transfers to accretable discount of $7.2 million for the improvement in expected cash flows. The accretable discount increased to $26.1 million for the first quarter of 2013 from $21.8 million on a linked-quarter basis, primarily driven by the transfer of $7.2 million from the non-accretable discount and the addition of $1.7 million for the Frontier acquired loans, offset in part by loan discount accretion of $4.6 million for the current quarter, which compares with $6.6 million on a linked-quarter basis.
Asset Quality
Total non-performing assets, excluding assets acquired in FDIC-assisted acquisitions, decreased to $15.7 million, or 1.15% of total assets, compared with $17.3 million, or 1.58% of total assets, for the linked quarter and improved from $13.7 million, or 1.75% of total assets, from the year-earlier quarter. Annualized net charge-offs to average outstanding loans, excluding loans acquired in FDIC-assisted acquisitions, were 0.27% for the first quarter of 2013 compared with 0.05% for the linked quarter and 0.24% for the year-earlier quarter. Non-performing loans totaled $12.7 million, down from $14.7 million for the linked quarter, but up from $10.7 million for the year-earlier quarter. Other real estate owned and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, totaled $3.0 million for the first quarter of 2013, slightly up from $2.7 million for the linked quarter and in line with $3.0 million for the year-earlier quarter.
The provision for loan losses on non-FDIC-acquired loans slightly increased to $450,000 for the first quarter of 2013 from $400,000 for the year-earlier quarter, primarily driven by organic loan growth. For the first quarter in 2013, the allowance for loan losses represented 1.51% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.55% for the linked quarter and 1.70% for the year-earlier quarter. The improving loan loss allowance is primarily the result of declining criticized and classified assets as a percentage of total loans.
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, North Central Florida and Eastern Alabama through 29 full-service branch locations, 12 mortgage offices, and 4 investment offices. As of March 31, 2013, the Company reported total assets of approximately $1.4 billion and total stockholders' equity of approximately $121 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 includes 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 2012 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. Unaudited Reconciliation of Non-GAAP Measures Presented in Earnings Release (Dollars in thousands, except per share data) |
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| Three Months Ended | ||||||||||||
| March 31, | Dec. 31, | |||||||||||
| 2013 | 2012 | 2012 | ||||||||||
| Total non-interest income | $ | 5,810 | $ | 2,783 | $ | 2,873 | ||||||
| Gain on sale of securities and securities impairment | – | (42 | ) | (1,285 | ) | |||||||
| Accrual of FDIC acquisitions estimated true-up liability | 566 | – | 219 | |||||||||
| Gain on acquisitions | (4,188 | ) | – | – | ||||||||
| Adjusted non-interest income | $ | 2,188 | $ | 2,741 | $ | 1,807 | ||||||
| Total non-interest expense | $ | 12,790 | $ | 10,801 | $ | 12,095 | ||||||
| Acquisition-related expenses | (792 | ) | (331 | ) | (3 | ) | ||||||
| Adjusted non-interest expense | $ | 11,998 | $ | 10,470 | $ | 12,092 | ||||||
| Net income as reported | $ | 3,928 | $ | 971 | $ | 2,428 | ||||||
| Total adjustments, net of tax* | (1,924 | ) | 215 | (922 | ) | |||||||
| Adjustment for state tax credits | – | – | (264 | ) | ||||||||
| Adjusted net income | $ | 2,004 | $ | 1,186 | $ | 1,242 | ||||||
| Diluted earnings per share | $ | 0.52 | $ | 0.12 | $ | 0.31 | ||||||
| Total adjustments, net of tax* | (0.25 | ) | 0.03 | (0.15 | ) | |||||||
| Adjusted diluted earnings per share | $ | 0.27 | $ | 0.15 | $ | 0.16 | ||||||
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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 and Diluted Earnings Per Share are presented in accordance with Generally Accepted Accounting Principles (GAAP). Adjusted Noninterest Income, Adjusted Noninterest Expense, Adjusted Net Income and Adjusted Diluted Earnings 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. Unaudited Financial Highlights (Dollars in thousands, except per share data) |
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Three Months Ended |
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| 2013 | 2012 | ||||||||
| Interest income | $ | 15,047 | $ | 11,659 | |||||
| Interest expense | 1,803 | 1,935 | |||||||
| Net interest income | 13,244 | 9,724 | |||||||
| Provision for loan losses | 450 | 400 | |||||||
| Provision for loan losses – covered | 35 | – | |||||||
| Provision for loan losses – non covered | – | – | |||||||
| Net interest income after provision for loan losses | 12,759 | 9,324 | |||||||
| Non-interest income | 5,810 | 2,783 | |||||||
| Non-interest expense | 12,790 | 10,801 | |||||||
| Income before income taxes | 5,779 | 1,306 | |||||||
| Income tax expense | 1,851 | 335 | |||||||
| Net income | $ | 3,928 | $ | 971 | |||||
| Net income per share: | |||||||||
| Basic | $ | 0.52 | $ | 0.12 | |||||
| Diluted | $ | 0.52 | $ | 0.12 | |||||
| Weighted average shares outstanding: | |||||||||
| Basic | 7,526,344 | 8,144,382 | |||||||
| Diluted | 7,528,522 | 8,145,730 | |||||||
| Dividends declared per share | $ | – | $ | 0.04 | |||||
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March 31,
2013 |
Dec. 31,
2012 |
March 31,
2012 |
|||||||
| Total assets | $ | 1,370,550 | $ | 1,097,506 | $ | 1,075,510 | |||
| Cash and cash equivalents | 37,916 | 23,993 | 22,438 | ||||||
| Interest-bearing deposits in banks | 149,216 | 15,393 | 47,174 | ||||||
| Securities available for sale | 267,307 | 221,406 | 264,535 | ||||||
| Loans | 752,866 | 670,004 | 562,495 | ||||||
| Allowance for loan losses | 9,105 | 9,061 | 7,629 | ||||||
| Total deposits | 1,095,559 | 869,554 | 868,743 | ||||||
| Federal Home Loan Bank advances | 97,068 | 60,000 | 35,000 | ||||||
| Stockholders' equity | 120,655 | 120,649 | 125,067 | ||||||
| Heritage Financial Group, Inc. |
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| First Quarter 2013 Earnings Release Supplement | ||||||||
| (Unaudited) | ||||||||
| (Dollars in thousands, except per share data) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2013 | 2012 | |||||||
| Income Statement Data | ||||||||
|
Interest income |
||||||||
| Loans | $ | 13,369 | $ | 10,147 | ||||
| Loans held for sale | 504 | 182 | ||||||
| Securities - taxable | 866 | 979 | ||||||
| Securities - nontaxable | 285 | 299 | ||||||
| Federal funds sold | 1 | 15 | ||||||
| Interest-bearing deposits in banks | 22 | 37 | ||||||
| Total interest income | 15,047 | 11,659 | ||||||
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Interest expense |
||||||||
| Deposits | 1,054 | 1,263 | ||||||
| Other borrowings | 749 | 672 | ||||||
| Total interest expense | 1,803 | 1,935 | ||||||
| Net interest income | 13,244 | 9,724 | ||||||
| Provision for loan losses | 450 | 400 | ||||||
| Provision for loan losses - FDIC acquired covered | 35 | - | ||||||
| Provision for loan losses - FDIC acquired non covered | - | - | ||||||
| Net interest income after provision for loan losses | 12,759 | 9,324 | ||||||
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Non-interest income |
||||||||
| Service charges on deposit accounts | 1,154 | 1,020 | ||||||
| Bankcard services income | 762 | 824 | ||||||
| Other service charges, fees & commissions | 99 | 85 | ||||||
| Brokerage fees | 481 | 446 | ||||||
| Mortgage banking activities | 1,793 | 689 | ||||||
| Bank owned life insurance | 202 | 140 | ||||||
| Gain on sale of securities | - | 42 | ||||||
| Gain on acquisitions | 4,188 | - | ||||||
| Accretion of FDIC loss-share receivable | (2,963 | ) | (498 | ) | ||||
| Other | 94 | 35 | ||||||
| Total non-interest income | 5,810 | 2,783 | ||||||
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Non-interest expense |
||||||||
| Salaries and employee benefits | 6,430 | 5,536 | ||||||
| Equipment and occupancy | 1,666 | 1,324 | ||||||
| Advertising & marketing | 187 | 180 | ||||||
| Professional fees | 215 | 238 | ||||||
| Information services expenses | 1,182 | 1,052 | ||||||
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Gain on sale and write-downs of other real estate owned |
(25 | ) | (7 | ) | ||||
|
Loss on sale and write-downs of FDIC acquired other real estate |
24 | 174 | ||||||
| Foreclosed asset expenses | 215 | 221 | ||||||
| Foreclosed FDIC acquired asset expenses | 421 | 162 | ||||||
| FDIC insurance and other regulatory fees | 256 | 245 | ||||||
| Acquisition related expenses | 792 | 331 | ||||||
| Deposit intangible expense | 194 | 201 | ||||||
| Other operating | 1,233 | 1,144 | ||||||
| Total non-interest expense | 12,790 | 10,801 | ||||||
| Income before taxes | 5,779 | 1,306 | ||||||
| Applicable income tax | 1,851 | 335 | ||||||
| Net income | $ | 3,928 | $ | 971 | ||||
| Weighted average shares - basic | 7,526,344 | 8,144,382 | ||||||
| Weighted average shares - diluted | 7,528,522 | 8,145,730 | ||||||
| Basic earnings per share | $ | 0.52 | $ | 0.12 | ||||
| Diluted earnings per share | 0.52 | 0.12 | ||||||
| Cash dividend declared per share | - | 0.04 | ||||||
| Heritage Financial Group, Inc. |
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|||||||
| First Quarter 2013 Earnings Release Supplement | ||||||||
| (Unaudited) | ||||||||
| (Dollars in thousands, except per share data) | ||||||||
| March 31, | ||||||||
|
2013 |
2012 | |||||||
| Balance Sheet Data (Ending Balance) | ||||||||
| Total loans | $ | 752,866 | $ | 562,495 | ||||
| Loans held for sale | 18,905 | 4,731 | ||||||
| Covered loans | 65,815 | 95,493 | ||||||
| Allowance for loan losses | 9,105 | 7,629 | ||||||
| Total other real estate owned | 13,851 | 12,092 | ||||||
| Covered other real estate owned | 9,460 | 8,445 | ||||||
| FDIC loss-share receivable | 52,012 | 82,925 | ||||||
| Intangible assets | 4,666 | 4,647 | ||||||
| Total assets | 1,370,550 | 1,075,510 | ||||||
| Non-interest-bearing deposits | 151,709 | 88,582 | ||||||
| Interest-bearing deposits | 943,850 | 780,161 | ||||||
| Federal Home Loan Bank advances | 97,068 | 35,000 | ||||||
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Federal funds purchased and securities sold under agreement to repurchase |
39,393 | 37,227 | ||||||
| Stockholders' equity | 120,655 | 125,067 | ||||||
| Total shares outstanding | 7,881,260 | 8,668,752 | ||||||
| Unearned ESOP shares | 372,511 | 425,813 | ||||||
| Total shares outstanding net of unearned ESOP | 7,508,749 | 8,242,939 | ||||||
| Book value per share | $ | 16.07 | $ | 15.17 | ||||
| Book value per share including unearned ESOP (non-GAAP) | 15.31 | 14.43 | ||||||
| Tangible book value per share (non-GAAP) | 15.45 | 14.61 | ||||||
| Tangible book value per share including unearned ESOP (non-GAAP) | 14.72 | 13.89 | ||||||
| Market value per share | 14.48 | 11.82 | ||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2013 | 2012 | |||||||
| Average Balance Sheet Data | ||||||||
| Average interest-bearing deposits in banks | $ | 43,824 | $ | 37,999 | ||||
| Average federal funds sold | 1,789 | 22,363 | ||||||
| Average investment securities | 237,729 | 257,863 | ||||||
| Average loans | 685,388 | 560,385 | ||||||
| Average mortgage loans held for sale | 13,827 | 4,550 | ||||||
| Average FDIC loss-share receivable | 59,252 | 84,017 | ||||||
| Average earning assets | 982,247 | 883,160 | ||||||
| Average assets | 1,148,845 | 1,074,260 | ||||||
| Average noninterest-bearing deposits | 119,059 | 84,920 | ||||||
| Average interest-bearing deposits | 797,146 | 784,944 | ||||||
| Average total deposits | 916,205 | 869,864 | ||||||
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Average federal funds purchased and securities sold under agreement to repurchase |
34,273 | 33,822 | ||||||
| Average Federal Home Loan Bank advances | 65,965 | 35,000 | ||||||
| Average interest-bearing liabilities | 797,146 | 853,766 | ||||||
| Average stockholders' equity | 120,800 | 125,503 | ||||||
| Performance Ratios | ||||||||
| Annualized return on average assets | 1.37 | % | 0.36 | % | ||||
| Annualized return on average equity | 13.01 | % | 3.09 | % | ||||
| Net interest margin | 5.51 | % | 4.49 | % | ||||
| Net interest spread | 5.44 | % | 4.46 | % | ||||
| Core net interest margin | 3.35 | % | 2.93 | % | ||||
| Core net interest spread | 3.23 | % | 2.79 | % | ||||
| Efficiency ratio | 80.22 | % | 86.36 | % | ||||
| Capital Ratios | ||||||||
| Average stockholders' equity to average assets | 10.5 | % | 11.7 | % | ||||
| Tangible equity to tangible assets (non-GAAP) | 8.5 | % | 11.2 | % | ||||
| Tier 1 leverage ratio (1) | 10.4 | % | 11.3 | % | ||||
| Tier 1 risk-based capital ratio (1) | 15.2 | % | 21.6 | % | ||||
| Total risk-based capital ratio (1) | 16.4 | % | 22.8 | % | ||||
| Other Information | ||||||||
| Full-time equivalent employees | 355 | 324 | ||||||
| Banking | 285 | 283 | ||||||
| Mortgage | 64 | 34 | ||||||
| Investments | 6 | 7 | ||||||
| Number of full-service offices | 29 | 21 | ||||||
| Mortgage loan offices | 12 | 11 | ||||||
| Investment offices | 4 | 3 | ||||||
| (1) March 31, 2013 consolidated ratios are estimated and may be subject to change pending the filing of the call report; all other periods are presented as filed. | ||||||||
| Heritage Financial Group, Inc. |
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| First Quarter 2013 Earnings Release Supplement | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
| Five Quarter Comparison for the Three Months Ended | ||||||||||||||||||||
| 3/31/13 | 12/31/12 | 9/30/12 | 6/30/12 | 3/31/12 | ||||||||||||||||
| Income Statement Data | ||||||||||||||||||||
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Interest income |
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| Loans | $ | 13,369 | $ | 15,084 | $ | 13,067 | $ | 10,532 | $ | 10,147 | ||||||||||
| Loans held for sale | 504 | 238 | 342 | 204 | 182 | |||||||||||||||
| Securities - taxable | 866 | 762 | 924 | 1,016 | 979 | |||||||||||||||
| Securities - nontaxable | 285 | 232 | 298 | 295 | 299 | |||||||||||||||
| Federal funds sold | 1 | 9 | 3 | 4 | 15 | |||||||||||||||
| Interest-bearing deposits in banks | 22 | 26 | 17 | 26 | 37 | |||||||||||||||
| Total interest income | 15,047 | 16,351 | 14,651 | 12,077 | 11,659 | |||||||||||||||
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Interest expense |
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| Deposits | 1,054 | 1,108 | 1,257 | 1,246 | 1,263 | |||||||||||||||
| Other borrowings | 749 | 713 | 681 | 672 | 672 | |||||||||||||||
| Total interest expense | 1,803 | 1,821 | 1,938 | 1,918 | 1,935 | |||||||||||||||
| Net interest income | 13,244 | 14,530 | 12,713 | 10,159 | 9,724 | |||||||||||||||
| Provision for loan losses | 450 | 600 | 750 | 750 | 400 | |||||||||||||||
| Provision for loan losses - FDIC acquired covered | 35 | 1,907 | 1,172 | 338 | - | |||||||||||||||
| Provision for loan losses - FDIC acquired non covered | - | - | 12 | 3 | - | |||||||||||||||
| Net interest income after provision for loan losses | 12,759 | 12,023 | 10,779 | 9,068 | 9,324 | |||||||||||||||
|
Non-interest income |
||||||||||||||||||||
| Service charges on deposit accounts | 1,154 | 1,307 | 1,285 | 1,135 | 1,020 | |||||||||||||||
| Bankcard services income | 762 | 794 | 783 | 831 | 824 | |||||||||||||||
| Other service charges, fees & commissions | 99 | 89 | 80 | 73 | 85 | |||||||||||||||
| Brokerage fees | 481 | 463 | 467 | 462 | 446 | |||||||||||||||
| Mortgage banking activities | 1,793 | 1,451 | 1,689 | 938 | 689 | |||||||||||||||
| Bank owned life insurance | 202 | 210 | 210 | 211 | 140 | |||||||||||||||
| Life insurance proceeds | - | - | - | - | - | |||||||||||||||
| Gain on sale of securities | - | 1,285 | 1,484 | 27 | 42 | |||||||||||||||
| Gain (loss) on acquisitions | 4,188 | - | (90 | ) | 34 | 0 | ||||||||||||||
| Accretion of FDIC loss-share receivable | (2,963 | ) | (2,792 | ) | (1,606 | ) | (133 | ) | (498 | ) | ||||||||||
| Other | 94 | 66 | 59 | 101 | 35 | |||||||||||||||
| Total non-interest income | 5,810 | 2,873 | 4,361 | 3,679 | 2,783 | |||||||||||||||
|
Non-interest expense |
||||||||||||||||||||
| Salaries and employee benefits | 6,430 | 6,167 | 6,380 | 5,460 | 5,536 | |||||||||||||||
| Equipment and occupancy | 1,666 | 1,597 | 1,317 | 1,395 | 1,324 | |||||||||||||||
| Advertising & marketing | 187 | 147 | 114 | 214 | 180 | |||||||||||||||
| Professional fees | 215 | 387 | 354 | 340 | 238 | |||||||||||||||
| Information services expenses | 1,182 | 1,184 | 1,240 | 1,163 | 1,052 | |||||||||||||||
|
(Gain) loss on sale and write-downs of other real estate owned |
(25 | ) | 277 | 90 | (141 | ) | (7 | ) | ||||||||||||
|
Loss (gain) on sale and write-downs of FDIC acquired other real estate |
24 | (204 | ) | (33 | ) | (249 | ) | 174 | ||||||||||||
| Foreclosed asset expenses | 215 | 353 | 177 | 218 | 221 | |||||||||||||||
| Foreclosed FDIC acquired asset expenses | 421 | 575 | 563 | 466 | 162 | |||||||||||||||
| FDIC insurance and other regulatory fees | 256 | 252 | 276 | 265 | 245 | |||||||||||||||
| Acquisition related expenses | 792 | 3 | 14 | 69 | 331 | |||||||||||||||
| Deposit intangible expense | 194 | 191 | 194 | 195 | 201 | |||||||||||||||
| Other operating | 1,233 | 1,166 | 1,292 | 1,279 | 1,144 | |||||||||||||||
| Total non-interest expense | 12,790 | 12,095 | 11,978 | 10,674 | 10,801 | |||||||||||||||
| Income before taxes | 5,779 | 2,801 | 3,162 | 2,073 | 1,306 | |||||||||||||||
| Applicable income tax | 1,851 | 373 | 1,164 | 713 | 335 | |||||||||||||||
| Net income | $ | 3,928 | $ | 2,428 | $ | 1,998 | $ | 1,360 | $ | 971 | ||||||||||
| Weighted average shares - basic | 7,526,344 | 7,720,839 | 7,942,852 | 8,071,354 | 8,144,382 | |||||||||||||||
| Weighted average shares - diluted | 7,528,522 | 7,722,867 | 7,944,983 | 8,072,935 | 8,145,730 | |||||||||||||||
| Basic earnings per share | $ | 0.52 | $ | 0.31 | $ | 0.25 | $ | 0.17 | $ | 0.12 | ||||||||||
| Diluted earnings per share | 0.52 | 0.31 | 0.25 | 0.17 | 0.12 | |||||||||||||||
| Cash dividend declared per share | - | 0.24 | 0.04 | 0.04 | 0.04 | |||||||||||||||
| Heritage Financial Group, Inc. |
|
|||||||||||||||||||
| First Quarter 2013 Earnings Release Supplement | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
| Five Quarter Comparison | ||||||||||||||||||||
| 3/31/13 | 12/31/12 | 9/30/12 | 6/30/12 | 3/31/12 | ||||||||||||||||
| Balance Sheet Data (at period end) | ||||||||||||||||||||
| Total loans | $ | 752,866 | $ | 670,004 | $ | 634,932 | $ | 605,001 | $ | 562,495 | ||||||||||
| Loans held for sale | 18,905 | 15,608 | 7,236 | 6,017 | 4,731 | |||||||||||||||
| Covered loans | 65,815 | 72,425 | 78,757 | 87,386 | 95,493 | |||||||||||||||
| Allowance for loan losses | 9,105 | 9,061 | 8,530 | 8,099 | 7,629 | |||||||||||||||
| Total other real estate owned | 13,851 | 12,709 | 11,458 | 9,290 | 12,092 | |||||||||||||||
| Covered other real estate owned | 9,460 | 9,467 | 9,457 | 7,571 | 8,445 | |||||||||||||||
| FDIC loss-share receivable | 52,012 | 60,731 | 67,698 | 76,294 | 82,925 | |||||||||||||||
| Intangible assets | 4,666 | 4,235 | 4,426 | 4,621 | 4,647 | |||||||||||||||
| Total assets | 1,370,550 | 1,097,506 | 1,054,899 | 1,063,426 | 1,075,510 | |||||||||||||||
| Non-interest-bearing deposits | 151,709 | 116,272 | 108,767 | 87,815 | 88,582 | |||||||||||||||
| Interest-bearing deposits | 943,850 | 753,282 | 736,312 | 772,453 | 780,161 | |||||||||||||||
| Federal home loan bank advances | 97,068 | 60,000 | 35,000 | 35,000 | 35,000 | |||||||||||||||
|
Federal funds purchased and securities sold under agreement to repurchase |
39,393 | 33,219 | 35,833 | 31,746 | 37,227 | |||||||||||||||
| Stockholders' equity | 120,655 | 120,649 | 121,793 | 123,291 | 125,067 | |||||||||||||||
| Total shares outstanding | 7,881,260 | 8,172,486 | 8,229,955 | 8,490,247 | 8,668,752 | |||||||||||||||
| Unearned ESOP shares | 372,511 | 385,836 | 399,162 | 412,487 | 425,813 | |||||||||||||||
| Total shares outstanding net of unearned ESOP | 7,508,749 | 7,786,650 | 7,830,793 | 8,077,760 | 8,242,939 | |||||||||||||||
| Book value per share | $ | 16.07 | $ | 15.49 | $ | 15.55 | $ | 15.26 | $ | 15.17 | ||||||||||
|
Book value per share including unearned ESOP (non-GAAP) |
15.31 | 14.76 | 14.80 | 14.52 | 14.43 | |||||||||||||||
| Tangible book value per share (non-GAAP) | 15.45 | 14.95 | 14.99 | 14.69 | 14.61 | |||||||||||||||
|
Tangible book value per share including unearned ESOP (non-GAAP) |
14.72 | 14.24 | 14.26 | 13.98 | 13.89 | |||||||||||||||
| Market value per share | 14.48 | 13.79 | 13.14 | 12.87 | 11.82 | |||||||||||||||
| Five Quarter Comparison | ||||||||||||||||||||
| 3/31/13 | 12/31/12 | 9/30/12 | 6/30/12 | 3/31/12 | ||||||||||||||||
| Average Balance Sheet Data | ||||||||||||||||||||
| Average interest-bearing deposits in banks | $ | 43,824 | $ | 29,422 | $ | 19,343 | $ | 21,897 | $ | 37,999 | ||||||||||
| Average federal funds sold | 1,789 | 12,842 | 5,471 | 6,038 | 22,363 | |||||||||||||||
| Average investment securities | 237,729 | 211,524 | 235,862 | 252,894 | 257,863 | |||||||||||||||
| Average loans | 685,388 | 647,476 | 625,464 | 583,366 | 560,385 | |||||||||||||||
| Average mortgage loans held for sale | 13,827 | 11,161 | 6,198 | 5,519 | 4,550 | |||||||||||||||
| Average FDIC Loss-Share Receivable | 59,252 | 65,534 | 74,045 | 79,812 | 84,017 | |||||||||||||||
| Average earning assets | 982,247 | 912,134 | 883,319 | 869,393 | 883,160 | |||||||||||||||
| Average assets | 1,148,846 | 1,087,078 | 1,070,130 | 1,053,140 | 1,074,260 | |||||||||||||||
| Average noninterest-bearing deposits | 119,059 | 115,014 | 94,453 | 89,763 | 84,920 | |||||||||||||||
| Average interest-bearing deposits | 797,146 | 747,632 | 768,247 | 760,409 | 784,944 | |||||||||||||||
| Average total deposits | 916,205 | 862,646 | 862,700 | 850,172 | 869,864 | |||||||||||||||
|
Average federal funds purchased and securities sold under agreement to repurchase |
34,273 | 34,324 | 33,916 | 32,043 | 33,822 | |||||||||||||||
| Average Federal Home Loan Bank advances | 65,965 | 50,489 | 35,326 | 35,000 | 35,000 | |||||||||||||||
| Average interest-bearing liabilities | 797,146 | 747,632 | 837,489 | 827,452 | 853,766 | |||||||||||||||
| Average stockholders' equity | 120,800 | 122,927 | 124,884 | 125,083 | 125,503 | |||||||||||||||
| Performance Ratios | ||||||||||||||||||||
| Annualized return on average assets | 1.37 | % | 0.89 | % | 0.75 | % | 0.52 | % | 0.36 | % | ||||||||||
| Annualized return on average equity | 13.01 | % | 7.90 | % | 6.40 | % | 4.35 | % | 3.09 | % | ||||||||||
| Net interest margin | 5.51 | % | 6.37 | % | 5.77 | % | 4.75 | % | 4.49 | % | ||||||||||
| Net interest spread | 5.44 | % | 6.30 | % | 5.72 | % | 4.70 | % | 4.46 | % | ||||||||||
| Efficiency ratio | 80.22 | % | 69.50 | % | 70.15 | % | 77.14 | % | 86.36 | % | ||||||||||
| Capital Ratios | ||||||||||||||||||||
| Average stockholders' equity to average assets | 10.5 | % | 11.3 | % | 11.7 | % | 11.9 | % | 11.7 | % | ||||||||||
| Tangible equity to tangible assets (non-GAAP) | 8.5 | % | 10.6 | % | 11.2 | % | 11.2 | % | 11.2 | % | ||||||||||
| Tier 1 leverage ratio | 10.4 | % | 11.0 | % | 10.9 | % | 11.3 | % | 11.3 | % | ||||||||||
| Tier 1 risk-based capital ratio | 15.2 | % | 17.2 | % | 18.0 | % | 19.1 | % | 21.6 | % | ||||||||||
| Total risk-based capital ratio | 16.4 | % | 18.4 | % | 19.2 | % | 20.3 | % | 22.8 | % | ||||||||||
| Other Information | ||||||||||||||||||||
| Full-time equivalent employees | 355 | 321 | 316 | 319 | 324 | |||||||||||||||
| Banking | 285 | 264 | 270 | 279 | 283 | |||||||||||||||
| Mortgage | 64 | 50 | 39 | 33 | 34 | |||||||||||||||
| Investments | 6 | 7 | 7 | 7 | 7 | |||||||||||||||
| Number of full-service offices | 29 | 20 | 23 | 22 | 21 | |||||||||||||||
| Mortgage loan offices | 12 | 13 | 11 | 11 | 11 | |||||||||||||||
| Investment offices | 4 | 4 | 4 | 3 | 3 | |||||||||||||||
| Heritage Financial Group, Inc. |
|
|||||||
| First Quarter 2013 Earnings Release Supplement | ||||||||
| (Dollars in thousands) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2013 | 2012 | |||||||
| Loans by Type | ||||||||
| Construction and land | $ | 37,659 | $ | 24,375 | ||||
| Farmland | 20,749 | 17,150 | ||||||
| Permanent 1 - 4 | 163,302 | 132,172 | ||||||
| Permanent 1 - 4 - junior liens and revolving | 28,852 | 25,220 | ||||||
| Multifamily | 24,280 | 18,577 | ||||||
| Nonresidential | 225,946 | 150,492 | ||||||
| Commercial business | 83,015 | 59,697 | ||||||
| Consumer and other | 19,931 | 21,935 | ||||||
| 603,734 | 449,618 | |||||||
| Loans acquired through FDIC-assisted acquisitions: | ||||||||
| Non covered | 83,317 | 17,384 | ||||||
| Covered | 65,815 | 95,493 | ||||||
| 149,132 | 112,877 | |||||||
| 752,866 | 562,495 | |||||||
| OREO (excluding assets acquired through FDIC-assisted acquisitions): | 3,028 | 2,992 | ||||||
| OREO assets acquired through FDIC-assisted acquisitions: | ||||||||
| Non Covered | 1,363 | 655 | ||||||
| Covered | 9,460 | 8,445 | ||||||
| 13,851 | 12,092 | |||||||
| Asset Quality Data (excluding assets acquired through FDIC-assisted acquisitions): | ||||||||
| Allowance for loan losses to total loans | 1.51 | % | 1.70 | % | ||||
| Allowance for loan losses to average loans | 1.53 | % | 1.35 | % | ||||
| Allowance for loan losses to non-performing loans | 71.56 | % | 71.44 | % | ||||
| Accruing past due loans | $ | 1,316 | $ | 452 | ||||
| Nonaccrual loans | 12,723 | 10,681 | ||||||
| Loans - 90 days past due & still accruing | - | - | ||||||
| Total non-performing loans | 12,723 | 10,681 | ||||||
| OREO and repossessed assets | 3,028 | 2,992 | ||||||
| Total non-performing assets | 15,751 | 13,673 | ||||||
| Non-performing loans to total loans | 2.11 | % | 2.38 | % | ||||
| Non-performing assets to total assets | 1.15 | % | 1.27 | % | ||||
| QTD Net charge-offs to average loans (annualized) | 0.27 | % | 0.24 | % | ||||
| Net charge-offs QTD | $ | 406 | $ | 265 | ||||
| YTD Net charge-offs to average loans | 0.07 | % | 0.06 | % | ||||
| Net charge-offs YTD | $ | 406 | $ | 265 | ||||
| Trouble debt restructuring - nonaccrual | $ | 4,593 | $ | 6,679 | ||||
| Trouble debt restructuring - accruing | 2,023 | 3,514 | ||||||
| Total trouble debt restructuring | 6,616 | 10,193 | ||||||
| Total criticized assets | 25,474 | 32,782 | ||||||
| Total classified assets | $ | 22,118 | $ | 25,629 | ||||
| Heritage Financial Group, Inc. |
|
|||||||||||||||||||
| First Quarter 2013 Earnings Release Supplement | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Five Quarter Comparison for the Quarter Ended | ||||||||||||||||||||
| 3/31/13 | 12/31/12 | 9/30/12 | 6/30/12 | 3/31/12 | ||||||||||||||||
| Loans by Type | ||||||||||||||||||||
| Construction and land | $ | 37,659 | $ | 33,340 | $ | 30,010 | $ | 31,134 | $ | 24,375 | ||||||||||
| Farmland | 20,749 | 20,141 | 20,298 | 18,121 | 17,150 | |||||||||||||||
| Permanent 1 - 4 | 163,302 | 161,883 | 157,551 | 148,162 | 132,172 | |||||||||||||||
| Permanent 1 - 4 - junior liens and revolving | 28,852 | 27,345 | 25,507 | 25,289 | 25,220 | |||||||||||||||
| Multifamily | 24,280 | 21,293 | 19,805 | 19,639 | 18,577 | |||||||||||||||
| Nonresidential | 225,946 | 212,570 | 193,392 | 177,307 | 150,492 | |||||||||||||||
| Commercial business | 83,015 | 83,659 | 68,800 | 58,589 | 59,697 | |||||||||||||||
| Consumer and other | 19,931 | 25,498 | 26,521 | 24,172 | 21,935 | |||||||||||||||
| 603,734 | 585,729 | 541,884 | 502,413 | 449,618 | ||||||||||||||||
| Loans acquired through FDIC-assisted acquisitions: | ||||||||||||||||||||
| Non covered | 83,317 | 11,850 | 14,291 | 15,202 | 17,384 | |||||||||||||||
| Covered | 65,815 | 72,425 | 78,757 | 87,386 | 95,493 | |||||||||||||||
| 752,866 | 670,004 | 634,932 | 605,001 | 562,495 | ||||||||||||||||
| Asset Quality Data (excluding Loans acquired through FDIC-assisted acquisitions): | ||||||||||||||||||||
| Allowance for loan losses to total loans | 1.51 | % | 1.55 | % | 1.57 | % | 1.61 | % | 1.70 | % | ||||||||||
| Allowance for loan losses to average loans | 1.53 | % | 1.62 | % | 1.61 | % | 1.70 | % | 1.35 | % | ||||||||||
| Allowance for loan losses to non-performing loans | 71.56 | % | 61.73 | % | 52.15 | % | 81.27 | % | 71.42 | % | ||||||||||
| Accruing past due loans | $ | 1,316 | $ | 2,131 | $ | 1,038 | $ | 3,215 | $ | 452 | ||||||||||
| Nonaccrual loans | 12,723 | 14,678 | 16,358 | 9,965 | 10,681 | |||||||||||||||
| Loans - 90 days past due & still accruing | - | - | - | - | - | |||||||||||||||
| Total non-performing loans | 12,723 | 14,678 | 16,358 | 9,965 | 10,681 | |||||||||||||||
| OREO and repossessed assets | 3,028 | 2,650 | 1,403 | 1,519 | 2,992 | |||||||||||||||
| Total non-performing assets | 15,751 | 17,328 | 17,761 | 11,484 | 13,673 | |||||||||||||||
| Non-performing loans to total loans | 2.11 | % | 2.51 | % | 3.02 | % | 1.98 | % | 2.38 | % | ||||||||||
| Non-performing assets to total assets | 1.15 | % | 1.58 | % | 1.68 | % | 1.08 | % | 1.75 | % | ||||||||||
| Net charge-offs to average loans (annualized) | 0.27 | % | 0.05 | % | 0.24 | % | 0.23 | % | 0.24 | % | ||||||||||
| Net charge-offs | $ | 406 | $ | 68 | $ | 320 | $ | 279 | $ | 265 | ||||||||||
|
Note: |
||||||||||||||||||||
| Certain prior-period amounts have been reclassified to conform with current presentation. | ||||||||||||||||||||
| Loans acquired through FDIC-assisted acquisitions include loans acquired in the acquisition of The Tattnall Bank in December of 2009, the acquisition of Citizens Bank of Effingham in February 2011, First Southern National Bank in August 2011, and Frontier Bank in March 2013. The acquisitions of The Tattnall Bank and Frontier Bank did not involve loss-share agreements with the FDIC. The acquisitions of Citizens Bank of Effingham and First Southern National Bank involved loss-share agreements 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. | ||||||||||||||||||||
