JONESBORO, Ga.--(BUSINESS WIRE)--Heritage Southeast Bancorporation, Inc. (“Company”) (OTCQX: HSBI) a $1.5 billion bank holding company headquartered in Jonesboro, Georgia today announced quarterly net income of $901,000 or $0.13 per diluted share for the third quarter of 2020 compared to $948,000 or $0.13 per diluted share for the quarter ended June 30, 2020.
Highlights of the Company’s performance and results for the quarter ended September 30, 2020 include the following:
- Pre-tax core earnings (excluding any impact from the Paycheck Protection Program (PPP), credit charges and securities gains) improved 42% when compared to previous quarter (see GAAP to Non-GAAP Reconciliation).
- Significant reductions to the legacy problem assets portfolio occurred during the period as total classified assets were down $11.5 million, or 40%.
- The COVID-19 loan modifications declined in the third quarter as 90% of loans granted payment deferrals related to the pandemic have returned to original terms. This portfolio decreased from $165 million at June 30, 2020 to $16 million at September 30, 2020 and now represents less than 2% of loans outstanding (excluding PPP loans).
- Successfully completed the first of two core processing conversions which will ultimately create the infrastructure for full backroom consolidation and overall efficiency.
- Purchased two parcels in Cumming and Carrollton for future branch expansion. These markets are natural extensions to our existing footprint and anticipate the new locations to open in the first half of 2021.
Commenting on the announcement, Leonard Moreland, Chief Executive Officer of HSBI, said, “Our performance in the third quarter demonstrates our team’s ability to remain committed to the business plan despite on-going disruptions created by the COVID-19 pandemic. Although the first full year under the new operating model was challenging, we are pleased with our plan execution and the continued development of a common culture and purpose. This foundation has us well positioned to take advantage of current market opportunities, enhance the customer experience, support our communities and deliver an acceptable return to our shareholders.”
Net Interest Income
The Company’s net interest income increased from $11.8 million during the second quarter of 2020 to $11.9 million during the third quarter of 2020. The Company’s reported net interest margin decreased 28 basis points from 3.71% for the second quarter of 2020 to 3.43% for the third quarter of 2020. The net interest margin was negatively impacted by the subordinated debt issuance on June 30, 2020 and the expansion of our revolving senior debt facility. Earning asset yield and cost of funds decreased during the period 29 basis points and one basis point, respectively.
Asset Quality
Classified assets, which include nonperforming assets, totaled $17.6 million at September 30, 2020, compared with $29.1 million at June 30, 2020 and $28.0 million at December 31, 2019. The decrease during the third quarter was due to the execution of specific resolution plans on the legacy portfolio. These assets were resolved without any additional losses being recorded. Classified assets (adjusted for SBA guarantees) to tier one capital plus allowance for loan losses was 11.9% at September 30, 2020 versus 18.1% at June 30, 2020 and 22.0% at December 31, 2019. Past due loans decreased from $3.5 million, or 0.37% of total loans outstanding (exclusive of PPP), at June 30, 2020 to $2.2 million, or 0.23% of total loans outstanding (exclusive of PPP), at September 30, 2020.
As a result of the Company’s quarterly analysis of the adequacy of the allowance for loan losses, the Company recorded a provision for loan losses of $2.6 million in the third quarter of 2020, equal to the amount recorded in each of the first two quarters of 2020. The elevated provision for credit losses recorded in the first nine months of 2020 reflects the uncertain economic impact from the COVID-19 pandemic. In the third quarter of 2020, net loan charge-offs were $397,000 or 0.15% of average loans compared with $108,000 or 0.04% of average loans in the second quarter of 2020. For the nine months ended September 30, 2020, net charge-offs were $671,000 or 0.09% of average loans.
Non-interest Income
During the quarter ended September 30, 2020, non-interest income decreased from $4.1 million for the second quarter of 2020 to $3.9 million for the third quarter of 2020. Lower gains on sale of securities were partially offset by improved activity-based account service charges of $215,000, higher debit / ATM card fees of $97,000 and increased gains on sales of SBA loans of $214,000.
Non-interest Expense
Non-interest expense increased $77,000, from $12.0 million in the second quarter of 2020 to $12.1 million in the third quarter of 2020. Salaries and employee benefits increased $600,000 due primarily to deferred PPP costs recorded in the second quarter. The increase was partly offset by lower other real estate owned costs and other operating expenses to secure the work environment during the pandemic.
Balance Sheet
Loans, excluding PPP, decreased $1.4 million from $950.9 million at June 30, 2020 to $949.5 million at September 30, 2020. Excluding reductions related to previously mentioned problem loan workouts, the loan portfolio grew $7.1 million in the period.
Total deposits increased $29.2 million, or 2.3%, from the quarter ended June 30, 2020 to the quarter ended September 30, 2020. Demand deposits increased $22.1 million and money market and savings deposits increased $18.1 million. These increases were partially offset by a reduction in time deposits of $11.0 million in the period. Overall, the increases to the deposit base associated with PPP and other consumer-based stimulus programs remain on the balance sheet at September 30, 2020 and is estimated to be $150 million.
Capital
The Company continues to remain well capitalized. The issuance of subordinated notes in the second quarter provided support for its wholly owned subsidiary, Heritage Southeast Bank (“Bank”). This coupled with an enhanced revolving senior debt facility creates needed flexibility going forward. At September 30, 2020, the Bank’s Leverage Ratio was 9.08%, its Common Equity Tier I and Tier 1 Capital ratios were 12.10%, and its Total Risk-Based Capital ratio was 13.26%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized”, which is the highest possible regulatory designation. Additionally, excluding the balance sheet growth associated with government stimulus programs, the Bank’s Leverage Ratio would be in excess of 10%.
About Heritage Southeast Bancorporation, Inc.
Heritage Southeast Bancorporation, Inc. serves as the holding company for Heritage Southeast Bank, which is headquartered in Jonesboro, GA and operates under the names “Heritage Bank,” “The Heritage Bank,” and “Providence Bank” in its various markets. With approximately $1.5 billion in assets, the Bank provides a well-rounded offering of commercial and consumer products through its 24 locations. For additional information, visit the HSBI website.
Forward-Looking Information
Statements included in this press release, which are not historical in nature, are intended to be, and hereby are identified as, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “will,” “may,” “anticipate,” “create,” “plan,” “expect,” “should,” and “could” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results. Such risks, uncertainties and assumptions, include, among others, the following:
• the possibility that the anticipated benefits of the transaction, including anticipated improved product and service offerings, efficiencies and strategic gains, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the three companies or as a result of the strength of the economy, competitive factors in the areas where the combined company does business, or as a result of other unexpected factors or events;
• the impact of purchase accounting with respect to the transaction, or any change in the assumptions used regarding the assets purchased and liabilities assumed to determine their fair value;
• the integration of the businesses and operations of the three companies, which may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to the combined company’s business; and
• other factors that may affect future results of the combined company, including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; actions of the Federal Reserve Board; and other legislative and regulatory actions and reforms.
Heritage Southeast Bancorporation, Inc. and its subsidiary disclaim any obligation to update or revise any forward-looking statements contained in this press release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by law.
| HERITAGE SOUTHEAST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||||
| Financial Highlights | ||||||||||||
| (Unaudited) (in thousands, except per share data) | ||||||||||||
Three Months Ended |
||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
|||||||||
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
| Earnings: | ||||||||||||
| Net Interest Income | $ |
11,901 |
|
$ |
11,769 |
|
$ |
12,213 |
|
$ |
12,477 |
|
| Net Income |
|
901 |
|
|
948 |
|
|
1,616 |
|
|
2,740 |
|
| Per Share Data: | ||||||||||||
| Earnings per share: | ||||||||||||
| Basic | $ |
0.13 |
|
$ |
0.14 |
|
$ |
0.23 |
|
$ |
0.40 |
|
| Diluted | $ |
0.13 |
|
$ |
0.13 |
|
$ |
0.23 |
|
$ |
0.38 |
|
| Weighted average number of shares: | ||||||||||||
| Basic |
|
6,921 |
|
|
6,908 |
|
|
6,893 |
|
|
6,877 |
|
| Diluted |
|
7,139 |
|
|
7,131 |
|
|
7,117 |
|
|
7,204 |
|
| Period-end number of shares (1) |
|
7,229 |
|
|
7,227 |
|
|
7,231 |
|
|
7,242 |
|
| Book value per share (period-end) | $ |
19.62 |
|
$ |
19.45 |
|
$ |
19.29 |
|
$ |
18.71 |
|
| Tangible book value per share (period-end) | $ |
14.54 |
|
$ |
14.34 |
|
$ |
14.14 |
|
$ |
13.60 |
|
| Key Ratios (percent): | ||||||||||||
| Return on average assets |
|
0.24 |
% |
|
0.27 |
% |
|
0.49 |
% |
|
0.83 |
% |
| Return on average tangible equity |
|
3.44 |
% |
|
3.70 |
% |
|
6.45 |
% |
|
10.74 |
% |
| Yield on interest earning assets |
|
4.03 |
% |
|
4.32 |
% |
|
5.01 |
% |
|
5.13 |
% |
| Cost of funds |
|
0.60 |
% |
|
0.61 |
% |
|
0.80 |
% |
|
0.84 |
% |
| Cost of interest bearing liabilities |
|
0.87 |
% |
|
0.87 |
% |
|
1.07 |
% |
|
1.14 |
% |
| Net interest margin |
|
3.43 |
% |
|
3.71 |
% |
|
4.21 |
% |
|
4.29 |
% |
| Net interest margin, excluding PPP loans |
|
3.67 |
% |
|
3.78 |
% |
|
4.21 |
% |
|
4.29 |
% |
| Non-interest income as a percent of total revenue |
|
24.7 |
% |
|
26.0 |
% |
|
27.9 |
% |
|
23.6 |
% |
| Efficiency Ratio |
|
75.1 |
% |
|
74.2 |
% |
|
71.3 |
% |
|
70.8 |
% |
| Asset Quality (period-end): | ||||||||||||
| Allowance for loan losses to total loans |
|
1.23 |
% |
|
1.02 |
% |
|
0.90 |
% |
|
0.65 |
% |
| Allowance for loan losses to loans, excluding PPP loans |
|
1.36 |
% |
|
1.13 |
% |
|
0.90 |
% |
|
0.65 |
% |
| Allowance for loan losses to total nonperforming loans |
|
118.6 |
% |
|
54.9 |
% |
|
54.4 |
% |
|
36.9 |
% |
| Nonperforming assets to total assets |
|
1.0 |
% |
|
1.9 |
% |
|
1.8 |
% |
|
1.9 |
% |
| Net charge-offs (annualized) to average loans |
|
0.15 |
% |
|
0.04 |
% |
|
0.07 |
% |
|
0.06 |
% |
| Net charge-offs (annualized) to average loans, excluding PPP loans |
|
0.17 |
% |
|
0.05 |
% |
|
0.07 |
% |
|
0.06 |
% |
| Capital (period-end): | ||||||||||||
| Heritage Southeast Bank risk based capital ratios: | ||||||||||||
| CET1 |
|
12.10 |
% |
|
11.99 |
% |
|
10.58 |
% |
|
10.24 |
% |
| Tier 1 |
|
12.10 |
% |
|
11.99 |
% |
|
10.58 |
% |
|
10.24 |
% |
| Total |
|
13.26 |
% |
|
12.97 |
% |
|
11.36 |
% |
|
10.81 |
% |
| Leverage |
|
9.08 |
% |
|
9.55 |
% |
|
8.92 |
% |
|
8.54 |
% |
| Other (period-end): | ||||||||||||
| Branches |
|
24 |
|
|
24 |
|
|
24 |
|
|
23 |
|
| FTE |
|
289 |
|
|
302 |
|
|
309 |
|
|
309 |
|
| (1) Includes restricted stock and shares yet to be issued under a supplemental executive retirement plan. | ||||||||||||
| HERITAGE SOUTHEAST BANCORPORATION, INC. AND SUBSIDIARY | |||||||||||
| Consolidated Statements of Income | |||||||||||
| (Unaudited) (in thousands, except per share data) | |||||||||||
Three Months Ended |
|
Nine Months Ended |
|||||||||
September 30, |
June 30, |
March 31, |
December 31, |
|
September 30, |
||||||
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|
|
2020 |
|
| Interest and dividend revenue: | |||||||||||
| Loans, including fees | $ |
12,806 |
$ |
12,748 |
$ |
13,564 |
$ |
13,903 |
$ |
39,118 |
|
| PPP loans, including fees |
|
666 |
|
523 |
|
- |
|
- |
|
1,189 |
|
| Investment securities |
|
426 |
|
394 |
|
618 |
|
606 |
|
1,438 |
|
| Fed funds sold, deposits in banks and other |
|
76 |
|
40 |
|
347 |
|
406 |
|
463 |
|
| Total interest and dividend revenue |
|
13,974 |
|
13,705 |
|
14,529 |
|
14,915 |
|
42,208 |
|
| Interest expense: | |||||||||||
| Deposits |
|
1,457 |
|
1,673 |
|
2,022 |
|
2,116 |
|
5,152 |
|
| Fed funds purchased and repurchase agreements |
|
21 |
|
20 |
|
50 |
|
54 |
|
91 |
|
| Federal Home Loan Bank advances |
|
1 |
|
14 |
|
23 |
|
25 |
|
38 |
|
| Line of credit |
|
196 |
|
135 |
|
100 |
|
100 |
|
431 |
|
| Subordinated debentures |
|
313 |
|
- |
|
- |
|
- |
|
313 |
|
| Line of credit |
|
85 |
|
94 |
|
121 |
|
143 |
|
300 |
|
| Total interest expense |
|
2,073 |
|
1,936 |
|
2,316 |
|
2,438 |
|
6,325 |
|
| Net interest income |
|
11,901 |
|
11,769 |
|
12,213 |
|
12,477 |
|
35,883 |
|
| Provision for loan losses |
|
2,550 |
|
2,550 |
|
2,550 |
|
560 |
|
7,650 |
|
| Net interest revenue after provision for loan losses |
|
9,351 |
|
9,219 |
|
9,663 |
|
11,917 |
|
28,233 |
|
| Noninterest revenue: | |||||||||||
| Service charges and fees |
|
1,433 |
|
1,218 |
|
1,698 |
|
1,727 |
|
4,349 |
|
| Interchange and ATM fees |
|
1,524 |
|
1,427 |
|
1,268 |
|
1,315 |
|
4,219 |
|
| Securities gains, net |
|
- |
|
741 |
|
572 |
|
- |
|
1,313 |
|
| Gain on sale of loans |
|
275 |
|
61 |
|
551 |
|
184 |
|
887 |
|
| Other |
|
678 |
|
696 |
|
639 |
|
628 |
|
2,013 |
|
| Total noninterest revenue |
|
3,910 |
|
4,143 |
|
4,728 |
|
3,854 |
|
12,781 |
|
| Operating expenses: | |||||||||||
| Salaries and employee benefits |
|
6,477 |
|
5,877 |
|
6,856 |
|
6,125 |
|
19,210 |
|
| Occupancy and equipment |
|
1,454 |
|
1,382 |
|
1,292 |
|
1,376 |
|
4,128 |
|
| Other real estate expenses, including losses | |||||||||||
| on sales and impairments, net |
|
113 |
|
619 |
|
73 |
|
44 |
|
805 |
|
| Other |
|
4,070 |
|
4,159 |
|
4,098 |
|
4,324 |
|
12,327 |
|
| Total other operating expenses |
|
12,114 |
|
12,037 |
|
12,319 |
|
11,869 |
|
36,470 |
|
| Income before income tax expense |
|
1,147 |
|
1,325 |
|
2,072 |
|
3,902 |
|
4,544 |
|
| Income tax expense |
|
246 |
|
377 |
|
456 |
|
1,162 |
|
1,079 |
|
| Net income | $ |
901 |
$ |
948 |
$ |
1,616 |
$ |
2,740 |
$ |
3,465 |
|
| Average common shares outstanding |
|
6,921 |
|
6,908 |
|
6,893 |
|
6,877 |
|
6,906 |
|
| Shares for diluted earnings per share |
|
7,139 |
|
7,131 |
|
7,117 |
|
7,204 |
|
7,126 |
|
| Basic earnings per common share | $ |
0.13 |
$ |
0.14 |
$ |
0.23 |
$ |
0.40 |
$ |
0.50 |
|
| Diluted earnings per common share | $ |
0.13 |
$ |
0.13 |
$ |
0.23 |
$ |
0.38 |
$ |
0.49 |
|
| HERITAGE SOUTHEAST BANCORPORATION, INC. AND SUBSIDIARY | |||||||||||||||
| Consolidated Balance Sheets | |||||||||||||||
| (in thousands) | |||||||||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
(Unaudited) |
|||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
|||||||||||
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
| Assets | |||||||||||||||
| Cash and due from banks | $ |
23,001 |
|
$ |
26,767 |
|
$ |
37,192 |
|
$ |
30,458 |
|
$ |
26,633 |
|
| Interest-bearing deposits with banks |
|
178,473 |
|
|
172,961 |
|
|
95,446 |
|
|
142,552 |
|
|
113,293 |
|
| Cash and cash equivalents |
|
201,474 |
|
|
199,728 |
|
|
132,638 |
|
|
173,010 |
|
|
139,926 |
|
| Securities available for sale, at fair value |
|
157,045 |
|
|
131,429 |
|
|
133,520 |
|
|
125,479 |
|
|
104,265 |
|
| Other investments |
|
1,203 |
|
|
1,451 |
|
|
1,451 |
|
|
1,322 |
|
|
1,322 |
|
| Loans: | |||||||||||||||
| Loans, excluding PPP loans |
|
949,473 |
|
|
950,920 |
|
|
929,295 |
|
|
911,850 |
|
|
913,306 |
|
| PPP loans |
|
103,402 |
|
|
103,074 |
|
|
- |
|
|
- |
|
|
- |
|
| Allowance for loan losses |
|
(12,925 |
) |
|
(10,772 |
) |
|
(8,330 |
) |
|
(5,946 |
) |
|
(5,523 |
) |
| Loans, net |
|
1,039,950 |
|
|
1,043,222 |
|
|
920,965 |
|
|
905,904 |
|
|
907,783 |
|
| Premises and equipment, net |
|
37,154 |
|
|
34,375 |
|
|
34,537 |
|
|
34,443 |
|
|
34,192 |
|
| Bank owned life insurance |
|
28,536 |
|
|
28,334 |
|
|
28,129 |
|
|
26,802 |
|
|
26,617 |
|
| Other real estate owned |
|
5,043 |
|
|
8,496 |
|
|
9,029 |
|
|
9,293 |
|
|
11,838 |
|
| Goodwill |
|
28,275 |
|
|
28,275 |
|
|
28,275 |
|
|
28,275 |
|
|
28,275 |
|
| Core deposit intangible, net |
|
8,470 |
|
|
8,707 |
|
|
8,944 |
|
|
9,182 |
|
|
9,498 |
|
| Deferred tax asset, net |
|
14,989 |
|
|
15,276 |
|
|
15,660 |
|
|
16,598 |
|
|
19,300 |
|
| Other assets |
|
8,058 |
|
|
6,156 |
|
|
5,807 |
|
|
5,743 |
|
|
3,140 |
|
| Total Assets | $ |
1,530,197 |
|
$ |
1,505,449 |
|
$ |
1,318,955 |
|
$ |
1,336,051 |
|
$ |
1,286,156 |
|
| Liabilities | |||||||||||||||
| Deposits: | |||||||||||||||
| Noninterest-bearing | $ |
427,389 |
|
$ |
417,690 |
|
$ |
312,203 |
|
$ |
296,851 |
|
$ |
304,342 |
|
| Interest-bearing demand |
|
237,710 |
|
|
225,292 |
|
|
199,585 |
|
|
234,334 |
|
|
189,500 |
|
| Money market and savings |
|
355,308 |
|
|
337,169 |
|
|
299,901 |
|
|
291,778 |
|
|
284,047 |
|
| Time |
|
290,521 |
|
|
301,532 |
|
|
317,571 |
|
|
331,515 |
|
|
328,830 |
|
| Total deposits |
|
1,310,928 |
|
|
1,281,683 |
|
|
1,129,260 |
|
|
1,154,478 |
|
|
1,106,719 |
|
| Securities sold under agreements to repurchase |
|
15,407 |
|
|
17,194 |
|
|
13,310 |
|
|
12,295 |
|
|
11,418 |
|
| Federal Home Loan Bank advances |
|
- |
|
|
4,167 |
|
|
4,667 |
|
|
5,167 |
|
|
5,667 |
|
| Line of credit |
|
24,688 |
|
|
24,688 |
|
|
14,688 |
|
|
9,088 |
|
|
9,088 |
|
| Subordinated debt |
|
19,637 |
|
|
19,653 |
|
|
- |
|
|
- |
|
|
- |
|
| Junior subordinated debentures |
|
9,211 |
|
|
9,173 |
|
|
9,135 |
|
|
9,096 |
|
|
9,045 |
|
| Accrued expenses and other liabilities |
|
8,441 |
|
|
8,267 |
|
|
8,443 |
|
|
9,992 |
|
|
10,746 |
|
| Total liabilities |
|
1,388,312 |
|
|
1,364,825 |
|
|
1,179,503 |
|
|
1,200,116 |
|
|
1,152,683 |
|
| Shareholders' Equity | |||||||||||||||
| Common stock |
|
702 |
|
|
701 |
|
|
702 |
|
|
703 |
|
|
702 |
|
| Additional paid in capital |
|
116,628 |
|
|
116,396 |
|
|
116,201 |
|
|
116,234 |
|
|
116,089 |
|
| Retained earnings |
|
23,007 |
|
|
22,105 |
|
|
21,157 |
|
|
19,541 |
|
|
16,914 |
|
| Other comprehensive income (loss) |
|
1,548 |
|
|
1,422 |
|
|
1,392 |
|
|
(543 |
) |
|
(232 |
) |
| Total Shareholders' Equity |
|
141,885 |
|
|
140,624 |
|
|
139,452 |
|
|
135,935 |
|
|
133,473 |
|
| Total Liabilities and Shareholders' Equity | $ |
1,530,197 |
|
$ |
1,505,449 |
|
$ |
1,318,955 |
|
$ |
1,336,051 |
|
$ |
1,286,156 |
|
| HERITAGE SOUTHEAST BANCORPORATION, INC. AND SUBSIDIARY | |||||||||||
| GAAP to Non-GAAP Reconciliation | |||||||||||
| (Unaudited) (in thousands) | |||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
||||||||
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
| Income before income tax expense (GAAP) | $ |
1,147 |
|
$ |
1,325 |
|
$ |
2,072 |
|
$ |
3,902 |
| Provision for loan losses |
|
2,550 |
|
|
2,550 |
|
|
2,550 |
|
|
560 |
| Other real estate expenses, including losses on sales and impairments, net |
|
113 |
|
|
619 |
|
|
73 |
|
|
44 |
| Securities gains, net |
|
- |
|
|
(741 |
) |
|
(572 |
) |
|
- |
| PPP impact |
|
(646 |
) |
|
(1,523 |
) |
|
- |
|
|
- |
| Pre-tax core earnings | $ |
3,164 |
|
$ |
2,230 |
|
$ |
4,123 |
|
$ |
4,506 |
| HERITAGE SOUTHEAST BANCORPORATION, INC. AND SUBSIDIARY | |||||||||||||||
| Loan Portfolio | |||||||||||||||
| (Unaudited) (in thousands) | |||||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
|||||||||||
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
| Real estate loans: | |||||||||||||||
| Construction and land development | $ |
136,313 |
|
$ |
148,158 |
|
$ |
133,592 |
|
$ |
134,864 |
|
$ |
134,669 |
|
| Single-family residential |
|
166,673 |
|
|
167,734 |
|
|
176,844 |
|
|
166,082 |
|
|
164,123 |
|
| Commercial |
|
446,590 |
|
|
435,033 |
|
|
420,317 |
|
|
416,235 |
|
|
417,072 |
|
| Multifamily |
|
11,849 |
|
|
11,669 |
|
|
11,748 |
|
|
19,247 |
|
|
20,741 |
|
| Total real estate loans |
|
761,425 |
|
|
762,594 |
|
|
742,501 |
|
|
736,428 |
|
|
736,605 |
|
| Commercial loans (not secured by real estate) |
|
171,251 |
|
|
172,134 |
|
|
170,252 |
|
|
158,332 |
|
|
159,407 |
|
| Consumer loans (not secured by real estate) |
|
17,844 |
|
|
17,117 |
|
|
17,477 |
|
|
17,928 |
|
|
18,098 |
|
| Gross loans |
|
950,520 |
|
|
951,845 |
|
|
930,230 |
|
|
912,688 |
|
|
914,110 |
|
| Unearned income |
|
(1,047 |
) |
|
(925 |
) |
|
(935 |
) |
|
(838 |
) |
|
(804 |
) |
| Loans, net of unearned income | $ |
949,473 |
|
$ |
950,920 |
|
$ |
929,295 |
|
$ |
911,850 |
|
$ |
913,306 |
|
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
|||||||||||
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
| PPP loans: | |||||||||||||||
| Up to $50,000 | $ |
12,762 |
|
$ |
12,765 |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
| $50,001 - $150,000 |
|
27,371 |
|
|
27,371 |
|
|
- |
|
|
- |
|
|
- |
|
| $150,001 - $2 million |
|
47,724 |
|
|
47,724 |
|
|
- |
|
|
- |
|
|
- |
|
| Greater than $2 million |
|
17,953 |
|
|
17,953 |
|
|
- |
|
|
- |
|
|
- |
|
| Total PPP loans |
|
105,810 |
|
|
105,813 |
|
|
- |
|
|
- |
|
|
- |
|
| Unearned income |
|
(2,408 |
) |
|
(2,739 |
) |
|
- |
|
|
- |
|
|
- |
|
| PPP loans, net of unearned income | $ |
103,402 |
|
$ |
103,074 |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
| HERITAGE SOUTHEAST BANCORPORATION, INC. AND SUBSIDIARY | ||||||||||||
| Asset Quality Information | ||||||||||||
| (Unaudited) (in thousands) | ||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
|||||||||
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
| Classified assets: | ||||||||||||
| Nonperforming loans | $ |
10,902 |
|
$ |
19,638 |
|
$ |
15,317 |
|
$ |
16,096 |
|
| Other real estate owned |
|
5,043 |
|
|
8,496 |
|
|
9,029 |
|
|
9,293 |
|
| Total nonperforming assets |
|
15,945 |
|
|
28,134 |
|
|
24,346 |
|
|
25,389 |
|
| Accruing classified loans |
|
1,634 |
|
|
971 |
|
|
1,378 |
|
|
2,632 |
|
| Total classified assets | $ |
17,579 |
|
$ |
29,105 |
|
$ |
25,724 |
|
$ |
28,021 |
|
| Classified assets to Tier 1 capital plus ALL |
|
11.9 |
% |
|
18.1 |
% |
|
18.5 |
% |
|
22.0 |
% |
| Nonperforming assets to total assets |
|
1.0 |
% |
|
1.9 |
% |
|
1.8 |
% |
|
1.9 |
% |
| Allowance for loan losses: | ||||||||||||
| Balance at beginning of period | $ |
10,772 |
|
$ |
8,330 |
|
$ |
5,946 |
|
$ |
5,523 |
|
| Provision for loan losses |
|
2,550 |
|
|
2,550 |
|
|
2,550 |
|
|
560 |
|
| Charge-offs |
|
(403 |
) |
|
(170 |
) |
|
(307 |
) |
|
(701 |
) |
| Recoveries |
|
6 |
|
|
62 |
|
|
141 |
|
|
564 |
|
| Balance at end of period | $ |
12,925 |
|
$ |
10,772 |
|
$ |
8,330 |
|
$ |
5,946 |
|
| Loans, excluding PPP loans | $ |
949,324 |
|
$ |
950,920 |
|
$ |
929,295 |
|
$ |
911,850 |
|
| PPP loans |
|
103,551 |
|
|
103,074 |
|
|
- |
|
|
- |
|
| Performing past due loans |
|
2,193 |
|
|
3,506 |
|
|
4,798 |
|
|
4,987 |
|
| Allowance as % of loans |
|
1.23 |
% |
|
1.02 |
% |
|
0.90 |
% |
|
0.65 |
% |
| Allowance as % of loans, excluding PPP loans |
|
1.36 |
% |
|
1.13 |
% |
|
0.90 |
% |
|
0.65 |
% |
| Allowance as a % of nonperforming loans |
|
118.6 |
% |
|
54.9 |
% |
|
54.4 |
% |
|
36.9 |
% |
| Average loans, excluding PPP loans |
|
947,177 |
|
|
946,389 |
|
|
930,099 |
|
|
924,878 |
|
| Average PPP loans |
|
102,396 |
|
|
78,981 |
|
|
- |
|
|
- |
|
| Net charge-offs (annualized) to average loans |
|
0.15 |
% |
|
0.04 |
% |
|
0.07 |
% |
|
0.06 |
% |
| Net charge-offs (annualized) to average loans, excluding PPP loans |
|
0.17 |
% |
|
0.05 |
% |
|
0.07 |
% |
|
0.06 |
% |