Heritage Financial 8-K Heritage Financial Group Posts Higher First Quarter Net Income

Exhibit 99

Heritage Financial Group Posts Higher First Quarter Net Income

Company Receives Regulatory Approval to Purchase Five Park Avenue Bank Branches from PAB Bankshares

ALBANY, Ga.--(BUSINESS WIRE)--May 10, 2010--Heritage Financial Group (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced financial results for the first quarter ended March 31, 2010. The Company's first quarter net income totaled $798,000 or $0.08 per diluted share, more than doubling net income of $395,000 or $0.04 per diluted share reported for the year-earlier quarter. Other highlights of the quarter included a strong increase in net interest income versus the year-earlier quarter, a 38% decrease in the loan loss provision – reflecting stabilizing quality in the Company's loan portfolio, and solid year-over-year advances in total assets, loans receivable, and deposits.

Separately, the Company also announced that it has received regulatory approval on its previously announced purchase of five bank branches from PAB Bankshares, Inc. (NASDAQ: PABK), the Valdosta, Georgia-based holding company for The Park Avenue Bank. These branches, all in Georgia, are located in Statesboro (2), Baxley, Hazlehurst, and Adel. The transaction, which is expected to add approximately $52 million to the Bank's loan portfolio and approximately $98 million to its deposit base, now is expected to close on or about May 24, 2010.

Commenting on the results, Leonard Dorminey, President and Chief Executive Officer of Heritage Financial Group, said, "We are pleased to post a solid start to the new year, with significantly higher earnings for the first quarter and strengthening credit quality. These results also reflect the positive impact of the recent addition of three branches – one in Florida by acquisition and two in Georgia by means of a FDIC-assisted whole-bank purchase and assumption – that has contributed to the substantial loan and deposit growth we have experienced since the first quarter of 2009.

"We are excited about the growth opportunities we see for our company and bank," Dorminey added. "Our increased expansion activity over the past year has taken us to new markets, helped fill in our branch footprint between Albany and Ocala, and has allowed us to deploy our capital position. We look forward to continuing these efforts with the conclusion of our purchase of five branches from PAB Bankshares later this month, which will mark nearly a doubling of our branch network in just the past year. We also remain cautiously optimistic about the prospects for an improving economy over the course of the year and the new, organic growth opportunities that may accompany such a recovery."

As previously announced, in March 2010 Heritage Financial Group adopted a plan to reorganize from a two-tier mutual holding company to a full stock holding company and will undertake a "second-step" offering of shares of the new holding company's common stock. The conversion and offering is expected to be completed in the third quarter of 2010, subject to regulatory, stockholder and depositor approvals. Keefe Bruyette & Woods will serve as the sole book running manager for the offering and Sterne Agee & Leach will serve as co-manager for the offering.

At the end of the first quarter of 2010, Heritage Financial Group's capital levels remained significantly above the levels required to be considered "well-capitalized" under regulatory standards – the highest capital rating category a financial institution can achieve. The Company's total risk-based capital ratio at March 31, 2010, was 15.3%, significantly exceeding the required minimum of 10% to be considered a well-capitalized institution. The ratio of tangible common equity to total tangible assets (both non-GAAP measures – see reconciliation to closest GAAP measures later in this release) was 10.5% as of March 31, 2010. The Company provides this ratio, in addition to those defined by banking regulators, because of its widespread use by investors as a means to evaluate capital adequacy.

Net interest income for the first quarter increased 24% to $4,410,000 from $3,556,000 in the same quarter last year, primarily reflecting a higher level of interest-earning assets combined with lower funding costs. The Company's net interest margin increased 37 basis points to 3.68% in the first quarter of 2010 compared with 3.31% in the year-earlier period due to a higher level of interest-earning assets combined with lower funding costs. On a linked-quarter basis, net interest margin declined four basis points in the first quarter from 3.72% in the fourth quarter of 2009.

Total nonperforming loans and nonperforming assets were $6,518,000 and $10,088,000, respectively, at March 31, 2010, and included nonperforming assets and nonperforming loans of $327,000 and $13,000, respectively, associated with the portfolio acquired from the FDIC in December 2009. The acquired portfolio was not covered by a loss-share agreement, but was subject to a purchase discount totaling $15 million. Total nonperforming loans and nonperforming assets were $7,731,000 and $9,526,000, respectively, at December 31, 2009, and $7,916,000 and $9,319,000, respectively, at March 31, 2009.

In order to provide a more comparable analysis of credit quality issues, the Company provides credit quality information for its core loan portfolio, which excludes the FDIC acquired loan portfolio and is equivalent to prior reported periods. Nonperforming assets in the core portfolio increased to $9,758,000 at March 31, 2010, from $8,427,000 at December 31, 2009, due to an increase in Other Real Estate Owned (OREO) and repossessed assets, which rose to $3,253,000 from $1,190,000 in the fourth quarter of 2009. Nonperforming loans in the core portfolio at the end of the first quarter declined to $6,505,000 from $7,237,000 in the fourth quarter of 2009, primarily reflecting a slowing in the pace of loans being placed on nonperforming status. Nonperforming loans were 2.05% of total loans as of March 31, 2010, versus 2.34% of total loans at December 31, 2009.

Net charge-offs to average outstanding loans in the total portfolio, on an annualized basis, were 0.88% for the first quarter of 2010 versus 7.42% for the fourth quarter of 2009 and 0.42% in the year-earlier period. The higher level of net charge-offs in the fourth quarter of 2009 primarily reflected the Company's action to write down and charge off a significant amount of a single loan on raw land in preparation for a pending sale of the property. While this sale did not occur as planned, the net carrying value of the subject property is now well below appraised value.

Management believes that nonperforming assets and net charge-offs will likely remain at elevated levels, at least in the near term, because of the continued weakness in the economy. However, the Company has continued to reduce its exposure to acquisition, construction and development loans, with those representing only 7% of its core portfolio at March 31, 2010, versus 12% at the end of the first quarter of 2009. Additionally, criticized and classified loans have remained relatively stable over the past several months. Accordingly, the Company's provision for loan losses declined to $500,000 for the first quarter of 2010 from $800,000 in the year-earlier period and $3,700,000 in the fourth quarter of 2009, with the latter reflecting the previously mentioned partial write down and charge off of a single loan. At March 31, 2010, the allowance for loan losses represented 1.70% of total loans outstanding versus 1.81% of total loans outstanding at December 31, 2009, and 1.82% of total loans outstanding at March 31, 2009.

Noninterest income increased 10% to $1,812,000 for the first quarter of 2010 from $1,645,000 in the year-earlier quarter. Noninterest expense for the first quarter of 2010 increased 14% to $4,705,000 from $4,114,000 in the first quarter of 2009, primarily reflecting higher salaries and employee benefits related to the addition of three branches since the first quarter of 2009, as well as higher FDIC insurance premiums. These increases were partially offset by gains on the sale of OREO.

The Company's total assets increased 17% to $574,363,000 at March 31, 2010, from $490,992,000 at March 31, 2009, again primarily reflecting the acquisition of three branches since the year-earlier quarter. Gross loans increased 15% to $342,495,000 at March 31, 2010, from $298,151,000 at March 31, 2009. Deposits rose 33% to $428,403,000 at March 31, 2010, from $321,492,000 at the March 31, 2009. Total stockholders' equity of $61,615,000 at March 31, 2010, was down slightly from $62,421,000 at March 31, 2009.

Heritage Financial Group is the mid-tier holding company for HeritageBank of the South, a community-oriented bank serving primarily South Georgia and North Central Florida through 10 full-service banking offices. As of March 31, 2010, the Company reported total assets of approximately $574 million and total stockholders' equity of approximately $62 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.

Heritage, MHC, a mutual holding company formed in 2002, holds approximately 76% of the shares of Heritage Financial Group. The remaining 24% of Heritage Financial Group's shares are held by public stockholders.

Except for historical information contained herein, the matters included in this news release and other information in the Company's filings with the Securities and Exchange Commission may contain certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995 and include this statement for purposes of these safe harbor provisions. Further information concerning the Company and its business, including additional factors that could materially affect our financial results, is included in our other filings with the SEC.

Tangible Common Equity Ratio (Unaudited)
(Dollars in thousands, except per share amounts)
	March 31, 2010			Dec. 31, 2009			March 31, 2009
Total stockholders' equity	$	61,615		$	60,817		$	62,421
Less intangible assets		1,540			1,571			1,000
Tangible common equity	$	60,075		$	59,246		$	61,421
Total assets	$	574,363		$	571,948		$	490,992
Less intangible assets		1,540			1,571			1,000
Tangible assets	$	572,823		$	570,377		$	489,992
Total stockholders' equity to total assets		10.7	%		10.6	%		12.7	%
Tangible common equity ratio		10.5	%		10.4	%		12.5	%
Unaudited Financial Highlights
(In thousands, except per share amounts)
				First Quarter Ended March 31,
				2010			2009
Interest income				$	6,447		$	6,128
Interest expense					2,037			2,572
Net interest income					4,410			3,556
Provision for loan losses					500			800
Net interest income after provision for loan losses					3,910			2,756
Noninterest income					1,812			1,645
Noninterest expense					4,705			4,114
Loss before income taxes					1,017			287
Income tax benefit					219			(108	)
Net income				$	798		$	395
Net income per share:
Basic				$	0.08		$	0.04
Diluted				$	0.08		$	0.04
Weighted average shares outstanding:
Basic					10,081			10,026
Diluted					10,081			10,026
Dividends declared per share				$	0.09		$	0.08
	March 31, 2010			Dec. 31, 2009			March 31, 2009
Total assets	$	574,363		$	571,948		$	490,992
Cash and cash equivalents		24,414			14,922			12,563
Interest-bearing deposits in banks		26,988			43,236			651
Securities available for sale		115,552			120,527			128,712
Loans receivable		342,495			334,139			298,151
Allowance for loan losses		5,816			6,060			5,435
Total deposits		428,403			426,607			321,492
Federal Home Loan Bank advances		42,500			42,500			52,500
Stockholders' equity		61,615			60,817			62,421

Heritage Financial Group
First Quarter 2010 Earnings Release Supplement
(Dollars in thousands)
	Quarter Ended
	March 31,
	2010			2009
Income Statement Data
Interest income
Loans	$	5,320		$	4,593
Securities - taxable		776			1,225
Securities - nontaxable		298			293
Federal funds sold		9			17
Interest bearing deposits in banks		44			-
Total interest income		6,447			6,128
Interest expense
Deposits		1,524			1,888
Other borrowings		513			684
Total interest expense		2,037			2,572
Net interest income		4,410			3,556
Provision for loan losses		500			800
Net interest income after provision for loan losses		3,910			2,756
Non-interest income
Service charges on deposit accounts		824			808
Other service charges, fees & commissions		403			360
Brokerage fees		222			194
Mortgage origination fees		38			106
Bank owned life insurance		152			150
Gain (loss) on sale of securities		152			21
Impairment loss on securities		-			-
Other		21			6
Total non-interest income		1,812			1,645
Non-interest expense
Salaries and employee benefits		2,565			2,198
Equipment		255			273
Occupancy		306			292
Advertising & marketing		120			87
Legal & accounting		149			118
Consulting & other professional fees		71			62
Director fees & retirement		139			153
Telecommunications		69			62
Supplies		58			38
Data processing fees		481			330
(Gain) loss on sale and write-downs of other real estate owned		(231	)		49
Foreclosed asset expenses		171			45
FDIC insurance and other regulatory fees		170			81
Impairment loss on premises held for sale		-			-
Other operating		382			326
Total non-interest expense		4,705			4,114
Income before taxes		1,017			287
Applicable income tax (benefit)		219			(108	)
Net income	$	798		$	395
Weighted average shares - basic		10,081			10,026
Weighted average shares - diluted		10,081			10,026
Basic earnings per share	$	0.08		$	0.04
Diluted earnings per share		0.08			0.04
Cash dividend declared per share		0.09			0.08

Heritage Financial Group
First Quarter 2010 Earnings Release Supplement
(Dollars in thousands)
	Quarter Ended
	March 31,
	2010			2009
Balance Sheet Data (at period end)
Total loans	$	342,495		$	298,151
Allowance for loan losses		5,816			5,435
Intangible assets		1,540			1,000
Total assets		574,363			490,992
Non-interest bearing deposits		28,375			18,721
Interest bearing deposits		400,028			302,771
Federal home loan bank advances		42,500			52,500
Federal funds purchased and securities sold under agreement to repurchase		32,778			47,113
Stockholders' equity		61,615			62,421
Total shares outstanding		11,454			11,452
Less treasury shares		1,055			1,041
Net shares outstanding		10,399			10,411
Shares held by Heritage, MHC		7,869			7,869
Unearned ESOP shares		231			275
Book value per share	$	6.06		$	6.16
Tangible book value per share (non-GAAP)		5.91			6.06
Market value per share		12.08			7.25
	Quarter Ended
	March 31,
	2010			2009
Average Balance Sheet Data
Average interest bearing deposits in banks	$	33,419		$	536
Average federal funds sold		14,002			26,693
Average investment securities		117,578			126,789
Average loans		336,801			298,705
Average earning assets		501,800			452,723
Average assets		569,898			504,814
Average noninterest bearing deposits		29,171			18,723
Average interest bearing deposits		395,033			319,283
Average total deposits		424,204			338,006
Average federal funds purchased and securities sold under agreement to repurchase		33,048			44,793
Average Federal Home Loan Bank advances		42,500			52,500
Average interest bearing liabilities		470,581			416,576
Average stockholders' equity		61,145			62,879
Performance Ratios
Annualized return on average assets		0.56	%		0.31	%
Annualized return on average equity		5.22	%		2.51	%
Net interest margin		3.68	%		3.31	%
Net interest spread		3.57	%		3.10	%
Efficiency ratio		75.62	%		79.10	%
Capital Ratios
Average stockholders' equity to average assets		10.7	%		12.5	%
Tangible equity to tangible assets (non-GAAP)		10.5	%		12.4	%
Tier 1 leverage ratio		9.3	%		12.7	%
Tier 1 risk-based capital ratio		14.0	%		17.8	%
Total risk-based capital ratio		15.3	%		19.0	%
Other Information
Full-time equivalent employees		139			117
Number of full-service offices		10			8

Heritage Financial Group
First Quarter 2010 Earnings Release Supplement
(Dollars in thousands)
	Five Quarter Comparison
	3/31/09			6/30/09		9/30/09			12/31/09			3/31/10
Income Statement Data
Interest income
Loans	$	4,593		$	4,528	$	4,600		$	4,834		$	5,320
Securities - taxable		1,225			915		781			682			776
Securities - nontaxable		293			293		296			292			298
Federal funds sold		17			16		7			14			9
Interest bearing deposits in banks		-			-		1			13			44
Total interest income		6,128			5,752		5,685			5,835			6,447
Interest expense
Deposits		1,888			1,683		1,479			1,422			1,524
Other borrowings		684			645		500			492			513
Total interest expense		2,572			2,328		1,979			1,914			2,037
Net interest income		3,556			3,424		3,706			3,921			4,410
Provision for loan losses		800			500		2,500			3,700			500
Net interest income after provision for loan losses		2,756			2,924		1,206			221			3,910
Non-interest income
Service charges on deposit accounts		808			837		951			950			824
Other service charges, fees & commissions		360			362		338			345			403
Brokerage fees		194			216		252			252			222
Mortgage origination fees		106			104		66			68			38
Bank owned life insurance		150			159		155			156			152
Gain (loss) on sale of securities		21			345		470			73			152
Impairment loss on securities		-			-		-			-			-
Other		6			16		12			15			21
Total non-interest income		1,645			2,039		2,244			1,859			1,812
Non-interest expense
Salaries and employee benefits		2,198			2,227		2,296			2,177			2,565
Equipment		273			266		221			225			255
Occupancy		292			297		312			297			306
Advertising & marketing		87			111		147			94			120
Legal & accounting		118			155		118			102			149
Consulting & other professional fees		62			91		70			74			71
Director fees & retirement		153			153		155			92			139
Telecommunications		62			54		53			70			69
Supplies		38			46		46			47			58
Data processing fees		330			383		431			461			481
(Gain) loss on sale and write-downs of other real estate owned		49			255		80			38			(231	)
Foreclosed asset expenses		45			48		78			86			171
FDIC insurance and other regulatory fees		81			284		136			371			170
Impairment loss on premises held for sale		-			-		-			502			-
Other operating		326			372		307			328			382
Total non-interest expense		4,114			4,742		4,450			4,964			4,705
Income (loss) before taxes		287			221		(1,000	)		(2,884	)		1,017
Applicable income tax (benefit)		(109	)		66		(533	)		(1,148	)		219
Net income (loss)	$	396		$	155	$	(467	)	$	(1,736	)	$	798
Weighted average shares - basic		10,026			10,040		10,072			10,053			10,081
Weighted average shares - diluted		10,026			10,040		10,072			10,053			10,081
Basic earnings (loss) per share	$	0.04		$	0.02	$	(0.05	)	$	(0.17	)	$	0.08
Diluted earnings (loss) per share		0.04			0.02		(0.05	)		(0.17	)		0.08
Cash dividend declared per share		0.08			0.08		0.08			0.08			0.09

Heritage Financial Group
First Quarter 2010 Earnings Release Supplement
(Dollars in thousands)
	Five Quarter Comparison
	3/31/09			6/30/09			9/30/09			12/31/09			3/31/10
Balance Sheet Data (at period end)
Total loans	$	298,151		$	295,881		$	299,296		$	334,138		$	342,495
Allowance for loan losses		5,435			5,747			8,028			6,060			5,816
Intangible assets		1,000			1,000			1,000			1,571			1,540
Total assets		490,992			470,985			470,458			571,948			574,363
Non-interest bearing deposits		18,721			18,747			18,811			28,882			28,375
Interest bearing deposits		302,771			305,177			303,500			397,724			400,028
Federal home loan bank advances		52,500			42,500			42,500			42,500			42,500
Federal funds purchased and securities sold under agreement to repurchase		47,113			34,745			35,211			32,843			32,778
Stockholders' equity		62,421			62,132			62,823			60,817			61,615
Total shares outstanding		11,452			11,452			11,452			11,454			11,454
Less treasury shares		1,041			1,042			1,042			1,055			1,055
Net shares outstanding		10,411			10,410			10,410			10,399			10,399
Shares held by Heritage, MHC		7,869			7,869			7,869			7,869			7,869
Unearned ESOP shares		275			264			253			242			231
Book value per share	$	6.16		$	6.12		$	6.19		$	5.99		$	6.06
Tangible book value per share (non-GAAP)		6.06			6.03			6.09			5.83			5.91
Market value per share		7.25			8.57			8.28			7.25			12.08
	Five Quarter Comparison
	3/31/09			6/30/09			9/30/09			12/31/09			3/31/10
Average Balance Sheet Data
Average interest bearing deposits in banks	$	536		$	468		$	751		$	5,954		$	33,419
Average federal funds sold		26,693			24,362			11,746			21,607			14,002
Average investment securities		126,789			117,813			109,338			103,410			117,578
Average loans		298,705			296,363			296,800			305,694			336,801
Average earning assets		452,723			439,006			418,635			436,665			501,800
Average assets		504,814			493,868			471,517			494,889			569,898
Average noninterest bearing deposits		18,723			20,355			21,212			23,208			29,171
Average interest bearing deposits		319,283			306,540			302,408			325,547			395,033
Average total deposits		338,006			326,895			323,620			348,755			424,204
Average federal funds purchased and securities sold under agreement to repurchase		44,793			45,927			35,903			33,827			33,048
Average Federal Home Loan Bank advances		52,500			51,500			42,500			42,572			42,500
Average interest bearing liabilities		416,576			403,967			380,811			401,946			470,581
Average stockholders' equity		62,879			63,413			62,975			63,067			61,145
Performance Ratios
Annualized return on average assets		0.31	%		-0.38	%		-0.40	%		-1.40	%		0.56	%
Annualized return on average equity		2.52	%		-2.95	%		-2.97	%		-7.28	%		5.22	%
Net interest margin		3.31	%		3.27	%		3.68	%		3.72	%		3.68	%
Net interest spread		3.10	%		3.09	%		3.49	%		3.57	%		3.57	%
Efficiency ratio		79.10	%		74.79	%		74.79	%		85.88	%		75.62	%
Capital Ratios
Average stockholders' equity to average assets		12.5	%		12.8	%		13.4	%		12.7	%		10.7	%
Tangible equity to tangible assets (non-GAAP)		12.5	%		13.2	%		13.2	%		10.4	%		10.5	%
Tier 1 leverage ratio		12.7	%		12.9	%		13.2	%		11.2	%		9.3	%
Tier 1 risk-based capital ratio		17.8	%		18.6	%		18.0	%		14.2	%		14.0	%
Total risk-based capital ratio		19.0	%		19.8	%		19.3	%		15.5	%		15.3	%
Other Information
Full-time equivalent employees		117			118			117			134			139
Number of full-service offices		8			8			8			10			10

Heritage Financial Group
First Quarter 2010 Earnings Release Supplement
(Dollars in thousands)
										Quarter Ended
Total Portfolio										March 31,
										2010			2009
Loans by Type
Construction and land loans										$	24,193		$	36,926
Farmland loans											20,403			5,686
Permanent 1 - 4											92,241			73,606
Permanent 1 - 4 - junior liens and revolving											25,395			23,677
Multifamily											10,254			10,637
Nonresidential											88,476			59,169
Commercial business loans											47,081			42,882
Consumer and other loans											35,397			45,568
Fair market value adjustments											(945	)		-
											342,495			298,151
Asset Quality Data
Allowance for loan losses to total loans											1.70	%		1.82	%
Allowance for loan losses to average loans											1.73	%		1.82	%
Allowance for loan losses to non-performing loans											89.23	%		68.66	%
Loans - 30 to 89 days past due & still accruing										$	1,810		$	4,054
Nonaccrual loans											6,518			7,916
Loans - 90 days past due & still accruing											-			-
Total non-performing loans											6,518			7,916
OREO and repossessed assets											3,567			1,403
Total non-performing assets											10,085			9,319
Non-performing loans to total loans											1.90	%		2.66	%
Non-performing assets to total assets											1.76	%		1.90	%
Net charge-offs to average loans (annualized)											0.88	%		0.42	%
Net charge-offs										$	744		$	315
	Five Quarter Comparison
	3/31/09			6/30/09			9/30/09			12/31/09			3/31/10
Loans by Type
Construction and land loans	$	36,926		$	31,414		$	31,762		$	31,474		$	24,193
Farmland loans		5,686			5,743			7,101			16,387			20,403
Permanent 1 - 4		73,606			74,676			75,182			86,511			92,241
Permanent 1 - 4 - junior liens and revolving		23,677			23,697			23,556			25,930			25,395
Multifamily		10,637			10,596			10,899			12,257			10,254
Nonresidential		59,169			64,915			67,771			81,046			88,476
Commercial business loans		42,882			43,345			44,778			48,578			47,081
Consumer and other loans		45,568			41,494			38,424			39,183			35,397
Fair market value adjustments		-			-			-			(7,228	)		(945	)
		298,151			295,880			299,473			334,138			342,495
Asset Quality Data
Allowance for loan losses to total loans		1.82	%		1.94	%		2.68	%		1.81	%		1.70	%
Allowance for loan losses to average loans		1.82	%		1.94	%		2.70	%		1.98	%		1.73	%
Allowance for loan losses to non-performing loans		68.66	%		47.48	%		61.80	%		78.39	%		89.23	%
Loans - 30 to 89 days past due & still accruing	$	4,054		$	1,275		$	1,277		$	3,247		$	1,810
Nonaccrual loans		7,916			12,105			12,990			7,731			6,518
Loans - 90 days past due & still accruing		-			-			-			-			-
Total non-performing loans		7,916			12,105			12,990			7,731			6,518
OREO and repossessed assets		1,403			907			898			1,795			3,567
Total non-performing assets		9,319			13,012			13,888			9,526			10,085
Non-performing loans to total loans		2.66	%		4.09	%		4.34	%		2.31	%		1.90	%
Non-performing assets to total assets		1.90	%		2.76	%		2.95	%		1.67	%		1.76	%
Net charge-offs to average loans (annualized)		0.42	%		0.26	%		0.29	%		7.42	%		0.88	%
Net charge-offs	$	315		$	189		$	219		$	5,667		$	744

Heritage Financial Group
First Quarter 2010 Earnings Release Supplement
(Dollars in thousands)
										Quarter Ended
Core Portfolio										March 31,
										2010			2009
Loans by Type
Construction and land loans										$	22,329		$	36,926
Farmland loans											12,956			5,686
Permanent 1 - 4											87,420			73,606
Permanent 1 - 4 - junior liens and revolving											24,727			23,677
Multifamily											10,254			10,637
Nonresidential											81,128			59,169
Commercial business loans											44,448			42,882
Consumer and other loans											33,141			45,568
Fair market value adjustments											331			-
											316,734			298,151
Asset Quality Data
Loans - 30 to 89 days past due & still accruing										$	1,603		$	4,054
Nonaccrual loans											6,505			7,916
Loans - 90 days past due & still accruing											-			-
Total non-performing loans											6,505			7,916
OREO and repossessed assets											3,253			1,403
Total non-performing assets											9,758			9,319
Non-performing loans to total loans											2.05	%		2.66	%
Net charge-offs										$	744		$	315
	Five Quarter Comparison
	3/31/09			6/30/09			9/30/09			12/31/09			3/31/10
Loans by Type
Construction and land loans	$	36,926		$	31,414		$	31,762		$	28,385		$	22,329
Farmland loans		5,686			5,743			7,101			9,013			12,956
Permanent 1 - 4		73,606			74,676			75,182			81,055			87,420
Permanent 1 - 4 - junior liens and revolving		23,677			23,697			23,556			25,192			24,727
Multifamily		10,637			10,596			10,899			12,135			10,254
Nonresidential		59,169			64,915			67,771			71,158			81,128
Commercial business loans		42,882			43,345			44,778			45,836			44,448
Consumer and other loans		45,568			41,494			38,424			36,575			33,141
Fair market value adjustments		-			-			-			370			331
		298,151			295,880			299,473			309,719			316,734
Asset Quality Data
Loans - 30 to 89 days past due & still accruing	$	4,054		$	1,275		$	1,277		$	1,826		$	1,603
Nonaccrual loans		7,916			12,105			12,990			7,237			6,505
Loans - 90 days past due & still accruing		-			-			-			-			-
Total non-performing loans		7,916			12,105			12,990			7,237			6,505
OREO and repossessed assets		1,403			907			898			1,190			3,253
Total non-performing assets		9,319			13,012			13,888			8,427			9,758
Non-performing loans to total loans		2.66	%		4.09	%		4.34	%		2.34	%		2.05	%
Net charge-offs	$	315		$	189		$	219		$	5,667		$	744

Heritage Financial Group
First Quarter 2010 Earnings Release Supplement
(Dollars in thousands)
				Quarter Ended
FDIC Acquired Portfolio				March 31,
				2010			2009
Loans by Type
Construction and land loans				$	1,864		$	-
Farmland loans					7,447			-
Permanent 1 - 4					4,821			-
Permanent 1 - 4 - junior liens and revolving					668			-
Multifamily					-			-
Nonresidential					7,348			-
Commercial business loans					2,633			-
Consumer and other loans					2,256			-
Fair market value adjustments					(1,276	)		-
					25,761			-
Asset Quality Data
Loans - 30 to 89 days past due & still accruing				$	207		$	-
Nonaccrual loans					13			-
Loans - 90 days past due & still accruing					-			-
Total non-performing loans					13			-
OREO and repossessed assets					314			-
Total non-performing assets					327			-
Non-performing loans to total loans					1.27	%		-
Net charge-offs				$	-			-
	Five Quarter Comparison
	3/31/09	6/30/09	9/30/09	12/31/09			3/31/10
Loans by Type
Construction and land loans	-	-	-	$	3,089		$	1,864
Farmland loans	-	-	-		7,374			7,447
Permanent 1 - 4	-	-	-		5,456			4,821
Permanent 1 - 4 - junior liens and revolving	-	-	-		738			668
Multifamily	-	-	-		122			-
Nonresidential	-	-	-		9,888			7,348
Commercial business loans	-	-	-		2,742			2,633
Consumer and other loans	-	-	-		2,609			2,256
Fair market value adjustments	-	-	-		(7,598	)		(1,276	)
	-	-	-		24,420			25,761
Asset Quality Data
Loans - 30 to 89 days past due & still accruing	-	-	-	$	1,421		$	207
Nonaccrual loans	-	-	-		1,226			13
Loans - 90 days past due & still accruing	-	-	-		-			-
Total non-performing loans	-	-	-		1,226			13
OREO and repossessed assets	-	-	-		605			314
Total non-performing assets	-	-	-		1,831			327
Non-performing loans to total loans	-	-	-		7.50	%		1.27	%
Net charge-offs	-	-	-		-			-
Note:
Certain prior-period amounts have been reclassified to conform with current presentation.
For non-GAAP measures see reconciliation to closest GAAP measures contained in this press release.

CONTACT:
Heritage Financial Group
T. Heath Fountain, 229-878-2055
Senior Vice President and Chief Financial Officer