For additional information, contact:
T. Heath Fountain
Executive Vice President and
Chief Financial Officer
(229) 878-2055
HERITAGE FINANCIAL GROUP, INC. REPORTS SECOND QUARTER NET INCOME OF
$1.4 MILLION OR $0.17 PER DILUTED SHARE
COMPANY ANNOUNCES EXPENSE MANAGEMENT INITIATIVES EXPECTED
TO PROVIDE ANNUAL SAVINGS UP TO $1.3 MILLION IN 2013
ALBANY, Ga. (July 25, 2012) – Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced unaudited financial results for the quarter ended June 30, 2012. Highlights of the Company's results for the second quarter 2012 include:
| | · | Net income of $1.4 million or $0.17 per diluted share compared with a net loss of $481,000 or $0.06 per diluted share for the second quarter of 2011; |
| | · | Excluding special items for each quarter, net income was $1.4 million or $0.17 per diluted share for 2012 versus a net loss of $96,000 or $0.01 per diluted share for 2011 (see reconciliation of non-GAAP items); |
| | · | The successful completion of a previously announced branch acquisition in Auburn, Alabama, adding $12.2 million in loans and $18.7 million in deposits; |
| | · | Loan growth for the quarter, excluding loans acquired through FDIC-assisted acquisitions, of $51.7 million or 11%; |
| | · | A decrease in loans acquired through FDIC-assisted acquisitions of $10.3 million or 9% for the quarter; |
| | · | An increase in provision for non-FDIC acquired loan losses of $50,000 to $750,000 for the second quarter of 2012 compared with the same quarter for 2011; |
| | · | Provision expense of $341,000 for FDIC-acquired loan losses; |
| | · | A decrease in net charge-offs to 0.23% for the second quarter of 2012 compared with 0.26% for the second quarter of 2011 and 0.24% for the first quarter of 2012; and |
| | · | A decline in nonperforming assets (NPAs) to total assets, excluding assets acquired in FDIC-assisted acquisitions, to 1.08% at the end of the second quarter of 2012 from 1.17% at the end of the second quarter of 2011 and 1.27% at the end of the first quarter of 2012. |
Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "We are pleased to report continued improvement in our operating results, which reflect the impact of significant organic loan growth, successful expense management efforts, and ongoing acquisition and expansion activities. Noninterest expense declined on a linked-quarter basis and has remained essentially level for three consecutive quarters, illustrating our commitment to expense management. Regarding acquisitions, we were pleased to complete our previously announced acquisition during the quarter of a branch in Auburn, Alabama, marking our entry into another growth market to further expand our franchise."
HBOS Reports Second Quarter 2012 Results
Page 2
July 25, 2012
In closing, Dorminey added, "Over the past few years, our company has experienced significant growth and has invested heavily in our infrastructure to support expansion and capitalize on emerging opportunities across our market footprint. At this point, with a strong leadership team in place to pursue these dual objectives, we continue to increase our focus on creating efficiencies in our operations and managing our expenses in light of our customers' needs and prevailing business conditions. Accordingly, we are pleased to see that noninterest expense has stabilized, and we remain committed in our efforts to further reduce these expenses across the Company in coming quarters to enhance the Company's performance and build stockholder value, without compromising our commitment to maintaining what we believe is the best customer service in our markets."
Expense Management Initiatives
In the second half of 2012, the Company will pursue several expense management initiatives. Among these, the Company has offered an early retirement program to certain employees. It is expected that the one-time pre-tax cost of this early retirement program will be between $500,000 and $800,000 in the third quarter; however, the Company expects to realize annual savings of approximately $500,000 to $800,000 per year as a result. The Company also is terminating its Director’s and Supplemental Executive Retirement Plans. Under these plans, the current participants are fully vested in their benefits.
Additionally, the Company plans to close two branches that it acquired in FDIC-assisted acquisitions. The Company intends to close its branch in Collins, Georgia, which was acquired as part of the acquisition of The Tattnall Bank in 2009, and its branch in Guyton, Georgia, which was acquired as part of the acquisition of the Citizens Bank of Effingham in 2011. Combined, these branches have loans of approximately $5 million and deposits of $13 million. The Company expects that it will not experience a material reduction in customer relationships in these areas and will seek to service these customers from nearby branches. The Company expects these branches to close in the fourth quarter of 2012, subject to customary regulatory conditions, and anticipates expense savings of approximately $500,000 per year related to these closures.
Capital Initiatives
The Company's estimated total risk-based capital ratio at June 30, 2012, was 19.6%, significantly exceeding the required minimum of 10% to be considered a well-capitalized institution. The ratio of tangible common equity to total tangible assets was 11.2% as of June 30, 2012.
Looking ahead, the Company intends to maintain its capital strength at the current level to support growth and its acquisition activities. Accordingly, stock buybacks and dividend growth in the future will reflect largely the Company's future earnings power, rather than a return of capital to stockholders.
During the second quarter of 2012, the Company repurchased approximately 179,000 shares under its stock repurchase programs. The program expiring in July 2012 has been completed, and the program, expiring in December 2012 unless extended or otherwise completed, has a remaining authorization to repurchase approximately 260,000 shares.
HBOS Reports Second Quarter 2012 Results
Page 3
July 25, 2012
Second Quarter 2012 Results of Operations
The Company reported net income of $1.4 million or $0.17 per diluted share for the second quarter in 2012 compared with a net loss of $481,000 or $0.06 per diluted share for the second quarter in 2011. However, the Company's results for the second quarters of 2012 and 2011 included special items that affect comparability. Results for the second quarter of 2012 included net non-recurring expenses of $23,000, net of tax, while the results of the year-earlier quarter included net non-recurring expenses of $385,000, net of tax. Excluding these special items, the Company's adjusted net income for the second quarter of 2012 was $1.4 million or $0.17 per diluted share compared with a net loss of $96,000 or $0.01 per diluted share for the second quarter of 2011 (see reconciliation of non-GAAP items).
The $1.8 million improvement in reported earnings was primarily the result of the following items:
| | · | Improved net interest income of $3.7 million due to growth in interest-earning assets and a reduction in the cost of interest-bearing deposits; |
| | · | Increased noninterest income of $119,000, driven by improvements in mortgage banking fees of $314,000, bankcard services income of $157,000 and bargain purchase gains of $151,000, partially offset by reductions in the gain on sale of securities of $426,000 and in the accretion for the FDIC loss-share receivable of $138,000; offset by |
| | · | Increased noninterest expense of $634,000, primarily due to higher salaries and employment benefits of $537,000 and increased equipment and occupancy expense of $279,000 and $152,000, respectively, driven by the acquisition-related hiring of an additional 24 full-time equivalent employees, as well as growth in most other noninterest expense categories, and offset in part by reduced acquisition-related expenses of $405,000; |
| | · | Increased provision expense for non-FDIC-acquired loan losses of $50,000, driven by organic loan growth; |
| | · | Increased provision expense for FDIC-acquired loan losses of $341,000, driven by the resolution of those assets, which did not increase the allowance for loan losses. |
Net interest income for the second quarter of 2012 increased 58% to $10.1 million from $6.4 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 deposits. The Company's net interest margin was 4.75% for the second quarter of 2012, an increase of 26 basis points over 4.49% on a linked-quarter basis and 139 basis points over 3.36% in the year-earlier period. The improvement in the second quarter of 2012 net interest margin on a linked-quarter basis was driven by an increase in loan yields on the Company's FDIC-assisted loan portfolios, coupled with a decline in the cost of interest-bearing deposits as rates continue to reset to lower levels.
In the second quarter of 2012, the Company continued to achieve loan growth, with its loan portfolio increasing $40.7 million organically on a linked-quarter basis and advancing $74.3 million overall compared with the year-earlier quarter. For the second quarter of 2012, the Company's loan portfolio, including loans acquired through FDIC-assisted acquisitions, totaled $605.0 million, which increased $42.4 million on a linked-quarter basis. Total deposits stood at $860.3 million at the end of the second quarter of 2012, down 1% or $8.4 million on a linked-quarter basis from $868.7 million, primarily reflecting a planned runoff of time deposits.
HBOS Reports Second Quarter 2012 Results
Page 4
July 25, 2012
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 $87.4 million in covered and $15.2 million in non-covered loans at the end of the second quarter of 2012 compared with $95.5 million in covered and $17.4 million in non-covered loans at the end of the first quarter of 2012. The principal balance of the FDIC-assisted loan portfolios totaled $188.0 million at the end of the second quarter of 2012 compared with $209.8 million as of the end of the first quarter of 2012. The details of the accounting for the FDIC-assisted loan portfolios for the second quarter of 2012 are as follows:
| | · | Covered loans acquired in FDIC-assisted acquisitions decreased $8.1 million to $87.4 million; |
| | · | Non-covered loans acquired in FDIC-assisted acquisitions decreased $2.2 million to $15.2 million; |
| | · | The FDIC loss-share receivable associated with covered loans acquired in FDIC-assisted acquisitions decreased $6.6 million to $76.3 million; |
| | · | The negative accretion for the FDIC loss-share receivable was $133,000; |
| | · | Provision expense for loans acquired in FDIC-assisted acquisitions was $341,000; |
| | · | The non-accretable discount decreased $17.6 million to $66.5 million; and |
| | · | The accretable discount increased $6.1 million to $18.8 million. |
For the second quarter of 2012, provision expense of $341,000 was recorded for loan charge-offs on loans acquired in FDIC-assisted acquisitions not provided for by the discount or reimbursement from 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 loans decreased $6.6 million from $82.9 million for the prior quarter to $76.3 million, primarily driven by reimbursements received from the FDIC of $5.1 million and negative accretion of $858,000 affecting the loss-share receivable asset that was associated with the improvement in expected cash flows of the loss-share performing portfolios.
The non-accretable discount decreased to $66.5 million at the end of the second quarter of 2012 from $84.1 million on a linked-quarter basis, primarily driven by the clearing of $9.4 million of discount in conjunction with the resolution of FDIC-assisted loans and transfers to accretable discount of $8.2 million. The accretable discount increased to $18.8 million for the second quarter of 2012 from $12.7 million on a linked-quarter basis, primarily due to the transfer from the non-accretable discount as a result of the improvement in cash flows, partially offset by loan discount accretion of $2.1 million.
Asset Quality
Net charge-offs to average outstanding loans on an annualized basis, excluding loans acquired in FDIC-assisted acquisitions, were down to 0.23% for the second quarter of 2012 versus 0.26% for the second quarter of 2011. Total nonperforming assets, excluding assets acquired in FDIC-assisted acquisitions, have significantly improved as a percentage of assets compared with the prior year and were $11.5 million or 1.08% of total assets for the second quarter of 2012 compared with $11.3 million or 1.17% of total assets for the same quarter in 2011. Other real estate owned and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, totaled $1.5 million for the second quarter of 2012, down from $2.7 million for the same quarter in 2011.
HBOS Reports Second Quarter 2012 Results
Page 5
July 25, 2012
The provision for loan losses on non-FDIC-acquired loans increased to $750,000 for the second quarter of 2012 from $700,000 for the same quarter in 2011, primarily driven by organic loan growth. For the second quarter in 2012, the allowance for loan losses represented 1.61% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.58% for the same quarter in 2011.
About Heritage Financial Group, Inc. and HeritageBank of the South
Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving primarily South Georgia, North Central Florida and Eastern Alabama through 22 full-service branch locations, 11 mortgage offices, and 3 investment offices. As of June 30, 2012, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $123 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 2011 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.
HBOS Reports Second Quarter 2012 Results
Page 6
July 25, 2012
HERITAGE FINANCIAL GROUP, INC.
Unaudited Reconciliation of Non-GAAP Measures Presented in Earnings Release
(Dollars in thousands, except per share data)
| | | Three Months Ended June 30, | | | | |
| | | | | | | | | | | | | |
| Total noninterest income | | $ | 3,679 | | | $ | 3,560 | | | $ | 6,462 | | | $ | 8,401 | |
| Bargain purchase gain | | | (34 | ) | | | 117 | | | | (34 | ) | | | (2,217 | ) |
| Adjusted noninterest income | | $ | 3,645 | | | $ | 3,677 | | | $ | 6,428 | | | $ | 6,184 | |
| | | | | | | | | | | | | | | | | |
| Total noninterest expense | | $ | 10,674 | | | $ | 10,040 | | | $ | 21,475 | | | $ | 18,438 | |
| Acquisition-related expenses | | | (69 | ) | | | (474 | ) | | | (400 | ) | | | (756 | ) |
| Adjusted noninterest expense | | $ | 10,605 | | | $ | 9,566 | | | $ | 21,075 | | | $ | 17,682 | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) as reported | | $ | 1,360 | | | $ | (481 | ) | | $ | 2,331 | | | $ | 734 | |
| Bargain purchase gain and acquisition-related expenses, net of tax* | | | 23 | | | | 385 | | | | 269 | | | | (833 | ) |
| Adjusted net income (loss) | | $ | 1,383 | | | $ | (96 | ) | | $ | 2,600 | | | $ | (99 | ) |
| | | | | | | | | | | | | | | | | |
| Diluted earnings (loss) per share | | $ | 0.17 | | | $ | (0.06 | ) | | $ | 0.29 | | | $ | 0.09 | |
| Bargain purchase gain and acquisition-related expenses, net of tax* | | | 0.00 | | | | 0.05 | | | | 0.03 | | | | (0.10 | ) |
| Adjusted diluted earnings (loss) per share | | $ | 0.17 | | | $ | (0.01 | ) | | $ | 0.32 | | | $ | (0.01 | ) |
* The effective tax rate is used for the period presented to determine net of tax amounts.
Net Income (Loss) and Diluted Earnings (Loss) Per Share are presented in accordance with Generally Accepted Accounting Principles (GAAP). Adjusted Noninterest Income, Adjusted Noninterest Expense, Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) Per Share are non-GAAP financial measures. The Company believes that these non-GAAP measures aid in understanding and comparing current-year and prior-year results, both of which include unusual items of different natures. These non-GAAP measures should be viewed in addition to, and not as a substitute for, the Company's reported results.
HBOS Reports Second Quarter 2012 Results
Page 7
July 25, 2012
HERITAGE FINANCIAL GROUP, INC.
Unaudited Financial Highlights
(Dollars in thousands, except per share data)
| | | Three Months Ended June 30, | | | | |
| | | | | | | | | | | | | |
| Interest income | | $ | 12,077 | | | $ | 9,109 | | | $ | 23,736 | | | $ | 17,733 | |
| Interest expense | | | 1,918 | | | | 2,667 | | | | 3,853 | | | | 5,258 | |
| Net interest income | | | 10,159 | | | | 6,442 | | | | 19,883 | | | | 12,475 | |
| Provision for loan losses | | | 750 | | | | 700 | | | | 1,150 | | | | 1,300 | |
| Provision for loan losses – covered | | | 338 | | | | – | | | | 338 | | | | – | |
| Provision for loan losses – non covered | | | 3 | | | | – | | | | 3 | | | | – | |
| Net interest income after provision for loan losses | | | 9,068 | | | | 5,742 | | | | 18,392 | | | | 11,175 | |
| Noninterest income | | | 3,679 | | | | 3,560 | | | | 6,463 | | | | 8,401 | |
| Noninterest expense | | | 10,674 | | | | 10,040 | | | | 21,475 | | | | 18,438 | |
| Income (loss) before income taxes | | | 2,073 | | | | (738 | ) | | | 3,380 | | | | 1,138 | |
| Income tax expense (benefit) | | | 713 | | | | (257 | ) | | | 1,049 | | | | 404 | |
| Net income (loss) | | $ | 1,360 | | | $ | (481 | ) | | $ | 2,331 | | | $ | 734 | |
| Net income (loss) per share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.17 | | | $ | (0.06 | ) | | $ | 0.29 | | | $ | 0.09 | |
| Diluted | | $ | 0.17 | | | $ | (0.06 | ) | | $ | 0.29 | | | $ | 0.09 | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 8,071,354 | | | | 8,213,761 | | | | 8,107,868 | | | | 8,200,207 | |
| Diluted | | | 8,072,935 | | | | 8,215,090 | | | | 8,109,356 | | | | 8,201,633 | |
| Dividends declared per share | | $ | 0.04 | | | $ | 0.03 | | | $ | 0.08 | | | $ | 0.06 | |
| | | | | | | | | | |
| Total assets | | $ | 1,063,426 | | | $ | 1,089,852 | | | $ | 963,571 | |
| Cash and cash equivalents | | | 22,499 | | | | 34,521 | | | | 15,225 | |
| Interest-bearing deposits in banks | | | 32,153 | | | | 43,101 | | | | 100,309 | |
| Securities available for sale | | | 227,984 | | | | 259,017 | | | | 186,867 | |
| Loans | | | 605,001 | | | | 560,620 | | | | 500,725 | |
| Allowance for loan losses | | | 8,099 | | | | 7,494 | | | | 6,585 | |
| Total deposits | | | 860,268 | | | | 884,187 | | | | 763,673 | |
| Federal Home Loan Bank advances | | | 35,000 | | | | 35,000 | | | | 35,000 | |
| Stockholders' equity | | | 123,291 | | | | 124,136 | | | | 122,038 | |
-END-
| Heritage Financial Group, Inc. | Page 1 of 6 |
| Second Quarter 2012 Earnings Release Supplement | |
| (Unaudited) | |
| (Dollars in thousands, except per share data) | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Income Statement Data | | | | | | | | | | | | |
| Interest income | | | | | | | | | | | | |
| Loans | | $ | 10,532 | | | $ | 7,564 | | | $ | 20,680 | | | $ | 14,709 | |
| Loans held for sale | | | 204 | | | | 46 | | | | 387 | | | | 54 | |
| Securities - taxable | | | 1,016 | | | | 1,221 | | | | 1,995 | | | | 2,428 | |
| Securities - nontaxable | | | 295 | | | | 211 | | | | 593 | | | | 422 | |
| Federal funds sold | | | 4 | | | | 16 | | | | 18 | | | | 29 | |
| Interest-bearing deposits in banks | | | 26 | | | | 51 | | | | 63 | | | | 91 | |
| Total interest income | | | 12,077 | | | | 9,109 | | | | 23,736 | | | | 17,733 | |
| Interest expense | | | | | | | | | | | | | | | | |
| Deposits | | | 1,246 | | | | 1,983 | | | | 2,509 | | | | 3,831 | |
| Other borrowings | | | 672 | | | | 684 | | | | 1,344 | | | | 1,427 | |
| Total interest expense | | | 1,918 | | | | 2,667 | | | | 3,853 | | | | 5,258 | |
| Net interest income | | | 10,159 | | | | 6,442 | | | | 19,883 | | | | 12,475 | |
| Provision for loan losses | | | 750 | | | | 700 | | | | 1,150 | | | | 1,300 | |
| Provision for loan losses - covered | | | 338 | | | | - | | | | 338 | | | | - | |
| Provision for loan losses - uncovered | | | 3 | | | | - | | | | 3 | | | | - | |
| Net interest income after provision for loan losses | | | 9,068 | | | | 5,742 | | | | 18,392 | | | | 11,175 | |
| Non-interest income | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 1,135 | | | | 1,222 | | | | 2,156 | | | | 2,273 | |
| Bankcard services income | | | 831 | | | | 674 | | | | 1,654 | | | | 1,260 | |
| Other service charges, fees & commissions | | | 73 | | | | 69 | | | | 158 | | | | 144 | |
| Brokerage fees | | | 462 | | | | 406 | | | | 908 | | | | 760 | |
| Mortgage banking fees | | | 938 | | | | 624 | | | | 1,627 | | | | 892 | |
| Bank owned life insurance | | | 211 | | | | 149 | | | | 351 | | | | 294 | |
| Gain on sale of securities | | | 27 | | | | 453 | | | | 70 | | | | 453 | |
| Bargain purchase gain | | | 34 | | | | (117 | ) | | | 34 | | | | 2,217 | |
| Accretion of FDIC loss-share receivable | | | (133 | ) | | | 5 | | | | (630 | ) | | | 5 | |
| Other | | | 101 | | | | 75 | | | | 135 | | | | 103 | |
| Total non-interest income | | | 3,679 | | | | 3,560 | | | | 6,463 | | | | 8,401 | |
| Non-interest expense | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 5,460 | | | | 4,923 | | | | 10,995 | | | | 9,251 | |
| Equipment | | | 707 | | | | 428 | | | | 1,374 | | | | 779 | |
| Occupancy | | | 688 | | | | 536 | | | | 1,344 | | | | 981 | |
| Advertising & marketing | | | 214 | | | | 220 | | | | 395 | | | | 384 | |
| Legal & accounting | | | 222 | | | | 167 | | | | 341 | | | | 377 | |
| Consulting & other professional fees | | | 118 | | | | 198 | | | | 237 | | | | 377 | |
| Director fees & retirement | | | 126 | | | | 161 | | | | 290 | | | | 388 | |
| Telecommunications | | | 288 | | | | 204 | | | | 520 | | | | 349 | |
| Supplies | | | 145 | | | | 145 | | | | 299 | | | | 240 | |
| Data processing fees | | | 875 | | | | 615 | | | | 1,696 | | | | 1,133 | |
| (Gain) loss on sale and write-downs of other real estate owned | | | (141 | ) | | | 535 | | | | (148 | ) | | | 937 | |
| Gain on sale and write-downs of FDIC acquired other real estate | | | (249 | ) | | | (45 | ) | | | (75 | ) | | | (45 | ) |
| Foreclosed asset expenses | | | 218 | | | | 245 | | | | 440 | | | | 415 | |
| Foreclosed FDIC acquired asset expenses | | | 466 | | | | - | | | | 628 | | | | - | |
| FDIC insurance and other regulatory fees | | | 265 | | | | 354 | | | | 509 | | | | 647 | |
| Acquisition related expenses | | | 69 | | | | 474 | | | | 400 | | | | 757 | |
| Deposit Intangible expense | | | 195 | | | | 207 | | | | 396 | | | | 302 | |
| Other operating | | | 1,008 | | | | 673 | | | | 1,834 | | | | 1,166 | |
| Total non-interest expense | | | 10,674 | | | | 10,040 | | | | 21,475 | | | | 18,438 | |
| Income before taxes | | | 2,073 | | | | (738 | ) | | | 3,380 | | | | 1,138 | |
| Applicable income tax | | | 713 | | | | (257 | ) | | | 1,049 | | | | 404 | |
| Net income | | $ | 1,360 | | | $ | (481 | ) | | $ | 2,331 | | | $ | 734 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares - basic | | | 8,071,354 | | | | 8,213,761 | | | | 8,107,868 | | | | 8,200,207 | |
| Weighted average shares - diluted | | | 8,072,935 | | | | 8,215,090 | | | | 8,109,356 | | | | 8,201,633 | |
| | | | | | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.17 | | | $ | (0.06 | ) | | $ | 0.29 | | | $ | 0.09 | |
| Diluted earnings per share | | | 0.17 | | | | (0.06 | ) | | | 0.29 | | | | 0.09 | |
| Cash dividend declared per share | | | 0.04 | | | | 0.03 | | | | 0.08 | | | | 0.06 | |
| Heritage Financial Group, Inc. | Page 2 of 6 |
| Second Quarter 2012 Earnings Release Supplement | |
| (Unaudited) | |
| (Dollars in thousands, except per share data) | |
| | | June 30, | |
| | | 2012 | | | 2011 | |
| Balance Sheet Data (Ending Balance) | | | | | | |
| Total loans | | $ | 605,001 | | | $ | 500,724 | |
| Loans held for sale | | | 6,017 | | | | 5,579 | |
| Covered loans | | | 87,386 | | | | 60,426 | |
| Allowance for loan losses | | | 8,099 | | | | 6,585 | |
| Total foreclosed assets | | | 9,290 | | | | 9,693 | |
| Covered other real estate owned | | | 7,571 | | | | 6,968 | |
| FDIC loss-share receivable | | | 76,294 | | | | 58,152 | |
| Intangible assets | | | 4,621 | | | | 4,388 | |
| Total assets | | | 1,063,426 | | | | 963,571 | |
| Non-interest-bearing deposits | | | 87,815 | | | | 73,382 | |
| Interest-bearing deposits | | | 772,453 | | | | 690,291 | |
| Federal Home Loan Bank advances | | | 35,000 | | | | 35,000 | |
| Federal funds purchased and securities sold under agreement to repurchase | | | 31,746 | | | | 31,989 | |
| Stockholders' equity | | | 123,291 | | | | 122,038 | |
| Total shares outstanding | | | 8,668,752 | | | | 8,712,750 | |
| | | | | | | | | |
| Unearned ESOP shares | | | 412,487 | | | | 465,673 | |
| | | | | | | | | |
| Book value per share | | $ | 14.93 | | | $ | 14.80 | |
| Tangible book value per share (non-GAAP) | | | 14.37 | | | | 14.27 | |
| Market value per share | | | 12.87 | | | | 11.92 | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Average Balance Sheet Data | | | | | | | | | | | | |
| Average interest-bearing deposits in banks | | $ | 21,897 | | | $ | 44,525 | | | $ | 29,872 | | | $ | 30,301 | |
| Average federal funds sold | | | 6,038 | | | | 20,447 | | | | 14,211 | | | | 21,955 | |
| Average investment securities | | | 252,894 | | | | 210,261 | | | | 256,884 | | | | 217,581 | |
| Average loans | | | 583,366 | | | | 501,929 | | | | 571,880 | | | | 479,613 | |
| Average mortgage loans held for sale | | | 5,519 | | | | 3,878 | | | | 5,043 | | | | 2,315 | |
| Average FDIC loss-share receivable | | | 79,812 | | | | 58,149 | | | | 81,902 | | | | 42,733 | |
| Average earning assets | | | 869,393 | | | | 777,162 | | | | 877,569 | | | | 751,467 | |
| Average assets | | | 1,053,140 | | | | 966,962 | | | | 1,063,466 | | | | 912,806 | |
| Average noninterest-bearing deposits | | | 89,763 | | | | 70,346 | | | | 87,325 | | | | 61,483 | |
| Average interest-bearing deposits | | | 760,409 | | | | 680,424 | | | | 772,718 | | | | 633,601 | |
| Average total deposits | | | 850,172 | | | | 750,770 | | | | 860,043 | | | | 695,084 | |
| Average federal funds purchased and securities sold under agreement to repurchase | | | 32,043 | | | | 31,664 | | | | 32,926 | | | | 31,617 | |
| Average Federal Home Loan Bank advances | | | 35,000 | | | | 54,143 | | | | 35,000 | | | | 57,917 | |
| Average interest-bearing liabilities | | | 827,452 | | | | 766,231 | | | | 840,644 | | | | 723,135 | |
| Average stockholders' equity | | | 125,083 | | | | 122,528 | | | | 125,288 | | | | 121,384 | |
| | | | | | | | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | | | | | | | |
| Annualized return on average assets | | | 0.52 | % | | | -0.20 | % | | | 0.44 | % | | | 0.16 | % |
| Annualized return on average equity | | | 4.35 | % | | | -1.57 | % | | | 3.72 | % | | | 1.21 | % |
| Net interest margin | | | 4.75 | % | | | 3.36 | % | | | 4.60 | % | | | 3.39 | % |
| Net interest spread | | | 4.70 | % | | | 3.34 | % | | | 4.56 | % | | | 3.33 | % |
| Efficiency ratio | | | 77.14 | % | | | 100.38 | % | | | 81.51 | % | | | 88.32 | % |
| | | | | | | | | | | | | | | | | |
| Capital Ratios | | | | | | | | | | | | | | | | |
| Average stockholders' equity to average assets | | | 11.9 | % | | | 12.7 | % | | | 11.8 | % | | | 13.3 | % |
| Tangible equity to tangible assets (non-GAAP) | | | 11.2 | % | | | 12.3 | % | | | 11.2 | % | | | 12.3 | % |
| Tier 1 leverage ratio (1) | | | 11.3 | % | | | 12.1 | % | | | 11.3 | % | | | 12.1 | % |
| Tier 1 risk-based capital ratio (1) | | | 19.6 | % | | | 22.2 | % | | | 19.6 | % | | | 22.2 | % |
| Total risk-based capital ratio (1) | | | 20.8 | % | | | 23.4 | % | | | 20.8 | % | | | 23.4 | % |
| | | | | | | | | | | | | | | | | |
| Other Information | | | | | | | | | | | | | | | | |
| Full-time equivalent employees | | | 319 | | | | 295 | | | | 319 | | | | 295 | |
| Number of full-service offices | | | 22 | | | | 21 | | | | 22 | | | | 21 | |
| Mortgage loan offices | | | 11 | | | | 10 | | | | 11 | | | | 10 | |
| Investment offices | | | 3 | | | | 2 | | | | 3 | | | | 2 | |
(1) June 30, 2012 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. | Page 3 of 6 |
| Second Quarter 2012 Earnings Release Supplement | |
| (Unaudited) | |
| (Dollars in thousands, except per share data) | |
| | | Five Quarter Comparison for the Three Months Ended | |
| | | 6/30/12 | | | 3/31/12 | | | 12/31/11 | | | 9/30/11 | | | 6/30/11 | |
| Income Statement Data | | | | | | | | | | | | | | | |
| Interest income | | | | | | | | | | | | | | | |
| Loans | | $ | 10,532 | | | $ | 10,147 | | | $ | 9,945 | | | $ | 8,774 | | | $ | 7,564 | |
| Loans held for sale | | | 204 | | | | 182 | | | | 198 | | | | 45 | | | | 46 | |
| Securities - taxable | | | 1,016 | | | | 979 | | | | 1,095 | | | | 1,013 | | | | 1,221 | |
| Securities - nontaxable | | | 295 | | | | 299 | | | | 251 | | | | 207 | | | | 211 | |
| Federal funds sold | | | 4 | | | | 15 | | | | 15 | | | | 16 | | | | 16 | |
| Interest-bearing deposits in banks | | | 26 | | | | 37 | | | | 65 | | | | 93 | | | | 51 | |
| Total interest income | | | 12,077 | | | | 11,659 | | | | 11,569 | | | | 10,148 | | | | 9,109 | |
| Interest expense | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 1,246 | | | | 1,263 | | | | 1,671 | | | | 2,048 | | | | 1,983 | |
| Other borrowings | | | 672 | | | | 672 | | | | 686 | | | | 687 | | | | 684 | |
| Total interest expense | | | 1,918 | | | | 1,935 | | | | 2,357 | | | | 2,735 | | | | 2,667 | |
| Net interest income | | | 10,159 | | | | 9,724 | | | | 9,212 | | | | 7,413 | | | | 6,442 | |
| Provision for loan losses | | | 1,091 | | | | 400 | | | | 595 | | | | 1,000 | | | | 700 | |
| Net interest income after provision for loan losses | | | 9,068 | | | | 9,324 | | | | 8,617 | | | | 6,413 | | | | 5,742 | |
| Non-interest income | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 1,135 | | | | 1,020 | | | | 1,237 | | | | 1,267 | | | | 1,222 | |
| Bankcard services income | | | 831 | | | | 824 | | | | 691 | | | | 684 | | | | 674 | |
| Other service charges, fees & commissions | | | 73 | | | | 85 | | | | 188 | | | | 62 | | | | 75 | |
| Brokerage fees | | | 462 | | | | 446 | | | | 298 | | | | 328 | | | | 406 | |
| Mortgage banking fees | | | 938 | | | | 689 | | | | 674 | | | | 719 | | | | 624 | |
| Bank owned life insurance | | | 211 | | | | 140 | | | | 148 | | | | 146 | | | | 149 | |
| Life insurance proceeds | | | - | | | | - | | | | - | | | | - | | | | 32 | |
| Gain on sale of securities | | | 27 | | | | 42 | | | | 18 | | | | 213 | | | | 453 | |
| Bargain purchase gain | | | 34 | | | | - | | | | - | | | | 2,000 | | | | (117 | ) |
| Accretion of FDIC loss-share receivable | | | (133 | ) | | | (498 | ) | | | (72 | ) | | | 448 | | | | 5 | |
| Other | | | 101 | | | | 35 | | | | 33 | | | | 25 | | | | 37 | |
| Total non-interest income | | | 3,679 | | | | 2,783 | | | | 3,215 | | | | 5,892 | | | | 3,560 | |
| Non-interest expense | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 5,460 | | | | 5,536 | | | | 5,758 | | | | 5,384 | | | | 4,923 | |
| Equipment | | | 707 | | | | 667 | | | | 701 | | | | 516 | | | | 428 | |
| Occupancy | | | 688 | | | | 657 | | | | 613 | | | | 685 | | | | 536 | |
| Advertising & marketing | | | 214 | | | | 180 | | | | 233 | | | | 167 | | | | 220 | |
| Legal & accounting | | | 222 | | | | 119 | | | | 93 | | | | 118 | | | | 167 | |
| Consulting & other professional fees | | | 118 | | | | 119 | | | | 131 | | | | 208 | | | | 198 | |
| Director fees & retirement | | | 126 | | | | 165 | | | | 151 | | | | 160 | | | | 161 | |
| Telecommunications | | | 288 | | | | 231 | | | | 274 | | | | 206 | | | | 204 | |
| Supplies | | | 145 | | | | 154 | | | | 151 | | | | 156 | | | | 145 | |
| Data processing fees | | | 875 | | | | 821 | | | | 856 | | | | 857 | | | | 615 | |
| (Gain) loss on sale and write-downs of other real estate owned | | | (141 | ) | | | (7 | ) | | | (27 | ) | | | (139 | ) | | | 535 | |
| Loss (gain) on sale and write-downs of FDIC acquired other real estate | | | (249 | ) | | | 174 | | | | (92 | ) | | | (246 | ) | | | (45 | ) |
| Foreclosed asset expenses | | | 218 | | | | 221 | | | | 22 | | | | 216 | | | | 244 | |
| Foreclosed FDIC acquired asset expenses | | | 466 | | | | 162 | | | | 118 | | | | 72 | | | | 1 | |
| FDIC insurance and other regulatory fees | | | 265 | | | | 245 | | | | 179 | | | | 128 | | | | 354 | |
| Acquisition related expenses | | | 69 | | | | 331 | | | | 254 | | | | 299 | | | | 474 | |
| Deposit intangible expense | | | 195 | | | | 201 | | | | 207 | | | | 183 | | | | 207 | |
| Other operating | | | 1,008 | | | | 825 | | | | 906 | | | | 809 | | | | 673 | |
| Total non-interest expense | | | 10,674 | | | | 10,801 | | | | 10,528 | | | | 9,779 | | | | 10,040 | |
| Income (loss) before taxes | | | 2,073 | | | | 1,306 | | | | 1,304 | | | | 2,526 | | | | (738 | ) |
| Applicable income tax (benefit) | | | 713 | | | | 335 | | | | (91 | ) | | | 786 | | | | (257 | ) |
| Net income (loss) | | $ | 1,360 | | | $ | 971 | | | $ | 1,395 | | | $ | 1,740 | | | $ | (481 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average shares - basic | | | 8,071,354 | | | | 8,144,382 | | | | 8,229,293 | | | | 8,215,077 | | | | 8,213,761 | |
| Weighted average shares - diluted | | | 8,072,935 | | | | 8,145,730 | | | | 8,230,206 | | | | 8,216,472 | | | | 8,215,090 | |
| | | | | | | | | | | | | | | | | | | | | |
| Basic earnings (loss) per share | | $ | 0.17 | | | $ | 0.12 | | | $ | 0.17 | | | $ | 0.21 | | | $ | (0.05 | ) |
| Diluted earnings (loss) per share | | | 0.17 | | | | 0.12 | | | | 0.17 | | | | 0.21 | | | | (0.05 | ) |
| Cash dividend declared per share | | | 0.04 | | | | 0.04 | | | | 0.03 | | | | 0.03 | | | | 0.03 | |
| Heritage Financial Group, Inc. | Page 4 of 6 |
| Second Quarter 2012 Earnings Release Supplement | |
| (Unaudited) | |
| (Dollars in thousands, except per share data) | |
| | | Five Quarter Comparison | |
| | | 6/30/12 | | | 3/31/12 | | | 12/31/11 | | | 9/30/11 | | | 6/30/11 | |
| Balance Sheet Data (at period end) | | | | | | | | | | | | | | | |
| Total loans | | $ | 605,001 | | | $ | 562,495 | | | $ | 560,620 | | | $ | 560,940 | | | $ | 500,724 | |
| Loans held for sale | | | 6,017 | | | | 4,731 | | | | 7,471 | | | | 5,538 | | | | 5,579 | |
| Covered loans | | | 87,386 | | | | 95,493 | | | | 107,457 | | | | 116,206 | | | | 60,426 | |
| Allowance for loan losses | | | 8,099 | | | | 7,629 | | | | 7,494 | | | | 6,936 | | | | 6,585 | |
| Total foreclosed assets | | | 9,290 | | | | 12,117 | | | | 13,441 | | | | 12,355 | | | | 9,693 | |
| Covered other real estate owned | | | 7,571 | | | | 8,445 | | | | 10,084 | | | | 10,514 | | | | 6,968 | |
| FDIC loss-share receivable | | | 76,294 | | | | 82,925 | | | | 83,901 | | | | 87,757 | | | | 58,152 | |
| Intangible assets | | | 4,621 | | | | 4,647 | | | | 4,848 | | | | 5,056 | | | | 4,388 | |
| Total assets | | | 1,063,426 | | | | 1,075,510 | | | | 1,089,852 | | | | 1,102,504 | | | | 963,571 | |
| Non-interest-bearing deposits | | | 87,815 | | | | 88,582 | | | | 78,823 | | | | 84,716 | | | | 73,382 | |
| Interest-bearing deposits | | | 772,453 | | | | 780,161 | | | | 805,364 | | | | 815,387 | | | | 690,291 | |
| Federal home loan bank advances | | | 35,000 | | | | 35,000 | | | | 35,000 | | | | 35,000 | | | | 35,000 | |
| Federal funds purchased and securities sold under agreement to repurchase | | | 31,746 | | | | 37,227 | | | | 35,049 | | | | 36,118 | | | | 31,989 | |
| Stockholders' equity | | | 123,291 | | | | 125,067 | | | | 124,136 | | | | 123,638 | | | | 122,038 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total shares outstanding | | | 8,668,752 | | | | 8,668,752 | | | | 8,712,031 | | | | 8,712,140 | | | | 8,712,750 | |
| Unearned ESOP shares | | | 412,487 | | | | 425,813 | | | | 439,138 | | | | 452,348 | | | | 465,673 | |
| | | | | | | | | | | | | | | | | | | | | |
| Book value per share | | $ | 14.93 | | | $ | 15.17 | | | $ | 15.01 | | | $ | 14.97 | | | $ | 14.80 | |
| Tangible book value per share (non-GAAP) | | | 14.37 | | | | 14.61 | | | | 14.42 | | | | 14.36 | | | | 14.26 | |
| Market value per share | | | 12.87 | | | | 11.82 | | | | 11.80 | | | | 10.36 | | | | 11.92 | |
| | | Five Quarter Comparison | |
| | | 6/30/12 | | | 3/31/12 | | | 12/31/11 | | | 9/30/11 | | | 6/30/11 | |
| Average Balance Sheet Data | | | | | | | | | | | | | | | | | | | | |
| Average interest-bearing deposits in banks | | $ | 21,897 | | | $ | 37,999 | | | $ | 56,025 | | | $ | 102,769 | | | $ | 44,525 | |
| Average federal funds sold | | | 6,038 | | | | 22,363 | | | | 22,805 | | | | 26,889 | | | | 20,447 | |
| Average investment securities | | | 252,894 | | | | 257,863 | | | | 240,101 | | | | 201,762 | | | | 210,261 | |
| Average loans | | | 583,366 | | | | 560,385 | | | | 559,556 | | | | 533,487 | | | | 501,929 | |
| Average mortgage loans held for sale | | | 5,519 | | | | 4,550 | | | | 7,599 | | | | 4,336 | | | | 3,878 | |
| Average FDIC Loss-Share Receivable | | | 79,812 | | | | 84,017 | | | | 86,544 | | | | 71,942 | | | | 58,149 | |
| Average earning assets | | | 869,393 | | | | 883,160 | | | | 878,487 | | | | 864,907 | | | | 777,162 | |
| Average assets | | | 1,053,140 | | | | 1,074,260 | | | | 1,085,490 | | | | 1,040,575 | | | | 966,962 | |
| Average noninterest-bearing deposits | | | 89,763 | | | | 84,920 | | | | 80,376 | | | | 76,940 | | | | 70,346 | |
| Average interest-bearing deposits | | | 760,409 | | | | 784,944 | | | | 801,246 | | | | 761,344 | | | | 680,424 | |
| Average total deposits | | | 850,172 | | | | 869,864 | | | | 881,622 | | | | 838,284 | | | | 750,770 | |
| Average federal funds purchased and securities sold under agreement to repurchase | | | 32,043 | | | | 33,822 | | | | 36,621 | | | | 33,678 | | | | 31,664 | |
| Average Federal Home Loan Bank advances | | | 35,000 | | | | 35,000 | | | | 35,000 | | | | 35,000 | | | | 54,143 | |
| Average interest-bearing liabilities | | | 827,452 | | | | 853,766 | | | | 872,867 | | | | 830,022 | | | | 766,231 | |
| Average stockholders' equity | | | 125,083 | | | | 125,503 | | | | 124,257 | | | | 123,844 | | | | 122,528 | |
| | | | | | | | | | | | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | | | | | | | | | | | |
| Annualized return on average assets | | | 0.52 | % | | | 0.36 | % | | | 0.51 | % | | | 0.67 | % | | | -0.20 | % |
| Annualized return on average equity | | | 4.35 | % | | | 3.09 | % | | | 4.49 | % | | | 5.62 | % | | | -1.57 | % |
| Net interest margin | | | 4.75 | % | | | 4.49 | % | | | 4.19 | % | | | 3.44 | % | | | 3.36 | % |
| Net interest spread | | | 4.70 | % | | | 4.46 | % | | | 4.17 | % | | | 3.38 | % | | | 3.34 | % |
| Efficiency ratio | | | 77.14 | % | | | 86.36 | % | | | 85.01 | % | | | 73.50 | % | | | 100.38 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Capital Ratios | | | | | | | | | | | | | | | | | | | | |
| Average stockholders' equity to average assets | | | 11.9 | % | | | 11.7 | % | | | 11.4 | % | | | 11.9 | % | | | 12.7 | % |
| Tangible equity to tangible assets (non-GAAP) | | | 11.2 | % | | | 11.2 | % | | | 11.0 | % | | | 10.8 | % | | | 12.3 | % |
| Tier 1 leverage ratio | | | 11.3 | % | | | 11.4 | % | | | 11.2 | % | | | 11.3 | % | | | 12.1 | % |
| Tier 1 risk-based capital ratio | | | 19.6 | % | | | 21.0 | % | | | 21.2 | % | | | 21.2 | % | | | 22.2 | % |
| Total risk-based capital ratio | | | 20.8 | % | | | 22.2 | % | | | 22.4 | % | | | 22.4 | % | | | 23.4 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Other Information | | | | | | | | | | | | | | | | | | | | |
| Full-time equivalent employees | | | 319 | | | | 324 | | | | 327 | | | | 313 | | | | 295 | |
| Number of full-service offices | | | 22 | | | | 21 | | | | 22 | | | | 23 | | | | 21 | |
| Mortgage loan offices | | | 11 | | | | 11 | | | | 11 | | | | 11 | | | | 10 | |
| Investment offices | | | 3 | | | | 3 | | | | 3 | | | | 3 | | | | 2 | |
| Heritage Financial Group, Inc. | Page 5 of 6 |
| Second Quarter 2012 Earnings Release Supplement | |
| (Dollars in thousands) | |
| | | Three Months Ended | |
| | | June 30, | |
| | | 2012 | | | 2011 | |
| Loans by Type | | | | | | |
| Construction and land loans | | $ | 31,134 | | | $ | 26,688 | |
| Farmland loans | | | 18,121 | | | | 13,276 | |
| Permanent 1 - 4 | | | 148,162 | | | | 131,596 | |
| Permanent 1 - 4 - junior liens and revolving | | | 25,289 | | | | 26,140 | |
| Multifamily | | | 19,639 | | | | 12,755 | |
| Nonresidential | | | 177,307 | | | | 131,027 | |
| Commercial business loans | | | 58,589 | | | | 50,997 | |
| Consumer and other loans | | | 24,172 | | | | 23,592 | |
| | | | 502,413 | | | | 416,071 | |
| Loans acquired through FDIC-assisted acquisitions: | | | | | | | | |
| Non covered loans | | | 15,202 | | | | 24,227 | |
| Covered loans | | | 87,386 | | | | 60,427 | |
| | | | 605,001 | | | | 500,725 | |
| | | | | | | | | |
| OREO | | | 1,519 | | | | 2,659 | |
| | | | | | | | | |
| OREO assets acquired through FDIC-assisted acquisitions: | | | | | | | | |
| Non Covered | | | 200 | | | | 556 | |
| Covered | | | 7,571 | | | | - | |
| | | | 9,290 | | | | 3,215 | |
| | | | | | | | | |
| Asset Quality Data (excluding assets acquired through FDIC-assisted acquisitions): | | | | | | | | |
| Allowance for loan losses to total loans | | | 1.61 | % | | | 1.58 | % |
| Allowance for loan losses to average loans | | | 1.70 | % | | | 1.48 | % |
| Allowance for loan losses to non-performing loans | | | 81.27 | % | | | 76.68 | % |
| Accruing past due loans | | $ | 3,215 | | | $ | 727 | |
| Nonaccrual loans | | | 9,965 | | | | 8,589 | |
| Loans - 90 days past due & still accruing | | | - | | | | - | |
| Total non-performing loans | | | 9,965 | | | | 8,589 | |
| OREO and repossessed assets | | | 1,519 | | | | 2,725 | |
| Total non-performing assets | | | 11,484 | | | | 11,314 | |
| Non-performing loans to total loans | | | 1.98 | % | | | 2.06 | % |
| Non-performing assets to total assets | | | 1.08 | % | | | 1.17 | % |
| QTD Net charge-offs to average loans (annualized) | | | 0.23 | % | | | 0.26 | % |
| Net charge-offs QTD | | $ | 279 | | | $ | 253 | |
| Heritage Financial Group, Inc. | Page 6 of 6 |
| First Quarter 2012 Earnings Release Supplement | |
| (Dollars in thousands) | |
| | | Five Quarter Comparison for the Quarter Ended | |
| | | 6/30/12 | | | 3/31/12 | | | 12/31/11 | | | 9/30/11 | | | 6/30/11 | |
| Loans by Type | | | | | | | | | | | | | | | |
| Construction and land loans | | $ | 31,134 | | | $ | 24,375 | | | $ | 26,804 | | | $ | 28,115 | | | $ | 26,688 | |
| Farmland loans | | | 18,121 | | | | 17,150 | | | | 17,921 | | | | 18,272 | | | | 13,276 | |
| Permanent 1 - 4 | | | 148,162 | | | | 132,172 | | | | 129,745 | | | | 134,269 | | | | 131,596 | |
| Permanent 1 - 4 - junior liens and revolving | | | 25,289 | | | | 25,220 | | | | 26,154 | | | | 26,071 | | | | 26,140 | |
| Multifamily | | | 19,639 | | | | 18,577 | | | | 15,797 | | | | 13,754 | | | | 12,755 | |
| Nonresidential | | | 177,307 | | | | 150,492 | | | | 138,970 | | | | 129,730 | | | | 131,027 | |
| Commercial business loans | | | 58,589 | | | | 59,697 | | | | 55,179 | | | | 47,854 | | | | 50,997 | |
| Consumer and other loans | | | 24,172 | | | | 21,935 | | | | 23,872 | | | | 21,955 | | | | 23,592 | |
| | | | 502,413 | | | | 449,618 | | | | 434,442 | | | | 420,020 | | | | 416,071 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loans acquired through FDIC-assisted acquisitions: | | | | | | | | | | | | | | | | | |
| Non covered loans | | | 15,202 | | | | 17,384 | | | | 18,721 | | | | 24,713 | | | | 24,227 | |
| Covered loans | | | 87,386 | | | | 95,493 | | | | 107,457 | | | | 116,206 | | | | 60,427 | |
| | | | 605,001 | | | | 562,495 | | | | 560,620 | | | | 560,939 | | | | 500,725 | |
| | | | | | | | | | | | | | | | | | | | | |
| Asset Quality Data (excluding Loans acquired through FDIC-assisted acquisitions): | | | | | | | | | | | | |
| Allowance for loan losses to total loans | | | 1.61 | % | | | 1.70 | % | | | 1.72 | % | | | 1.65 | % | | | 1.58 | % |
| Allowance for loan losses to average loans | | | 1.70 | % | | | 1.35 | % | | | 1.32 | % | | | 1.29 | % | | | 1.48 | % |
| Allowance for loan losses to non-performing loans | | | 81.27 | % | | | 71.42 | % | | | 106.40 | % | | | 86.76 | % | | | 76.67 | % |
| Accruing past due loans | | $ | 3,215 | | | $ | 452 | | | $ | 371 | | | $ | 1,487 | | | $ | 727 | |
| Nonaccrual loans | | | 9,965 | | | | 10,681 | | | | 7,043 | | | | 7,994 | | | | 8,589 | |
| Loans - 90 days past due & still accruing | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total non-performing loans | | | 9,965 | | | | 10,681 | | | | 7,043 | | | | 7,994 | | | | 8,589 | |
| OREO and repossessed assets | | | 1,519 | | | | 2,992 | | | | 3,356 | | | | 1,841 | | | | 2,725 | |
| Total non-performing assets | | | 11,484 | | | | 13,673 | | | | 10,399 | | | | 9,835 | | | | 11,314 | |
| Non-performing loans to total loans | | | 1.98 | % | | | 2.38 | % | | | 1.62 | % | | | 1.90 | % | | | 1.72 | % |
| Non-performing assets to total assets | | | 1.08 | % | | | 1.75 | % | | | 0.95 | % | | | 0.89 | % | | | 1.17 | % |
| Net charge-offs to average loans (annualized) | | | 0.23 | % | | | 0.24 | % | | | 0.04 | % | | | 0.73 | % | | | 0.26 | % |
| Net charge-offs | | $ | 279 | | | $ | 265 | | | $ | 37 | | | $ | 650 | | | $ | 253 | |
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 and First Southern National Bank in August 2011. The acquisition of The Tattnall Bank did not involve a loss-share agreement with the FDIC. The acquisition of Citizens Bank of Effingham involved a loss-share agreement in which the FDIC will, for a specified number of years, reimburse the Bank for 80% of all losses and related expenses on covered assets.
