For additional information, contact:
T. Heath Fountain
Executive Vice President and
Chief Financial Officer
(229) 878-2055
HERITAGE FINANCIAL GROUP, INC. REPORTS HIGHER THIRD QUARTER NET INCOME OF
$2.0 MILLION OR $0.25 PER DILUTED SHARE
COMPANY ANNOUNCES SHELF OFFERING AND NEW STOCK REPURCHASE PLAN
ALBANY, Ga. (October 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 September 30, 2012. Highlights of the Company's results for the third quarter of 2012 include:
| | · | Net income of $2.0 million or $0.25 per diluted share, up 15% from net income of $1.7 million or $0.21 per diluted share for the third quarter of 2011 and up 47% from $1.4 million or $0.17 per diluted share for the second quarter of 2012; |
| | · | Excluding special items for each quarter, net income was $1.5 million or $0.19 per diluted share for 2012 versus net income of $422,000 or $0.05 per diluted share for 2011 and $1.4 million or $0.17 per diluted share from the second quarter of 2012 (see reconciliation of non-GAAP items); |
| | · | The completion of a previously announced early retirement program, which added $641,000 in additional expense for the quarter, but which is expected to save approximately $700,000 annually beginning in 2013; |
| | · | Loan growth for the quarter, excluding loans acquired through FDIC-assisted acquisitions, of $39.5 million or 8%; |
| | · | A decrease in loans acquired through FDIC-assisted acquisitions of $9.5 million or 9% for the quarter; |
| | · | A decrease in provision for loan losses, excluding FDIC-acquired loans, of $250,000 to $750,000 for the third quarter of 2012 compared with $1.0 million for the same quarter for 2011 and $750,000 for the second quarter of 2012; |
| | · | Provision for loan losses of $1.2 million for FDIC-acquired loans with approximately 80% of the losses reimbursable by the FDIC compared with no provision expense on such loans for the third quarter of 2011 and $341,000 for the second quarter of 2012; |
| | · | A decrease in annualized net charge-offs to 0.24% for the third quarter of 2012 compared with 0.73% for the third quarter of 2011 and 0.23% for the second quarter of 2012; and |
| | · | Elected fair value accounting for mortgage loans held for sale for the third quarter resulting in an overall positive impact to earnings of $492,000. |
Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "We are pleased to report another quarter of significant organic loan growth, continued improvement in core earnings, and ongoing acquisition and expansion activities. Regarding expansion activity, we were pleased to announce the addition of a new management team to our mortgage division. We expect this team to lead significant growth in our mortgage business, particularly in the Atlanta, Georgia market. We also opened a full-service banking office in Macon, Georgia, during the quarter, which will enhance the success of our mortgage and commercial banking operations in that market."
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HBOS Reports Third Quarter 2012 Results
Page 2
October 25, 2012
Dorminey added, "In addition to our efforts to increase revenues, we are concurrently working on expense management initiatives. During the quarter, we completed an early retirement program that will generate annual savings of approximately $700,000. We also continue to take steps to efficiently manage our capital. During the quarter, we completed our stock buyback plan adopted in December 2011. Concurrently, we are announcing a new 5% buyback plan along with a shelf stock offering of $60 million. These two plans will allow us to efficiently manage our capital levels at our current size, while also providing us with the tools we need to take advantage of acquisition and internal growth opportunities that may arise."
Expense Management Initiatives
During the third quarter of 2012, the Company completed the early retirement program announced during the second quarter of 2012 regarding certain employees at a cost of $641,000. It is anticipated that the early retirement program will generate annual savings of approximately $700,000 per year beginning in 2013.
Additionally, the Company is still on track to close its Collins, Georgia and Guyton, Georgia branches that it acquired in FDIC-assisted acquisitions. 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 Management Initiatives
The Company announced that it will file a shelf offering on Form S-3 with the Securities and Exchange Commission (SEC). Under the shelf registration statement, once declared effective by the SEC, the Company may offer and sell from time to time in the future, in one or more offerings, common stock, preferred stock, debt securities, warrants, depository shares, or units consisting of any combination of the forgoing.
The aggregate offering price of all securities that may be sold under the registration statement will not exceed $60 million. This shelf offering will give the Company flexibility to take advantage of acquisition opportunities that may arise in the future by accessing the capital markets on a timely and cost-effective basis. The specifics of any future offering, along with the prices and terms of any such securities offered by the Company, will be determined at the time of any such offering and will be described in detail in a prospectus supplement filed in connection with such offering. At this present time, the Company has no specific plans for an offering.
"Although we do not have any current plans to raise capital, we believe that the shelf registration statement will provide a benefit to the Company and our stockholders by enabling us to take advantage of favorable market conditions in capital raising transactions and to facilitate and expedite opportunistic acquisition and growth activities," said T. Heath Fountain, Executive Vice President and Chief Financial Officer. "The dollar amounts set forth are the amounts that we currently anticipate will be adequate to meet our needs under this registration statement over the next two years. We may use less, and we may continue to issue other shares of common stock pursuant to available registration exemptions or other registration statements. Any draw-down under the registration statement will only be done with the advance approval of our Board of Directors."
HBOS Reports Third Quarter 2012 Results
Page 3
October 25, 2012
The shelf registration statement relating to these securities will be filed with the SEC, but will not become effective until the SEC declares the statement so. These securities may not be sold nor may offers to buy be accepted prior to the time the shelf registration statement becomes effective. This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Any offering of the securities covered by the shelf registration statement will only be by means of a prospectus and an accompanying prospectus supplement.
During the third quarter of 2012, the Company repurchased approximately 260,000 shares of common stock at an average price of $13.54, completing its stock repurchase program expiring in December 2012. The Company’s Board of Directors has approved another stock repurchase program expiring in October 2013, which authorizes the repurchase of 397,000 shares of common stock, or approximately 5% of the shares currently outstanding.
The Company's estimated total risk-based capital ratio at September 30, 2012, was 19.2%, significantly exceeding the required minimum of 10% to be considered a well-capitalized institution. The ratio of tangible common equity to total tangible assets was 11.2% as of September 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.
HBOS Reports Third Quarter 2012 Results
Page 4
October 25, 2012
Third Quarter 2012 Results of Operations
The Company reported net income of $2.0 million or $0.25 per diluted share for the third quarter in 2012 compared with net income of $1.7 million or $0.21 per diluted share for the third quarter in 2011. However, the Company's results for the third quarters of 2012 and 2011 included special items that affect comparability. Results for the third quarter of 2012 included net non-recurring income and expenses of $472,000, net of tax, while the results of the year-earlier quarter included net non-recurring income and expenses of $1.3 million, net of tax. Excluding these special items, the Company's adjusted net income for the third quarter of 2012 was $1.5 million or $0.19 per diluted share compared with net income of $422,000 or $0.05 per diluted share for the third quarter of 2011 (see reconciliation of non-GAAP items).
The $258,000 improvement in reported quarterly earnings primarily resulted from the following items:
| | · | Improved net interest income of $5.3 million; and |
| | · | Reduced provision expense for loan losses, excluding FDIC-acquired loans, loan losses of $250,000; offset by |
| | · | Reduced non-interest income of $1.5 million; |
| | · | Increased non-interest expense of $2.2 million; and |
| | · | Increased provision expense for FDIC-acquired loan losses of $1.2 million. |
Net interest income for the third quarter of 2012 increased 71% to $12.7 million from $7.4 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 5.77% for the third quarter of 2012, an increase of 102 basis points over 4.75% on a linked-quarter basis and 233 basis points over 3.44% in the year-earlier period. The improvement in the third 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 third quarter of 2012, the Company continued to achieve loan growth, with its loan portfolio increasing $39.5 million organically on a linked-quarter basis and advancing $121.9 million overall compared with the year-earlier quarter. For the third quarter of 2012, the Company's loan portfolio, including loans acquired through FDIC-assisted acquisitions, totaled $634.9 million, which increased $29.9 million on a linked-quarter basis. Total deposits stood at $845.1 million at the end of the third quarter of 2012, down 2% or $15.2 million on a linked-quarter basis from $860.3 million, primarily reflecting a planned runoff of time deposits.
Non-interest income for the third quarter of 2012 decreased 26% to $4.4 million from $5.9 million in the year-earlier quarter, primarily driven by a negative swing in the accretion for the FDIC loss-share receivable of $2.1 million and a negative change in gain on acquisitions of $2.1 million, which were partially offset by an increased gain on sale of securities of $1.3 million and improvements in mortgage banking fees of $1.0 million and bankcard services income of $98,000. Non-interest expense for the third quarter of 2012 increased 22% to $12.0 million from $9.8 million in the year-earlier quarter, primarily driven increased salaries and employment benefits of $1.0 million, driven in part by $641,000 in early retirement expense, and increased foreclosure expense on FDIC-acquired assets of $563,000 and loss on sale and write-downs of other real estate assets, excluding FDIC-acquired, of $229,000 offset in part by reduced acquisition-related expenses of $285,000.
HBOS Reports Third Quarter 2012 Results
Page 5
October 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 $78.8 million in covered and $14.3 million in non-covered loans at the end of the third quarter of 2012 compared with $87.4 million in covered and $15.2 million in non-covered loans at the end of the second quarter of 2012. The principal balance of the FDIC-assisted loan portfolios totaled $171.6 million at the end of the third quarter of 2012 compared with $188.0 million as of the end of the second quarter of 2012. The details of the accounting for the FDIC-assisted loan portfolios for the third quarter of 2012 are as follows:
| | · | Covered loans acquired in FDIC-assisted acquisitions decreased $8.6 million to $78.8 million; |
| | · | Non-covered loans acquired in FDIC-assisted acquisitions decreased $911,000 to $14.3 million; |
| | · | The FDIC loss-share receivable associated with covered loans acquired in FDIC-assisted acquisitions decreased $8.6 million to $67.7 million; |
| | · | The negative accretion for the FDIC loss-share receivable was $1.6 million; |
| | · | Provision expense for loans acquired in FDIC-assisted acquisitions was $1.2 million; |
| | · | The non-accretable discount decreased $12.3 million to $54.2 million; and |
| | · | The accretable discount increased $5.6 million to $24.4 million. |
For the third quarter of 2012, provision expense of $1.2 million was recorded for loan charge-offs on loans acquired in FDIC-assisted acquisitions not provided for by the discount, with approximately 80% of the charge-offs reimbursable by the FDIC. The provision expense for these loans did not affect the Company's loan loss reserve. The FDIC loss-share receivable associated with covered FDIC-assisted loans decreased $8.6 million from $76.3 million for the prior quarter to $67.7 million, primarily driven by reimbursements received from the FDIC of $7.0 million and negative accretion of $1.6 million affecting the loss-share receivable asset associated with the improvement in expected cash flows of the loss-share performing portfolios. A FDIC true-up (claw back) liability was recorded as an expense, which reduced non-interest income for the current quarter by $484,000. This true-up was driven by an improvement in estimates of expected cash flows for both FDIC-assisted acquisitions.
The non-accretable discount decreased to $54.2 million at the end of the third quarter of 2012 from $66.5 million on a linked-quarter basis, primarily driven by the clearing of $3.6 million of discount in conjunction with the resolution of FDIC-assisted loans and transfers to accretable discount of $8.7 million. The accretable discount increased to $24.4 million for the third quarter of 2012 from $18.8 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 $4.8 million for the current quarter which compares with $2.1 million on a linked-quarter basis.
HBOS Reports Third Quarter 2012 Results
Page 6
October 25, 2012
Asset Quality
Annualized net charge-offs to average outstanding loans, excluding loans acquired in FDIC-assisted acquisitions, were down to 0.24% for the third quarter of 2012 versus 0.73% for the third quarter of 2011. Total non-performing assets, excluding assets acquired in FDIC-assisted acquisitions, reversed an improving trend as a percentage of assets compared with the prior year and were $17.8 million or 1.68% of total assets for the third quarter of 2012 compared with $9.8 million or 0.89% of total assets for the same quarter in 2011. The primary reason for the increase in non-performing assets was the migration of two relationships totaling $6.0 million to non-performing status. One of the relationships totaling $3.5 million was classified a troubled-debt restructuring and additional collateral of $6.1 million has been secured. The other relationship was a Chapter 11 bankruptcy where the collateral deficiency is fully reserved as of the current quarter. Both of these relationships were previously identified as criticized assets. Other real estate owned and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, totaled $1.4 million for the third quarter of 2012, down from $1.8 million for the same quarter in 2011.
The provision for loan losses on non-FDIC-acquired loans decreased 25% to $750,000 for the third quarter of 2012 from $1.0 million for the same quarter in 2011, primarily driven by improving net charge-off trends. For the third quarter in 2012, the allowance for loan losses represented 1.57% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.65% for the same quarter in 2011.
HBOS Reports Third Quarter 2012 Results
Page 7
October 25, 2012
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 23 full-service branch locations, 11 mortgage offices, and 4 investment offices. As of September 30, 2012, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $122 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.
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HBOS Reports Third Quarter 2012 Results
Page 8
October 25, 2012
HERITAGE FINANCIAL GROUP, INC.
Unaudited Reconciliation of Non-GAAP Measures Presented in Earnings Release
(Dollars in thousands, except per share data)
| | | | | | Nine Months Ended | |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Total interest income | | $ | 14,651 | | | $ | 10,148 | | | $ | 12,077 | | | $ | 38,387 | | | $ | 27,881 | |
| Loan held for sale – fair value election | | | (156 | ) | | | – | | | | – | | | | (156 | ) | | | – | |
| Adjusted interest income | | $ | 14,495 | | | $ | 10,148 | | | $ | 12,077 | | | $ | 38,231 | | | $ | 27,881 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total non-interest income | | $ | 4,361 | | | $ | 5,892 | | | $ | 3,679 | | | $ | 10,824 | | | $ | 14,294 | |
| Mortgage banking activities – fair value election | | | (336 | ) | | | – | | | | – | | | | (336 | ) | | | – | |
| Gain on sale of securities | | | (1,484 | ) | | | (213 | ) | | | – | | | | (1,554 | ) | | | (666 | ) |
| Accrual of FDIC acquisitions estimated true-up liability | | | 484 | | | | – | | | | – | | | | 484 | | | | – | |
| Bargain purchase (gain) loss | | | 90 | | | | (2,000 | ) | | | (34 | ) | | | 56 | | | | (4,217 | ) |
| Adjusted non-interest income | | $ | 3,115 | | | $ | 3,679 | | | $ | 3,645 | | | $ | 9,474 | | | $ | 9,411 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total non-interest expense | | $ | 11,978 | | | $ | 9,779 | | | $ | 10,674 | | | $ | 33,453 | | | $ | 28,218 | |
| Salaries and employee benefits – early retirement program | | | (641 | ) | | | – | | | | – | | | | (641 | ) | | | – | |
| Acquisition-related expenses | | | (14 | ) | | | (299 | ) | | | (69 | ) | | | (414 | ) | | | (1,056 | ) |
| Adjusted non-interest expense | | $ | 11,323 | | | $ | 9,480 | | | $ | 10,605 | | | $ | 32,398 | | | $ | 27,162 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net income as reported | | $ | 1,998 | | | $ | 1,740 | | | $ | 1,360 | | | $ | 4,349 | | | $ | 2,474 | |
| Adjustments for interest income, interest expense, non-interest income and non-interest expense, net of tax* | | | (472 | ) | | | (1,318 | ) | | | 23 | | | | (298 | ) | | | (2,584 | ) |
| Adjusted net income (loss) | | $ | 1,526 | | | $ | 422 | | | $ | 1,383 | | | $ | 4,051 | | | $ | (110 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Diluted earnings per share | | $ | 0.25 | | | $ | 0.21 | | | $ | 0.17 | | | $ | 0.54 | | | $ | 0.30 | |
| Adjustments for interest income, interest expense, non-interest income and non-interest expense, net of tax* | | | (0.06 | ) | | | (0.16 | ) | | | 0.00 | | | | (0.04 | ) | | | (0.31 | ) |
| Adjusted diluted earnings (loss) per share | | $ | 0.19 | | | $ | 0.05 | | | $ | 0.17 | | | $ | 0.50 | | | $ | (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.
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HBOS Reports Third Quarter 2012 Results
Page 9
October 25, 2012
HERITAGE FINANCIAL GROUP, INC.
Unaudited Financial Highlights
(Dollars in thousands, except per share data)
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | | | | | | | | | | | |
| Interest income | | $ | 14,651 | | | $ | 10,148 | | | $ | 38,387 | | | $ | 27,881 | |
| Interest expense | | | 1,938 | | | | 2,735 | | | | 5,791 | | | | 7,993 | |
| Net interest income | | | 12,713 | | | | 7,413 | | | | 32,596 | | | | 19,888 | |
| Provision for loan losses | | | 750 | | | | 1,000 | | | | 1,900 | | | | 2,300 | |
| Provision for loan losses – covered | | | 1,172 | | | | – | | | | 1,513 | | | | – | |
| Provision for loan losses – non covered | | | 12 | | | | – | | | | 12 | | | | – | |
| Net interest income after provision for loan losses | | | 10,779 | | | | 6,413 | | | | 29,171 | | | | 17,588 | |
| Non-interest income | | | 4,361 | | | | 5,892 | | | | 10,824 | | | | 14,294 | |
| Non-interest expense | | | 11,978 | | | | 9,779 | | | | 33,453 | | | | 28,218 | |
| Income before income taxes | | | 3,162 | | | | 2,526 | | | | 6,542 | | | | 3,664 | |
| Income tax expense | | | 1,164 | | | | 786 | | | | 2,213 | | | | 1,190 | |
| Net income | | $ | 1,998 | | | $ | 1,740 | | | $ | 4,329 | | | $ | 2,474 | |
| Net income per share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.25 | | | $ | 0.21 | | | $ | 0.54 | | | $ | 0.30 | |
| Diluted | | $ | 0.25 | | | $ | 0.21 | | | $ | 0.54 | | | $ | 0.30 | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 7,942,852 | | | | 8,305,615 | | | | 8,052,462 | | | | 8,205,305 | |
| Diluted | | | 7,944,983 | | | | 8,307,010 | | | | 8,054,183 | | | | 8,206,906 | |
| Dividends declared per share | | $ | 0.04 | | | $ | 0.03 | | | $ | 0.12 | | | $ | 0.09 | |
| | | | | | | | | | |
| Total assets | | $ | 1,054,899 | | | $ | 1,063,426 | | | $ | 1,102,504 | |
| Cash and cash equivalents | | | 22,016 | | | | 22,499 | | | | 23,292 | |
| Interest-bearing deposits in banks | | | 17,026 | | | | 32,153 | | | | 99,211 | |
| Securities available for sale | | | 209,287 | | | | 227,984 | | | | 218,384 | |
| Loans | | | 634,932 | | | | 605,001 | | | | 560,940 | |
| Allowance for loan losses | | | 8,530 | | | | 8,099 | | | | 6,936 | |
| Total deposits | | | 845,079 | | | | 860,268 | | | | 900,103 | |
| Federal Home Loan Bank advances | | | 35,000 | | | | 35,000 | | | | 35,000 | |
| Stockholders' equity | | | 121,792 | | | | 123,291 | | | | 123,638 | |
| Heritage Financial Group, Inc. | | Page 1 of 6 |
Third Quarter 2012 Earnings Release Supplement
(Unaudited)
(Dollars in thousands, except per share data)
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Income Statement Data | | | | | | | | | | | | |
| Interest income | | | | | | | | | | | | |
| Loans | | $ | 13,067 | | | $ | 8,774 | | | $ | 33,747 | | | $ | 23,483 | |
| Loans held for sale | | | 342 | | | | 45 | | | | 729 | | | | 99 | |
| Securities - taxable | | | 924 | | | | 1,013 | | | | 2,919 | | | | 3,441 | |
| Securities - nontaxable | | | 298 | | | | 207 | | | | 891 | | | | 629 | |
| Federal funds sold | | | 3 | | | | 16 | | | | 21 | | | | 45 | |
| Interest-bearing deposits in banks | | | 17 | | | | 93 | | | | 80 | | | | 184 | |
| Total interest income | | | 14,651 | | | | 10,148 | | | | 38,387 | | | | 27,881 | |
| Interest expense | | | | | | | | | | | | | | | | |
| Deposits | | | 1,257 | | | | 2,048 | | | | 3,766 | | | | 5,879 | |
| Other borrowings | | | 681 | | | | 687 | | | | 2,025 | | | | 2,114 | |
| Total interest expense | | | 1,938 | | | | 2,735 | | | | 5,791 | | | | 7,993 | |
| Net interest income | | | 12,713 | | | | 7,413 | | | | 32,596 | | | | 19,888 | |
| Provision for loan losses | | | 750 | | | | 1,000 | | | | 1,900 | | | | 2,300 | |
| Provision for loan losses - FDIC acquired covered | | | 1,172 | | | | - | | | | 1,513 | | | | - | |
| Provision for loan losses - FDIC acquired non covered | | | 12 | | | | - | | | | 12 | | | | - | |
| Net interest income after provision for loan losses | | | 10,779 | | | | 6,413 | | | | 29,171 | | | | 17,588 | |
| Non-interest income | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 1,285 | | | | 1,267 | | | | 3,441 | | | | 3,540 | |
| Bankcard services income | | | 783 | | | | 685 | | | | 2,437 | | | | 1,946 | |
| Other service charges, fees & commissions | | | 80 | | | | 61 | | | | 238 | | | | 205 | |
| Brokerage fees | | | 467 | | | | 328 | | | | 1,375 | | | | 1,088 | |
| Mortgage banking activities | | | 1,689 | | | | 719 | | | | 3,316 | | | | 1,611 | |
| Bank owned life insurance | | | 210 | | | | 146 | | | | 561 | | | | 440 | |
| Gain on sale of securities | | | 1,484 | | | | 213 | | | | 1,554 | | | | 666 | |
| Gain (loss) on acquisitions | | | (90 | ) | | | 2,000 | | | | (56 | ) | | | 4,217 | |
| Accretion of FDIC loss-share receivable | | | (1,606 | ) | | | 448 | | | | (2,236 | ) | | | 453 | |
| Other | | | 59 | | | | 25 | | | | 194 | | | | 128 | |
| Total non-interest income | | | 4,361 | | | | 5,892 | | | | 10,824 | | | | 14,294 | |
| Non-interest expense | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 6,380 | | | | 5,384 | | | | 17,375 | | | | 14,635 | |
| Equipment and occupancy | | | 1,317 | | | | 1,201 | | | | 4,035 | | | | 2,961 | |
| Advertising & marketing | | | 114 | | | | 167 | | | | 509 | | | | 551 | |
| Professional fees | | | 354 | | | | 326 | | | | 932 | | | | 1,079 | |
| Information services expenses | | | 1,240 | | | | 1,063 | | | | 3,456 | | | | 2,546 | |
(Gain) loss on sale and write-downs of other real estate owned | | | 90 | | | | (139 | ) | | | (58 | ) | | | 798 | |
Gain on sale and write-downs of FDIC acquired other real estate | | | (33 | ) | | | (246 | ) | | | (108 | ) | | | (291 | ) |
| Foreclosed asset expenses | | | 177 | | | | 288 | | | | 617 | | | | 703 | |
| Foreclosed FDIC acquired asset expenses | | | 563 | | | | - | | | | 1,191 | | | | - | |
| FDIC insurance and other regulatory fees | | | 276 | | | | 128 | | | | 785 | | | | 775 | |
| Acquisition related expenses | | | 14 | | | | 299 | | | | 414 | | | | 1,056 | |
| Deposit Intangible expense | | | 194 | | | | 183 | | | | 590 | | | | 485 | |
| Other operating | | | 1,292 | | | | 1,125 | | | | 3,715 | | | | 2,920 | |
| Total non-interest expense | | | 11,978 | | | | 9,779 | | | | 33,453 | | | | 28,218 | |
| Income before taxes | | | 3,162 | | | | 2,526 | | | | 6,542 | | | | 3,664 | |
| Applicable income tax | | | 1,164 | | | | 786 | | | | 2,213 | | | | 1,190 | |
| Net income | | $ | 1,998 | | | $ | 1,740 | | | $ | 4,329 | | | $ | 2,474 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares - basic | | | 7,942,852 | | | | 8,305,615 | | | | 8,052,462 | | | | 8,205,305 | |
| Weighted average shares - diluted | | | 7,944,983 | | | | 8,307,010 | | | | 8,054,183 | | | | 8,206,906 | |
| | | | | | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.25 | | | $ | 0.21 | | | $ | 0.54 | | | $ | 0.30 | |
| Diluted earnings per share | | | 0.25 | | | | 0.21 | | | | 0.54 | | | | 0.30 | |
| Cash dividend declared per share | | | 0.04 | | | | 0.03 | | | | 0.12 | | | | 0.09 | |
| Heritage Financial Group, Inc. | | Page 2 of 6 |
Third Quarter 2012 Earnings Release Supplement
(Unaudited)
(Dollars in thousands, except per share data)
| | | September 30, | |
| | | 2012 | | | 2011 | |
| Balance Sheet Data (Ending Balance) | | | | | | |
| Total loans | | $ | 634,932 | | | $ | 560,940 | |
| Loans held for sale | | | 7,236 | | | | 5,538 | |
| Covered loans | | | 78,757 | | | | 116,206 | |
| Allowance for loan losses | | | 8,530 | | | | 6,936 | |
| Total foreclosed assets | | | 11,458 | | | | 12,355 | |
| Covered other real estate owned | | | 9,457 | | | | 10,514 | |
| FDIC loss-share receivable | | | 67,698 | | | | 87,757 | |
| Intangible assets | | | 4,426 | | | | 5,056 | |
| Total assets | | | 1,054,899 | | | | 1,102,504 | |
| Non-interest-bearing deposits | | | 108,767 | | | | 84,716 | |
| Interest-bearing deposits | | | 736,312 | | | | 815,387 | |
| Federal Home Loan Bank advances | | | 35,000 | | | | 35,000 | |
Federal funds purchased and securities sold under agreement to repurchase | | | 35,833 | | | | 36,118 | |
| Stockholders' equity | | | 121,793 | | | | 123,637 | |
| Total shares outstanding | | | 8,229,955 | | | | 8,712,140 | |
| Unearned ESOP shares | | | 399,162 | | | | 452,348 | |
| Total shares outstanding net of unearned ESOP | | | 7,830,793 | | | | 8,259,792 | |
| | | | | | | | | |
| Book value per share | | $ | 15.55 | | | $ | 14.97 | |
| Book value per share including unearned ESOP (non-GAAP) | | | 14.80 | | | | 14.19 | |
| Tangible book value per share (non-GAAP) | | | 14.99 | | | | 14.36 | |
| Tangible book value per share including unearned ESOP (non-GAAP) | | | 14.26 | | | | 13.61 | |
| Market value per share | | | 13.14 | | | | 10.39 | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Average Balance Sheet Data | | | | | | | | | | | | |
| Average interest-bearing deposits in banks | | $ | 19,343 | | | $ | 102,769 | | | $ | 26,337 | | | $ | 54,737 | |
| Average federal funds sold | | | 5,471 | | | | 26,889 | | | | 11,276 | | | | 23,607 | |
| Average investment securities | | | 235,862 | | | | 201,762 | | | | 249,826 | | | | 213,518 | |
| Average loans | | | 625,464 | | | | 533,487 | | | | 589,871 | | | | 497,353 | |
| Average mortgage loans held for sale | | | 6,198 | | | | 4,336 | | | | 5,430 | | | | 2,998 | |
| Average FDIC loss-share receivable | | | 74,045 | | | | 71,942 | | | | 79,264 | | | | 52,568 | |
| Average earning assets | | | 883,319 | | | | 864,907 | | | | 879,499 | | | | 792,220 | |
| Average assets | | | 1,070,130 | | | | 1,040,575 | | | | 1,065,701 | | | | 956,622 | |
| Average noninterest-bearing deposits | | | 94,453 | | | | 76,940 | | | | 89,719 | | | | 66,664 | |
| Average interest-bearing deposits | | | 768,247 | | | | 761,344 | | | | 771,214 | | | | 675,966 | |
| Average total deposits | | | 862,700 | | | | 838,284 | | | | 860,933 | | | | 742,630 | |
| Average federal funds purchased and securities | | | | | | | | | | | | | | | | |
| sold under agreement to repurchase | | | 33,916 | | | | 33,678 | | | | 33,259 | | | | 32,304 | |
| Average Federal Home Loan Bank advances | | | 35,326 | | | | 35,000 | | | | 35,109 | | | | 50,195 | |
| Average interest-bearing liabilities | | | 837,489 | | | | 830,022 | | | | 839,582 | | | | 758,567 | |
| Average stockholders' equity | | | 124,884 | | | | 123,844 | | | | 125,152 | | | | 122,210 | |
| | | | | | | | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | | | | | | | |
| Annualized return on average assets | | | 0.75 | % | | | 0.67 | % | | | 0.81 | % | | | 0.52 | % |
| Annualized return on average equity | | | 6.40 | % | | | 5.62 | % | | | 6.92 | % | | | 4.05 | % |
| Net interest margin | | | 5.77 | % | | | 3.44 | % | | | 5.00 | % | | | 3.41 | % |
| Net interest spread | | | 5.72 | % | | | 3.38 | % | | | 4.96 | % | | | 3.35 | % |
| Efficiency ratio | | | 70.15 | % | | | 73.50 | % | | | 77.05 | % | | | 82.55 | % |
| | | | | | | | | | | | | | | | | |
| Capital Ratios | | | | | | | | | | | | | | | | |
| Average stockholders' equity to average assets | | | 11.7 | % | | | 12.7 | % | | | 11.7 | % | | | 12.8 | % |
| Tangible equity to tangible assets (non-GAAP) | | | 11.2 | % | | | 12.3 | % | | | 11.2 | % | | | 10.8 | % |
| Tier 1 leverage ratio (1) | | | 10.9 | % | | | 11.3 | % | | | 10.9 | % | | | 11.3 | % |
| Tier 1 risk-based capital ratio (1) | | | 18.0 | % | | | 20.2 | % | | | 18.0 | % | | | 20.2 | % |
| Total risk-based capital ratio (1) | | | 19.2 | % | | | 21.4 | % | | | 19.2 | % | | | 21.4 | % |
| | | | | | | | | | | | | | | | | |
| Other Information | | | | | | | | | | | | | | | | |
| Full-time equivalent employees | | | 316 | | | | 313 | | | | 316 | | | | 313 | |
| Banking | | | 270 | | | | 270 | | | | 270 | | | | 270 | |
| Mortgage | | | 39 | | | | 36 | | | | 39 | | | | 36 | |
| Investments | | | 7 | | | | 7 | | | | 7 | | | | 7 | |
| Number of full-service offices | | | 23 | | | | 23 | | | | 23 | | | | 23 | |
| Mortgage loan offices | | | 11 | | | | 11 | | | | 11 | | | | 11 | |
| Investment offices | | | 4 | | | | 3 | | | | 4 | | | | 3 | |
| (1) | September 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 |
Third Quarter 2012 Earnings Release Supplement
(Unaudited)
(Dollars in thousands, except per share data)
| | | Five Quarter Comparison for the Three Months Ended | |
| | | 9/30/12 | | | 6/30/12 | | | 3/31/12 | | | 12/31/11 | | | 9/30/11 | |
| Income Statement Data | | | | | | | | | | | | | | | |
| Interest income | | | | | | | | | | | | | | | |
| Loans | | $ | 13,067 | | | $ | 10,532 | | | $ | 10,147 | | | $ | 9,945 | | | $ | 8,774 | |
| Loans held for sale | | | 342 | | | | 204 | | | | 182 | | | | 198 | | | | 45 | |
| Securities - taxable | | | 924 | | | | 1,016 | | | | 979 | | | | 1,095 | | | | 1,013 | |
| Securities - nontaxable | | | 298 | | | | 295 | | | | 299 | | | | 251 | | | | 207 | |
| Federal funds sold | | | 3 | | | | 4 | | | | 15 | | | | 15 | | | | 16 | |
| Interest-bearing deposits in banks | | | 17 | | | | 26 | | | | 37 | | | | 65 | | | | 93 | |
| Total interest income | | | 14,651 | | | | 12,077 | | | | 11,659 | | | | 11,569 | | | | 10,148 | |
| Interest expense | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 1,257 | | | | 1,246 | | | | 1,263 | | | | 1,671 | | | | 2,048 | |
| Other borrowings | | | 681 | | | | 672 | | | | 672 | | | | 686 | | | | 687 | |
| Total interest expense | | | 1,938 | | | | 1,918 | | | | 1,935 | | | | 2,357 | | | | 2,735 | |
| Net interest income | | | 12,713 | | | | 10,159 | | | | 9,724 | | | | 9,212 | | | | 7,413 | |
| Provision for loan losses | | | 750 | | | | 750 | | | | 400 | | | | 595 | | | | 1,000 | |
| Provision for loan losses - FDIC acquired covered | | | 1,172 | | | | 338 | | | | - | | | | - | | | | - | |
| Provision for loan losses - FDIC acquired non covered | | | 12 | | | | 3 | | | | - | | | | - | | | | - | |
| Net interest income after provision for loan losses | | | 10,779 | | | | 9,068 | | | | 9,324 | | | | 8,617 | | | | 6,413 | |
| Non-interest income | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 1,285 | | | | 1,135 | | | | 1,020 | | | | 1,237 | | | | 1,267 | |
| Bankcard services income | | | 783 | | | | 831 | | | | 824 | | | | 691 | | | | 684 | |
| Other service charges, fees & commissions | | | 80 | | | | 73 | | | | 85 | | | | 188 | | | | 62 | |
| Brokerage fees | | | 467 | | | | 462 | | | | 446 | | | | 298 | | | | 328 | |
| Mortgage banking activities | | | 1,689 | | | | 938 | | | | 689 | | | | 674 | | | | 719 | |
| Bank owned life insurance | | | 210 | | | | 211 | | | | 140 | | | | 148 | | | | 146 | |
| Life insurance proceeds | | | - | | | | - | | | | - | | | | - | | | | - | |
| Gain on sale of securities | | | 1,484 | | | | 27 | | | | 42 | | | | 18 | | | | 213 | |
| Bargain purchase gain | | | (90 | ) | | | 34 | | | | - | | | | - | | | | 2,000 | |
| Accretion of FDIC loss-share receivable | | | (1,606 | ) | | | (133 | ) | | | (498 | ) | | | (72 | ) | | | 448 | |
| Other | | | 59 | | | | 101 | | | | 35 | | | | 33 | | | | 25 | |
| Total non-interest income | | | 4,361 | | | | 3,679 | | | | 2,783 | | | | 3,215 | | | | 5,892 | |
| Non-interest expense | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 6,380 | | | | 5,460 | | | | 5,536 | | | | 5,758 | | | | 5,384 | |
| Equipment and occupancy | | | 1,317 | | | | 1,395 | | | | 1,324 | | | | 1,314 | | | | 1,201 | |
| Advertising & marketing | | | 114 | | | | 214 | | | | 180 | | | | 233 | | | | 167 | |
| Professional fees | | | 354 | | | | 340 | | | | 238 | | | | 224 | | | | 326 | |
| Information services expenses | | | 1,240 | | | | 1,163 | | | | 1,052 | | | | 1,130 | | | | 1,063 | |
(Gain) loss on sale and write-downs of other real estate owned | | | 90 | | | | (141 | ) | | | (7 | ) | | | (27 | ) | | | (139 | ) |
| Loss (gain) on sale and write-downs of FDIC acquired other real estate | | | (33 | ) | | | (249 | ) | | | 174 | | | | (92 | ) | | | (246 | ) |
| Foreclosed asset expenses | | | 177 | | | | 218 | | | | 221 | | | | 22 | | | | 216 | |
| Foreclosed FDIC acquired asset expenses | | | 563 | | | | 466 | | | | 162 | | | | 118 | | | | 72 | |
| FDIC insurance and other regulatory fees | | | 276 | | | | 265 | | | | 245 | | | | 179 | | | | 128 | |
| Acquisition related expenses | | | 14 | | | | 69 | | | | 331 | | | | 254 | | | | 299 | |
| Deposit intangible expense | | | 194 | | | | 195 | | | | 201 | | | | 207 | | | | 183 | |
| Other operating | | | 1,292 | | | | 1,279 | | | | 1,144 | | | | 1,208 | | | | 1,125 | |
| Total non-interest expense | | | 11,978 | | | | 10,674 | | | | 10,801 | | | | 10,528 | | | | 9,779 | |
| Income (loss) before taxes | | | 3,162 | | | | 2,073 | | | | 1,306 | | | | 1,304 | | | | 2,526 | |
| Applicable income tax (benefit) | | | 1,164 | | | | 713 | | | | 335 | | | | (91 | ) | | | 786 | |
| Net income (loss) | | $ | 1,998 | | | $ | 1,360 | | | $ | 971 | | | $ | 1,395 | | | $ | 1,740 | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average shares - basic | | | 7,942,852 | | | | 8,071,354 | | | | 8,144,382 | | | | 8,229,293 | | | | 8,305,615 | |
| Weighted average shares - diluted | | | 7,944,983 | | | | 8,072,935 | | | | 8,145,730 | | | | 8,230,206 | | | | 8,307,010 | |
| | | | | | | | | | | | | | | | | | | | | |
| Basic earnings (loss) per share | | $ | 0.25 | | | $ | 0.17 | | | $ | 0.12 | | | $ | 0.17 | | | $ | 0.21 | |
| Diluted earnings (loss) per share | | | 0.25 | | | | 0.17 | | | | 0.12 | | | | 0.17 | | | | 0.21 | |
| Cash dividend declared per share | | | 0.04 | | | | 0.04 | | | | 0.04 | | | | 0.03 | | | | 0.03 | |
| Heritage Financial Group, Inc. | | Page 4 of 6 |
Third Quarter 2012 Earnings Release Supplement
(Unaudited)
(Dollars in thousands, except per share data)
| | | Five Quarter Comparison | |
| | | 9/30/12 | | | 6/30/12 | | | 3/31/12 | | | 12/31/11 | | | 9/30/11 | |
| Balance Sheet Data (at period end) | | | | | | | | | | | | | | | |
| Total loans | | $ | 634,932 | | | $ | 605,001 | | | $ | 562,495 | | | $ | 560,620 | | | $ | 560,940 | |
| Loans held for sale | | | 7,236 | | | | 6,017 | | | | 4,731 | | | | 7,471 | | | | 5,538 | |
| Covered loans | | | 78,757 | | | | 87,386 | | | | 95,493 | | | | 107,457 | | | | 116,206 | |
| Allowance for loan losses | | | 8,530 | | | | 8,099 | | | | 7,629 | | | | 7,494 | | | | 6,936 | |
| Total foreclosed assets | | | 11,458 | | | | 9,290 | | | | 12,117 | | | | 13,441 | | | | 12,355 | |
| Covered other real estate owned | | | 9,457 | | | | 7,571 | | | | 8,445 | | | | 10,084 | | | | 10,514 | |
| FDIC loss-share receivable | | | 67,698 | | | | 76,294 | | | | 82,925 | | | | 83,901 | | | | 87,757 | |
| Intangible assets | | | 4,426 | | | | 4,621 | | | | 4,647 | | | | 4,848 | | | | 5,056 | |
| Total assets | | | 1,054,899 | | | | 1,063,426 | | | | 1,075,510 | | | | 1,089,852 | | | | 1,102,504 | |
| Non-interest-bearing deposits | | | 108,767 | | | | 87,815 | | | | 88,582 | | | | 78,823 | | | | 84,716 | |
| Interest-bearing deposits | | | 736,312 | | | | 772,453 | | | | 780,161 | | | | 805,364 | | | | 815,387 | |
| 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 | | | 35,833 | | | | 31,746 | | | | 37,227 | | | | 35,049 | | | | 36,118 | |
| Stockholders' equity | | | 121,793 | | | | 123,291 | | | | 125,067 | | | | 124,136 | | | | 123,637 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total shares outstanding | | | 8,229,955 | | | | 8,490,247 | | | | 8,668,752 | | | | 8,712,031 | | | | 8,712,140 | |
| Unearned ESOP shares | | | 399,162 | | | | 412,487 | | | | 425,813 | | | | 439,138 | | | | 452,348 | |
| Total shares outstanding net of unearned ESOP | | | 7,830,793 | | | | 8,077,760 | | | | 8,242,939 | | | | 8,272,893 | | | | 8,259,792 | |
| | | | | | | | | | | | | | | | | | | | | |
| Book value per share | | $ | 15.55 | | | $ | 15.26 | | | $ | 15.17 | | | $ | 15.01 | | | $ | 14.97 | |
| Book value per share including unearned ESOP (non-GAAP) | | | 14.80 | | | | 14.52 | | | | 14.43 | | | | 14.25 | | | | 14.19 | |
| Tangible book value per share (non-GAAP) | | | 14.99 | | | | 14.69 | | | | 14.61 | | | | 14.42 | | | | 14.36 | |
| Tangible book value per share including unearned ESOP (non-GAAP) | | | 14.26 | | | | 13.98 | | | | 13.89 | | | | 13.69 | | | | 13.61 | |
| Market value per share | | | 13.14 | | | | 12.87 | | | | 11.82 | | | | 11.80 | | | | 10.39 | |
| | | Five Quarter Comparison | |
| | | 9/30/12 | | | 6/30/12 | | | 3/31/12 | | | 12/31/11 | | | 9/30/11 | |
| Average Balance Sheet Data | | | | | | | | | | | | | | | |
| Average interest-bearing deposits in banks | | $ | 19,343 | | | $ | 21,897 | | | $ | 37,999 | | | $ | 56,025 | | | $ | 102,769 | |
| Average federal funds sold | | | 5,471 | | | | 6,038 | | | | 22,363 | | | | 22,805 | | | | 26,889 | |
| Average investment securities | | | 235,862 | | | | 252,894 | | | | 257,863 | | | | 240,101 | | | | 201,762 | |
| Average loans | | | 625,464 | | | | 583,366 | | | | 560,385 | | | | 559,556 | | | | 533,487 | |
| Average mortgage loans held for sale | | | 6,198 | | | | 5,519 | | | | 4,550 | | | | 7,599 | | | | 4,336 | |
| Average FDIC Loss-Share Receivable | | | 74,045 | | | | 79,812 | | | | 84,017 | | | | 86,544 | | | | 71,942 | |
| Average earning assets | | | 883,319 | | | | 869,393 | | | | 883,160 | | | | 878,487 | | | | 864,907 | |
| Average assets | | | 1,070,130 | | | | 1,053,140 | | | | 1,074,260 | | | | 1,085,490 | | | | 1,040,575 | |
| Average noninterest-bearing deposits | | | 94,453 | | | | 89,763 | | | | 84,920 | | | | 80,376 | | | | 76,940 | |
| Average interest-bearing deposits | | | 768,247 | | | | 760,409 | | | | 784,944 | | | | 801,246 | | | | 761,344 | |
| Average total deposits | | | 862,700 | | | | 850,172 | | | | 869,864 | | | | 881,622 | | | | 838,284 | |
| Average federal funds purchased and securities sold under agreement to repurchase | | | 33,916 | | | | 32,043 | | | | 33,822 | | | | 36,621 | | | | 33,678 | |
| Average Federal Home Loan Bank advances | | | 35,326 | | | | 35,000 | | | | 35,000 | | | | 35,000 | | | | 35,000 | |
| Average interest-bearing liabilities | | | 837,489 | | | | 827,452 | | | | 853,766 | | | | 872,867 | | | | 830,022 | |
| Average stockholders' equity | | | 124,884 | | | | 125,083 | | | | 125,503 | | | | 124,257 | | | | 123,844 | |
| | | | | | | | | | | | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | | | | | | | | | | | |
| Annualized return on average assets | | | 0.75 | % | | | 0.52 | % | | | 0.36 | % | | | 0.51 | % | | | 0.67 | % |
| Annualized return on average equity | | | 6.40 | % | | | 4.35 | % | | | 3.09 | % | | | 4.49 | % | | | 5.62 | % |
| Net interest margin | | | 5.77 | % | | | 4.75 | % | | | 4.49 | % | | | 4.19 | % | | | 3.44 | % |
| Net interest spread | | | 5.72 | % | | | 4.70 | % | | | 4.46 | % | | | 4.17 | % | | | 3.38 | % |
| Efficiency ratio | | | 70.15 | % | | | 77.14 | % | | | 86.36 | % | | | 85.01 | % | | | 73.50 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Capital Ratios | | | | | | | | | | | | | | | | | | | | |
| Average stockholders' equity to average assets | | | 11.7 | % | | | 11.9 | % | | | 11.7 | % | | | 11.4 | % | | | 11.9 | % |
| Tangible equity to tangible assets (non-GAAP) | | | 11.2 | % | | | 11.2 | % | | | 11.2 | % | | | 11.0 | % | | | 10.8 | % |
| Tier 1 leverage ratio | | | 10.9 | % | | | 11.3 | % | | | 11.4 | % | | | 11.2 | % | | | 11.3 | % |
| Tier 1 risk-based capital ratio | | | 18.0 | % | | | 19.1 | % | | | 21.0 | % | | | 21.2 | % | | | 21.2 | % |
| Total risk-based capital ratio | | | 19.2 | % | | | 20.3 | % | | | 22.2 | % | | | 22.4 | % | | | 22.4 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Other Information | | | | | | | | | | | | | | | | | | | | |
| Full-time equivalent employees | | | 316 | | | | 319 | | | | 324 | | | | 327 | | | | 313 | |
| Banking | | | 270 | | | | 279 | | | | 283 | | | | 286 | | | | 270 | |
| Mortgage | | | 39 | | | | 33 | | | | 34 | | | | 34 | | | | 36 | |
| Investments | | | 7 | | | | 7 | | | | 7 | | | | 7 | | | | 7 | |
| Number of full-service offices | | | 23 | | | | 22 | | | | 21 | | | | 22 | | | | 23 | |
| Mortgage loan offices | | | 11 | | | | 11 | | | | 11 | | | | 11 | | | | 11 | |
| Investment offices | | | 4 | | | | 3 | | | | 3 | | | | 3 | | | | 3 | |
| Heritage Financial Group, Inc. | | Page 5 of 6 |
Third Quarter 2012 Earnings Release Supplement
(Dollars in thousands)
| | | Three Months Ended | |
| | | September 30, | |
| | | 2012 | | | 2011 | |
| Loans by Type | | | | | | |
| Construction and land | | $ | 30,010 | | | $ | 28,115 | |
| Farmland | | | 20,298 | | | | 18,272 | |
| Permanent 1 - 4 | | | 157,551 | | | | 134,269 | |
| Permanent 1 - 4 - junior liens and revolving | | | 25,507 | | | | 26,071 | |
| Multifamily | | | 19,805 | | | | 13,754 | |
| Nonresidential | | | 193,392 | | | | 129,730 | |
| Commercial business | | | 68,800 | | | | 47,854 | |
| Consumer and other | | | 26,519 | | | | 21,955 | |
| | | | 541,882 | | | | 420,020 | |
| Loans acquired through FDIC-assisted acquisitions: | | | | | | | | |
| Non covered | | | 14,291 | | | | 24,714 | |
| Covered | | | 78,757 | | | | 116,206 | |
| | | | 93,048 | | | | 140,920 | |
| | | | | | | | | |
| | | | 634,930 | | | | 560,940 | |
| | | | | | | | | |
| OREO (excluding assets acquired through FDIC-assisted acquisitions): | | | 1,403 | | | | 1,596 | |
| | | | | | | | | |
| OREO assets acquired through FDIC-assisted acquisitions: | | | | | | | | |
| Non Covered | | | 598 | | | | 245 | |
| Covered | | | 9,457 | | | | 10,514 | |
| | | | 11,458 | | | | 12,355 | |
| | | | | | | | | |
| Asset Quality Data (excluding assets acquired through FDIC-assisted acquisitions): | | | | | | | | |
| Allowance for loan losses to total loans | | | 1.57 | % | | | 1.65 | % |
| Allowance for loan losses to average loans | | | 1.61 | % | | | 1.29 | % |
| Allowance for loan losses to non-performing loans | | | 52.15 | % | | | 86.78 | % |
| Accruing past due loans | | $ | 1,038 | | | $ | 1,487 | |
| Nonaccrual loans | | | 16,358 | | | | 7,994 | |
| Loans - 90 days past due & still accruing | | | - | | | | - | |
| Total non-performing loans | | | 16,358 | | | | 7,994 | |
| OREO and repossessed assets | | | 1,403 | | | | 1,841 | |
| Total non-performing assets | | | 17,761 | | | | 9,835 | |
| Non-performing loans to total loans | | | 3.02 | % | | | 1.90 | % |
| Non-performing assets to total assets | | | 1.68 | % | | | 0.89 | % |
| QTD Net charge-offs to average loans (annualized) | | | 0.24 | % | | | 0.73 | % |
| Net charge-offs QTD | | $ | 320 | | | $ | 650 | |
| Heritage Financial Group, Inc. | | Page 6 of 6 |
Third Quarter 2012 Earnings Release Supplement
(Dollars in thousands)
| | | Five Quarter Comparison for the Quarter Ended | |
| | | 9/30/12 | | | 6/30/12 | | | 3/31/12 | | | 12/31/11 | | | 9/30/11 | |
| Loans by Type | | | | | | | | | | | | | | | |
| Construction and land | | $ | 30,010 | | | $ | 31,134 | | | $ | 24,375 | | | $ | 26,804 | | | $ | 28,115 | |
| Farmland | | | 20,298 | | | | 18,121 | | | | 17,150 | | | | 17,921 | | | | 18,272 | |
| Permanent 1 - 4 | | | 157,551 | | | | 148,162 | | | | 132,172 | | | | 129,745 | | | | 134,269 | |
| Permanent 1 - 4 - junior liens and revolving | | | 25,507 | | | | 25,289 | | | | 25,220 | | | | 26,154 | | | | 26,071 | |
| Multifamily | | | 19,805 | | | | 19,639 | | | | 18,577 | | | | 15,797 | | | | 13,754 | |
| Nonresidential | | | 193,392 | | | | 177,307 | | | | 150,492 | | | | 138,970 | | | | 129,730 | |
| Commercial business | | | 68,800 | | | | 58,589 | | | | 59,697 | | | | 55,179 | | | | 47,854 | |
| Consumer and other | | | 26,519 | | | | 24,172 | | | | 21,935 | | | | 23,872 | | | | 21,955 | |
| | | | 541,882 | | | | 502,413 | | | | 449,618 | | | | 434,442 | | | | 420,020 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loans acquired through FDIC-assisted acquisitions: | | | | | | | | | | | | | | | | | | | | |
| Non covered | | | 14,291 | | | | 15,202 | | | | 17,384 | | | | 18,721 | | | | 24,714 | |
| Covered | | | 78,757 | | | | 87,386 | | | | 95,493 | | | | 107,457 | | | | 116,206 | |
| | | | 634,930 | | | | 605,001 | | | | 562,495 | | | | 560,620 | | | | 560,940 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Asset Quality Data (excluding Loans acquired through FDIC-assisted acquisitions): | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses to total loans | | | 1.57 | % | | | 1.61 | % | | | 1.70 | % | | | 1.72 | % | | | 1.65 | % |
| Allowance for loan losses to average loans | | | 1.61 | % | | | 1.70 | % | | | 1.35 | % | | | 1.32 | % | | | 1.29 | % |
| Allowance for loan losses to non-performing loans | | | 52.15 | % | | | 81.27 | % | | | 71.42 | % | | | 106.40 | % | | | 86.76 | % |
| Accruing past due loans | | $ | 1,038 | | | $ | 3,215 | | | $ | 452 | | | $ | 371 | | | $ | 1,487 | |
| Nonaccrual loans | | | 16,358 | | | | 9,965 | | | | 10,681 | | | | 7,043 | | | | 7,994 | |
| Loans - 90 days past due & still accruing | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total non-performing loans | | | 16,358 | | | | 9,965 | | | | 10,681 | | | | 7,043 | | | | 7,994 | |
| OREO and repossessed assets | | | 1,403 | | | | 1,519 | | | | 2,992 | | | | 3,356 | | | | 1,841 | |
| Total non-performing assets | | | 17,761 | | | | 11,484 | | | | 13,673 | | | | 10,399 | | | | 9,835 | |
| Non-performing loans to total loans | | | 3.02 | % | | | 1.98 | % | | | 2.38 | % | | | 1.62 | % | | | 1.90 | % |
| Non-performing assets to total assets | | | 1.68 | % | | | 1.08 | % | | | 1.75 | % | | | 0.95 | % | | | 0.89 | % |
| Net charge-offs to average loans (annualized) | | | 0.24 | % | | | 0.23 | % | | | 0.24 | % | | | 0.04 | % | | | 0.73 | % |
| Net charge-offs | | $ | 320 | | | $ | 279 | | | $ | 265 | | | $ | 37 | | | $ | 650 | |
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.
