EXHIBIT 99
For additional information, contact:
T. Heath Fountain
Executive Vice President and
Chief Financial Officer
(229) 878-2055
HERITAGE FINANCIAL GROUP, INC. REPORTS FIRST QUARTER NET INCOME OF
$1.3 MILLION OR $0.18 PER DILUTED SHARE
COMPANY DECLARES QUARTERLY CASH DIVIDEND OF $0.07 PER SHARE AND EXTENDS ITS STOCK REPURCHASE PLAN
ALBANY, Ga. (April 24, 2014) – Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced unaudited financial results for the quarter ended March 31, 2014. Key aspects of the Company's results for the first quarter of 2014 include:
| · | Net income of $1.3 million or $0.18 per diluted share, down 61% from $3.4 million or $0.45 per diluted share for the linked quarter and down 66% from $3.9 million or $0.52 per diluted share for the year-earlier quarter; |
| · | Excluding special items for each quarter, net income of $1.8 million or $0.24 per diluted share, down 55% from $4.0 million or $0.53 per diluted share for the linked quarter and down 11% from $2.0 million or $0.27 per diluted share for the year-earlier quarter (see reconciliation of non-GAAP items); |
| · | Loan growth, excluding loans acquired through FDIC-assisted acquisitions, of $18.0 million or 3% on a linked-quarter basis and $98.8 million or 16% compared with the year-earlier quarter; |
| · | A decline in nonperforming loans, excluding FDIC-acquired loans, of 2% on a linked-quarter basis and 28% compared with the year-earlier quarter; |
| · | A decrease in the provision for loan losses, excluding FDIC-acquired loans, to $65,000, down 70% from $220,000 for the linked quarter and down 86% compared with $450,000 for the year-earlier quarter; and |
| · | An increase in the provision for FDIC-acquired loan losses to $105,000, up from $12,000 for the linked quarter (there was no provision for FDIC-acquired loan losses in the year-earlier quarter). |
Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "While accretion from our FDIC-assisted acquisitions and mortgage banking add volatility to our earnings, we are pleased to note ongoing improvement in our core operations. Asset quality indicators in our core loan portfolio continue to improve and organic loan growth is on track for another year of double-digit growth. Our banking expansion efforts continue as we opened a loan production office in Birmingham during the quarter. Our mortgage expansion also continues as we were able to recruit a mortgage banking team in Colorado Springs, Colorado during the quarter. This team, which had previously worked with our mortgage executives, will add significantly to our mortgage expansion efforts."
Dorminey noted that the Company's Board of Directors has declared a regular quarterly cash dividend of $0.07 per share, which will be paid on May 23, 2014, to stockholders of record as of May 9, 2014. Dorminey also noted the Company’s Board of Directors also has extended the current stock repurchase plan for one year. The plan has approximately 340,000 shares authorized for repurchase and now expires in May 2015, unless otherwise completed or extended.
HBOS Reports First Quarter 2014 Results
Page 2
April 24, 2014
Acquisition News
Commenting on the Company's recently announced acquisition, Dorminey added, "We are excited and optimistic about our pending acquisition of Alarion Financial Services, Inc., which is expected to contribute significantly to our growth plans in Florida and for our mortgage division. This transaction is a significant event, not only for its implications for our franchise, but also because it demonstrates that our company is well positioned to be a consolidator in the post FDIC-assisted transaction merger and acquisition environment."
First Quarter 2014 Results of Operations
The $2.1 million decrease in reported quarterly earnings for the first quarter of 2014 compared with the linked quarter resulted primarily from the following items:
| · | Decreased loan discount accretion from FDIC-acquired loans of $2.4 million coupled with steady negative accretion of the FDIC loss-share receivable; and |
| · | Decreased mortgage banking fees of $783,000. |
The $2.6 million decrease in reported quarterly earnings for the first quarter of 2014 compared with the year-earlier quarter primarily resulted from the following items:
| · | Reduction in gain on acquisitions of $4.2 million; |
| · | Increased salaries and employee benefits of $2.2 million; offset by |
| · | Improved interest income on loans held for sale of $910,000; and |
| · | Increased interest income on securities of $409,000. |
Net interest income for the first quarter of 2014 increased 9% to $14.0 million from $12.9 million in the year-earlier quarter, primarily reflecting an increase in interest-earning assets related to both acquisitions and organic growth and a reduction in the cost of interest-bearing liabilities. The Company's net interest margin was 4.66% for the first quarter of 2014, a decline of 69 basis points from 5.35% for the year-earlier period. The reduction in net interest margin for the first quarter of 2014 compared with the year-earlier quarter was driven by a decline in the yield on loans, offset in part by an increase in the yield on investment securities coupled with a reduction in the cost of interest-bearing liabilities as rates continue to reset to lower levels and the Company takes advantage of historically low interest rates on non-deposit funding. Excluding FDIC-acquired loan discount adjustments from the net interest margin, the core net interest margin remained unchanged at 3.23% for the first quarter of 2014 compared to the year-earlier quarter.
In the first quarter of 2014, the Company continued to achieve loan growth, with its core loan portfolio increasing $18.0 million organically on a linked-quarter basis and advancing $98.8 million overall compared with the year-earlier quarter. For the first quarter of 2014, the Company's loan portfolio, including FDIC-acquired loans, totaled $800.9 million, increasing $11.1 million on a linked-quarter basis from $789.8 million and from $743.8 million compared with the year-earlier quarter. The organic loan growth for the linked quarter was primarily driven by growth in the Albany, Macon, South Atlanta, and Valdosta, Georgia markets, as well as in the Auburn and Birmingham, Alabama markets. Total deposits stood at $1.127 billion at the end of the first quarter of 2014, up 5% from $1.076 billion on a linked-quarter basis, and up 3% from $1.096 billion for the year-earlier quarter.
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HBOS Reports First Quarter 2014 Results
Page 3
April 24, 2014
For the first quarter of 2014, the Company's loans held for sale totaled $126.4 million, increasing $15.8 million, or 14%, on a linked-quarter basis from $110.7 million, and increasing $107.5 million, or 569%, from $18.9 million compared with the year-earlier quarter. The increase in the loans held for sale for the current quarter was driven by an increase in production outpacing loan sales for the quarter. Loan sales to Fannie Mae for the first quarter totaled $88.3 million and, separately, the Company recorded a gain of $717,000 related to the mortgage servicing rights for those loans. During the quarter, the Company made the decision to slow loan sales to Fannie Mae in order to sell to Freddie Mac for better execution. The Company received approval to sell loans to Freddie Mac at the end of the first quarter of 2014, and expects to deliver loans during the second quarter of 2014. Total mortgage production for the first quarter was $135.5 million, up 13% on a linked-quarter basis from $120.4 million and up 146% from $55.0 million compared with the year-earlier quarter.
Noninterest income for the first quarter of 2014 declined 48% to $3.5 million from $6.8 million in the year-earlier quarter, primarily driven by a decrease in gain on acquisitions of $4.2 million offset in part by a decline in negative accretion for the FDIC loss-share receivable of $366,000 and increases in service charges on deposit accounts of $289,000 and bankcard services income of $127,000. Noninterest expense for the first quarter of 2014 increased 16% to $15.5 million from $13.4 million in the year-earlier quarter, primarily driven by increases in salaries and employee benefits of $2.2 million related to the expansion of the mortgage division.
Accounting for FDIC-Assisted Acquisitions
The Company performs ongoing assessments of the estimated cash flows of its FDIC-acquired loan portfolios. The fair value of the FDIC-acquired loan portfolios consisted of $47.7 million in covered and $59.8 million in non-covered loans at the end of the first quarter of 2014 compared with $65.8 million in covered and $83.3 million in non-covered loans for the year-earlier quarter. The outstanding principal balance of the FDIC-acquired loan portfolios totaled $165.8 million at the end of the first quarter of 2014 compared with $234.8 million for the year-earlier quarter. The details of the accounting for the FDIC-acquired loan portfolios for the first quarter of 2014 are as follows:
| · | Covered FDIC-acquired loans decreased $3.2 million and non-covered FDIC-acquired loans decreased $3.5 million from the linked quarter; |
| · | The negative accretion for the FDIC loss-share receivable was $2.0 million and the FDIC loss-share clawback accrual increased to $2.5 million; |
| · | Provision expense for FDIC-acquired non-covered loans increased to $93,000; and |
| · | Loan discount accretion recognized in interest income declined $2.4 million. |
For the first quarter of 2014, loan discount accretion recognized in interest income declined 39% to $3.9 million from $6.3 million for the linked quarter, and declined 16% from $4.6 million for the year-earlier quarter. Provision expense for non-covered loans of $105,000 was recorded for a valuation adjustment needed for the Frontier portfolio to adjust the yield for the current quarter compared with $12,000 for the linked quarter and no provision expense for the year-earlier quarter. The FDIC loss-share receivable associated with covered FDIC-acquired assets decreased 9% to $37.6 million from $41.3 million for the linked quarter and declined 28% from $52.0 million for the year-earlier quarter. The reduction in the FDIC loss-share receivable for the linked quarter was primarily driven by negative accretion of $2.0 million affecting the loss-share receivable asset associated with the improvement in expected cash flows of the covered FDIC-acquired performing loan portfolios and FDIC reimbursements received of $1.5 million. An increase to the FDIC clawback liability accrual was recorded as an expense for the current quarter of $543,000, which increased the total accrual to $2.5 million. This clawback was caused by an improvement in estimates of expected cash flows for both FDIC-assisted acquisitions covered under loss-sharing agreements.
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HBOS Reports First Quarter 2014 Results
Page 4
April 24, 2014
The covered FDIC-acquired loan discount affecting the loss-share receivable was $35.9 million, or 95.4% of the loss-share receivable, for the first quarter of 2014 compared with $50.9 million, or 97.8% of the loss-share receivable, for the year-earlier quarter. The gross balance of covered FDIC-acquired assets decreased to $100.5 million for the first quarter of 2014 compared with $142.9 million for the year-earlier quarter. The FDIC loss-share receivable as a percent of the covered FDIC-acquired assets decreased to 37.5% compared with 36.4% for the year-earlier quarter.
Asset Quality
Total nonperforming assets, excluding FDIC-acquired assets, decreased to $10.3 million, or 0.73% of total assets, compared with $11.2 million, or 0.81% of total assets, for the linked quarter and declined from $15.8 million, or 1.15% of total assets, for the year-earlier quarter. Annualized net recoveries to average outstanding loans, excluding FDIC-acquired loans, were 0.01% for the first quarter of 2014 compared with annualized net charge-offs of 0.10% for the linked quarter and annualized net-charge-offs of 0.27% for the year-earlier quarter. Nonperforming loans, excluding FDIC-acquired loans, totaled $9.2 million for the first quarter of 2014, down from $9.4 million for the linked quarter and from $12.7 million for the year-earlier quarter. Other real estate owned and repossessed assets, excluding FDIC-acquired assets, totaled $1.1 million for the first quarter of 2014, down from $1.8 million for the linked quarter and from $3.0 million for the year-earlier quarter.
The provision for loan losses on non-FDIC-acquired loans decreased to $65,000 for the first quarter of 2014 from $220,000 for the linked quarter and from $450,000 for the year-earlier quarter, primarily driven by improving trends in total criticized and classified loans. For the first quarter in 2014, the allowance for loan losses represented 1.30% of total loans outstanding, excluding FDIC-acquired loans, versus 1.31% for the linked quarter and 1.51% for the year-earlier quarter. The improving loan loss allowance was primarily the result of declining criticized and classified loans as a percentage of total loans.
Capital Management Initiatives
The Company's Board of Directors has declared a regular quarterly cash dividend of $0.07 per share, payable on May 23, 2014, to stockholders of record as of May 9, 2014. The Board of Directors also has extended the Company's current stock repurchase program for an additional year until April 2015, unless extended or otherwise completed earlier, and has total authorization under the program to purchase 340,000 shares, or 4% of the Company's currently outstanding common stock.
Looking ahead, the Company intends to maintain its capital strength at the current level to support growth and its acquisition activities. Accordingly, future stock buybacks and future dividends will be premised largely on the Company's future earnings power rather than a return of capital to stockholders.
The Company's estimated total risk-based capital ratio at March 31, 2014, was 13.8%, significantly exceeding the required minimum of 10% to be considered a well-capitalized institution. The ratio of tangible common equity to total tangible assets was 8.7% as of March 31, 2014.
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 Georgia, Florida and Alabama through 29 banking locations, 15 mortgage offices, and 5 investment offices. As of March 31, 2014, the Company reported total assets of approximately $1.4 billion and total stockholders' equity of approximately $128 million. For more information about the Company, visit HeritageBank of the South on the Web at www.eheritagebank.com under the "Investors" tab.
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HBOS Reports First Quarter 2014 Results
Page 5
April 24, 2014
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 2013 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.
HERITAGE FINANCIAL GROUP, INC.
Unaudited Reconciliation of Non-GAAP Measures Presented in Earnings Release
(Dollars in thousands, except per share data)
| | Three Months Ended | |
| | March 31, | | | | |
| | 2014 | | | 2013 | |
| Total noninterest income | | $ | 3,487 | | | $ | 6,765 | | | $ | 4,536 | |
| | | | | | | | | | | | |
| Gain on sale of securities | | | – | | | | – | | | | (85 | ) |
| Gain on acquisitions | | | – | | | | (4,188 | ) | | | – | |
| Adjusted noninterest income | | $ | 3,487 | | | $ | 2,577 | | | $ | 4,451 | |
| | | | | | | | | | | | |
| Total noninterest expense | | $ | 15,476 | | | $ | 13,356 | | | $ | 15,706 | |
| Salaries and employee benefits – early retirement and severance expense | | | – | | | | – | | | | (7 | ) |
| Acquisition-related expenses | | | (52 | ) | | | (792 | ) | | | (102 | ) |
| Impairment loss on assets held for sale | | | – | | | | – | | | | (328 | ) |
| Realized loss on the disposition of assets held for sale | | | – | | | | – | | | | (226 | ) |
| Accrual of FDIC acquisitions estimated clawback liability | | | (543 | ) | | | (566 | ) | | | (261 | ) |
| Adjusted noninterest expense | | $ | 14,881 | | | $ | 11,998 | | | $ | 14,782 | |
| | | | | | | | | | | | |
| Net income as reported | | $ | 1,343 | | | $ | 3,928 | | | $ | 3,405 | |
| Total adjustments, net of tax* | | | 441 | | | | (1,924 | ) | | | 589 | |
| Adjusted net income | | $ | 1,784 | | | $ | 2,004 | | | $ | 3,994 | |
| | | | | | | | | | | | |
| Diluted earnings per share | | $ | 0.18 | | | $ | 0.52 | | | $ | 0.45 | |
| Total adjustments, net of tax* | | | 0.06 | | | | (0.25 | ) | | | 0.08 | |
| Adjusted diluted earnings per share | | $ | 0.24 | | | $ | 0.27 | | | $ | 0.53 | |
* The effective tax rate for the period presented is used to determine net of tax amounts.
Net Income and Diluted Earnings Per Share are presented in accordance with Generally Accepted Accounting Principles ("GAAP"). Adjusted Noninterest Income, Adjusted Noninterest Expense, Adjusted Net Income and Adjusted Diluted Earnings Per Share are non-GAAP financial measures. The Company believes that these non-GAAP measures aid in understanding and comparing current-year and prior-year results, both of which include unusual items of different natures. These non-GAAP measures should be viewed in addition to, and not as a substitute for, the Company's reported results.
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Heritage Financial Group, Inc. and Subsidiary
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands)
| | (Unaudited) | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Cash and due from banks | | $ | 27,703 | | | $ | 34,804 | |
| Interest-bearing deposits in banks | | | 10,495 | | | | 3,249 | |
| Federal funds sold | | | 1,215 | | | | 130 | |
| Cash and cash equivalents | | | 39,413 | | | | 38,183 | |
| | | | | | | | |
| Securities available for sale, at fair value | | | 305,044 | | | | 294,299 | |
| Federal Home Loan Bank stock, at cost | | | 6,282 | | | | 7,342 | |
| Other equity securities, at cost | | | 1,010 | | | | 1,010 | |
| Loans held for sale | | | 126,436 | | | | 110,669 | |
| Loans | | | 762,344 | | | | 747,862 | |
| Covered loans | | | 47,684 | | | | 50,891 | |
| Less allowance for loan losses | | | 9,145 | | | | 8,955 | |
| Loans, net | | | 800,883 | | | | 789,798 | |
| | | | | | | | |
| Other real estate owned | | | 2,632 | | | | 3,482 | |
| Covered other real estate owned | | | 6,095 | | | | 7,053 | |
| Total other real estate owned | | | 8,727 | | | | 10,535 | |
| | | | | | | | |
| FDIC loss-share receivable | | | 37,637 | | | | 41,306 | |
| Premises and equipment, net | | | 38,603 | | | | 37,978 | |
| Goodwill and intangible assets | | | 4,757 | | | | 4,253 | |
| Cash surrender value of bank owned life insurance | | | 24,372 | | | | 24,183 | |
| Other assets | | | 20,376 | | | | 21,369 | |
| Total assets | | $ | 1,413,540 | | | $ | 1,380,925 | |
| | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | |
| Non-interest-bearing deposits | | $ | 163,090 | | | $ | 148,253 | |
| Interest-bearing deposits | | | 963,564 | | | | 928,168 | |
| Total deposits | | | 1,126,654 | | | | 1,076,421 | |
| | | | | | | | |
| Federal funds purchased and securities sold under repurchase agreements | | | 33,785 | | | | 37,648 | |
| Other borrowings | | | 116,127 | | | | 131,394 | |
| Other liabilities | | | 8,990 | | | | 10,399 | |
| Total liabilities | | | 1,285,556 | | | | 1,255,862 | |
| | | | | | | | |
SHAREHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | |
| Preferred stock, par value; $0.01; 5,000,000 shares authorized; none issued | | | - | | | | - | |
Common stock, par value $0.01; 45,000,000 shares authorized; 7,834,517 and 7,834,537 shares issued and outstanding, respectively | | | 78 | | | | 78 | |
| Capital surplus | | | 78,871 | | | | 78,566 | |
| Retained earnings | | | 58,464 | | | | 57,614 | |
| Accumulated other comprehensive loss, net of tax of $4,098 and $5,175, respectively | | | (6,147 | ) | | | (7,762 | ) |
| Unearned employee stock ownership plan (ESOP), 319,210 and 332,535 shares, respectively | | | (3,282 | ) | | | (3,433 | ) |
| Total shareholders' equity | | | 127,984 | | | | 125,063 | |
| | | | | | | | |
| Total liabilities & shareholders' equity | | $ | 1,413,540 | | | $ | 1,380,925 | |
* Derived from Audited Consolidated Financial Statements.
Heritage Financial Group, Inc. and Subsidiary
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands except share and per share data)
| | Three Months Ended | |
| | | | | | |
| | | | | | |
Interest income: | | | | | | |
| Interest and fees on loans | | $ | 13,350 | | | $ | 13,369 | |
| Interest on loans held for sale | | | 1,025 | | | | 115 | |
| Interest on taxable securities | | | 1,206 | | | | 866 | |
| Interest on nontaxable securities | | | 354 | | | | 285 | |
| Interest on federal funds sold | | | 1 | | | | 1 | |
| Interest on deposits in other banks | | | 19 | | | | 22 | |
| Total interest income | | | 15,955 | | | | 14,658 | |
| | | | | | | | |
Interest expense: | | | | | | | | |
| Interest on deposits | | | 1,140 | | | | 1,054 | |
| Interest on other borrowings | | | 844 | | | | 749 | |
| Total interest expense | | | 1,984 | | | | 1,803 | |
| | | | | | | | |
| Net interest income | | | 13,971 | | | | 12,855 | |
| | | | | | | | |
| Provision for loan losses | | | 170 | | | | 485 | |
| | | | | | | | |
| Net interest income after provision for loan losses | | | 13,801 | | | | 12,370 | |
| | | | | | | | |
Noninterest income: | | | | | | | | |
| Service charges on deposit accounts | | | 1,443 | | | | 1,154 | |
| Bankcard services income | | | 889 | | | | 762 | |
| Other service charges, commissions and fees | | | 162 | | | | 99 | |
| Brokerage fees | | | 566 | | | | 481 | |
| Mortgage banking activities | | | 2,166 | | | | 2,182 | |
| Bank-owned life insurance | | | 189 | | | | 202 | |
| Gain on acquisitions | | | - | | | | 4,188 | |
| Accretion of FDIC loss-share receivable | | | (2,031 | ) | | | (2,397 | ) |
| Other | | | 103 | | | | 94 | |
| Total noninterest income | | | 3,487 | | | | 6,765 | |
Noninterest expense: | | | | | | | | |
| Salaries and employee benefits | | | 8,580 | | | | 6,430 | |
| Equipment and occupancy | | | 1,995 | | | | 1,666 | |
| Advertising and marketing | | | 228 | | | | 187 | |
| Professional fees | | | 451 | | | | 215 | |
| Information services expenses | | | 1,200 | | | | 1,182 | |
| Loss (gain) on sales and write-downs of other real estate owned | | | 318 | | | | (25 | ) |
| (Gain) loss on sales and write-downs of FDIC-acquired other real estate owned | | | (264 | ) | | | 24 | |
| Foreclosed asset expenses | | | 87 | | | | 215 | |
| Foreclosed FDIC-acquired asset expenses | | | 333 | | | | 421 | |
| FDIC insurance and other regulatory fees | | | 244 | | | | 256 | |
| Acquisition related expenses | | | 52 | | | | 792 | |
| Deposit intangible expenses | | | 196 | | | | 194 | |
| FDIC loss-share clawback expenses | | | 543 | | | | 566 | |
| Other operating expenses | | | 1,513 | | | | 1,233 | |
| Total noninterest expense | | | 15,476 | | | | 13,356 | |
| | | | | | | | |
| Income before income taxes | | | 1,812 | | | | 5,779 | |
| | | | | | | | |
| Applicable income tax | | | 469 | | | | 1,851 | |
| | | | | | | | |
| Net income | | $ | 1,343 | | | $ | 3,928 | |
| | | | | | | | |
Earnings per common share: | | | | | | | | |
| Basic earnings per share | | $ | 0.18 | | | $ | 0.52 | |
| Diluted earnings per share | | $ | 0.18 | | | $ | 0.52 | |
| | | | | | | | |
Weighted average-common shares outstanding: | | | | | | | | |
| Basic | | | 7,422,044 | | | | 7,526,344 | |
| Diluted | | | 7,581,775 | | | | 7,528,522 | |
Heritage Financial Group, Inc. and Subsidiary
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands except share and per share data)
| | Five Quarter Comparison | |
| | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | | | 3/31/2013 | |
| | | | | | | | | | | | | | | |
Interest income: | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 13,350 | | | $ | 15,911 | | | $ | 13,452 | | | $ | 15,702 | | | $ | 13,369 | |
| Interest on loans held for sale | | | 1,025 | | | | 619 | | | | 434 | | | | 290 | | | | 115 | |
| Interest on taxable securities | | | 1,206 | | | | 1,231 | | | | 1,155 | | | | 1,095 | | | | 866 | |
| Interest on nontaxable securities | | | 354 | | | | 337 | | | | 318 | | | | 308 | | | | 285 | |
| Interest on federal funds sold | | | 1 | | | | 2 | | | | 4 | | | | 2 | | | | 1 | |
| Interest on deposits in other banks | | | 19 | | | | 15 | | | | 30 | | | | 88 | | | | 22 | |
| Total interest income | | | 15,955 | | | | 18,115 | | | | 15,393 | | | | 17,485 | | | | 14,658 | |
| | | | | | | | | | | | | | | | | | | | |
Interest expense: | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 1,140 | | | | 1,000 | | | | 982 | | | | 1,041 | | | | 1,054 | |
| Interest on other borrowings | | | 844 | | | | 862 | | | | 853 | | | | 844 | | | | 749 | |
| Total interest expense | | | 1,984 | | | | 1,862 | | | | 1,835 | | | | 1,885 | | | | 1,803 | |
| | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | 13,971 | | | | 16,253 | | | | 13,558 | | | | 15,600 | | | | 12,855 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Provision for loan losses | | | 65 | | | | 220 | | | | 350 | | | | 640 | | | | 450 | |
| Provision for loan losses- FDIC-acquired covered | | | - | | | | - | | | | - | | | | 28 | | | | 35 | |
| Provision for loan losses- FDIC-acquired non-covered | | | 105 | | | | 12 | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 13,801 | | | | 16,021 | | | | 13,208 | | | | 14,932 | | | | 12,370 | |
| | | | | | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 1,443 | | | | 1,642 | | | | 1,577 | | | | 1,297 | | | | 1,154 | |
| Bankcard services income | | | 889 | | | | 890 | | | | 852 | | | | 831 | | | | 762 | |
| Other service charges, commissions and fees | | | 162 | | | | 121 | | | | 136 | | | | 157 | | | | 99 | |
| Brokerage fees | | | 566 | | | | 560 | | | | 561 | | | | 536 | | | | 481 | |
| Mortgage banking activities | | | 2,166 | | | | 2,949 | | | | 1,953 | | | | 3,425 | | | | 2,182 | |
| Bank-owned life insurance | | | 189 | | | | 198 | | | | 200 | | | | 201 | | | | 202 | |
| Gain on sales of securities | | | - | | | | 85 | | | | - | | | | - | | | | - | |
| Gain on acquisitions | | | - | | | | - | | | | - | | | | - | | | | 4,188 | |
| Accretion of FDIC loss-share receivable | | | (2,031 | ) | | | (2,021 | ) | | | (1,499 | ) | | | (3,376 | ) | | | (2,397 | ) |
| Other | | | 103 | | | | 112 | | | | 138 | | | | 124 | | | | 94 | |
| Total noninterest income | | | 3,487 | | | | 4,536 | | | | 3,918 | | | | 3,195 | | | | 6,765 | |
Noninterest expense: | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 8,580 | | | | 8,722 | | | | 8,108 | | | | 8,185 | | | | 6,430 | |
| Equipment and occupancy | | | 1,995 | | | | 1,922 | | | | 1,932 | | | | 1,838 | | | | 1,666 | |
| Advertising and marketing | | | 228 | | | | 299 | | | | 335 | | | | 349 | | | | 187 | |
| Professional fees | | | 451 | | | | 559 | | | | 340 | | | | 302 | | | | 215 | |
| Information services expenses | | | 1,200 | | | | 1,285 | | | | 1,335 | | | | 1,307 | | | | 1,182 | |
| Loss (gain) on sales and write-downs of other real estate owned | | | 318 | | | | 38 | | | | 335 | | | | 58 | | | | (25 | ) |
| (Gain) loss on sales and write-downs of FDIC-acquired other real estate owned | | | (264 | ) | | | (536 | ) | | | (206 | ) | | | (251 | ) | | | 24 | |
| Foreclosed asset expenses | | | 87 | | | | 240 | | | | 337 | | | | 227 | | | | 215 | |
| Foreclosed FDIC-acquired asset expenses | | | 333 | | | | 286 | | | | 366 | | | | 313 | | | | 421 | |
| FDIC insurance and other regulatory fees | | | 244 | | | | 254 | | | | 293 | | | | 278 | | | | 256 | |
| Impairment loss on assets held for sale | | | - | | | | 328 | | | | - | | | | - | | | | - | |
| Acquisition related expenses | | | 52 | | | | 102 | | | | 280 | | | | 148 | | | | 792 | |
| Deposit intangible expenses | | | 196 | | | | 200 | | | | 204 | | | | 211 | | | | 194 | |
| FDIC loss-share clawback expenses | | | 543 | | | | 261 | | | | 286 | | | | 124 | | | | 566 | |
| Other operating expenses | | | 1,513 | | | | 1,746 | | | | 1,389 | | | | 1,466 | | | | 1,233 | |
| Total noninterest expense | | | 15,476 | | | | 15,706 | | | | 15,334 | | | | 14,555 | | | | 13,356 | |
| | | | | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 1,812 | | | | 4,851 | | | | 1,792 | | | | 3,572 | | | | 5,779 | |
| | | | | | | | | | | | | | | | | | | | |
| Applicable income tax | | | 469 | | | | 1,446 | | | | 470 | | | | 912 | | | | 1,851 | |
| | | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 1,343 | | | $ | 3,405 | | | $ | 1,322 | | | $ | 2,660 | | | $ | 3,928 | |
| | | | | | | | | | | | | | | | | | | | |
Earnings per common share: | | | | | | | | | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.18 | | | $ | 0.46 | | | $ | 0.18 | | | $ | 0.36 | | | $ | 0.52 | |
| Diluted earnings per share | | $ | 0.18 | | | $ | 0.45 | | | $ | 0.18 | | | $ | 0.36 | | | $ | 0.52 | |
| Dividends | | $ | 0.07 | | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.00 | |
| | | | | | | | | | | | | | | | | | | | |
Weighted average-common shares outstanding: | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 7,422,044 | | | | 7,407,722 | | | | 7,371,804 | | | | 7,381,370 | | | | 7,526,344 | |
| Diluted | | | 7,581,775 | | | | 7,530,606 | | | | 7,483,812 | | | | 7,383,992 | | | | 7,528,522 | |
Heritage Financial Group, Inc. and Subsidiary
Condensed Average Balances, Interest Rates and Yields
(Unaudited)
(Dollars in thousands)
| | Three Months Ended | |
| | March 31, | |
| | 2014 | | | 2013 | |
| | | | | Interest | | | | | | | | | Interest | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Loans(1)(2) | | $ | 903,153 | | | $ | 14,379 | | | | 6.46 | % | | $ | 698,905 | | | $ | 13,486 | | | | 7.83 | % |
Investment securities (2) | | | 301,407 | | | | 1,680 | | | | 2.26 | % | | | 237,729 | | | | 1,248 | | | | 2.13 | % |
| Other short-term investments | | | 20,715 | | | | 20 | | | | 0.39 | % | | | 45,613 | | | | 24 | | | | 0.21 | % |
| Total interest-earning assets | | | 1,225,275 | | | | 16,079 | | | | 5.32 | % | | | 982,247 | | | | 14,758 | | | | 6.09 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest earning assets | | | 163,312 | | | | | | | | | | | | 166,667 | | | | | | | | | |
| Total assets | | $ | 1,388,587 | | | | | | | | | | | $ | 1,148,914 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest checking, money market and savings | | $ | 555,828 | | | $ | 327 | | | | 0.24 | % | | $ | 475,176 | | | $ | 287 | | | | 0.24 | % |
| Time deposits | | | 382,486 | | | | 813 | | | | 0.86 | % | | | 321,970 | | | | 767 | | | | 0.97 | % |
| Total interest bearing-deposits | | | 938,314 | | | | 1,140 | | | | 0.49 | % | | | 797,146 | | | | 1,054 | | | | 0.54 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Funds purchased and securities sold under repurchase agreements | | | 35,977 | | | | 329 | | | | 3.71 | % | | | 34,273 | | | | 328 | | | | 3.88 | % |
| Other Borrowings | | | 119,413 | | | | 515 | | | | 1.75 | % | | | 65,965 | | | | 421 | | | | 2.59 | % |
| Total interest-bearing liabilities | | | 1,093,704 | | | | 1,984 | | | | 0.74 | % | | | 897,384 | | | | 1,803 | | | | 0.81 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Non-interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand Deposits | | | 158,583 | | | | | | | | | | | | 119,059 | | | | | | | | | |
| Other Liabilities | | | 8,475 | | | | | | | | | | | | 11,671 | | | | | | | | | |
| Total non-interest bearing liabilities | | | 167,058 | | | | | | | | | | | | 130,730 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities | | | 1,260,762 | | | | | | | | | | | | 1,028,114 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Shareholders' equity | | | 127,825 | | | | | | | | | | | | 120,800 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities & shareholders' equity | | $ | 1,388,587 | | | | | | | | | | | $ | 1,148,914 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | | | | $ | 14,095 | | | | | | | | | | | $ | 12,955 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Interest rate spread | | | | | | | | | | | 4.59 | % | | | | | | | | | | | 5.28 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Net yield on interest-earning assets (net interest margin) | | | | | | | | | | | 4.66 | % | | | | | | | | | | | 5.35 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Core net interest margin (non-GAAP): | | | | | | | | | | | | | | | | | | | | | | | | |
Loans(1)(2) | | $ | 903,153 | | | $ | 14,379 | | | | 6.46 | % | | $ | 698,905 | | | $ | 13,486 | | | | 7.83 | % |
FDIC-acquired loan discount adjustments(3) | | | 61,056 | | | | 3,850 | | | | 25.57 | % | | | 67,744 | | | | 4,588 | | | | 27.47 | % |
| Adjusted loans | | | 964,209 | | | | 10,529 | | | | 4.43 | % | | | 766,649 | | | | 8,898 | | | | 4.71 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Adjusted total interest-earning assets | | $ | 1,286,331 | | | | 12,229 | | | | 3.86 | % | | $ | 1,049,991 | | | | 10,170 | | | | 3.93 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Total interest-bearing liabilities | | $ | 1,093,704 | | | | 1,984 | | | | 0.74 | % | | $ | 897,384 | | | | 1,803 | | | | 0.81 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Core Net interest income | | | | | | $ | 10,245 | | | | | | | | | | | $ | 8,367 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Core Interest rate spread | | | | | | | | | | | 3.12 | % | | | | | | | | | | | 3.11 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Core Net yield on interest-earning assets (net interest margin non-GAAP) | | | | 3.23 | % | | | | | | | | | | | 3.23 | % |
| (1) | Average loan balances includes nonaccrual loans for the periods presented. |
| (2) | Fully Taxable Equivalent (“FTE”) at the rate of 34%. The FTE basis adjusts for the tax benefits of income on certain tax-exempt loans and investments using the federal statutory rate of 34% for each period presented. The Company believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts. |
| (3) | FDIC-acquired loan discount adjustments include the reduction of interest income for FDIC-acquired loan discount accretion excluding contractual interest payments and the increase of core loans for the total balance of FDIC-acquired loan discounts. |
Heritage Financial Group, Inc. and Subsidiary
Consolidated Financial Highlights
(Unaudited)
(Dollars in thousands except share and per share data)
| | Five Quarter Comparison | |
Financial Condition Data: | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | | | 3/31/2013 | |
| | | | | | | | | | | | | | | |
| Total loans | | $ | 810,028 | | | $ | 798,753 | | | $ | 789,092 | | | $ | 769,921 | | | $ | 752,866 | |
| Loans held for sale | | | 126,436 | | | | 110,669 | | | | 38,042 | | | | 43,545 | | | | 18,905 | |
| Covered loans | | | 47,684 | | | | 50,891 | | | | 53,843 | | | | 57,176 | | | | 65,815 | |
| Allowance for loan losses | | | 9,145 | | | | 8,955 | | | | 8,894 | | | | 9,047 | | | | 9,105 | |
| Total other real estate owned | | | 8,727 | | | | 10,535 | | | | 10,244 | | | | 11,949 | | | | 13,851 | |
| Covered other real estate owned | | | 6,095 | | | | 7,053 | | | | 5,909 | | | | 7,815 | | | | 9,460 | |
| FDIC loss-share receivable | | | 37,637 | | | | 41,306 | | | | 44,527 | | | | 48,106 | | | | 52,012 | |
| Goodwill and intangible assets | | | 4,757 | | | | 4,253 | | | | 4,251 | | | | 4,455 | | | | 4,666 | |
| Total assets | | | 1,413,540 | | | | 1,380,925 | | | | 1,322,309 | | | | 1,334,016 | | | | 1,370,550 | |
| Non-interest-bearing deposits | | | 163,090 | | | | 148,253 | | | | 153,163 | | | | 148,219 | | | | 151,709 | |
| Interest-bearing deposits | | | 963,564 | | | | 928,168 | | | | 899,318 | | | | 917,712 | | | | 943,850 | |
| Other borrowings | | | 116,127 | | | | 131,394 | | | | 101,667 | | | | 101,940 | | | | 102,210 | |
| Federal funds purchased and securities sold under agreement to repurchase | | | 33,785 | | | | 37,648 | | | | 35,393 | | | | 33,094 | | | | 34,251 | |
| Stockholders' equity | | | 127,984 | | | | 125,063 | | | | 120,534 | | | | 118,540 | | | | 120,655 | |
| | | | | | | | | | | | | | | | | | | | |
| Total shares outstanding | | | 7,834,517 | | | | 7,834,537 | | | | 7,834,765 | | | | 7,803,910 | | | | 7,881,260 | |
| Unearned ESOP shares | | | 319,210 | | | | 332,535 | | | | 345,860 | | | | 359,186 | | | | 372,511 | |
| Total shares outstanding net of unearned ESOP | | | 7,515,307 | | | | 7,502,002 | | | | 7,488,905 | | | | 7,444,724 | | | | 7,508,749 | |
| | | | | | | | | | | | | | | | | | | | |
| Book value per share | | $ | 17.03 | | | $ | 16.67 | | | $ | 16.10 | | | $ | 15.92 | | | $ | 16.07 | |
| Book value per share including unearned ESOP (non-GAAP) | | | 16.34 | | | | 15.96 | | | | 15.38 | | | | 15.19 | | | | 15.31 | |
| Tangible book value per share (non-GAAP) | | | 16.40 | | | | 16.10 | | | | 15.53 | | | | 15.32 | | | | 15.45 | |
| Tangible book value per share including unearned ESOP (non-GAAP) | | | 15.73 | | | | 15.42 | | | | 14.84 | | | | 14.62 | | | | 14.72 | |
| Market value per share | | | 19.65 | | | | 19.25 | | | | 17.42 | | | | 14.75 | | | | 14.48 | |
| | Five Quarter Comparison | |
| | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | | | 3/31/2013 | |
Key Financial Ratios and other information: | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | | | | | | |
| Annualized return on average assets | | | 0.39 | % | | | 1.00 | % | | | 0.40 | % | | | 0.79 | % | | | 1.37 | % |
| Annualized return on average equity | | | 4.26 | % | | | 11.10 | % | | | 4.41 | % | | | 8.74 | % | | | 13.01 | % |
| Net interest margin | | | 4.66 | % | | | 5.50 | % | | | 4.73 | % | | | 4.78 | % | | | 5.35 | % |
| Net interest spread | | | 4.59 | % | | | 5.43 | % | | | 4.66 | % | | | 4.71 | % | | | 5.28 | % |
| Core net interest margin | | | 3.23 | % | | | 3.20 | % | | | 3.23 | % | | | 3.28 | % | | | 3.23 | % |
| Core net interest spread | | | 3.12 | % | | | 3.10 | % | | | 3.13 | % | | | 3.17 | % | | | 3.11 | % |
| Efficiency ratio | | | 84.20 | % | | | 71.66 | % | | | 82.29 | % | | | 74.17 | % | | | 80.22 | % |
| | | | | | | | | | | | | | | | | | | | |
| Capital Ratios | | | | | | | | | | | | | | | | | | | | |
| Average stockholders' equity to average assets | | | 9.2 | % | | | 9.0 | % | | | 9.0 | % | | | 9.0 | % | | | 10.5 | % |
| Tangible equity to tangible assets (non-GAAP) | | | 8.7 | % | | | 8.8 | % | | | 8.8 | % | | | 8.6 | % | | | 8.5 | % |
| Tier 1 leverage ratio | | | 9.0 | % | | | 9.5 | % | | | 9.4 | % | | | 9.0 | % | | | 10.4 | % |
| Tier 1 risk-based capital ratio | | | 12.8 | % | | | 13.5 | % | | | 14.3 | % | | | 14.3 | % | | | 15.2 | % |
| Total risk-based capital ratio | | | 13.8 | % | | | 14.5 | % | | | 15.4 | % | | | 15.3 | % | | | 16.3 | % |
| | | | | | | | | | | | | | | | | | | | |
| Other Information | | | | | | | | | | | | | | | | | | | | |
| Full-time equivalent employees | | | 455 | | | | 426 | | | | 412 | | | | 401 | | | | 355 | |
| Banking | | | 305 | | | | 306 | | | | 308 | | | | 316 | | | | 285 | |
| Mortgage | | | 143 | | | | 113 | | | | 97 | | | | 79 | | | | 64 | |
| Investments | | | 7 | | | | 7 | | | | 7 | | | | 6 | | | | 6 | |
| Number of banking offices | | | 29 | | | | 27 | | | | 27 | | | | 29 | | | | 29 | |
| Mortgage loan offices | | | 15 | | | | 14 | | | | 12 | | | | 12 | | | | 12 | |
| Investment offices | | | 5 | | | | 4 | | | | 4 | | | | 4 | | | | 4 | |
Heritage Financial Group, Inc. and Subsidiary
Consolidated Financial Highlights
(Unaudited)
(Dollars in thousands)
| | Five Quarter Comparison | |
Loans | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | | | 3/31/2013 | |
| Construction and land | | $ | 53,138 | | | $ | 50,167 | | | $ | 48,808 | | | $ | 42,753 | | | $ | 37,659 | |
| Farmland | | | 30,116 | | | | 23,420 | | | | 22,561 | | | | 23,447 | | | | 20,749 | |
| Permanent 1 - 4 | | | 173,581 | | | | 174,565 | | | | 169,105 | | | | 166,199 | | | | 163,302 | |
| Permanent 1 - 4 - junior liens and revolving | | | 34,661 | | | | 32,038 | | | | 30,180 | | | | 29,432 | | | | 28,852 | |
| Multifamily | | | 25,718 | | | | 22,650 | | | | 27,468 | | | | 26,301 | | | | 24,280 | |
| Nonresidential | | | 262,753 | | | | 256,567 | | | | 250,859 | | | | 234,259 | | | | 225,946 | |
| Commercial business | | | 101,696 | | | | 101,161 | | | | 95,108 | | | | 88,828 | | | | 83,015 | |
| Consumer and other | | | 20,907 | | | | 23,976 | | | | 21,499 | | | | 26,889 | | | | 19,931 | |
| Total core loans | | $ | 702,570 | | | $ | 684,544 | | | $ | 665,588 | | | $ | 638,108 | | | $ | 603,734 | |
| | | | | | | | | | | | | | | | | | | | |
| FDIC-acquired non-covered | | | 59,774 | | | | 63,318 | | | | 69,661 | | | | 74,637 | | | | 83,317 | |
| Total loans | | | 762,344 | | | | 747,862 | | | | 735,249 | | | | 712,745 | | | | 687,051 | |
| | | | | | | | | | | | | | | | | | | | |
| FDIC-acquired covered | | | 47,684 | | | | 50,891 | | | | 53,843 | | | | 57,176 | | | | 65,815 | |
| | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses | | | 9,145 | | | | 8,955 | | | | 8,894 | | | | 9,047 | | | | 9,105 | |
| | $ | 800,883 | | | $ | 789,798 | | | $ | 780,198 | | | $ | 760,874 | | | $ | 743,761 | |
Loan Balances by Geographical Region (excluding FDIC- acquired loans): | | | | | | | | | | |
| | Five Quarter Comparison | |
| | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | | | 3/31/2013 | |
| | | | | | | | | | | | | | | |
| Albany, Georgia | | $ | 302,664 | | | $ | 294,033 | | | $ | 288,089 | | | $ | 282,509 | | | $ | 273,116 | |
| Valdosta, Georgia | | | 103,479 | | | | 100,936 | | | | 101,729 | | | | 96,485 | | | | 90,385 | |
| Ocala, Florida | | | 57,322 | | | | 58,343 | | | | 58,115 | | | | 58,240 | | | | 58,533 | |
| Statesboro, Georgia | | | 121,636 | | | | 122,928 | | | | 124,667 | | | | 118,056 | | | | 107,650 | |
| Auburn, Alabama | | | 36,171 | | | | 36,130 | | | | 31,485 | | | | 26,061 | | | | 24,386 | |
| Macon, Georgia | | | 75,722 | | | | 68,638 | | | | 60,197 | | | | 55,935 | | | | 49,165 | |
| Birmingham, Alabama | | | 2,091 | | | | 1,590 | | | | 344 | | | | 822 | | | | 499 | |
| South Atlanta | | | 3,485 | | | | 1,946 | | | | 962 | | | | - | | | | - | |
| | $ | 702,570 | | | $ | 684,544 | | | $ | 665,588 | | | $ | 638,108 | | | $ | 603,734 | |
Asset Quality Data (excluding FDIC -acquired loans): | | | | | | | | | | | | | |
| | Five Quarter Comparison | |
| | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | | | 3/31/2013 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 9,245 | | | $ | 9,435 | | | $ | 10,986 | | | $ | 12,223 | | | $ | 12,723 | |
| Loans - 90 days past due & still accruing | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total non-performing loans | | | 9,245 | | | | 9,435 | | | | 10,986 | | | | 12,223 | | | | 12,723 | |
| | | | | | | | | | | | | | | | | | | | |
| OREO | | | 1,104 | | | | 1,789 | | | | 2,654 | | | | 3,046 | | | | 3,028 | |
| Total non-performing assets | | $ | 10,349 | | | $ | 11,224 | | | $ | 13,640 | | | $ | 15,269 | | | $ | 15,751 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Trouble debt restructuring - nonaccrual | | $ | 5,702 | | | $ | 5,763 | | | $ | 5,840 | | | $ | 6,496 | | | $ | 4,593 | |
| Trouble debt restructuring - accruing | | | 1,968 | | | | 1,983 | | | | 1,996 | | | | 2,009 | | | | 2,023 | |
| Total trouble debt restructuring | | $ | 7,670 | | | $ | 7,746 | | | $ | 7,836 | | | $ | 8,505 | | | $ | 6,616 | |
| | | | | | | | | | | | | | | | | | | | |
| Accruing past due loans | | $ | 830 | | | $ | 1,001 | | | $ | 669 | | | $ | 934 | | | $ | 1,316 | |
| | | | | | | | | | | | | | | | | | | | |
| Total criticized assets | | | 22,026 | | | | 22,741 | | | | 26,116 | | | | 25,785 | | | | 25,474 | |
| Total classified assets | | | 18,717 | | | | 19,582 | | | | 23,048 | | | | 22,985 | | | | 22,118 | |
| | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses | | | 9,145 | | | | 8,955 | | | | 8,894 | | | | 9,047 | | | | 9,105 | |
| Net (recoveries) charge-offs | | $ | (20 | ) | | $ | 160 | | | $ | 503 | | | $ | 698 | | | $ | 406 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Asset Quality Ratios: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses to total core loans | | | 1.30 | % | | | 1.31 | % | | | 1.34 | % | | | 1.42 | % | | | 1.51 | % |
| Allowance for loan losses to average core loans | | | 1.32 | % | | | 1.33 | % | | | 1.37 | % | | | 1.45 | % | | | 1.53 | % |
| Allowance for loan losses to non-performing loans | | | 98.92 | % | | | 94.91 | % | | | 80.96 | % | | | 74.02 | % | | | 71.56 | % |
| Non-performing loans to total core loans | | | 1.32 | % | | | 1.38 | % | | | 1.65 | % | | | 1.92 | % | | | 2.11 | % |
| Non-performing assets to total assets | | | 0.73 | % | | | 0.81 | % | | | 1.03 | % | | | 1.14 | % | | | 1.15 | % |
| Net (recoveries) charge-offs to average core loans (annualized) | | | -0.01 | % | | | 0.10 | % | | | 0.31 | % | | | 0.45 | % | | | 0.27 | % |
Heritage Financial Group, Inc. and Subsidiary
Consolidated Financial Highlights
(Unaudited)
(Dollars in thousands)
| | Five Quarter Comparison | |
FDIC-acquired assets | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | | | 3/31/2013 | |
| | | | | | | | | | | | | | | |
FDIC-acquired non-covered loans: | | | | | | | | | | | | | | | |
| Commercial real estate | | $ | 21,269 | | | $ | 22,268 | | | $ | 25,027 | | | $ | 27,258 | | | $ | 30,851 | |
| Residential real estate | | | 28,115 | | | | 30,134 | | | | 32,318 | | | | 33,452 | | | | 34,938 | |
| Construction and land | | | 5,573 | | | | 5,156 | | | | 5,195 | | | | 5,941 | | | | 7,756 | |
| Commercial and industrial | | | 1,926 | | | | 2,604 | | | | 3,638 | | | | 4,106 | | | | 5,125 | |
| Consumer and other | | | 2,891 | | | | 3,156 | | | | 3,483 | | | | 3,880 | | | | 4,647 | |
| Total | | | 59,774 | | | | 63,318 | | | | 69,661 | | | | 74,637 | | | | 83,317 | |
FDIC-acquired covered loans: | | | | | | | | | | | | | | | | | | | | |
| Commercial real estate | | | 14,044 | | | | 14,161 | | | | 14,956 | | | | 15,384 | | | | 18,849 | |
| Residential real estate | | | 22,372 | | | | 23,886 | | | | 25,082 | | | | 27,283 | | | | 30,735 | |
| Construction and land | | | 10,332 | | | | 11,642 | | | | 12,469 | | | | 12,645 | | | | 13,370 | |
| Commercial and industrial | | | 801 | | | | 864 | | | | 924 | | | | 1,340 | | | | 2,216 | |
| Consumer and other | | | 135 | | | | 338 | | | | 412 | | | | 524 | | | | 645 | |
| Total | | | 47,684 | | | | 50,891 | | | | 53,843 | | | | 57,176 | | | | 65,815 | |
| Total carrying value of FDIC-acquired loans | | $ | 107,458 | | | $ | 114,209 | | | $ | 123,504 | | | $ | 131,813 | | | $ | 149,132 | |
| Non-accrete discount for FDIC-acquired loans | | | 30,818 | | | | 36,746 | | | | 48,545 | | | | 55,170 | | | | 59,558 | |
| Accretable discount for FDIC-acquired loans | | | 27,492 | | | | 26,860 | | | | 23,445 | | | | 23,007 | | | | 26,136 | |
| Total discount for FDIC-acquired loans | | | 58,310 | | | | 63,606 | | | | 71,990 | | | | 78,177 | | | | 85,694 | |
| Outstanding principal balance for FDIC-acquired loans | | $ | 165,768 | | | $ | 177,815 | | | $ | 195,494 | | | $ | 209,989 | | | $ | 234,826 | |
| | | | | | | | | | | | | | | | | | | | |
FDIC-acquired OREO: | | | | | | | | | | | | | | | | | | | | |
| Non-covered | | $ | 1,527 | | | $ | 1,694 | | | $ | 1,680 | | | $ | 1,087 | | | $ | 1,363 | |
| Covered | | | 6,095 | | | | 7,053 | | | | 5,909 | | | | 7,815 | | | | 9,460 | |
| Total carrying value of FDIC-acquired OREO | | $ | 7,622 | | | $ | 8,747 | | | $ | 7,589 | | | $ | 8,902 | | | $ | 10,823 | |
| Total discount for FDIC-acquired OREO | | | 10,255 | | | | 11,186 | | | | 12,038 | | | | 11,013 | | | | 12,176 | |
| Gross carrying value of FDIC-acquired OREO | | $ | 17,877 | | | $ | 19,933 | | | $ | 19,627 | | | $ | 19,915 | | | $ | 22,999 | |
| | | | | | | | | | | | | | | | | | | | |
Total loan discount accretion recognized in income: | | | | | | | | | | | | | | | | | | | | |
| Individual assessed discount accretion | | $ | 808 | | | $ | 3,132 | | | $ | 791 | | | $ | 2,336 | | | $ | 637 | |
| Pooled assessed discount accretion | | | 3,042 | | | | 3,140 | | | | 2,927 | | | | 3,808 | | | | 3,951 | |
| Total loan discount accretion recognized in income | | $ | 3,850 | | | $ | 6,272 | | | $ | 3,718 | | | $ | 6,144 | | | $ | 4,588 | |
| | | | | | | | | | | | | | | | | | | | |
FDIC-acquired ratios: | | | | | | | | | | | | | | | | | | | | |
| Total discount to principal balance for FDIC-acquired loans | | | 35.2 | % | | | 35.8 | % | | | 36.8 | % | | | 37.2 | % | | | 36.5 | % |
| | Five Quarter Comparison | |
Non-covered FDIC-acquired assets | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | | | 3/31/2013 | |
| | | | | | | | | | | | | | | |
Outstanding principal balance: | | | | | | | | | | | | | | | |
| FDIC-acquired non-covered loan pools | | $ | 58,294 | | | $ | 61,893 | | | $ | 66,294 | | | $ | 70,144 | | | $ | 76,675 | |
| FDIC-acquired non-covered loans individually assessed | | | 20,644 | | | | 22,214 | | | | 27,627 | | | | 31,603 | | | | 35,837 | |
| Total non-covered outstanding principal loan balance | | | 78,938 | | | | 84,107 | | | | 93,921 | | | | 101,747 | | | | 112,512 | |
| Gross carrying value for FDIC-acquired non-covered OREO | | | 4,254 | | | | 4,470 | | | | 4,993 | | | | 2,529 | | | | 2,371 | |
| Total gross balance of non-covered assets | | $ | 83,192 | | | $ | 88,577 | | | $ | 98,914 | | | $ | 104,276 | | | $ | 114,883 | |
Non-covered non-accretable discount for estimated credit losses: | | | | | | | | | | | | | | | | | | | | |
| FDIC-acquired non-covered loan pools | | $ | 7,337 | | | | 8,932 | | | | 9,297 | | | | 9,341 | | | | 9,479 | |
| FDIC-acquired non-covered loans individually assessed | | | 4,283 | | | | 5,397 | | | | 12,294 | | | | 14,894 | | | | 16,482 | |
| Total non-covered non-accretable discount | | | 11,620 | | | | 14,329 | | | | 21,591 | | | | 24,235 | | | | 25,961 | |
| FDIC-acquired non-covered OREO discount | | | 2,728 | | | | 2,776 | | | | 3,313 | | | | 1,442 | | | | 1,008 | |
| Total non-covered discount for estimated credit losses | | | 14,348 | | | | 17,105 | | | | 24,904 | | | | 25,677 | | | | 26,969 | |
Non-covered accretable discount: | | | | | | | | | | | | | | | | | | | | |
| Non-covered accretable discount for improvement in cash flows | | | 6,603 | | | | 5,458 | | | | 380 | | | | 318 | | | | 475 | |
| Other non-covered accretable discount | | | 941 | | | | 1,002 | | | | 2,288 | | | | 2,558 | | | | 2,759 | |
| Total non-covered accretable discount | | | 7,544 | | | | 6,460 | | | | 2,668 | | | | 2,876 | | | | 3,234 | |
| Total non-covered discount | | $ | 21,892 | | | $ | 23,565 | | | $ | 27,572 | | | $ | 28,553 | | | $ | 30,203 | |
| | | | | | | | | | | | | | | | | | | | |
Non-covered loan discount accretion recognized in income: | | | | | | | | | | | | | | | | | | | | |
| Individual assessed discount accretion | | $ | 428 | | | $ | 2,375 | | | $ | 619 | | | $ | 974 | | | $ | 42 | |
| Pooled assessed discount accretion | | | 187 | | | | 249 | | | | 184 | | | | 174 | | | | 24 | |
| Total non-covered discount accretion recognized in income | | $ | 615 | | | $ | 2,624 | | | $ | 803 | | | $ | 1,148 | | | $ | 66 | |
| | | | | | | | | | | | | | | | | | | | |
Non-covered FDIC-acquired ratios: | | | | | | | | | | | | | | | | | | | | |
| Total discount to principal balance for non-covered FDIC-acquired assets | | | 26.3 | % | | | 26.6 | % | | | 27.9 | % | | | 27.4 | % | | | 26.3 | % |
| Gross balance of non-covered loans to total FDIC-acquired loans | | | 47.6 | % | | | 47.3 | % | | | 48.0 | % | | | 48.5 | % | | | 47.9 | % |
Heritage Financial Group, Inc. and Subsidiary
Consolidated Financial Highlights
(Unaudited)
(Dollars in thousands)
