EXHIBIT 99
For additional information, contact:
T. Heath Fountain
Executive Vice President and
Chief Financial Officer
(229) 878-2055
HERITAGE FINANCIAL GROUP, INC. REPORTS SECOND QUARTER NET INCOME OF
$1.8 MILLION OR $0.23 PER DILUTED SHARE
COMPANY DECLARES QUARTERLY CASH DIVIDEND OF $0.07 PER SHARE
ALBANY, Ga. (July 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 June 30, 2014. Key aspects of the Company's results for the second quarter of 2014 include:
| · | Net income of $1.8 million or $0.23 per diluted share, up 32% from $1.3 million or $0.18 per diluted share for the linked quarter, but down 33% from $2.7 million or $0.36 per diluted share for the year-earlier quarter; |
| · | Excluding special items for each quarter, net income of $2.4 million or $0.31 per diluted share, up 33% from $1.8 million or $0.24 per diluted share for the linked quarter, but down 17% from $2.9 million or $0.39 per diluted share for the year-earlier quarter (see non-GAAP reconciliation); |
| · | Loan growth, excluding loans acquired through FDIC-assisted acquisitions, of $42.2 million or 6% on a linked-quarter basis and $106.7 million or 17% compared with the year-earlier quarter; |
| · | A decline in nonperforming loans, excluding FDIC-acquired loans, of 24% on a linked-quarter basis and 43% compared with the year-earlier quarter; |
| · | An increase in the provision for loan losses, excluding FDIC-acquired loans, to $510,000, up from $65,000 for the linked quarter and down 20% compared with $640,000 for the year-earlier quarter; |
| · | Mortgage originations increased to $249.9 million for the quarter, up $114.4 million or 84% from the linked quarter and up $133.2 million or 114% from the year-earlier quarter; and |
| · | FDIC-acquired portfolios experienced improvement in cash flows, which resulted in $12.7 million of non-accretable discount transferred to the accretable discount and also resulted in an increase in the FDIC clawback expenses to $882,000. |
Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "We are pleased to report ongoing improvements in our operating results. Our core loan portfolio continued to grow in the second quarter, reflecting overall expansion along with continued organic growth, while at the same time credit quality metrics demonstrated further improvements in portfolio risks. Cash flows from our FDIC-acquired portfolios also have continued to improve, which have increased our interest income, but likewise resulted in a large increase in our clawback liability during the quarter. Additionally, our mortgage expansion efforts continue to cement as a solid platform for future growth, evidenced by a substantial increase in originations during the second quarter and a significantly larger pipeline of loans in process at quarter's end." Dorminey noted that HeritageBank Mortgage turned solidly profitable in the second quarter of 2014 as the Company begins to benefit from the investment it has made in these operations over the past two years.
Referring to the April 2014 announcement of the Company's pending acquisition of Alarion Bank, the banking subsidiary of Alarion Financial Services, Inc. ("Alarion"), Dorminey noted that the Company expects to complete the acquisition during the third quarter of 2014, assuming approval by regulatory authorities and Alarion's shareholders as well as the satisfaction of other customary closing conditions. Alarion has called a special meeting of its shareholders to be held on August 19, 2014, to consider and vote on the transaction, which is valued at approximately $22.3 million. Integration planning relating to the proposed transaction is continuing and, related to this, the Company has hired David C. Wilson to assist with preparation for the Company's entry into the Gainesville market. Wilson, with more than 30 years of lending experience, was most recently Gainesville City President for BBVA – Compass Bank.
HBOS Reports Second Quarter 2014 Results
Dorminey also 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 August 22, 2014, to stockholders of record as of August 8, 2014.
Second Quarter 2014 Results of Operations
The $429,000 increase in reported quarterly earnings for the second quarter of 2014 compared with the linked quarter resulted primarily from the following items:
| · | Increased interest income of $1.9 million, driven by growth in interest earning assets coupled with improved loan discount accretion from FDIC-acquired loans of $793,000; |
| · | Solid growth in revenue from mortgage banking activities of $2.9 million; offset by |
| · | Increased provision for loan losses expense of $445,000, driven by core loan growth; |
| · | Accelerated negative accretion of the FDIC loss-share receivable of $1.3 million; and |
| · | Increased salaries and employee benefits of $1.7 million, driven by mortgage banking expansion. |
The $888,000 decrease in reported quarterly earnings for the second quarter of 2014 compared with the year-earlier quarter primarily resulted from the following items:
| · | Increased salaries and employee benefits of $2.1 million; |
| · | Reduced interest income on loans of $972,000; |
| · | Growth in FDIC loss-share clawback expenses of $758,000; offset by |
| · | Increased revenue from mortgage banking activities of $1.6 million; and |
| · | Improved interest income on loans held for sale of $1.2 million |
Net interest income for the second quarter of 2014 increased 1% to $15.8 million from $15.6 million in the year-earlier quarter, primarily reflecting an increase in interest-earning assets related to acquisitions and organic growth. The Company's net interest margin was 4.92% for the second quarter of 2014, a decline of 48 basis points from 5.40% for the year-earlier period. The reduction in net interest margin for the second 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. Excluding FDIC-acquired loan discount adjustments from the net interest margin, the core net interest margin was 3.34% for the second quarter of 2014, an improvement of 27 basis points from 3.07% compared with the year-earlier quarter. The improvement in the core net interest margin was driven by an increase in the yield on core loans compared with the year-earlier quarter.
In the second quarter of 2014, the Company continued to achieve loan growth, with its core loan portfolio increasing $42.2 million organically on a linked-quarter basis and advancing $106.7 million overall compared with the year-earlier quarter. For the second quarter of 2014, the Company's loan portfolio, including FDIC-acquired loans, totaled $845.1 million, increasing $35.1 million on a linked-quarter basis from $810.0 million and from $769.9 million compared with the year-earlier quarter. The organic loan growth from the linked quarter was primarily driven by growth in the Albany, South Atlanta, and Macon, Georgia markets, as well as in the Birmingham, Alabama market. Total deposits stood at $1.209 billion at the end of the second quarter of 2014, up 7% from $1.127 billion on a linked-quarter basis, and up 13% from $1.066 billion for the year-earlier quarter.
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HBOS Reports Second Quarter 2014 Results
Page 3
July 24, 2014
For the second quarter of 2014, the Company's loans held for sale totaled $127.2 million, increasing $750,000 or 1% on a linked-quarter basis from $126.4 million, and increasing $83.6 million or 192% from $43.5 million compared with the year-earlier quarter. The slight increase in the loans held for sale for the current quarter occurred as loan sales paced current production for the quarter. Loan sales to the agencies for the second quarter totaled $158.0 million and, separately, the Company recorded a gain of $1.3 million related to the mortgage servicing rights for those loans. Total mortgage production for the second quarter was $249.9 million, up 84% on a linked-quarter basis from $135.5 million and up 114% from $116.7 million compared with the year-earlier quarter.
Noninterest income for the second quarter of 2014 improved 65% to $5.3 million from $3.2 million in the year-earlier quarter, primarily driven by increases in revenue from mortgage banking activities of $1.6 million, service charges on deposit accounts of $206,000, gain on sales of securities of $138,000 and bankcard services income of $110,000. Noninterest expense for the second quarter of 2014 increased 24% to $18.1 million from $14.6 million in the year-earlier quarter, primarily driven by increases in salaries and employee benefits of $2.1 million related to the expansion of the mortgage division and an increase in FDIC loss-share clawback expenses of $758,000 related to the improvement in cash flows experienced on covered loss-share loan portfolios.
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 $43.4 million in covered and $56.9 million in non-covered loans at the end of the second quarter of 2014 compared with $57.2 million in covered and $74.6 million in non-covered loans for the year-earlier quarter. The outstanding principal balance of the FDIC-acquired loan portfolios totaled $153.0 million at the end of the second quarter of 2014 compared with $210.0 million for the year-earlier quarter. The details of the accounting for the FDIC-acquired loan portfolios for the second quarter of 2014 are as follows:
| · | Covered FDIC-acquired loans decreased $4.2 million and non-covered FDIC-acquired loans decreased $2.9 million from the linked quarter; |
| · | The negative accretion for the FDIC loss-share receivable was $3.4 million and the FDIC loss-share clawback accrual increased to $3.4 million; |
| · | Provision expense for FDIC-acquired covered loans increased to $25,000 while non-covered loans decreased to negative $61,000; and |
| · | Loan discount accretion recognized in interest income increased to $4.6 million. |
For the second quarter of 2014, loan discount accretion recognized in interest income improved 21% to $4.6 million from $3.9 million for the linked quarter, but declined 24% from $6.1 million for the year-earlier quarter. Provision expense of $25,000 was recorded for loan charge-offs on covered individually assessed FDIC-acquired loans not provided for by the discount, with approximately 80% of the charge-offs reimbursable by the FDIC. The provision expense for these covered loans did not affect the Company's loan loss reserve. Negative provision expense of $61,000 was recorded for non-covered FDIC-acquired loans, driven by the reversal of the $105,000 valuation allowance recorded during the first quarter of 2014, offset in part by $44,000 in loan charge-offs on non-covered individually assessed loans not provided by the discount. The FDIC loss-share receivable associated with covered FDIC-acquired assets decreased 12% to $33.2 million from $37.6 million for the linked quarter and declined 31% from $48.1 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 $3.4 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 $896,000. An increase to the FDIC clawback liability accrual was recorded as an expense for the current quarter of $882,000, which increased the total accrual to $3.4 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 Second Quarter 2014 Results
Page 4
July 24, 2014
The covered FDIC-acquired loan discount affecting the loss-share receivable was $29.9 million, or 89.8% of the loss-share receivable, for the second quarter of 2014 compared with $45.4 million, or 94.5% of the loss-share receivable, for the year-earlier quarter. The gross balance of covered FDIC-acquired assets decreased to $89.5 million for the second quarter of 2014 compared with $125.6 million for the year-earlier quarter. The FDIC loss-share receivable as a percent of the covered FDIC-acquired assets decreased to 37.1% compared with 38.3% for the year-earlier quarter.
Asset Quality
Total nonperforming assets, excluding FDIC-acquired assets, decreased to $7.5 million, or 0.50% of total assets, compared with $10.3 million, or 0.73% of total assets, for the linked quarter and declined from $15.3 million, or 1.14% of total assets, for the year-earlier quarter. Annualized net charge-offs to average outstanding loans, excluding FDIC-acquired loans, were 0.05% for the second quarter of 2014 compared with annualized net recoveries of 0.01% for the linked quarter and annualized net charge-offs of 0.45% for the year-earlier quarter. Nonperforming loans, excluding FDIC-acquired loans, totaled $7.0 million for the second quarter of 2014, down from $9.2 million for the linked quarter and from $12.2 million for the year-earlier quarter. Other real estate owned and repossessed assets, excluding FDIC-acquired assets, totaled $507,000 for the second quarter of 2014, down from $1.1 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 increased to $510,000 for the second quarter of 2014 from $65,000 for the linked quarter, but decreased from $640,000 for the year-earlier quarter, primarily driven by improving trends in total criticized and classified loans offset in part by core loan growth. For the second quarter in 2014, the allowance for loan losses represented 1.27% of total loans outstanding, excluding FDIC-acquired loans, versus 1.30% for the linked quarter and 1.42% for the year-earlier quarter.
Capital Management Initiatives
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 June 30, 2014, was 14.0%, 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 8.5% as of June 30, 2014.
Upcoming Investor Conference
At 10:00 a.m. ET on Wednesday, July 30, 2014, the Company's management will make a presentation at Keefe, Bruyette & Woods' 15
th Annual Community Bank Investor Conference, which will be available to investors via a live audio webcast. The presentation used at the conference, updated for second quarter results, is now available on the Company's website at
www.eheritagebank.com under the "Investors" tab and will remain available for 90 days.
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HBOS Reports Second Quarter 2014 Results
Page 5
July 24, 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 June 30, 2014, the Company reported total assets of approximately $1.5 billion and total stockholders' equity of approximately $132 million. For more information about the Company, visit HeritageBank of the South on the Web at www.eheritagebank.com under the "Investors" tab.
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.
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HBOS Reports Second Quarter 2014 Results
Page 6
July 24, 2014
HERITAGE FINANCIAL GROUP, INC.
Unaudited Reconciliation of Non-GAAP Measures Presented in Earnings Release
(Dollars in thousands, except per share data)
| | Three Months Ended | | | Six Months Ended | |
| | June 30, | | | March 31, | | | June 30, | |
| | 2014 | | | 2013 | | | 2014 | | | 2014 | | | 2013 | |
| Total noninterest income | | $ | 5,286 | | | $ | 3,195 | | | $ | 3,487 | | | $ | 8,773 | | | $ | 9,959 | |
| Gain on sale of securities | | | (138 | ) | | | – | | | | – | | | | (138 | ) | | | – | |
| Gain on acquisitions | | | – | | | | – | | | | – | | | | – | | | | (4,188 | ) |
| Adjusted noninterest income | | $ | 5,148 | | | $ | 3,195 | | | $ | 3,487 | | | $ | 8,635 | | | $ | 5,771 | |
| | | | | | | | | | | | | | | | | | | | |
| Total noninterest expense | | $ | 18,116 | | | $ | 14,555 | | | $ | 15,476 | | | $ | 33,592 | | | $ | 27,909 | |
| Acquisition-related expenses | | | (101 | ) | | | (148 | ) | | | (52 | ) | | | (153 | ) | | | (940 | ) |
| Accrual of FDIC acquisitions estimated clawback liability | | | (882 | ) | | | (124 | ) | | | (543 | ) | | | (1,425 | ) | | | (690 | ) |
| Adjusted noninterest expense | | $ | 17,133 | | | $ | 14,283 | | | $ | 14,881 | | | $ | 32,014 | | | $ | 26,279 | |
| | | | | | | | | | | | | | | | | | | | |
| Net income as reported | | $ | 1,772 | | | $ | 2,660 | | | $ | 1,343 | | | $ | 3,115 | | | $ | 6,588 | |
| Total adjustments, net of tax* | | | 606 | | | | 203 | | | | 441 | | | | 1,048 | | | | (1,802 | ) |
| Adjusted net income | | $ | 2,378 | | | $ | 2,863 | | | $ | 1,784 | | | $ | 4,163 | | | $ | 4,786 | |
| | | | | | | | | | | | | | | | | | | | |
| Diluted earnings per share | | $ | 0.23 | | | $ | 0.36 | | | $ | 0.18 | | | $ | 0.41 | | | $ | 0.88 | |
| Total adjustments, net of tax* | | | 0.08 | | | | 0.03 | | | | 0.06 | | | | 0.14 | | | | (0.24 | ) |
| Adjusted diluted earnings per share | | $ | 0.31 | | | $ | 0.39 | | | $ | 0.24 | | | $ | 0.55 | | | $ | 0.64 | |
| * | 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) | | | | |
| | June 30, 2014 | | | December 31, 2013* | |
| | | | | | |
| | | | | | |
| Cash and due from banks | | $ | 29,305 | | | $ | 34,804 | |
| Interest-bearing deposits in banks | | | 57,244 | | | | 3,249 | |
| Federal funds sold | | | 2,028 | | | | 130 | |
| Cash and cash equivalents | | | 88,577 | | | | 38,183 | |
| | | | | | | | |
| Securities available for sale, at fair value | | | 300,556 | | | | 294,299 | |
| Federal Home Loan Bank stock, at cost | | | 5,604 | | | | 7,342 | |
| Other equity securities, at cost | | | 1,010 | | | | 1,010 | |
| Loans held for sale | | | 127,186 | | | | 110,669 | |
| Loans | | | 801,659 | | | | 747,862 | |
| Covered loans | | | 43,442 | | | | 50,891 | |
| Less allowance for loan losses | | | 9,457 | | | | 8,955 | |
| Loans, net | | | 835,644 | | | | 789,798 | |
| | | | | | | | |
| Other real estate owned | | | 1,845 | | | | 3,482 | |
| Covered other real estate owned | | | 5,865 | | | | 7,053 | |
| Total other real estate owned | | | 7,710 | | | | 10,535 | |
| | | | | | | | |
| FDIC loss-share receivable | | | 33,239 | | | | 41,306 | |
| Premises and equipment, net | | | 38,346 | | | | 37,978 | |
| Goodwill and intangible assets | | | 5,786 | | | | 4,253 | |
| Cash surrender value of bank owned life insurance | | | 24,559 | | | | 24,183 | |
| Other assets | | | 19,214 | | | | 21,369 | |
| Total assets | | $ | 1,487,431 | | | $ | 1,380,925 | |
| | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | |
| Non-interest-bearing deposits | | $ | 168,666 | | | $ | 148,253 | |
| Interest-bearing deposits | | | 1,040,134 | | | | 928,168 | |
| Total deposits | | | 1,208,800 | | | | 1,076,421 | |
| | | | | | | | |
| Federal funds purchased and securities sold under repurchase agreements | | | 35,350 | | | | 37,648 | |
| Other borrowings | | | 100,789 | | | | 131,394 | |
| Other liabilities | | | 10,832 | | | | 10,399 | |
| Total liabilities | | | 1,355,771 | | | | 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; 7,851,296 and 7,834,537 shares issued and outstanding, respectively | | | 79 | | | | 78 | |
| Capital surplus | | | 79,288 | | | | 78,566 | |
| Retained earnings | | | 59,769 | | | | 57,614 | |
| Accumulated other comprehensive loss, net of tax of $2,897 and $5,175, respectively | | | (4,346 | ) | | | (7,762 | ) |
| Unearned employee stock ownership plan (ESOP), 305,885 and 332,535 shares, respectively | | | (3,130 | ) | | | (3,433 | ) |
| Total shareholders' equity | | | 131,660 | | | | 125,063 | |
| | | | | | | | |
| Total liabilities & shareholders' equity | | $ | 1,487,431 | | | $ | 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 | | | Six Months Ended | |
| | June 30, 2014 | | | June 30, 2013 | | | June 30, 2014 | | | June 30, 2013 | |
| | | | | | | | | | | | |
Interest income: | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 14,730 | | | $ | 15,702 | | | $ | 28,080 | | | $ | 29,071 | |
| Interest on loans held for sale | | | 1,466 | | | | 290 | | | | 2,491 | | | | 405 | |
| Interest on taxable securities | | | 1,215 | | | | 1,095 | | | | 2,421 | | | | 1,961 | |
| Interest on nontaxable securities | | | 368 | | | | 308 | | | | 722 | | | | 593 | |
| Interest on federal funds sold | | | 1 | | | | 2 | | | | 2 | | | | 3 | |
| Interest on deposits in other banks | | | 30 | | | | 88 | | | | 49 | | | | 109 | |
| Total interest income | | | 17,810 | | | | 17,485 | | | | 33,765 | | | | 32,142 | |
| | | | | | | | | | | | | | | | |
Interest expense: | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 1,176 | | | | 1,041 | | | | 2,316 | | | | 2,095 | |
| Interest on other borrowings | | | 860 | | | | 844 | | | | 1,704 | | | | 1,593 | |
| Total interest expense | | | 2,036 | | | | 1,885 | | | | 4,020 | | | | 3,688 | |
| | | | | | | | | | | | | | | | |
| Net interest income | | | 15,774 | | | | 15,600 | | | | 29,745 | | | | 28,454 | |
| | | | | | | | | | | | | | | | |
| Provision for loan losses | | | 474 | | | | 668 | | | | 644 | | | | 1,153 | |
| | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 15,300 | | | | 14,932 | | | | 29,101 | | | | 27,301 | |
| | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 1,503 | | | | 1,297 | | | | 2,946 | | | | 2,451 | |
| Bankcard services income | | | 941 | | | | 831 | | | | 1,830 | | | | 1,593 | |
| Other service charges, commissions and fees | | | 158 | | | | 157 | | | | 320 | | | | 256 | |
| Brokerage fees | | | 615 | | | | 536 | | | | 1,181 | | | | 1,017 | |
| Mortgage banking activities | | | 5,022 | | | | 3,425 | | | | 7,188 | | | | 5,608 | |
| Bank-owned life insurance | | | 187 | | | | 201 | | | | 376 | | | | 403 | |
| Gain on sales of securities | | | 138 | | | | - | | | | 138 | | | | - | |
| Gain on acquisitions | | | - | | | | - | | | | - | | | | 4,188 | |
| Accretion of FDIC loss-share receivable | | | (3,377 | ) | | | (3,376 | ) | | | (5,408 | ) | | | (5,775 | ) |
| Other | | | 99 | | | | 124 | | | | 202 | | | | 218 | |
| Total noninterest income | | | 5,286 | | | | 3,195 | | | | 8,773 | | | | 9,959 | |
Noninterest expense: | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 10,310 | | | | 8,185 | | | | 18,890 | | | | 14,615 | |
| Equipment and occupancy | | | 2,153 | | | | 1,838 | | | | 4,148 | | | | 3,504 | |
| Advertising and marketing | | | 221 | | | | 349 | | | | 449 | | | | 536 | |
| Professional fees | | | 523 | | | | 302 | | | | 974 | | | | 517 | |
| Information services expenses | | | 1,150 | | | | 1,307 | | | | 2,350 | | | | 2,489 | |
| Net loss on sales and write-downs of other real estate owned | | | 107 | | | | 58 | | | | 425 | | | | 33 | |
| Net loss (gain) on sales and write-downs of FDIC-acquired other real estate owned | | | 173 | | | | (251 | ) | | | (91 | ) | | | (227 | ) |
| Foreclosed asset expenses | | | 82 | | | | 227 | | | | 169 | | | | 442 | |
| Foreclosed FDIC-acquired asset expenses | | | 285 | | | | 313 | | | | 618 | | | | 734 | |
| FDIC insurance and other regulatory fees | | | 299 | | | | 278 | | | | 543 | | | | 534 | |
| Acquisition related expenses | | | 101 | | | | 148 | | | | 153 | | | | 940 | |
| Deposit intangible expenses | | | 192 | | | | 211 | | | | 388 | | | | 405 | |
| FDIC loss-share clawback expenses | | | 882 | | | | 124 | | | | 1,425 | | | | 690 | |
| Other operating expenses | | | 1,638 | | | | 1,466 | | | | 3,151 | | | | 2,697 | |
| Total noninterest expense | | | 18,116 | | | | 14,555 | | | | 33,592 | | | | 27,909 | |
| | | | | | | | | | | | | | | | |
| Income before income taxes | | | 2,470 | | | | 3,572 | | | | 4,282 | | | | 9,351 | |
| | | | | | | | | | | | | | | | |
| Applicable income tax | | | 698 | | | | 912 | | | | 1,167 | | | | 2,763 | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 1,772 | | | $ | 2,660 | | | $ | 3,115 | | | $ | 6,588 | |
| | | | | | | | | | | | | | | | |
Earnings per common share: | | | | | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.24 | | | $ | 0.36 | | | $ | 0.42 | | | $ | 0.88 | |
| Diluted earnings per share | | $ | 0.23 | | | $ | 0.36 | | | $ | 0.41 | | | $ | 0.88 | |
| | | | | | | | | | | | | | | | |
Weighted average-common shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 7,436,717 | | | | 7,381,370 | | | | 7,429,421 | | | | 7,453,457 | |
| Diluted | | | 7,607,501 | | | | 7,383,992 | | | | 7,594,730 | | | | 7,455,892 | |
Heritage Financial Group, Inc. and Subsidiary
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands except share and per share data)
| | Five Quarter Comparison | |
| | 6/30/2014 | | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | |
| | | | | | | | | | | | | | | |
Interest income: | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 14,730 | | | $ | 13,350 | | | $ | 15,911 | | | $ | 13,452 | | | $ | 15,702 | |
| Interest on loans held for sale | | | 1,466 | | | | 1,025 | | | | 619 | | | | 434 | | | | 290 | |
| Interest on taxable securities | | | 1,215 | | | | 1,206 | | | | 1,231 | | | | 1,155 | | | | 1,095 | |
| Interest on nontaxable securities | | | 368 | | | | 354 | | | | 337 | | | | 318 | | | | 308 | |
| Interest on federal funds sold | | | 1 | | | | 1 | | | | 2 | | | | 4 | | | | 2 | |
| Interest on deposits in other banks | | | 30 | | | | 19 | | | | 15 | | | | 30 | | | | 88 | |
| Total interest income | | | 17,810 | | | | 15,955 | | | | 18,115 | | | | 15,393 | | | | 17,485 | |
| | | | | | | | | | | | | | | | | | | | |
Interest expense: | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 1,176 | | | | 1,140 | | | | 1,000 | | | | 982 | | | | 1,041 | |
| Interest on other borrowings | | | 860 | | | | 844 | | | | 862 | | | | 853 | | | | 844 | |
| Total interest expense | | | 2,036 | | | | 1,984 | | | | 1,862 | | | | 1,835 | | | | 1,885 | |
| | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | 15,774 | | | | 13,971 | | | | 16,253 | | | | 13,558 | | | | 15,600 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Provision for loan losses | | | 510 | | | | 65 | | | | 220 | | | | 350 | | | | 640 | |
| Provision for loan losses- FDIC-acquired covered | | | 25 | | | | - | | | | - | | | | - | | | | 28 | |
| Provision for loan losses- FDIC-acquired non-covered | | | (61 | ) | | | 105 | | | | 12 | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 15,300 | | | | 13,801 | | | | 16,021 | | | | 13,208 | | | | 14,932 | |
| | | | | | | | | | | | | | | | | | | | |
Noninterest income: | | | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 1,503 | | | | 1,443 | | | | 1,642 | | | | 1,577 | | | | 1,297 | |
| Bankcard services income | | | 941 | | | | 889 | | | | 890 | | | | 852 | | | | 831 | |
| Other service charges, commissions and fees | | | 158 | | | | 162 | | | | 121 | | | | 136 | | | | 157 | |
| Brokerage fees | | | 615 | | | | 566 | | | | 560 | | | | 561 | | | | 536 | |
| Mortgage banking activities | | | 5,022 | | | | 2,166 | | | | 2,949 | | | | 1,953 | | | | 3,425 | |
| Bank-owned life insurance | | | 187 | | | | 189 | | | | 198 | | | | 200 | | | | 201 | |
| Gain on sales of securities | | | 138 | | | | - | | | | 85 | | | | - | | | | - | |
| Gain on acquisitions | | | - | | | | - | | | | - | | | | - | | | | - | |
| Accretion of FDIC loss-share receivable | | | (3,377 | ) | | | (2,031 | ) | | | (2,021 | ) | | | (1,499 | ) | | | (3,376 | ) |
| Other | | | 99 | | | | 103 | | | | 112 | | | | 138 | | | | 124 | |
| Total noninterest income | | | 5,286 | | | | 3,487 | | | | 4,536 | | | | 3,918 | | | | 3,195 | |
Noninterest expense: | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 10,310 | | | | 8,580 | | | | 8,722 | | | | 8,108 | | | | 8,185 | |
| Equipment and occupancy | | | 2,153 | | | | 1,995 | | | | 1,922 | | | | 1,932 | | | | 1,838 | |
| Advertising and marketing | | | 221 | | | | 228 | | | | 299 | | | | 335 | | | | 349 | |
| Professional fees | | | 523 | | | | 451 | | | | 559 | | | | 340 | | | | 302 | |
| Information services expenses | | | 1,150 | | | | 1,200 | | | | 1,285 | | | | 1,335 | | | | 1,307 | |
| Net loss on sales and write-downs of other real estate owned | | | 107 | | | | 318 | | | | 38 | | | | 335 | | | | 58 | |
| Net loss (gain) on sales and write-downs of FDIC-acquired other real estate owned | | | 173 | | | | (264 | ) | | | (536 | ) | | | (206 | ) | | | (251 | ) |
| Foreclosed asset expenses | | | 82 | | | | 87 | | | | 240 | | | | 337 | | | | 227 | |
| Foreclosed FDIC-acquired asset expenses | | | 285 | | | | 333 | | | | 286 | | | | 366 | | | | 313 | |
| FDIC insurance and other regulatory fees | | | 299 | | | | 244 | | | | 254 | | | | 293 | | | | 278 | |
| Impairment loss on assets held for sale | | | - | | | | - | | | | 328 | | | | - | | | | - | |
| Acquisition related expenses | | | 101 | | | | 52 | | | | 102 | | | | 280 | | | | 148 | |
| Deposit intangible expenses | | | 192 | | | | 196 | | | | 200 | | | | 204 | | | | 211 | |
| FDIC loss-share clawback expenses | | | 882 | | | | 543 | | | | 261 | | | | 286 | | | | 124 | |
| Other operating expenses | | | 1,638 | | | | 1,513 | | | | 1,746 | | | | 1,389 | | | | 1,466 | |
| Total noninterest expense | | | 18,116 | | | | 15,476 | | | | 15,706 | | | | 15,334 | | | | 14,555 | |
| | | | | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 2,470 | | | | 1,812 | | | | 4,851 | | | | 1,792 | | | | 3,572 | |
| | | | | | | | | | | | | | | | | | | | |
| Applicable income tax | | | 698 | | | | 469 | | | | 1,446 | | | | 470 | | | | 912 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 1,772 | | | $ | 1,343 | | | $ | 3,405 | | | $ | 1,322 | | | $ | 2,660 | |
| | | | | | | | | | | | | | | | | | | | |
Earnings per common share: | | | | | | | | | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.24 | | | $ | 0.18 | | | $ | 0.46 | | | $ | 0.18 | | | $ | 0.36 | |
| Diluted earnings per share | | $ | 0.23 | | | $ | 0.18 | | | $ | 0.45 | | | $ | 0.18 | | | $ | 0.36 | |
| Dividends | | $ | 0.07 | | | $ | 0.07 | | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.00 | |
| | | | | | | | | | | | | | | | | | | | |
Weighted average-common shares outstanding: | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 7,436,717 | | | | 7,422,044 | | | | 7,407,722 | | | | 7,371,804 | | | | 7,381,370 | |
| Diluted | | | 7,607,501 | | | | 7,581,775 | | | | 7,530,606 | | | | 7,483,812 | | | | 7,383,992 | |
| | | | | | | | | | | | | | | | | | | | |
Other Financial Items: | | | | | | | | | | | | | | | | | | | | |
| Fixed compensation | | | 5,431 | | | | 5,092 | | | | 4,979 | | | | 5,175 | | | | 5,354 | |
| Variable compensation | | | 3,074 | | | | 1,617 | | | | 1,531 | | | | 1,336 | | | | 1,163 | |
| Employee benefits and taxes | | | 1,805 | | | | 1,871 | | | | 2,212 | | | | 1,597 | | | | 1,668 | |
Heritage Financial Group, Inc. and Subsidiary
Condensed Average Balances, Interest Rates and Yields
(Unaudited)
(Dollars in thousands)
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | 2014 | | | 2013 | | | 2014 | | | 2013 | |
| | | | | Interest | | | | | | | | | Interest | | | | | | | | | Interest | | | | | | | | | Interest | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans(1)(2) | | $ | 955,685 | | | $ | 16,199 | | | | 6.80 | % | | $ | 793,576 | | | $ | 15,994 | | | | 8.08 | % | | $ | 929,563 | | | $ | 30,577 | | | | 6.63 | % | | $ | 746,503 | | | $ | 29,480 | | | | 7.96 | % |
Investment securities (2) | | | 302,132 | | | | 1,707 | | | | 2.27 | % | | | 293,516 | | | | 1,508 | | | | 2.06 | % | | | 301,772 | | | | 3,388 | | | | 2.26 | % | | | 265,777 | | | | 2,756 | | | | 2.09 | % |
| Other short-term investments | | | 39,427 | | | | 31 | | | | 0.32 | % | | | 80,554 | | | | 90 | | | | 0.45 | % | | | 30,124 | | | | 51 | | | | 0.34 | % | | | 63,180 | | | | 112 | | | | 0.36 | % |
| Total interest-earning assets | | | 1,297,244 | | | | 17,937 | | | | 5.55 | % | | | 1,167,646 | | | | 17,592 | | | | 6.04 | % | | | 1,261,459 | | | | 34,016 | | | | 5.44 | % | | | 1,075,460 | | | | 32,348 | | | | 6.07 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest earning assets | | | 159,701 | | | | | | | | | | | | 185,264 | | | | | | | | | | | | 161,496 | | | | | | | | | | | | 175,982 | | | | | | | | | |
| Total assets | | $ | 1,456,945 | | | | | | | | | | | $ | 1,352,910 | | | | | | | | | | | $ | 1,422,955 | | | | | | | | | | | $ | 1,251,442 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest checking, money market and savings | | $ | 608,590 | | | $ | 357 | | | | 0.24 | % | | $ | 570,606 | | | $ | 324 | | | | 0.23 | % | | $ | 582,355 | | | $ | 685 | | | | 0.24 | % | | $ | 523,154 | | | $ | 611 | | | | 0.24 | % |
| Time deposits | | | 380,141 | | | | 819 | | | | 0.86 | % | | | 362,264 | | | | 717 | | | | 0.79 | % | | | 381,306 | | | | 1,631 | | | | 0.86 | % | | | 342,229 | | | | 1,484 | | | | 0.87 | % |
| Total interest-bearing deposits | | | 988,731 | | | | 1,176 | | | | 0.48 | % | | | 932,870 | | | | 1,041 | | | | 0.45 | % | | | 963,661 | | | | 2,316 | | | | 0.48 | % | | | 865,383 | | | | 2,095 | | | | 0.49 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Federal Funds purchased and securities sold under repurchase agreements | | | 34,430 | | | | 333 | | | | 3.88 | % | | | 33,305 | | | | 332 | | | | 4.00 | % | | | 35,198 | | | | 663 | | | | 3.80 | % | | | 33,787 | | | | 660 | | | | 3.94 | % |
| Other Borrowings | | | 132,453 | | | | 527 | | | | 1.60 | % | | | 102,115 | | | | 512 | | | | 2.01 | % | | | 125,968 | | | | 1,041 | | | | 1.67 | % | | | 84,140 | | | | 933 | | | | 2.24 | % |
| Total interest-bearing liabilities | | | 1,155,614 | | | | 2,036 | | | | 0.71 | % | | | 1,068,290 | | | | 1,885 | | | | 0.71 | % | | | 1,124,827 | | | | 4,020 | | | | 0.72 | % | | | 983,310 | | | | 3,688 | | | | 0.76 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-interest bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand Deposits | | | 162,431 | | | | | | | | | | | | 147,376 | | | | | | | | | | | | 160,518 | | | | | | | | | | | | 133,296 | | | | | | | | | |
| Other Liabilities | | | 7,862 | | | | | | | | | | | | 15,546 | | | | | | | | | | | | 8,170 | | | | | | | | | | | | 13,585 | | | | | | | | | |
| Total non-interest bearing liabilities | | | 170,293 | | | | | | | | | | | | 162,922 | | | | | | | | | | | | 168,688 | | | | | | | | | | | | 146,881 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities | | | 1,325,907 | | | | | | | | | | | | 1,231,212 | | | | | | | | | | | | 1,293,515 | | | | | | | | | | | | 1,130,191 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shareholders' equity | | | 131,038 | | | | | | | | | | | | 121,698 | | | | | | | | | | | | 129,440 | | | | | | | | | | | | 121,251 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities & shareholders' equity | | $ | 1,456,945 | | | | | | | | | | | $ | 1,352,910 | | | | | | | | | | | $ | 1,422,955 | | | | | | | | | | | $ | 1,251,442 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | | | | $ | 15,901 | | | | | | | | | | | $ | 15,707 | | | | | | | | | | | $ | 29,996 | | | | | | | | | | | $ | 28,660 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest rate spread | | | | | | | | | | | 4.84 | % | | | | | | | | | | | 5.34 | % | | | | | | | | | | | 4.72 | % | | | | | | | | | | | 5.31 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net yield on interest-earning assets (net interest margin) | | | | 4.92 | % | | | | | | | | | | | 5.40 | % | | | | | | | | | | | 4.80 | % | | | | | | | | | | | 5.37 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core net interest margin (non-GAAP): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans(1)(2) | | $ | 955,685 | | | $ | 16,199 | | | | 6.80 | % | | $ | 793,576 | | | $ | 15,994 | | | | 8.08 | % | | $ | 929,563 | | | $ | 30,577 | | | | 6.63 | % | | $ | 746,503 | | | $ | 29,480 | | | | 7.96 | % |
FDIC-acquired loan discount adjustments(3) | | | 56,445 | | | | 4,644 | | | | 33.00 | % | | | 82,508 | | | | 6,144 | | | | 29.87 | % | | | 58,738 | | | | 8,494 | | | | 29.16 | % | | | 75,167 | | | | 10,732 | | | | 28.79 | % |
| Adjusted loans | | | 1,012,130 | | | | 11,555 | | | | 4.58 | % | | | 876,084 | | | | 9,850 | | | | 4.51 | % | | | 988,301 | | | | 22,083 | | | | 4.51 | % | | | 821,670 | | | | 18,748 | | | | 4.60 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Adjusted total interest-earning assets | | $ | 1,353,689 | | | | 13,293 | | | | 3.94 | % | | $ | 1,250,154 | | | | 11,448 | | | | 3.67 | % | | $ | 1,320,197 | | | | 25,522 | | | | 3.90 | % | | $ | 1,150,627 | | | | 21,616 | | | | 3.79 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total interest-bearing liabilities | | $ | 1,155,614 | | | | 2,036 | | | | 0.71 | % | | $ | 1,068,290 | | | | 1,885 | | | | 0.71 | % | | $ | 1,124,827 | | | | 4,020 | | | | 0.72 | % | | $ | 983,310 | | | | 3,688 | | | | 0.76 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core Net interest income | | | | | | $ | 11,257 | | | | | | | | | | | $ | 9,563 | | | | | | | | | | | $ | 21,502 | | | | | | | | | | | $ | 17,928 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core Interest rate spread | | | | | | | | | | | 3.23 | % | | | | | | | | | | | 2.97 | % | | | | | | | | | | | 3.18 | % | | | | | | | | | | | 3.03 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core Net yield on interest-earning assets (net interest margin non-GAAP) | | | | 3.34 | % | | | | | | | | | | | 3.07 | % | | | | | | | | | | | 3.28 | % | | | | | | | | | | | 3.14 | % |
| (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: | | 6/30/2014 | | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | |
| | | | | | | | | | | | | | | |
| Total loans | | $ | 845,101 | | | $ | 810,028 | | | $ | 798,753 | | | $ | 789,092 | | | $ | 769,921 | |
| Loans held for sale | | | 127,186 | | | | 126,436 | | | | 110,669 | | | | 38,042 | | | | 43,545 | |
| Covered loans | | | 43,442 | | | | 47,684 | | | | 50,891 | | | | 53,843 | | | | 57,176 | |
| Allowance for loan losses | | | 9,457 | | | | 9,145 | | | | 8,955 | | | | 8,894 | | | | 9,047 | |
| Total other real estate owned | | | 7,710 | | | | 8,727 | | | | 10,535 | | | | 10,244 | | | | 11,949 | |
| Covered other real estate owned | | | 5,865 | | | | 6,095 | | | | 7,053 | | | | 5,909 | | | | 7,815 | |
| FDIC loss-share receivable | | | 33,239 | | | | 37,637 | | | | 41,306 | | | | 44,527 | | | | 48,106 | |
| Goodwill and intangible assets | | | 5,786 | | | | 4,757 | | | | 4,253 | | | | 4,251 | | | | 4,455 | |
| Total assets | | | 1,487,431 | | | | 1,413,540 | | | | 1,380,925 | | | | 1,322,309 | | | | 1,334,016 | |
| Non-interest-bearing deposits | | | 168,666 | | | | 163,090 | | | | 148,253 | | | | 153,163 | | | | 148,219 | |
| Interest-bearing deposits | | | 1,040,134 | | | | 963,564 | | | | 928,168 | | | | 899,318 | | | | 917,712 | |
| Other borrowings | | | 100,789 | | | | 116,127 | | | | 131,394 | | | | 101,667 | | | | 101,940 | |
| Federal funds purchased and securities sold under agreement to repurchase | | | 35,350 | | | | 33,785 | | | | 37,648 | | | | 35,393 | | | | 33,094 | |
| Stockholders' equity | | | 131,660 | | | | 127,984 | | | | 125,063 | | | | 120,534 | | | | 118,540 | |
| | | | | | | | | | | | | | | | | | | | |
| Total shares outstanding | | | 7,851,296 | | | | 7,834,517 | | | | 7,834,537 | | | | 7,834,765 | | | | 7,803,910 | |
| Unearned ESOP shares | | | 305,885 | | | | 319,210 | | | | 332,535 | | | | 345,860 | | | | 359,186 | |
| Total shares outstanding net of unearned ESOP | | | 7,545,411 | | | | 7,515,307 | | | | 7,502,002 | | | | 7,488,905 | | | | 7,444,724 | |
| | | | | | | | | | | | | | | | | | | | |
| Book value per share | | $ | 17.45 | | | $ | 17.03 | | | $ | 16.67 | | | $ | 16.10 | | | $ | 15.92 | |
| Book value per share including unearned ESOP (non-GAAP) | | | 16.77 | | | | 16.34 | | | | 15.96 | | | | 15.38 | | | | 15.19 | |
| Tangible book value per share (non-GAAP) | | | 16.68 | | | | 16.40 | | | | 16.10 | | | | 15.53 | | | | 15.32 | |
| Tangible book value per share including unearned ESOP (non-GAAP) | | | 16.03 | | | | 15.73 | | | | 15.42 | | | | 14.84 | | | | 14.62 | |
| Market value per share | | | 19.83 | | | | 19.65 | | | | 19.25 | | | | 17.42 | | | | 14.75 | |
| | | | | | | | | | | | | | | | | | | | |
| | Five Quarter Comparison | |
| | 6/30/2014 | | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | |
Key Financial Ratios and other information: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | | | | | | | | | | | |
| Annualized return on average assets | | | 0.49 | % | | | 0.39 | % | | | 1.00 | % | | | 0.40 | % | | | 0.79 | % |
| Annualized return on average equity | | | 5.42 | % | | | 4.26 | % | | | 11.10 | % | | | 4.41 | % | | | 8.74 | % |
| Net interest margin | | | 4.92 | % | | | 4.66 | % | | | 5.50 | % | | | 4.73 | % | | | 4.78 | % |
| Net interest spread | | | 4.84 | % | | | 4.59 | % | | | 5.43 | % | | | 4.66 | % | | | 4.71 | % |
| Core net interest margin | | | 3.34 | % | | | 3.23 | % | | | 3.20 | % | | | 3.23 | % | | | 3.28 | % |
| Core net interest spread | | | 3.23 | % | | | 3.12 | % | | | 3.10 | % | | | 3.13 | % | | | 3.17 | % |
| Efficiency ratio | | | 82.07 | % | | | 84.20 | % | | | 71.66 | % | | | 82.29 | % | | | 74.17 | % |
| | | | | | | | | | | | | | | | | | | | |
| Capital Ratios | | | | | | | | | | | | | | | | | | | | |
| Average stockholders' equity to average assets | | | 9.0 | % | | | 9.2 | % | | | 9.0 | % | | | 9.0 | % | | | 9.0 | % |
| Tangible equity to tangible assets (non-GAAP) | | | 8.5 | % | | | 8.7 | % | | | 8.8 | % | | | 8.8 | % | | | 8.6 | % |
| Tier 1 leverage ratio | | | 9.1 | % | | | 9.0 | % | | | 9.5 | % | | | 9.4 | % | | | 9.0 | % |
| Tier 1 risk-based capital ratio | | | 13.0 | % | | | 12.8 | % | | | 13.5 | % | | | 14.3 | % | | | 14.3 | % |
| Total risk-based capital ratio | | | 14.0 | % | | | 13.8 | % | | | 14.5 | % | | | 15.4 | % | | | 15.3 | % |
| | | | | | | | | | | | | | | | | | | | |
| Other Information | | | | | | | | | | | | | | | | | | | | |
| Full-time equivalent employees | | | 490 | | | | 455 | | | | 426 | | | | 412 | | | | 401 | |
| Banking | | | 312 | | | | 305 | | | | 306 | | | | 308 | | | | 316 | |
| Mortgage | | | 171 | | | | 143 | | | | 113 | | | | 97 | | | | 79 | |
| Investments | | | 7 | | | | 7 | | | | 7 | | | | 7 | | | | 6 | |
| Number of banking offices | | | 29 | | | | 29 | | | | 27 | | | | 27 | | | | 29 | |
| Mortgage loan offices | | | 15 | | | | 15 | | | | 14 | | | | 12 | | | | 12 | |
| Investment offices | | | 5 | | | | 5 | | | | 4 | | | | 4 | | | | 4 | |
Heritage Financial Group, Inc. and Subsidiary Consolidated Financial Highlights
(Unaudited)
(Dollars in thousands)
| | Five Quarter Comparison | |
Loans | | 6/30/2014 | | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | |
| Construction and land | | $ | 57,863 | | | $ | 53,138 | | | $ | 50,167 | | | $ | 48,808 | | | $ | 42,753 | |
| Farmland | | | 28,502 | | | | 30,116 | | | | 23,420 | | | | 22,561 | | | | 23,447 | |
| Permanent 1 - 4 | | | 174,026 | | | | 173,581 | | | | 174,565 | | | | 169,105 | | | | 166,199 | |
| Permanent 1 - 4 - junior liens and revolving | | | 35,827 | | | | 34,661 | | | | 32,038 | | | | 30,180 | | | | 29,432 | |
| Multifamily | | | 26,436 | | | | 25,718 | | | | 22,650 | | | | 27,468 | | | | 26,301 | |
| Nonresidential | | | 277,295 | | | | 262,753 | | | | 256,567 | | | | 250,859 | | | | 234,259 | |
| Commercial business | | | 116,926 | | | | 101,696 | | | | 101,161 | | | | 95,108 | | | | 88,828 | |
| Consumer and other | | | 27,918 | | | | 20,907 | | | | 23,976 | | | | 21,499 | | | | 26,889 | |
| Total core loans | | $ | 744,793 | | | $ | 702,570 | | | $ | 684,544 | | | $ | 665,588 | | | $ | 638,108 | |
| | | | | | | | | | | | | | | | | | | | |
| FDIC-acquired non-covered | | | 56,866 | | | | 59,774 | | | | 63,318 | | | | 69,661 | | | | 74,637 | |
| Total loans | | | 801,659 | | | | 762,344 | | | | 747,862 | | | | 735,249 | | | | 712,745 | |
| | | | | | | | | | | | | | | | | | | | |
| FDIC-acquired covered | | | 43,442 | | | | 47,684 | | | | 50,891 | | | | 53,843 | | | | 57,176 | |
| | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses | | | 9,457 | | | | 9,145 | | | | 8,955 | | | | 8,894 | | | | 9,047 | |
| | $ | 835,644 | | | $ | 800,883 | | | $ | 789,798 | | | $ | 780,198 | | | $ | 760,874 | |
| | | | | | | | | | | | | | | | | | | | |
Loan Balances by Geographical Region (excluding FDIC- acquired loans): | |
| | Five Quarter Comparison | |
| | 6/30/2014 | | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | |
| | | | | | | | | | | | | | | | | | | | |
| Albany, Georgia | | $ | 321,566 | | | $ | 302,664 | | | $ | 294,033 | | | $ | 288,089 | | | $ | 282,509 | |
| Valdosta, Georgia | | | 103,231 | | | | 103,479 | | | | 100,936 | | | | 101,729 | | | | 96,485 | |
| Ocala, Florida | | | 55,231 | | | | 57,322 | | | | 58,343 | | | | 58,115 | | | | 58,240 | |
| Statesboro, Georgia | | | 128,421 | | | | 121,636 | | | | 122,928 | | | | 124,667 | | | | 118,056 | |
| Auburn, Alabama | | | 36,023 | | | | 36,171 | | | | 36,130 | | | | 31,485 | | | | 26,061 | |
| Macon, Georgia | | | 80,323 | | | | 75,722 | | | | 68,638 | | | | 60,197 | | | | 55,935 | |
| Birmingham, Alabama | | | 10,834 | | | | 2,091 | | | | 1,590 | | | | 344 | | | | 822 | |
| South Atlanta | | | 9,164 | | | | 3,485 | | | | 1,946 | | | | 962 | | | | - | |
| | $ | 744,793 | | | $ | 702,570 | | | $ | 684,544 | | | $ | 665,588 | | | $ | 638,108 | |
| | | | | | | | | | | | | | | | | | | | |
Asset Quality Data (excluding FDIC -acquired loans): | |
| | Five Quarter Comparison | |
| | 6/30/2014 | | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | |
| | | | | | | | | | | | | | | | | | | | |
| Nonaccrual loans | | $ | 7,003 | | | $ | 9,245 | | | $ | 9,435 | | | $ | 10,986 | | | $ | 12,223 | |
| Loans - 90 days past due & still accruing | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total non-performing loans | | | 7,003 | | | | 9,245 | | | | 9,435 | | | | 10,986 | | | | 12,223 | |
| | | | | | | | | | | | | | | | | | | | |
| OREO | | | 507 | | | | 1,104 | | | | 1,789 | | | | 2,654 | | | | 3,046 | |
| Total non-performing assets | | $ | 7,510 | | | $ | 10,349 | | | $ | 11,224 | | | $ | 13,640 | | | $ | 15,269 | |
| | | | | | | | | | | | | | | | | | | | |
| Trouble debt restructuring - nonaccrual | | $ | 3,426 | | | $ | 5,702 | | | $ | 5,763 | | | $ | 5,840 | | | $ | 6,496 | |
| Trouble debt restructuring - accruing | | | 4,392 | | | | 1,968 | | | | 1,983 | | | | 1,996 | | | | 2,009 | |
| Total trouble debt restructuring | | $ | 7,818 | | | $ | 7,670 | | | $ | 7,746 | | | $ | 7,836 | | | $ | 8,505 | |
| | | | | | | | | | | | | | | | | | | | |
| Accruing past due loans | | $ | 750 | | | $ | 830 | | | $ | 1,001 | | | $ | 669 | | | $ | 934 | |
| | | | | | | | | | | | | | | | | | | | |
| Total criticized assets | | | 21,553 | | | | 22,026 | | | | 22,741 | | | | 26,116 | | | | 25,785 | |
| Total classified assets | | | 18,573 | | | | 18,717 | | | | 19,582 | | | | 23,048 | | | | 22,985 | |
| | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses | | | 9,457 | | | | 9,145 | | | | 8,955 | | | | 8,894 | | | | 9,047 | |
| Net charge-offs (recoveries) | | $ | 92 | | | $ | (20 | ) | | $ | 160 | | | $ | 503 | | | $ | 698 | |
| | | | | | | | | | | | | | | | | | | | |
Asset Quality Ratios: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses to total core loans | | | 1.27 | % | | | 1.30 | % | | | 1.31 | % | | | 1.34 | % | | | 1.42 | % |
| Allowance for loan losses to average core loans | | | 1.31 | % | | | 1.32 | % | | | 1.33 | % | | | 1.37 | % | | | 1.45 | % |
| Allowance for loan losses to non-performing loans | | | 135.04 | % | | | 98.92 | % | | | 94.91 | % | | | 80.96 | % | | | 74.02 | % |
| Non-performing loans to total core loans | | | 0.94 | % | | | 1.32 | % | | | 1.38 | % | | | 1.65 | % | | | 1.92 | % |
| Non-performing assets to total assets | | | 0.50 | % | | | 0.73 | % | | | 0.81 | % | | | 1.03 | % | | | 1.14 | % |
| Net charge-offs (recoveries) to average core loans (annualized) | | | 0.05 | % | | | -0.01 | % | | | 0.10 | % | | | 0.31 | % | | | 0.45 | % |
Heritage Financial Group, Inc. and Subsidiary
Consolidated Financial Highlights
(Unaudited)
(Dollars in thousands)
| | | Five Quarter Comparison | |
FDIC-acquired assets | | 6/30/2014 | | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | |
| | | | | | | | | | | | | | | |
FDIC-acquired non-covered loans: | | | | | | | | | | | | | | | |
| Commercial real estate | | $ | 21,020 | | | $ | 21,269 | | | $ | 22,268 | | | $ | 25,027 | | | $ | 27,258 | |
| Residential real estate | | | 26,456 | | | | 28,115 | | | | 30,134 | | | | 32,318 | | | | 33,452 | |
| Construction and land | | | 4,934 | | | | 5,573 | | | | 5,156 | | | | 5,195 | | | | 5,941 | |
| Commercial and industrial | | | 1,800 | | | | 1,926 | | | | 2,604 | | | | 3,638 | | | | 4,106 | |
| Consumer and other | | | 2,656 | | | | 2,891 | | | | 3,156 | | | | 3,483 | | | | 3,880 | |
| Total | | | 56,866 | | | | 59,774 | | | | 63,318 | | | | 69,661 | | | | 74,637 | |
FDIC-acquired covered loans: | | | | | | | | | | | | | | | | | | | | |
| Commercial real estate | | | 12,295 | | | | 14,044 | | | | 14,161 | | | | 14,956 | | | | 15,384 | |
| Residential real estate | | | 19,637 | | | | 22,372 | | | | 23,886 | | | | 25,082 | | | | 27,283 | |
| Construction and land | | | 10,679 | | | | 10,332 | | | | 11,642 | | | | 12,469 | | | | 12,645 | |
| Commercial and industrial | | | 762 | | | | 801 | | | | 864 | | | | 924 | | | | 1,340 | |
| Consumer and other | | | 69 | | | | 135 | | | | 338 | | | | 412 | | | | 524 | |
| Total | | | 43,442 | | | | 47,684 | | | | 50,891 | | | | 53,843 | | | | 57,176 | |
| Total carrying value of FDIC-acquired loans | | $ | 100,308 | | | $ | 107,458 | | | $ | 114,209 | | | $ | 123,504 | | | $ | 131,813 | |
| Non-accrete discount for FDIC-acquired loans | | | 16,600 | | | | 30,818 | | | | 36,746 | | | | 48,545 | | | | 55,170 | |
| Accretable discount for FDIC-acquired loans | | | 36,066 | | | | 27,492 | | | | 26,860 | | | | 23,445 | | | | 23,007 | |
| Total discount for FDIC-acquired loans | | | 52,666 | | | | 58,310 | | | | 63,606 | | | | 71,990 | | | | 78,177 | |
| Outstanding principal balance for FDIC-acquired loans | | $ | 152,974 | | | $ | 165,768 | | | $ | 177,815 | | | $ | 195,494 | | | $ | 209,989 | |
| | | | | | | | | | | | | | | | | | | | |
FDIC-acquired OREO: | | | | | | | | | | | | | | | | | | | | |
| Non-covered | | $ | 1,338 | | | $ | 1,527 | | | $ | 1,694 | | | $ | 1,680 | | | $ | 1,087 | |
| Covered | | | 5,865 | | | | 6,095 | | | | 7,053 | | | | 5,909 | | | | 7,815 | |
| Total carrying value of FDIC-acquired OREO | | $ | 7,203 | | | $ | 7,622 | | | $ | 8,747 | | | $ | 7,589 | | | $ | 8,902 | |
| Total discount for FDIC-acquired OREO | | | 7,593 | | | | 10,255 | | | | 11,186 | | | | 12,038 | | | | 11,013 | |
| Gross carrying value of FDIC-acquired OREO | | $ | 14,796 | | | $ | 17,877 | | | $ | 19,933 | | | $ | 19,627 | | | $ | 19,915 | |
| | | | | | | | | | | | | | | | | | | | |
Total loan discount accretion recognized in income: | | | | | | | | | | | | | | | | | | | | |
| Individual assessed discount accretion | | $ | 1,681 | | | $ | 808 | | | $ | 3,132 | | | $ | 791 | | | $ | 2,336 | |
| Pooled assessed discount accretion | | | 2,963 | | | | 3,042 | | | | 3,140 | | | | 2,927 | | | | 3,808 | |
| Total loan discount accretion recognized in income | | $ | 4,644 | | | $ | 3,850 | | | $ | 6,272 | | | $ | 3,718 | | | $ | 6,144 | |
| | | �� | | | | | | | | | | | | | | | | | |
FDIC-acquired ratios: | | | | | | | | | | | | | | | | | | | | |
| Total discount to principal balance for FDIC-acquired loans | | | 34.4 | % | | | 35.2 | % | | | 35.8 | % | | | 36.8 | % | | | 37.2 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | Five Quarter Comparison | |
Non-covered FDIC-acquired assets | | 6/30/2014 | | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding principal balance: | | | | | | | | | | | | | | | | | | | | |
| FDIC-acquired non-covered loan pools | | $ | 54,899 | | | $ | 58,294 | | | $ | 61,893 | | | $ | 66,294 | | | $ | 70,144 | |
| FDIC-acquired non-covered loans individually assessed | | | 19,497 | | | | 20,644 | | | | 22,214 | | | | 27,627 | | | | 31,603 | |
| Total non-covered outstanding principal loan balance | | | 74,396 | | | | 78,938 | | | | 84,107 | | | | 93,921 | | | | 101,747 | |
| Gross carrying value for FDIC-acquired non-covered OREO | | | 3,892 | | | | 4,254 | | | | 4,470 | | | | 4,993 | | | | 2,529 | |
| Total gross balance of non-covered assets | | $ | 78,288 | | | $ | 83,192 | | | $ | 88,577 | | | $ | 98,914 | | | $ | 104,276 | |
Non-covered non-accretable discount for estimated credit losses: | | | | | | | | | | | | | | | | | | | | |
| FDIC-acquired non-covered loan pools | | $ | 2,883 | | | $ | 7,337 | | | $ | 8,932 | | | $ | 9,297 | | | $ | 9,341 | |
| FDIC-acquired non-covered loans individually assessed | | | 3,524 | | | | 4,283 | | | | 5,397 | | | | 12,294 | | | | 14,894 | |
| Total non-covered non-accretable discount | | | 6,407 | | | | 11,620 | | | | 14,329 | | | | 21,591 | | | | 24,235 | |
| FDIC-acquired non-covered OREO discount | | | 2,554 | | | | 2,728 | | | | 2,776 | | | | 3,313 | | | | 1,442 | |
| Total non-covered discount for estimated credit losses | | $ | 8,961 | | | $ | 14,348 | | | $ | 17,105 | | | $ | 24,904 | | | $ | 25,677 | |
Non-covered accretable discount: | | | | | | | | | | | | | | | | | | | | |
| Non-covered accretable discount for improvement in cash flows | | $ | 10,270 | | | $ | 6,603 | | | $ | 5,458 | | | $ | 380 | | | $ | 318 | |
| Other non-covered accretable discount | | | 855 | | | | 941 | | | | 1,002 | | | | 2,288 | | | | 2,558 | |
| Total non-covered accretable discount | | | 11,125 | | | | 7,544 | | | | 6,460 | | | | 2,668 | | | | 2,876 | |
| Total non-covered discount | | $ | 20,086 | | | $ | 21,892 | | | $ | 23,565 | | | $ | 27,572 | | | $ | 28,553 | |
| | | | | | | | | | | | | | | | | | | | |
Non-covered loan discount accretion recognized in income: | | | | | | | | | | | | | | | | | | | | |
| Individual assessed discount accretion | | $ | 690 | | | $ | 428 | | | $ | 2,375 | | | $ | 619 | | | $ | 974 | |
| Pooled assessed discount accretion | | | 321 | | | | 187 | | | | 249 | | | | 184 | | | | 174 | |
| Total non-covered discount accretion recognized in income | | $ | 1,011 | | | $ | 615 | | | $ | 2,624 | | | $ | 803 | | | $ | 1,148 | |
| | | | | | | | | | | | | | | | | | | | |
Non-covered FDIC-acquired ratios: | | | | | | | | | | | | | | | | | | | | |
| Total discount to principal balance for non-covered FDIC-acquired assets | | | 25.7 | % | | | 26.3 | % | | | 26.6 | % | | | 27.9 | % | | | 27.4 | % |
| Gross balance of non-covered loans to total FDIC-acquired loans | | | 48.6 | % | | | 47.6 | % | | | 47.3 | % | | | 48.0 | % | | | 48.5 | % |
Heritage Financial Group, Inc. and Subsidiary
Consolidated Financial Highlights
(Unaudited)
(Dollars in thousands)
| | | Five Quarter Comparison | |
Covered FDIC-acquired assets | | 6/30/2014 | | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding principal balance: | | | | | | | | | | | | | | | | | | | | |
| FDIC-acquired covered loan pools | | $ | 57,567 | | | $ | 63,789 | | | $ | 69,192 | | | $ | 74,020 | | | $ | 79,552 | |
| FDIC-acquired covered loans individually assessed | | | 21,010 | | | | 23,041 | | | | 24,517 | | | | 27,554 | | | | 28,690 | |
| Total covered outstanding principal loan balance | | | 78,577 | | | | 86,830 | | | | 93,709 | | | | 101,574 | | | | 108,242 | |
| Gross carrying value for FDIC-acquired OREO covered | | | 10,904 | | | | 13,622 | | | | 15,463 | | | | 14,634 | | | | 17,385 | |
| Total gross balance of covered assets | | $ | 89,481 | | | $ | 100,452 | | | $ | 109,172 | | | $ | 116,208 | | | $ | 125,627 | |
Covered non-accretable discount for estimated credit losses: | | | | | | | | | | | | | | | | | | | | |
| FDIC-acquired covered loan pools | | $ | 5,401 | | | $ | 12,215 | | | $ | 15,284 | | | $ | 16,281 | | | $ | 19,917 | |
| FDIC-acquired covered loans individually assessed | | | 4,792 | | | | 6,983 | | | | 7,133 | | | | 10,673 | | | | 11,018 | |
| Total covered non-accretable discount | | | 10,193 | | | | 19,198 | | | | 22,417 | | | | 26,954 | | | | 30,935 | |
| FDIC-acquired covered OREO discount | | | 5,039 | | | | 7,528 | | | | 8,410 | | | | 8,725 | | | | 9,570 | |
| Total covered discount for estimated credit losses | | $ | 15,232 | | | $ | 26,726 | | | $ | 30,827 | | | $ | 35,679 | | | $ | 40,505 | |
Covered accretable discount: | | | | | | | | | | | | | | | | | | | | |
| Covered accretable discount for improvement in cash flows | | $ | 22,084 | | | $ | 18,156 | | | $ | 18,012 | | | $ | 17,676 | | | $ | 16,297 | |
| Other covered accretable discount | | | 2,858 | | | | 1,792 | | | | 2,389 | | | | 3,101 | | | | 3,834 | |
| Total covered accretable discount | | | 24,942 | | | | 19,948 | | | | 20,401 | | | | 20,777 | | | | 20,131 | |
| Total covered discount | | $ | 40,174 | | | $ | 46,674 | | | $ | 51,228 | | | $ | 56,456 | | | $ | 60,636 | |
| | | | | | | | | | | | | | | | | | | | |
Covered loan discount accretion recognized in income: | | | | | | | | | | | | | | | | | | | | |
| Individual assessed accretion | | $ | 991 | | | $ | 380 | | | $ | 757 | | | $ | 172 | | | $ | 1,362 | |
| Pooled assessed accretion | | | 2,642 | | | | 2,855 | | | | 2,891 | | | | 2,743 | | | | 3,634 | |
| Total covered discount accretion recognized in income | | $ | 3,633 | | | $ | 3,235 | | | $ | 3,648 | | | $ | 2,915 | | | $ | 4,996 | |
| | | | | | | | | | | | | | | | | | | | |
Covered FDIC-acquired ratios: | | | | | | | | | | | | | | | | | | | | |
| Total discount to principal balance for covered FDIC-acquired assets | | | 44.9 | % | | | 46.5 | % | | | 46.9 | % | | | 48.6 | % | | | 48.3 | % |
| | | | | | | | | | | | | | | | | | | | |
| | | Five Quarter Comparison | |
FDIC loss-share receivable | | 6/30/2014 | | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | |
| | | | | | | | | | | | | | | | | | | | |
FDIC loss-share receivable: | | | | | | | | | | | | | | | | | | | | |
| Single family estimated credit losses | | $ | 7,506 | | | $ | 8,446 | | | $ | 8,995 | | | $ | 9,134 | | | $ | 9,764 | |
| Non-single family estimated credit losses | | | 22,347 | | | | 27,459 | | | | 30,077 | | | | 33,550 | | | | 35,678 | |
| Pending reimbursements and other | | | 3,386 | | | | 1,732 | | | | 2,234 | | | | 1,843 | | | | 2,664 | |
| Total | | $ | 33,239 | | | $ | 37,637 | | | $ | 41,306 | | | $ | 44,527 | | | $ | 48,106 | |
| | | | | | | | | | | | | | | | | | | | |
| FDIC loss-share clawback liability | | $ | 3,366 | | | $ | 2,484 | | | $ | 1,941 | | | $ | 1,681 | | | $ | 1,393 | |
| | | | | | | | | | | | | | | | | | | | |
| Total covered discount | | $ | 40,174 | | | $ | 46,674 | | | $ | 51,228 | | | $ | 56,456 | | | $ | 60,636 | |
| Total covered discount impacting FDIC loss-share receivable | | $ | 37,316 | | | $ | 44,882 | | | $ | 48,839 | | | $ | 53,355 | | | $ | 56,802 | |
| Total covered discount impacting FDIC loss-share receivable at 80% | | $ | 29,853 | | | $ | 35,906 | | | $ | 39,071 | | | $ | 42,684 | | | $ | 45,442 | |
| | | | | | | | | | | | | | | | | | | | |
FDIC loss-share receivable ratios: | | | | | | | | | | | | | | | | | | | | |
| FDIC receivable as % of gross balance of covered assets | | | 37.1 | % | | | 37.5 | % | | | 37.8 | % | | | 38.3 | % | | | 38.3 | % |
| Covered discount at 80% as of % of FDIC receivable | | | 89.8 | % | | | 95.4 | % | | | 94.6 | % | | | 95.9 | % | | | 94.5 | % |
Heritage Financial Group, Inc. and Subsidiary
Consolidated Financial Highlights
(Unaudited)
Mortgage Segment Information | |
| | Five Quarter Comparison | |
| | 6/30/2014 | | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | |
| | | | | | | | | | | | | | | |
| Net interest income | | $ | 924 | | | $ | 825 | | | $ | 114 | | | $ | 218 | | | $ | 112 | |
| Provision for loan losses | | | - | | | | - | | | | - | | | | - | | | | - | |
| Noninterest income | | | 6,153 | | | | 2,392 | | | | 2,951 | | | | 1,952 | | | | 3,424 | |
| Noninterest expense | | | 6,178 | | | | 3,815 | | | | 3,149 | | | | 2,968 | | | | 3,239 | |
| Income tax expense (benefit) | | | 278 | | | | (185 | ) | | | (26 | ) | | | (247 | ) | | | 92 | |
| Mortgage profit (loss) | | $ | 621 | | | $ | (413 | ) | | $ | (58 | ) | | $ | (551 | ) | | $ | 205 | |
| | | | | | | | | | | | | | | | | | | | |
| Mortgage segment assets | | $ | 139,024 | | | $ | 136,662 | | | $ | 120,716 | | | $ | 44,588 | | | $ | 46,854 | |
| | | | | | | | | | | | | | | | | | | | |
Other Financial Items: | | | | | | | | | | | | | | | | | | | | |
| Fixed compensation | | $ | 1,375 | | | $ | 1,106 | | | $ | 1,037 | | | $ | 1,010 | | | $ | 1,123 | |
| Variable compensation | | | 2,832 | | | | 1,402 | | | | 1,311 | | | | 1,121 | | | | 969 | |
| | | | | | | | | | | | | | | | | | | | |
Mortgage Segment Selected Other Information: | |
| | Five Quarter Comparison | |
| | 6/30/2014 | | | 3/31/2014 | | | 12/31/2013 | | | 9/30/2013 | | | 6/30/2013 | |
| | | | | | | | | | | | | | | | | | | | |
| Retail production | | $ | 187,669 | | | $ | 98,554 | | | $ | 84,381 | | | $ | 83,657 | | | $ | 97,608 | |
| Wholesale production | | | 62,228 | | | | 36,941 | | | | 36,030 | | | | 31,646 | | | | 19,072 | |
| Total production | | $ | 249,897 | | | $ | 135,495 | | | $ | 120,411 | | | $ | 115,303 | | | $ | 116,680 | |
| Purchase as a % of total production | | | 84 | % | | | 80 | % | | | 78 | % | | | 76 | % | | | 66 | % |
| Refi as a % of total production | | | 16 | % | | | 20 | % | | | 22 | % | | | 24 | % | | | 34 | % |
| End of period locks | | $ | 117,940 | | | $ | 71,121 | | | $ | 43,054 | | | $ | 47,871 | | | $ | 53,910 | |
