EXHIBIT 99
Heritage Financial Group Announces Higher First Quarter Earnings
Board of Directors Declares Regular Quarterly Cash Dividend of
$0.06 Per Common Share
ALBANY, Ga.--(BUSINESS WIRE)--April 27, 2007--Heritage Financial
Group (NASDAQ:HBOS), the mid-tier holding company for HeritageBank of
the South, today announced financial results for the first quarter
ended March 31, 2007. Highlights of the quarter included a 45%
increase in net income, strong asset and deposit growth - reflecting
in part the Company's opening of its first branch in Florida in
mid-2006, and ongoing improvements in credit quality.
Separately, the Company announced that its Board of Directors has
declared a regular quarterly cash dividend of $0.06 per common share.
The dividend will be paid on May 25, 2007, to stockholders of record
as of May 11, 2007. Heritage, MHC, which holds 7,868,875 shares or
approximately 72% of the Company's total outstanding stock, has
informed the Company that it will waive receipt of the dividend on its
shares.
For the first quarter of 2007, net interest income was virtually
unchanged at $3,487,000 versus $3,488,000 in the year-earlier period.
The Company's net interest margin for the first quarter was 3.73%,
down 43 basis points from the fourth quarter of 2006 and 56 basis
points below the first quarter last year as higher funding costs more
than offset the rising yields on interest-earning assets. Although
asset quality metrics continued to show improvement, the Company
increased its provision for loan losses 76% to $158,000 for the first
quarter from $90,000 for the same period last year, in part because of
growth in the loan portfolio over the past year and also to reflect
increasing pressures on the general economy. Net interest income after
provision for loan losses declined 2% to $3,329,000 for the first
quarter of 2007 from $3,399,000 for the prior-year period.
Non-interest income for the first quarter of 2007 totaled
$1,588,000, up 31% from $1,212,000 in the same period last year,
primarily due to higher income from service charges and fees on
deposit accounts and fees from brokerage services. Non-interest
expense for the first quarter of 2007 increased 1% to $3,906,000 from
$3,872,000 in the year-earlier quarter, reflecting primarily higher
salaries and employee benefits costs associated with the Company's new
Florida branch. The Company's efficiency ratio in the first quarter
was 76.97% versus 82.38% in the first quarter of 2006.
Net income for the first quarter of 2007 totaled $719,000 or $0.07
per diluted share. This represented a 45% increase from $496,000 or
$0.05 per diluted share in the year-earlier period.
Commenting on the Company's announcement, Leonard Dorminey,
President and Chief Executive Officer of Heritage Financial Group,
said, "We are pleased to report a solid start to our new fiscal year,
with significant balance sheet growth from both our traditional
Georgia markets as well as our new entry into Florida with the opening
of a branch in Ocala. The growth of our loan portfolio has helped
offset the impact of a relatively flat yield curve and the resulting
margin compression we have experienced. Also, we are pleased to report
strong growth in our non-interest income this quarter, which, coupled
with more effective control of our expenses, factored prominently in
the Company's higher earnings for the first quarter."
Non-performing loans at the end of the first quarter of 2007
declined to $363,000 from $878,000 at March 31, 2006, and as a percent
of total loans outstanding, fell to 0.13% from 0.32% for the
year-earlier period. Meanwhile, net charge-offs to average outstanding
loans, on an annualized basis, were 0.07% for the first quarter of
2007 versus 0.09% for the prior-year period.
The Company's total assets increased 7% to $441,289,000 at March
31, 2007, from $413,330,000 at December 31, 2006, and 22% from
$362,953,000 at March 31, 2006. Gross loans increased 4% to
$286,622,000 at March 31, 2007, compared with $276,776,000 at
December 31, 2006, and 12% from $256,719,000 a year earlier. Deposits
increased 7% to $320,659,000 at the end of the first quarter of 2007
compared with $299,189,000 at December 31, 2006, and 32% from
$242,981,000 at March 31, 2006. Total stockholders' equity increased
1% to $63,718,000 at March 31, 2007, compared with $62,809,000 at
December 31, 2006, and was 8% lower than $69,355,000 a year ago, due
primarily to the Company's stock repurchase plans.
Annualized return on average stockholders' equity for the first
quarter ended March 31, 2007, was 4.53% versus 2.87% for the
comparable period last year. Annualized return on average total assets
for the first quarter ended March 31, 2007, was 0.68% compared with
0.55% for the same period in 2006.
Heritage Financial Group is the mid-tier holding company for
HeritageBank of the South, a community-oriented bank serving primarily
Albany, Georgia, and surrounding Dougherty, Lee and Worth counties in
Georgia through six full-service banking offices. HeritageBank also
commenced operations in the State of Florida during the third quarter
of 2006 with the opening of a full-service banking office in Ocala.
As of March 31, 2007, Heritage Financial Group reported total
assets of approximately $441 million and total stockholders' equity of
approximately $64 million. For more information about the Company,
visit HeritageBank of the South on the Web at www.eheritagebank.com,
and see Investor Relations under About Us.
Heritage, MHC, a mutual holding company formed in 2002, holds
approximately 72% of the shares of Heritage Financial Group. The
remaining 28% of Heritage Financial Group's shares are held by public
stockholders following the Company's June 2005 initial public
offering.
Except for historical information contained herein, the matters
included in this news release and other information in the Company's
filings with the Securities and Exchange Commission may contain
certain "forward-looking statements," within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. We intend such
forward-looking statements to be covered by the safe harbor provisions
for forward-looking statements contained in the Private Securities
Reform Act of 1995 and include this statement for purposes of these
safe harbor provisions. Further information concerning the Company and
its business, including additional factors that could materially
affect our financial results, is included in our other filings with
the SEC.
HERITAGE FINANCIAL GROUP
Unaudited Financial Highlights
(In thousands, except per share amounts)
Three Months Ended
March 31,
-------------------
2007 2006
--------- ---------
Total interest income $6,584 $5,191
Total interest expense 3,097 1,703
--------- ---------
Net interest income 3,487 3,488
Provision for loan losses 158 90
--------- ---------
Net interest income after provision for loan
losses 3,329 3,398
Non-interest income 1,588 1,212
Non-interest expense 3,906 3,872
--------- ---------
Income before income taxes 1,011 738
Income tax expense 292 242
--------- ---------
Net income $719 $496
========= =========
Basic and diluted earnings per share $0.07 $0.05
========= =========
March 31, Dec. 31, March 31,
2007 2006 2006
--------- --------- ---------
Total assets $441,289 $413,330 $362,953
Cash and cash equivalents 8,887 9,781 7,602
Interest bearing deposits in banks 283 2,154 1,596
Securities available for sale 105,101 84,572 63,528
Loans receivable 286,622 276,776 256,719
Allowance for loan losses 4,184 4,076 3,649
Total deposits 320,659 299,189 242,981
Federal Home Loan Bank advances 40,000 40,000 45,000
Stockholders' equity 63,718 62,809 69,355
Selected Consolidated Financial Ratios and Other Data (unaudited)
for the first quarter ended March 31, 2007 and 2006, may be found at
the following link: http://www.irinfo.com/hbos/HBOS1Q07FST.pdf.
Investors should refer to the Company's Form 10-Q for the three months
ended March 31, 2007, for additional information and disclosures; the
Form 10-Q will be available at the Investor Information section of the
Company's website immediately upon filing with the Securities and
Exchange Commission.
CONTACT: Heritage Financial Group
T. Heath Fountain, 229-878-2055
Senior Vice President and Chief Financial Officer