ALBANY, Ga., Apr 25, 2013 (BUSINESS WIRE) -- 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, 2013. Highlights of the Company's results for the first quarter of 2013 include:
-- Net income of $3.9 million or $0.52 per diluted share, up threefold from net income of $971,000 or $0.12 per diluted share for the year-earlier quarter and up 62% from $2.4 million or $0.31 per diluted share for the linked quarter;
-- Excluding special items for each quarter, net income was $2.0 million or $0.27 per diluted share, up 67% from net income of $1.2 million or $0.15 per diluted share for the year-earlier quarter and $1.2 million or $0.16 per diluted share for the linked quarter (see reconciliation of non-GAAP items);
-- Successful completion of the Company's fourth FDIC-assisted acquisition, Frontier Bank ("Frontier") on March 8, 2013, resulting in a $2.5 million bargain purchase gain, net of tax;
-- Loan growth, excluding loans acquired through FDIC-assisted acquisitions, of $18.0 million or 3% on a linked-quarter basis;
-- An increase in loans acquired through FDIC-assisted acquisitions of $64.9 million or 77% on a linked-quarter basis;
-- An increase in the provision for loan losses, excluding FDIC-acquired loans, to $450,000 compared with $400,000 for the year-earlier quarter, but a reduction from $600,000 for the linked quarter;
-- Provision for loan losses of $35,000 for FDIC-acquired loans with approximately 80% of the losses reimbursable by the FDIC versus no provision expense on such loans for the year-earlier quarter and a reduction from $1.9 million for the linked quarter; and
-- Non-performing assets to total assets declined to 1.15% for the first quarter of 2013 compared with 1.75% for the year-earlier quarter and 1.58% for the linked quarter.
Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "We are pleased to report another quarter of improved financial results. The positive results of our focus on efficiency and expense management are coming to fruition. In addition, the investments we made in our mortgage division and commercial banking network are paying dividends, as evidenced by increased fee income and continued organic loan growth.
"We are also excited about the acquisition of Frontier in an FDIC-assisted transaction completed in the first quarter," Dorminey continued. "This marks our fourth FDIC-assisted transaction and further demonstrates our ability to successfully execute our expansion strategy and prudently deploy our strong capital base. We are optimistic about the opportunities for loan growth both in the Birmingham market area as well as the Western Georgia / Eastern Alabama corridor."
Expense Management Initiatives
In connection with the Frontier FDIC-assisted acquisition, the Company plans to close the Vincent, Alabama, branch later in 2013, subject to regulatory approval. The Company does not expect to experience a significant reduction in customer relationships and will serve these customers from other nearby locations. Separately, the Company implemented staff reductions related to the Frontier acquisition that will occur during the second and third quarters, resulting in a decrease of approximately $1.6 million from Frontier's pre-acquisition level of personnel expenses.
Commenting on the expense management initiatives in the Frontier acquisition, Heath Fountain, Chief Financial Officer and Chief Administrative Officer, said, "We are confident in our ability to operate the acquired branch network in an efficient and profitable manner. While we are early in the transition, we believe we will be able to achieve all of our cost-saving targets identified prior to the acquisition."
Capital Management Initiatives
During the first quarter of 2013, the Company repurchased approximately 291,000 shares of common stock at an average price of $14.02 under its stock repurchase program. With remaining authorization to repurchase approximately 33,000 shares under the current program, which was set to expire in October 2013, unless extended or otherwise completed, the Company's Board of Directors has increased the program by adding 394,000 shares, or 5% of the Company's currently outstanding common stock, and has extended the program for an additional year. As a result, the Company has a total authorization to repurchase up to approximately 427,000 shares that expires in April 2014, unless the program is extended or completed earlier.
The Company's estimated total risk-based capital ratio at March 31, 2013, was 16.4%, 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 March 31, 2013.
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. As previously announced, it is not currently anticipated that any quarterly dividends will be paid in 2013, but that regular quarterly dividends will be reinstated in 2014.
First Quarter 2013 Results of Operations
The $3.0 million improvement in reported quarterly earnings for the first quarter of 2013 compared with the year-earlier quarter primarily resulted from the following items:
-- Improved net interest income of $3.5 million;
-- Increased non-interest income of $3.0 million; offset by
-- Increased non-interest expense of $2.0 million.
Net interest income for the first quarter of 2013 increased 36% to $13.2 million from $9.7 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 5.51% for the first quarter of 2013, a decrease of 86 basis points from 6.37% on a linked-quarter basis, but an increase of 102 basis points over 4.49% in the year-earlier period. The reduction in the first quarter of 2013 net interest margin on a linked-quarter basis was driven by a decline in the loan yields on the Company's FDIC-assisted loan portfolio, offset in part by a decline in the cost of interest-bearing liabilities as rates continue to reset to lower levels and the Company takes advantage of historically low non-deposit funding. Excluding purchase accounting adjustments, which include FDIC-assisted loan discount accretion from the net interest margin, the core net interest margin was 3.35% for the first quarter of 2013, an increase of 16 basis points from 3.19% on a linked-quarter basis and 42 basis points from 2.93% for the year-earlier quarter.
In the first quarter of 2013, the Company continued to achieve loan growth, with its loan portfolio increasing $18.0 million organically on a linked-quarter basis and advancing $154.1 million overall compared with the year-earlier quarter. For the first quarter of 2013, the Company's loan portfolio, including loans acquired through FDIC-assisted acquisitions, totaled $752.9 million, increasing $82.9 million on a linked-quarter basis from $670.0 million and from $562.5 million compared with the year-earlier quarter. Total deposits stood at $1.1 billion at the end of the first quarter of 2013, up 26% or $226.0 million on a linked-quarter basis from $869.6 million and from $868.7 million compared with the year-earlier quarter. The linked-quarter increase in deposits was primarily driven by the Frontier acquisition, which accounted for $212.1 million, and the remaining growth resulted in core deposit growth of $34.0 million and wholesale deposit growth of $23.8 million, which was offset in part by $24.5 million in planned time deposit runoff associated with Frontier internet and single service customers and $19.4 million in planned runoff of retail time deposits.
Non-interest income for the first quarter of 2013 increased 109% to $5.8 million from $2.8 million in the year-earlier quarter, primarily driven by a bargain purchase gain recorded on the Frontier FDIC-assisted acquisition of $4.2 million, coupled with solid growth in mortgage banking fees of $1.1 million, which was partially offset by an increase in negative accretion for the FDIC loss-share receivable of $2.5 million. Non-interest expense for the first quarter of 2013 increased 18% to $12.8 million from $10.8 million in the year-earlier quarter, primarily driven by increased salaries and employment benefits of $894,000 associated with the hiring of 30 employees for the mortgage division, increased acquisition-related expenses of $461,000 related to Frontier, increased equipment and occupancy expense of $342,000 related to the Company's continued efforts to expand the mortgage division, and increased foreclosure expense on FDIC-acquired assets of $259,000.
Accounting for FDIC-Assisted Loans
The Company performs ongoing assessments of the estimated cash flows of its acquired FDIC-assisted loan portfolios. The fair value of the FDIC-assisted loan portfolios consisted of $65.8 million in covered and $83.3 million in non-covered loans at the end of the first quarter of 2013 compared with $72.4 million in covered and $11.9 million in non-covered loans for the linked quarter. The principal balance of the FDIC-assisted loan portfolios totaled $234.8 million at the end of the first quarter of 2013 compared with $152.1 million for the linked quarter. The details of the accounting for the FDIC-assisted loan portfolios for the first quarter of 2013 are as follows:
-- Covered loans acquired in FDIC-assisted acquisitions decreased $6.6 million to $65.8 million;
-- Non-covered loans acquired in FDIC-assisted acquisitions increased $71.5 million to $83.3 million, driven by the Frontier acquisition;
-- The FDIC loss-share receivable associated with covered assets acquired in FDIC-assisted acquisitions decreased $8.7 million to $52.0 million;
-- The negative accretion for the FDIC loss-share receivable was $3.0 million;
-- Provision expense for individually assessed loans acquired in FDIC-assisted acquisitions was $35,000;
-- The non-accretable discount increased $13.6 million to $59.6 million; and
-- The accretable discount increased $4.3 million to $26.1 million.
During the first quarter of 2013, the Company completed the FDIC-assisted acquisition of Frontier without a loss-sharing agreement. The acquisition added non-covered loans at a principal balance of $98.0 million with a $23.0 million non-accretable discount and a $1.7 million accretable discount for a fair value balance of $73.3 million as of the acquisition date.
For the first quarter of 2013, provision expense of $35,000 was recorded for loan charge-offs on individually assessed loans acquired in FDIC-assisted acquisitions not provided for by the discount, with approximately 80% of the charge-offs reimbursable by the FDIC. The provision expense for these loans did not affect the Company's loan loss reserve. The FDIC loss-share receivable associated with covered FDIC-assisted assets decreased $8.7 million from $60.7 million for the prior quarter to $52.0 million, primarily driven by reimbursements received from the FDIC of $5.6 million and negative accretion of $3.5 million affecting the loss-share receivable asset associated with the improvement in expected cash flows of the loss-share performing portfolios. A FDIC true-up (clawback) liability was recorded as an expense, which reduced non-interest income for the current quarter by $566,000. This true-up was driven by an improvement in estimates of expected cash flows for both FDIC-assisted acquisitions covered under loss-sharing agreements.
The non-accretable discount increased to $59.6 million at the end of the first quarter of 2013 from $46.0 million on a linked-quarter basis, primarily driven by the addition of $23.0 million for the Frontier acquired loans, offset by the clearing of $2.2 million of discount in conjunction with the resolution of FDIC-assisted loans and transfers to accretable discount of $7.2 million for the improvement in expected cash flows. The accretable discount increased to $26.1 million for the first quarter of 2013 from $21.8 million on a linked-quarter basis, primarily driven by the transfer of $7.2 million from the non-accretable discount and the addition of $1.7 million for the Frontier acquired loans, offset in part by loan discount accretion of $4.6 million for the current quarter, which compares with $6.6 million on a linked-quarter basis.
Asset Quality
Total non-performing assets, excluding assets acquired in FDIC-assisted acquisitions, decreased to $15.7 million, or 1.15% of total assets, compared with $17.3 million, or 1.58% of total assets, for the linked quarter and improved from $13.7 million, or 1.75% of total assets, from the year-earlier quarter. Annualized net charge-offs to average outstanding loans, excluding loans acquired in FDIC-assisted acquisitions, were 0.27% for the first quarter of 2013 compared with 0.05% for the linked quarter and 0.24% for the year-earlier quarter. Non-performing loans totaled $12.7 million, down from $14.7 million for the linked quarter, but up from $10.7 million for the year-earlier quarter. Other real estate owned and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, totaled $3.0 million for the first quarter of 2013, slightly up from $2.7 million for the linked quarter and in line with $3.0 million for the year-earlier quarter.
The provision for loan losses on non-FDIC-acquired loans slightly increased to $450,000 for the first quarter of 2013 from $400,000 for the year-earlier quarter, primarily driven by organic loan growth. For the first quarter in 2013, the allowance for loan losses represented 1.51% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.55% for the linked quarter and 1.70% for the year-earlier quarter. The improving loan loss allowance is primarily the result of declining criticized and classified assets as a percentage of total loans.
About Heritage Financial Group, Inc. and HeritageBank of the South
Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving primarily South Georgia, North Central Florida and Eastern Alabama through 29 full-service branch locations, 12 mortgage offices, and 4 investment offices. As of March 31, 2013, the Company reported total assets of approximately $1.4 billion and total stockholders' equity of approximately $121 million. For more information about the Company, visit HeritageBank of the South on the Web at www.eheritagebank.com and see Investor Relations under About Us.
Cautionary Note Regarding Forward Looking Statements
Except for historical information contained herein, the matters included in this news release and other information in the Company's filings with the Securities and Exchange Commission may contain certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements can be identified by the fact that they do not relate strictly to historical or current facts and often use words or phrases "opportunities," "prospects," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions. The forward-looking statements made herein represent the current expectations, plans or forecasts of the Company's future results and revenues. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995 and includes this statement for purposes of these safe harbor provisions. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and are often beyond the Company's control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements. Investors should not place undue reliance on any forward-looking statement and should consider the uncertainties and risks, discussed under Item 1A. "Risk Factors" of the Company's 2012 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, Dec. 31,
--------------------------------------------------- -------------------------
2013 2012 2012
------------------------- ------------------------- -------------------------
Total non-interest income $ 5,810 $ 2,783 $ 2,873
Gain on sale of securities and securities impairment - (42 ) (1,285 )
Accrual of FDIC acquisitions estimated true-up liability 566 - 219
Gain on acquisitions (4,188 ) - -
-------------- ---- -------------- --------------
Adjusted non-interest income $ 2,188 $ 2,741 $ 1,807
==== ============== ==== ============== ==== ==============
Total non-interest expense $ 12,790 $ 10,801 $ 12,095
Acquisition-related expenses (792 ) (331 ) (3 )
-------------- ---- -------------- ---- -------------- ----
Adjusted non-interest expense $ 11,998 $ 10,470 $ 12,092
==== ============== ==== ============== ==== ==============
Net income as reported $ 3,928 $ 971 $ 2,428
Total adjustments, net of tax* (1,924 ) 215 (922 )
Adjustment for state tax credits - - (264 )
-------------- -------------- -------------- ----
Adjusted net income $ 2,004 $ 1,186 $ 1,242
==== ============== ==== ============== ==== ==============
Diluted earnings per share $ 0.52 $ 0.12 $ 0.31
Total adjustments, net of tax* (0.25 ) 0.03 (0.15 )
-------------- ---- -------------- -------------- ----
Adjusted diluted earnings per share $ 0.27 $ 0.15 $ 0.16
==== ============== ==== ============== ==== ==============
* The effective tax rate is used for the period presented 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.
HERITAGE FINANCIAL GROUP, INC.
Unaudited Financial Highlights
(Dollars in thousands, except per share data)
Three Months Ended
March 31,
------------------------------------
2013 2012
-------------------- --------------------
Interest income $ 15,047 $ 11,659
Interest expense 1,803 1,935
-------------- --------------
Net interest income 13,244 9,724
Provision for loan losses 450 400
Provision for loan losses - covered 35 -
Provision for loan losses - non covered - -
-------------- --------------
Net interest income after provision for loan losses 12,759 9,324
Non-interest income 5,810 2,783
Non-interest expense 12,790 10,801
-------------- --------------
Income before income taxes 5,779 1,306
Income tax expense 1,851 335
-------------- --------------
Net income $ 3,928 $ 971
==== ============== ==== ==============
Net income per share:
Basic $ 0.52 $ 0.12
==== ============== ==== ==============
Diluted $ 0.52 $ 0.12
==== ============== ==== ==============
Weighted average shares outstanding:
Basic 7,526,344 8,144,382
============== ==============
Diluted 7,528,522 8,145,730
============== ==============
Dividends declared per share $ - $ 0.04
==== ============== ==== ==============
March 31, Dec. 31, March 31,
2013 2012 2012
-------------------------- ------------------ ------------------
Total assets $ 1,370,550 $ 1,097,506 $ 1,075,510
Cash and cash equivalents 37,916 23,993 22,438
Interest-bearing deposits in banks 149,216 15,393 47,174
Securities available for sale 267,307 221,406 264,535
Loans 752,866 670,004 562,495
Allowance for loan losses 9,105 9,061 7,629
Total deposits 1,095,559 869,554 868,743
Federal Home Loan Bank advances 97,068 60,000 35,000
Stockholders' equity 120,655 120,649 125,067
Heritage Financial Group, Inc.
First Quarter 2013 Earnings Release Supplement
(Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended
March 31,
---------------------------------
2013 2012
---------------- ----------------
Income Statement Data
Interest income
---------------------------------------------------------------
Loans $ 13,369 $ 10,147
Loans held for sale 504 182
Securities - taxable 866 979
Securities - nontaxable 285 299
Federal funds sold 1 15
Interest-bearing deposits in banks 22 37
--------- ---------
Total interest income 15,047 11,659
--------- ---------
Interest expense
---------------------------------------------------------------
Deposits 1,054 1,263
Other borrowings 749 672
--------- ---------
Total interest expense 1,803 1,935
--------- ---------
Net interest income 13,244 9,724
Provision for loan losses 450 400
Provision for loan losses - FDIC acquired covered 35 -
Provision for loan losses - FDIC acquired non covered - -
--------- ---------
Net interest income after provision for loan losses 12,759 9,324
--------- ---------
Non-interest income
---------------------------------------------------------------
Service charges on deposit accounts 1,154 1,020
Bankcard services income 762 824
Other service charges, fees & commissions 99 85
Brokerage fees 481 446
Mortgage banking activities 1,793 689
Bank owned life insurance 202 140
Gain on sale of securities - 42
Gain on acquisitions 4,188 -
Accretion of FDIC loss-share receivable (2,963 ) (498 )
Other 94 35
--------- ---------
Total non-interest income 5,810 2,783
--------- ---------
Non-interest expense
---------------------------------------------------------------
Salaries and employee benefits 6,430 5,536
Equipment and occupancy 1,666 1,324
Advertising & marketing 187 180
Professional fees 215 238
Information services expenses 1,182 1,052
Gain on sale and write-downs of other real estate owned (25 ) (7 )
Loss on sale and write-downs of FDIC acquired other real estate 24 174
Foreclosed asset expenses 215 221
Foreclosed FDIC acquired asset expenses 421 162
FDIC insurance and other regulatory fees 256 245
Acquisition related expenses 792 331
Deposit intangible expense 194 201
Other operating 1,233 1,144
--------- ---------
Total non-interest expense 12,790 10,801
--------- ---------
Income before taxes 5,779 1,306
Applicable income tax 1,851 335
--------- ---------
Net income $ 3,928 $ 971
== ========= == =========
Weighted average shares - basic 7,526,344 8,144,382
Weighted average shares - diluted 7,528,522 8,145,730
Basic earnings per share $ 0.52 $ 0.12
Diluted earnings per share 0.52 0.12
Cash dividend declared per share - 0.04
Heritage Financial Group, Inc.
First Quarter 2013 Earnings Release Supplement
(Unaudited)
(Dollars in thousands, except per share data)
March 31,
-----------------------------------------
2013 2012
----------------- -----------------
Balance Sheet Data (Ending Balance)
Total loans $ 752,866 $ 562,495
Loans held for sale 18,905 4,731
Covered loans 65,815 95,493
Allowance for loan losses 9,105 7,629
Total other real estate owned 13,851 12,092
Covered other real estate owned 9,460 8,445
FDIC loss-share receivable 52,012 82,925
Intangible assets 4,666 4,647
Total assets 1,370,550 1,075,510
Non-interest-bearing deposits 151,709 88,582
Interest-bearing deposits 943,850 780,161
Federal Home Loan Bank advances 97,068 35,000
Federal funds purchased and securities sold under agreement to 39,393 37,227
repurchase
Stockholders' equity 120,655 125,067
Total shares outstanding 7,881,260 8,668,752
Unearned ESOP shares 372,511 425,813
--------- ---------
Total shares outstanding net of unearned ESOP 7,508,749 8,242,939
--------- ---------
Book value per share $ 16.07 $ 15.17
Book value per share including unearned ESOP (non-GAAP) 15.31 14.43
Tangible book value per share (non-GAAP) 15.45 14.61
Tangible book value per share including unearned ESOP (non-GAAP) 14.72 13.89
Market value per share 14.48 11.82
Three Months Ended
March 31,
-----------------------------------------
2013 2012
-------------------- --------------------
Average Balance Sheet Data
Average interest-bearing deposits in banks $ 43,824 $ 37,999
Average federal funds sold 1,789 22,363
Average investment securities 237,729 257,863
Average loans 685,388 560,385
Average mortgage loans held for sale 13,827 4,550
Average FDIC loss-share receivable 59,252 84,017
Average earning assets 982,247 883,160
Average assets 1,148,845 1,074,260
Average noninterest-bearing deposits 119,059 84,920
Average interest-bearing deposits 797,146 784,944
Average total deposits 916,205 869,864
Average federal funds purchased and securities sold under 34,273 33,822
agreement to repurchase
Average Federal Home Loan Bank advances 65,965 35,000
Average interest-bearing liabilities 797,146 853,766
Average stockholders' equity 120,800 125,503
Performance Ratios
Annualized return on average assets 1.37 % 0.36 %
Annualized return on average equity 13.01 % 3.09 %
Net interest margin 5.51 % 4.49 %
Net interest spread 5.44 % 4.46 %
Core net interest margin 3.35 % 2.93 %
Core net interest spread 3.23 % 2.79 %
Efficiency ratio 80.22 % 86.36 %
Capital Ratios
Average stockholders' equity to average assets 10.5 % 11.7 %
Tangible equity to tangible assets (non-GAAP) 8.5 % 11.2 %
Tier 1 leverage ratio (1) 10.4 % 11.3 %
Tier 1 risk-based capital ratio (1) 15.2 % 21.6 %
Total risk-based capital ratio (1) 16.4 % 22.8 %
Other Information
Full-time equivalent employees 355 324
Banking 285 283
Mortgage 64 34
Investments 6 7
Number of full-service offices 29 21
Mortgage loan offices 12 11
Investment offices 4 3
(1) March 31, 2013 consolidated ratios are estimated and may be
subject to change pending the filing of the call report; all other
periods are presented as filed.
Heritage Financial Group, Inc.
First Quarter 2013 Earnings Release Supplement
(Unaudited)
(Dollars in thousands, except per share data)
Five Quarter Comparison for the Three Months Ended
------------------------------------------------------------------------------------
3/31/13 12/31/12 9/30/12 6/30/12 3/31/12
---------------- ---------------- ---------------- ---------------- ----------------
Income Statement Data
Interest income
---------------------------------------------------------------
Loans $ 13,369 $ 15,084 $ 13,067 $ 10,532 $ 10,147
Loans held for sale 504 238 342 204 182
Securities - taxable 866 762 924 1,016 979
Securities - nontaxable 285 232 298 295 299
Federal funds sold 1 9 3 4 15
Interest-bearing deposits in banks 22 26 17 26 37
--------- --------- --------- --------- ---------
Total interest income 15,047 16,351 14,651 12,077 11,659
--------- --------- --------- --------- ---------
Interest expense
---------------------------------------------------------------
Deposits 1,054 1,108 1,257 1,246 1,263
Other borrowings 749 713 681 672 672
--------- --------- --------- --------- ---------
Total interest expense 1,803 1,821 1,938 1,918 1,935
--------- --------- --------- --------- ---------
Net interest income 13,244 14,530 12,713 10,159 9,724
Provision for loan losses 450 600 750 750 400
Provision for loan losses - FDIC acquired covered 35 1,907 1,172 338 -
Provision for loan losses - FDIC acquired non covered - - 12 3 -
--------- --------- --------- --------- ---------
Net interest income after provision for loan losses 12,759 12,023 10,779 9,068 9,324
--------- --------- --------- --------- ---------
Non-interest income
---------------------------------------------------------------
Service charges on deposit accounts 1,154 1,307 1,285 1,135 1,020
Bankcard services income 762 794 783 831 824
Other service charges, fees & commissions 99 89 80 73 85
Brokerage fees 481 463 467 462 446
Mortgage banking activities 1,793 1,451 1,689 938 689
Bank owned life insurance 202 210 210 211 140
Life insurance proceeds - - - - -
Gain on sale of securities - 1,285 1,484 27 42
Gain (loss) on acquisitions 4,188 - (90 ) 34 0
Accretion of FDIC loss-share receivable (2,963 ) (2,792 ) (1,606 ) (133 ) (498 )
Other 94 66 59 101 35
--------- --------- --------- --------- ---------
Total non-interest income 5,810 2,873 4,361 3,679 2,783
--------- --------- --------- --------- ---------
Non-interest expense
---------------------------------------------------------------
Salaries and employee benefits 6,430 6,167 6,380 5,460 5,536
Equipment and occupancy 1,666 1,597 1,317 1,395 1,324
Advertising & marketing 187 147 114 214 180
Professional fees 215 387 354 340 238
Information services expenses 1,182 1,184 1,240 1,163 1,052
(Gain) loss on sale and write-downs of other real estate owned (25 ) 277 90 (141 ) (7 )
Loss (gain) on sale and write-downs of FDIC acquired other real 24 (204 ) (33 ) (249 ) 174
estate
Foreclosed asset expenses 215 353 177 218 221
Foreclosed FDIC acquired asset expenses 421 575 563 466 162
FDIC insurance and other regulatory fees 256 252 276 265 245
Acquisition related expenses 792 3 14 69 331
Deposit intangible expense 194 191 194 195 201
Other operating 1,233 1,166 1,292 1,279 1,144
--------- --------- --------- --------- ---------
Total non-interest expense 12,790 12,095 11,978 10,674 10,801
--------- --------- --------- --------- ---------
Income before taxes 5,779 2,801 3,162 2,073 1,306
Applicable income tax 1,851 373 1,164 713 335
--------- --------- --------- --------- ---------
Net income $ 3,928 $ 2,428 $ 1,998 $ 1,360 $ 971
== ========= == ========= == ========= == ========= == =========
Weighted average shares - basic 7,526,344 7,720,839 7,942,852 8,071,354 8,144,382
Weighted average shares - diluted 7,528,522 7,722,867 7,944,983 8,072,935 8,145,730
Basic earnings per share $ 0.52 $ 0.31 $ 0.25 $ 0.17 $ 0.12
Diluted earnings per share 0.52 0.31 0.25 0.17 0.12
Cash dividend declared per share - 0.24 0.04 0.04 0.04
Heritage Financial Group, Inc.
First Quarter 2013 Earnings Release Supplement
(Unaudited)
(Dollars in thousands, except per share data)
Five Quarter Comparison
------------------------------------------------------------------------------------------
3/31/13 12/31/12 9/30/12 6/30/12 3/31/12
---------------------- ---------------- ---------------- ---------------- ----------------
Balance Sheet Data (at period end)
Total loans $ 752,866 $ 670,004 $ 634,932 $ 605,001 $ 562,495
Loans held for sale 18,905 15,608 7,236 6,017 4,731
Covered loans 65,815 72,425 78,757 87,386 95,493
Allowance for loan losses 9,105 9,061 8,530 8,099 7,629
Total other real estate owned 13,851 12,709 11,458 9,290 12,092
Covered other real estate owned 9,460 9,467 9,457 7,571 8,445
FDIC loss-share receivable 52,012 60,731 67,698 76,294 82,925
Intangible assets 4,666 4,235 4,426 4,621 4,647
Total assets 1,370,550 1,097,506 1,054,899 1,063,426 1,075,510
Non-interest-bearing deposits 151,709 116,272 108,767 87,815 88,582
Interest-bearing deposits 943,850 753,282 736,312 772,453 780,161
Federal home loan bank advances 97,068 60,000 35,000 35,000 35,000
Federal funds purchased and securities sold under agreement to 39,393 33,219 35,833 31,746 37,227
repurchase
Stockholders' equity 120,655 120,649 121,793 123,291 125,067
Total shares outstanding 7,881,260 8,172,486 8,229,955 8,490,247 8,668,752
Unearned ESOP shares 372,511 385,836 399,162 412,487 425,813
--------- --------- --------- --------- ---------
Total shares outstanding net of unearned ESOP 7,508,749 7,786,650 7,830,793 8,077,760 8,242,939
--------- --------- --------- --------- ---------
Book value per share $ 16.07 $ 15.49 $ 15.55 $ 15.26 $ 15.17
Book value per share including unearned ESOP (non-GAAP) 15.31 14.76 14.80 14.52 14.43
Tangible book value per share (non-GAAP) 15.45 14.95 14.99 14.69 14.61
Tangible book value per share including unearned ESOP (non-GAAP) 14.72 14.24 14.26 13.98 13.89
Market value per share 14.48 13.79 13.14 12.87 11.82
Five Quarter Comparison
------------------------------------------------------------------------------------------
3/31/13 12/31/12 9/30/12 6/30/12 3/31/12
---------------------- ---------------- ---------------- ---------------- ----------------
Average Balance Sheet Data
Average interest-bearing deposits in banks $ 43,824 $ 29,422 $ 19,343 $ 21,897 $ 37,999
Average federal funds sold 1,789 12,842 5,471 6,038 22,363
Average investment securities 237,729 211,524 235,862 252,894 257,863
Average loans 685,388 647,476 625,464 583,366 560,385
Average mortgage loans held for sale 13,827 11,161 6,198 5,519 4,550
Average FDIC Loss-Share Receivable 59,252 65,534 74,045 79,812 84,017
Average earning assets 982,247 912,134 883,319 869,393 883,160
Average assets 1,148,846 1,087,078 1,070,130 1,053,140 1,074,260
Average noninterest-bearing deposits 119,059 115,014 94,453 89,763 84,920
Average interest-bearing deposits 797,146 747,632 768,247 760,409 784,944
Average total deposits 916,205 862,646 862,700 850,172 869,864
Average federal funds purchased and securities sold under 34,273 34,324 33,916 32,043 33,822
agreement to repurchase
Average Federal Home Loan Bank advances 65,965 50,489 35,326 35,000 35,000
Average interest-bearing liabilities 797,146 747,632 837,489 827,452 853,766
Average stockholders' equity 120,800 122,927 124,884 125,083 125,503
Performance Ratios
Annualized return on average assets 1.37 % 0.89 % 0.75 % 0.52 % 0.36 %
Annualized return on average equity 13.01 % 7.90 % 6.40 % 4.35 % 3.09 %
Net interest margin 5.51 % 6.37 % 5.77 % 4.75 % 4.49 %
Net interest spread 5.44 % 6.30 % 5.72 % 4.70 % 4.46 %
Efficiency ratio 80.22 % 69.50 % 70.15 % 77.14 % 86.36 %
Capital Ratios
Average stockholders' equity to average assets 10.5 % 11.3 % 11.7 % 11.9 % 11.7 %
Tangible equity to tangible assets (non-GAAP) 8.5 % 10.6 % 11.2 % 11.2 % 11.2 %
Tier 1 leverage ratio 10.4 % 11.0 % 10.9 % 11.3 % 11.3 %
Tier 1 risk-based capital ratio 15.2 % 17.2 % 18.0 % 19.1 % 21.6 %
Total risk-based capital ratio 16.4 % 18.4 % 19.2 % 20.3 % 22.8 %
Other Information
Full-time equivalent employees 355 321 316 319 324
Banking 285 264 270 279 283
Mortgage 64 50 39 33 34
Investments 6 7 7 7 7
Number of full-service offices 29 20 23 22 21
Mortgage loan offices 12 13 11 11 11
Investment offices 4 4 4 3 3
Heritage Financial Group, Inc.
First Quarter 2013 Earnings Release Supplement
(Dollars in thousands)
Three Months Ended
March 31,
-----------------------------
2013 2012
-------------- --------------
Loans by Type
Construction and land $ 37,659 $ 24,375
Farmland 20,749 17,150
Permanent 1 - 4 163,302 132,172
Permanent 1 - 4 - junior liens and revolving 28,852 25,220
Multifamily 24,280 18,577
Nonresidential 225,946 150,492
Commercial business 83,015 59,697
Consumer and other 19,931 21,935
------- -------
603,734 449,618
------- -------
Loans acquired through FDIC-assisted acquisitions:
Non covered 83,317 17,384
Covered 65,815 95,493
------- -------
149,132 112,877
------- -------
752,866 562,495
======= =======
OREO (excluding assets acquired through FDIC-assisted 3,028 2,992
acquisitions):
OREO assets acquired through FDIC-assisted acquisitions:
Non Covered 1,363 655
Covered 9,460 8,445
------- -------
13,851 12,092
======= =======
Asset Quality Data (excluding assets acquired through
FDIC-assisted acquisitions):
Allowance for loan losses to total loans 1.51 % 1.70 %
Allowance for loan losses to average loans 1.53 % 1.35 %
Allowance for loan losses to non-performing loans 71.56 % 71.44 %
Accruing past due loans $ 1,316 $ 452
Nonaccrual loans 12,723 10,681
Loans - 90 days past due & still accruing - -
Total non-performing loans 12,723 10,681
OREO and repossessed assets 3,028 2,992
Total non-performing assets 15,751 13,673
Non-performing loans to total loans 2.11 % 2.38 %
Non-performing assets to total assets 1.15 % 1.27 %
QTD Net charge-offs to average loans (annualized) 0.27 % 0.24 %
Net charge-offs QTD $ 406 $ 265
YTD Net charge-offs to average loans 0.07 % 0.06 %
Net charge-offs YTD $ 406 $ 265
Trouble debt restructuring - nonaccrual $ 4,593 $ 6,679
Trouble debt restructuring - accruing 2,023 3,514
Total trouble debt restructuring 6,616 10,193
Total criticized assets 25,474 32,782
Total classified assets $ 22,118 $ 25,629
Heritage Financial Group, Inc.
First Quarter 2013 Earnings Release Supplement
(Dollars in thousands)
Five Quarter Comparison for the Quarter Ended
--------------------------------------------------------------------------------------------
3/31/13 12/31/12 9/30/12 6/30/12 3/31/12
------------------------ ---------------- ---------------- ---------------- ----------------
Loans by Type
Construction and land $ 37,659 $ 33,340 $ 30,010 $ 31,134 $ 24,375
Farmland 20,749 20,141 20,298 18,121 17,150
Permanent 1 - 4 163,302 161,883 157,551 148,162 132,172
Permanent 1 - 4 - junior liens and revolving 28,852 27,345 25,507 25,289 25,220
Multifamily 24,280 21,293 19,805 19,639 18,577
Nonresidential 225,946 212,570 193,392 177,307 150,492
Commercial business 83,015 83,659 68,800 58,589 59,697
Consumer and other 19,931 25,498 26,521 24,172 21,935
---------- ------- ------- ------- -------
603,734 585,729 541,884 502,413 449,618
========== ======= ======= ======= =======
Loans acquired through FDIC-assisted acquisitions:
Non covered 83,317 11,850 14,291 15,202 17,384
Covered 65,815 72,425 78,757 87,386 95,493
---------- ------- ------- ------- -------
752,866 670,004 634,932 605,001 562,495
========== ======= ======= ======= =======
Asset Quality Data (excluding Loans acquired through
FDIC-assisted acquisitions):
Allowance for loan losses to total loans 1.51 % 1.55 % 1.57 % 1.61 % 1.70 %
Allowance for loan losses to average loans 1.53 % 1.62 % 1.61 % 1.70 % 1.35 %
Allowance for loan losses to non-performing loans 71.56 % 61.73 % 52.15 % 81.27 % 71.42 %
Accruing past due loans $ 1,316 $ 2,131 $ 1,038 $ 3,215 $ 452
Nonaccrual loans 12,723 14,678 16,358 9,965 10,681
Loans - 90 days past due & still accruing - - - - -
Total non-performing loans 12,723 14,678 16,358 9,965 10,681
OREO and repossessed assets 3,028 2,650 1,403 1,519 2,992
Total non-performing assets 15,751 17,328 17,761 11,484 13,673
Non-performing loans to total loans 2.11 % 2.51 % 3.02 % 1.98 % 2.38 %
Non-performing assets to total assets 1.15 % 1.58 % 1.68 % 1.08 % 1.75 %
Net charge-offs to average loans (annualized) 0.27 % 0.05 % 0.24 % 0.23 % 0.24 %
Net charge-offs $ 406 $ 68 $ 320 $ 279 $ 265
Note:
-------------------------------------------------
Certain prior-period amounts have been reclassified to conform with
current presentation.
Loans acquired through FDIC-assisted acquisitions include loans
acquired in the acquisition of The Tattnall Bank in December of
2009, the acquisition of Citizens Bank of Effingham in February
2011, First Southern National Bank in August 2011, and Frontier Bank
in March 2013. The acquisitions of The Tattnall Bank and Frontier
Bank did not involve loss-share agreements with the FDIC. The
acquisitions of Citizens Bank of Effingham and First Southern
National Bank involved loss-share agreements in which the FDIC will,
for a specified number of years, reimburse the Bank for 80% of all
losses and related expenses on covered assets.
http://cts.businesswire.com/ct/CT?id=bwnews&sty=20130425005450r1&sid=cmtx4&distro=nx
SOURCE: Heritage Financial Group, Inc.
Heritage Financial Group, Inc. T. Heath Fountain, 229-878-2055 Executive Vice President and Chief Financial Officer
Copyright Business Wire 2013
