HERITAGE FINANCIAL GROUP INC 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, 2015. Key highlights of the Company's report for the first quarter of 2015 include:
- Net income of $3.9 million or $0.43 per diluted share, up 56% from $2.5 million or $0.28 per diluted share for the linked quarter, and up 189% from $1.3 million or $0.18 per diluted share for the year-earlier quarter;
- Net income, excluding special items for each quarter, of $4.0 million or $0.44 per diluted share, up 36% from $2.9 million or $0.32 per diluted share for the linked quarter, and up 123% from $1.8 million or $0.24 per diluted share for the year-earlier quarter (see non-GAAP reconciliation);
- Core net interest margin expanded to 3.60%, up 16 basis points from 3.44% for the linked quarter and up 37 basis points from 3.23% for the year-earlier quarter;
- Loan growth, excluding acquired loans, of $7.3 million or 1% on a linked-quarter basis and $104.5 million or 15% compared with the year-earlier quarter;
- A decline in nonperforming loans, excluding acquired loans, of 9% on a linked-quarter basis and 40% compared with the year-earlier quarter;
- A decrease in the provision for loan losses, excluding acquired loans, to $75,000 from $285,000 for the linked-quarter, but up from $65,000 for the year-earlier quarter; and
- An increase in mortgage originations to $448.1 million, up $103.4 million or 30% from the linked-quarter and up $312.6 million or 231% from the year-earlier quarter.
Commenting on the announcement, Leonard Dorminey, President and Chief Executive Officer, said, "During the first quarter of 2015, our company continued to make significant and meaningful progress on a number of fronts. First, and most important, we were pleased to see continued improvement in our operations, building on the momentum evident in our business as 2014 came to an end. We continue to successfully assimilate the purchase of a branch of The PrivateBank in our Atlanta market and the acquisition of Alarion Bank, which provided for our entry into the Gainesville market and expanded our presence in Ocala. Additionally, we continue to see solid growth in our mortgage lending business. Together, these factors helped drive attractive earnings growth for the Company in the first quarter of 2015.
"Another area in which we have made important headway during 2015 is with our previously announced merger with Renasant Bank," Dorminey continued. "Both companies have scheduled special meetings of stockholders for June 16, 2015, to consider and approve the merger, and we currently expect to mail proxy materials for that meeting to stockholders on or about May 1, 2015. Pending stockholder approvals, and other conditions set forth in the merger agreement, we expect the merger to close during the third quarter of 2015."
Dorminey noted that the Company's Board of Directors has declared a regular quarterly cash dividend of $0.07 per share, which will be paid on May 22, 2015, to stockholders of record as of May 8, 2015.
First Quarter 2015 Results of Operations
The $1.4 million increase in reported quarterly earnings for the first quarter of 2015 compared with the linked-quarter resulted primarily from the following items:
- Increased net interest income of $976,000;
- Growth in revenue from mortgage banking activities of $3.1 million;
- Decreased acquisition-related expenses of $173,000; offset by
- Increased salaries and employee benefits of $1.1 million, driven primarily by mortgage banking expansion;
- Decreased gain on sales of securities of $190,000; and
- Decreased service charges on deposit accounts of $243,000.
The $2.5 million increase in reported quarterly earnings for the first quarter of 2015 compared with the year-earlier quarter primarily reflected the following items:
- Increased salaries and employee benefits of $7.1 million due primarily to personnel additions related to mortgage banking expansion and the Alarion merger;
- Increased equipment and occupancy expense of $709,000; offset by
- Growth in revenue from mortgage banking activities of $8.9 million; and
- Increased net interest income of $4.5 million.
Net interest income for the first quarter of 2015 increased 32% to $18.4 million from $14.0 million in the year-earlier quarter, primarily reflecting an increase in interest-earning assets related to acquisitions, mortgage and organic growth. The Company's net interest margin was 4.80% for the first quarter of 2015, an increase of 13 basis points from 4.67% for the year-earlier period. The increase in the net interest margin for the first quarter of 2015 compared with the year-earlier quarter was driven by a decline in the yield on interest-bearing liabilities of 14 basis points, reflecting lower cost of deposits and borrowings. Excluding acquired credit impaired loan discount adjustments from the net interest margin, the core net interest margin was 3.60% for the first quarter of 2015, an improvement of 37 basis points from 3.23% for the year-earlier quarter.
In the first quarter of 2015, the Company continued to achieve loan growth, with its non-acquired loan portfolio increasing $7.3 million organically on a linked-quarter basis and advancing $104.5 million overall compared with the year-earlier quarter. For the first quarter of 2015, the Company's loan portfolio, including acquired loans, totaled $1.104 billion, increasing $28.8 million on a linked-quarter basis from $1.075 billion and $303.4 million from $800.1 million compared with the year-earlier quarter, driven primarily by the Alarion merger and to a lesser extent The PrivateBank branch acquisition and organic loan growth. The organic loan growth from the linked-quarter reflected primarily growth in the Gainesville/Ocala, Macon, Birmingham, Auburn/Columbus, and Atlanta markets. Total deposits stood at $1.394 billion at the end of the first quarter of 2015, up 5% from $1.322 billion on a linked-quarter basis, and up 24% from $1.127 billion for the year-earlier quarter, driven primarily by the Alarion merger and The PrivateBank branch acquisition.
For the first quarter of 2015, the Company's loans held for sale totaled $233.5 million, increasing $72.4 million or 45% on a linked-quarter basis from $161.1 million, and increasing $107.0 million or 85% from $126.4 million compared with the year-earlier quarter. The increase in the loans held for sale is due to the increase in mortgage loan production. Total mortgage production for the first quarter was $448.1 million, up 30% on a linked-quarter basis from $344.7 million and up 231% from $135.5 million compared with the year-earlier quarter.
Noninterest income for the first quarter of 2015 improved 234% to $11.7 million from $3.5 million in the year-earlier quarter, primarily reflecting increases in revenue from mortgage banking activities of $8.9 million. Noninterest expense for the first quarter of 2015 increased 56% to $24.1 million from $15.5 million in the year-earlier quarter, driven primarily by increases in salaries and employee benefits of $7.1 million related to the expansion of the mortgage division and the Alarion merger.
Asset Quality
Total nonperforming assets, excluding acquired assets, increased to $7.5 million, or 0.41% of total assets compared with $6.7 million or 0.39% of total assets, for the linked-quarter and declined from $10.3 million or 0.73% of total assets for the year-earlier quarter. Annualized net charge-offs to average outstanding loans, excluding acquired loans, were 0.04% for the first quarter of 2015 compared with annualized net charge-offs of 0.07% for the linked-quarter and annualized net recoveries of 0.01% for the year-earlier quarter. Nonperforming loans, excluding acquired loans, totaled $5.6 million for the first quarter of 2015, down from $6.1 million for the linked-quarter and down from $9.2 million for the year-earlier quarter. Other real estate owned and repossessed assets, excluding acquired assets, totaled $2.0 million for the first quarter of 2015, up from $577,000 for the linked-quarter and from $1.1 million for the year-earlier quarter.
The provision for loan losses on non-acquired loans decreased to $75,000 for the first quarter of 2015 from $285,000 for the linked-quarter, primarily driven by lower loan growth, but increased from $65,000 for the year-earlier quarter. For the first quarter of 2015, the allowance for loan losses represented 1.24% of total loans outstanding, excluding acquired loans, versus 1.25% for the linked quarter and 1.30% for the year-earlier quarter.
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 36 banking locations, 21 mortgage offices, and 5 investment offices. As of March 31, 2015, the Company reported total assets of approximately $1.8 billion and total stockholders' equity of approximately $164 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 such as "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 2014 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, | December 31, | |||||||||||
| 2015 | 2014 | 2014 | ||||||||||
| Total noninterest income | $ | 11,657 | $ | 3,487 | $ | 9,551 | ||||||
| Gain on sale of securities | – | – | (190 | ) | ||||||||
| Gain on acquisitions | – | – | – | |||||||||
| Adjusted noninterest income | $ | 11,657 | $ | 3,487 | $ | 9,361 | ||||||
| Total noninterest expense | $ | 24,100 | $ | 15,476 | $ | 23,165 | ||||||
| Acquisition-related expenses | (253 | ) | (52 | ) | (426 | ) | ||||||
| Impairment loss on assets held for sale | – | – | (172 | ) | ||||||||
Realized loss on the disposition of assets held for sale | – | – | (6 | ) | ||||||||
Accrual of FDIC acquisitions estimated clawback liability | (11 | ) | (543 | ) | (191 | ) | ||||||
| Adjusted noninterest expense | $ | 23,836 | $ | 14,881 | $ | 22,370 | ||||||
| Net income as reported | $ | 3,884 | $ | 1,343 | $ | 2,494 | ||||||
| Total adjustments, net of tax* | 91 | 441 | 422 | |||||||||
| Adjusted net income | $ | 3,975 | $ | 1,784 | $ | 2,916 | ||||||
| Diluted earnings per share | $ | 0.43 | $ | 0.18 | $ | 0.28 | ||||||
| Total adjustments, net of tax* | 0.01 | 0.06 | 0.04 | |||||||||
| Adjusted diluted earnings per share | $ | 0.44 | $ | 0.24 | $ | 0.32 | ||||||
* 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. | ||||||||||||
| Heritage Financial Group, Inc. and Subsidiary | ||||||||
| Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| (Dollars in thousands) | ||||||||
| (Unaudited) | ||||||||
| March 31, | December 31, | |||||||
| 2015 | 2014* | |||||||
ASSETS | ||||||||
| Cash and due from banks | $ | 31,947 | $ | 29,107 | ||||
| Interest-bearing deposits in banks | 3,419 | 6,135 | ||||||
| Federal funds sold | 979 | 141 | ||||||
| Cash and cash equivalents | 36,345 | 35,383 | ||||||
| Securities available for sale, at fair value | 262,856 | 269,678 | ||||||
| Federal Home Loan Bank stock, at cost | 9,139 | 8,510 | ||||||
| Other equity securities, at cost | 1,010 | 1,010 | ||||||
| Loans held for sale | 233,466 | 161,104 | ||||||
| Loans: | ||||||||
| Non-acquired loans | 807,101 | 799,793 | ||||||
| Acquired non-credit impaired loans | 182,213 | 156,513 | ||||||
| Acquired credit impaired loans non-covered | 84,123 | 86,763 | ||||||
| Acquired credit impaired loans covered | 40,834 | 42,404 | ||||||
| Less allowance for non-acquired loans | 10,010 | 10,034 | ||||||
| Loans, net | 1,104,261 | 1,075,439 | ||||||
| Non-acquired other real estate owned | 1,951 | 577 | ||||||
| Acquired non-covered other real estate owned | 2,623 | 2,721 | ||||||
| Acquired covered other real estate owned | 4,714 | 5,107 | ||||||
| Total other real estate owned | 9,288 | 8,405 | ||||||
| FDIC loss-share receivable | 20,170 | 23,837 | ||||||
| Premises and equipment, net | 49,810 | 50,041 | ||||||
| Goodwill and intangible assets | 24,889 | 18,177 | ||||||
| Cash surrender value of bank owned life insurance | 25,114 | 24,931 | ||||||
| Other assets | 31,480 | 29,100 | ||||||
| Total assets | $ | 1,807,828 | $ | 1,705,615 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Non-interest-bearing deposits | $ | 253,811 | $ | 217,869 | ||||
| Interest-bearing deposits | 1,140,300 | 1,104,240 | ||||||
| Total deposits | 1,394,111 | 1,322,109 | ||||||
| Federal funds purchased | ||||||||
| Federal funds purchased and securities sold under repurchase agreements | 41,128 | 43,339 | ||||||
| Other borrowings | 181,981 | 159,247 | ||||||
| Other liabilities | 26,750 | 20,902 | ||||||
| Total liabilities | 1,643,970 | 1,545,597 | ||||||
| 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; 9,239,498 and 9,238,973 shares issued and outstanding, respectively | 92 | 92 | ||||||
| Capital surplus | 106,331 | 105,965 | ||||||
| Retained earnings | 66,527 | 63,289 | ||||||
| Accumulated other comprehensive loss, net of tax of $4,277 and $4,333, respectively | (6,415 | ) | (6,500 | ) | ||||
| Unearned employee stock ownership plan (ESOP), 265,909 and 279,234 shares, respectively | (2,677 | ) | (2,828 | ) | ||||
| Total shareholders' equity | 163,858 | 160,018 | ||||||
| Total liabilities & shareholders' equity | $ | 1,807,828 | $ | 1,705,615 | ||||
* 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 | ||||||||
| March 31, | March 31, | |||||||
| 2015 | 2014 | |||||||
Interest income: | ||||||||
| Interest and fees on loans | $ | 17,376 | $ | 13,350 | ||||
| Interest on loans held for sale | 1,730 | 1,025 | ||||||
| Interest on taxable securities | 958 | 1,206 | ||||||
| Interest on nontaxable securities | 351 | 354 | ||||||
| Interest on federal funds sold | 2 | 1 | ||||||
| Interest on deposits in other banks | 12 | 19 | ||||||
| Total interest income | 20,429 | 15,955 | ||||||
Interest expense: | ||||||||
| Interest on deposits | 1,202 | 1,140 | ||||||
| Interest on other borrowings | 778 | 844 | ||||||
| Total interest expense | 1,980 | 1,984 | ||||||
| Net interest income | 18,449 | 13,971 | ||||||
| Provision for loan losses | 75 | 170 | ||||||
| Net interest income after provision for loan losses | 18,374 | 13,801 | ||||||
Noninterest income: | ||||||||
| Service charges on deposit accounts | 1,386 | 1,443 | ||||||
| Bankcard services income | 923 | 889 | ||||||
| Other service charges, commissions and fees | 261 | 162 | ||||||
| Brokerage fees | 597 | 566 | ||||||
| Mortgage banking activities | 11,080 | 2,166 | ||||||
| Bank-owned life insurance | 182 | 189 | ||||||
| Accretion of FDIC loss-share receivable | (2,883 | ) | (2,031 | ) | ||||
| Other | 111 | 103 | ||||||
| Total noninterest income | 11,657 | 3,487 | ||||||
Noninterest expense: | ||||||||
| Salaries and employee benefits | 15,654 | 8,580 | ||||||
| Equipment and occupancy | 2,704 | 1,995 | ||||||
| Advertising and marketing | 392 | 228 | ||||||
| Professional fees | 272 | 451 | ||||||
| Information services expenses | 1,594 | 1,200 | ||||||
| Net loss on sales and write-downs of other real estate owned | 123 | 318 | ||||||
| Net gain on sales and write-downs of acquired other real estate owned | (98 | ) | (264 | ) | ||||
| Foreclosed asset expenses | 113 | 87 | ||||||
| Foreclosed acquired asset expenses | 120 | 333 | ||||||
| FDIC insurance and other regulatory fees | 334 | 244 | ||||||
| Acquisition related expenses | 253 | 52 | ||||||
| Deposit intangible expenses | 321 | 196 | ||||||
| FDIC loss-share clawback expenses | 11 | 543 | ||||||
| Other operating expenses | 2,307 | 1,513 | ||||||
| Total noninterest expense | 24,100 | 15,476 | ||||||
| Income before income taxes | 5,931 | 1,812 | ||||||
| Applicable income tax | 2,047 | 469 | ||||||
| Net income | $ | 3,884 | $ | 1,343 | ||||
Earnings per common share: | ||||||||
| Basic earnings per share | $ | 0.44 | $ | 0.18 | ||||
| Diluted earnings per share | $ | 0.43 | $ | 0.18 | ||||
Weighted average-common shares outstanding: | ||||||||
| Basic | 8,889,252 | 7,422,044 | ||||||
| Diluted | 9,117,388 | 7,581,775 | ||||||
| Heritage Financial Group, Inc. and Subsidiary | ||||||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in thousands except share and per share data) | ||||||||||||||||||||
| Five Quarter Comparison | ||||||||||||||||||||
| 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | 3/31/2014 | ||||||||||||||||
Interest income: | ||||||||||||||||||||
| Interest and fees on loans | $ | 17,376 | $ | 16,372 | $ | 14,901 | $ | 14,730 | $ | 13,350 | ||||||||||
| Interest on loans held for sale | 1,730 | 1,759 | 1,493 | 1,466 | 1,025 | |||||||||||||||
| Interest on taxable securities | 958 | 1,143 | 1,180 | 1,215 | 1,206 | |||||||||||||||
| Interest on nontaxable securities | 351 | 380 | 381 | 368 | 354 | |||||||||||||||
| Interest on federal funds sold | 2 | 2 | 2 | 1 | 1 | |||||||||||||||
| Interest on deposits in other banks | 12 | 14 | 20 | 30 | 19 | |||||||||||||||
| Total interest income | 20,429 | 19,670 | 17,977 | 17,810 | 15,955 | |||||||||||||||
Interest expense: | ||||||||||||||||||||
| Interest on deposits | 1,202 | 1,337 | 1,192 | 1,176 | 1,140 | |||||||||||||||
| Interest on other borrowings | 778 | 860 | 856 | 860 | 844 | |||||||||||||||
| Total interest expense | 1,980 | 2,197 | 2,048 | 2,036 | 1,984 | |||||||||||||||
| Net interest income | 18,449 | 17,473 | 15,929 | 15,774 | 13,971 | |||||||||||||||
| Provision for loan losses - non-acquired | 75 | 285 | 575 | 510 | 65 | |||||||||||||||
| Provision for loan losses - acquired covered | - | - | 65 | 25 | - | |||||||||||||||
| Provision for loan losses - acquired non-covered | - | - | - | (61 | ) | 105 | ||||||||||||||
| Net interest income after provision for loan losses | 18,374 | 17,188 | 15,289 | 15,300 | 13,801 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||
| Service charges on deposit accounts | 1,386 | 1,629 | 1,612 | 1,503 | 1,443 | |||||||||||||||
| Bankcard services income | 923 | 950 | 919 | 941 | 889 | |||||||||||||||
| Other service charges, commissions and fees | 261 | 185 | 178 | 154 | 162 | |||||||||||||||
| Brokerage fees | 597 | 611 | 644 | 615 | 566 | |||||||||||||||
| Mortgage banking activities | 11,080 | 7,946 | 6,723 | 5,026 | 2,166 | |||||||||||||||
| Bank-owned life insurance | 182 | 182 | 190 | 187 | 189 | |||||||||||||||
| Gain on sales of securities | - | 190 | 628 | 138 | - | |||||||||||||||
| Accretion of FDIC loss-share receivable | (2,883 | ) | (2,349 | ) | (2,669 | ) | (3,377 | ) | (2,031 | ) | ||||||||||
| Other | 111 | 207 | 49 | 99 | 103 | |||||||||||||||
| Total noninterest income | 11,657 | 9,551 | 8,274 | 5,286 | 3,487 | |||||||||||||||
Noninterest expense: | ||||||||||||||||||||
| Salaries and employee benefits | 15,654 | 14,559 | 11,382 | 10,310 | 8,580 | |||||||||||||||
| Equipment and occupancy | 2,704 | 2,589 | 2,234 | 2,153 | 1,995 | |||||||||||||||
| Advertising and marketing | 392 | 359 | 288 | 221 | 228 | |||||||||||||||
| Professional fees | 272 | 472 | 446 | 523 | 451 | |||||||||||||||
| Information services expenses | 1,594 | 1,404 | 1,080 | 1,150 | 1,200 | |||||||||||||||
| Net loss on sales and write-downs of other real estate owned | 123 | 92 | 8 | 107 | 318 | |||||||||||||||
| Net (gain) loss on sales and write-downs of acquired other real estate owned | (98 | ) | (216 | ) | (37 | ) | 173 | (264 | ) | |||||||||||
| Foreclosed asset expenses | 113 | 45 | 77 | 82 | 87 | |||||||||||||||
| Foreclosed acquired asset expenses | 120 | 331 | 217 | 285 | 333 | |||||||||||||||
| FDIC insurance and other regulatory fees | 334 | 332 | 274 | 299 | 244 | |||||||||||||||
| Impairment loss on assets held for sale | - | 172 | - | - | - | |||||||||||||||
| Acquisition related expenses | 253 | 426 | 2,543 | 101 | 52 | |||||||||||||||
| Deposit intangible expenses | 321 | 305 | 186 | 192 | 196 | |||||||||||||||
| FDIC loss-share clawback expenses | 11 | 191 | (35 | ) | 882 | 543 | ||||||||||||||
| Other operating expenses | 2,307 | 2,104 | 1,934 | 1,638 | 1,513 | |||||||||||||||
| Total noninterest expense | 24,100 | 23,165 | 20,597 | 18,116 | 15,476 | |||||||||||||||
| Income before income taxes | 5,931 | 3,574 | 2,966 | 2,470 | 1,812 | |||||||||||||||
| Applicable income tax | 2,047 | 1,080 | 1,007 | 698 | 469 | |||||||||||||||
| Net income | $ | 3,884 | $ | 2,494 | $ | 1,959 | $ | 1,772 | $ | 1,343 | ||||||||||
Earnings per common share: | ||||||||||||||||||||
| Basic earnings per share | $ | 0.44 | $ | 0.28 | $ | 0.26 | $ | 0.24 | $ | 0.18 | ||||||||||
| Diluted earnings per share | $ | 0.43 | $ | 0.28 | $ | 0.26 | $ | 0.23 | $ | 0.18 | ||||||||||
| Dividends | $ | 0.07 | $ | 0.07 | $ | 0.07 | $ | 0.07 | $ | 0.07 | ||||||||||
Weighted average-common shares outstanding: | ||||||||||||||||||||
| Basic | 8,889,252 | 8,826,740 | 7,485,528 | 7,436,717 | 7,422,044 | |||||||||||||||
| Diluted | 9,117,388 | 9,057,258 | 7,676,233 | 7,607,501 | 7,581,775 | |||||||||||||||
Other Financial Items: | ||||||||||||||||||||
| Fixed compensation | $ | 6,677 | $ | 6,841 | $ | 5,787 | $ | 5,431 | $ | 5,092 | ||||||||||
| Variable compensation | $ | 5,097 | $ | 4,201 | $ | 3,321 | $ | 3,074 | $ | 1,617 | ||||||||||
| Employee benefits and taxes | $ | 3,880 | $ | 3,517 | $ | 2,274 | $ | 1,805 | $ | 1,871 | ||||||||||
| Heritage Financial Group, Inc. and Subsidiary | |||||||||||||||||||
| Condensed Average Balances, Interest Rates and Yields | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Three Months Ended December 31, | |||||||||||||||||||
| 2014 | 2013 | ||||||||||||||||||
| Average | Average | Average | Average | ||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||
Interest-earning assets: | |||||||||||||||||||
| Loans(1)(2) | $ | 1,286,665 | $ | 19,108 | 6.02 | % | $ | 903,153 | $ | 14,379 | 6.46 | % | |||||||
| Investment securities (2) | 267,574 | 1,429 | 2.17 | % | 301,407 | 1,680 | 2.26 | % | |||||||||||
| Other short-term investments | 13,930 | 14 | 0.41 | % | 20,715 | 20 | 0.39 | % | |||||||||||
| Total interest-earning assets | 1,568,169 | 20,551 | 5.31 | % | 1,225,275 | 16,079 | 5.32 | % | |||||||||||
| Non-interest earning assets | 193,889 | 163,312 | |||||||||||||||||
| Total assets | $ | 1,762,058 | $ | 1,388,587 | |||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
Deposits: | |||||||||||||||||||
| Interest checking, money market and savings | $ | 670,843 | $ | 385 | 0.23 | % | $ | 555,828 | $ | 327 | 0.24 | % | |||||||
| Time deposits | 473,479 | 814 | 0.70 | % | 382,486 | 813 | 0.86 | % | |||||||||||
| Total interest-bearing deposits | 1,144,322 | 1,199 | 0.42 | % | 938,314 | 1,140 | 0.49 | % | |||||||||||
Federal funds purchased and securities sold under repurchase agreements | 42,860 | 290 | 2.74 | % | 35,977 | 329 | 3.70 | % | |||||||||||
| Other borrowings | 149,631 | 487 | 1.32 | % | 119,413 | 515 | 1.75 | % | |||||||||||
| Total interest-bearing liabilities | 1,336,813 | 1,976 | 0.60 | % | 1,093,704 | 1,984 | 0.74 | % | |||||||||||
Non-interest bearing liabilities: | |||||||||||||||||||
| Demand deposits | 237,896 | 158,583 | |||||||||||||||||
| Other liabilities | 25,061 | 8,475 | |||||||||||||||||
| Total non-interest bearing liabilities | 262,957 | 167,058 | |||||||||||||||||
| Total liabilities | 1,599,770 | 1,260,762 | |||||||||||||||||
| Shareholders' equity | 162,288 | 127,825 | |||||||||||||||||
| Total liabilities & shareholders' equity | $ | 1,762,058 | $ | 1,388,587 | |||||||||||||||
| Net interest income | $ | 18,575 | $ | 14,095 | |||||||||||||||
| Interest rate spread | 4.72 | % | 4.59 | % | |||||||||||||||
Net yield on interest-earning assets (net interest margin) | 4.80 | % | 4.67 | % | |||||||||||||||
| Core net interest margin (non-GAAP): | |||||||||||||||||||
| Loans(1)(2) | $ | 1,286,665 | $ | 19,108 | 6.02 | % | $ | 903,153 | $ | 14,379 | 6.46 | % | |||||||
| Acquired credit impaired loan discount adjustments(3) | 48,129 | 4,246 | 35.78 | % | 61,056 | 3,850 | 25.57 | % | |||||||||||
| Adjusted loans | 1,334,794 | 14,862 | 4.52 | % | 964,209 | 10,529 | 4.43 | % | |||||||||||
| Adjusted total interest-earning assets | $ | 1,616,298 | 16,305 | 4.09 | % | $ | 1,286,331 | 12,229 | 3.86 | % | |||||||||
| Total interest-bearing liabilities | $ | 1,336,813 | 1,976 | 0.60 | % | $ | 1,093,704 | 1,984 | 0.74 | % | |||||||||
| Core net interest income | $ | 14,329 | $ | 10,245 | |||||||||||||||
| Core interest rate spread | 3.49 | % | 3.12 | % | |||||||||||||||
Core net yield on interest-earning assets (net interest margin non-GAAP) | 3.60 | % | 3.23 | % | |||||||||||||||
(1) | Average loan balances includes nonaccrual loans for the periods presented. | ||||||||||||||||||
(2) | Fully Taxable Equivalent (“FTE”) at the rate of 34%. The FTE basis adjusts for the tax benefits of income on certain tax-exempt loans and investments using the federal statutory rate of 34% for each period presented. The Company believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts. | ||||||||||||||||||
(3) | Acquired credit impaired loan discount adjustments include the reduction of interest income for discount accretion excluding contractual interest payments and the increase of core loans for the total balance of acquired credit impaired loan discounts. | ||||||||||||||||||
| Heritage Financial Group, Inc. and Subsidiary | |||||||||||||||
| Consolidated Financial Highlights | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (Dollars in thousands except share and per share data) | |||||||||||||||
| Five Quarter Comparison | |||||||||||||||
Financial Condition Data: | 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | 3/31/2014 | ||||||||||
| Total loans | $ | 1,114,271 | $ | 1,085,473 | $ | 1,069,108 | $ | 845,101 | $ | 810,028 | |||||
| Loans held for sale | 233,466 | 161,104 | 147,867 | 127,186 | 126,436 | ||||||||||
| Acquired credit impaired loans covered | 40,834 | 86,763 | 42,447 | 43,442 | 47,684 | ||||||||||
| Allowance for loan losses | 10,010 | 10,034 | 9,916 | 9,457 | 9,145 | ||||||||||
| Total other real estate owned | 9,288 | 8,405 | 9,225 | 7,710 | 8,727 | ||||||||||
| Acquired other real estate owned covered | 4,714 | 5,107 | 5,281 | 5,865 | 6,095 | ||||||||||
| FDIC loss-share receivable | 20,170 | 23,837 | 27,929 | 33,239 | 37,637 | ||||||||||
| Goodwill and intangible assets | 24,889 | 18,177 | 16,702 | 5,786 | 4,757 | ||||||||||
| Total assets | 1,807,828 | 1,705,614 | 1,755,534 | 1,487,431 | 1,413,540 | ||||||||||
| Non-interest-bearing deposits | 253,811 | 217,869 | 199,336 | 168,666 | 163,090 | ||||||||||
| Interest-bearing deposits | 1,140,300 | 1,104,240 | 1,141,925 | 1,040,134 | 963,564 | ||||||||||
| Other borrowings | 181,981 | 159,247 | 190,440 | 100,789 | 116,127 | ||||||||||
Federal funds purchased and securities sold under agreement to repurchase | 41,128 | 43,339 | 42,815 | 35,350 | 33,785 | ||||||||||
| Stockholders' equity | 163,858 | 160,017 | 159,948 | 131,660 | 127,984 | ||||||||||
| Total shares outstanding | 9,239,498 | 9,238,973 | 9,183,574 | 7,851,296 | 7,834,517 | ||||||||||
| Unearned ESOP shares | 265,908 | 279,234 | 292,559 | 305,885 | 319,210 | ||||||||||
| Total shares outstanding net of unearned ESOP | 8,973,590 | 8,959,739 | 8,891,015 | 7,545,411 | 7,515,307 | ||||||||||
| Book value per share | $ | 18.26 | $ | 17.86 | $ | 17.99 | $ | 17.45 | $ | 17.03 | |||||
| Book value per share including unearned ESOP (non-GAAP) | 17.73 | 17.32 | 17.42 | 16.77 | 16.34 | ||||||||||
| Tangible book value per share (non-GAAP) | 15.49 | 15.83 | 16.11 | 16.68 | 16.40 | ||||||||||
Tangible book value per share including unearned ESOP (non-GAAP) | 15.04 | 15.35 | 15.60 | 16.03 | 15.73 | ||||||||||
| Market value per share | 27.23 | 25.90 | 20.19 | 19.83 | 19.65 | ||||||||||
| Five Quarter Comparison | ||||||||||||||||||||
| 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | 3/31/2014 | ||||||||||||||||
Key Financial Ratios and other information: | ||||||||||||||||||||
| Performance Ratios | ||||||||||||||||||||
| Annualized return on average assets | 0.89 | % | 0.57 | % | 0.52 | % | 0.49 | % | 0.39 | % | ||||||||||
| Annualized return on average equity | 9.71 | % | 6.10 | % | 5.82 | % | 5.42 | % | 4.26 | % | ||||||||||
| Net interest margin | 4.80 | % | 4.48 | % | 4.80 | % | 4.92 | % | 4.66 | % | ||||||||||
| Net interest spread | 4.72 | % | 4.40 | % | 4.72 | % | 4.84 | % | 4.59 | % | ||||||||||
| Core net interest margin | 3.60 | % | 3.44 | % | 3.29 | % | 3.34 | % | 3.23 | % | ||||||||||
| Core net interest spread | 3.49 | % | 3.35 | % | 3.19 | % | 3.23 | % | 3.12 | % | ||||||||||
| Efficiency ratio | 77.81 | % | 83.15 | % | 84.80 | % | 82.07 | % | 84.20 | % | ||||||||||
| Capital Ratios | ||||||||||||||||||||
| Average stockholders' equity to average assets | 9.0 | % | 9.3 | % | 9.0 | % | 9.0 | % | 9.2 | % | ||||||||||
| Tangible equity to tangible assets (non-GAAP) | 7.8 | % | 8.4 | % | 8.2 | % | 8.5 | % | 8.7 | % | ||||||||||
| Tier 1 leverage ratio | 8.3 | % | 8.8 | % | 10.3 | % | 9.1 | % | 9.0 | % | ||||||||||
| Tier 1 risk-based capital ratio | 11.6 | % | 12.2 | % | 12.0 | % | 13.0 | % | 12.8 | % | ||||||||||
| Total risk-based capital ratio | 12.4 | % | 13.0 | % | 12.8 | % | 14.0 | % | 13.8 | % | ||||||||||
| Other Information | ||||||||||||||||||||
| Full-time equivalent employees | 579 | 568 | 586 | 490 | 455 | |||||||||||||||
| Banking | 337 | 343 | 371 | 312 | 305 | |||||||||||||||
| Mortgage | 236 | 219 | 209 | 171 | 143 | |||||||||||||||
| Investments | 6 | 6 | 6 | 7 | 7 | |||||||||||||||
| Number of banking offices | 36 | 36 | 36 | 29 | 29 | |||||||||||||||
| Mortgage loan offices | 21 | 21 | 20 | 15 | 15 | |||||||||||||||
| Investment offices | 5 | 5 | 5 | 5 | 5 | |||||||||||||||
| Heritage Financial Group, Inc. and Subsidiary | |||||||||||||||
| Consolidated Financial Highlights | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||
| Five Quarter Comparison | |||||||||||||||
Loans | 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | 3/31/2014 | ||||||||||
| Construction and land | $ | 87,844 | $ | 81,547 | $ | 73,137 | $ | 57,863 | $ | 53,138 | |||||
| Farmland | 26,810 | 26,821 | 29,441 | 28,502 | 30,116 | ||||||||||
| Permanent 1 - 4 | 182,258 | 180,692 | 176,191 | 174,026 | 173,581 | ||||||||||
| Permanent 1 - 4 - junior liens and revolving | 42,665 | 40,741 | 39,694 | 35,827 | 34,661 | ||||||||||
| Multifamily | 28,706 | 29,309 | 28,742 | 26,436 | 25,718 | ||||||||||
| Nonresidential | 298,022 | 286,992 | 284,218 | 277,295 | 262,753 | ||||||||||
| Commercial business | 116,696 | 120,933 | 121,073 | 116,926 | 101,696 | ||||||||||
| Consumer and other | 24,100 | 32,758 | 21,612 | 27,918 | 20,907 | ||||||||||
| Total non-acquired loans | $ | 807,101 | $ | 799,793 | $ | 774,108 | $ | 744,793 | $ | 702,570 | |||||
| Allowance for non-acquired loans | 10,010 | 10,034 | 9,916 | 9,457 | 9,145 | ||||||||||
| Net non-acquired loans | $ | 797,091 | $ | 789,759 | $ | 764,192 | $ | 735,336 | $ | 693,425 | |||||
| Acquired non-credit impaired loans | 182,213 | 156,513 | 160,502 | - | - | ||||||||||
| Acquired credit impaired non-covered | 84,123 | 86,763 | 92,051 | 56,866 | 59,774 | ||||||||||
| Acquired credit impaired covered | 40,834 | 42,404 | 42,447 | 43,442 | 47,684 | ||||||||||
| Total acquired credit impaired loans | 124,957 | 129,167 | 134,498 | 100,308 | 107,458 | ||||||||||
| Net loans | $ | 1,104,261 | $ | 1,075,439 | $ | 1,059,192 | $ | 835,644 | $ | 800,883 | |||||
Loan Balances by Geographical Region (excluding acquired loans): | ||||||||||||||||
| Five Quarter Comparison | ||||||||||||||||
| 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | 3/31/2014 | ||||||||||||
| Albany | $ | 309,399 | $ | 325,697 | $ | 314,875 | $ | 321,566 | $ | 302,664 | ||||||
| Valdosta | 99,739 | 100,873 | 102,751 | 103,231 | 103,479 | |||||||||||
| Ocala | 72,657 | 62,719 | 64,678 | 55,231 | 57,322 | |||||||||||
| Statesboro | 129,249 | 133,669 | 135,861 | 128,421 | 121,636 | |||||||||||
| Auburn/Columbus | 47,928 | 45,766 | 41,092 | 36,023 | 36,171 | |||||||||||
| Macon | 103,899 | 94,305 | 86,041 | 80,323 | 75,722 | |||||||||||
| Birmingham | 24,369 | 20,243 | 14,798 | 10,834 | 2,091 | |||||||||||
| South Atlanta | 19,861 | 16,521 | 14,012 | 9,164 | 3,485 | |||||||||||
| $ | 807,101 | $ | 799,793 | $ | 774,108 | $ | 744,793 | $ | 702,570 | |||||||
| Heritage Financial Group, Inc. and Subsidiary | ||||||||||||||||||||
| Consolidated Financial Highlights | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
Asset Quality Data (excluding acquired loans): | Five Quarter Comparison | |||||||||||||||||||
| 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | 3/31/2014 | ||||||||||||||||
| Nonaccrual loans | $ | 5,550 | $ | 6,083 | $ | 6,895 | $ | 7,003 | $ | 9,245 | ||||||||||
| Loans - 90 days past due & still accruing | - | - | - | - | - | |||||||||||||||
| Total non-performing loans | 5,550 | 6,083 | 6,895 | 7,003 | 9,245 | |||||||||||||||
| OREO | 1,951 | 577 | 648 | 507 | 1,104 | |||||||||||||||
| Total non-performing assets | $ | 7,501 | $ | 6,660 | $ | 7,543 | $ | 7,510 | $ | 10,349 | ||||||||||
| Trouble debt restructuring - nonaccrual | $ | 2,160 | $ | 3,074 | $ | 3,097 | $ | 3,426 | $ | 5,702 | ||||||||||
| Trouble debt restructuring - accruing | 5,548 | 5,594 | 4,683 | 4,392 | 1,968 | |||||||||||||||
| Total trouble debt restructuring | $ | 7,708 | $ | 8,668 | $ | 7,780 | $ | 7,818 | $ | 7,670 | ||||||||||
| Accruing past due loans | $ | 498 | $ | 1,805 | $ | 1,065 | $ | 752 | $ | 830 | ||||||||||
| Total criticized assets | $ | 27,065 | $ | 25,575 | $ | 23,737 | $ | 21,553 | $ | 22,026 | ||||||||||
| Total classified assets | $ | 18,168 | $ | 17,449 | $ | 19,280 | $ | 18,573 | $ | 18,717 | ||||||||||
| Allowance for loan losses | $ | 10,010 | $ | 10,034 | $ | 9,916 | $ | 9,457 | $ | 9,145 | ||||||||||
| Net charge-offs (recoveries) | $ | 99 | $ | 165 | $ | 117 | $ | 92 | $ | (20 | ) | |||||||||
Asset Quality Ratios: | ||||||||||||||||||||
| Allowance for loan losses to total non-acquired loans | 1.24 | % | 1.26 | % | 1.28 | % | 1.27 | % | 1.30 | % | ||||||||||
| Allowance for loan losses to average non-acquired loans | 1.02 | % | 1.02 | % | 1.30 | % | 1.31 | % | 1.32 | % | ||||||||||
| Allowance for loan losses to non-performing loans | 180.36 | % | 164.95 | % | 143.81 | % | 135.04 | % | 98.92 | % | ||||||||||
| Non-performing loans to total non-acquired loans | 0.69 | % | 0.76 | % | 0.89 | % | 0.94 | % | 1.32 | % | ||||||||||
| Non-performing assets to total assets | 0.41 | % | 0.39 | % | 0.43 | % | 0.50 | % | 0.73 | % | ||||||||||
Net charge-offs (recoveries) to average non-acquired loans (annualized) | 0.04 | % | 0.07 | % | 0.06 | % | 0.05 | % | -0.01 | % | ||||||||||
| Heritage Financial Group, Inc. and Subsidiary | ||||||||||||||||||||
| Consolidated Financial Highlights | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
Mortgage Segment Information | ||||||||||||||||||||
| Five Quarter Comparison | ||||||||||||||||||||
| 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | 3/31/2014 | ||||||||||||||||
| Net interest income | $ | 547 | $ | 887 | $ | 716 | $ | 924 | $ | 825 | ||||||||||
| Provision for loan losses | - | - | - | - | - | |||||||||||||||
| Noninterest income | 11,954 | 8,806 | 6,892 | 6,153 | 2,392 | |||||||||||||||
| Noninterest expense | 11,265 | 9,192 | 7,103 | 6,178 | 3,815 | |||||||||||||||
| Income tax expense (benefit) | 427 | 155 | 157 | 278 | (185 | ) | ||||||||||||||
| Mortgage profit (loss) | $ | 809 | $ | 346 | $ | 348 | $ | 621 | $ | (413 | ) | |||||||||
| Mortgage segment assets | $ | 260,566 | $ | 184,606 | $ | 158,277 | $ | 139,024 | $ | 136,662 | ||||||||||
Other Financial Items: | ||||||||||||||||||||
| Fixed compensation | $ | 2,030 | $ | 1,861 | $ | 1,594 | $ | 1,375 | $ | 1,106 | ||||||||||
| Variable compensation | $ | 7,219 | $ | 5,682 | $ | 3,433 | $ | 2,832 | $ | 1,402 | ||||||||||
Mortgage Segment Selected Other Information: | ||||||||||||||||||||
| Five Quarter Comparison | ||||||||||||||||||||
| 3/31/2015 | 12/31/2014 | 9/30/2014 | 6/30/2014 | 3/31/2014 | ||||||||||||||||
| Retail production | $ | 321,012 | $ | 255,822 | $ | 207,315 | $ | 187,669 | $ | 98,554 | ||||||||||
| Wholesale production | 127,078 | 88,913 | 85,294 | 62,228 | 36,941 | |||||||||||||||
| Total production | $ | 448,090 | $ | 344,735 | $ | 292,609 | $ | 249,897 | $ | 135,495 | ||||||||||
| Purchase as a % of total production | 59 | % | 77 | % | 78 | % | 84 | % | 80 | % | ||||||||||
| Refi as a % of total production | 41 | % | 23 | % | 22 | % | 16 | % | 20 | % | ||||||||||
| End of period locks | $ | 235,472 | $ | 176,262 | $ | 135,963 | $ | 117,940 | $ | 71,121 | ||||||||||
