Heritage Financial Group Inc (HBOS)

[Enterprising Investor]

Renasant Corporation and Heritage Financial Group, Inc. Announce Definitive Merger Agreement (12/10/14)

TUPELO, Miss. and ALBANY, Ga., Dec. 10, 2014 /PRNewswire/ -- Renasant Corporation (NASDAQ: RNST) and Heritage Financial Group, Inc. (NASDAQ: HBOS) jointly announced today the signing of a definitive merger agreement pursuant to which Renasant Corporation ("Renasant" or "the Company") will acquire, in an all-stock merger, Heritage Financial Group, Inc. ("Heritage"), a bank holding company headquartered in Albany, Georgia, and the parent of HeritageBank of the South ("HeritageBank"), a Georgia savings bank.

Upon completion of the transaction, the combined company will have approximately $7.5 billion in total assets, $5.2 billion in gross loans and $6.1 billion in deposits with 171 banking, mortgage, insurance, wealth management and investment offices in Mississippi, Alabama, Tennessee, Georgia and Florida. The transaction will add to Renasant approximately $1.9 billion in assets, $1.2 billion in loans and $1.3 billion in deposits, and 48 banking, mortgage and investment offices in Alabama, Georgia and Florida as of September 30, 2014, inclusive of Heritage's pending previously announced branch acquisition from The PrivateBank and Trust Company of a branch in Norcross, GA with $40 million in loans and $129 million in deposits.

The merger will solidify Renasant as one of the largest community banks operating in the Southeast with significant other business lines including insurance, mortgage and wealth management.

The transaction also enhances the Company's presence in the metro markets of Birmingham, AL and Atlanta, GA with minimal existing overlap while also providing entry into new markets, such as Albany, GA, Statesboro, GA, Savannah, GA, Auburn, AL, Ocala, FL and Gainesville, FL.

Additionally, the merger will provide a stable source of low-cost core deposits that are expected to support and enhance Renasant's future growth activities.

O. Leonard Dorminey, President and Chief Executive Officer of Heritage, said, "We are excited to partner with Renasant to provide enhanced value to our stockholders, clients, employees, and communities. This merger will provide greater resources and operational scale that will allow us to grow as part of a larger community bank. Renasant's strong fundamentals and superior service are consistent with our own culture. Their proven track record of profitable growth, ability to successfully execute acquisitions, and similar community bank culture makes Renasant an excellent choice for Heritage. We are confident that this merger will be positive for all of our constituents: our stockholders, clients, employees and communities."

Dorminey will join the Company as Executive Vice President of Renasant Corporation and will serve as the President of Renasant Bank's Georgia region. He has been with HeritageBank since 2001 and has served as President and CEO of Heritage since 2003. Dorminey began his career in banking as a lender more than 32 years ago.

According to the terms of the merger agreement, which has been approved by the Boards of Directors of both companies, Heritage stockholders will receive 0.9266 shares of Renasant common stock for each share of Heritage common stock, and the merger is expected to qualify as a tax-free reorganization for Heritage stockholders. Based on Renasant's 20-day average closing price of $29.14 per share as of December 9, 2014, the aggregate deal value is approximately $258 million or $27.00 per share. Under the proposed terms, the transaction is expected to be immediately accretive to Renasant's estimated earnings per share with the estimated tangible book value dilution being earned back in less than two years and an IRR which exceeds internal thresholds.

"This merger between Renasant and Heritage adds branch and mortgage locations to our legacy markets of Birmingham and Atlanta while providing for our entry into several attractive new markets in Alabama, Georgia and Florida," said Renasant Chairman and Chief Executive Officer, E. Robinson McGraw. "This merger will expand our market share, earnings growth and profitability and is expected to greatly benefit our current and future clients with expanded locations, services and products. Heritage is a community bank with a proven track record of success in serving their clients and communities, and we look forward to completing this acquisition."

The acquisition is expected to close during the third quarter of 2015 and is subject to Renasant and Heritage stockholder approval, regulatory approval and other conditions set forth in the merger agreement. Pursuant to the terms of the merger agreement, HeritageBank will merge with and into Renasant Bank immediately after the merger of Heritage with and into Renasant.

Renasant was advised by the investment banking firm of Raymond James & Associates, Inc., and the law firm of Phelps Dunbar LLP. Heritage was advised by the investment banking firm of Keefe, Bruyette & Woods and the law firm of Alston & Bird LLP.

Conference Call Information:

Renasant and Heritage will host an investor conference call and webcast on December 11, 2014, at 9:00 AM Eastern through http://services.choruscall.com/links/rnst141211.html.

The conference may be accessed via telephone by dialing 1-877-513-1143 in the United States and requesting the Renasant Corporation call. International participants should dial 1-412-902-4145. A presentation outlining this announcement will be available through the Company's IR site, www.renasant.com. The presentation will also be available through Heritage's website at www.eheritagebank.com. A replay of the conference call will be available by dialing 1-877-344-7529 in the U.S. or 1-412-317-0088 internationally and entering access code 10057355. The webcast can be replayed until December 11, 2015, from either the Company's or Heritage's website.

ABOUT RENASANT CORPORATION:

Renasant Corporation is the parent of Renasant Bank, a 110-year-old financial services institution, and Renasant Insurance. Renasant has assets of approximately $5.8 billion and operates more than 120 banking, mortgage, financial services and insurance offices in Mississippi, Tennessee, Alabama and Georgia.

ABOUT HERITAGE FINANCIAL GROUP, INC.:

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, 20 mortgage offices, and 5 investment offices.

Additional Information about the Renasant/Heritage Transaction

This communication is being made in respect of the proposed merger transaction involving Renasant and Heritage. In connection with the proposed merger, Renasant and Heritage will file a registration statement on Form S-4 that will include a joint proxy statement/prospectus, and other relevant documents concerning the proposed merger, with the Securities and Exchange Commission (the "SEC"). This release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT RENASANT, HERITAGE AND THE PROPOSED MERGER. When available, the joint proxy statement/prospectus will be mailed to shareholders of both Renasant and Heritage. Investors will also be able to obtain copies of the joint proxy statement/prospectus and other relevant documents (when they become available) free of charge at the SEC's website (www.sec.gov). In addition, documents filed with the SEC by Renasant will be available free of charge from Kevin Chapman, Chief Financial Officer, Renasant Corporation, 209 Troy Street, Tupelo, Mississippi 38804-4827, telephone: [phone]. Documents filed with the SEC by Heritage will be available free of charge from Heritage by contacting T. Heath Fountain, Chief Financial Officer, Heritage Financial Group, Inc., 721 N. Westover Blvd, Albany, Georgia, telephone: [phone].

Renasant, Heritage and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Renasant and Heritage in connection with the proposed merger. Information about the directors and executive officers of Renasant is included in the proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on March 11, 2014. Information about the directors and executive officers of Heritage is included in the proxy statement for its 2014 annual meeting of shareholders, which was filed with the SEC on April 25, 2014. Additional information regarding the interests of such participants and other persons who may be deemed participants in the transaction will be included in the joint proxy statement/prospectus and the other relevant documents filed with the SEC when they become available.

http://www.prnewswire.com/news-releases/renasant-corporation-and-heritage-financial-group-inc-announce-definitive-merger-agreement-300008091.html

[Enterprising Investor]

Heritage Financial Group, Inc. Reports Third Quarter Net Income Increases 48% to $2.0 Million or $0.26 Per Diluted Share (10/29/14)

Company Declares Quarterly Cash Dividend of $0.07 Per Share

http://www.businesswire.com/news/home/20141029006227/en/Heritage-Financial-Group-Reports-Quarter-Net-Income#.VFFRy4l0yUk

[Enterprising Investor]

Heritage Financial Group, Inc. Names Brian Schmitt EVP, Atlanta Market CEO and Director of Mergers & Acquisitions (10/16/14)

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. ("Heritage" or the "Company," NASDAQ: HBOS), the holding company for HeritageBank of the South ("HeritageBank"), today announced that it has named Brian D. Schmitt as Executive Vice President, Atlanta Market CEO and Director of Mergers & Acquisitions.

Prior to joining Heritage Financial Group, Schmitt, age 53, worked as an independent consultant to financial institutions. From 2006 to 2013, he served as President and CEO of The PrivateBank and Trust Company's Georgia division, where he oversaw all operations of the $350 million bank division. Before joining PrivateBank, he was President and CEO of the Piedmont Bank of Georgia from 2001 until the bank was acquired by PrivateBank in 2006. Other career responsibilities included serving as Senior Vice President of Branch Bank and Trust Company (BB&T), Executive Vice President of Premier Bank, and Vice President of Prime Bank, all based in Atlanta.

Schmitt will be based at the Company's metro Atlanta branch office in Norcross, Georgia, following the closing of Heritage Financial Group's previously announced acquisition of that branch from PrivateBank. That branch acquisition is expected to close in the fourth quarter of 2014, subject to regulatory approval and other customary conditions.

Commenting on the addition of Schmitt to the Company's management team, Leonard Dorminey, President and Chief Executive Officer of Heritage Financial Group, Inc., said, "We are pleased and fortunate to have someone of Brian's experience and Atlanta market expertise join our company. We consider this a further indication of the rising stature of HeritageBank as an employer of choice – an exciting opportunity and a career destination – for high-performing banking talent in the South. Brian brings with him deep market knowledge and a diverse background in mergers and acquisitions that we believe will help us better serve our customers, identify additional banks that offer a good fit with what we are accomplishing at HeritageBank, broaden our visibility in the market, and enhance our ability to continue to recruit capable commercial bankers."

About Heritage Financial Group

Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving Georgia, Florida and Alabama through 36 banking locations, 20 mortgage offices, and 5 investment offices. With the recent completion of the purchase of Alarion Financial Services, Inc., Heritage has approximately $1.8 billion in assets, $1.0 billion in loans, and $1.5 billion in deposits. For more information about the Company, visit HeritageBank of the South on the Web at www.eheritagebank.com under the "Investors" tab.

http://www.businesswire.com/news/home/20141016005098/en/Heritage-Financial-Group-Names-Brian-Schmitt-EVP#.VD_E84l0yUk

[Enterprising Investor]

Heritage Financial Group, Inc. Completes Acquisition of Alarion Financial Services, Inc.(10/01/14)

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. ("Heritage" or the "Company," NASDAQ: HBOS), the holding company for HeritageBank of the South ("HeritageBank"), announced that it completed its previously announced acquisition of Alarion Financial Services, Inc. ("Alarion") on September 30, 2014. Alarion was the holding company for Alarion Bank, which operated six branches in Ocala, Gainesville and Alachua (suburban Gainesville).

The Company's stockholders voted overwhelmingly at a special meeting on Monday to approve the transaction, valued at approximately $23.6 million. The acquisition was previously approved by Alarion's shareholders and the Company's banking regulators.

Commenting on the announcement, Leonard Dorminey, President and Chief Executive Officer of Heritage Financial Group, said, "We are pleased to complete this important step in the ongoing growth of our company. By tripling the number of branches we have in North Central Florida, this transaction expands our presence in the Ocala market and provides us with an initial entry into the Gainesville area. In addition, Alarion's strong mortgage banking operations will further support our strategic goal of expanding those services across our markets. We look forward to capitalizing on these opportunities and continuing to expand our business in North Central Florida."

The Company will issue approximately 1,337,000 shares of common stock in connection with the merger, including approximately 1,159,000 shares of common stock in exchange for 100% of the outstanding Alarion common stock. As a result of the merger, the Company assumed $6.84 million of Alarion's preferred stock. Immediately following the merger, the Company redeemed all of the preferred stock in exchange for $4.5 million in cash and approximately 178,000 shares of the Company's common stock. The transaction is expected to be immediately accretive to Heritage's fully diluted earnings per share, excluding deal costs.

Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving Georgia, Florida and Alabama through 36 banking locations, 20 mortgage offices, and 5 investment offices. With the completion of the Alarion transaction, Heritage has approximately $1.8 billion in assets, $1.0 billion in loans, and $1.5 billion in deposits. For more information about the Company, visit HeritageBank of the South on the Web at www.eheritagebank.com under the "Investors" tab.

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.

Contacts

Heritage Financial Group, Inc.
T. Heath Fountain, 229-878-2055
Executive Vice President and
Chief Financial Officer

http://www.businesswire.com/news/home/20141001005325/en/Heritage-Financial-Group-Completes-Acquisition-Alarion-Financial#.VCv3tYl0yUk

[Enterprising Investor]

ARFS previously traded at $3.80 on 4/14/14.

The shares rarely traded prior to the announcement and only in small volumes. In addition, it has only traded three days since: 4/22/14 (40,520 shares), 4/24/14 (59,000) and 4/25/14 (5,000).

[Enterprising Investor]

Looks good now.

Need to review again upon completion later in the year.

[56Chevy]

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. ("Heritage" or the "Company,") (NASDAQ: HBOS), the holding company for HeritageBank of the South ("HeritageBank"), today announced it has entered into a definitive agreement to acquire all of the common stock of Alarion Financial Services, Inc. ("Alarion"), the holding company for Alarion Bank, in a stock transaction valued at approximately $22.1 million.

Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, Alarion's shareholders will receive 0.44 shares of the Company's common stock for each share of Alarion common stock owned, resulting in the issuance of a total of approximately 1,159,000 shares in the exchange.

More than a double!

ARFS shareholders did real well in this merger. ARFS was selling for under $4 @ share prior to the acquisition announcement. Post acquisition ARFS shareholders received .44% of one HBOS share @ $19.20 = $8.45

Book value on ARFS at the time of the deal was $6.60...which means HBOS paid book value plus a 28% premium. Very nice!

https://alarionbank.com/news/articles/alarion-bank-agrees-to-merge-with-heritagebank-of-the-south

Congrats to the ARFS holders!

[Enterprising Investor]

Heritage Financial Group, Inc. Announces Preliminary Earnings Outlook for First Quarter of 2014 (4/22/14)

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced a preliminary earnings outlook for the first quarter ended March 31, 2014. The Company offers this preliminary information to provide certain context for the proposed acquisition announced earlier this morning. The Company plans to announce complete unaudited quarterly information on Thursday, April 24, 2014, after market close.

As has been the case over the past year, the change in loan discount accretion related to FDIC-acquired loans has created significant volatility in the Company's earnings. Over the past four quarters, the loan discount accretion related to FDIC-acquired loans varied on a sequential basis as much as $2.6 million. Because of that volatility and due to the occurrence of other unusual items from time to time, such as gains on acquisitions, the Company desires to highlight some of these variations to aid investor understanding of comparable-period results.

Net income for the first quarter ended March 31, 2014, is expected to total $1.3 million or $0.18 per diluted share, down 61% from $3.4 million or $0.45 per diluted share for the linked quarter and down 66% from $3.9 million or $0.52 per diluted share for the year-earlier quarter. Total shares outstanding at the end of the first quarter of 2014 is expected to be 7,834,517, and basic and diluted weighted average shares outstanding for the first quarter of 2014 are expected to be 7,422,044 and 7,581,731 shares, respectively. Book value and tangible book value (a non-GAAP measure) at the end of the first quarter of 2014 are expected to be $17.03 and $16.40 per share, respectively.

The expected decline in net income on a linked-quarter basis reflects primarily a $2.4 million decline in loan discount accretion from FDIC-acquired loans, coupled with steady negative accretion of the FDIC loss-share receivable, an increase of $282,000 in FDIC loss-share clawback expenses and a $783,000 decline in mortgage banking fees, reflecting increased loan production that was more than offset in a pricing decline as loans were sold in the secondary market.

The expected decline in net income compared with the first quarter of 2013 reflects primarily a $4.2 million gain on acquisitions in the first quarter of 2013 that did not recur in the current-year quarter and a $2.2 million increase in salaries and employee benefits related to the Company's mortgage expansion, which together were partially offset by a $910,000 improvement in interest income on loans held for sale and a $409,000 increase in interest income on securities.

About Heritage Financial Group, Inc. and HeritageBank of the South

Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving primarily Georgia, Florida and Alabama through 29 banking locations, 15 mortgage offices, and 5 investment offices. As of March 31, 2014, the Company had total assets of approximately $1.4 billion and total stockholders' equity of approximately $128 million. For more information about the Company, visit HeritageBank of the South on the Web at www.eheritagebank.com and see Investors.

http://www.businesswire.com/news/home/20140422005733/en/Heritage-Financial-Group-Announces-Preliminary-Earnings-Outlook

[Enterprising Investor]

Heritage Financial Group, Inc. Signs Definitive Agreement to Acquire Ocala-Based Alarion Financial Services, Inc. (4/22/14)

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. ("Heritage" or the "Company,") (NASDAQ: HBOS), the holding company for HeritageBank of the South ("HeritageBank"), today announced it has entered into a definitive agreement to acquire all of the common stock of Alarion Financial Services, Inc. ("Alarion"), the holding company for Alarion Bank, in a stock transaction valued at approximately $22.1 million.

Alarion, headquartered in Ocala, Florida, is the holding company for Alarion Bank, which operates six branches in Ocala, Gainesville and Alachua (suburban Gainesville). As of March 31, 2014, Alarion reported approximately $283 million in assets, $200 million in loans, $241 million in deposits and $18 million in tangible common equity. Upon completion of the transaction, Heritage is expected to have approximately $1.7 billion in assets, $1.0 billion in loans, and $1.4 billion in deposits. The transaction is expected to be immediately accretive to Heritage Financial Group's fully diluted earnings per share, excluding deal costs.

Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, Alarion's shareholders will receive 0.44 shares of the Company's common stock for each share of Alarion common stock owned, resulting in the issuance of a total of approximately 1,159,000 shares in the exchange. Additionally, in connection with the transaction, affiliates of Jacobs Asset Management, LLC that are investors in both Heritage and the preferred stock of Alarion will exchange approximately $3.5 million of Alarion preferred stock and accrued but unpaid dividends for approximately 178,000 shares of Heritage common stock. The transaction, which is subject to regulatory approval, the approval of the shareholders of Alarion and other customary conditions, is expected to close in the third quarter of 2014.

Commenting on the announcement, Leonard Dorminey, President and Chief Executive Officer of Heritage Financial Group, said, "We are pleased to announce the acquisition of Alarion, our first open-bank acquisition following a number of FDIC-assisted transactions and other branch acquisitions. This transaction will greatly increase our footprint in North Central Florida, expanding our presence in the Ocala market and providing us with an initial entry into the Gainesville area – both attractive markets for HeritageBank. The combination with Alarion will triple the number of branches we have in North Central Florida and is expected to move our deposit market share into the top 10 in both Ocala and Gainesville. Lastly, the acquisition of Alarion, with its strong mortgage banking operations, fits nicely with our efforts to expand those services across our markets.

"As we look at this opportunity to continue to deploy capital, we see a good cultural and operational fit between our organizations, which should result in a smooth integration," Dorminey continued. "While the changes for Alarion's customers should be seamless, we think they will notice and welcome the additional products, services and resources that we will bring to these markets. We look forward to earning their confidence and loyalty."

Loralee Hutchinson, President of Alarion, added, "We are pleased to join forces with Heritage Financial Group to provide enhanced and long-term value to our customers and communities. Our combination with Heritage will provide greater capital resources and operational scale that will allow us to grow as part of a larger community bank, with more than $1.7 billion in total assets and the tools and resources to enhance long-term value for our shareholders."

SunTrust Robinson Humphrey served as financial advisor and Bryan Cave, LLP provided legal counsel to Heritage Financial Group. Banks Street Partners, LLC served as financial advisor to Alarion and has rendered a fairness opinion to its Board of Directors in connection with this transaction. Adams & Reese provided legal counsel to Alarion.

CONFERENCE CALL AND INVESTOR PRESENTATION

Heritage Financial Group will host a conference call with analysts today at 10:00 a.m. ET to discuss this transaction. The number to call for the interactive teleconference is [phone]. A telephonic replay of the conference call will be available from 12:00 p.m. ET on Tuesday, April 22, 2014, through 6:00 p.m. ET on Wednesday, April 23, 2014, by dialing [phone] and entering confirmation number 21714335. A public, listen-only simulcast of the conference call, along with an investor presentation related to the transaction, may be accessed at the Company's web site, www.eheritagebank.com/Investors. A 30-day online replay of the conference call will be available approximately an hour following the conclusion of the live broadcast. The investor presentation also will be available online at www.eheritagebank.com/Investors for a period of 30 days.

ABOUT HERITAGE FINANCIAL GROUP

Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving primarily Georgia, Florida and Alabama through 29 banking locations, 15 mortgage offices, and 5 investment offices. As of March 31, 2014, the Company had total assets of approximately $1.4 billion and total stockholders' equity of approximately $128 million. For more information about the Company, visit HeritageBank of the South on the Web at www.eheritagebank.com and see Investors.

ABOUT ALARION FINANCIAL SERVICES

Alarion Financial Services, headquartered in Ocala, Florida, is the holding company for Alarion Bank, which provides a full range of commercial and consumer banking services from six banking offices located in Ocala (3), Gainesville (2) and Alachua (1). Alarion also provides mortgage banking services from offices in Ocala, Gainesville and St. Augustine.

http://www.businesswire.com/news/home/20140422005743/en/Heritage-Financial-Group-Signs-Definitive-Agreement-Acquire

[Enterprising Investor]

Heritage Financial Group, Inc. Reports Higher Net Income for the Fourth Quarter and Year (1/29/14)

Company Declares Quarterly Dividend of $0.07 Per Share

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced unaudited financial results for the quarter and year ended December 31, 2013. Highlights of the Company's results for the year ended 2013 include:

• Net income of $11.3 million or $1.50 per diluted share, up 67% from net income of $6.8 million or $0.85 per diluted share for the year ended 2012;

• Excluding special items for each year, net income of $10.6 million or $1.42 per diluted share, up 86% from $5.7 million or $0.71 per diluted share for the year ended 2012 (see reconciliation of non-GAAP items);

• Loan growth, excluding loans acquired through FDIC-assisted acquisitions, of $98.8 million or 17% from 2012;

• A decline in the provision for loan losses, excluding FDIC-acquired loans, to $1.7 million, down 34% from $2.5 million for 2012;

Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "We are pleased to announce solid financial results for the fourth quarter and for all of 2013. Our team has been focused on several strategic initiatives, and we are excited to report that those efforts came to fruition in our financial results this past quarter. Contributing to our results were organic loan growth from commercial banking, fee income and improved efficiency from our branch network, fee income and growth in assets under management from our brokerage division, continued growth in mortgage banking, and significant gains on resolutions from our FDIC-acquired special asset team. We enter 2014 well positioned on all strategic fronts."

Dorminey also noted that the Company's Board of Directors has declared a quarterly cash dividend of $0.07 per share, resuming regular payments after a special dividend was paid in December 2012 in lieu of dividends for 2013. The new dividend will be paid on February 28, 2014, to stockholders of record as of February 14, 2014.

Operating Efficiency Initiatives

During 2013, the Company closed its branch in Vincent, Alabama, and its Broadway Avenue branch in Sylacauga, Alabama, both of which were added with the FDIC-assisted acquisition of Frontier Bank in March 2013. Also, the Company completed staffing reductions related to the Frontier acquisition that will result in a decrease of approximately $1.6 million from Frontier's pre-acquisition level of personnel expenses. Separately, the Company reduced Bank staffing by nine full-time equivalent employees, resulting in a one-time charge of $67,000 for severance ($60,000 in the third quarter of 2013 and $7,000 in the fourth quarter), and anticipates expense savings of approximately $460,000 per year related to this staffing reduction.

Commenting on the operating efficiency initiatives, Heath Fountain, Executive Vice President and Chief Financial Officer, said, "We continue to focus on improving our operating efficiency while expanding our mortgage and banking presence. While we have completed many efficiency initiatives, we anticipate building on the momentum gained in 2013 to further improve our operating efficiency in 2014."

Fourth Quarter 2013 Results of Operations

Highlights of the Company's results for the fourth quarter of 2013 include:

• Net income of $3.4 million or $0.45 per diluted share, up 158% from $1.3 million or $0.18 per diluted share for the linked quarter and up 40% from $2.4 million or $0.31 per diluted share for the year-earlier quarter;

• Excluding special items for each quarter, net income of $4.0 million or $0.53 per diluted share, up 124% from $1.8 million or $0.24 per diluted share for the linked quarter and up 221% from $1.2 million or $0.16 per diluted share for the year-earlier quarter (see reconciliation of non-GAAP items);

• Loan growth, excluding loans acquired through FDIC-assisted acquisitions, of $19.0 million or 3% on a linked-quarter basis and $98.8 million or 17% compared with the year-earlier quarter;

• A decrease in FDIC-acquired loans of $9.3 million, or 8%, on a linked-quarter basis, but an increase of $29.9 million or 36% compared with the year-earlier quarter;

• A decrease in the provision for loan losses, excluding FDIC-acquired loans, to $220,000, down 37% from $350,000 for the linked quarter and down 63% compared with $600,000 for the year-earlier quarter;

The $2.1 million increase in reported quarterly earnings for the fourth quarter of 2013 compared with the linked quarter resulted primarily from the following items:

• Increased loan discount accretion from FDIC-acquired loans of $2.3 million, partially offset by increased negative accretion of the FDIC loss-share receivable of $522,000;

• Increased mortgage banking fees of $1.0 million;

• Decreased FDIC-acquired other real estate owned write-downs and foreclosed asset expenses of $410,000;

• Decreased legacy other real estate owned write-downs and foreclosed asset expenses of $394,000;

• Increased interest income on core loans and loans held for sale of $385,000;

• Decreased acquisition-related expenses of $178,000; offset by

• Increased salaries and employee benefits of $614,000; and

• Increased impairment loss on assets held for sale of $328,000.

Commenting on the fourth quarter results, Fountain added, "During the fourth quarter, we were able to resolve several FDIC-acquired non-covered loans that significantly improved our loan discount accretion income. Loan discount accretion income can vary significantly based on the timing of asset resolutions and will continue to cause volatility in earnings. We also posted a significant increase in our mortgage banking fees, building on the momentum that our mortgage division developed in the previous quarter."

The $977,000 increase in reported quarterly earnings for the fourth quarter of 2013 compared with the year-earlier quarter primarily resulted from the following items:

• Improved net interest income of $1.7 million;

• Decreased provision expense of $2.3 million;

• Increased non-interest income of $1.4 million; offset by

• Increased non-interest expense of $3.4 million.

Net interest income for the fourth quarter of 2013 increased 12% to $16.3 million from $14.5 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 5.50% for the fourth quarter of 2013, a decline of 87 basis points from 6.37% for the year-earlier period. The reduction in net interest margin for the fourth quarter of 2013 compared with the year-earlier quarter was driven by a decline in the yield on loans, offset in part by an increase in the yield on investment securities coupled with a reduction in the cost of interest-bearing liabilities as rates continue to reset to lower levels and the Company takes advantage of historically low interest rates on non-deposit funding. Excluding FDIC-acquired loan discount adjustments from the net interest margin, the core net interest margin was 3.20% for the fourth quarter of 2013, a decrease of two basis points from 3.22% for the year-earlier quarter.

In the fourth quarter of 2013, the Company continued to achieve loan growth, with its core loan portfolio increasing $19.0 million organically on a linked-quarter basis and advancing $98.8 million overall compared with the year-earlier quarter. For the fourth quarter of 2013, the Company's loan portfolio, including FDIC-acquired loans, totaled $798.8 million, increasing $9.7 million on a linked-quarter basis from $789.1 million and from $670.0 million compared with the year-earlier quarter. The organic loan growth for the linked quarter was primarily driven by growth in Albany, Macon, and South Atlanta, Georgia markets, Auburn and Birmingham, Alabama markets, and the Ocala, Florida market. Total deposits stood at $1.076 billion at the end of the fourth quarter of 2013, up 2% from $1.052 billion on a linked-quarter basis, and up 24% from $869.6 million for the year-earlier quarter.

For the fourth quarter of 2013, the Company's loans held for sale totaled $110.7 million, increasing significantly by $72.6 million, or 191%, on a linked-quarter basis from $38.0 million, and increasing $95.1 million, or 609%, from $15.6 million compared with the year-earlier quarter. The significant increase in the loans held for sale for the current quarter was driven by a slowing in loan sales as the Company prepared to deliver directly to Fannie Mae. Loan sales to Fannie Mae for the fourth quarter totaled $20.8 million and, separately, the Company recorded a gain of $202,000 related to the mortgage servicing rights for those loans. Total mortgage production for the fourth quarter was $120.4 million, up 4% on a linked-quarter basis from $115.3 million and up 116% from $55.8 million compared with the year-earlier quarter.

Non-interest income for the fourth quarter of 2013 increased 47% to $4.5 million from $3.1 million in the year-earlier quarter, primarily driven by increases in mortgage banking fees of $1.5 million and service charges on deposit accounts of $335,000 and a decline in negative accretion for the FDIC loss-share receivable of $552,000, together which were partially offset by a decline in the gain on sales of securities of $1.2 million. Non-interest expense for the fourth quarter of 2013 increased 28% to $15.7 million from $12.3 million in the year-earlier quarter, primarily driven by increases in salaries and employee benefits of $2.6 million, impairment loss on assets held for sale of $328,000 and realized loss on assets held for sale of $228,000. The increase in salaries and employee benefits was associated with the hiring of employees from the Frontier acquisition and for the mortgage division expansion, while the impairment loss on assets held for sale was driven by two former branch buildings and a corporate facility the Company holds, and the realized loss on assets held for sale was the result of the Company selling its former corporate headquarters building in Albany, Georgia.

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 $50.9 million in covered and $63.3 million in non-covered loans at the end of the fourth quarter of 2013 compared with $72.4 million in covered and $11.9 million in non-covered loans for the year-earlier quarter. The outstanding principal balance of the FDIC-acquired loan portfolios totaled $177.8 million at the end of the fourth quarter of 2013 compared with $152.1 million for the year-earlier quarter. The details of the accounting for the FDIC-acquired loan portfolios for the fourth quarter of 2013 are as follows:

• Covered FDIC-acquired loans decreased $3.0 million from the linked quarter to $50.9 million;

• Non-covered FDIC-acquired loans decreased $6.3 million to $63.3 million;

• The FDIC loss-share receivable associated with covered assets acquired in FDIC-assisted acquisitions decreased $3.2 million to $41.3 million;

• The negative accretion for the FDIC loss-share receivable was $2.0 million and the FDIC loss-share clawback accrual increased to $1.9 million;

• Increase in provision expense for FDIC-acquired non-covered loans to $12,000;

• Loan discount accretion recognized in interest income improved $2.6 million;

• The non-accretable discount decreased $11.8 million to $36.7 million; and

• The accretable discount increased $3.4 million to $26.9 million.

For the fourth quarter of 2013, loan discount accretion recognized in interest income improved 69% to $6.3 million from $3.7 million for the linked quarter, but declined 6% from $6.6 million for the year-earlier quarter. The FDIC loss-share receivable associated with covered FDIC-acquired assets decreased 7% to $41.3 million from $44.5 million for the linked quarter and declined 32% from $60.7 million for the year-earlier quarter. The reduction in the FDIC loss-share receivable for the linked quarter was primarily driven by negative accretion of $2.0 million affecting the loss-share receivable asset associated with the improvement in expected cash flows of the covered FDIC-acquired performing loan portfolios and FDIC reimbursements received of $1.2 million. An increase to the FDIC clawback liability accrual was recorded as an expense for the current quarter of $261,000, which increased the total accrual to $1.9 million. This clawback was caused by an improvement in estimates of expected cash flows for both FDIC-assisted acquisitions covered under loss-sharing agreements.

The covered FDIC-acquired loan discount affecting the loss-share receivable was $39.1 million, or 94.6% of the loss-share receivable, for the fourth quarter 2013 compared with $55.2 million, or 90.9% of the loss-share receivable, for the year-earlier quarter. The gross balance of covered FDIC-acquired assets decreased to $109.2 million for the fourth quarter of 2013 compared with $156.0 million for the year-earlier quarter. The FDIC loss-share receivable as a percent of the covered FDIC-acquired assets decreased to 37.8% compared with 38.9% for the year-earlier quarter.

Asset Quality

Total non-performing assets, excluding FDIC-acquired assets, decreased to $11.2 million, or 0.81% of total assets, compared with $13.6 million, or 1.03% of total assets, for the linked quarter and declined from $17.3 million, or 1.58% of total assets, for the year-earlier quarter. Annualized net charge-offs to average outstanding loans, excluding FDIC-acquired loans, were 0.10% for the fourth quarter of 2013 compared with 0.31% for the linked quarter and 0.05% for the year-earlier quarter. Non-performing loans, excluding FDIC-acquired loans, totaled $9.4 million, down from $11.0 million for the linked quarter and from $14.7 million for the year-earlier quarter. Other real estate owned and repossessed assets, excluding FDIC-acquired assets, totaled $1.8 million for the fourth quarter of 2013, down from $2.7 million for the linked quarter and from $2.6 million for the year-earlier quarter.

The provision for loan losses on non-FDIC-acquired loans decreased to $220,000 for the fourth quarter of 2013 from $350,000 for the linked quarter and from $600,000 for the year-earlier quarter, primarily driven by improving trends in total criticized and classified loans. For the fourth quarter in 2013, the allowance for loan losses represented 1.31% of total loans outstanding, excluding FDIC-acquired loans, versus 1.34% for the linked quarter and 1.55% for the year-earlier quarter. The improving loan loss allowance was primarily the result of declining criticized and classified loans as a percentage of total loans.

Capital Management Initiatives

The Company reinstated its regular quarterly dividend during January 2014 at $0.07 per share. Looking ahead, the Company intends to maintain its capital strength at the current level to support growth and its acquisition activities. The Company currently has authorization to purchase approximately 344,000 shares under the current repurchase program, which is set to expire in April 2014, unless extended or otherwise completed. 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 December 31, 2013, was 14.5%, 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 8.8% as of December 31, 2013.

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 27 full-service branch locations, 14 mortgage offices, and 4 investment offices. As of December 31, 2013, the Company reported total assets of approximately $1.4 billion and total stockholders' equity of approximately $125 million. For more information about the Company, visit HeritageBank of the South on the Web at www.eheritagebank.com and see Investors.

http://www.businesswire.com/news/home/20140129006328/en/Heritage-Financial-Group-Reports-Higher-Net-Income#.Uun8wx6YaUk

[Enterprising Investor]

Heritage Financial Group, Inc. Reports Second Quarter Net Income of $2.7 Million or $0.36 Per Diluted Share (7/25/13)

ALBANY, Ga.--(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 June 30, 2013. Highlights of the Company's results for the second quarter of 2013 include:

• Net income of $2.7 million or $0.36 per diluted share, up almost twofold from net income of $1.4 million or $0.17 per diluted share for the year-earlier quarter, but down 32% from $3.9 million or $0.52 per diluted share for the linked quarter, primarily due to the recording of a bargain purchase gain on an acquisition in the first quarter of 2013;

• Excluding special items for each quarter, net income was $2.9 million or $0.39 per diluted share, up twofold from net income of $1.4 million or $0.17 per diluted share for the year-earlier quarter and up 43% from net income of $2.0 million or $0.27 per diluted share for the linked quarter (see reconciliation of non-GAAP items);

• Loan growth, excluding loans acquired through FDIC-assisted acquisitions, of $34.4 million or 6% on a linked-quarter basis;

• Loans held for sale increased $24.6 million or 130% on a linked-quarter basis;

• A decrease in FDIC-acquired loans of $17.3 million or 12% on a linked-quarter basis;

• A decrease in the provision for loan losses, excluding FDIC-acquired loans, to $640,000 compared with $750,000 for the year-earlier quarter, and an increase from $450,000 for the linked quarter; and

• A decline in the provision for loan losses for FDIC-acquired loans, with approximately 80% of the losses reimbursable by the FDIC, to $28,000 compared with $341,000 for the year-earlier quarter and $35,000 for the linked quarter.

Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "We are pleased to report ongoing growth in our business and improving financial results. We continue to benefit from our efforts to increase revenue and manage our expenses. Additionally, our mortgage division has again achieved significant increases in volume and our commercial bank network continued to see solid loan growth.

"We remain on schedule with our conversion and integration plans for Frontier Bank," Dorminey continued. "We continue to make progress with integrating the new team into our system and filling key strategic roles to expand in the former Frontier Bank footprint. We are excited about the opportunities for loan growth in these new markets."

Expense Management Initiatives

In connection with the Frontier FDIC-assisted acquisition, the Company is on track to close its branch in Vincent, Alabama, and its Broadway Avenue branch in Sylacauga, Alabama, during the third quarter of 2013. 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 is on track with the implementation of staffing reductions related to the Frontier acquisition that will be completed during the third quarter of 2013, 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, Executive Vice President and Chief Financial Officer, said, "While expenses increased related to the Frontier acquisition and our mortgage expansion, we continue to make progress in expense management initiatives within our branch network. We will convert the former Frontier branches to our core system in the third quarter, and we are well on schedule to achieve all of our previously identified cost-saving targets."

Capital Management Initiatives

During the second quarter of 2013, the Company repurchased approximately 77,000 shares of common stock at an average price of $14.26 under its stock repurchase program. Authorization to repurchase approximately 350,000 shares remains under the current program, which is set to expire in April 2014, unless extended or otherwise completed.

The Company's estimated total risk-based capital ratio at June 30, 2013, was 14.4%, 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 8.6% as of June 30, 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, with the Company having accelerated 2013 dividends in December 2012, but the Company expects to resume regular quarterly dividends in 2014.

Second Quarter 2013 Results of Operations

The $1.3 million improvement in reported quarterly earnings for the second quarter of 2013 compared with the year-earlier quarter primarily resulted from the following items:

• Improved net interest income of $6.1 million;

• Decreased provision expense of $423,000; offset by

• Reduced non-interest income of $1.1 million; and

• Increased non-interest expense of $3.9 million.

Net interest income for the second quarter of 2013 increased 60% to $16.2 million from $10.2 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 5.61% for the second quarter of 2013, an increase of 10 basis points from 5.51% on a linked-quarter basis, and an increase of 86 basis points over 4.75% in the year-earlier period. The improvement in net interest margin for the second quarter of 2013 compared with the year-earlier quarter was driven by an increase in loan yields on the Company's FDIC-acquired loan portfolio coupled with reductions in the cost of interest-bearing liabilities as rates continue to reset to lower levels and the Company takes advantage of historically low interest rates on non-deposit funding, all of which were offset in part by declining yields on the investment portfolio. Excluding FDIC-acquired loan discount adjustments from the net interest margin, the core net interest margin was 3.27% for the second quarter of 2013, a decrease of nine basis points from 3.38% on a linked-quarter basis and six basis points from 3.33% for the year-earlier quarter.

In the second quarter of 2013, the Company continued to achieve loan growth, with its core loan portfolio increasing $34.4 million organically on a linked-quarter basis and advancing $135.7 million overall compared with the year-earlier quarter. For the second quarter of 2013, the Company's loan portfolio, including FDIC-acquired loans, totaled $769.9 million, increasing $17.1 million on a linked-quarter basis from $752.9 million and from $605.0 million compared with the year-earlier quarter. The organic loan growth for the linked quarter was driven by all the Company's markets with the exception of the Ocala, Florida market, which recorded a slight reduction. For the second quarter of 2013, the Company's loans held for sale totaled $43.5 million, increasing $24.6 million on a linked-quarter basis from $18.9 million and from $6.0 million compared with the year-earlier quarter. Total deposits stood at $1.066 billion at the end of the second quarter of 2013, up 24% from $860.3 million at June 30, 2012, but down 3% or $30.0 million from $1.096 billion on a linked-quarter basis. The linked quarter decrease in deposits was primarily driven by planned run-off of non-relationship customers from the Frontier acquisition, which accounted for $22.0 million of the decrease.

Non-interest income for the second quarter of 2013 decreased 30% to $2.6 million from $3.7 million in the year-earlier quarter, primarily because of an increase in negative accretion for the FDIC loss-share receivable of $3.2 million partially offset by an increase in mortgage banking fees of $1.9 million. Non-interest expense for the second quarter of 2013 increased 36% to $14.6 million from $10.7 million in the year-earlier quarter, primarily driven by increased salaries and employee benefits of $2.7 million associated with the hiring of employees from the Frontier acquisition and for the mortgage division. The increased equipment and occupancy expense of $443,000 related to the Company's continued efforts to expand the mortgage division and the Frontier acquisition.

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 $57.2 million in covered and $74.6 million in non-covered loans at the end of the second quarter of 2013 compared with $65.8 million in covered and $83.3 million in non-covered loans for the linked quarter. The outstanding principal balance of the FDIC-acquired loan portfolios totaled $210.0 million at the end of the second quarter of 2013 compared with $234.8 million for the linked quarter. The details of the accounting for the FDIC-acquired loan portfolios for the second quarter of 2013 are as follows:

• Covered FDIC-acquired loans decreased $8.6 million to $57.2 million;

• Non-covered FDIC-acquired loans decreased $8.7 million to $74.6 million;

• The FDIC loss-share receivable associated with covered assets acquired in FDIC-assisted acquisitions decreased $3.9 million to $48.1 million;

• The negative accretion for the FDIC loss-share receivable was $3.4 million and the FDIC loss-share clawback accrual was increased to $1.4 million;

• Provision expense for individually assessed FDIC-acquired loans was $28,000;

• The non-accretable discount decreased $4.4 million to $55.2 million; and

• The accretable discount decreased $3.1 million to $23.0 million.

For the second quarter of 2013, provision expense of $28,000 was recorded for loan charge-offs on 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 loans did not affect the Company's loan loss reserve. The FDIC loss-share receivable associated with covered FDIC-acquired assets decreased $3.9 million from $52.0 million for the prior quarter to $48.1 million, 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. An increase to the FDIC clawback liability accrual was recorded as an expense for the current quarter of $124,000, which increased the total accrual to $1.4 million. This clawback was caused by an improvement in estimates of expected cash flows for both FDIC-assisted acquisitions covered under loss-sharing agreements.

The covered FDIC-acquired loan discounts affecting the loss-share receivable was $56.8 million, or 94.5% of the loss-share receivable, for the second quarter 2013 compared with $63.6 million, or 97.8% of the loss-share receivable, for the linked quarter. The gross balance of covered FDIC-acquired assets decreased to $125.6 million for the second quarter of 2013 compared with $142.9 million for the linked quarter. The FDIC loss-share receivable as a percent of the covered FDIC-acquired assets increased to 38.3% compared with 36.4% for the linked quarter.

Asset Quality

Total non-performing assets, excluding FDIC-acquired assets, decreased to $15.3 million, or 1.14% of total assets, compared with $15.8 million, or 1.15% of total assets, for the linked quarter, but it increased from $11.5 million, or 1.08% of total assets, from the year-earlier quarter. Annualized net charge-offs to average outstanding loans, excluding FDIC-acquired loans, were 0.45% for the second quarter of 2013 compared with 0.27% for the linked quarter and 0.23% for the year-earlier quarter. Non-performing loans totaled $12.2 million, down from $12.7 million for the linked quarter, but up from $10.0 million for the year-earlier quarter. Other real estate owned and repossessed assets, excluding FDIC-acquired assets, totaled $3.0 million for the second quarter of 2013, in line with the $3.0 million for the linked quarter and up from the $1.5 million for the year-earlier quarter.

The provision for loan losses on non-FDIC-acquired loans decreased to $640,000 for the second quarter of 2013 from $750,000 for the year-earlier quarter, primarily driven by improving trends in total criticized and classified assets. For the second quarter in 2013, the allowance for loan losses represented 1.42% of total loans outstanding, excluding FDIC-acquired loans, versus 1.51% for the linked quarter and 1.61% 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 June 30, 2013, the Company reported total assets of approximately $1.3 billion and total stockholders' equity of approximately $119 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.

http://www.businesswire.com/news/home/20130725006445/en/Heritage-Financial-Group-Reports-Quarter-Net-Income

[Enterprising Investor]

Heritage Financial Group, Inc. Reports First Quarter Net Income of $3.9 Million or $0.52 Per Diluted Share (4/26/13)

Company Increases and Extends Its Stock Repurchase Plan, Adding 394,000 Shares to the Current Authorization

ALBANY, Ga.--(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.

http://www.businesswire.com/news/home/20130425005450/en/Heritage-Financial-Group-Reports-Quarter-Net-Income

[Enterprising Investor]

HeritageBank of the South, a Subsidiary of HBOS, Purchases Frontier Bank in Transaction with the FDIC (3/08/13)

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced that HeritageBank of the South has entered into a definitive whole-bank purchase and assumption agreement with the Federal Deposit Insurance Corporation ("FDIC") to acquire Frontier Bank, a full-service bank based in LaGrange, Georgia. The Georgia Department of Banking and Finance today closed Frontier Bank and, by Order of the Georgia Superior Court, appointed the FDIC as Receiver.

Three of Frontier Bank's branches are strategically located for HeritageBank of the South along the 40-mile corridor between LaGrange and Auburn, Alabama, a market that the Bank entered in 2012. Six additional branches are located south and southeast of Birmingham, Alabama, marking HeritageBank of the South's entry into this new market.

As a result of this acquisition, HeritageBank of the South will assume approximately $224 million in deposits and acquire approximately $111 million in loans. HeritageBank of the South will not acquire any of Frontier Bank's other real estate owned. This transaction does not involve a loss-share agreement, but is subject to an asset purchase discount of $34.8 million.

The nine branches in Georgia and Alabama previously operated by Frontier Bank will reopen on Saturday or Monday, according to their prior normal operating hours, as branches of HeritageBank of the South. Depositors of Frontier Bank will automatically become depositors of HeritageBank of the South, and deposits will continue to be insured by the FDIC. With this acquisition, HeritageBank of the South will now operate 29 banking locations.

Commenting on the announcement, Leonard Dorminey, President and Chief Executive Officer of Heritage Financial Group, said, "We are pleased to welcome the customers of Frontier Bank to HeritageBank of the South and count them among our valued family of customers. It is our hope to make this transition as transparent and easy as possible for all. We want to assure our new customers that their deposits are safe and fully accessible using their existing account numbers, checks, and debit/ATM cards. These accounts will automatically be converted into standard HeritageBank of the South deposit accounts in an orderly fashion. We look forward to proving to our new Frontier Bank customers the difference that we bring to community banking, building on already strong relationships to achieve even greater things in the months and years ahead."

Dorminey pointed out that the Company's strong capital position – with a Total Risk-Based Capital Ratio of 18.4% at December 31, 2012 – has enabled it to continue to take advantage of expansion opportunities. Frontier Bank represents the fourth acquisition with the FDIC that HeritageBank of the South has completed. "We are excited by the opportunities this acquisition presents to our company, including the overall continued growth of our franchise in Georgia, Alabama and Florida, and more specifically to our growing presence in and around Auburn, Alabama," Dorminey continued. "The Auburn-Opelika market has proven to be very attractive for our bank: it is home to Auburn University and the robust economic environment associated with the Kia Motors manufacturing plant and related suppliers in the area, making it one of the most attractive markets in the state.

"Additionally, we look forward to the opportunity to enter the Birmingham market," Dorminey added, "one of the major metropolitan markets in the state where we hope to differentiate HeritageBank of the South as a leader in community banking and build a solid banking platform for future growth. Overall, we feel confident about the quality of the assets we are acquiring and the limited risk structure of this deal."

Keefe, Bruyette & Woods served as financial advisor to the Company in this transaction.

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, 13 mortgage offices, and 4 investment offices. As of December 31, 2012, the Company reported total assets of approximately $1.1 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 2011 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.

Contacts

Heritage Financial Group, Inc.
T. Heath Fountain, 229-878-2055
Executive Vice President and Chief Financial Officer

http://www.businesswire.com/news/home/20130308005944/en/HeritageBank-South-Subsidiary-Heritage-Financial-Group-Purchases

[Enterprising Investor]

Heritage Financial Group, Inc. 2012 Net Income up 77% versus 2011, Increasing to $6.8 Million or $0.85 Per Diluted Share (1/24/12)

Fourth Quarter Net Income up 80% to $2.4 Million or $0.31 Per Diluted Share

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced unaudited financial results for the quarter and year ended December 31, 2012. Highlights of the Company's results for the year ended 2012 include:

•Net income of $6.8 million or $0.85 per diluted share, up 77% from net income of $3.8 million or $0.47 per diluted share for the year ended 2011;
•Excluding special items for each year, net income was $5.4 million or $0.67 per diluted share for 2012 versus net income of $1.6 million or $0.19 per diluted share for 2011 (see reconciliation of non-GAAP items);
•Loan growth for the year, excluding loans acquired through FDIC-assisted acquisitions, of $151.3 million or 35% from 2011;
•A decrease in loans acquired through FDIC-assisted acquisitions for the year of $41.9 million or 33% from 2011;
•A decrease in provision for loan losses, excluding FDIC-acquired loans, of $395,000 to $2.5 million for the year compared with $2.9 million for 2011;
•Provision for loan losses of $3.4 million for FDIC-acquired loans with approximately 80% of the losses reimbursable by the FDIC versus no provision expense on such loans for 2011; and
•A decrease in net charge-offs to 0.19% for the year compared with 0.82% for 2011.
Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "During 2012, our team worked hard to explore new opportunities for growth, effectively assimilate our recent acquisitions to capitalize on the benefits of that expansion, and optimize our operations at every level of our organization. Those efforts paid off handsomely in 2012 with significantly increased earnings, robust organic loan growth, and strong contributions from our mortgage banking and brokerage departments. Moreover, during 2012, we implemented several expense management initiatives that are anticipated to reduce costs by approximately $1.2 million in 2013.

"While we expect to face ongoing challenges in 2013 regarding both the competitive and interest rate environments, we remain confident in our outlook for the coming year," Dorminey continued. "Considering the fundamental strength of our operations, the success we have achieved in integrating recent acquisitions, our expanded footprint in the Southeast, and bolstered by anticipated cost reductions, we look forward to a successful and promising year in 2013."

Expense Management Initiatives

During the third quarter of 2012, the Company completed an early retirement program for certain employees announced during the second quarter of 2012 at a cost of $641,000. It is anticipated that the early retirement program will generate annual savings of approximately $700,000 per year beginning in 2013.

Additionally, during the fourth quarter of 2012, the Company closed two branches, one each in Collins and Guyton, Georgia, which were acquired in FDIC-assisted acquisitions. Combined, these branches had loans of approximately $5 million and deposits of $13 million. The Company does not expect to experience a significant reduction in customer relationships in these areas and will seek to service these customers from nearby branches. The Company anticipates expense savings of approximately $500,000 per year beginning in 2013 related to these closures.

Capital Management Initiatives

During the fourth quarter of 2012, the Company paid a special one-time dividend of $0.20 per share in addition to the normal quarterly dividend of $0.04 per share. The special one-time dividend was equivalent to and in lieu of regular quarterly dividends that would have been anticipated to be paid in 2013. The Company also repurchased approximately 73,000 shares of common stock at an average price of $13.50 under its stock repurchase program. The program, which expires in October 2013 unless extended or otherwise completed, has a remaining authorization to repurchase approximately 324,000 shares.

During the fourth quarter of 2012, the Company's previously announced shelf offering on Form S-3 with the Securities and Exchange Commission ("SEC") became effective. Under the shelf registration statement, the Company may offer and sell from time to time in the future, in one or more offerings, common stock, preferred stock, debt securities, warrants, depositary shares, or units consisting of any combination of the foregoing. The aggregate offering price of all securities that could be sold under the registration statement may not exceed $60 million.

The Company's estimated total risk-based capital ratio at December 31, 2012, was 18.4%, 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 10.6% as of December 31, 2012.

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.

Fourth Quarter 2012 Results of Operations

Highlights of the Company's results for the fourth quarter of 2012 include:

•Net income of $2.4 million or $0.31 per diluted share, up 80% from net income of $1.4 million or $0.17 per diluted share for the fourth quarter of 2011 and up 22% from $2.0 million or $0.25 per diluted share for the third quarter of 2012;
•Excluding special items for each quarter, net income was $1.2 million or $0.16 per diluted share for the fourth quarter of 2012 versus net income of $1.0 million or $0.13 per diluted share for the year-earlier quarter and $1.5 million or $0.19 per diluted share for the third quarter of 2012 (see reconciliation of non-GAAP items);
•Loan growth, excluding loans acquired through FDIC-assisted acquisitions, of $151.3 million or 35% for 2012 and $43.8 million or 8% on a linked-quarter basis;
•A decrease in loans acquired through FDIC-assisted acquisitions of $41.9 million or 33% for 2012 and a decrease of $8.8 million or 9% on a linked-quarter basis;
•A slight increase in provision for loan losses, excluding FDIC-acquired loans, of $5,000 to $600,000 for the fourth quarter of 2012 compared with $595,000 for the same quarter for 2011 and a decrease of $150,000 compared with $750,000 for the third quarter of 2012;
•Provision for loan losses for the fourth quarter of 2012 of $1.9 million for FDIC-acquired loans with approximately 80% of the losses reimbursable by the FDIC compared with no provision expense on such loans for the fourth quarter of 2011 and $1.2 million for the third quarter of 2012; and
•Annualized net charge-offs of 0.05% for the fourth quarter of 2012 were in line with the 0.04% experienced for the fourth quarter of 2011 and represented a significant decline from 0.24% for the third quarter of 2012.
The $1.1 million improvement in reported quarterly earnings for the fourth quarter of 2012 compared with the same period in 2011 primarily resulted from the following items:

•Improved net interest income of $5.3 million; offset by
•Reduced non-interest income of $300,000;
•Increased non-interest expense of $1.6 million; and
•Increased provision expense for FDIC-acquired loan losses of $1.9 million, with approximately 80% of the losses reimbursable by the FDIC.
Net interest income for the fourth quarter of 2012 increased 58% to $14.5 million from $9.2 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 deposits. The Company's net interest margin was 6.37% for the fourth quarter of 2012, an increase of 60 basis points over 5.77% on a linked-quarter basis and 218 basis points over 4.19% in the year-earlier period. The improvement in the fourth quarter of 2012 net interest margin on a linked-quarter basis was driven by an increase in loan yields on the Company's FDIC-assisted loan portfolios, coupled with a decline in the cost of interest-bearing deposits as rates continue to reset to lower levels. Excluding purchase accounting adjustments, which include FDIC-assisted loan discount accretion from the net interest margin, the core net interest margin was 3.19% for the fourth quarter of 2012, an increase of 77 basis points from 2.42% for the same quarter in 2011, but a decline of 13 basis points from 3.32% on a linked-quarter basis.

In the fourth quarter of 2012, the Company continued to achieve loan growth, with its loan portfolio increasing $43.8 million organically on a linked-quarter basis and advancing $151.3 million overall compared with the year-earlier quarter. For the fourth quarter of 2012, the Company's loan portfolio, including loans acquired through FDIC-assisted acquisitions, totaled $670.0 million, which increased $35.1 million on a linked-quarter basis. Total deposits stood at $869.6 million at the end of the fourth quarter of 2012, up 3% or $24.5 million on a linked-quarter basis from $845.1 million, but down from $884.2 million compared with the year-earlier quarter. The linked-quarter increase in deposits was primarily driven by core deposit growth of $15.2 million and wholesale deposit growth of $22.8 million offset in part by $13.5 million in planned runoff of retail time deposits.

Non-interest income for the fourth quarter of 2012 decreased 9% to $2.9 million from $3.2 million in the year-earlier quarter, primarily driven by a negative swing in the accretion for the FDIC loss-share receivable of $2.7 million, which was partially offset by an increased gain on sale of securities of $1.3 million and improvements in mortgage banking fees of $685,000, brokerage fees of $165,000, and bankcard services income of $103,000. Non-interest expense for the fourth quarter of 2012 increased 15% to $12.1 million from $10.5 million in the year-earlier quarter, primarily driven by increased foreclosure expense on FDIC-acquired assets of $457,000, increased salaries and employment benefits of $410,000, increased foreclosure expense, excluding FDIC-acquired assets, of $332,000, and loss on sale and write-downs of other real estate assets, excluding FDIC-acquired, of $307,000.

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 $72.4 million in covered and $11.9 million in non-covered loans at the end of the fourth quarter of 2012 compared with $78.8 million in covered and $14.3 million in non-covered loans at the end of the third quarter of 2012. The principal balance of the FDIC-assisted loan portfolios totaled $152.1 million at the end of the fourth quarter of 2012 compared with $171.6 million as of the end of the third quarter of 2012. The details of the accounting for the FDIC-assisted loan portfolios for the fourth quarter of 2012 are as follows:

•Covered loans acquired in FDIC-assisted acquisitions decreased $6.3 million to $72.4 million;
•Non-covered loans acquired in FDIC-assisted acquisitions decreased $2.4 million to $11.9 million;
•The FDIC loss-share receivable associated with covered loans acquired in FDIC-assisted acquisitions decreased $7.0 million to $60.7 million;
•The negative accretion for the FDIC loss-share receivable was $2.8 million;
•Provision expense for individually assessed loans acquired in FDIC-assisted acquisitions was $1.9 million;
•The non-accretable discount decreased $8.2 million to $46.0 million; and
•The accretable discount decreased $2.6 million to $21.8 million.
For the fourth quarter of 2012, provision expense of $1.9 million 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 loans decreased $7.0 million from $67.7 million for the prior quarter to $60.7 million, primarily driven by reimbursements received from the FDIC of $4.0 million and negative accretion of $2.8 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 (claw back) liability was recorded as an expense, which reduced non-interest income for the current quarter by $219,000. 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 decreased to $46.0 million at the end of the fourth quarter of 2012 from $54.2 million on a linked-quarter basis, primarily driven by the clearing of $4.2 million of discount in conjunction with the resolution of FDIC-assisted loans and transfers to accretable discount of $4.0 million. The accretable discount decreased to $21.8 million for the fourth quarter of 2012 from $24.4 million on a linked-quarter basis, primarily due to loan discount accretion of $6.6 million for the current quarter, which compares with $4.8 million on a linked-quarter basis partially offset by the transfer from the non-accretable discount as a result of the improvement in cash flows.

Asset Quality

Annualized net charge-offs to average outstanding loans, excluding loans acquired in FDIC-assisted acquisitions, were 0.05% for the fourth quarter of 2012 compared with 0.24% for the linked-quarter and in line with the 0.04% experienced for the fourth quarter of 2011. Total non-performing assets, excluding assets acquired in FDIC-assisted acquisitions, decreased to $17.3 million or 1.58% of total assets compared with $17.8 million or 1.68% of total assets for the linked-quarter, but increased from $10.4 million or 0.95% of total assets from 2011. Non-performing loans totaled $14.7 million, down from $16.4 million for the linked-quarter, but up from $7.0 million for 2011.

The primary reason for the increase in non-performing assets from 2011 was the migration of two relationships totaling $6.0 million to non-performing status during the third quarter of 2012. One of the relationships totaling $3.5 million was classified a troubled-debt restructuring and additional collateral of $6.1 million has been secured. The other relationship was a Chapter 11 bankruptcy where the collateral deficiency is fully reserved as of the current quarter. Both of these relationships were previously identified as criticized assets. Other real estate owned and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, totaled $2.7 million for the fourth quarter of 2012, up from $1.4 million for the linked-quarter, but down from $2.9 million for 2011.

The provision for loan losses on non-FDIC-acquired loans slightly increased to $600,000 for the fourth quarter of 2012 from $595,000 for the same quarter in 2011, primarily driven by organic loan growth offset in part by improving net charge-off trends. For the fourth quarter in 2012, the allowance for loan losses represented 1.55% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.57% for the linked-quarter and 1.72% for the same quarter in 2011.

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 20 full-service branch locations, 13 mortgage offices, and 4 investment offices. As of December 31, 2012, the Company reported total assets of approximately $1.1 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.

http://www.businesswire.com/news/home/20130124006137/en/Heritage-Financial-Group-2012-Net-Income-77

[Enterprising Investor]

HBOS Reports Higher Third Quarter Net Income of $2.0 Million or $0.25 Per Diluted Share (10/25/12)

Company Announces Shelf Offering and New Stock Repurchase Plan

ALBANY, Ga.--(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 September 30, 2012. Highlights of the Company's results for the third quarter of 2012 include:
• Net income of $2.0 million or $0.25 per diluted share, up 15% from net income of $1.7 million or $0.21 per diluted share for the third quarter of 2011 and up 47% from $1.4 million or $0.17 per diluted share for the second quarter of 2012;
• Excluding special items for each quarter, net income was $1.5 million or $0.19 per diluted share for 2012 versus net income of $422,000 or $0.05 per diluted share for 2011 and $1.4 million or $0.17 per diluted share from the second quarter of 2012 (see reconciliation of non-GAAP items);
• The completion of a previously announced early retirement program, which added $641,000 in additional expense for the quarter, but which is expected to save approximately $700,000 annually beginning in 2013;
• Loan growth for the quarter, excluding loans acquired through FDIC-assisted acquisitions, of $39.5 million or 8%;
• A decrease in loans acquired through FDIC-assisted acquisitions of $9.5 million or 9% for the quarter;
• A decrease in provision for loan losses, excluding FDIC-acquired loans, of $250,000 to $750,000 for the third quarter of 2012 compared with $1.0 million for the same quarter for 2011 and $750,000 for the second quarter of 2012;
• Provision for loan losses of $1.2 million for FDIC-acquired loans with approximately 80% of the losses reimbursable by the FDIC compared with no provision expense on such loans for the third quarter of 2011 and $341,000 for the second quarter of 2012;
• A decrease in annualized net charge-offs to 0.24% for the third quarter of 2012 compared with 0.73% for the third quarter of 2011 and 0.23% for the second quarter of 2012; and
• Elected fair value accounting for mortgage loans held for sale for the third quarter resulting in an overall positive impact to earnings of $492,000.

Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "We are pleased to report another quarter of significant organic loan growth, continued improvement in core earnings, and ongoing acquisition and expansion activities. Regarding expansion activity, we were pleased to announce the addition of a new management team to our mortgage division. We expect this team to lead significant growth in our mortgage business, particularly in the Atlanta, Georgia market. We also opened a full-service banking office in Macon, Georgia, during the quarter, which will enhance the success of our mortgage and commercial banking operations in that market."

Dorminey added, "In addition to our efforts to increase revenues, we are concurrently working on expense management initiatives. During the quarter, we completed an early retirement program that will generate annual savings of approximately $700,000. We also continue to take steps to efficiently manage our capital. During the quarter, we completed our stock buyback plan adopted in December 2011. Concurrently, we are announcing a new 5% buyback plan along with a shelf stock offering of $60 million. These two plans will allow us to efficiently manage our capital levels at our current size, while also providing us with the tools we need to take advantage of acquisition and internal growth opportunities that may arise."

Expense Management Initiatives

During the third quarter of 2012, the Company completed the early retirement program announced during the second quarter of 2012 regarding certain employees at a cost of $641,000. It is anticipated that the early retirement program will generate annual savings of approximately $700,000 per year beginning in 2013.

Additionally, the Company is still on track to close its Collins, Georgia and Guyton, Georgia branches that it acquired in FDIC-assisted acquisitions. Combined, these branches have loans of approximately $5 million and deposits of $13 million. The Company expects that it will not experience a material reduction in customer relationships in these areas and will seek to service these customers from nearby branches. The Company expects these branches to close in the fourth quarter of 2012, subject to customary regulatory conditions, and anticipates expense savings of approximately $500,000 per year related to these closures.

Capital Management Initiatives

The Company announced that it will file a shelf offering on Form S-3 with the Securities and Exchange Commission (SEC). Under the shelf registration statement, once declared effective by the SEC, the Company may offer and sell from time to time in the future, in one or more offerings, common stock, preferred stock, debt securities, warrants, depository shares, or units consisting of any combination of the forgoing.

The aggregate offering price of all securities that may be sold under the registration statement will not exceed $60 million. This shelf offering will give the Company flexibility to take advantage of acquisition opportunities that may arise in the future by accessing the capital markets on a timely and cost-effective basis. The specifics of any future offering, along with the prices and terms of any such securities offered by the Company, will be determined at the time of any such offering and will be described in detail in a prospectus supplement filed in connection with such offering. At this present time, the Company has no specific plans for an offering.

"Although we do not have any current plans to raise capital, we believe that the shelf registration statement will provide a benefit to the Company and our stockholders by enabling us to take advantage of favorable market conditions in capital raising transactions and to facilitate and expedite opportunistic acquisition and growth activities," said T. Heath Fountain, Executive Vice President and Chief Financial Officer. "The dollar amounts set forth are the amounts that we currently anticipate will be adequate to meet our needs under this registration statement over the next two years. We may use less, and we may continue to issue other shares of common stock pursuant to available registration exemptions or other registration statements. Any draw-down under the registration statement will only be done with the advance approval of our Board of Directors."

The shelf registration statement relating to these securities will be filed with the SEC, but will not become effective until the SEC declares the statement so. These securities may not be sold nor may offers to buy be accepted prior to the time the shelf registration statement becomes effective. This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Any offering of the securities covered by the shelf registration statement will only be by means of a prospectus and an accompanying prospectus supplement.

During the third quarter of 2012, the Company repurchased approximately 260,000 shares of common stock at an average price of $13.54, completing its stock repurchase program expiring in December 2012. The Company's Board of Directors has approved another stock repurchase program expiring in October 2013, which authorizes the repurchase of 397,000 shares of common stock, or approximately 5% of the shares currently outstanding.

The Company's estimated total risk-based capital ratio at September 30, 2012, was 19.2%, 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 11.2% as of September 30, 2012.

Looking ahead, the Company intends to maintain its capital strength at the current level to support growth and its acquisition activities. Accordingly, stock buybacks and dividend growth in the future will reflect largely the Company's future earnings power, rather than a return of capital to stockholders.

Third Quarter 2012 Results of Operations

The Company reported net income of $2.0 million or $0.25 per diluted share for the third quarter in 2012 compared with net income of $1.7 million or $0.21 per diluted share for the third quarter in 2011. However, the Company's results for the third quarters of 2012 and 2011 included special items that affect comparability. Results for the third quarter of 2012 included net non-recurring income and expenses of $472,000, net of tax, while the results of the year-earlier quarter included net non-recurring income and expenses of $1.3 million, net of tax. Excluding these special items, the Company's adjusted net income for the third quarter of 2012 was $1.5 million or $0.19 per diluted share compared with net income of $422,000 or $0.05 per diluted share for the third quarter of 2011 (see reconciliation of non-GAAP items).

The $258,000 improvement in reported quarterly earnings primarily resulted from the following items:
• Improved net interest income of $5.3 million; and
• Reduced provision expense for loan losses, excluding FDIC-acquired loans, loan losses of $250,000; offset by
• Reduced non-interest income of $1.5 million;
• Increased non-interest expense of $2.2 million; and
• Increased provision expense for FDIC-acquired loan losses of $1.2 million.

Net interest income for the third quarter of 2012 increased 71% to $12.7 million from $7.4 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 deposits. The Company's net interest margin was 5.77% for the third quarter of 2012, an increase of 102 basis points over 4.75% on a linked-quarter basis and 233 basis points over 3.44% in the year-earlier period. The improvement in the third quarter of 2012 net interest margin on a linked-quarter basis was driven by an increase in loan yields on the Company's FDIC-assisted loan portfolios, coupled with a decline in the cost of interest-bearing deposits as rates continue to reset to lower levels.

In the third quarter of 2012, the Company continued to achieve loan growth, with its loan portfolio increasing $39.5 million organically on a linked-quarter basis and advancing $121.9 million overall compared with the year-earlier quarter. For the third quarter of 2012, the Company's loan portfolio, including loans acquired through FDIC-assisted acquisitions, totaled $634.9 million, which increased $29.9 million on a linked-quarter basis. Total deposits stood at $845.1 million at the end of the third quarter of 2012, down 2% or $15.2 million on a linked-quarter basis from $860.3 million, primarily reflecting a planned runoff of time deposits.

Non-interest income for the third quarter of 2012 decreased 26% to $4.4 million from $5.9 million in the year-earlier quarter, primarily driven by a negative swing in the accretion for the FDIC loss-share receivable of $2.1 million and a negative change in gain on acquisitions of $2.1 million, which were partially offset by an increased gain on sale of securities of $1.3 million and improvements in mortgage banking fees of $1.0 million and bankcard services income of $98,000. Non-interest expense for the third quarter of 2012 increased 22% to $12.0 million from $9.8 million in the year-earlier quarter, primarily driven increased salaries and employment benefits of $1.0 million, driven in part by $641,000 in early retirement expense, and increased foreclosure expense on FDIC-acquired assets of $563,000 and loss on sale and write-downs of other real estate assets, excluding FDIC-acquired, of $229,000 offset in part by reduced acquisition-related expenses of $285,000.

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 $78.8 million in covered and $14.3 million in non-covered loans at the end of the third quarter of 2012 compared with $87.4 million in covered and $15.2 million in non-covered loans at the end of the second quarter of 2012. The principal balance of the FDIC-assisted loan portfolios totaled $171.6 million at the end of the third quarter of 2012 compared with $188.0 million as of the end of the second quarter of 2012. The details of the accounting for the FDIC-assisted loan portfolios for the third quarter of 2012 are as follows:
• Covered loans acquired in FDIC-assisted acquisitions decreased $8.6 million to $78.8 million;
• Non-covered loans acquired in FDIC-assisted acquisitions decreased $911,000 to $14.3 million;
• The FDIC loss-share receivable associated with covered loans acquired in FDIC-assisted acquisitions decreased $8.6 million to $67.7 million;
• The negative accretion for the FDIC loss-share receivable was $1.6 million;
• Provision expense for loans acquired in FDIC-assisted acquisitions was $1.2 million;
• The non-accretable discount decreased $12.3 million to $54.2 million; and
• The accretable discount increased $5.6 million to $24.4 million.

For the third quarter of 2012, provision expense of $1.2 million was recorded for loan charge-offs on 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 loans decreased $8.6 million from $76.3 million for the prior quarter to $67.7 million, primarily driven by reimbursements received from the FDIC of $7.0 million and negative accretion of $1.6 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 (claw back) liability was recorded as an expense, which reduced non-interest income for the current quarter by $484,000. This true-up was driven by an improvement in estimates of expected cash flows for both FDIC-assisted acquisitions.

The non-accretable discount decreased to $54.2 million at the end of the third quarter of 2012 from $66.5 million on a linked-quarter basis, primarily driven by the clearing of $3.6 million of discount in conjunction with the resolution of FDIC-assisted loans and transfers to accretable discount of $8.7 million. The accretable discount increased to $24.4 million for the third quarter of 2012 from $18.8 million on a linked-quarter basis, primarily due to the transfer from the non-accretable discount as a result of the improvement in cash flows, partially offset by loan discount accretion of $4.8 million for the current quarter which compares with $2.1 million on a linked-quarter basis.

Asset Quality

Annualized net charge-offs to average outstanding loans, excluding loans acquired in FDIC-assisted acquisitions, were down to 0.24% for the third quarter of 2012 versus 0.73% for the third quarter of 2011. Total non-performing assets, excluding assets acquired in FDIC-assisted acquisitions, reversed an improving trend as a percentage of assets compared with the prior year and were $17.8 million or 1.68% of total assets for the third quarter of 2012 compared with $9.8 million or 0.89% of total assets for the same quarter in 2011. The primary reason for the increase in non-performing assets was the migration of two relationships totaling $6.0 million to non-performing status. One of the relationships totaling $3.5 million was classified a troubled-debt restructuring and additional collateral of $6.1 million has been secured. The other relationship was a Chapter 11 bankruptcy where the collateral deficiency is fully reserved as of the current quarter. Both of these relationships were previously identified as criticized assets. Other real estate owned and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, totaled $1.4 million for the third quarter of 2012, down from $1.8 million for the same quarter in 2011.

The provision for loan losses on non-FDIC-acquired loans decreased 25% to $750,000 for the third quarter of 2012 from $1.0 million for the same quarter in 2011, primarily driven by improving net charge-off trends. For the third quarter in 2012, the allowance for loan losses represented 1.57% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.65% for the same quarter in 2011.

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 23 full-service branch locations, 11 mortgage offices, and 4 investment offices. As of September 30, 2012, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $122 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.

http://www.businesswire.com/news/home/20121025006642/en/Heritage-Financial-Group-Reports-Higher-Quarter-Net

[Enterprising Investor]

HBOS Upgrades Macon Loan Production Office to a Full-Service Banking Office (8/28/12)

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced that it has converted its loan production office in Macon, Georgia, to a full-service banking location. HeritageBank of the South entered the Macon market in August 2011 with the opening of a mortgage loan office. In April 2012, the Bank opened a loan production office headed by Hughes Pinson, President of the Macon market, who joined HeritageBank of the South at that time to lead the Bank's expansion in central Georgia.

The new HeritageBank of the South office is located at 4961 Forsyth Road in Macon.

Concurrent with the conversion of the Macon location to a full-service branch, the Bank also announced the hiring of Donna L. Sanders as its Branch Manager. Sanders brings to HeritageBank of the South more than 30 years of banking experience in the Macon market, along with seasoned skills in operations, lending, new business development, customer service, and relationship management.

Commenting on the announcement, Leonard Dorminey, President and Chief Executive Officer of Heritage Financial Group, said, "We are excited to announce the Bank's continued growth in Macon over such a short period of time. The ability to elevate our presence there now with a new full-service branch is a tribute to the leadership and dedication of Hughes and his team. Going forward, we expect that Donna will have a similar positive impact on our business in Macon, contributing to the steady expansion we have seen there."

Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving multiple markets across Georgia, North Central Florida and Eastern Alabama through 23 full-service branch locations, 11 mortgage offices, and 4 investment offices. As of June 30, 2012, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $123 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.

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 2011 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.
Contacts

Heritage Financial Group, Inc.
T. Heath Fountain, 229-878-2055
Executive Vice President and
Chief Financial Officer

http://www.businesswire.com/news/home/20120828005818/en/HeritageBank-South-Upgrades-Macon-Loan-Production-Office

[Enterprising Investor]

HBOS Announces Quarterly Cash Dividend of $0.04 Per Share (8/22/12)

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced that its Board of Directors has declared a cash dividend of $0.04 per share. The dividend will be paid on September 21, 2011, to stockholders of record as of September 7, 2011.

Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving multiple markets across Georgia, North Central Florida and Eastern Alabama through 23 full-service branch locations, 11 mortgage offices, and 3 investment offices. As of June 30, 2012, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $123 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.

Contacts
Heritage Financial Group, Inc.
T. Heath Fountain, 229-878-2055
Executive Vice President and Chief Financial Officer

http://www.businesswire.com/news/home/20120822005796/en/Heritage-Financial-Group-Announces-Quarterly-Cash-Dividend

[Enterprising Investor]

HBOS Announces Three Key Additions to Its Mortgage Division Leadership Team (8/06/12)

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced the addition of three veteran industry leaders to the Company's management team for its mortgage division, located at 11675 Rainwater Dr., Suite 150, Alpharetta, GA 30009 (770-663-1203). Stephen M. Cannon, formerly Vice President of Business Development for LoanSouth Mortgage in Atlanta, and J. Brent Harrell, previously Director of Wholesale and Correspondent Lending for Fidelity Bank Mortgage in Atlanta, have joined HeritageBank Mortgage in the newly created positions of division Co-Presidents. Additionally, Patrick Huefner, who also previously was with Fidelity Bank Mortgage as Vice President, joins HeritageBank Mortgage as Executive Vice President – Director of Secondary Market Operations.

Together with Bernard M. Catall, Group Vice President of Mortgage Operations, Cannon, Harrell and Huefner will round out a seasoned management team for HeritageBank Mortgage and provide a foundation of experience for future expansion.

Commenting on the announcement, Leonard Dorminey, President and Chief Executive Officer, said, "We are very pleased to welcome Stephen, Brent and Patrick to our company and HeritageBank Mortgage. This marks another significant step in strengthening our management team and positioning our mortgage operations for accelerated growth. With the addition of this new talent and experience, we expect to expand HeritageBank Mortgage aggressively by adding retail mortgage originators and developing new capabilities, like wholesale and correspondent mortgage services."

According to Dorminey, another aspect of the Company's plan to capitalize on growth opportunities for HeritageBank Mortgage will be the formation of an advisory board to provide input for management on market intelligence, new business development and strategic matters. The initial appointee to this board will be Robert S. "Bob" Cannon, a 25-year mortgage industry veteran in the Atlanta market. Cannon was an original co-founder of BancMortgage Financial Corp. in Atlanta in 1996 and served as its President at the time of his retirement in 2006.

Stephen Cannon brings more than 14 years of experience in the financial services industry to HeritageBank Mortgage and has worked in the mortgage industry since 2003. In 2009, he co-founded Meridian Mortgage Partners and was a partner in that Company prior to joining LoanSouth. Cannon holds a bachelor's degree in economics from Duke University.

Brent Harrell has 10 years of experience in mortgage lending, including wholesale and correspondent lending with Madison Corporation before joining Fidelity Bank. He also served in positions involved with secondary marketing and underwriting, along with credit and compliance matters. He is a graduate of Georgia Southern University with a degree in business administration.

Patrick Huefner began his career in mortgage lending in 2001 with Sunshine Mortgage Corporation, later joining Fidelity Bank. His experience includes mortgage pricing, interest rate risk management, whole loan sales and securitizations, and new product development. Huefner received a bachelor's degree in business management from the SUNY Brockport University.

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 22 full-service branch locations, 11 mortgage offices, and 3 investment offices. As of June 30, 2012, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $123 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.

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 2011 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.

Contacts

Heritage Financial Group, Inc.
T. Heath Fountain, 229-878-2055
Executive Vice President and Chief Financial Officer

http://www.businesswire.com/news/home/20120806006061/en/Heritage-Financial-Group-Announces-Key-Additions-Mortgage

[Enterprising Investor]

HBOS Reports Second Quarter Net Income of $1.4 Million or $0.17 Per Diluted Share (7/25/12)

Company Announces Expense Management Initiatives Expected to Provide Annual Savings up to $1.3 Million in 2013

ALBANY, Ga.--(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 June 30, 2012. Highlights of the Company's results for the second quarter 2012 include:
• Net income of $1.4 million or $0.17 per diluted share compared with a net loss of $481,000 or $0.06 per diluted share for the second quarter of 2011;
• Excluding special items for each quarter, net income was $1.4 million or $0.17 per diluted share for 2012 versus a net loss of $96,000 or $0.01 per diluted share for 2011 (see reconciliation of non-GAAP items);
• The successful completion of a previously announced branch acquisition in Auburn, Alabama, adding $12.2 million in loans and $18.7 million in deposits;
• Loan growth for the quarter, excluding loans acquired through FDIC-assisted acquisitions, of $51.7 million or 11%;
• A decrease in loans acquired through FDIC-assisted acquisitions of $10.3 million or 9% for the quarter;
• An increase in provision for non-FDIC acquired loan losses of $50,000 to $750,000 for the second quarter of 2012 compared with the same quarter for 2011;
• Provision expense of $341,000 for FDIC-acquired loan losses;
• A decrease in net charge-offs to 0.23% for the second quarter of 2012 compared with 0.26% for the second quarter of 2011 and 0.24% for the first quarter of 2012; and
• A decline in nonperforming assets (NPAs) to total assets, excluding assets acquired in FDIC-assisted acquisitions, to 1.08% at the end of the second quarter of 2012 from 1.17% at the end of the second quarter of 2011 and 1.27% at the end of the first quarter of 2012.

Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "We are pleased to report continued improvement in our operating results, which reflect the impact of significant organic loan growth, successful expense management efforts, and ongoing acquisition and expansion activities. Noninterest expense declined on a linked-quarter basis and has remained essentially level for three consecutive quarters, illustrating our commitment to expense management. Regarding acquisitions, we were pleased to complete our previously announced acquisition during the quarter of a branch in Auburn, Alabama, marking our entry into another growth market to further expand our franchise."

In closing, Dorminey added, "Over the past few years, our company has experienced significant growth and has invested heavily in our infrastructure to support expansion and capitalize on emerging opportunities across our market footprint. At this point, with a strong leadership team in place to pursue these dual objectives, we continue to increase our focus on creating efficiencies in our operations and managing our expenses in light of our customers' needs and prevailing business conditions. Accordingly, we are pleased to see that noninterest expense has stabilized, and we remain committed in our efforts to further reduce these expenses across the Company in coming quarters to enhance the Company's performance and build stockholder value, without compromising our commitment to maintaining what we believe is the best customer service in our markets."

Expense Management Initiatives

In the second half of 2012, the Company will pursue several expense management initiatives. Among these, the Company has offered an early retirement program to certain employees. It is expected that the one-time pre-tax cost of this early retirement program will be between $500,000 and $800,000 in the third quarter; however, the Company expects to realize annual savings of approximately $500,000 to $800,000 per year as a result. The Company also is terminating its Director’s and Supplemental Executive Retirement Plans. Under these plans, the current participants are fully vested in their benefits.

Additionally, the Company plans to close two branches that it acquired in FDIC-assisted acquisitions. The Company intends to close its branch in Collins, Georgia, which was acquired as part of the acquisition of The Tattnall Bank in 2009, and its branch in Guyton, Georgia, which was acquired as part of the acquisition of the Citizens Bank of Effingham in 2011. Combined, these branches have loans of approximately $5 million and deposits of $13 million. The Company expects that it will not experience a material reduction in customer relationships in these areas and will seek to service these customers from nearby branches. The Company expects these branches to close in the fourth quarter of 2012, subject to customary regulatory conditions, and anticipates expense savings of approximately $500,000 per year related to these closures.

Capital Initiatives

The Company's estimated total risk-based capital ratio at June 30, 2012, was 19.6%, 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 11.2% as of June 30, 2012.

Looking ahead, the Company intends to maintain its capital strength at the current level to support growth and its acquisition activities. Accordingly, stock buybacks and dividend growth in the future will reflect largely the Company's future earnings power, rather than a return of capital to stockholders.

During the second quarter of 2012, the Company repurchased approximately 179,000 shares under its stock repurchase programs. The program expiring in July 2012 has been completed, and the program, expiring in December 2012 unless extended or otherwise completed, has a remaining authorization to repurchase approximately 260,000 shares.

Second Quarter 2012 Results of Operations

The Company reported net income of $1.4 million or $0.17 per diluted share for the second quarter in 2012 compared with a net loss of $481,000 or $0.06 per diluted share for the second quarter in 2011. However, the Company's results for the second quarters of 2012 and 2011 included special items that affect comparability. Results for the second quarter of 2012 included net non-recurring expenses of $23,000, net of tax, while the results of the year-earlier quarter included net non-recurring expenses of $385,000, net of tax. Excluding these special items, the Company's adjusted net income for the second quarter of 2012 was $1.4 million or $0.17 per diluted share compared with a net loss of $96,000 or $0.01 per diluted share for the second quarter of 2011 (see reconciliation of non-GAAP items).

The $1.8 million improvement in reported earnings was primarily the result of the following items:
• Improved net interest income of $3.7 million due to growth in interest-earning assets and a reduction in the cost of interest-bearing deposits;
• Increased noninterest income of $119,000, driven by improvements in mortgage banking fees of $314,000, bankcard services income of $157,000 and bargain purchase gains of $151,000, partially offset by reductions in the gain on sale of securities of $426,000 and in the accretion for the FDIC loss-share receivable of $138,000; offset by
• Increased noninterest expense of $634,000, primarily due to higher salaries and employment benefits of $537,000 and increased equipment and occupancy expense of $279,000 and $152,000, respectively, driven by the acquisition-related hiring of an additional 24 full-time equivalent employees, as well as growth in most other noninterest expense categories, and offset in part by reduced acquisition-related expenses of $405,000;
• Increased provision expense for non-FDIC-acquired loan losses of $50,000, driven by organic loan growth;
• Increased provision expense for FDIC-acquired loan losses of $341,000, driven by the resolution of those assets, which did not increase the allowance for loan losses.

Net interest income for the second quarter of 2012 increased 58% to $10.1 million from $6.4 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 deposits. The Company's net interest margin was 4.75% for the second quarter of 2012, an increase of 26 basis points over 4.49% on a linked-quarter basis and 139 basis points over 3.36% in the year-earlier period. The improvement in the second quarter of 2012 net interest margin on a linked-quarter basis was driven by an increase in loan yields on the Company's FDIC-assisted loan portfolios, coupled with a decline in the cost of interest-bearing deposits as rates continue to reset to lower levels.

In the second quarter of 2012, the Company continued to achieve loan growth, with its loan portfolio increasing $40.7 million organically on a linked-quarter basis and advancing $74.3 million overall compared with the year-earlier quarter. For the second quarter of 2012, the Company's loan portfolio, including loans acquired through FDIC-assisted acquisitions, totaled $605.0 million, which increased $42.4 million on a linked-quarter basis. Total deposits stood at $860.3 million at the end of the second quarter of 2012, down 1% or $8.4 million on a linked-quarter basis from $868.7 million, primarily reflecting a planned runoff of time deposits.

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 $87.4 million in covered and $15.2 million in non-covered loans at the end of the second quarter of 2012 compared with $95.5 million in covered and $17.4 million in non-covered loans at the end of the first quarter of 2012. The principal balance of the FDIC-assisted loan portfolios totaled $188.0 million at the end of the second quarter of 2012 compared with $209.8 million as of the end of the first quarter of 2012. The details of the accounting for the FDIC-assisted loan portfolios for the second quarter of 2012 are as follows:
• Covered loans acquired in FDIC-assisted acquisitions decreased $8.1 million to $87.4 million;
• Non-covered loans acquired in FDIC-assisted acquisitions decreased $2.2 million to $15.2 million;
• The FDIC loss-share receivable associated with covered loans acquired in FDIC-assisted acquisitions decreased $6.6 million to $76.3 million;
• The negative accretion for the FDIC loss-share receivable was $133,000;
• Provision expense for loans acquired in FDIC-assisted acquisitions was $341,000;
• The non-accretable discount decreased $17.6 million to $66.5 million; and
• The accretable discount increased $6.1 million to $18.8 million.

For the second quarter of 2012, provision expense of $341,000 was recorded for loan charge-offs on loans acquired in FDIC-assisted acquisitions not provided for by the discount or reimbursement from 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 loans decreased $6.6 million from $82.9 million for the prior quarter to $76.3 million, primarily driven by reimbursements received from the FDIC of $5.1 million and negative accretion of $858,000 affecting the loss-share receivable asset that was associated with the improvement in expected cash flows of the loss-share performing portfolios.

The non-accretable discount decreased to $66.5 million at the end of the second quarter of 2012 from $84.1 million on a linked-quarter basis, primarily driven by the clearing of $9.4 million of discount in conjunction with the resolution of FDIC-assisted loans and transfers to accretable discount of $8.2 million. The accretable discount increased to $18.8 million for the second quarter of 2012 from $12.7 million on a linked-quarter basis, primarily due to the transfer from the non-accretable discount as a result of the improvement in cash flows, partially offset by loan discount accretion of $2.1 million.

Asset Quality

Net charge-offs to average outstanding loans on an annualized basis, excluding loans acquired in FDIC-assisted acquisitions, were down to 0.23% for the second quarter of 2012 versus 0.26% for the second quarter of 2011. Total nonperforming assets, excluding assets acquired in FDIC-assisted acquisitions, have significantly improved as a percentage of assets compared with the prior year and were $11.5 million or 1.08% of total assets for the second quarter of 2012 compared with $11.3 million or 1.17% of total assets for the same quarter in 2011. Other real estate owned and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, totaled $1.5 million for the second quarter of 2012, down from $2.7 million for the same quarter in 2011.

The provision for loan losses on non-FDIC-acquired loans increased to $750,000 for the second quarter of 2012 from $700,000 for the same quarter in 2011, primarily driven by organic loan growth. For the second quarter in 2012, the allowance for loan losses represented 1.61% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.58% for the same quarter in 2011.

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 22 full-service branch locations, 11 mortgage offices, and 3 investment offices. As of June 30, 2012, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $123 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.

http://www.businesswire.com/news/home/20120725006568/en/Heritage-Financial-Group-Reports-Quarter-Net-Income

[Enterprising Investor]

HBOS Reports First Quarter Net Income of $1.0 Million or $0.12 Per Diluted Share (4/30/12)

ALBANY, Ga.--(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, 2012. Highlights of the Company's results for the first quarter 2012 include:

Net income of $1.0 million or $0.12 per diluted share compared with net income of $1.2 million or $0.15 per diluted share for the first quarter of 2011;

Excluding special items for each quarter, net income was $1.2 million or $0.15 per diluted share for 2012 versus a net loss of $3,000 or $0.00 per diluted share for 2011 (see reconciliation of non-GAAP items);

Organic loan growth, excluding loans acquired in FDIC-assisted acquisitions, of $44.2 million or 11% from 2011;

Loans acquired through FDIC-assisted acquisitions increased $22.3 million or 25% from the first quarter of 2011;

A decrease in provision for loan losses of $200,000 for the first quarter of 2012 compared with the same quarter for 2011;

A significant decrease in annualized net charge-offs to 0.24% for the first quarter of 2012 from 2.80% for the first quarter of 2011; and

A slight decline in nonperforming assets (NPAs) to total assets, excluding assets acquired in FDIC-assisted acquisitions, to 1.27% for 2012 from 1.29% for 2011.

Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "During the first quarter of 2012, Heritage Financial Group continued to post improving results. Excluding the effects of special items associated with acquisitions, net income per diluted share increased to $0.15 for the first quarter of 2012 versus essentially flat earnings in the year-earlier quarter. Importantly, this improvement reflected both organic growth across most of our markets as well as the contribution of two FDIC-assisted acquisitions completed during 2011. With respect to acquisitions, we are pleased with our integration activities over the past year, which have been very successful, providing us with a sense of optimism about the prospects for seizing additional opportunities to expand in the months and years ahead."

Regarding expansion activity, Dorminey noted that the Company recently signed a definitive agreement to purchase a branch office in Auburn, Alabama, marking the Company's initial entry into that state. When completed, the purchase is expected to add approximately $13 million in loans and approximately $20 million in deposits. While this acquisition is small, we view the Auburn-Opelika area as one of the most attractive markets in the state of Alabama, characterized by low unemployment and a dynamic economic environment, and it is home to Auburn University and is in close proximity to two automobile manufacturing plants, along with their related suppliers in the area. The Company also recently announced that it will open a new commercial banking office in Macon, Georgia, after entering that market in August 2011 with a mortgage loan office. The Company considers Macon to be a strategically important and vibrant market and an attractive expansion opportunity.

During the first quarter, the Company also closed the single branch it acquired in Statesboro in connection with the August 2011 FDIC-assisted acquisition of First Southern National Bank. Management was pleased to see continued strong and loyal support from its new First Southern customers during and following this consolidation effort to improve efficiency and reduce costs.

In closing, Dorminey added, "We were pleased with our company's overall progress in the first quarter and consider it a solid start to the new year. Importantly, we saw meaningful improvements in credit quality and, thus, were able to reduce our provision for loan losses. While the first quarter did include some acquisition-related expenses associated with the closing of the First Southern office, it marked the beginning of a return to a more normalized level of noninterest expenses following two years of heightened expansion activity. Throughout the remainder of the year, we will continue to focus aggressively on efforts to reduce our operating expenses. We also are taking steps to enhance revenue through loan growth, as evidenced by our core portfolio growth and our entrance into the Auburn and Macon markets."

Capital Initiatives

The Company's estimated total risk-based capital ratio at March 31, 2012, was 22.2%, 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 11.2% as of March 31, 2012.

During the first quarter of 2012, the Company repurchased approximately 43,000 shares under its stock repurchase program. The program, which expires in July 2012 unless completed sooner or otherwise extended, has a remaining authorization to repurchase approximately 438,000 shares. Additionally, in February 2012, Heritage Financial Group's Board of Directors increased the Company's quarterly cash dividend 33% to $0.04 per share.

First Quarter 2012 Results of Operations

The Company reported net income of $1.0 million or $0.12 per diluted share for the first quarter in 2012 compared with net income of $1.2 million or $0.15 per diluted share for the first quarter in 2011. However, the Company's results for the first quarters of 2012 and 2011 included special items that affect comparability. Results for the first quarter of 2012 included acquisition-related expenses of $246,000 net of tax, while the results of the year-earlier quarter included a bargain purchase gain and acquisition-related expenses that together totaled $1.2 million net of tax. Excluding these special items, the Company's adjusted net income for the first quarter of 2012 was $1.2 million or $0.15 per diluted share compared with a net loss of $3,000 or $0.00 per diluted share for the first quarter of 2011 (see reconciliation of non-GAAP items).

The $244,000 quarter-over-quarter reduction in reported earnings was primarily the result of the following items:

Reduced noninterest income of $2.1 million, reflecting a $2.3 million bargain purchase gain associated with the Citizens FDIC-assisted acquisition during the first quarter of 2011 and $498,000 of negative accretion of the FDIC loss-share receivable during the first quarter of 2012, partially offset by improvement in mortgage banking fees of $421,000 and bankcard services income of $238,000;

Increased noninterest expense of $2.4 million due to higher salaries and employment benefits of $1.2 million and increased equipment and occupancy expense of $528,000, driven by the acquisition-related hiring of an additional 51 full-time equivalent employees, as well as growth in most other noninterest expense categories;

offset by Improved net interest income of $3.7 million due to growth in interest-earning assets and a reduction in the cost of interest-bearing deposits; and

Lower provision expense of $200,000 reflecting lower net charge-offs compared with the 2011 quarter.

Net interest income for the first quarter of 2012 increased 62% to $9.7 million from $6.0 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 deposits. The Company's net interest margin for the first quarter of 2012 increased 30 basis points to 4.49% on a linked-quarter basis from 4.19% for the fourth quarter of 2011 and 107 basis points from 3.42% in the year-earlier period. The improvement in the first quarter of 2012 net interest margin on a linked-quarter basis was driven by an increase in loan yields on the Company's FDIC-assisted loan portfolios, coupled with a decline in the cost of interest-bearing deposits as rates continue to reset to lower levels.

In the first quarter of 2012, the Company continued to achieve loan growth, with its loan portfolio increasing $15.2 million organically on a linked-quarter basis and advancing $44.2 million overall compared with the year-earlier quarter. For the first quarter ended 2012, the Company's loan portfolio, including loans acquired through FDIC-assisted acquisitions, totaled $562.5 million, which increased $1.9 million on a linked-quarter basis as a result of organic loan growth of $15.2 million. This increase was partially offset by loan pay-downs in the FDIC-assisted portfolios. Total deposits stood at $868.7 million at the end of the first quarter of 2012, down 2% or $15.5 million from $884.2 million for the fourth quarter of 2011, driven primarily by planned runoff of time deposits.

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 $95.5 million in covered and $17.4 million in non-covered loans for the first quarter ended 2012 compared with $107.5 million in covered and $18.7 million in non-covered loans for the fourth quarter ended 2011. The principal balance of the FDIC-assisted loan portfolios totaled $209.8 million for the first quarter ended 2012 compared with $228.4 million as of the fourth quarter ended 2011. The details of the accounting for the FDIC-assisted loan portfolios for the first quarter of 2012 are as follows:

Covered loans acquired in FDIC-assisted acquisitions decreased $12.0 million to $95.5 million;

Non-covered loans acquired in FDIC-assisted acquisitions decreased $1.3 million to $17.4 million;

The FDIC loss-share receivable associated with covered loans acquired in FDIC-assisted acquisitions decreased $1.0 million to $82.9 million;

The accretion for the FDIC loss-share receivable turned negative $498,000;

The non-accretable discount decreased $5.4 million to $84.1 million; and

The accretable discount decreased $100,000 to $12.7 million.
For the first quarter ended 2012, net charge-offs for both the covered and non-covered loans were fully provided by the associated loan discounts and expected reimbursement from the FDIC and did not affect the Company's loan loss reserve. The FDIC loss-share receivable associated with covered FDIC-assisted loans decreased $1.0 million from $83.9 million for the prior quarter to $82.9 million primarily, driven by negative accretion of $843,000 affecting the loss-share receivable asset that was associated with the improvement in expected cash flows of the loss-share performing portfolios.

The non-accretable discount decreased to $84.1 million at the end of the first quarter of 2012 from $89.5 million on a linked-quarter basis, primarily driven by the clearing of $3.9 million of discount in conjunction with the resolution of the FDIC-assisted loans and transfers to accretable discount of $1.5 million. The accretable discount decreased to $12.7 million for the current quarter from $12.8 million on a linked-quarter basis, primarily due to loan discount accretion of $1.6 million that was partially offset by the transfer from the non-accretable discount as a result of the improvement in cash flows.

Asset Quality

Net charge-offs to average outstanding loans on an annualized basis, excluding loans acquired in FDIC-assisted acquisitions, were down sharply to 0.24% for the first quarter of 2012 versus 2.80% for the first quarter of 2011. Total nonperforming loans, excluding loans acquired in FDIC-assisted acquisitions, were $10.7 million or 2.38% of total loans for the first quarter of 2012 compared with $9.1 million or 2.24% of total loans for the same quarter in 2011. Other real estate owned and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, were $3.0 million for the first quarter of 2012, down from $3.2 million for the same quarter in 2011.

The provision for loan losses decreased to $400,000 for the first quarter of 2012 from $600,000 for the same quarter in 2011, reflecting primarily a decline in annualized net charge-offs. For the first quarter in 2012, the allowance for loan losses represented 1.70% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.51% for the first quarter in 2011.

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 and North Central Florida through 21 full-service branch locations, 11 mortgage offices, and 3 investment offices. As of March 31, 2012, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $125 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 2011 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.

http://www.businesswire.com/news/home/20120430006618/en/Heritage-Financial-Group-Reports-Quarter-Net-Income

[Enterprising Investor]

HBOS Opens New Banking Office in Macon (4/18/12)

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced that the Bank has hired Hughes Pinson to lead its expansion in the Macon, Georgia market. After entering the Macon market in August 2011 with a mortgage loan office, HeritageBank has now opened a new commercial banking office. Pinson will serve as the new Regional President for HeritageBank of the South in Macon.

Commenting on the announcement, Leonard Dorminey, President and Chief Executive Officer of Heritage Financial Group, said, "We have long considered Macon to be an attractive and vibrant market, one that could be strategically important to our company. So we are excited to capitalize on the opportunity to both expand there and strengthen our team at the same time by adding talented leadership for the market. We are pleased to welcome Hughes to HeritageBank of the South and we will commit our full resources and capabilities to help him create the best banking experience possible for the Macon community."

Pinson has a 20-year career in the financial industry in Macon. His experience in the market is expected to provide HeritageBank of the South with an advantage as it seeks to grow its customer base in Middle Georgia. Pinson is a graduate of Auburn University.

The new HeritageBank of the South office is located next to the Bank's mortgage office at 3200 Riverside Drive, Suite B #275 in Macon.

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, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving primarily South Georgia and North Central Florida through 22 full-service branch locations, 11 mortgage offices, and 3 investment offices. As of December 31, 2011, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $124 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.

Contacts
Heritage Financial Group, Inc.
T. Heath Fountain, 229-878-2055
Executive Vice President and Chief Financial Officer

http://www.businesswire.com/news/home/20120418005152/en/HeritageBank-South-Opens-Banking-Office-Macon

[Enterprising Investor]

HBOS Agrees to Purchase Auburn, Alabama Branch from Community Capital Bancshares (4/11/12)

Location Will Mark Initial Entry into Alabama for Heritage Financial Group

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced that it has signed a definitive agreement to purchase a single branch in Auburn, Alabama, from AB&T National Bank, a wholly owned subsidiary of Community Capital Bancshares, Inc. (ALBY:PK), based in Albany, Georgia. The branch to be acquired is located at 1943 East Glenn Avenue, Auburn, Alabama.

The transaction, which is expected to close in the second quarter of 2012, subject to regulatory approval and other customary conditions, is expected to result in the transfer of approximately $13 million in loans and approximately $20 million in deposits, including all demand deposits, savings accounts, money market accounts and certificates of deposit. In addition to purchasing the branch, HeritageBank of the South also expects to retain the employees currently working in that branch.

Commenting on the announcement, Leonard Dorminey, President and Chief Executive Officer of Heritage Financial Group, Inc., said, "We are pleased to announce the entry of HeritageBank of the South into the state of Alabama. Our Bank has built its reputation on strength, service and the ability to meet the needs of consumers and small business owners. We look forward to putting those values to work for our new customers in Auburn and Opelika.

"Less than 125 miles from our core market in Albany, the Auburn-Opelika market is very attractive for our bank," Dorminey continued. "It is highlighted by low unemployment, the cultural and intellectual impact of Auburn University, and the dynamic economic environment associated with the Kia Motors manufacturing plant and related suppliers in the area. Together, we believe these conditions, which make the Auburn-Opelika metropolitan statistical area one of the most attractive markets in the state, will support high future growth for the region in the future. With this acquisition to establish our presence in Auburn, HeritageBank of the South should benefit from the strong commercial climate there that, in turn, will translate into a strategic opportunity to expand our loan portfolio – in contrast with our earlier FDIC-assisted deals that had a greater impact on our deposit base."

Dorminey noted that, considering the Company's strong capital position – with a total risk-based capital ratio of 19.2% at December 31, 2011, Heritage Financial Group remains well positioned to take advantage of future acquisition opportunities and FDIC-assisted deals that make sense for HeritageBank of the South's business and markets. Currently, the Company continues to focus on its present footprint across South Georgia and North Central Florida, as well as adjacent or neighboring markets in Alabama and South Carolina.

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, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving primarily South Georgia and North Central Florida through 21 full-service branch locations, 11 mortgage offices, and 3 investment offices. As of December 31, 2011, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $124 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.

Contacts
Heritage Financial Group, Inc.
T. Heath Fountain, 229-878-2055
Executive Vice President and Chief Financial Officer

http://www.businesswire.com/news/home/20120411005119/en/Heritage-Financial-Group-Agrees-Purchase-Auburn-Alabama

[Penny Roger$]

~ $HBOS ~ Earnings posted, pending or coming soon! In Charts and Links Below!

~ $HBOS ~ Earnings expected on Monday *
This Week In Earnings: Earnings are coming or are already posted! This is what the charts look like! If you play the earnings these posts can be very helpful to you!
Want more like this? Search Keyword: MACMONEY >>> http://tinyurl.com/MACMONEY <<<
One or more of many earnings sites has alerted this security has or will be posting earnings on or around the day of this message.








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*If the earnings date is in error please ignore error. I do my best.

[Enterprising Investor]

HBOS 2011 Net Income More Than Doubles (1/26/12)

Fourth Quarter Net Income up 47% to $1.4 Million or $0.16 Per Diluted Share

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced unaudited financial results for the quarter and year ended December 31, 2011. Key aspects of the Company's results for the year ended 2011 include:

•Net income of $3.8 million, or $0.47 per diluted share, compared with net income of $1.4 million or $0.17 per diluted share for the year ended 2010;

•Excluding special items for each year, net income was $1.6 million or $0.19 per diluted share versus a net loss of $434,000 or $0.05 per diluted share for 2010 (see reconciliation of non-GAAP items);

•Organic loan growth, excluding loans acquired in FDIC-assisted acquisitions, of $36.8 million or 9% from 2010;

•Loans acquired through FDIC-assisted acquisitions increased $104.8 million or 490% from 2010, driven primarily by two FDIC-assisted acquisitions completed during 2011;

•A decrease in the allowance for loan losses to 1.72% of period-end loans, excluding loans acquired in FDIC-assisted acquisitions, from 2.04% of period-end loans, excluding loans acquired in FDIC-assisted acquisitions, for 2010;

•A slight increase in annualized net charge-offs to 0.91% for 2011 from 0.87% for 2010; and

•A decline in nonperforming assets (NPAs) to total assets, excluding loans acquired in FDIC-assisted acquisitions, to 0.95% at year-end 2011 from 1.80% at year-end 2010.
Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "This past year marked a period of historic growth for our company as we completed two strategic FDIC-assisted acquisitions that vastly expanded our branch network and increased our market share in Southeast Georgia. We have fully integrated these acquisitions and continue to explore other opportunities for strategic expansion.

"During 2011, we saw a dramatic decrease in our provision expense as we continue to experience improvement in the credit quality in our loan portfolio, excluding loans acquired through FDIC-assisted acquisitions," Dorminey continued. "We are optimistic about the prospects for continued improvement in our financial performance in 2012."

Fourth Quarter 2011 Results of Operations

The Company reported net income of $1.4 million, or $0.16 per diluted share, for the three months ended December 31, 2011, compared with net income of $922,000 or $0.11 per diluted share for the three months ended December 31, 2010. This $430,000 improvement in earnings was primarily the result of the following items:

•Improved net interest income of $3.3 million due to growth in interest-earning assets;

•Lower provision expense of $2.8 million reflecting lower net charge-offs compared with the 2010 quarter; offset by

•Reduced noninterest income of $3.1 million, reflecting a $2.7 million bargain purchase gain associated with the Tattnall FDIC-assisted acquisition and $916,000 of life insurance proceeds on a former key employee recorded during the 2010 quarter, partially offset by improvement in mortgage banking fees of $404,000; and

•Increased non-interest expense of $3.0 million due to increased salaries and employment benefits of $2.1 million driven by the acquisition-related hiring of an additional 121 full-time equivalent employees, on top of growth in most other noninterest expense categories.

The Company's results for the three months ended December 31, 2011, included acquisition-related expenses, net of tax, of $177,000 and a $477,000 income tax benefit for state tax credits recorded as the Company returned to core profitability. Excluding special items, the Company would have reported net income of $1.1 million or $0.13 per diluted share for the fourth quarter of 2011 compared with a net loss of $1.6 million or $0.19 per diluted share in the fourth quarter of 2010 (see reconciliation of non-GAAP items).

Net interest income for the fourth quarter increased 55% to $9.2 million from $5.9 million in the year-earlier quarter, primarily reflecting an increase in interest-earning assets related to both acquisitions and organic growth. The Company's net interest margin for the fourth quarter of 2011 increased 75 basis points to 4.19% on a linked-quarter basis from 3.44% in the third quarter of 2011 and increased 31 basis points from 3.88% in the year-earlier period. The improvement in the fourth quarter of 2011 net interest margin on a linked-quarter basis was driven by an increase in loan yields on the Company's FDIC-assisted loan portfolios, coupled with a decline in the cost of interest bearing deposits as rates continue to reset to lower levels.

The Company's estimated total risk-based capital ratio at December 31, 2011, was 19.2%, 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 11.0% as of December 31, 2011.

In the fourth quarter of 2011, the Company continued to post organic and acquisition-related loan growth, increasing on a linked-quarter basis and advancing significantly compared with the year-earlier quarter. Still, bank acquisitions, including the Company's second and third whole-bank acquisitions in February 2011 and August 2011, respectively, accounted for much of the growth in loans and deposits over the past 12 months. At December 31, 2011, the Company's loan portfolio, including loans acquired through FDIC-assisted acquisitions, totaled $560.6 million, which was flat on a linked-quarter basis as a result of organic loan growth of $14.4 million, which offset loan pay-downs in the FDIC-assisted portfolios. Total deposits stood at $884.2 million at the end of the fourth quarter of 2011, down $15.9 million or 2% from $900.1 million at September 30, 2011, driven primarily by planned time deposit runoff.

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 consist of $107.5 million in covered and $18.7 million in non-covered loans as of December 31, 2011, compared with $116.2 million in covered and $24.7 million in non-covered loans as of September 30, 2011. The principal balance of the FDIC-assisted loan portfolios totaled $228.4 million as of December 31, 2011, compared with $248.6 million as of September 30, 2011. The details of the accounting for the FDIC-assisted loan portfolios for the fourth quarter of 2011 are as follows:

•Covered loans acquired in FDIC-assisted acquisitions decreased $8.7 million to $107.5 million;

•Non-covered loans acquired in FDIC-assisted acquisitions decreased $6.0 million to $18.7 million;

•The FDIC loss-share receivable associated with covered loans acquired in FDIC-assisted acquisitions decreased $3.9 million to $83.9 million;

•The accretion for the FDIC loss-share receivable turned negative $72,000;
•The non-accretable discount decreased $9.3 million to $89.5 million; and

•The accretable discount increased $4.0 million to $12.8 million.
At December 31, 2011, covered and non-covered loans acquired in FDIC-assisted acquisitions decreased to $107.5 million and $18.7 million, respectively, on a linked-quarter basis from $116.2 million and $24.7 million, respectively, primarily driven by loan pay-downs. The net charge-offs for both the covered and non-covered loans were fully provided for by the associated loan discounts and expected reimbursement from the FDIC and did not affect the Company's loan loss reserve. The FDIC loss-share receivable associated with covered FDIC-assisted loans decreased $3.9 million from $87.8 million in the prior quarter to $83.9 million, driven by $3.2 million of reimbursements received from the FDIC.

The non-accretable discount decreased to $89.5 million at the end of the fourth quarter of 2011 from $98.8 million on a linked-quarter basis, primarily driven by net charge-offs in the FDIC-assisted loan portfolios and transfers to accretable discount. The accretable discount increased to $12.8 million for the current quarter from $8.8 million on a linked-quarter basis, primarily driven by transfers from accretable discount as a result of the improvement in cash flows received from the Company's FDIC-assisted loan portfolios. Moreover, the improvement in cash flows received also negatively affected the accretion for the loss-share receivable and turned it negative $72,000.

Asset Quality

Total nonperforming loans, excluding loans acquired in FDIC-assisted acquisitions, were $7.0 million at December 31, 2011, down from $8.0 million at September 30, 2011. Other real estate owned and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, were $3.4 million at December 31, 2011, up from $1.8 million at September 30, 2011, and primarily driven by the resolution process of moving nonperforming loans to foreclosure. Nonperforming loans to total loans, excluding loans acquired in FDIC-assisted acquisitions, decreased to 1.62% as of December 31, 2011, from 1.90% as of September 30, 2011. Net charge-offs to average outstanding loans, excluding loans acquired in FDIC-assisted acquisitions, on an annualized basis, were 0.04% for the fourth quarter of 2011 versus 0.73% for the third quarter of 2011, while the year-to-date net charge-offs were 0.91% as of December 31, 2011, versus 0.87% as of December 31, 2010.

The provision for loan losses decreased to $595,000 for the fourth quarter of 2011 from $1.0 million for the third quarter of 2011, driven primarily by a decrease in annualized net charge-offs. At December 31, 2011, the allowance for loan losses represented 1.72% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.65% at September 30, 2011.

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 and North Central Florida through 22 full-service branch locations, 11 mortgage offices, and 3 investment offices. As of December 31, 2011, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $124 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.

http://www.businesswire.com/news/home/20120126006210/en/Heritage-Financial-Group-2011-Net-Income-Doubles

[Enterprising Investor]

HBOS Announces Stock Repurchase Program (12/23/11)

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced that its Board of Directors has approved a new stock repurchase program. The program authorizes the Company to repurchase up to approximately 5% of its outstanding common stock, or approximately 435,000 shares. Repurchases may be made from time to time in open-market or negotiated transactions as deemed appropriate by the Company and will depend on market conditions. The new program will expire in December 2012 unless completed sooner or otherwise extended.

Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving primarily South Georgia and North Central Florida through 23 full-service branch locations and 11 mortgage offices. As of September 30, 2011, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $124 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.

Contacts
Heritage Financial Group, Inc.
T. Heath Fountain, 229-878-2055
Executive Vice President and Chief Financial Officer

http://www.businesswire.com/news/home/20111223005017/en/Heritage-Financial-Group-Announces-Stock-Repurchase-Program

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HBOS Agrees to Purchase Assets and Assume Deposits of First Southern National Bank of Statesboro (8/19/11)

ALBANY, Ga.--(BUSINESS WIRE)--Heritage Financial Group, Inc. (the "Company") (NASDAQ: HBOS), the holding company for HeritageBank of the South (the "Bank"), today announced that the Bank has entered into a definitive whole-bank purchase and assumption agreement with the Federal Deposit Insurance Corporation (the "FDIC") to acquire substantially all of the assets and assume substantially all of the deposits of First Southern National Bank ("First Southern"), a full-service bank based in Statesboro, Georgia, with total assets of approximately $175 million. The Office of the Comptroller of the Currency today closed First Southern and appointed the FDIC as receiver.

In the acquisition, HeritageBank of the South will assume approximately $170 million in deposits and acquire $120 million in loans. In addition to assuming all of the deposits of First Southern, HeritageBank of the South will purchase essentially all of its assets. The FDIC and the Bank have entered into a loss-share agreement under which the FDIC will reimburse HeritageBank of the South for 80% of the losses on First Southern's covered loans and other real estate owned.

The single office previously operated by First Southern in Statesboro will reopen on Saturday, according to its normal operating hours, as a branch of HeritageBank of the South. Depositors of First Southern will automatically become depositors of HeritageBank of the South, and deposits will continue to be insured by the FDIC up to applicable limits.

First Southern, with a single location in Statesboro, further expands the Bank's footprint in the Statesboro market, increasing to three the number of branch offices there. The acquisition is expected to boost the Bank's market ranking, in terms of deposit market share, into the top four banks in Statesboro. HeritageBank of the South will now operate 22 branch locations in South Georgia and North Central Florida.

Commenting on the announcement, Leonard Dorminey, President and Chief Executive Officer of Heritage Financial Group, Inc., said, "We are pleased to welcome all First Southern's customers to HeritageBank of the South. Our goal is to make this transition as simple and transparent as possible for all customers and introduce them to the distinctly different style of community banking that our customers have come to expect. We believe customers will see this difference in the stronger service capabilities we have brought to the Statesboro market, including not only an array of traditional banking products and services, but also a platform for mortgage lending and investment services. We point out to our new customers that their deposits are safe and fully accessible using their existing account numbers, checks, and debit/ATM cards. We look forward to forging even stronger relationships with all current First Southern customers in the months and years ahead.

"With this acquisition, we continue to strategically deploy our capital," Dorminey continued. "First Southern marks the third FDIC-assisted acquisition we have completed, which, along with our other transactions, have greatly expanded our footprint across southern Georgia and have strengthened our presence in attractive markets such as Statesboro. These steps have enhanced our regional footprint and have increased our asset base significantly." Dorminey noted that, considering the Company's strong capital position – with a total risk-based capital ratio of 23.4% at June 30, 2011, the Company remains well positioned to take advantage of possible future acquisition opportunities and FDIC-assisted deals that make sense for HeritageBank of the South's business and markets.

Sterne Agee acted as financial advisor to the Company in this transaction, while Silver, Freedman & Taff, L.L.P. served as legal counsel.

Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving primarily South Georgia and North Central Florida through 22 full-service branch locations, 10 mortgage offices and two investment offices. As of June 30, 2011, the Company reported total assets of approximately $964 million and total stockholders' equity of approximately $122 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.

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.

Contacts
Heritage Financial Group, Inc.
T. Heath Fountain, 229-878-2055
Executive Vice President and Chief Financial Officer

http://www.businesswire.com/news/home/20110819005823/en/HeritageBank-South-Agrees-Purchase-Assets-Assume-Deposits

[Enterprising Investor]

HBOS Assumes All of the Deposits of First Southern National Bank (8/19/11)

FOR IMMEDIATE RELEASE
August 19, 2011

Media Contact:
LaJuan Williams-Young
[phone]
Email: [e-mail]

First Southern National Bank, Statesboro, Georgia, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Heritage Bank of the South, Albany, Georgia, to assume all of the deposits of First Southern National Bank.

The sole branch of First Southern National Bank will reopen on Saturday as a branch of Heritage Bank of the South. Depositors of First Southern National Bank will automatically become depositors of Heritage Bank of the South. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of First Southern National Bank should continue to use their existing branch until they receive notice from Heritage Bank of the South that it has completed systems changes to allow other Heritage Bank of the South branches to process their accounts as well.

This evening and over the weekend, depositors of First Southern National Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of June 30, 2011, First Southern National Bank had approximately $164.6 million in total assets and $159.7 million in total deposits. Heritage Bank of the South will pay the FDIC a premium of 1.0 percent to assume all of the deposits of First Southern National Bank. In addition to assuming all of the deposits of the failed bank, Heritage Bank of the South agreed to purchase essentially all of the assets.

The FDIC and Heritage Bank of the South entered into a loss-share transaction on $115.7 million of First Southern National Bank's assets. Heritage Bank of the South will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.

Customers with questions about today's transaction should call the FDIC toll-free at 1-800-517-1846. The phone number will be operational this evening until 9:00 p.m., Eastern Daylight Time (EDT); on Saturday from 9:00 a.m. to 6:00 p.m., EDT; on Sunday from noon to 6:00 p.m., EDT; and thereafter from 8:00 a.m. to 8:00 p.m., EDT. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/firstsouthern-ga.html.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $39.6 million. Compared to other alternatives, Heritage Bank of the South's acquisition was the least costly resolution for the FDIC's DIF. First Southern National Bank is the 67th FDIC-insured institution to fail in the nation this year, and the seventeenth in Georgia. The last FDIC-insured institution closed in the state was High Trust Bank, Stockbridge, on July 15, 2011.

http://fdic.gov/news/news/press/2011/pr11138.html

[Enterprising Investor]

Heritage Financial Group, Inc. Reports Second Quarter Net Loss of $481,000 or $0.06 Per Diluted Share

Board Authorizes New Stock Repurchase Program

ALBANY, Ga.--(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 June 30, 2011. Key aspects of the Company's results for the second quarter of 2011 include:

•A net loss of $481,000 or $0.06 per diluted share, which compared with net income of $128,000 or $0.02 per diluted share in the year-earlier quarter;

•Organic loan growth, excluding loans acquired in FDIC-assisted acquisitions, of $10.6 million or 3% on a linked-quarter basis;

•Core deposit growth, excluding certificates of deposit and brokered deposits, of $18.9 million or 4% on a linked-quarter basis;

•An increase in the allowance for loan losses to 1.58% of period-end loans, excluding loans acquired in FDIC-assisted acquisitions, from 1.51% of loans at March 31, 2011;

•A decline in annualized net charge-offs to 0.26% for the second quarter of 2011 from 2.80% on a linked-quarter basis; and

•A decline in nonperforming assets (NPAs), excluding loans acquired in FDIC-assisted acquisitions, to 1.17% from 1.66% on a linked-quarter basis.

Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "During the second quarter of 2011, we experienced significant costs and dedicated substantial Company resources to convert our second FDIC-assisted transaction, Citizens Bank of Effingham ("Citizens"), onto our core operating system. After the successful integration of Citizens, we have refocused our attention on strategic expansion to build our brand and branch footprint by seizing on other attractive opportunities to deploy our capital and position the Company for future growth.

"At the same time, the credit quality of our non-FDIC-assisted loan portfolio also improved in the second quarter," Dorminey continued. "We continue to manage our FDIC-acquired loan portfolios prudently, and have hired an experienced team to handle the workout of our FDIC-acquired assets and the complex requirements of loss-share agreements."

Additionally, the Company announced that its Board of Directors has authorized a new stock repurchase program in connection with the restricted shares issued under the 2011 equity incentive plan. Under the new program, the Company may purchase during the coming year up to 163,852 shares, or approximately 2% of its currently outstanding publicly held shares of common stock. The repurchases will be made from time to time in open-market or negotiated transactions as deemed appropriate by the Company and will depend on market conditions. The new program will expire in July 2012 unless completed sooner or otherwise extended.

Results of Operations

The Company reported a net loss of $481,000 or $0.06 per diluted share for the three months ended June 30, 2011, compared with net income of $128,000 or $0.02 per diluted share for the three months ended June 30, 2010. This $609,000 change in earnings was primarily the result of the following items:

•Increased non-interest expense of $4.0 million, reflecting $2.0 million in additional employee salaries and benefits directly linked to the hiring of 101 full-time equivalent employees in connection with the Company's recent expansion by acquisition;

•Higher write-downs for other real estate owned (OREO) of $647,000, excluding OREO acquired in FDIC-assisted acquisitions;

•Increased provision expense of $50,000, driven by growth in the non-FDIC-assisted loan portfolio, offset by:

•Improved net interest income of $1.7 million due to growth in interest-earning assets; and

•Improved non-interest income of $1.6 million, reflecting increases in service charges and mortgage-related fees of $240,000 and $553,000, respectively, coupled with an increase in gains on the sale of investment securities of $445,000.

The Company's results for the second quarter ended June 30, 2011, included acquisition-related expenses of $474,000 and a reduction in the pre-tax bargain purchase gain of $117,000. This reduction reflected the availability of updated information at June 30, 2011, concerning the intangible value of Citizens' core deposits acquired on February 18, 2011. Excluding the acquisition-related expenses and adjustment to the bargain purchase gain net of tax, the Company would have incurred a net loss of $96,000 or $0.01 per diluted share for the first quarter of 2011 (see reconciliation of non-GAAP items).

Net interest income for the first quarter increased 37% to $6.4 million from $4.7 million in the year-earlier quarter, primarily reflecting an increase in interest-earning assets related to both acquisitions and organic growth. The Company's net interest margin for the second quarter of 2011 decreased six basis points to 3.36% on a linked-quarter basis from 3.42% in the first quarter of 2011, and declined 19 basis points from 3.55% in the year-earlier period, reflecting excess liquidity related to the Company's capital raise in the fourth quarter of 2010 and acquisition activity, as those funds are currently deployed in lower-yielding investments.

The Company's total risk-based capital ratio at June 30, 2011, was 23.4%, significantly exceeding the required minimum of 10% to be considered a well-capitalized institution. This reflected, in part, the Company's second-step conversion and offering that was completed in November 2010, raising net proceeds of $61.4 million. The ratio of tangible common equity to total tangible assets was 12.3% as of June 30, 2011.

In the second quarter of 2011, the Company continued to post loan and deposit growth, with both increasing on a linked-quarter basis and rising significantly compared with the year-earlier quarter in all of its markets except Ocala. Ocala has been disproportionately affected by the real estate downturn and higher unemployment. Still, bank acquisitions, including the Company's second whole-bank acquisition in February 2011, accounted for much of the growth in loans and deposits over the past 12 months. At June 30, 2011, the Company's loan portfolio totaled $500.7 million, including loans acquired through FDIC-assisted acquisitions, up 1% from $496.1 million at March 31, 2011, including loans acquired through FDIC-assisted acquisitions. Total deposits stood at $763.7 million at the end of the second quarter of 2011, up 4% from $731.1 million at March 31, 2011.

Accounting for FDIC-Assisted Loans

The Company performs ongoing assessments of the estimated cash flows of its acquired FDIC-assisted loan portfolios. The FDIC-assisted loan portfolios consist of $60.4 million in covered and $24.2 million in non-covered loans as of June 30, 2011. The details of the accounting for the FDIC-assisted loan portfolios for the second quarter of 2011 are as follows:

•Covered loans acquired in FDIC-assisted acquisitions decreased $1.9 million from the first quarter of 2011;

•Non-covered loans acquired in FDIC-assisted acquisitions declined $4.0 million during the quarter;

•The FDIC indemnification asset associated with covered loans acquired in FDIC-assisted acquisitions remained unchanged at $58.2 million;

•The non-accretable discount decreased $3.7 million to $67.3 million; and

•The accretable discount increased $1.4 million to $4.1 million, and $224,000 was transferred to income.

At June 30, 2011, covered and non-covered loans acquired in FDIC-assisted acquisitions decreased to $60.4 million and $24.2 million, respectively, on a linked-quarter basis from $62.3 million and $28.3 million, respectively, driven by a combination of net charge-offs, principal reductions, and balance transfers from non-covered to covered. The net charge-offs for both the covered and non-covered loans were fully provided for by the associated loan discounts and expected reimbursement from the FDIC and did not affect the Company's loan loss reserve. Although the FDIC indemnification asset associated with covered FDIC-assisted loans remained unchanged at $58.2 million, $1.5 million of net charge-offs and another $158,000 in expenses associated with covered FDIC-assisted loans were set aside for FDIC reimbursement as of June 30, 2011.

The non-accretable discount decreased to $67.3 million at the end of the second quarter of 2011 from $71.0 million on a linked-quarter basis, due primarily to net charge-offs for the FDIC-assisted loan portfolios and a transfer to accretable discount. The accretable discount increased to $4.1 million for the current quarter from $2.7 million for the first quarter of 2011, reflecting a transfer from non-accretable, while $224,000 in accretable discount was recognized as interest income for the current quarter.

Asset Quality

Total nonperforming loans, excluding loans acquired in FDIC-assisted acquisitions, were $8.6 million at June 30, 2011, down from $9.1 million at March 31, 2011. OREO and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, were $2.7 million at June 30, 2011, down from $3.2 million at March 31, 2011, reflecting primarily one OREO write-down of $490,000. Nonperforming loans to total loans, excluding loans acquired in FDIC-assisted acquisitions, decreased to 2.06% as of June 30, 2011, from 2.24% as of March 31, 2011. Net charge-offs to average outstanding loans, excluding loans acquired in FDIC-assisted acquisitions, on an annualized basis, were 0.26% for the second quarter of 2011 versus 2.80% for the first quarter of 2011. Although improvement was noted in nonperforming assets and net charge-offs, management believes nonperforming assets will likely remain at elevated levels, at least in the near term, as a result of the continued weakness in the economy.

On a linked-quarter basis, the provision for loan losses increased to $700,000 for the second quarter of 2011 from $600,000 for the first quarter of 2011, driven primarily by growth in the non-FDIC-assisted loan portfolio. At June 30, 2011, the allowance for loan losses represented 1.58% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.51% at March 31, 2011.

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 and North Central Florida through 21 full-service branch locations and 10 mortgage offices. As of June 30, 2011, the Company reported total assets of approximately $964 million and total stockholders' equity of approximately $122 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.

http://www.businesswire.com/news/home/20110725006520/en/Heritage-Financial-Group-Reports-Quarter-Net-Loss

[Enterprising Investor]

HBOS Assumes All of the Deposits of the Tattnall Bank, Reidsville, Georgia (12/04/09)

FOR IMMEDIATE RELEASE
December 4, 2009 Media Contact:
LaJuan Williams-Dickerson
Office: [phone]
Email: [e-mail]

The Tattnall Bank, Reidsville, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with HeritageBank of the South, Albany, Georgia, to assume all of the deposits of The Tattnall Bank.

The two branches of The Tattnall Bank will reopen during normal business hours as branches of HeritageBank of the South. Depositors of The Tattnall Bank will automatically become depositors of HeritageBank of the South. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until HeritageBank of the South can fully integrate the deposit records of The Tattnall Bank.

This evening and over the weekend, depositors of The Tattnall Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of September 30, 2009, The Tattnall Bank had total assets of $49.6 million and total deposits of approximately $47.3 million. HeritageBank of the South did not pay the FDIC a premium for the deposits of The Tattnall Bank. In addition to assuming all of the deposits of the failed bank, HeritageBank of the South agreed to purchase $48.5 million of the failed bank's assets. The FDIC retained the remaining assets for later disposition.

Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-405-8251. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00p.m., EST; and thereafter from 8:00 a.m. to 8:00 p.m., EST. Interested parties can also visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/tattnall.html.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $13.9 million. HeritageBank of the South's acquisition of all the deposits was the "least costly" resolution for the DIF compared to alternatives. The Tattnall Bank is the 127th FDIC-insured institution to fail in the nation this year, and the 24th in Georgia. The last FDIC-insured institution closed in the state was First Security National Bank, Norcross, earlier today.

http://fdic.gov/news/news/press/2009/pr09221.html

[Enterprising Investor]

HBOS Completes Second Step Conversion and $65.9 Million Stock Offering (11/30/10)

ALBANY, Ga. (November 30, 2010) – Heritage Financial Group, Inc. (the "Company") (NASDAQ: HBOSD), the holding company for HeritageBank of the South (the "Bank"), announced today that it has completed the conversion from a mutual holding company structure and the related public stock offering and is now a stock holding company that is 100% owned by public stockholders. The Company sold a total of 6,591,756 shares of common stock in the subscription, community and syndicated offerings, including 327,677 shares to the Heritage Financial Group employee stock ownership plan.

The Company also announced that the prior holding companies for the Bank, Heritage MHC and Heritage Financial Group ("Old Heritage") have ceased to exist and that all outstanding shares of Old Heritage common stock (other than those owned by Heritage MHC) have been converted into the right to receive 0.8377 shares of Company common stock. In this stock exchange, cash in lieu of fractional shares will be paid at a rate of $10.00 per share. As a result of the conversion, offering and exchange, the Company will have approximately 8,710,640 shares outstanding and a market capitalization of approximately $87.1 million, based on the public offering price of $10.00 per share.

The shares of common stock sold in the offering and issued in the exchange will begin trading on the NASDAQ Global Select Market on November 30, 2010, under the symbol HBOSD for a period of 20 trading days. Thereafter, the trading symbol will be HBOS. Stock certificates for shares purchased in the subscription offering and community offering are expected to be mailed to subscribers on or about November 30, 2010. Syndicated offering subscribers and Old Heritage shareholders that hold their shares in street name or in book-entry form will have shares of the Company deposited directly to their accounts. Old Heritage shareholders holding shares in certificated form will be mailed a letter of transmittal on or about December 1, 2010, and receive their shares of Company common stock and cash in lieu of fractional shares after returning their stock certificates and a properly completed letter of transmittal to the Company's transfer agent. Old Heritage stock certificates became void upon completion of the conversion.

Keefe, Bruyette & Woods, Inc acted as selling agent for the subscription and community offering. Keefe, Bruyette & Woods, Inc. also acted as sole book-running manager and Sterne, Agee & Leach, Inc. acted as co-manager for the syndicated offering. Silver Freedman & Taff, L.L.P. acted as legal counsel to the Company and Old Heritage in connection with the conversion, offering and exchange. Malizzia Spidi & Fisch, PC acted as counsel to Keefe, Bruyette & Woods, Inc. for the conversion, offering and exchange. Feldman Financial Advisors, Inc., served as independent appraiser for the conversion, offering and exchange.

http://sec.gov/Archives/edgar/data/1320002/000114036110047408/ex99_1.htm

http://sec.gov/Archives/edgar/data/1320002/000115752310006961/a6514454ex99_1.htm