"We also are pleased with the strategic direction of the Company in terms of expansion and our ability to add customer relationships," Dorminey continued. "Over the past nine months, we have established several new markets in South Georgia and North Central Florida that greatly enhance our banking footprint that overlays these two states. Our strong capital position has allowed us to seize these opportunities to build our network and fill in our footprint between Albany and Ocala and has enabled us to enter several attractive markets, including Statesboro and Valdosta, Georgia. With the recent addition of experienced bankers from the financial institutions with the top market share in Statesboro and Valdosta, along with the support of dedicated employees associated with the branches we have acquired, we are enthusiastic about our expanded operations and the prospects for ongoing growth in the months and years ahead."
Looking ahead to the third quarter, Dorminey noted that the recent passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act will, among other things, remove existing barriers to interstate banking. In the past, interstate banking was often accomplished by the purchase of an existing bank charter in a target state, which HeritageBank of the South did when it entered Florida in 2007. Because such charter purchases are no longer necessary to branch into Florida and other states, the Company believes the value assigned to its intangible asset related to the Florida bank charter purchased in 2007 is now impaired. Accordingly, the Company intends to take a one-time, noncash pre-tax charge of $1,000,000 in the third quarter of 2010 to write-off this intangible asset. This write-off will have no effect on the Company's or the Bank's regulatory capital or tangible capital.
At the end of the second quarter of 2010, Heritage Financial Group's capital levels remained significantly above the levels required to be considered "well-capitalized" under regulatory standards – the highest capital rating category a financial institution can achieve. The Company's total risk-based capital ratio at June 30, 2010, was 14.9%, significantly exceeding the required minimum of 10% to be considered a well-capitalized institution. The ratio of tangible common equity to total tangible assets (both non-GAAP measures – see reconciliation to closest GAAP measures later in this release) was 9.1% as of June 30, 2010.