This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Heritage Financial Group To Revise Its Accounting Treatment And Fair Value Measurements Related To The FDIC-Assisted Acquisition Completed In December 2009

Heritage Financial Group (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced that it will revise its accounting treatment and fair value measurements related to the FDIC-assisted acquisition of The Tattnall Bank. This revision will affect the accounting for expenses which have been or will be incurred in connection with the work-out of loans in the acquired loan portfolio. This revision will not alter previously reported balance sheets or results of operations for the periods ended and as of December 31, 2009 and March 31, 2010.

Unlike many FDIC-assisted transactions, The Tattnall Bank acquisition did not involve a loss-share agreement, but instead provided for a purchase discount of $15.0 million paid by the FDIC. Approximately $12.2 million of that purchase discount originally was used to reduce the value of portfolio loans and other real estate owned included in the transaction to a fair value determined by the Company, and approximately $2.3 million was used to establish a contingent liability for anticipated expenses to be incurred in the future in connection with the work-out of certain loans in the portfolio. The Company now has determined that the amount allocated to the contingent liability should be reflected as a further reduction to the fair value of the acquired loan portfolio, eliminating the contingent liability. The Company has also determined that work-out expenses on loans should be recorded in operations as incurred, rather than offsetting those expenses against a contingent liability.

With the elimination of this contingent liability, actual expenses incurred will be reported as part of operations. In the second quarter of 2010, approximately $280,000 of loan work-out costs were expensed. On August 9, 2010, the Company's announced financial results for the second quarter were based on the prior treatment of charging these work-out expenses to the contingent liability. As a result, when the Company files its Form 10-Q for the second quarter of 2010 later today, these expenses will be reported as current period expenses and included in noninterest expense, and previously reported net income of $297,000 or $0.03 per diluted share will be reduced to $129,000 or $0.01 per diluted share for the second quarter of 2010. For the first six months of 2010, previously reported net income of $1.1 million or $0.11 per diluted share will be reduced to $926,000 or $0.09 per diluted share. Accordingly, the Company's previously issued results for the second quarter and first six months of 2010 on August 9, 2010, and the Form 8-K filed that day regarding results of operations for the second quarter and first six months of 2010, should no longer be relied upon.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
HBOS $27.77 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs