This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Heritage Financial Group Reports Third Quarter Results

As previously announced, Heritage Financial Group and its affiliates have adopted a plan to reorganize from a two-tier mutual holding company to a full stock holding company and will undertake a "second-step" offering of shares of the new holding company's common stock in subscription, community and syndicated offerings. A proxy statement has been mailed to shareholders and depositors, who will vote to approve the plan of conversion on November 23, 2010. The conversion and offering is expected to be completed in the fourth quarter, subject to shareholder, depositor and regulatory approvals. Keefe Bruyette & Woods will manage the subscription and community offerings and will serve as the sole book-running manager for the offering. Sterne Agee & Leach will serve as co-manager for the syndicated offering.

Net interest income for the third quarter increased 38% to $5,106,000 from $3,706,000 in the same quarter last year, primarily reflecting a higher level of interest-earning assets as lower yields on interest-earning assets were offset by reduced rates on interest-bearing liabilities. The Company's net interest margin declined 18 basis points to 3.50% in the third quarter of 2010 from 3.68% in the year-earlier period due primarily to lower loan yields. On a linked-quarter basis, net interest margin decreased five basis points to 3.50% in the third quarter from 3.55% in the second quarter of 2010. Net interest income for the first nine months of 2010 increased 33% to $14,211,000 from $10,687,000 for the year-earlier period, again reflecting the impact of a higher level of interest-earning assets. The Company's net interest margin was 3.57% for the first nine months of 2010, reflecting an increase of 16 basis points from 3.41% in the comparable period last year.

Total nonperforming loans and nonperforming assets were $12,199,000 and $14,986,000, respectively, at September 30, 2010, up from $7,514,000 and $10,533,000, respectively, at June 30, 2010, but only slightly changed from $12,990,000 and $13,888,000, respectively, at September 30, 2009. Although nonperforming loans to total loans increased during the third quarter versus the second quarter of 2010, rising to 2.95% as of September 30, 2010, versus 1.93% at June 30, 2010, the relative amount of nonperforming loans declined significantly from 4.34% at September 30, 2009, primarily due to the growth in the loan portfolio from acquisition activity and internal growth. The increase in nonperforming loans during the quarter was primarily due to the addition of one relationship totaling $4.0 million. This loan is secured by various residential rental properties located in Southwest Georgia, and has been on the Bank's watch list since the first quarter of 2010 due to deteriorating cash flow. The Bank expects to restructure this loan during the fourth quarter, and believes it is adequately reserved at this time. Additionally, the Company has continued to reduce its exposure to acquisition, construction and development loans, with those declining to only 7% of its core portfolio at September 30, 2010, from 11% at the end of the third quarter of 2009. Net charge-offs to average outstanding loans in the total portfolio, on an annualized basis, were 0.45% for the third quarter of 2010 versus 0.48% for the second quarter of 2010 and 0.29% in the year-earlier period. Management believes that nonperforming assets and net charge-offs will likely remain at elevated levels, at least in the near term, because of the continued weakness in the economy.

3 of 6

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!


DOW 17,890.88 +86.08 0.48%
S&P 500 2,071.52 +0.87 0.04%
NASDAQ 4,770.8660 +5.4860 0.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs