Net interest income for the fourth quarter increased 52% to $6.0 million from $3.9 million in the year-earlier quarter, primarily reflecting a higher level of interest-earning assets as reduced funding costs offset lower loan yields. The Company's net interest margin increased 16 basis points to 3.88% in the fourth quarter of 2010 from 3.72% in the year-earlier period and increased 31 basis points on a linked-quarter basis from 3.57% in the third quarter of 2010. Net interest income for 2010 increased 38% to $20.2 million from $14.6 million for the year-earlier period, again primarily reflecting a higher level of interest-earning assets. The Company's net interest margin was 3.66% for 2010, an increase of 17 basis points from 3.49% in the comparable period last year.Total nonperforming loans and nonperforming assets were $9.9 million and $13.8 million, respectively, at December 31, 2010, down from $12.2 million and $15.0 million, respectively, at September 30, 2010, but up from $8.5 million and $10.3 million, respectively, at December 31, 2009. Nonperforming loans to total loans declined during the fourth quarter versus the third quarter of 2010, falling to 2.37% as of December 31, 2010, versus 2.95% as of September 30, 2010, and 2.53% at December 31, 2009. The decline in the levels of nonperforming loans and assets at December 31, 2010, primarily reflected migration of loans to foreclosure status and increased charge-off activity as the Company continued to aggressively confront credit quality issues in its loan portfolio. Net charge-offs to average outstanding loans in the total portfolio, on an annualized basis, were 1.75% for the fourth quarter of 2010 versus 0.45% for the third quarter of 2010 and 7.42% in the year-earlier period, with the latter reflecting additional provisioning and write-off related to a single nonperforming loan on raw land in Atlanta, Georgia. The Company continues to reduce its exposure to acquisition, construction and development loans, which were 6% of its core portfolio at December 31, 2010, from 9% at the end of the fourth quarter of 2009. 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.
Heritage Financial Group, Inc. Reports Fourth Quarter Net Income Of $922,000 Or $0.11 Per Diluted Share
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