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."