Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced unaudited financial results for the quarter ended September 30, 2013. Key aspects of the Company's results for the third quarter of 2013 include:
- Net income of $1.3 million or $0.18 per diluted share, down 50% from $2.7 million or $0.36 per diluted share for the linked quarter and down 34% from $2.0 million or $0.25 per diluted share for the year-earlier quarter;
- Excluding special items for each quarter, net income of $1.8 million or $0.24 per diluted share, down 38% from $2.9 million or $0.39 per diluted share for the linked quarter and down 3% from $1.8 million or $0.23 per diluted share for the year-earlier quarter (see reconciliation of non-GAAP items);
- Loan growth, excluding loans acquired through FDIC-assisted acquisitions, of $27.5 million or 4% on a linked-quarter basis and $123.7 million or 23% compared with the year-earlier quarter;
- A decrease in FDIC-acquired loans of $8.3 million, or 6%, on a linked-quarter basis;
- A decrease in the provision for loan losses, excluding FDIC-acquired loans, to $350,000, down 45% from $640,000 for the linked quarter and down 53% compared with $750,000 for the year-earlier quarter;
- No provision for loan losses for FDIC-acquired loans for the current quarter compared with $28,000 for the linked quarter and $1.2 million for the year-earlier quarter; and
- Non-performing assets to total assets declined to 1.03% for the third quarter of 2013 compared with 1.14% for the linked quarter and 1.68% for the year-earlier quarter.
Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "While net income declined for the quarter, we continue to make progress on many items that will enhance our ongoing profitability. Organic loan growth continues to significantly outpace the decline in our FDIC-acquired portfolios. Expense management efforts continue to progress as we closed two FDIC-acquired branches during the quarter and made further staffing reductions in our branch network. However, our mortgage banking revenue declined during the quarter, a trend seen across the industry as interest rates have recently risen. Although this rate increase slowed our refinance activity dramatically, we remain excited about our mortgage expansion, as our business is focused primarily on financing home purchases. We are also pleased to have recently received approval to sell mortgage loans directly to Fannie Mae. With this approval, we expect to increase our wholesale mortgage production significantly, improve our margins and enhance the future profitability of our mortgage business."