Since September 2009, Heritage Financial Group (NASDAQ: HBOS), the mid-tier holding company for HeritageBank of the South, has announced three acquisitions, adding $103 million in loans and $164 million in deposits to the bank’s portfolio.  That represents a 34 percent increase in loans over the bank’s year-end 2008 total and a 48 percent growth in deposits.

Building top-line growth

Annual growth in the 30- to 40-percent range is substantial under most circumstances.  It’s remarkable in an economy that is recovering at a slow and uneven pace. The acquisitions give Heritage good branch coverage in the Albany area, the Ocala, Fla. market and points in between.

“Our strong capital position has enabled us to take advantage of attractive expansion opportunities,” explains Leonard Dorminey, President and Chief Executive Officer of Heritage Financial Group.

As of Dec. 31, 2009 the total risk-based capital ratio for Heritage Financial Group was 17.0 percent, significantly higher than the 10 percent required to be considered a well-capitalized institution by federal financial regulatory agencies.  Heritage plans to use its capital position to continue its growth through acquisition.

Integrating the latest acquisition

Integration of the latest acquisition – the five branches acquired from PAB Bankshares, Inc. – is under way and expected to be completed by the end of May.  Integrating the branches encompasses software and website conversions, new signage and stationery, and training PAB staff on Heritage processes.

“We’re working to make the transition smooth and easy for PAB staff so they can make the transition seamless for customers,” said Mary Beth Hobby, vice president of Marketing.

According to Hobby, there is a solid fit between PAB systems and procedures and those used at Heritage, which makes the integration relatively straightforward.  Customers should not experience much more than a name change at the bank.

“The PAB branches operate with the same philosophy that we have at Heritage and that is: people bank with people.  We’re very happy with the staff we acquired,” Hobby said.

Acquisition Summary


• Announced a definitive agreement in February to purchase five bank branches in Georgia from PAB Bankshares, Inc.  Branches are located in Statesboro (2), Baxley, Hazlehurst and Adel.  The deal is expected to result in the transfer of approximately $52 million in loans and approximately $72 million in deposits.

• Announced in December a definitive whole-bank purchase and assumption agreement with the Federal Deposit Insurance Corporation to acquire The Tattnall Bank with two Georgia locations in Reidsville and Collins.  The agreement includes $39 million in loans, $47 million in deposits and is subject to a purchase discount by the FDIC totaling $15 million.

• Announced in September an agreement to purchase from the Atlantic Coast Federal Corporation a branch in Lake City, Fla.  The agreement includes $12 million in loans and $45 million in deposits.


For more information on HeritageBank, visit www.eheritagebank.com

About Barbara Kieker

Barbara Kieker is a freelance writer who writes on business-related topics for a number of web-based properties. She also provides communications services to Fortune 500 corporations, small businesses and nonprofit organizations.