Banking & Finance

NEWS - Banking & Finance

Company increases and extends its stock repurchase plan, adding 394,000 shares to the current authorization

April 29, 2013 – Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, has announced unaudited financial results for the quarter ended March 31, 2013. Highlights of the Company's results for the first quarter of 2013 include:

• Net income of $3.9 million or $0.52 per diluted share, up threefold from net income of $971,000 or $0.12 per diluted share for the year-earlier quarter and up 62 percent from $2.4 million or $0.31 per diluted share for the linked quarter;
• Excluding special items for each quarter, net income was $2.0 million or $0.27 per diluted share, up 67 percent from net income of $1.2 million or $0.15 per diluted share for the year-earlier quarter and $1.2 million or $0.16 per diluted share for the linked quarter;
• Successful completion of the Company's fourth FDIC-assisted acquisition, Frontier Bank ("Frontier") on March 8, 2013, resulting in a $2.5 million bargain purchase gain, net of tax;
• Loan growth, excluding loans acquired through FDIC-assisted acquisitions, of $18.0 million or 3 percent on a linked-quarter basis;
• An increase in loans acquired through FDIC-assisted acquisitions of $64.9 million or 77 percent on a linked-quarter basis;
• An increase in the provision for loan losses, excluding FDIC-acquired loans, to $450,000 compared with $400,000 for the year-earlier quarter, but a reduction from $600,000 for the linked quarter;
• Provision for loan losses of $35,000 for FDIC-acquired loans with approximately 80 percent of the losses reimbursable by the FDIC versus no provision expense on such loans for the year-earlier quarter and a reduction from $1.9 million for the linked quarter; and
• Non-performing assets to total assets declined to 1.15 percent for the first quarter of 2013 compared with 1.75 percent for the year-earlier quarter and 1.58 percent for the linked quarter.

Commenting on the results, Leonard Dorminey, President and Chief Executive Officer, said, "We are pleased to report another quarter of improved financial results. The positive results of our focus on efficiency and expense management are coming to fruition. In addition, the investments we made in our mortgage division and commercial banking network are paying dividends, as evidenced by increased fee income and continued organic loan growth.

"We are also excited about the acquisition of Frontier in an FDIC-assisted transaction completed in the first quarter," Dorminey continued. "This marks our fourth FDIC-assisted transaction and further demonstrates our ability to successfully execute our expansion strategy and prudently deploy our strong capital base. We are optimistic about the opportunities for loan growth both in the Birmingham market area as well as the Western Georgia / Eastern Alabama corridor."

Expense Management Initiatives
In connection with the Frontier FDIC-assisted acquisition, the Company plans to close the Vincent, Alabama, branch later in 2013, subject to regulatory approval. The Company does not expect to experience a significant reduction in customer relationships and will serve these customers from other nearby locations. Separately, the Company implemented staff reductions related to the Frontier acquisition that will occur during the second and third quarters, resulting in a decrease of approximately $1.6 million from Frontier's pre-acquisition level of personnel expenses.

Commenting on the expense management initiatives in the Frontier acquisition, Heath Fountain, Chief Financial Officer and Chief Administrative Officer, said, "We are confident in our ability to operate the acquired branch network in an efficient and profitable manner. While we are early in the transition, we believe we will be able to achieve all of our cost-saving targets identified prior to the acquisition."

Capital Management Initiatives
During the first quarter of 2013, the Company repurchased approximately 291,000 shares of common stock at an average price of $14.02 under its stock repurchase program. With remaining authorization to repurchase approximately 33,000 shares under the current program, which was set to expire in October 2013, unless extended or otherwise completed, the Company's Board of Directors has increased the program by adding 394,000 shares, or 5% of the Company's currently outstanding common stock, and has extended the program for an additional year. As a result, the Company has a total authorization to repurchase up to approximately 427,000 shares that expires in April 2014, unless the program is extended or completed earlier.

The Company's estimated total risk-based capital ratio at March 31, 2013, was 16.4%, significantly exceeding the required minimum of 10% to be considered a well-capitalized institution. The ratio of tangible common equity to total tangible assets was 8.5% as of March 31, 2013.

Looking ahead, the Company intends to maintain its capital strength at the current level to support growth and its acquisition activities. Accordingly, future stock buybacks and future dividends will be premised largely on the Company's future earnings power rather than a return of capital to stockholders. As previously announced, it is not currently anticipated that any quarterly dividends will be paid in 2013, but that regular quarterly dividends will be reinstated in 2014.

First Quarter 2013 Results of Operations
The $3.0 million improvement in reported quarterly earnings for the first quarter of 2013 compared with the year-earlier quarter primarily resulted from the following items:

• Improved net interest income of $3.5 million;
• Increased non-interest income of $3.0 million; offset by
• Increased non-interest expense of $2.0 million.

Net interest income for the first quarter of 2013 increased 36% to $13.2 million from $9.7 million in the year-earlier quarter, primarily reflecting an increase in interest-earning assets related to both acquisitions and organic growth and a reduction in the cost of interest-bearing liabilities. The Company's net interest margin was 5.51% for the first quarter of 2013, a decrease of 86 basis points from 6.37% on a linked-quarter basis, but an increase of 102 basis points over 4.49% in the year-earlier period. The reduction in the first quarter of 2013 net interest margin on a linked-quarter basis was driven by a decline in the loan yields on the Company's FDIC-assisted loan portfolio, offset in part by a decline in the cost of interest-bearing liabilities as rates continue to reset to lower levels and the Company takes advantage of historically low non-deposit funding. Excluding purchase accounting adjustments, which include FDIC-assisted loan discount accretion from the net interest margin, the core net interest margin was 3.35% for the first quarter of 2013, an increase of 16 basis points from 3.19% on a linked-quarter basis and 42 basis points from 2.93% for the year-earlier quarter.

In the first quarter of 2013, the Company continued to achieve loan growth, with its loan portfolio increasing $18.0 million organically on a linked-quarter basis and advancing $154.1 million overall compared with the year-earlier quarter. For the first quarter of 2013, the Company's loan portfolio, including loans acquired through FDIC-assisted acquisitions, totaled $752.9 million, increasing $82.9 million on a linked-quarter basis from $670.0 million and from $562.5 million compared with the year-earlier quarter. Total deposits stood at $1.1 billion at the end of the first quarter of 2013, up 26% or $226.0 million on a linked-quarter basis from $869.6 million and from $868.7 million compared with the year-earlier quarter. The linked-quarter increase in deposits was primarily driven by the Frontier acquisition, which accounted for $212.1 million, and the remaining growth resulted in core deposit growth of $34.0 million and wholesale deposit growth of $23.8 million, which was offset in part by $24.5 million in planned time deposit runoff associated with Frontier internet and single service customers and $19.4 million in planned runoff of retail time deposits.

Non-interest income for the first quarter of 2013 increased 109% to $5.8 million from $2.8 million in the year-earlier quarter, primarily driven by a bargain purchase gain recorded on the Frontier FDIC-assisted acquisition of $4.2 million, coupled with solid growth in mortgage banking fees of $1.1 million, which was partially offset by an increase in negative accretion for the FDIC loss-share receivable of $2.5 million. Non-interest expense for the first quarter of 2013 increased 18% to $12.8 million from $10.8 million in the year-earlier quarter, primarily driven by increased salaries and employment benefits of $894,000 associated with the hiring of 30 employees for the mortgage division, increased acquisition-related expenses of $461,000 related to Frontier, increased equipment and occupancy expense of $342,000 related to the Company's continued efforts to expand the mortgage division, and increased foreclosure expense on FDIC-acquired assets of $259,000.

Accounting for FDIC-Assisted Loans
The Company performs ongoing assessments of the estimated cash flows of its acquired FDIC-assisted loan portfolios. The fair value of the FDIC-assisted loan portfolios consisted of $65.8 million in covered and $83.3 million in non-covered loans at the end of the first quarter of 2013 compared with $72.4 million in covered and $11.9 million in non-covered loans for the linked quarter. The principal balance of the FDIC-assisted loan portfolios totaled $234.8 million at the end of the first quarter of 2013 compared with $152.1 million for the linked quarter. The details of the accounting for the FDIC-assisted loan portfolios for the first quarter of 2013 are as follows:

• Covered loans acquired in FDIC-assisted acquisitions decreased $6.6 million to $65.8 million;
• Non-covered loans acquired in FDIC-assisted acquisitions increased $71.5 million to $83.3 million, driven by the Frontier acquisition;
• The FDIC loss-share receivable associated with covered assets acquired in FDIC-assisted acquisitions decreased $8.7 million to $52.0 million;
• The negative accretion for the FDIC loss-share receivable was $3.0 million;
• Provision expense for individually assessed loans acquired in FDIC-assisted acquisitions was $35,000;
• The non-accretable discount increased $13.6 million to $59.6 million; and
• The accretable discount increased $4.3 million to $26.1 million.

During the first quarter of 2013, the Company completed the FDIC-assisted acquisition of Frontier without a loss-sharing agreement. The acquisition added non-covered loans at a principal balance of $98.0 million with a $23.0 million non-accretable discount and a $1.7 million accretable discount for a fair value balance of $73.3 million as of the acquisition date.

For the first quarter of 2013, provision expense of $35,000 was recorded for loan charge-offs on individually assessed loans acquired in FDIC-assisted acquisitions not provided for by the discount, with approximately 80% of the charge-offs reimbursable by the FDIC. The provision expense for these loans did not affect the Company's loan loss reserve. The FDIC loss-share receivable associated with covered FDIC-assisted assets decreased $8.7 million from $60.7 million for the prior quarter to $52.0 million, primarily driven by reimbursements received from the FDIC of $5.6 million and negative accretion of $3.5 million affecting the loss-share receivable asset associated with the improvement in expected cash flows of the loss-share performing portfolios. A FDIC true-up (clawback) liability was recorded as an expense, which reduced non-interest income for the current quarter by $566,000. This true-up was driven by an improvement in estimates of expected cash flows for both FDIC-assisted acquisitions covered under loss-sharing agreements.

The non-accretable discount increased to $59.6 million at the end of the first quarter of 2013 from $46.0 million on a linked-quarter basis, primarily driven by the addition of $23.0 million for the Frontier acquired loans, offset by the clearing of $2.2 million of discount in conjunction with the resolution of FDIC-assisted loans and transfers to accretable discount of $7.2 million for the improvement in expected cash flows. The accretable discount increased to $26.1 million for the first quarter of 2013 from $21.8 million on a linked-quarter basis, primarily driven by the transfer of $7.2 million from the non-accretable discount and the addition of $1.7 million for the Frontier acquired loans, offset in part by loan discount accretion of $4.6 million for the current quarter, which compares with $6.6 million on a linked-quarter basis.

Asset Quality
Total non-performing assets, excluding assets acquired in FDIC-assisted acquisitions, decreased to $15.7 million, or 1.15% of total assets, compared with $17.3 million, or 1.58% of total assets, for the linked quarter and improved from $13.7 million, or 1.75% of total assets, from the year-earlier quarter. Annualized net charge-offs to average outstanding loans, excluding loans acquired in FDIC-assisted acquisitions, were 0.27% for the first quarter of 2013 compared with 0.05% for the linked quarter and 0.24% for the year-earlier quarter. Non-performing loans totaled $12.7 million, down from $14.7 million for the linked quarter, but up from $10.7 million for the year-earlier quarter. Other real estate owned and repossessed assets, excluding assets acquired in FDIC-assisted acquisitions, totaled $3.0 million for the first quarter of 2013, slightly up from $2.7 million for the linked quarter and in line with $3.0 million for the year-earlier quarter.

The provision for loan losses on non-FDIC-acquired loans slightly increased to $450,000 for the first quarter of 2013 from $400,000 for the year-earlier quarter, primarily driven by organic loan growth. For the first quarter in 2013, the allowance for loan losses represented 1.51% of total loans outstanding, excluding loans acquired in FDIC-assisted acquisitions, versus 1.55% for the linked quarter and 1.70% for the year-earlier quarter. The improving loan loss allowance is primarily the result of declining criticized and classified assets as a percentage of total loans.

About Heritage Financial Group, Inc. and HeritageBank of the South
Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving primarily South Georgia, North Central Florida and Eastern Alabama through 29 full-service branch locations, 12 mortgage offices, and 4 investment offices. As of March 31, 2013, the Company reported total assets of approximately $1.4 billion and total stockholders' equity of approximately $121 million. For more information about the Company, visit HeritageBank of the South on the Web at www.eheritagebank.com and see Investor Relations under About Us.

Cautionary Note Regarding Forward Looking Statements
Except for historical information contained herein, the matters included in this news release and other information in the Company's filings with the Securities and Exchange Commission may contain certain "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements can be identified by the fact that they do not relate strictly to historical or current facts and often use words or phrases "opportunities," "prospects," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions. The forward-looking statements made herein represent the current expectations, plans or forecasts of the Company's future results and revenues. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995 and includes this statement for purposes of these safe harbor provisions. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and are often beyond the Company's control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements. Investors should not place undue reliance on any forward-looking statement and should consider the uncertainties and risks, discussed under Item 1A. "Risk Factors" of the Company's 2012 Annual Report on Form 10-K and in any of the Company's subsequent SEC filings. Further information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in its other filings with the SEC.

NEWS - Banking & Finance

By Lou Phelps

SBJ Staff

April 27, 2013 - The FDIC entered into a purchase and assumption agreement with CertusBank, N.A. on Friday, headquartered in Easley, SC, to assume all of the deposits of Parkway Bank. Parkway Bank, Lenoir, NC was closed Friday by the North Carolina Office of the Commissioner of Banks, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.

CertusBank has branches in Savannah, Rincon, Brunswick and Darien along the Georgia coast. The three former branches of Parkway Bank will reopen as branches of CertusBank, N.A.

As of December 31, 2012, Parkway Bank had approximately $108.6 million in total assets and $103.7 million in total deposits. In addition to assuming all of the deposits of the failed bank, CertusBank, N.A. agreed to purchase approximately $99.2 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $18.1 million. Compared to other alternatives, CertusBank, N.A.'s acquisition was the least costly resolution for the FDIC's DIF. Parkway Bank is the ninth FDIC-insured institution to fail in the nation this year, and the first in North Carolina.

Another Georgia Bank closed

Also on Friday, Douglas County Bank, Douglasville, GA was closed by the Georgia Department of Banking & Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Hamilton State Bank, Hoschton, GA to assume all of the deposits of Douglas County Bank.

The four former branches of Douglas County Bank will reopen as branches of Hamilton State Bank. As of December 31, 2012, Douglas County Bank had approximately $316.5 million in total assets and $314.3 million in total deposits. Hamilton State Bank will pay the FDIC a premium of 0.5 percent to assume all of the deposits of Douglas County Bank. In addition to assuming all of the deposits of the failed bank, Hamilton State Bank agreed to purchase approximately $260.9 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.

Douglas County Bank is the 10th FDIC-insured institution to fail in the nation this year, and the second in Georgia. The last FDIC-insured institution closed in the state was Frontier Bank, LaGrange, on March 8, 2013.

NEWS - Banking & Finance

SBJ Staff Report

April 26, 2013 - Georgia-Carolina Bancshares, Inc. (OTCBB:GECR), parent company of First Bank of Georgia, has reported 2013 first quarter net income of $2,307,000 compared to $1,284,000 for the three months ended March 31, 2012.

This net income represents a 16.36% return on average equity and a 1.94% return on average assets (both annualized). Book value totaled $16.40 per common share at March 31, 2013, up from $14.28 at March 31, 2012.

According to Remer Y. Brinson III, president and CEO of the company, "We are pleased to report a record quarter of net income. Due to the continued improvement in our asset quality, we have conservatively reduced our loan loss reserve, in accordance with sound banking practices and proper accounting standards. However, we continue to maintain a healthy loan loss reserve and see improvement in asset quality. In addition, non-interest income included an $806,000 benefit on an insurance policy owned by the bank."

"Deposit growth remains strong and grew 6.36% (annualized) during the first quarter of the year. Loans, excluding loans held for sale, increased slightly during the first quarter and totaled $266,430,000."

The bank is opening its seventh branch location in the Kroger shopping center in Evans in early May. Phyllis Salazar, Vice President and Office Manager will be relocating to manage the new branch.

The Georgia-Carolina Bancshares' board of directors declared a quarterly cash dividend of $0.045 per share of common stock payable on May 14, 2013, to shareholders of record as of May 7, 2013, which represents a 12.5% increase in the $0.04 cash dividend paid in each of the previous four quarters," Brinson added.

Georgia-Carolina Bancshares' common stock is publicly traded on the OTC Bulletin Board under the symbol "GECR". First Bank of Georgia conducts banking operations through offices in Richmond County (Augusta), Columbia County (Evans and Martinez), and McDuffie County (Thomson), Georgia and operates mortgage origination offices in Augusta and Savannah, Georgia.

NEWS - Banking & Finance

By Lou Phelps
SBJ Staff

May 13, 2013 - Sunrise Bank of Valdosta was closed Friday by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Synovus Bank, headquartered in Columbus, to assume all of the deposits of Sunrise Bank. In the Savannah area, Synovus uses the Sea Island Bank brand.

The three former branches of Sunrise Bank will reopen as branches of Synovus Bank during their normal business hours. Depositors of Sunrise Bank will automatically become depositors of Synovus Bank.

As of March 31, 2013, Sunrise Bank had approximately $60.8 million in total assets and $57.8 million in total deposits. In addition to assuming all of the deposits of the failed bank, Synovus Bank agreed to purchase approximately $13.2 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that cost to the Deposit Insurance Fund will be $17.3 million. Compared to other alternatives, Synovus Bank was the least costly resolution for the FDIC's DIF fund, according to the FDIC.   Sunrise Bank is the 12th FDIC-insured institution to fail in the nation this year, and the third in Georgia. The last FDIC-insured institution closed in the state was Douglas County Bank, Douglasville, on April 26, 2013.

NEWS - Banking & Finance

By Lou Phelps, SBJ Staff

April 2, 2013 - Seacrest Partners has announced that longtime Savannahian Charles B. “Chip” Compton Jr. has joined the firm in the newly-created position of Chief Operating Officer.  Compton brings more than 30 years’ experience managing insurance programs for some of Savannah’s largest employers, according to president and founding partner David Paddison.

“We are now managing three office locations,” explained Paddison, with the company’s recent lease of additional Savannah office space at 1015 Whitaker Street, the former Seabolt Realty office, next door to the company’s headquarters.  The firm also has an Atlanta office.

From its founding by seven partners who were former employees of Wachovia Insurance, Seacrest Partners “is now approaching 50 employees.  We needed to add a senior leadership position to help run the company,” explained Paddison.

During his career, Compton has developed specialized expertise in the hospitality, construction and manufacturing industry sectors, and is recognized as an authority on the implementation of complex risk management strategies.

In his new role with Seacrest, Compton will be an integral part of the executive leadership team focusing on client services and technical resources for the rapidly growing firm, according to Paddison.

In addition to management responsibilities, Compton will continue to provide risk management advice and property-casualty insurance brokerage services to middle-market and large commercial clients throughout the region.

He most recently served as a senior vice president with Wells Fargo Insurance Services in Savannah where he was the senior broker and advisor. Prior to joining Wachovia Insurance Services in 2006 (Wells Fargo acquired Wachovia in 2008), Compton was a founding partner and owner of a Savannah-based insurance brokerage firm for more than 17 years. He began his insurance career in 1979 after graduating from University of Georgia, joining Savannah-based Palmer & Cay.

Paddison says that he sees Compton’s decision to move from an institutional firm to a privately held firm as the alignment of entrepreneurial spirits. “Entrepreneurs such as Chip thrive on providing new and better solutions for their clients. They need flexible environments that promote innovation and problem-solving. Chip will fit in perfectly at Seacrest and his extensive experience in key industry sectors will be an immediate resource to our staff as well as our current and future clients. We are extremely pleased with Chip’s decision to join our firm,” said Paddison.

“I am very excited to begin this new chapter of my career with Seacrest Partners,” Compton said. “What the firm has accomplished in just seven years is remarkable and I look forward to helping build the firm’s capabilities as Seacrest continues to grow.”

Compton currently serves as a board member with the Savannah Benevolent Association, is a member and past president of The Telfair Museum’s board of trustees, is chairman of Savannah Country Day School Board of Visitors and is past chairman of board of trustees of Savannah Country Day School. He is an active supporter of and volunteer with the United Way of Savannah, Savannah Chamber of Commerce and the Vestry of St. John’s Church.

Two highlights of his volunteer activity have been serving as the head coach of the Jenkins Boys’ Club and the Coastal Georgia Soccer Association.

Also, there is a 'circle-of-life' component to Compton’s joining Seacrest Partners:  in the summer of 1984, Paddison was looking for a summer business internship.  His dad, a local banker, called up his good friend John Cay, president of Palmer & Cay insurance, to see if they had a spot for young David.  “I ended up spending the summer working for Chip.  I’m in the insurance business today because of him,” said Paddison.  “It’s great to have him with us.”

NEWS - Banking & Finance

By Lou Phelps, SBJ Staff

April 2, 2013 -  It’s one of Georgia’s largest banks, and recent financial performance numbers continue to improve for Colony Bank, owned by Colony Bankcorp, Inc. (Nasdaq:CBAN).  By a number of benchmarks, the bank is outperforming many in Georgia.  The company’s publicly-traded stock continues to show consistent strength in 2013, closing at $5.45 per share yesterday, up 51 percent since Jan. 1.

The company recently reported year-end net income of $2.6 for 2012, up over 2011, and a strong capital position. According to Ed Loomis, president and CEO, “Several of our markets are showing signs of general economic improvement. Specifically some segments of agribusiness have experienced a record year in terms of price and yield. This is reflected on our balance sheet as total loans outstanding have increased over the previous quarter end for the third consecutive quarter.”

But like other banks in Georgia, Colony Bank continues to focus on problem asset resolution, “and those efforts resulted in further improvement during the quarter as nonperforming assets decreased to $46.16 million at Dec. 31, 2012 from $51.74 million at Sept. 30, 2012, or a decrease of 10.78 percent, while the substandard assets to tier one equity plus loan loss allowance ratio improved to 55.60 percent at December 31, 2012 from 63.87 percent at Sept. 30, 2012,” he said.

“Momentum carrying over from 2012 along with revenue enhancement initiatives bode well for a successful and rewarding year in 2013,” Loomis stated in a press release with the results.

Colony continues to maintain a strong capital position, and to be categorized as "well-capitalized" by the FDIC, according to the company.  At December 31, 2012, the Company's tier one leverage ratio, tier one and total risk-based capital ratios were 10.22 percent, 15.22 percent and 16.47 percent, respectively, compared to the previous quarter end of 10.07 percent, 15.39 percent  and 16.65 percent, respectively, at September 30, 2012 and to 9.51 percent, 15.24 percent and 16.50 percent, respectively, at December 31, 2011. Regulatory benchmarks to be categorized as "well-capitalized" for tier one leverage ratio, tier one and total risk-based capital ratios are 5.00 percent, 6.00 percent and 10.00 percent, respectively.

Other real estate totaled $20.45 million at year end Dec. 31, 2011 compared to $15.94 million at Dec. 31, 2012. During this period, $9.73 million has been added to other real estate, thus a reduction from sales and/or write-downs of $14.24 million. This significant movement of properties in a challenging real estate market is indicative of the commitment by Colony management to address its problem assets in a timely and prudent manner. Colony has established a target of twelve months to liquidate improved properties due to the high carrying cost of taxes, insurance, maintenance and repairs associated with holding these properties on our books.

In the fourth quarter of 2012 net charge-offs were $2.81 million, or 0.38 percent of average loans as compared to net charge-offs of $3.51 million, or 0.48 percent of average loans in fourth quarter 2011, while net charge-offs for twelve months ended December 31, 2012 were $9.70 million, or 1.34% of average loans as compared to net charge-offs of $20.88 million, or 2.74 percent of average loans for the comparable 2011 period, substantiation that the company is reducing its troubled assets portfolio.

Colony Bank has two offices in the Savannah market, overseen by City President Tommy Hester.

Colony Bankcorp, Inc., headquartered in Fitzgerald, consists of one operating subsidiary, Colony Bank. The Company conducts a general full service commercial, consumer and mortgage banking business through 28 offices located in the central, southern and coastal Georgia cities of Albany, Ashburn, Broxton, Centerville, Chester, Columbus, Cordele, Douglas, Eastman, Fitzgerald, Leesburg, Moultrie, Pitts, Quitman, Rochelle, Savannah, Soperton, Sylvester, Thomaston, Tifton, Valdosta and Warner Robins, Georgia.

NEWS - Banking & Finance

By Michael Smith and Richard Barid

With a slew of new income taxes this year affecting both the wealthy and the not so wealthy, you’re probably wondering what you can do to lower your taxable income.

For income earners in the top 1 percent, the tax rate rose to 39.6 percent this year from 35 percent last year. Wealthy Americans also saw a 5 percent increase in both capital gains and dividend tax rates and a new 3.8 percent tax on some investment income as well as a 0.9 percent tax on income of more than $250,000 per couple.

A far larger number of Americans, about 160 million, are feeling the impact of Social Security payroll taxes returning to their 2010 level of 6.2 percent. In 2011 and 2012 the payroll tax, which affects those making up to $113,700 a year, was only 4.2 percent. For the average worker making about $50,000 a year, that means about $1,000 more in taxes this year, according to the non-profit Tax Policy Center.

No one can avoid the tax man for good. But you can defer taxable income for retirement when you likely will be in a lower tax bracket.

One way to defer taxable income is to maximize your contributions to your retirement plan whether it be a 401(k) or traditional IRA. Contributions to these accounts are not taxed until withdrawn. Contributions to a Roth IRA are taxable, but then grow and may be withdrawn tax free.

This year, you can save up to $17,500 in a 401(k) – a 3 percent jump from 2012. Those age 50 and older can add an extra “catch up” contribution of $5,500 for a total of $23,000 in 2013.

If you don’t have a 401(k), you can contribute up to $5,500 ($6,500 if age 50 or older) to a traditional or a Roth IRA in 2013. Also, you may be able to contribute the same amounts to a spousal IRA —even if the spouse has little or no earned income.

Another way to minimize your tax bill is through your investments. Losses are deductible and gains are taxable. Depending on your situation, you might want to sell a depreciated investment prior to year end and take the deduction or postpone the sale of an appreciated investment until the new year to defer the taxes on that gain.

Capital losses are deductible up to the amount of your capital gains plus $3,000. The maximum tax on most capital assets held more than 12 months rose from 15 percent last year to 20 percent this year.

State or municipal bonds may be another good investment for those in higher tax brackets. Many Georgia bonds are tax exempt. Last year the state offered 2.69 percent interest on tax-free bonds. Commercial bonds may offer higher interest, but for individuals in higher income tax brackets, the taxes on these bonds may offset any gains.

Finally, you can lower your income tax liability by donating assets to your heirs or charity.

The gift tax exclusion rose to $14,000 per individual or $28,000 per couple this year from $13,000 or $26,000 last year. You can give these gifts to as many individuals as you like without paying federal gift taxes.

You also could donate the assets of appreciated investments using a charitable remainder trust to avoid otherwise taxable gains. The trust allows the charity to sell the assets tax free and reap a greater benefit than if you had sold the assets and donated the profits minus the amount subject to taxes. Also, you may deduct the fair market value of the property.

Michael Smith and Richard Barid are co-founders of Savannah-based Smith Barid LLC, which specializes in elder law, estate planning and special needs planning. They can be reached at 912-352-3999 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

NEWS - Banking & Finance

March 11, 2013 – 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."

Dorminey pointed out that the Company's strong capital position – with a Total Risk-Based Capital Ratio of 18.4 percent at Dec. 31, 2012 – has enabled it to continue to take advantage of expansion opportunities. Frontier Bank represents the fourth acquisition with the FDIC that HeritageBank of the South has completed. "We are excited by the opportunities this acquisition presents to our company, including the overall continued growth of our franchise in Georgia, Alabama and Florida, and more specifically to our growing presence in and around Auburn, Alabama," Dorminey continued. "The Auburn-Opelika market has proven to be very attractive for our bank: it is home to Auburn University and the robust economic environment associated with the Kia Motors manufacturing plant and related suppliers in the area, making it one of the most attractive markets in the state.

"Additionally, we look forward to the opportunity to enter the Birmingham market," Dorminey added, "one of the major metropolitan markets in the state where we hope to differentiate HeritageBank of the South as a leader in community banking and build a solid banking platform for future growth. Overall, we feel confident about the quality of the assets we are acquiring and the limited risk structure of this deal."

Keefe, Bruyette & Woods served as financial advisor to the Company in this transaction.

About Heritage Financial Group, Inc. and HeritageBank of the South
Heritage Financial Group, Inc. is the holding company for HeritageBank of the South, a community-oriented bank serving primarily South Georgia, North Central Florida and Eastern Alabama through 29 full-service branch locations, 13 mortgage offices, and 4 investment offices. As of Dec. 31, 2012, the Company reported total assets of approximately $1.1 billion and total stockholders' equity of approximately $121 million. For more information about the Company, visit HeritageBank of the South on the Web at www.eheritagebank.com and see Investor Relations under About Us.