HBOS (MM)

Company Declares Quarterly Cash Dividend of $0.07 Per Share

Heritage Financial Group, Inc. (NASDAQ: HBOS), the holding company for HeritageBank of the South, today announced unaudited financial results for the quarter and year ended December 31, 2014. Key highlights of the Company's report for the fourth quarter of 2014 include:

• Net income of $2.5 million or $0.28 per diluted share, up 27% from $2.0 million or $0.26 per diluted share for the linked quarter, but down 27% from $3.4 million or $0.45 per diluted share for the year-earlier quarter;
• Net income, excluding special items for each quarter, of $2.9 million or $0.32 per diluted share, down 9% from $3.2 million or $0.42 per diluted share for the linked quarter, and down 27% from $4.0 million or $0.53 per diluted share for the year-earlier quarter (see non-GAAP reconciliation);
• Core net interest margin expanded to 3.44%, up 15 basis points from 3.29% for the linked quarter and up 24 basis points from 3.20% for the year-earlier quarter;
• Loan growth, excluding acquired loans, of $24.9 million or 3% on a linked-quarter basis and $114.4 million or 17% compared with the year-earlier quarter;
• A decline in nonperforming loans, excluding acquired loans, of 12% on a linked-quarter basis and 36% compared with the year-earlier quarter;
• A decrease in the provision for loan losses, excluding acquired loans, to $285,000, down from $575,000 for the linked quarter but up from $220,000 for the year-earlier quarter; and
• An increase in mortgage originations to $344.7 million, up $52.1 million or 18% from the linked quarter and up $224.3 million or 186% from the year-earlier quarter.

Commenting on the announcement, Leonard Dorminey, President and Chief Executive Officer, said, "We are pleased to end 2014 with solid momentum in our operations, highlighted by attractive organic loan growth, continued improvements in credit quality measures, and strong growth in mortgage originations. These achievements reflect the underlying expansion of our footprint, with the acquisition of Alarion Financial Services ("Alarion") and Alarion Bank, which marked our entry into Gainesville, Florida, and strengthened our presence in the Ocala market. Also during 2014, we were able to expand our mortgage lending business, adding six additional offices during the year. These newer offices, along with the continued contributions from those opened previously, enabled our mortgage lending operations to more than double its revenue during 2014. Because of these strategic investments, as well as the completion of our recent branch acquisition in Atlanta, we believe the Company carries solid momentum into 2015 and remains well positioned for continued growth."

Commenting on the recent announcement of the Company's proposed merger with Renasant Corporation ("Renasant"), Dorminey reiterated that the transaction is expected to provide enhanced value to Heritage's stockholders and benefit clients, employees, and communities of the Company through access to greater resources and operational scale as part of a larger community bank. The transaction is expected to close during the third quarter of 2015 and is subject to Renasant and Heritage stockholder approval, regulatory approval and other conditions set forth in the merger agreement.

Dorminey also noted that the Company's Board of Directors has declared a regular quarterly cash dividend of $0.07 per share, which will be paid on February 18, 2015, to stockholders of record as of February 4, 2015.

Branch Acquisition and Merger Activity

On December 10, 2014, the Company and Renasant jointly announced the signing of a definitive merger agreement pursuant to which Renasant will acquire, in an all-stock merger, the Company and its wholly owned subsidiary HeritageBank of the South. According to the terms of the merger agreement, which has been approved by the boards of directors of both companies, Heritage stockholders will receive 0.9266 shares of Renasant common stock for each share of Heritage common stock, and the merger is expected to qualify as a tax-free reorganization for Heritage stockholders. Based on Renasant's 20-day average closing price of $29.14 per share as of December 9, 2014, the aggregate deal value is approximately $258 million or $27.00 per share. In connection with the proposed merger, the Company has incurred $231,000 in merger expenses through December 31, 2014.

On January 20, 2015, the Company completed its previously announced branch acquisition from The PrivateBank and Trust Company. The branch is located at 3169 Holcomb Bridge Road, Norcross, Georgia and the acquisition added $37 million in loans and $107 million in deposits before applying fair value adjustments.

On September 30, 2014, the Company successfully completed the merger of Alarion and its subsidiary Alarion Bank, which had six offices in the Gainesville and Ocala markets. In this acquisition, the Company acquired $160.5 million in non-credit impaired loans, $38.7 million in credit impaired loans, $2.0 million in other real estate owned ("OREO"), and $230.7 million in total deposits.

Fourth Quarter 2014 Results of Operations

The $535,000 increase in reported quarterly earnings for the fourth quarter of 2014 compared with the linked quarter resulted primarily from the following items:

• Increased interest income of $1.7 million;
• Solid growth in revenue from mortgage banking activities of $1.2 million;
• Decreased acquisition-related expenses of $2.1 million; offset by
• Increased salaries and employee benefits of $3.2 million, driven primarily by mortgage banking expansion and the Alarion merger;
• Decreased gain on sales of securities of $438,000; and
• Increased equipment and occupancy expense of $355,000.

The $911,000 decrease in reported quarterly earnings for the fourth quarter of 2014 compared with the year-earlier quarter primarily reflected the following items:

• Increased salaries and employee benefits of $5.8 million due primarily to personnel additions related to mortgage banking expansion and the Alarion merger;
• Increased equipment and occupancy expense of $667,000; offset by
• Growth in revenue from mortgage banking activities of $5.0 million; and
• Increased interest income of $1.6 million.

Net interest income for the fourth quarter of 2014 increased 8% to $17.5 million from $16.3 million in the year-earlier quarter, primarily reflecting an increase in interest-earning assets related to acquisitions and organic growth. The Company's net interest margin was 4.48% for the fourth quarter of 2014, a reduction of 102 basis points from 5.50% for the year-earlier period. The decrease in the net interest margin for the fourth quarter of 2014 compared with the year-earlier quarter was driven by a decline in the yield on interest-earning assets of 1.09% associated with a reduction in the contribution of interest income related to acquired credit impaired loans, which was offset in part by a decline in the cost of interest-bearing liabilities of five basis points driven by lower cost of other borrowings. Excluding acquired credit impaired loan discount adjustments from the net interest margin, the core net interest margin was 3.44% for the fourth quarter of 2014, an improvement of 24 basis points from 3.20% for the year-earlier quarter. The improvement in the core net interest margin was driven primarily by an improvement in the interest-earning asset mix compared with the year-earlier quarter.

In the fourth quarter of 2014, the Company continued to achieve loan growth, with its non-acquired loan portfolio increasing $24.9 million organically on a linked-quarter basis and advancing $114.4 million overall compared with the year-earlier quarter. For the fourth quarter of 2014, the Company's loan portfolio, including acquired loans, totaled $1.085 billion, increasing $16.4 million on a linked-quarter basis from $1.069 billion and $286.7 million from $798.8 million compared with the year-earlier quarter, driven primarily by the Alarion merger and to a lesser extent organic loan growth. The organic loan growth from the linked quarter reflected primarily growth in the Albany, Macon, Birmingham, Auburn/Columbus, and South Atlanta markets. Total deposits stood at $1.322 billion at the end of the fourth quarter of 2014, down 1% from $1.341 billion on a linked-quarter basis, but up 23% from $1.076 billion for the year-earlier quarter, driven primarily by the Alarion merger.

For the fourth quarter of 2014, the Company's loans held for sale totaled $161.1 million, increasing $13.2 million or 9% on a linked-quarter basis from $147.9 million, and increasing $50.4 million or 46% from $110.7 million compared with the year-earlier quarter. The increase in the loans held for sale for the current quarter occurred as production outpaced loan sales. Loan sales to agencies in the fourth quarter totaled $197.6 million and, separately, the Company recorded a gain of $1.9 million related to the mortgage servicing rights for those loans. Total mortgage production for the fourth quarter was $344.7 million, up 18% on a linked-quarter basis from $292.6 million and up 186% from $120.4 million compared with the year-earlier quarter.

Noninterest income for the fourth quarter of 2014 improved 111% to $9.6 million from $4.5 million in the year-earlier quarter, reflecting primarily increases in revenue from mortgage banking activities of $5.0 million. Noninterest expense for the fourth quarter of 2014 increased 47% to $23.2 million from $15.7 million in the year-earlier quarter, driven primarily by increases in salaries and employee benefits of $5.8 million and growth in equipment and occupancy expense of $667,000, both related to the expansion of the mortgage division and the Alarion merger.

Accounting for Acquired Assets

The Company performs ongoing assessments of the estimated cash flows of its acquired credit impaired loan portfolios. The fair value of the acquired loan portfolios consisted of $86.8 million in non-covered and $42.4 million in covered loans at the end of the fourth quarter of 2014 compared with $63.3 million in non-covered and $50.9 million in covered loans for the year-earlier quarter. The outstanding principal balance of the acquired credit impaired loan portfolios totaled $179.1 million at the end of the fourth quarter of 2014 compared with $177.8 million for the year-earlier quarter. The details of the accounting for the acquired credit impaired loan portfolios for the fourth quarter of 2014 are as follows:

• Covered loans decreased $43,000 and non-covered loans decreased $5.3 million from the linked quarter;
• The negative accretion for the FDIC loss-share receivable was $2.3 million and the FDIC loss-share clawback accrual increased to $191,000; and
• Loan discount accretion recognized in interest income increased to $3.6 million.

For the fourth quarter of 2014, credit impaired loan discount accretion recognized in interest income declined 22% to $3.6 million from the linked quarter, and declined 43% from $6.3 million for the year-earlier quarter. The FDIC loss-share receivable associated with acquired assets covered decreased 15% to $23.8 million from $27.9 million for the linked quarter and declined 42% from $41.3 million for the year-earlier quarter. The reduction in the FDIC loss-share receivable for the linked quarter was driven primarily by negative accretion of $2.3 million, affecting the loss-share receivable asset associated with the improvement in expected cash flows of the acquired credit impaired performing loan portfolios covered and by FDIC reimbursements received of $1.5 million. An increase to the FDIC clawback liability accrual was recorded as an expense for the current quarter of $191,000, which increased the total accrual to $3.5 million. This FDIC clawback liability was caused by improvement in the estimates of expected cash flows for acquired credit impaired loans covered under loss-sharing agreements.

The acquired credit impaired loan covered discount affecting the loss-share receivable was $22.4 million, or 93.8% of the loss-share receivable, for the fourth quarter of 2014 compared with $39.1 million, or 94.6% of the loss-share receivable, for the year-earlier quarter. The gross balance of acquired assets covered decreased to $79.0 million for the fourth quarter of 2014 compared with $109.2 million for the year-earlier quarter. The FDIC loss-share receivable as a percent of the acquired assets covered decreased to 30.2% compared with 37.8% for the year-earlier quarter.

Asset Quality

Total nonperforming assets, excluding acquired assets, decreased to $6.7 million, or 0.39% of total assets, compared with $7.5 million, or 0.43% of total assets, for the linked quarter and declined from $11.2 million, or 0.81% of total assets, for the year-earlier quarter. Annualized net charge-offs to average outstanding loans, excluding acquired loans, were 0.07% for the fourth quarter of 2014 compared with annualized net charge-offs of 0.06% for the linked quarter and annualized net charge-offs of 0.10% for the year-earlier quarter. Nonperforming loans, excluding acquired loans, totaled $6.1 million for the fourth quarter of 2014, down from $6.9 million for the linked quarter and down from $9.4 million for the year-earlier quarter. OREO and repossessed assets, excluding acquired assets, totaled $577,000 for the fourth quarter of 2014, down from $648,000 for the linked quarter and from $1.8 million for the year-earlier quarter.

The provision for loan losses on non-acquired loans decreased to $285,000 for the fourth quarter of 2014 from $575,000 for the linked quarter, primarily driven by improving credit trends, but increased from $220,000 for the year-earlier quarter. For the fourth quarter of 2014, the allowance for loan losses represented 1.26% of total loans outstanding, excluding acquired loans, versus 1.28% for the linked quarter and 1.31% for the year-earlier quarter.

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 Georgia, Florida and Alabama through 36 banking locations, 21 mortgage offices, and 5 investment offices. As of December 31, 2014, the Company reported total assets of approximately $1.7 billion and total stockholders' equity of approximately $160 million. For more information about the Company, visit HeritageBank of the South on the Web at www.eheritagebank.com under the "Investors" tab.

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 such as "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 2013 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.

       

HERITAGE FINANCIAL GROUP, INC.

Unaudited Reconciliation of Non-GAAP Measures Presented in Earnings Release

(Dollars in thousands, except per share data)

  Three Months Ended Twelve Months Ended December 31,     September 30, December 31, 2014   2013 2014 2014   2013 Total noninterest income $ 9,551 $ 4,536 $ 8,274 $ 26,598 $ 18,414 Gain on sale of securities (190) (85) (628) (956) (85) Gain on acquisitions   –   –   –   –   (4,188) Adjusted noninterest income $ 9,361 $ 4,451 $ 7,646 $ 25,642 $ 14,141 Total noninterest expense $ 23,165 $ 15,706 $ 20,597 $ 77,354 $ 58,951 Acquisition-related expenses (426) (102) (2,543) (3,122) (1,322)

Impairment loss on assets held for sale

(172) (328) – (172) (328)

Realized loss on the disposition of assets held for sale

(6) (226) – (7) (241)

Accrual of FDIC acquisitions estimated clawback liability

  (191)  

(261)

  35   (1,581)   (1,237) Adjusted noninterest expense $ 22,370 $ 14,789 $ 18,089 $ 72,472 $ 55,823 Net income as reported $ 2,494 $ 3,405 $ 1,959 $ 7,568 $ 11,315 Total adjustments, net of tax*   422   584   1,242   2,746   (810) Adjusted net income $ 2,916 $ 3,989 $ 3,201 $ 10,314 $ 10,505 Diluted earnings per share $ 0.28 $ 0.45 $ 0.26 $ 0.95 $ 1.50 Total adjustments, net of tax*   0.04   0.08   0.16   0.34   (0.10) Adjusted diluted earnings per share $ 0.32 $ 0.53 $ 0.42 $ 1.29 $ 1.40  

* The effective tax rate for the period presented is used to determine net of tax amounts.

 

Net Income and Diluted Earnings Per Share are presented in accordance with Generally Accepted Accounting Principles ("GAAP"). Adjusted Noninterest Income, Adjusted Noninterest Expense, Adjusted Net Income and Adjusted Diluted Earnings Per Share are non-GAAP financial measures. The Company believes that these non-GAAP measures aid in understanding and comparing current-year and prior-year results, both of which include unusual items of different natures. These non-GAAP measures should be viewed in addition to, and not as a substitute for, the Company's reported results.

  Heritage Financial Group, Inc. and Subsidiary Consolidated Balance Sheets (Unaudited)         (Dollars in thousands)   (Unaudited) December 31, December 31, 2014 2013*

ASSETS

Cash and due from banks $ 29,107 $ 34,804 Interest-bearing deposits in banks 6,135 3,249 Federal funds sold   141   130 Cash and cash equivalents 35,383 38,183 Securities available for sale, at fair value 269,678 294,299 Federal Home Loan Bank stock, at cost 8,510 7,342 Other equity securities, at cost 1,010 1,010 Loans held for sale 161,104 110,669 Loans: Non-acquired loans 799,793 684,544 Acquired non-credit impaired loans 156,513 - Acquired credit impaired loans non-covered 86,763 63,318 Acquired credit impaired loans covered 42,404 50,891 Less allowance for non-acquired loans   10,034   8,955 Loans, net   1,075,439   789,798 Non-acquired other real estate owned 577 1,789 Acquired non-covered other real estate owned 2,721 1,693 Acquired covered other real estate owned   5,107   7,053 Total other real estate owned   8,405   10,535 FDIC loss-share receivable 23,837 41,306 Premises and equipment, net 50,041 37,978 Goodwill and intangible assets 18,177 4,253 Cash surrender value of bank owned life insurance 24,931 24,183 Other assets   29,099   21,369 Total assets $ 1,705,614 $ 1,380,925

LIABILITIES AND SHAREHOLDERS' EQUITY

Non-interest-bearing deposits $ 217,869 $ 148,253 Interest-bearing deposits   1,104,240   928,168 Total deposits   1,322,109   1,076,421 Federal funds purchased

Federal funds purchased and securities sold under repurchase agreements

43,339 37,648 Other borrowings 159,247 131,394 Other liabilities   20,902   10,399 Total liabilities   1,545,597   1,255,862 Shareholders' equity: Preferred stock, par value; $0.01; 5,000,000 shares authorized; none issued - -

Common stock, par value $0.01; 45,000,000 shares authorized; 9,238,973 and 7,834,537 shares issued and outstanding, respectively

92 78 Capital surplus 105,964 78,566 Retained earnings 63,289 57,614

Accumulated other comprehensive loss, net of tax of $3,292 and $5,175, respectively

(6,500) (7,762)

Unearned employee stock ownership plan (ESOP), 279,234 and 332,535 shares, respectively

  (2,828)   (3,433) Total shareholders' equity   160,017   125,063 Total liabilities & shareholders' equity $ 1,705,614 $ 1,380,925  

* Derived from Audited Consolidated Financial Statements.

    Heritage Financial Group, Inc. and Subsidiary Consolidated Statements of Income (Unaudited) (Dollars in thousands except share and per share data)                 Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, 2014 2013 2014 2013

Interest income:

Interest and fees on loans $ 16,372 $ 15,911 $ 59,353 $ 58,433 Interest on loans held for sale 1,759 619 5,743 1,459 Interest on taxable securities 1,143 1,231 4,744 4,347 Interest on nontaxable securities 380 337 1,483 1,248 Interest on federal funds sold 2 2 6 9 Interest on deposits in other banks   14   15   83   155 Total interest income   19,670   18,115   71,412   65,651

Interest expense:

Interest on deposits 1,337 1,000 4,845 4,077 Interest on other borrowings   860   862   3,420   3,308 Total interest expense   2,197   1,862   8,265   7,385 Net interest income 17,473 16,253 63,147 58,266 Provision for loan losses   285   232   1,569   1,735 Net interest income after provision for loan losses   17,188   16,021   61,578   56,531

Noninterest income:

Service charges on deposit accounts 1,629 1,642 6,187 5,670 Bankcard services income 950 890 3,699 3,335 Other service charges, commissions and fees 185 121 679 490 Brokerage fees 611 560 2,436 2,138 Mortgage banking activities 7,946 2,949 21,861 10,532 Bank-owned life insurance 182 198 748 801 Gain on sales of securities 190 85 956 85 Gain on acquisitions - - - 4,188 Accretion of FDIC loss-share receivable (2,349) (2,021) (10,426) (9,293) Other   207   112   458   468 Total noninterest income   9,551   4,536   26,598   18,414

Noninterest expense:

Salaries and employee benefits 14,559 8,722 44,831 31,445 Equipment and occupancy 2,589 1,922 8,971 7,358 Advertising and marketing 359 299 1,096 1,170 Professional fees 472 559 1,892 1,416 Information services expenses 1,404 1,285 4,834 5,109 Net loss on sales and write-downs of other real estate owned 92 38 525 406 Net gain on sales and write-downs of acquired other real estate owned (216) (536) (344) (969) Foreclosed asset expenses 45 240 291 1,019 Foreclosed acquired asset expenses 331 286 1,166 1,373 FDIC insurance and other regulatory fees 332 254 1,149 1,081 Impairment loss on assets held for sale 172 328 172 328 Acquisition related expenses 426 102 3,122 1,322 Deposit intangible expenses 305 200 879 809 FDIC loss-share clawback expenses 191 261 1,581 1,237 Other operating expenses   2,104   1,746   7,189   5,847 Total noninterest expense   23,165   15,706   77,354   58,951 Income before income taxes 3,574 4,851 10,822 15,994 Applicable income tax   1,080   1,446   3,254   4,679 Net income $ 2,494 $ 3,405 $ 7,568 $ 11,315

Earnings per common share:

Basic earnings per share $ 0.28 $ 0.46 $ 0.97 $ 1.52 Diluted earnings per share $ 0.28 $ 0.45 $ 0.95 $ 1.50

Weighted average-common shares outstanding:

Basic   8,826,740   7,407,722   7,795,764   7,421,348 Diluted   9,057,258   7,530,606   7,985,849   7,528,246     Heritage Financial Group, Inc. and Subsidiary Consolidated Statements of Income (Unaudited) (Dollars in thousands except share and per share data)                     Five Quarter Comparison 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013

Interest income:

Interest and fees on loans $ 16,372 $ 14,901 $ 14,730 $ 13,350 $ 15,911 Interest on loans held for sale 1,759 1,493 1,466 1,025 619 Interest on taxable securities 1,143 1,180 1,215 1,206 1,231 Interest on nontaxable securities 380 381 368 354 337 Interest on federal funds sold 2 2 1 1 2 Interest on deposits in other banks   14   20   30   19   15 Total interest income   19,670   17,977   17,810   15,955   18,115

Interest expense:

Interest on deposits 1,337 1,192 1,176 1,140 1,000 Interest on other borrowings   860   856   860   844   862 Total interest expense   2,197   2,048   2,036   1,984   1,862 Net interest income 17,473 15,929 15,774 13,971 16,253 Provision for loan losses - non-acquired 285 575 510 65 220 Provision for loan losses - acquired covered - 65 25 - - Provision for loan losses - acquired non-covered   -   -   (61)   105   12 Net interest income after provision for loan losses   17,188   15,289   15,300   13,801   16,021

Noninterest income:

Service charges on deposit accounts 1,629 1,612 1,503 1,443 1,642 Bankcard services income 950 919 941 889 890 Other service charges, commissions and fees 185 178 154 162 121 Brokerage fees 611 644 615 566 560 Mortgage banking activities 7,946 6,723 5,026 2,166 2,949 Bank-owned life insurance 182 190 187 189 198 Gain on sales of securities 190 628 138 - 85 Accretion of FDIC loss-share receivable (2,349) (2,669) (3,377) (2,031) (2,021) Other   207   49   99   103   112 Total noninterest income   9,551   8,274   5,286   3,487   4,536

Noninterest expense:

Salaries and employee benefits 14,559 11,382 10,310 8,580 8,722 Equipment and occupancy 2,589 2,234 2,153 1,995 1,922 Advertising and marketing 359 288 221 228 299 Professional fees 472 446 523 451 559 Information services expenses 1,404 1,080 1,150 1,200 1,285 Net loss on sales and write-downs of other real estate owned 92 8 107 318 38 Net (gain) loss on sales and write-downs of acquired other real estate owned (216) (37) 173 (264) (536) Foreclosed asset expenses 45 77 82 87 240 Foreclosed acquired asset expenses 331 217 285 333 286 FDIC insurance and other regulatory fees 332 274 299 244 254 Impairment loss on assets held for sale 172 - - - 328 Acquisition related expenses 426 2,543 101 52 102 Deposit intangible expenses 305 186 192 196 200 FDIC loss-share clawback expenses 191 (35) 882 543 261 Other operating expenses   2,104   1,934   1,638   1,513   1,746 Total noninterest expense   23,165   20,597   18,116   15,476   15,706 Income before income taxes 3,574 2,966 2,470 1,812 4,851 Applicable income tax   1,080   1,007   698   469   1,446 Net income $ 2,494 $ 1,959 $ 1,772 $ 1,343 $ 3,405

Earnings per common share:

Basic earnings per share $ 0.28 $ 0.26 $ 0.24 $ 0.18 $ 0.46 Diluted earnings per share $ 0.28 $ 0.26 $ 0.23 $ 0.18 $ 0.45 Dividends $ 0.07 $ 0.07 $ 0.07 $ 0.07 $ -

Weighted average-common shares outstanding:

Basic   8,826,740   7,485,528   7,436,717   7,422,044   7,407,722 Diluted   9,057,258   7,676,233   7,607,501   7,581,775   7,530,606

Other Financial Items:

Fixed compensation $ 6,841 $ 5,787 $ 5,431 $ 5,092 $ 4,979 Variable compensation $ 4,201 $ 3,321 $ 3,074 $ 1,617 $ 1,531 Employee benefits and taxes $ 3,517 $ 2,274 $ 1,805 $ 1,871 $ 2,212     Heritage Financial Group, Inc. and Subsidiary Condensed Average Balances, Interest Rates and Yields (Unaudited)                         (Dollars in thousands)   Three Months Ended December 31, 2014 2013 Average Average Average Average Balance Interest Rate Balance Interest Rate

Interest-earning assets:

Loans(1)(2) $ 1,241,266 $ 18,137 5.80% $ 868,420 $ 16,536 7.55% Investment securities (2) 307,350 1,653 2.13% 299,638 1,683 2.23% Other short-term investments   12,035   16 0.53%   13,785   16 0.46% Total interest-earning assets   1,560,651   19,806 5.03%   1,181,843   18,235 6.12% Non-interest earning assets   188,326   169,547 Total assets $ 1,748,977 $ 1,351,390

Interest-bearing liabilities:

Deposits:

Interest checking, money market and savings $ 665,747 $ 404 0.24% $ 543,633 $ 343 0.25% Time deposits   463,277   933 0.80%   370,737   658 0.70% Total interest-bearing deposits   1,129,024   1,337 0.47%   914,370   1,001 0.43%

Federal funds purchased and securities sold under repurchase agreements

45,955 345 2.97% 36,548 337 3.66% Other borrowings   190,503   515 1.07%   114,041   525 1.83% Total interest-bearing liabilities   1,365,482   2,197 0.64%   1,064,959   1,863 0.69%

Non-interest bearing liabilities:

Demand deposits 203,770 152,577 Other liabilities   17,489   12,147 Total non-interest bearing liabilities   221,259   164,724 Total liabilities   1,586,741   1,229,683 Shareholders' equity 162,236 121,707 Total liabilities & shareholders' equity $ 1,748,977 $ 1,351,390 Net interest income $ 17,609 $ 16,372 Interest rate spread 4.40% 5.43%

Net yield on interest-earning assets (net interest margin)

4.48% 5.50% Core net interest margin (non-GAAP): Loans(1)(2) $ 1,241,266 $ 18,137 5.80% $ 868,420 $ 16,536 7.55%

Acquired credit impaired loan discount adjustments(3)

  52,422   3,605 27.28%   69,283   6,272 35.92% Adjusted loans   1,293,688   14,532 4.46%   937,703   10,264 4.34%

Adjusted total interest-earning assets

$ 1,613,073   16,201 3.98% $ 1,251,126   11,963 3.79%

Total interest-bearing liabilities

$ 1,365,482   2,196 0.64% $ 1,064,959   1,863 0.69% Core net interest income $ 14,005 $ 10,100 Core interest rate spread 3.35% 3.10%

Core net yield on interest-earning assets (net interest margin non-GAAP)

3.44% 3.20%   (1) Average loan balances includes nonaccrual loans for the periods presented. (2) Fully Taxable Equivalent (“FTE”) at the rate of 34%. The FTE basis adjusts for the tax benefits of income on certain tax-exempt loans and investments using the federal statutory rate of 34% for each period presented. The Company believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts. (3) Acquired credit impaired loan discount adjustments include the reduction of interest income for discount accretion excluding contractual interest payments and the increase of core loans for the total balance of acquired credit impaired loan discounts.     Heritage Financial Group, Inc. and Subsidiary Condensed Average Balances, Interest Rates and Yields (Unaudited)                         (Dollars in thousands)   Twelve Months Ended December 31, 2014 2013 Average Average Average Average Balance Interest Rate Balance Interest Rate

Interest-earning assets:

Loans(1)(2) $ 1,025,844 $ 65,113 6.35% $ 795,094 $ 59,907 7.53% Investment securities (2) 303,146 6,731 2.22% 283,782 6,020 2.12% Other short-term investments   24,869   89 0.36%   41,576   164 0.39% Total interest-earning assets   1,353,859   71,933 5.31%   1,120,452   66,091 5.90% Non-interest earning assets   166,623   175,168 Total assets $ 1,520,482   1,295,620

Interest-bearing liabilities:

Deposits:

Interest checking, money market and savings $ 622,915 $ 1,465 0.24% $ 534,972 $ 1,261 0.24% Time deposits   398,341   3,380 0.85%   353,802   2,818 0.80% Total interest-bearing deposits   1,021,256   4,845 0.47%   888,774   4,079 0.46%

Federal funds purchased and securities sold under repurchase agreements

38,485 1,343 3.49% 34,527 1,331 3.85% Other borrowings   138,671   2,077 1.50%   96,132   1,976 2.06% Total interest-bearing liabilities   1,198,412   8,265 0.69%   1,019,433   7,386 0.72%

Non-interest bearing liabilities:

Demand deposits 172,024 142,578 Other liabilities   11,319   12,852

Total non-interest bearing liabilities

  183,343   155,430 Total liabilities   1,381,755   1,174,863 Shareholders' equity 138,727 120,757

Total liabilities & shareholders' equity

$ 1,520,482   1,295,620 Net interest income $ 63,668 $ 58,705 Interest rate spread 4.62% 5.17%

Net yield on interest-earning assets (net interest margin)

4.70% 5.24% Core net interest margin (non-GAAP): Loans(1)(2) $ 1,025,844 $ 65,113 6.35% $ 795,094 $ 59,907 7.53%

Acquired credit impaired loan discount adjustments(3)

  55,096   16,720 30.35%   73,647   20,722 28.14% Adjusted loans   1,080,940   48,393 4.48%   868,741   39,185 4.51% Adjusted total interest-earning assets $ 1,408,955   55,213 3.92% $ 1,194,099   45,369 3.80% Total interest-bearing liabilities $ 1,198,412   8,262 0.69% $ 1,019,433   7,386 0.72% Core net interest income $ 46,951 $ 37,983 Core interest rate spread 3.23% 3.07%

Core net yield on interest-earning assets (net interest margin non-GAAP)

3.33% 3.18%   (1) Average loan balances includes nonaccrual loans for the periods presented. (2) Fully Taxable Equivalent (“FTE”) at the rate of 34%. The FTE basis adjusts for the tax benefits of income on certain tax-exempt loans and investments using the federal statutory rate of 34% for each period presented. The Company believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts. (3) Acquired credit impaired loan discount adjustments include the reduction of interest income for discount accretion excluding contractual interest payments and the increase of core loans for the total balance of acquired credit impaired loan discounts.     Heritage Financial Group, Inc. and Subsidiary Consolidated Financial Highlights (Unaudited)                     (Dollars in thousands except share and per share data)   Five Quarter Comparison

Financial Condition Data:

12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013 Total loans $ 1,085,473 $ 1,069,108 $ 845,101 $ 810,028 $ 798,753 Loans held for sale 161,104 147,867 127,186 126,436 110,669 Acquired credit impaired loans covered 86,763 42,447 43,442 47,684 50,891 Allowance for loan losses 10,034 9,916 9,457 9,145 8,955 Total other real estate owned 8,405 9,225 7,710 8,727 10,535 Acquired other real estate owned covered 5,107 5,281 5,865 6,095 7,053 FDIC loss-share receivable 23,837 27,929 33,239 37,637 41,306 Goodwill and intangible assets 18,177 16,702 5,786 4,757 4,253 Total assets 1,705,614 1,755,534 1,487,431 1,413,540 1,380,925 Non-interest-bearing deposits 217,869 199,336 168,666 163,090 148,253 Interest-bearing deposits 1,104,240 1,141,925 1,040,134 963,564 928,168 Other borrowings 159,247 190,440 100,789 116,127 131,394

Federal funds purchased and securities sold under agreement to repurchase

43,339 42,815 35,350 33,785 37,648 Stockholders' equity 160,017 159,948 131,660 127,984 125,063 Total shares outstanding 9,238,973 9,183,574 7,851,296 7,834,517 7,834,537 Unearned ESOP shares   279,234   292,559   305,885   319,210   332,535 Total shares outstanding net of unearned ESOP   8,959,739   8,891,015   7,545,411   7,515,307   7,502,002 Book value per share $ 17.86 $ 17.99 $ 17.45 $ 17.03 $ 16.67 Book value per share including unearned ESOP (non-GAAP) 17.32 17.42 16.77 16.34 15.96 Tangible book value per share (non-GAAP) 15.83 16.11 16.68 16.40 16.10

Tangible book value per share including unearned ESOP (non-GAAP)

15.35 15.60 16.03 15.73 15.42 Market value per share 25.90 20.19 19.83 19.65 19.25     Five Quarter Comparison 12/31/2014   9/30/2014   6/30/2014   3/31/2014   12/31/2013

Key Financial Ratios and other information:

          Performance Ratios Annualized return on average assets 0.57% 0.52% 0.49% 0.39% 1.00% Annualized return on average equity 6.10% 5.82% 5.42% 4.26% 11.10% Net interest margin 4.48% 4.80% 4.92% 4.66% 5.50% Net interest spread 4.40% 4.72% 4.84% 4.59% 5.43% Core net interest margin 3.44% 3.29% 3.34% 3.23% 3.20% Core net interest spread 3.35% 3.19% 3.23% 3.12% 3.10% Efficiency ratio 83.15% 84.80% 82.07% 84.20% 71.66% Capital Ratios Average stockholders' equity to average assets 9.3% 9.0% 9.0% 9.2% 9.0% Tangible equity to tangible assets (non-GAAP) 8.4% 8.2% 8.5% 8.7% 8.8% Tier 1 leverage ratio 8.8% 10.3% 9.1% 9.0% 9.5% Tier 1 risk-based capital ratio 12.2% 12.0% 13.0% 12.8% 13.5% Total risk-based capital ratio 13.0% 12.8% 14.0% 13.8% 14.5% Other Information Full-time equivalent employees 568 586 490 455 426 Banking 343 371 312 305 306 Mortgage 219 209 171 143 113 Investments 6 6 7 7 7 Number of banking offices 36 36 29 29 27 Mortgage loan offices 21 20 15 15 14 Investment offices 5 5 5 5 4     Heritage Financial Group, Inc. and Subsidiary Consolidated Financial Highlights (Unaudited)             (Dollars in thousands)   Five Quarter Comparison

Loans

12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013 Construction and land $ 81,547 $ 73,137 $ 57,863 $ 53,138 $ 50,167 Farmland 26,821 29,441 28,502 30,116 23,420 Permanent 1 - 4 180,692 176,191 174,026 173,581 174,565 Permanent 1 - 4 - junior liens and revolving 40,741 39,694 35,827 34,661 32,038 Multifamily 29,309 28,742 26,436 25,718 22,650 Nonresidential 286,992 284,218 277,295 262,753 256,567 Commercial business 120,933 121,073 116,926 101,696 101,161 Consumer and other   32,758   21,612   27,918   20,907   23,976 Total non-acquired loans $ 799,793 $ 774,108 $ 744,793 $ 702,570 $ 684,544 Allowance for non-acquired loans   10,034   9,916   9,457   9,145   8,955 Net non-acquired loans $ 789,759 $ 764,192 $ 735,336 $ 693,425 $ 675,589 Acquired non-credit impaired loans 156,513 160,502 - - - Acquired credit impaired non-covered 86,763 92,051 56,866 59,774 63,318 Acquired credit impaired covered   42,404   42,447   43,442   47,684   50,891 Total acquired credit impaired loans   129,167   134,498   100,308   107,458   114,209 Net loans $ 1,075,439 $ 1,059,192 $ 835,644 $ 800,883 $ 789,798  

Loan Balances by Geographical Region (excluding acquired loans):

Five Quarter Comparison 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013 Albany $ 325,697 $ 314,875 $ 321,566 $ 302,664 $ 294,033 Valdosta 100,873 102,751 103,231 103,479 100,936 Ocala 62,719 64,678 55,231 57,322 58,343 Statesboro 133,669 135,861 128,421 121,636 122,928 Auburn/Columbus 45,766 41,092 36,023 36,171 36,130 Macon 94,305 86,041 80,323 75,722 68,638 Birmingham 20,243 14,798 10,834 2,091 1,590 South Atlanta   16,521   14,012   9,164   3,485   1,946 $ 799,793 $ 774,108 $ 744,793 $ 702,570 $ 684,544     Heritage Financial Group, Inc. and Subsidiary Consolidated Financial Highlights (Unaudited)             (Dollars in thousands)  

Asset Quality Data (excluding acquired loans):

Five Quarter Comparison 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013 Nonaccrual loans $ 6,083 $ 6,895 $ 7,003 $ 9,245 $ 9,435 Loans - 90 days past due & still accruing   -   -   -   -   - Total non-performing loans   6,083   6,895   7,003   9,245   9,435 OREO   577   648   507   1,104   1,789 Total non-performing assets $ 6,660 $ 7,543 $ 7,510 $ 10,349 $ 11,224 Trouble debt restructuring - nonaccrual $ 3,074 $ 3,097 $ 3,426 $ 5,702 $ 5,763 Trouble debt restructuring - accruing   5,594   4,683   4,392   1,968   1,983 Total trouble debt restructuring $ 8,668 $ 7,780 $ 7,818 $ 7,670 $ 7,746 Accruing past due loans $ 1,805 $ 1,065 $ 752 $ 830 $ 1,001 Total criticized assets $ 25,575 $ 23,737 $ 21,553 $ 22,026 $ 22,741 Total classified assets $ 17,449 $ 19,280 $ 18,573 $ 18,717 $ 19,582 Allowance for loan losses $ 10,034 $ 9,916 $ 9,457 $ 9,145 $ 8,955 Net charge-offs (recoveries) $ 165 $ 117 $ 92 $ (20) $ 160

Asset Quality Ratios:

Allowance for loan losses to total non-acquired loans 1.26% 1.28% 1.27% 1.30% 1.31% Allowance for loan losses to average non-acquired loans 1.02% 1.30% 1.31% 1.32% 1.33%

Allowance for loan losses to non-performing loans

164.95% 143.81% 135.04% 98.92% 94.91% Non-performing loans to total non-acquired loans 0.76% 0.89% 0.94% 1.32% 1.38% Non-performing assets to total assets 0.39% 0.43% 0.50% 0.73% 0.81%

Net charge-offs (recoveries) to average non-acquired loans (annualized)

0.07% 0.06% 0.05% -0.01% 0.10%     Heritage Financial Group, Inc. and Subsidiary Consolidated Financial Highlights (Unaudited)             (Dollars in thousands)   Five Quarter Comparison

Acquired credit impaired assets

12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013

Acquired credit impaired loans non-covered:

Commercial real estate $ 42,630 $ 47,409 $ 21,020 $ 21,269 $ 22,268 Residential real estate 28,554 30,446 26,456 28,115 30,134 Construction and land 7,094 5,309 4,934 5,573 5,156 Commercial and industrial 5,531 5,796 1,800 1,926 2,604 Consumer and other   2,954   3,091   2,656   2,891   3,156 Total 86,763 92,051 56,866 59,774 63,318

Acquired credit impaired loans covered:

Commercial real estate 12,715 12,344 12,295 14,044 14,161 Residential real estate 18,342 19,219 19,637 22,372 23,886 Construction and land 10,452 10,126 10,679 10,332 11,642 Commercial and industrial 812 680 762 801 864 Consumer and other   83   78   69   135   338 Total   42,404   42,447   43,442   47,684   50,891 Total carrying value of acquired credit impaired loans $ 129,167 $ 134,498 $ 100,308 $ 107,458 $ 114,209 Non-accrete discount for acquired credit impaired loans 20,135 22,729 16,600 30,818 36,746 Accretable discount for acquired credit impaired loans   29,826   31,540   36,066   27,492   26,860 Total discount for acquired credit impaired loans   49,961   54,269   52,666   58,310   63,606 Outstanding principal balance for acquired credit impaired loans $ 179,128 $ 188,767 $ 152,974 $ 165,768 $ 177,815

Acquired OREO:

Non-covered $ 2,721 $ 3,296 $ 1,338 $ 1,527 $ 1,694 Covered   5,107   5,281   5,865   6,095   7,053 Total carrying value of acquired OREO $ 7,828 $ 8,577 $ 7,203 $ 7,622 $ 8,747 Total discount for acquired OREO   5,930   7,340   7,593   10,255   11,186 Gross carrying value of acquired OREO $ 13,758 $ 15,917 $ 14,796 $ 17,877 $ 19,933

Total credit impaired loan discount accretion recognized in income:

Individual assessed discount accretion $ 565 $ 1,058 $ 1,681 $ 808 $ 3,132 Pooled assessed discount accretion   3,040   3,562   2,963   3,042   3,140 Total credit impaired loan discount accretion recognized in income $ 3,605 $ 4,620 $ 4,644 $ 3,850 $ 6,272

Acquired credit impaired ratios:

Total discount to principal balance for acquired loans 27.9% 28.7% 34.4% 35.2% 35.8%     Heritage Financial Group, Inc. and Subsidiary Consolidated Financial Highlights (Unaudited)             (Dollars in thousands)   Five Quarter Comparison

Acquired credit impaired assets non-covered

12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013

Outstanding principal balance:

Acquired loan pools non-covered $ 76,341 $ 81,787 $ 54,899 $ 58,294 $ 61,893 Acquired loans individually assessed non-covered   32,445   33,774   19,497   20,644   22,214 Total outstanding principal loan balance non-covered 108,786 115,561 74,396 78,938 84,107 Gross carrying value for acquired OREO non-covered   5,106   6,373   3,892   4,254   4,470 Total gross balance of assets non-covered $ 113,892 $ 121,934 $ 78,288 $ 83,192 $ 88,577

Non-accretable discount for estimated credit losses non-covered:

Acquired loan pools non-covered $ 6,142 $ 6,293 $ 2,883 $ 7,337 $ 8,932 Acquired loans individually assessed non-covered   6,136   7,224   3,524   4,283   5,397 Total non-accretable discount non-covered 12,278 13,517 6,407 11,620 14,329 Acquired OREO discount non-covered   2,385   3,077   2,554   2,728   2,776 Total discount for estimated credit losses non-covered $ 14,663 $ 16,594 $ 8,961 $ 14,348 $ 17,105

Accretable discount non-covered:

Accretable discount for improvement in cash flows non-covered $ 9,010 $ 9,200 $ 10,270 $ 6,603 $ 5,458 Other accretable discount non-covered   735   793   855   941   1,002 Total accretable discount non-covered   9,745   9,993   11,125   7,544   6,460 Total discount non-covered $ 24,408 $ 26,587 $ 20,086 $ 21,892 $ 23,565

Loan discount accretion recognized in income non-covered:

Individual assessed discount accretion $ 216 $ 517 $ 690 $ 428 $ 2,375 Pooled assessed discount accretion   460   475   321   187   249 Total discount accretion recognized in income non-covered $ 676 $ 992 $ 1,011 $ 615 $ 2,624

Acquired ratios non-covered:

Total discount to principal balance for acquired assets non-covered 21.4% 21.8% 25.7% 26.3% 26.6% Gross balance of loans non-covered to total acquired loans 60.7% 61.2% 48.6% 47.6% 47.3%   Heritage Financial Group, Inc. and Subsidiary Consolidated Financial Highlights (Unaudited)             (Dollars in thousands)  

Acquired credit impaired assets covered

12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013

Outstanding principal balance:

Acquired loan pools covered $ 51,114 $ 53,733 $ 57,567 $ 63,789 $ 69,192 Acquired loans individually assessed covered   19,230   19,473   21,010   23,041   24,517 Total outstanding principal loan balance covered 70,344 73,206 78,577 86,830 93,709 Gross carrying value for acquired OREO covered   8,652   9,544   10,904   13,622   15,463 Total gross balance of assets covered $ 78,996 $ 82,750 $ 89,481 $ 100,452 $ 109,172

Non-accretable discount for estimated credit losses covered:

Acquired loan pools covered $ 3,834 $ 5,027 $ 5,401 $ 12,215 $ 15,284 Acquired loans individually assessed covered   4,024   4,184   4,792   6,983   7,133 Total non-accretable discount covered 7,858 9,211 10,193 19,198 22,417 Acquired OREO discount covered   3,545   4,263   5,039   7,528   8,410 Total discount for estimated credit losses covered $ 11,403 $ 13,474 $ 15,232 $ 26,726 $ 30,827

Accretable discount covered:

Accretable discount for improvement in cash flows covered $ 16,540 $ 18,597 $ 22,084 $ 18,156 $ 18,012 Other accretable discount covered   3,542   2,951   2,858   1,792   2,389 Total accretable discount covered   20,082   21,548   24,942   19,948   20,401 Total discount covered $ 31,485 $ 35,022 $ 40,174 $ 46,674 $ 51,228

Loan discount accretion recognized in income covered:

Individual assessed accretion $ 349 $ 541 $ 991 $ 380 $ 757 Pooled assessed accretion   2,580   3,087   2,642   2,855   2,891 Total discount accretion recognized in income covered $ 2,929 $ 3,628 $ 3,633 $ 3,235 $ 3,648

Acquired ratios covered:

Total discount to principal balance for acquired assets covered 39.9% 42.3% 44.9% 46.5% 46.9%     Five Quarter Comparison

FDIC loss-share receivable

12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013

FDIC loss-share receivable:

Single family estimated credit losses $ 6,018 $ 6,524 $ 7,506 $ 8,446 $ 8,995 Non-single family estimated credit losses 16,335 19,133 22,347 27,459 30,077 Pending reimbursements and other   1,484   2,272   3,386   1,732   2,234 Total $ 23,837 $ 27,929 $ 33,239 $ 37,637 $ 41,306 FDIC loss-share clawback liability $ 3,522 $ 3,332 $ 3,366 $ 2,484 $ 1,941 Total covered discount $ 31,485 $ 35,022 $ 40,174 $ 46,674 $ 51,228 Total covered discount impacting FDIC loss-share receivable $ 27,943 $ 32,071 $ 37,316 $ 44,882 $ 48,839 Total covered discount impacting FDIC loss-share receivable at 80% $ 22,354 $ 25,657 $ 29,853 $ 35,906 $ 39,071

FDIC loss-share receivable ratios:

FDIC receivable as % of gross balance of covered assets 30.2% 33.8% 37.1% 37.5% 37.8% Covered discount at 80% as % of FDIC receivable 93.8% 91.9% 89.8% 95.4% 94.6%     Heritage Financial Group, Inc. and Subsidiary Consolidated Financial Highlights (Unaudited)            

Mortgage Segment Information

Five Quarter Comparison 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013 Net interest income $ 887 $ 716 $ 924 $ 825 $ 114 Provision for loan losses - - - - - Noninterest income 8,806 6,892 6,153 2,392 2,951 Noninterest expense 9,192 7,103 6,178 3,815 3,149 Income tax expense (benefit)   155   157   278   (185)   (26) Mortgage profit (loss) $ 346 $ 348 $ 621 $ (413) $ (58) Mortgage segment assets $ 184,606 $ 158,277 $ 139,024 $ 136,662 $ 120,716

Other Financial Items:

Fixed compensation $ 1,861 $ 1,594 $ 1,375 $ 1,106 $ 1,037 Variable compensation $ 5,682 $ 3,433 $ 2,832 $ 1,402 $ 1,311  

Mortgage Segment Selected Other Information:

Five Quarter Comparison 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013 Retail production $ 255,822 $ 207,315 $ 187,669 $ 98,554 $ 84,381 Wholesale production   88,913   85,294   62,228   36,941   36,030 Total production $ 344,735 $ 292,609 $ 249,897 $ 135,495 $ 120,411 Purchase as a % of total production 77% 78% 84% 80% 78% Refi as a % of total production 23% 22% 16% 20% 22% End of period locks $ 176,262 $ 135,963 $ 117,940 $ 71,121 $ 43,054

Heritage Financial Group, Inc.T. Heath Fountain, 229-878-2055Executive Vice President andChief Financial Officer