Company to Remain Well Capitalized
Heritage Financial Group (NASDAQ:HBOS), the mid-tier holding company for
HeritageBank of the South, today announced that it currently holds
approximately $1.5 million par value of Freddie Mac preferred stock in
its available-for-sale investment portfolio. The Company has no
additional equity exposure to Fannie Mae or Freddie Mac equity
securities. Following the U.S. government's actions earlier this week to
place Freddie Mac under conservatorship and eliminate its dividends on
preferred stock, the Company has seen a dramatic decrease in the value
of this investment.
Management currently is examining tax issues and accounting treatment
related to the decline in value of this investment. The Company is
uncertain if it will be able to recognize a tax benefit if this
investment is written down to market value. As of September 10, 2008,
the fair value of the Company's investment in Freddie Mac preferred
stock was approximately $150,000. As of June 30, 2008, the fair value of
this investment was approximately $1.3 million.
At the end of the second quarter of 2008, Heritage Financial Group
reported that its total risk-based capital ratio was approximately 17% –
significantly above the 10% level required to be considered "well
capitalized." The Company will remain well capitalized at the end of the
third quarter, even if the Freddie Mac investment is written down to its
fair market value, or if deemed worthless, with no corresponding tax
benefit.
Heritage Financial Group is the mid-tier holding company for
HeritageBank of the South, a community-oriented bank serving primarily
Southwest Georgia and North Central Florida through seven full-service
banking offices. As of June 30, 2008, the Company reported total assets
of approximately $487.6 million and total stockholders' equity of
approximately $63.3 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.
Heritage, MHC, a mutual holding company formed in 2002, holds
approximately 74% of the shares of Heritage Financial Group. The
remaining 26% of Heritage Financial Group's shares are held by public
stockholders following the Company's June 2005 initial public offering.
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. We intend 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 include this statement for purposes of these safe harbor
provisions. Further information concerning the Company and its business,
including additional factors that could materially affect our financial
results, is included in our other filings with the SEC.
Heritage Financial Group
T. Heath Fountain, 229-878-2055
Senior
Vice President and
Chief Financial Officer
