JONESBORO, Ga., April 22, 2021 (GLOBE NEWSWIRE) -- Heritage Southeast Bancorporation, Inc. (“Company”) (OTCQX: HSBI) today announced quarterly net income of $4.3 million or $0.60 per diluted share for the first quarter ended March 31, 2021, compared to $977,000 or $0.14 per diluted share for the prior quarter. First quarter earnings included a higher net interest income, net loan loss recoveries which contributed to no loan loss provision and lower salary and employee benefit expenses compared to the prior quarter.
Highlights of the Company’s performance and results for the quarter ended March 31, 2021 include the following:
- In March, HSBI entered into an agreement with VyStar Credit Union. Under the terms of the agreement, VyStar will acquire the assets and assume the liabilities of Heritage Southeast Bank in an all-cash transaction. Upon closing, it is anticipated HSBI shareholders will receive $27.00 per share. The Company has filed all regulatory applications and is preparing proxy materials for shareholder approval.
- Significant reductions to the legacy problem assets portfolio occurred during the period as total classified assets declined to $4.8 million at March 31, 2021 from $13.3 million at December 31, 2020 and $25.7 million at March 31, 2020.
- Loan loss provisions were zero for the quarter ended March 31, 2021 compared to $1.7 million the prior quarter reflecting net recoveries recorded in the period and the overall improved credit outlook.
- The net interest margin expanded five basis points to 3.58% during the quarter ended March 31, 2021 from 3.53% the previous quarter. The improved margin was primarily due to accelerated recognition of PPP loan fees resulting from forgiveness of approximately $29 million in loans during the first quarter and reductions to the cost of funds.
- Data processing conversion was successfully completed in February which will provide a more efficient operational model and customer delivery platform.
- COVID-19 loan modifications declined in the first quarter as approximately 99% of loans granted payment deferrals related to the pandemic have returned to original terms. This portfolio decreased from a peak of $165 million at June 30, 2020 to $1.3 million at March 31, 2021 and consists of 7 loans.
“We are pleased with our first quarter performance as the actions taken in 2020 along with market opportunities identified for 2021 will provide a stronger sustainable earnings stream. This coupled with improvements in asset quality and efficiencies to be gained from our recent data processing conversion has us very optimistic for the remainder of this year,” stated Leonard Moreland, Chief Executive Officer. “Meanwhile, in late March we negotiated an agreement to be acquired by VyStar Credit Union, headquartered in Jacksonville, Florida. The unique structure of this acquisition will benefit our customers, employees, shareholders and the communities we serve. Our HSBI team continues to work with VyStar as we anticipate closing the transaction sometime in the fourth quarter of 2021.”
Net Interest Income
The Company’s net interest income increased to $12.8 million during the first quarter of 2021 from $12.5 million in the fourth quarter of 2020. The Company’s reported net interest margin increased 5 basis points to 3.58% for the first quarter of 2021 from 3.53% for the fourth quarter of 2020. First quarter net interest margin was positively impacted by the additional accretion of PPP related fees of approximately $855,000. The earning asset yield decreased 5 basis points to 4.00% during the first quarter of 2021 while the cost of funds decreased 10 basis points to 0.42% over the same time frame. The net interest margin excluding PPP loans decreased to 3.48% for the first quarter from 3.50% one quarter earlier primarily due to changes in earning asset mix.
Loan Loss Provisions
The Company did not recognize any loan loss provisions for the first quarter, compared to provisions totaling $1.7 million the prior quarter. During the first quarter, the Company realized net loan loss recoveries of $1.1 million which contributed to building the reserve against loans losses. Management believes the improved economic and pandemic climate has provided better clarity on the ability of borrowers to meet their loan obligations. As such, the current level of reserves is believed to be sufficient.
Non-interest Income
First quarter non-interest income decreased to $4.5 million from $4.6 million for the fourth quarter of 2020. Lower service charges and fees during the current quarter were partially offset by higher interchange and ATM fees.
Non-interest Expense
Non-interest expense decreased $2.6 million to $11.8 million for the first quarter of 2021 from $14.4 million the prior quarter. Salaries and employee benefits decreased $1.8 million to $6.5 million in the first quarter from $8.3 million in the preceding quarter due primarily to elevated expenses in the prior quarter from employee restructuring charges. Other expenses decreased to $3.9 million for the first quarter from $4.3 million the prior quarter, which was elevated due to a loss recognized on a sublease of $800,000.
Balance Sheet
Total assets increased to $1.65 billion at March 31, 2021 from $1.57 billion one quarter earlier. Liquidity levels remained elevated as cash and cash equivalents increased $52.1 million to $270.7 million from $218.6 million three months earlier, and securities available for sale increased $5.5 million to $174.8 million from $169.3 million. Loans, excluding PPP loans, increased $14.0 million to $994.3 million at March 31, 2021 from $980.3 million at December 31, 2020. Meanwhile, PPP loans increased slightly to $88.2 million at March 31, 2021 from $87.8 million three months earlier. Approximately $29.1 million in PPP loans were funded in 2021.
Total deposits increased $71.2 million to $1.43 billion at March 31, 2021 from $1.36 billion at December 31, 2020. The impact of the various government stimulus programs and organic transaction account growth more than offset reductions to municipal and time deposits. The largest portion of the deposit increase consisted of non-interest bearing deposits which grew $64.2 million. Non-interest bearing deposits remain the largest component of the deposit portfolio representing 33.5% of total deposits followed by money market and savings deposits at 29.5%, interest-bearing demand deposits at 18.8% and time deposits at 18.2%.
Asset Quality
Classified assets, which include nonperforming assets and accruing classified loans, totaled $4.8 million at March 31, 2021, compared with $13.3 million at December 31, 2020. The decrease during the first quarter reflected a reduction of $7.8 million in nonperforming loans and $754,000 reduction in other real estate owned. Nonperforming assets, which exclude accruing classified loans, totaled $3.9 million at March 31, 2021, or 0.24% of total assets compared to $12.5 million, or 0.79% during the prior quarter. During the quarter, the Company sold approximately $3.8 million in non-performing loans above carrying value. Additionally, $4.6 million of non-performing loans were upgraded or paid off and $755,000 of other real estate owned was sold.
The allowance for loan losses increased to $15.3 million, or 1.41% of total loans at March 31, 2021 from $14.1 million, or 1.32% of total loans at December 31, 2020. Excluding PPP loans, which are supported by guarantees from the SBA, the allowance for loans losses were 1.53% of total loans at March 31, 2021. During the first quarter of 2021, the Company realized loan loss recoveries of $1.3 million and loan charge-offs of $198,000, resulting in net recoveries of $1.1 million, or 0.43% of average loans, compared with net charge-offs of $508,000, or 0.19% of average loans, in the fourth quarter of 2020.
Capital
Total shareholder equity increased to $145.8 million at March 31, 2021 from $142.8 million one quarter earlier. Shareholder equity relative to total assets was 8.86% and tangible shareholder equity relative to tangible assets was 6.81% at March 31, 2021. Tangible book value per share was $15.16 at March 31, 2021, an increase of 7.2% from March 31, 2020. At March 31, 2021, the Bank’s Leverage Ratio was 9.10%, its Common Equity Tier I and Tier 1 Capital ratios were 12.02%, and its Total Risk-Based Capital ratio was 13.27%. These regulatory capital ratios are significantly above levels required to be considered “well capitalized,” which is the highest possible regulatory designation.
About Heritage Southeast Bancorporation, Inc.
Heritage Southeast Bancorporation, Inc. serves as the holding company for Heritage Southeast Bank, which is headquartered in Jonesboro, GA and operates under the names “Heritage Bank,” “The Heritage Bank,” and “Providence Bank” in its various markets. With approximately $1.6 billion in assets, the Bank provides a well-rounded offering of commercial and consumer products through its 22 locations. For additional information, visit the HSBI website at www.myhsbi.com.
Forward Looking Statements:
This press release contains forward-looking statements. These forward-looking statements include, but are not limited to, statements about the benefits of the proposed acquisition of HSBI by VyStar, statements related to the expected timing of the completion of the acquisition, the combined company's plans, objectives, expectations and intentions, and other statements that are not historical facts. Forward-looking statements may be identified by terminology such as "may," "will," "should," "scheduled," "plans," "intends," "anticipates," "expects," "believes," estimates," "potential," or "continue" or negatives of such terms or other comparable terminology. All forward-looking statements in this press release, or in any other written or oral communication that relates to the proposed acquisition or to matters that may affect such proposed acquisition are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of HSBI or VyStar to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, among others, (1) disruption from the proposed acquisition with customers, suppliers, employees or other business partners, (2) the occurrence of any event, change or other circumstances that could give rise to the termination of the agreement, (3) the failure to obtain the necessary approvals by the shareholders of HSBI, (4) the ability by the parties to obtain required governmental approvals of the acquisition (5) the failure of the closing conditions in the agreement to be satisfied, or any unexpected delay in closing the acquisition, and (6) general competitive, economic, political and market conditions.
HSBI disclaims any obligation to update or revise any forward-looking statements contained in this communication (which statements speak only as of the date hereof), or in any other written or oral communication that relates to the proposed combination or to matters that may affect such proposed combination, whether as a result of new information, future events or otherwise.
Heritage Southeast Bancorporation, Inc. and its subsidiary disclaim any obligation to update or revise any forward-looking statements contained in this press release, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by law.
CONTACT | |
Leonard A. Moreland | Philip F. Resch |
Chief Executive Officer | Chief Financial Officer |
Heritage Southeast Bancorporation, Inc. | |
101 North Main Street | |
P.O. Box 935 | |
Jonesboro, GA 30236 | |
(770) 824-9934 |
HERITAGE SOUTHEAST BANCORPORATION, INC. AND SUBSIDIARY | |||||||||||||||
Financial Highlights | |||||||||||||||
(Unaudited) (in thousands, except per share data) | |||||||||||||||
Three Months Ended | |||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||
Earnings: | |||||||||||||||
Net Interest Income | $ | 12,769 | $ | 12,530 | $ | 11,901 | $ | 11,769 | $ | 12,213 | |||||
Net Income | 4,333 | 977 | 901 | 948 | 1,616 | ||||||||||
Per Share Data: | |||||||||||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.62 | $ | 0.14 | $ | 0.13 | $ | 0.14 | $ | 0.23 | |||||
Diluted | $ | 0.60 | $ | 0.14 | $ | 0.13 | $ | 0.13 | $ | 0.23 | |||||
Weighted average number of shares: | |||||||||||||||
Basic | 6,956 | 6,924 | 6,921 | 6,908 | 6,893 | ||||||||||
Diluted | 7,179 | 7,139 | 7,139 | 7,131 | 7,117 | ||||||||||
Period-end number of shares (1) | 7,222 | 7,227 | 7,229 | 7,227 | 7,231 | ||||||||||
Book value per share (period-end) | $ | 20.18 | $ | 19.76 | $ | 19.62 | $ | 19.45 | $ | 19.29 | |||||
Tangible book value per share (period-end) | $ | 15.16 | $ | 14.71 | $ | 14.54 | $ | 14.34 | $ | 14.14 | |||||
Key Ratios (percent): | |||||||||||||||
Return on average assets | 1.10 | % | 0.25 | % | 0.24 | % | 0.27 | % | 0.49 | % | |||||
Return on average tangible equity | 16.28 | % | 3.66 | % | 3.44 | % | 3.70 | % | 6.45 | % | |||||
Yield on interest earning assets | 4.00 | % | 4.05 | % | 4.03 | % | 4.32 | % | 5.01 | % | |||||
Cost of funds | 0.42 | % | 0.52 | % | 0.60 | % | 0.61 | % | 0.80 | % | |||||
Net interest margin | 3.58 | % | 3.53 | % | 3.43 | % | 3.71 | % | 4.21 | % | |||||
Net interest margin, excluding PPP loans | 3.48 | % | 3.50 | % | 3.67 | % | 3.78 | % | 4.21 | % | |||||
Non-interest income as a percent of total revenue | 26.0 | % | 26.7 | % | 24.7 | % | 26.0 | % | 27.9 | % | |||||
Efficiency ratio | 67.2 | % | 83.1 | % | 75.1 | % | 77.8 | % | 73.8 | % | |||||
Tangible common equity to tangible assets | 6.81 | % | 6.93 | % | 7.04 | % | 7.06 | % | 7.98 | % | |||||
Asset Quality (period-end): | |||||||||||||||
Allowance for loan losses to total loans | 1.41 | % | 1.32 | % | 1.23 | % | 1.02 | % | 0.90 | % | |||||
Allowance for loan losses to loans, excluding PPP loans | 1.53 | % | 1.44 | % | 1.36 | % | 1.13 | % | 0.90 | % | |||||
Allowance for loan losses to total nonperforming loans | 731.0 | % | 143.1 | % | 118.6 | % | 54.9 | % | 54.4 | % | |||||
Nonperforming assets to total assets | 0.24 | % | 0.79 | % | 1.04 | % | 1.87 | % | 1.85 | % | |||||
Net charge-offs (annualized) to average loans | -0.43 | % | 0.19 | % | 0.15 | % | 0.04 | % | 0.07 | % | |||||
Net charge-offs (annualized) to average loans, excluding PPP loans | -0.47 | % | 0.21 | % | 0.17 | % | 0.05 | % | 0.07 | % | |||||
Capital (period-end): | |||||||||||||||
Heritage Southeast Bank (HSB) risk based capital ratios: | |||||||||||||||
CET1 | 12.02 | % | 11.95 | % | 12.10 | % | 11.99 | % | 10.58 | % | |||||
Tier 1 | 12.02 | % | 11.95 | % | 12.10 | % | 11.99 | % | 10.58 | % | |||||
Total | 13.27 | % | 13.19 | % | 13.26 | % | 12.97 | % | 11.36 | % | |||||
Leverage | 9.10 | % | 8.98 | % | 9.08 | % | 9.55 | % | 8.92 | % | |||||
Other (period-end): | |||||||||||||||
Branches | 22 | 22 | 24 | 24 | 24 | ||||||||||
FTE | 278 | 288 | 289 | 302 | 309 | ||||||||||
(1) Includes restricted stock and shares yet to be issued under a supplemental executive retirement plan. |
HERITAGE SOUTHEAST BANCORPORATION, INC. AND SUBSIDIARY | |||||||||||
Consolidated Statements of Income | |||||||||||
(Unaudited) (in thousands, except per share data) | |||||||||||
Three Months Ended | |||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||
2021 | 2020 | 2020 | 2020 | 2020 | |||||||
Interest and dividend revenue: | |||||||||||
Loans, including fees | $ | 12,625 | $ | 12,938 | $ | 12,806 | $ | 12,748 | $ | 13,564 | |
PPP loans, including fees | 1,071 | 984 | 666 | 523 | - | ||||||
Investment securities | 516 | 393 | 426 | 394 | 618 | ||||||
Fed funds sold, deposits in banks and other | 55 | 61 | 76 | 40 | 347 | ||||||
Total interest and dividend revenue | 14,267 | 14,376 | 13,974 | 13,705 | 14,529 | ||||||
Interest expense: | |||||||||||
Deposits | 986 | 1,256 | 1,457 | 1,673 | 2,022 | ||||||
Fed funds purchased and repurchase agreements | 10 | 15 | 21 | 20 | 50 | ||||||
Federal Home Loan Bank advances | - | - | 1 | 14 | 23 | ||||||
Line of credit | 110 | 181 | 196 | 135 | 100 | ||||||
Subordinated notes | 310 | 310 | 313 | - | - | ||||||
Junior subordinated debentures | 82 | 84 | 85 | 94 | 121 | ||||||
Total interest expense | 1,498 | 1,846 | 2,073 | 1,936 | 2,316 | ||||||
Net interest income | 12,769 | 12,530 | 11,901 | 11,769 | 12,213 | ||||||
Provision for loan losses | - | 1,700 | 2,550 | 2,550 | 2,550 | ||||||
Net interest revenue after provision for loan losses | 12,769 | 10,830 | 9,351 | 9,219 | 9,663 | ||||||
Noninterest revenue: | |||||||||||
Service charges and fees | 1,285 | 1,574 | 1,433 | 1,218 | 1,698 | ||||||
Interchange and ATM fees | 1,536 | 1,480 | 1,524 | 1,422 | 1,263 | ||||||
Securities gains, net | - | - | - | 741 | 572 | ||||||
Gain on sale of SBA loans | 906 | 924 | 275 | 61 | 551 | ||||||
Other | 765 | 579 | 678 | 701 | 644 | ||||||
Total noninterest revenue | 4,492 | 4,557 | 3,910 | 4,143 | 4,728 | ||||||
Operating expenses: | |||||||||||
Salaries and employee benefits | 6,528 | 8,309 | 6,477 | 5,877 | 6,856 | ||||||
Occupancy and equipment | 1,402 | 1,404 | 1,454 | 1,388 | 1,309 | ||||||
Other real estate expenses, including losses on sales and impairments, net | 7 | 391 | 113 | 619 | 73 | ||||||
Other | 3,904 | 4,335 | 4,070 | 4,153 | 4,081 | ||||||
Total other operating expenses | 11,841 | 14,439 | 12,114 | 12,037 | 12,319 | ||||||
Income before income tax expense | 5,420 | 948 | 1,147 | 1,325 | 2,072 | ||||||
Income tax expense | 1,087 | (29 | ) | 246 | 377 | 456 | |||||
Net income | $ | 4,333 | $ | 977 | $ | 901 | $ | 948 | $ | 1,616 | |
Weighted-average number of shares outstanding: | |||||||||||
Basic | 6,956 | 6,924 | 6,921 | 6,908 | 6,893 | ||||||
Diluted | 7,179 | 7,139 | 7,139 | 7,131 | 7,117 | ||||||
Earnings per share: | |||||||||||
Basic | $ | 0.62 | $ | 0.14 | $ | 0.13 | $ | 0.14 | $ | 0.23 | |
Diluted | $ | 0.60 | $ | 0.14 | $ | 0.13 | $ | 0.13 | $ | 0.23 | |
HERITAGE SOUTHEAST BANCORPORATION, INC. AND SUBSIDIARY | |||||||||||||||
Consolidated Balance Sheets | |||||||||||||||
(in thousands) | |||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||
Assets | |||||||||||||||
Cash and due from banks | $ | 23,851 | $ | 29,092 | $ | 23,001 | $ | 26,767 | $ | 37,192 | |||||
Interest-bearing deposits with banks | 246,824 | 189,533 | 178,473 | 172,961 | 95,446 | ||||||||||
Cash and cash equivalents | 270,675 | 218,625 | 201,474 | 199,728 | 132,638 | ||||||||||
Securities available for sale, at fair value | 174,785 | 169,329 | 157,045 | 131,429 | 133,520 | ||||||||||
Other investments | 786 | 1,203 | 1,203 | 1,451 | 1,451 | ||||||||||
Loans: | |||||||||||||||
Loans, excluding PPP loans | 994,251 | 980,257 | 949,473 | 950,920 | 929,295 | ||||||||||
PPP loans | 88,201 | 87,775 | 103,402 | 103,074 | - | ||||||||||
Allowance for loan losses | (15,256 | ) | (14,117 | ) | (12,925 | ) | (10,772 | ) | (8,330 | ) | |||||
Loans, net | 1,067,196 | 1,053,915 | 1,039,950 | 1,043,222 | 920,965 | ||||||||||
Premises and equipment, net | 37,220 | 37,165 | 37,154 | 34,375 | 34,537 | ||||||||||
Bank owned life insurance | 33,925 | 28,734 | 28,536 | 28,334 | 28,129 | ||||||||||
Other real estate owned | 1,839 | 2,593 | 5,043 | 8,496 | 9,029 | ||||||||||
Goodwill | 28,275 | 28,275 | 28,275 | 28,275 | 28,275 | ||||||||||
Core deposit intangible, net | 7,995 | 8,232 | 8,470 | 8,707 | 8,944 | ||||||||||
Deferred tax asset, net | 14,362 | 14,900 | 14,989 | 15,276 | 15,660 | ||||||||||
Other assets | 8,140 | 8,219 | 8,058 | 6,156 | 5,807 | ||||||||||
Total Assets | $ | 1,645,198 | $ | 1,571,190 | $ | 1,530,197 | $ | 1,505,449 | $ | 1,318,955 | |||||
Liabilities | |||||||||||||||
Deposits: | |||||||||||||||
Noninterest-bearing | $ | 479,653 | $ | 415,476 | $ | 427,389 | $ | 417,690 | $ | 312,203 | |||||
Interest-bearing demand | 269,517 | 283,009 | 237,710 | 225,292 | 199,585 | ||||||||||
Money market and savings | 422,904 | 385,246 | 355,308 | 337,169 | 299,901 | ||||||||||
Time | 261,710 | 278,825 | 290,521 | 301,532 | 317,571 | ||||||||||
Total deposits | 1,433,784 | 1,362,556 | 1,310,928 | 1,281,683 | 1,129,260 | ||||||||||
Securities sold under agreements to repurchase | 13,413 | 13,187 | 15,407 | 17,194 | 13,310 | ||||||||||
Federal Home Loan Bank advances | - | - | - | 4,167 | 4,667 | ||||||||||
Line of credit | 14,688 | 14,688 | 24,688 | 24,688 | 14,688 | ||||||||||
Subordinated notes | 19,656 | 19,646 | 19,637 | 19,653 | - | ||||||||||
Junior subordinated debentures | 9,288 | 9,250 | 9,211 | 9,173 | 9,135 | ||||||||||
Accrued expenses and other liabilities | 8,598 | 9,030 | 8,441 | 8,267 | 8,443 | ||||||||||
Total liabilities | 1,499,427 | 1,428,357 | 1,388,312 | 1,364,825 | 1,179,503 | ||||||||||
Shareholders' Equity | |||||||||||||||
Common stock | 702 | 702 | 702 | 701 | 702 | ||||||||||
Additional paid in capital | 116,972 | 116,825 | 116,628 | 116,396 | 116,201 | ||||||||||
Retained earnings | 28,316 | 23,983 | 23,007 | 22,105 | 21,157 | ||||||||||
Other comprehensive income (loss) | (219 | ) | 1,323 | 1,548 | 1,422 | 1,392 | |||||||||
Total Shareholders' Equity | 145,771 | 142,833 | 141,885 | 140,624 | 139,452 | ||||||||||
Total Liabilities and Shareholders' Equity | $ | 1,645,198 | $ | 1,571,190 | $ | 1,530,197 | $ | 1,505,449 | $ | 1,318,955 | |||||
HERITAGE SOUTHEAST BANCORPORATION, INC. AND SUBSIDIARY | |||||||||||||||
GAAP to Non-GAAP Reconciliation | |||||||||||||||
(Unaudited) (in thousands) | |||||||||||||||
Three Months Ended | |||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||
Income before income tax expense (GAAP) | $ | 5,420 | $ | 948 | $ | 1,147 | $ | 1,325 | $ | 2,072 | |||||
Provision for loan losses | - | 1,700 | 2,550 | 2,550 | 2,550 | ||||||||||
Other real estate expenses, including losses on sales and impairments, net | 7 | 391 | 113 | 619 | 73 | ||||||||||
Securities gains, net | - | - | - | (741 | ) | (572 | ) | ||||||||
Loss on sub-lease | - | 800 | - | - | - | ||||||||||
Employee restructuring costs | - | 1,310 | - | - | - | ||||||||||
PPP impact | (1,396 | ) | (984 | ) | (666 | ) | (1,523 | ) | - | ||||||
Pre-tax core earnings | $ | 4,031 | $ | 4,165 | $ | 3,144 | $ | 2,230 | $ | 4,123 | |||||
HERITAGE SOUTHEAST BANCORPORATION, INC. AND SUBSIDIARY | |||||||||||||||
Loan Portfolio | |||||||||||||||
(Unaudited) (in thousands) | |||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||
Real estate loans: | |||||||||||||||
Construction and land development | $ | 152,889 | $ | 142,513 | $ | 136,313 | $ | 148,158 | $ | 133,592 | |||||
Single-family residential | 165,362 | 171,153 | 166,673 | 167,734 | 176,844 | ||||||||||
Commercial - owner occupied | 266,258 | 259,592 | 255,277 | 248,001 | 248,102 | ||||||||||
Commercial - other | 198,965 | 192,808 | 191,313 | 187,032 | 172,215 | ||||||||||
Multifamily | 6,746 | 14,171 | 11,849 | 11,669 | 11,748 | ||||||||||
Total real estate loans | 790,220 | 780,237 | 761,425 | 762,594 | 742,501 | ||||||||||
Commercial loans (not secured by real estate) | 190,365 | 184,509 | 171,251 | 172,134 | 170,252 | ||||||||||
Consumer loans (not secured by real estate) | 14,861 | 16,677 | 17,844 | 17,117 | 17,477 | ||||||||||
Gross loans | 995,446 | 981,423 | 950,520 | 951,845 | 930,230 | ||||||||||
Unearned income | (1,195 | ) | (1,166 | ) | (1,047 | ) | (925 | ) | (935 | ) | |||||
Loans, net of unearned income | $ | 994,251 | $ | 980,257 | $ | 949,473 | $ | 950,920 | $ | 929,295 | |||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||
PPP loans: | |||||||||||||||
Up to $50,000 | $ | 11,718 | $ | 11,701 | $ | 12,762 | $ | 12,765 | $ | - | |||||
$50,001 - $150,000 | 24,231 | 23,448 | 27,371 | 27,371 | - | ||||||||||
$150,001 - $2 million | 35,498 | 36,357 | 47,724 | 47,724 | - | ||||||||||
Greater than $2 million | 17,953 | 17,953 | 17,953 | 17,953 | - | ||||||||||
Total PPP loans (2) | 89,400 | 89,459 | 105,810 | 105,813 | - | ||||||||||
Unearned income | (1,199 | ) | (1,684 | ) | (2,408 | ) | (2,739 | ) | - | ||||||
PPP loans, net of unearned income | $ | 88,201 | $ | 87,775 | $ | 103,402 | $ | 103,074 | $ | - | |||||
(2) March 31, 2021 includes $60.3 million and $29.1 million of loans originated in 2020 and 2021, respectively. |
HERITAGE SOUTHEAST BANCORPORATION, INC. AND SUBSIDIARY | |||||||||||||||
Asset Quality Information | |||||||||||||||
(Unaudited) (in thousands) | |||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||
2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||
Classified assets: | |||||||||||||||
Nonperforming loans | $ | 2,087 | $ | 9,866 | $ | 10,902 | $ | 19,638 | $ | 15,317 | |||||
Other real estate owned | 1,839 | 2,593 | 5,043 | 8,496 | 9,029 | ||||||||||
Total nonperforming assets | 3,926 | 12,459 | 15,945 | 28,134 | 24,346 | ||||||||||
Accruing classified loans | 835 | 888 | 1,634 | 971 | 1,378 | ||||||||||
Total classified assets | $ | 4,761 | $ | 13,347 | $ | 17,579 | $ | 29,105 | $ | 25,724 | |||||
Classified assets to HSB Tier 1 capital plus ALL | 3.1 | % | 8.9 | % | 11.9 | % | 18.1 | % | 18.5 | % | |||||
Nonperforming assets to total assets | 0.24 | % | 0.79 | % | 1.04 | % | 1.87 | % | 1.85 | % | |||||
Allowance for loan losses: | |||||||||||||||
Balance at beginning of period | $ | 14,117 | $ | 12,925 | $ | 10,772 | $ | 8,330 | $ | 5,946 | |||||
Provision for loan losses | - | 1,700 | 2,550 | 2,550 | 2,550 | ||||||||||
Charge-offs | (198 | ) | (860 | ) | (403 | ) | (170 | ) | (307 | ) | |||||
Recoveries | 1,337 | 352 | 6 | 62 | 141 | ||||||||||
Balance at end of period | $ | 15,256 | $ | 14,117 | $ | 12,925 | $ | 10,772 | $ | 8,330 | |||||
Loans, excluding PPP loans | $ | 994,251 | $ | 980,257 | $ | 949,473 | $ | 950,920 | $ | 929,295 | |||||
PPP loans | 88,201 | 87,775 | 103,402 | 103,074 | - | ||||||||||
Performing past due loans | 2,500 | 2,472 | 2,193 | 3,506 | 4,798 | ||||||||||
Allowance as % of loans | 1.41 | % | 1.32 | % | 1.23 | % | 1.02 | % | 0.90 | % | |||||
Allowance as % of loans, excluding PPP loans | 1.53 | % | 1.44 | % | 1.36 | % | 1.13 | % | 0.90 | % | |||||
Allowance as a % of nonperforming loans | 731.0 | % | 143.1 | % | 118.6 | % | 54.9 | % | 54.4 | % | |||||
Average loans, excluding PPP loans | 988,173 | 960,808 | 947,177 | 946,389 | 930,099 | ||||||||||
Average PPP loans | 83,546 | 100,725 | 102,396 | 78,981 | - | ||||||||||
Net charge-offs (annualized) to average loans | -0.43 | % | 0.19 | % | 0.15 | % | 0.04 | % | 0.07 | % | |||||
Net charge-offs (annualized) to average loans, excluding PPP loans | -0.47 | % | 0.21 | % | 0.17 | % | 0.05 | % | 0.07 | % |