Heritage Financial Group (HBOS) of Albany, Ga., is entering neighboring Alabama with an agreement to buy a branch in Auburn from the banking unit of Community Capital Bancshares.
The deal is an opportunity for the $1.1 billion-asset Heritage Financial to expand its loan portfolio, which would complement recent acquisitions of failed banks that grew its deposit base, Leonard Dorminey, the company's president and chief executive, said in a news release. Heritage acquired three failed banks in Georgia from 2009 to 2011.
"Less than 125 miles from our core market in Albany, the Auburn-Opelika market is very attractive for our bank," Dorminey said in a news release. "It is highlighted by low unemployment, the cultural and intellectual impact of Auburn University, and the dynamic economic environment associated with the Kia Motors manufacturing plant and related suppliers in the area."
The seller, the $148 million-asset Community Capital, is the parent of AB&T National Bank, also based in Albany, Ga. The company reported a 2011 net operating loss of $1.2 million, according to the FDIC.
Heritage would pick up roughly $13 million in loans and about $20 million in deposits in the deal, which is expected to close in the second quarter. The financial terms of the agreement were not disclosed. Heritage said Wednesday that it expects to retain the employees currently working at the branch.
Heritage's strong capital levels positions it well to take advantage of future acquisition opportunities, including more deals for failed banks, Dorminey said. At Dec. 31, it had a core capital leverage ratio of 8.64% and a total risk-based capital ratio of 18.34%, according to the Federal Deposit Insurance Corp.
The company currently has 21 branches and 11 mortgage offices serving the south Georgia and north central Florida markets. Heritage is focused on its current footprint but it is also interested in Alabama and South Carolina, the company said.