The parent company of HeritageBank of the South in Albany, Ga., announced a deal Thursday to acquire five branches from the Park Avenue Bank, which has struggled with credit-quality problems.
Heritage Financial Group, a $573.2 million-asset mutual holding company, will pick up $52 million of loans, $72 million of deposits and $26 million of certificates of deposits from the deal. HeritageBank said in a press release that it plans to retain all employees from the Park Avenue branches. The deal is expected to close in the second quarter.
Park Avenue Bank, a $1.2 billion-asset subsidiary of PAB Bankshares Inc., signed a written agreement with the Federal Reserve in July requiring the bank to strengthen its credit-risk management practices and improve assets.
The Valdosta, Ga., bank's noncurrent loans as a percentage of total loans increased 616 basis points, to 11.92%, at the end of 2009. At Dec. 31 its total risk-based capital dropped to 8.24% from 10.34%, Tier 1 risk-based capital dropped to 6.96% from 9.08% and its leverage ratio fell to 4.85% from 7.05%.
Donald "Jay" Torbert Jr., Park Avenue's chief executive, said in a press release that the deal "will allow us to continue to deleverage our balance sheet and focus our resources on resolving our problem assets."