Heritage wants to double its size in five years

Heath Fountain is Chief Financial Officer for HeritageBank of the South.

Heath Fountain is Chief Financial Officer for HeritageBank of the South.

ALBANY, Ga. -- The business climate at most Georgia banks during the past two years has been one of survival.

Survival is on the minds of executives with HeritageBank of the South, but survival at twice the size.

"We've got $750 million in total assets, and we feel like in the next three to five years we have the capital to grow to about $1.5 billion," said Heath Fountain, chief financial officer at HeritageBank.

To accomplish that, Heritage is operating in a bank-eat-bank environment where struggling institutions on the brink of failure are being gobbled up by HeritageBank and others like it.

"We're looking for two things," Fountain said. "A lot of banks are looking to get rid of branches because they are in such bad trouble and are not going to make it.

"Other banks may have struggles, but are going to be okay, but to be okay they need to shrink a little bit."

When buying from the still-strong banks, Fountain said Heritage looks for a good customer base in a market that "we feel like is going to be a good, long-term fit for HeritageBank."

"It's not that different in what we look for in the FDIC deals," he said.

Heritage has obtained several banks that were being shut down by the Federal Deposit Insurance Corporation. The Albany bank has hired its own managers for the struggling banks and is in the process of altering their procedures to become part of the Heritage culture.

Fountain said the bank will not use all of its proceeds ($65 million) from a recent stock offering to purchase banks. Some resources will be used to support internal growth, primarily in the new bank centers in Valdosta and Statesboro.

When checking out possible purchase targets, Fountain said Heritage looks primarily in Georgia south of Atlanta, in Florida north of Orlando and in the lower half of Alabama.

Fountain said Heritage has added quality managers during the purchasing phase, partly because of problems involving other Georgia banks.

"You had good bankers who worked for regional banks that got into trouble in Atlanta, causing these bankers to not be able to lend and do business," he said. "They were doing a great job but had their hands tied because of problems with the home office."

While the banks being purchased are outside the metro Albany market, it has benefited the local economy because of growth internally to process the business generated by the additional branches.