Len Dorminey, president and CEO of Heritage Financial Group, says conditions in the banking industry should lead to more acquisitions for the Albany-based bank. (Special Photo)
ALBANY — The growth of HeritageBank of the South in the tri-state area of Georgia, Florida and Alabama has been well documented in the Southeast. Now, the performance of the Albany-based bank has gained national attention.
The most recent edition of “Bank Director” magazine rates Heritage Financial Group Inc., parent company of HeritageBank of the South, among the top 10 banks in the country in terms of core revenue growth.
Heritage ranked No. 6 in the nation with an an annual growth rate of 23.24 percent. The ranking was prepared by Bank Intelligence Solutions of Atlanta which is led by President Kevin Tweddle.
Tweddle said, “Heritage has done an excellent job of integrating its FDIC-assisted purchases over the past few years as well as seizing opportunities in recovering markets throughout the Southeast, driving strong organic growth.”
In just a decade, Heritage has gone from a credit union to a savings bank to a state chartered commercial bank now boasting assets of $1.4 billion. That total will rise to $1.7 billion later this year when Heritage completes a merger with Alarion Bank in the Ocala and Gainesville, Fla. markets. HeritageBank of the South already had a presence in the Ocala market. That deal, expected to close in September, will add six new branches.
Even before the latest acquisition, Heritage had grown to 27 full-service branches. The company has almost 500 employees.
Tweddel said Heritage showed strong loan growth across all categories.
The magazine is distributed nationally and is widely read by bankers and others in the financial industry as well as executives and board members of companies associated with the banking industry.
The national recognition is good news for Len Dorminey, president and CEO of Heritage Financial Group. The exposure is a good selling tool for Dorminey who says he spends much of his time telling Heritage’s story to potential investors.
“I’m on the road a lot more,” Dorminey said. “I spend a significant amount of time on the road with Chief Financial Officer Heath Fountain attending investor conferences, making presentations and talking with shareholders and prospective shareholders.
“We’ve added some good markets with superb bankers,” said Dorminey. “We’ve seen significant (core organic loan) growth, like 35 percent in 2012, 17 percent in 2013 and we’re expecting double-digit loan growth in 2014, and that’s outside of any acquisitions.”
As Dorminney mentioned in the “Bank Director” magazine, the company has an attraction to college towns where the job markets are stable. The bank, for example, has expanded to markets around Auburn University, Georgia Southern University and the University of Florida.
In addition to the purchases, Heritage has made a substantial investment in the mortgage business, opening up a sizeable office in the Buckhead section of Atlanta, another office in Colorado Springs, Colo., as well as numerous other mortgage operations in existing markets.
“We hired a team in August 2012 to build our mortgage platform and we went from doing $100 million in loans a year on the mortgage side to $400 million in 2013,” Dorminey said. “The budget for 2014 is $800 million…That is a tremendous driver of interest income.”
As some banks struggle with tighter regulation, Dorminey said he expects acquisitions to continue.
“The cost to comply (with regulations) is onerous,” he said. “We’re seeing it now. A number of smaller banks would rather team up with larger banks to offset the costs. It’s a quicker and better return for the shareholders.”