##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2009  Commission File Number 000-51305
 
 
 HERITAGE FINANCIAL GROUP
 
 721 N. Westover Blvd., Albany, GA 31707
229-420-0000
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
 APPLICABLE ONLY TO CORPORATE ISSUERS




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##### 



HERITAGE FINANCIAL GROUP
 INDEX
 PageNumberPART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEETS AS OF
SEPTEMBER 30, 2009 AND DECEMBER 31, 2008
    
    
    3CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
    
    
    4CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
    
    
    5CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND THE YEAR ENDED
DECEMBER 31, 2008
    
    
    6CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
    
    
    7CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    
    
    8ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS
    
    
    17ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    28ITEM 4. CONTROLS AND PROCEDURES
    
    
    29PART II  OTHER INFORMATION
    
    
    30SIGNATURES
    
    
    31EXHIBITS31.1 Rule 13a14(a) Certification of Chief Executive Officer31.2 Rule 13a14(a) Certification of Chief Financial Officer32    Section 1350 CertificationEX-31.1EX-31.2EX-32




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
 
 Consolidated Balance Sheets
September 30, 2009 and December 31, 2008
 Unaudited
    
    
    AuditedSeptember 30,
    
    
    December 31,2009
    
    
    2008AssetsCash and due from banks
    
    $
    12,679,840
    
    
    $
    10,159,602Interest-bearing deposits in banks
    
    
    5,074,892
    
    
    
    745,758Federal funds sold
    
    
    13,033,000
    
    
    
    30,254,000Securities available for sale, at fair value
    
    
    101,338,131
    
    
    
    116,140,525Federal home loan bank stock, at cost
    
    
    3,253,400
    
    
    
    3,185,800Other equity securities, at cost
    
    
    1,010,000
    
    
    
    1,010,000Loans
    
    
    299,295,709
    
    
    
    302,487,892Less allowance for loan losses
    
    
    8,027,969
    
    
    
    4,950,722Loans, net
    
    
    291,267,740
    
    
    
    297,537,170Premises and equipment, net
    
    
    16,674,035
    
    
    
    16,801,183Accrued interest receivable
    
    
    2,128,634
    
    
    
    2,155,327Intangible assets
    
    
    1,000,000
    
    
    
    1,000,000Foreclosed assets
    
    
    898,345
    
    
    
    2,119,818Cash surrender value of bank owned life insurance
    
    
    14,600,887
    
    
    
    14,136,119Other assets
    
    
    7,499,534
    
    
    
    6,812,425$
    470,458,438
    
    
    $
    502,057,727Liabilities and Stockholders EquityDepositsNoninterest-bearing
    
    $
    18,811,403
    
    
    $
    19,100,197Interest-bearing
    
    
    303,499,910
    
    
    
    319,445,797Total deposits
    
    
    322,311,313
    
    
    
    338,545,994Federal funds purchased and securities sold under repurchase agreements
    
    
    35,210,539
    
    
    
    41,497,491Other borrowings
    
    
    42,500,000
    
    
    
    52,500,000Accrued interest payable
    
    
    596,742
    
    
    
    1,045,042Other liabilities
    
    
    7,017,206
    
    
    
    6,256,227Total liabilities
    
    
    407,635,800
    
    
    
    439,844,754Commitments and contingenciesStockholders equityPreferred stock, par value $0.01; 1,000,000 shares authorized;
no shares issued
    
    
    
    
    
    
    Common stock, par value $0.01; 25,000,000 shares authorized;
11,452,344 issued and outstanding
    
    
    114,523
    
    
    
    114,523Capital surplus
    
    
    40,484,351
    
    
    
    39,861,237Retained earnings
    
    
    40,828,431
    
    
    
    41,357,209Accumulated other comprehensive loss
    
    
    (2,081,164
    )
    
    
    (2,685,633
    )Unearned employee stock ownership plan (ESOP) shares,
253,403 and 286,455 shares
    
    
    (2,534,025
    )
    
    
    (2,864,550
    )76,812,116
    
    
    
    75,782,786Treasury stock, at cost, 1,042,124 and 993,498 shares
    
    
    (13,989,478
    )
    
    
    (13,569,813
    )Total stockholders equity
    
    
    62,822,638
    
    
    
    62,212,973$
    470,458,438
    
    
    $
    502,057,727
 See Notes to Consolidated Financial Statements.
 3




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
 
 Consolidated Statements of Operations (Unaudited)
For the Three and Nine Months Ended September 30, 2009 and 2008
 For the Three Months
    
    
    For the Nine Months2009
    
    
    2008
    
    
    2009
    
    
    2008Interest incomeInterest and fees on loans
    
    $
    4,599,933
    
    
    
    5,179,786
    
    
    $
    13,721,630
    
    
    $
    15,945,925Interest on taxable securities
    
    
    780,996
    
    
    
    1,268,420
    
    
    
    2,921,284
    
    
    
    3,623,502Interest on nontaxable securities
    
    
    296,394
    
    
    
    277,951
    
    
    
    882,416
    
    
    
    902,814Interest on federal funds sold
    
    
    7,694
    
    
    
    37,566
    
    
    
    39,670
    
    
    
    160,934Interest on deposits in other banks
    
    
    748
    
    
    
    3,636
    
    
    
    1,182
    
    
    
    14,5075,685,765
    
    
    
    6,767,359
    
    
    
    17,566,182
    
    
    
    20,647,682Interest expenseInterest on deposits
    
    
    1,478,611
    
    
    
    2,099,516
    
    
    
    5,049,607
    
    
    
    6,753,882Interest on other borrowings
    
    
    500,715
    
    
    
    875,147
    
    
    
    1,829,653
    
    
    
    2,608,8501,979,326
    
    
    
    2,974,663
    
    
    
    6,879,260
    
    
    
    9,362,732Net interest income
    
    
    3,706,439
    
    
    
    3,792,696
    
    
    
    10,686,922
    
    
    
    11,284,950Provision for loan losses
    
    
    2,500,000
    
    
    
    1,218,000
    
    
    
    3,800,000
    
    
    
    2,400,000Net interest income after provision for loan losses
    
    
    1,206,439
    
    
    
    2,574,696
    
    
    
    6,886,922
    
    
    
    8,884,950Noninterest incomeService charges on deposit accounts
    
    
    950,893
    
    
    
    1,046,544
    
    
    
    2,595,376
    
    
    
    2,949,962Other service charges, commissions and fees
    
    
    338,490
    
    
    
    314,847
    
    
    
    1,060,600
    
    
    
    973,650Brokerage fees
    
    
    251,854
    
    
    
    264,662
    
    
    
    662,177
    
    
    
    770,493Mortgage origination fees
    
    
    66,364
    
    
    
    108,894
    
    
    
    275,544
    
    
    
    314,602Bank owned life insurance
    
    
    155,285
    
    
    
    151,360
    
    
    
    464,767
    
    
    
    344,199Gain on sale of securities
    
    
    469,455
    
    
    
    
    
    
    
    835,584
    
    
    
    19,745Impairment loss on securities
    
    
    
    
    
    
    (3,019,181
    )
    
    
    
    
    
    
    (3,019,181
    )Other
    
    
    11,575
    
    
    
    33,435
    
    
    
    33,870
    
    
    
    311,5542,243,916
    
    
    
    (1,099,439
    )
    
    
    5,927,918
    
    
    
    2,665,024Noninterest expenseSalaries and employee benefits
    
    
    2,295,513
    
    
    
    2,353,230
    
    
    
    6,719,869
    
    
    
    6,878,605Equipment
    
    
    221,077
    
    
    
    294,381
    
    
    
    760,243
    
    
    
    914,439Occupancy
    
    
    312,000
    
    
    
    303,118
    
    
    
    901,263
    
    
    
    866,913Advertising and marketing
    
    
    146,962
    
    
    
    86,800
    
    
    
    345,191
    
    
    
    343,476Legal and accounting
    
    
    117,868
    
    
    
    129,632
    
    
    
    390,526
    
    
    
    398,435Consulting & other professional fees
    
    
    69,669
    
    
    
    73,821
    
    
    
    222,078
    
    
    
    252,511Directors fees and retirement
    
    
    154,608
    
    
    
    147,310
    
    
    
    460,824
    
    
    
    460,507Telecommunications
    
    
    52,861
    
    
    
    63,003
    
    
    
    169,189
    
    
    
    198,180Supplies
    
    
    46,384
    
    
    
    34,383
    
    
    
    130,687
    
    
    
    147,235Data processing fees
    
    
    431,608
    
    
    
    333,276
    
    
    
    1,144,789
    
    
    
    974,736Loss on sale and write-downs of
other real estate owned
    
    
    80,000
    
    
    
    191,872
    
    
    
    384,068
    
    
    
    271,317Foreclosed asset expenses
    
    
    78,561
    
    
    
    82,047
    
    
    
    171,789
    
    
    
    164,702FDIC insurance and other regulatory fees
    
    
    136,192
    
    
    
    68,285
    
    
    
    501,078
    
    
    
    196,645Other operating
    
    
    306,871
    
    
    
    528,377
    
    
    
    1,004,909
    
    
    
    1,154,2944,450,174
    
    
    
    4,689,535
    
    
    
    13,306,503
    
    
    
    13,221,995Loss before income taxes
    
    
    (999,819
    )
    
    
    (3,214,278
    )
    
    
    (491,663
    )
    
    
    (1,672,021
    )Applicable income tax benefits
    
    
    (532,945
    )
    
    
    (1,452,505
    )
    
    
    (574,189
    )
    
    
    (1,177,618
    )Net income (loss)
    
    $
    (466,874
    )
    
    $
    (1,761,773
    )
    
    $
    82,526
    
    
    $
    (494,403
    )Basic earnings (loss) per share
    
    $
    (0.05
    )
    
    $
    (0.17
    )
    
    $
    0.01
    
    
    $
    (0.05
    )Diluted earnings (loss) per share
    
    $
    (0.05
    )
    
    $
    (0.17
    )
    
    $
    0.01
    
    
    $
    (0.05
    )
 See Notes to Consolidated Financial Statements.
 4




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
 
 Consolidated Statements of Comprehensive Income (Unaudited)  For the Three and Nine Months Ended September 30, 2009 and 2008
 For the Three Months
    
    
    For the Nine Months2009
    
    
    2008
    
    
    2009
    
    
    2008Net income (loss)
    
    $
    (466,874
    )
    
    $
    (1,761,773
    )
    
    $
    82,526
    
    
    $
    (494,403
    )Other comprehensive income (loss):Net unrealized gain (loss) on cash
flow hedge arising during the
period, net of tax (benefit) of
$114,665 for the quarter and
($17,810) for the year to date
    
    
    
    
    
    
    162,206
    
    
    
    
    
    
    
    (26,713
    )Net realized gain on termination of
cash flow hedge during the period,
net of tax of $359,490
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    539,235Elimination of unrealized gain on
cash flow hedge terminated during
the period, net of tax of $156,558
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (234,838
    )Accretion of realized gain on
terminated cash flow hedge, net of
tax of $35,187 and $19,609 for the
quarter and $105,560 and $39,217
for the year to date
    
    
    (52,780
    )
    
    
    (29,413
    )
    
    
    (158,340
    )
    
    
    (58,826
    )Unrealized holding gains (losses)
on investments arising during the
period, net of tax (benefit) of
$909,531 and ($1,016,806) for the
quarter and $842,773 and
($2,058,604) for the year to date
    
    
    1,364,297
    
    
    
    (1,525,210
    )
    
    
    1,264,159
    
    
    
    (3,087,907
    )Reclassification adjustment for
investment (gains) losses included
in net income, net of (tax) benefit
of ($187,782) and $1,207,672 for
the quarter and ($334,234) and
$1,199,774 for the year to date
    
    
    (281,673
    )
    
    
    1,811,509
    
    
    
    (501,350
    )
    
    
    1,799,662Total other comprehensive income (loss)
    
    
    1,029,844
    
    
    
    419,092
    
    
    
    604,469
    
    
    
    (1,069,387
    )Comprehensive income (loss)
    
    $
    562,970
    
    
    $
    (1,342,681
    )
    
    $
    686,995
    
    
    $
    (1,563,790
    )
 See Notes to Consolidated Financial Statements.
 5




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
 
 Consolidated Statements of Stockholders Equity (Unaudited)
For the Nine Months Ended September 30, 2009 and
The Year Ended December 31, 2008
 AccumulatedUnearned
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Capital
    
    
    Retained
    
    
    ESOP
    
    
    Treasury
    
    
    ComprehensiveShares
    
    
    Par Value
    
    
    Surplus
    
    
    Earnings
    
    
    Shares
    
    
    Stock
    
    
    Income (Loss)
    
    
    TotalBalance, December 31, 2007
    
    
    11,443,723
    
    
    $
    114,437
    
    
    $
    39,009,323
    
    
    $
    42,406,483
    
    
    $
    (3,305,250
    )
    
    $
    (9,329,501
    )
    
    $
    (3,303,342
    )
    
    $
    65,592,150Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (262,360
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (262,360
    )Cash dividend declared, $0.28
per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (786,914
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (786,914
    )Stock-based compensation
expense
    
    
    
    
    
    
    
    
    
    
    809,086
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    809,086Repurchase of 377,894 shares
of stock for the treasury
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,244,715
    )
    
    
    
    
    
    
    (4,244,715
    )Issuance of 330 shares of
common stock from the
treasury
    
    
    
    
    
    
    
    
    
    
    (836
    )
    
    
    
    
    
    
    
    
    
    
    4,403
    
    
    
    
    
    
    
    3,567Issuance of restricted stock
    
    
    9,505
    
    
    
    95
    
    
    
    (95
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeiture of restricted stock
    
    
    (884
    )
    
    
    (9
    )
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    617,709
    
    
    
    617,709Excess tax expense from stock
based compensation plans
    
    
    
    
    
    
    
    
    
    
    (3,432
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,432
    )ESOP shares earned, 44,070
shares
    
    
    
    
    
    
    
    
    
    
    47,182
    
    
    
    
    
    
    
    440,700
    
    
    
    
    
    
    
    
    
    
    
    487,882Balance, December 31, 2008
    
    
    11,452,344
    
    
    
    114,523
    
    
    
    39,861,237
    
    
    
    41,357,209
    
    
    
    (2,864,550
    )
    
    
    (13,569,813
    )
    
    
    (2,685,633
    )
    
    
    62,212,973Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,526
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,526Cash dividend declared, $0.24
per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (611,304
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (611,304
    )Repurchase of 49,026 shares
of stock for the treasury
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (425,036
    )
    
    
    
    
    
    
    (425,036
    )Issuance of 400 shares of
common stock from the
treasury
    
    
    
    
    
    
    
    
    
    
    (2,372
    )
    
    
    
    
    
    
    
    
    
    
    5,371
    
    
    
    
    
    
    
    2,999Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    604,469
    
    
    
    604,469Stock-based compensation
expense
    
    
    
    
    
    
    
    
    
    
    605,389
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    605,389ESOP shares earned, 33,053
shares
    
    
    
    
    
    
    
    
    
    
    20,097
    
    
    
    
    
    
    
    330,525
    
    
    
    
    
    
    
    
    
    
    
    350,622Balance, September 30, 2009
    
    
    11,452,344
    
    
    $
    114,523
    
    
    $
    40,484,351
    
    
    $
    40,828,431
    
    
    $
    (2,534,025
    )
    
    $
    (13,989,478
    )
    
    $
    (2,081,164
    )
    
    $
    62,822,638
 See Notes to Consolidated Financial Statements.
 6




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
 
 Consolidated Statements of Cash Flows (Unaudited)  For the Nine Months Ended September 30, 2009 and 2008
 For the Nine Months2009
    
    
    2008OPERATING ACTIVITIESNet income (loss)
    
    $
    82,526
    
    
    $
    (494,403
    )Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Depreciation and amortization
    
    
    679,419
    
    
    
    733,986Provision for loan losses
    
    
    3,800,000
    
    
    
    2,400,000ESOP compensation expense
    
    
    350,622
    
    
    
    383,455Stock-based compensation expense
    
    
    605,389
    
    
    
    608,808Net gain on sale of securities available for sale
    
    
    (835,584
    )
    
    
    (19,745
    )Impairment loss on securities available for sale
    
    
    
    
    
    
    3,019,181Proceeds on termination of cash flow hedge
    
    
    
    
    
    
    898,725Accretion of gain on termination of cash flow hedge
    
    
    (263,900
    )
    
    
    (98,043
    )Increase in bank owned life insurance
    
    
    (464,768
    )
    
    
    (344,179
    )(Increase) decrease in interest receivable
    
    
    26,693
    
    
    
    (230,598
    )Decrease in interest payable
    
    
    (448,300
    )
    
    
    (57,138
    )Increase (decrease) in taxes payable
    
    
    (1,091,789
    )
    
    
    1,067,296Loss on sale and write-downs of other real estate owned
    
    
    384,068
    
    
    
    347,245Net other operating activities
    
    
    762,688
    
    
    
    (1,990,986
    )Total adjustments
    
    
    3,504,538
    
    
    
    6,718,007Net cash provided by operating activities
    
    
    3,587,064
    
    
    
    6,223,604INVESTING ACTIVITIESIncrease in interest-bearing deposits in banks
    
    
    (4,329,134
    )
    
    
    (203,379
    )Purchases of securities available for sale
    
    
    (68,130,095
    )
    
    
    (44,536,347
    )Proceeds from maturities of securities available for sale
    
    
    27,847,943
    
    
    
    10,879,670Proceeds from sale of securities available for sale
    
    
    57,191,479
    
    
    
    20,451,970Purchase of bank owned life insurance
    
    
    
    
    
    
    (5,000,000
    )Net change in Federal home loan bank stock
    
    
    (67,600
    )
    
    
    (441,100
    )Purchase of other equity securities
    
    
    
    
    
    
    (1,010,000
    )Decrease in federal funds sold
    
    
    17,221,000
    
    
    
    680,000(Increase) decrease in loans, net
    
    
    2,228,405
    
    
    
    (12,752,165
    )Purchase of premises and equipment
    
    
    (552,280
    )
    
    
    (2,754,281
    )Proceeds from sale of other real estate owned
    
    
    1,078,430
    
    
    
    844,911Net cash provided by (used in) investing activities
    
    
    32,488,148
    
    
    
    (33,840,721
    )FINANCING ACTIVITIESIncrease (decrease) in deposits
    
    
    (16,234,681
    )
    
    
    7,264,127Increase (decrease) in federal funds purchased and securities sold
under agreement to repurchase
    
    
    (6,286,952
    )
    
    
    23,426,259Proceeds from other borrowings
    
    
    
    
    
    
    28,000,000Repayment of other borrowings
    
    
    (10,000,000
    )
    
    
    (20,500,000
    )Excess tax related to stock-based compensation plans
    
    
    
    
    
    
    (1,780
    )Purchase of treasury stock, net
    
    
    (422,037
    )
    
    
    (2,793,519
    )Dividends paid to stockholders
    
    
    (611,304
    )
    
    
    (598,639
    )Net cash provided by (used in) financing activities
    
    
    (33,554,974
    )
    
    
    34,796,448Net increase in cash and due from banks
    
    
    2,520,238
    
    
    
    7,179,331Cash and due from banks at beginning of period
    
    
    10,159,602
    
    
    
    8,953,836Cash and due from banks at end of period
    
    $
    12,679,840
    
    
    $
    16,133,167SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid during the period for:Interest
    
    $
    7,327,559
    
    
    $
    9,419,870Taxes
    
    
    517,600
    
    
    
    6,300NONCASH TRANSACTIONSIncrease (decrease) in unrealized losses on securities available for sale
    
    $
    (1,271,348
    )
    
    $
    5,146,511Decrease in unrealized gain on termination of cash flow hedges
    
    
    
    
    
    
    391,396Increase in unrealized losses on cash flow hedges
    
    
    
    
    
    
    44,523Principal balances of loans transferred to other real estate owned
    
    
    288,954
    
    
    
    3,099,526
 See Notes to Consolidated Financial Statements.
 7




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
 
 CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)
 NOTE 1   BASIS OF PRESENTATION AND ACCOUNTING ESTIMATES
     NOTE 2   EARNINGS (LOSS) PER SHARE
  Three Months
    
    
    Nine Months2009
    
    
    2008
    
    
    2009
    
    
    2008Basic earnings (loss) per share:Net income (loss)
    
    $
    (466,874
    )
    
    $
    (1,761,773
    )
    
    $
    82,526
    
    
    $
    (494,403
    )Weighted average common shares outstanding
    
    
    10,072,438
    
    
    
    10,215,179
    
    
    
    10,046,325
    
    
    
    10,236,257Total basic earnings (loss) per common share
    
    $
    (0.05
    )
    
    $
    (0.17
    )
    
    $
    0.01
    
    
    $
    (0.05
    )Diluted earnings (loss) per share:Net income (loss)
    
    $
    (466,874
    )
    
    $
    (1,761,773
    )
    
    $
    82,526
    
    
    $
    (494,403
    )Weighted average common shares outstanding
    
    
    10,072,438
    
    
    
    10,215,179
    
    
    
    10,046,325
    
    
    
    10,236,257Effect of dilutive stock options and restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average dilutive common shares outstanding
    
    
    10,072,438
    
    
    
    10,215,179
    
    
    
    10,046,325
    
    
    
    10,236,257Total diluted earnings (loss) per common share
    
    $
    (0.05
    )
    
    $
    (0.17
    )
    
    $
    0.01
    
    
    $
    (0.05
    )
  8




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 3   SHARE BASED COMPENSATION
    9




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 4  SECURITIES
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueSeptember 30, 2009:U. S. Government sponsored
agency securities
    
    $
    21,033,474
    
    
    $
    189,492
    
    
    $
    (22,440
    )
    
    $
    21,200,526State and municipal securities
    
    
    29,004,343
    
    
    
    365,781
    
    
    
    (770,301
    )
    
    
    28,599,823Corporate debt securities
    
    
    2,181,124
    
    
    
    
    
    
    
    (318,736
    )
    
    
    1,862,388Mortgage-backed securities
    
    
    49,252,507
    
    
    
    418,368
    
    
    
    (375,396
    )
    
    
    49,295,479Total debt securities
    
    
    101,471,448
    
    
    
    973,641
    
    
    
    (1,486,873
    )
    
    
    100,958,216Equity securities
    
    
    434,801
    
    
    
    118,799
    
    
    
    (173,685
    )
    
    
    379,915Total securities
    
    $
    101,906,249
    
    
    $
    1,092,440
    
    
    $
    (1,660,558
    )
    
    $
    101,338,131December 31, 2008:U. S. Government sponsored
agency securities
    
    $
    20,923,967
    
    
    $
    248,091
    
    
    $
    (7,077
    )
    
    $
    21,164,981State and municipal securities
    
    
    30,052,558
    
    
    
    60,677
    
    
    
    (2,602,013
    )
    
    
    27,511,222Corporate debt securities
    
    
    2,187,686
    
    
    
    
    
    
    
    (398,303
    )
    
    
    1,789,383Mortgage-backed securities
    
    
    64,380,979
    
    
    
    1,469,043
    
    
    
    (442,624
    )
    
    
    65,407,398Total debt securities
    
    
    117,545,190
    
    
    
    1,777,811
    
    
    
    (3,450,017
    )
    
    
    115,872,984Equity securities
    
    
    434,801
    
    
    
    20,999
    
    
    
    (188,259
    )
    
    
    267,541Total securities
    
    $
    117,979,991
    
    
    $
    1,798,810
    
    
    $
    (3,638,276
    )
    
    $
    116,140,525
  Amortized
    
    
    FairCost
    
    
    ValueDue in one year or less
    
    $
    
    
    
    $
    Due from one year to five years
    
    
    3,703,270
    
    
    
    3,446,144Due from five to ten years
    
    
    9,351,626
    
    
    
    9,561,060Due after ten years
    
    
    39,598,846
    
    
    
    39,035,448Mortgage-backed securities
    
    
    49,252,507
    
    
    
    49,295,479$
    101,906,249
    
    
    $
    101,338,131
  10




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 4   SECURITIES (CONTINUED)
  September 30,
    
    
    December 31,2009
    
    
    2008Gross gains on sales of securities
    
    $
    873,413
    
    
    $
    361,701Gross losses on sales of securities
    
    
    (37,829
    )
    
    
    (127,025
    )Net realized gains on sales of securities available for sale
    
    $
    835,584
    
    
    $
    234,676
  Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDescription of Securities
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesSeptember 30, 2009:U.S.
Government sponsored agency securities
    
    $
    2,975,110
    
    
    $
    (22,440
    )
    
    $
    
    
    
    $
    
    
    
    $
    2,975,110
    
    
    $
    (22,440
    )State and municipal securities
    
    
    424,366
    
    
    
    (49,453
    )
    
    
    11,729,757
    
    
    
    (720,848
    )
    
    
    12,154,123
    
    
    
    (770,301
    )Corporate securities
    
    
    
    
    
    
    
    
    
    
    141,000
    
    
    
    (318,736
    )
    
    
    141,000
    
    
    
    (318,736
    )Mortgage-backed securities
    
    
    14,379,143
    
    
    
    (97,244
    )
    
    
    3,714,360
    
    
    
    (278,152
    )
    
    
    18,093,503
    
    
    
    (375,396
    )Subtotal, debt securities
    
    
    17,778,619
    
    
    
    (169,137
    )
    
    
    15,585,117
    
    
    
    (1,317,736
    )
    
    
    33,363,736
    
    
    
    (1,486,873
    )Equity securities
    
    
    
    
    
    
    
    
    
    
    961,115
    
    
    
    (173,685
    )
    
    
    961,115
    
    
    
    (173,685
    )Total temporarily impaired securities
    
    $
    17,778,619
    
    
    $
    (169,137
    )
    
    $
    16,546,232
    
    
    $
    (1,491,421
    )
    
    $
    34,324,851
    
    
    $
    (1,660,558
    )December 31, 2008:U.S.
Government sponsored agency securities
    
    $
    1,992,923
    
    
    $
    (7,077
    )
    
    $
    
    
    
    $
    
    
    
    $
    1,992,923
    
    
    $
    (7,077
    )State and municipal securities
    
    
    12,567,698
    
    
    
    (889,679
    )
    
    
    10,383,740
    
    
    
    (1,712,334
    )
    
    
    22,951,438
    
    
    
    (2,602,013
    )Corporate debt securities
    
    
    
    
    
    
    
    
    
    
    763,444
    
    
    
    (398,303
    )
    
    
    763,444
    
    
    
    (398,303
    )Mortgage-backed securities
    
    
    4,366,655
    
    
    
    (378,461
    )
    
    
    4,772,176
    
    
    
    (64,163
    )
    
    
    9,138,831
    
    
    
    (442,624
    )Subtotal, debt securities
    
    
    18,927,276
    
    
    
    (1,275,217
    )
    
    
    15,919,360
    
    
    
    (2,174,800
    )
    
    
    34,846,636
    
    
    
    (3,450,017
    )Equity securities
    
    
    
    
    
    
    
    
    
    
    246,541
    
    
    
    (188,259
    )
    
    
    246,541
    
    
    
    (188,259
    )Total temporarily impaired securities
    
    $
    18,927,276
    
    
    $
    (1,275,217
    )
    
    $
    16,165,901
    
    
    $
    (2,363,059
    )
    
    $
    35,093,177
    
    
    $
    (3,638,276
    )
 11




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 4
 SECURITIES (CONTINUED)
     
 12




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 5
 FAIR VALUE MEASUREMENTS
    Quoted Pricesin Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Inputs
    
    
    Inputs(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalAssetsAvailable for sale
investment Securities
    
    $
    
    
    
    $
    101,338,131
    
    
    $
    
    
    
    $
    101,338,131Total assets at fair value
    
    $
    
    
    
    $
    101,338,131
    
    
    $
    
    
    
    $
    101,338,131
 13




---



##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 5
 FAIR VALUE MEASUREMENTS (CONTINUED)
  Impaired Loans
  Fair Value Option
  Disclosures about Fair Value of Financial Instruments
  14




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 5
 FAIR VALUE MEASUREMENTS (CONTINUED)
  Cash, Due From Banks, Interest-Bearing Deposits in Banks and Federal Funds Sold:
 Securities:
 Loans:
 Deposits:
 Federal Funds Purchased and Securities Sold Under Repurchase Agreements:
 Other Borrowings:
 Accrued Interest:
 Off-Balance-Sheet Instruments:
 
 15




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##### Table of Contents



HERITAGE FINANCIAL GROUP AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 5
 FAIR VALUE MEASUREMENTS (CONTINUED)
  September 30, 2009
    
    
    December 31, 2008Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    ValueFinancial assets:Cash, due from banks and
interest-bearing deposits in banks
    
    $
    17,754,732
    
    
    $
    17,754,732
    
    
    $
    10,905,360
    
    
    $
    10,905,360Federal funds sold
    
    $
    13,033,000
    
    
    $
    13,033,000
    
    
    $
    30,254,000
    
    
    $
    30,254,000Securities available for sale
    
    $
    101,338,131
    
    
    $
    101,338,131
    
    
    $
    116,140,525
    
    
    $
    116,140,525Federal home loan bank stock
    
    $
    3,253,400
    
    
    $
    3,253,400
    
    
    $
    3,185,800
    
    
    $
    3,185,800Other equity securities
    
    $
    1,010,000
    
    
    $
    1,010,000
    
    
    $
    1,010,000
    
    
    $
    1,010,000Loans
    
    $
    299,295,709
    
    
    $
    298,059,866
    
    
    $
    302,487,892
    
    
    $
    309,635,072Allowance for loan losses
    
    
    8,027,969
    
    
    
    
    
    
    
    4,950,722
    
    
    
    Loans, net
    
    $
    291,267,740
    
    
    $
    298,059,866
    
    
    $
    297,537,170
    
    
    $
    309,635,072Accrued interest receivable
    
    $
    2,128,634
    
    
    $
    2,128,634
    
    
    $
    2,155,327
    
    
    $
    2,155,327Financial liabilities:Deposits
    
    $
    322,311,313
    
    
    $
    306,947,548
    
    
    $
    338,545,994
    
    
    $
    336,904,274Federal funds purchased and
securities
sold under repurchase agreements
    
    $
    35,210,539
    
    
    $
    35,210,539
    
    
    $
    41,497,491
    
    
    $
    41,497,491Other borrowings
    
    $
    42,500,000
    
    
    $
    45,269,267
    
    
    $
    52,500,000
    
    
    $
    56,936,956Accrued interest payable
    
    $
    596,742
    
    
    $
    596,742
    
    
    $
    1,045,042
    
    
    $
    1,045,042
 NOTE 6
 SUBSEQUENT EVENTS
  16




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS
 Forward-Looking Statements.
  General
   Evolution of Business Strategy
    17




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##### Table of Contents



Critical Accounting Policies
  Off Balance Sheet Liabilities
  (In thousands)Commitments to extend credit
    
    $
    35,898Financial stand-by letters of credit
    
    
    5,053$
    40,951
 18




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##### Table of Contents



Comparison of Financial Condition at September 30, 2009 and December 31, 2008
       19




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##### Table of Contents



Comparison of Operating Results
 General
 For the three months ended September 30, 2009 and 2008
  For the nine months ended September 30, 2009 and 2008
  Interest Income
 For the three months ended September 30, 2009 and 2008
  For the nine months ended September 30, 2009 and 2008
  Interest Expense
 For the three months ended September 30, 2009 and 2008
  20




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##### Table of Contents



For the nine months ended September 30, 2009 and 2008
  Net Interest Income
 For the three months ended September 30, 2009 and 2008
  For the nine months ended September 30, 2009 and 2008
  General Comments on Interest Rates
   Provision for Loan Losses
 For the three months and nine months ended September 30, 2009 and 2008
  21




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##### Table of Contents



22




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##### Table of Contents



Noninterest Income
  Three Months Ended September 30,2009
    
    
    2008
    
    
    $ Chg
    
    
    % ChgService charges on deposit accounts
    
    $
    950,893
    
    
    $
    1,046,544
    
    
    $
    (95,651
    )
    
    
    -9.14
    %Other service charges, commissions and fees
    
    
    338,490
    
    
    
    314,847
    
    
    
    23,643
    
    
    
    7.51
    %Brokerage fees
    
    
    251,854
    
    
    
    264,662
    
    
    
    (12,808
    )
    
    
    -4.84
    %Mortgage origination fees
    
    
    66,364
    
    
    
    108,894
    
    
    
    (42,530
    )
    
    
    -39.06
    %Bank owned life insurance
    
    
    155,285
    
    
    
    151,360
    
    
    
    3,925
    
    
    
    2.59
    %Other
    
    
    11,575
    
    
    
    33,435
    
    
    
    (21,860
    )
    
    
    -65.38
    %Total noninterest income
    
    $
    1,774,461
    
    
    $
    1,919,742
    
    
    $
    (145,281
    )
    
    
    -7.57
    %Noninterest income as a percentage of
average assets (annualized)
    
    
    1.51
    %
    
    
    1.54
    %
 Nine Months Ended September 30,2009
    
    
    2008
    
    
    $ Chg
    
    
    % ChgService charges on deposit accounts
    
    $
    2,595,376
    
    
    $
    2,949,962
    
    
    $
    (354,586
    )
    
    
    -12.02
    %Other service charges, commissions and fees
    
    
    1,060,600
    
    
    
    973,650
    
    
    
    86,950
    
    
    
    8.93
    %Brokerage fees
    
    
    662,177
    
    
    
    770,493
    
    
    
    (108,316
    )
    
    
    -14.06
    %Mortgage origination fees
    
    
    275,544
    
    
    
    314,602
    
    
    
    (39,058
    )
    
    
    -12.42
    %Bank owned life insurance
    
    
    464,767
    
    
    
    344,199
    
    
    
    120,568
    
    
    
    35.03
    %Other
    
    
    33,870
    
    
    
    311,554
    
    
    
    (277,684
    )
    
    
    -89.13
    %Total noninterest income
    
    $
    5,092,334
    
    
    $
    5,664,460
    
    
    $
    (572,126
    )
    
    
    -10-10
    %Noninterest income as a percentage of
average assets (annualized)
    
    
    1.39
    %
    
    
    1.52
    %
        23




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##### Table of Contents



Noninterest Expense
  Three Months Ended September 30,2009
    
    
    2008
    
    
    $ Chg
    
    
    % ChgSalaries and employee benefits
    
    $
    2,295,513
    
    
    $
    2,353,230
    
    
    $
    (57,717
    )
    
    
    -2.45
    %Equipment
    
    
    221,077
    
    
    
    294,381
    
    
    
    (73,304
    )
    
    
    -24.90
    %Occupancy
    
    
    312,000
    
    
    
    303,118
    
    
    
    8,882
    
    
    
    2.93
    %Advertising and marketing
    
    
    146,962
    
    
    
    86,800
    
    
    
    60,162
    
    
    
    69.31
    %Legal and accounting
    
    
    117,868
    
    
    
    129,632
    
    
    
    (11,764
    )
    
    
    -9.07
    %Consulting & other professional fees
    
    
    69,669
    
    
    
    73,821
    
    
    
    (4,152
    )
    
    
    -5.62
    %Directors fees and retirement
    
    
    154,608
    
    
    
    147,310
    
    
    
    7,298
    
    
    
    4.95
    %Telecommunications
    
    
    52,861
    
    
    
    63,003
    
    
    
    (10,142
    )
    
    
    -16.10
    %Supplies
    
    
    46,384
    
    
    
    34,383
    
    
    
    12,001
    
    
    
    34.90
    %Data processing fees
    
    
    431,608
    
    
    
    333,276
    
    
    
    98,332
    
    
    
    29.50
    %Loss on sale and write-downs of other
real estate owned
    
    
    80,000
    
    
    
    191,872
    
    
    
    (111,872
    )
    
    
    -58.31
    %Foreclosed asset expenses
    
    
    78,561
    
    
    
    82,047
    
    
    
    (3,486
    )
    
    
    -4.25
    %FDIC insurance and other regulatory fees
    
    
    136,192
    
    
    
    68,285
    
    
    
    67,907
    
    
    
    99.45
    %Other operating
    
    
    306,871
    
    
    
    528,377
    
    
    
    (221,506
    )
    
    
    -41.92
    %Total noninterest expenses
    
    $
    4,450,174
    
    
    $
    4,689,535
    
    
    $
    (239,361
    )
    
    
    -5.10
    %Noninterest expenses as a percentage of
average assets (annualized)
    
    
    3.74
    %
    
    
    3.76
    %
 Nine Months Ended September 30,2009
    
    
    2008
    
    
    $ Chg
    
    
    % ChgSalaries and employee benefits
    
    $
    6,719,869
    
    
    $
    6,878,605
    
    
    $
    (158,736
    )
    
    
    -2.31
    %Equipment
    
    
    760,243
    
    
    
    914,439
    
    
    
    (154,196
    )
    
    
    -16.86
    %Occupancy
    
    
    901,263
    
    
    
    866,913
    
    
    
    34,350
    
    
    
    3.96
    %Advertising and marketing
    
    
    345,191
    
    
    
    343,476
    
    
    
    1,715
    
    
    
    0.50
    %Legal and accounting
    
    
    390,526
    
    
    
    398,435
    
    
    
    (7,909
    )
    
    
    -1.99
    %Consulting & other professional fees
    
    
    222,078
    
    
    
    252,511
    
    
    
    (30,433
    )
    
    
    -12.05
    %Directors fees and retirement
    
    
    460,824
    
    
    
    460,507
    
    
    
    317
    
    
    
    0.07
    %Telecommunications
    
    
    169,189
    
    
    
    198,180
    
    
    
    (28,991
    )
    
    
    -14.63
    %Supplies
    
    
    130,687
    
    
    
    147,235
    
    
    
    (16,548
    )
    
    
    -11.24
    %Data processing fees
    
    
    1,144,789
    
    
    
    974,736
    
    
    
    170,053
    
    
    
    17.45
    %Loss on sale and write-downs of other
real estate owned
    
    
    384,068
    
    
    
    271,317
    
    
    
    112,751
    
    
    
    41.56
    %Foreclosed asset expenses
    
    
    171,789
    
    
    
    164,702
    
    
    
    7,087
    
    
    
    4.30
    %FDIC insurance and other regulatory fees
    
    
    501,078
    
    
    
    196,645
    
    
    
    304,433
    
    
    
    154.81
    %Other operating
    
    
    1,004,909
    
    
    
    1,154,294
    
    
    
    (149,385
    )
    
    
    -12.94
    %Total noninterest expenses
    
    $
    13,306,503
    
    
    $
    13,221,995
    
    
    $
    84,508
    
    
    
    0.64
    %Noninterest expenses as a percentage of
average assets (annualized)
    
    
    3.78
    %
    
    
    3.56
    %
     24




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##### Table of Contents



Income Tax Expense
   25




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##### Table of Contents



Liquidity and Capital Resources
    26




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##### Table of Contents



Regulatory Capital Ratios for the Company and HeritageBank of the South at September 30, 2009
  Minimum Requiredto Be Well CapitalizedFor Capital
    
    Under PromptAdequacy
    
    Corrective ActionActual
    
    Purposes
    
    ProvisionsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in thousands)Total Capital to Risk Weighted Assets
Consolidated
    
    $
    66,417
    
    
    
    19.3
    %
    
    $
    27,558
    
    
    
    8.0
    %
    
    
    
    
    
    
    HeritageBank of the South
    
    $
    59,848
    
    
    
    17.7
    %
    
    $
    27,039
    
    
    
    8.0
    %
    
    $
    33,799
    
    
    
    10.0
    %Tier I Capital to Risk Weighted Assets
Consolidated
    
    $
    62,145
    
    
    
    18.0
    %
    
    $
    13,779
    
    
    
    4.0
    %
    
    
    
    
    
    
    HeritageBank of the South
    
    $
    55,522
    
    
    
    16.4
    %
    
    $
    13,519
    
    
    
    4.0
    %
    
    $
    20,279
    
    
    
    6.0
    %Tier I Capital to Average Total Assets
Consolidated
    
    $
    62,145
    
    
    
    13.2
    %
    
    $
    18,847
    
    
    
    4.0
    %
    
    
    
    
    
    
    HeritageBank of the South
    
    $
    55,522
    
    
    
    11.9
    %
    
    $
    18,648
    
    
    
    4.0
    %
    
    $
    23,310
    
    
    
    5.0
    %
  27




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##### Table of Contents



ITEM 3. QUANTITAVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
       Market Rate
    
    Effect on NetChange
    
    Interest Income+300
    
    
    -9.8
    %+200
    
    
    -10.7
    %+100
    
    
    -5.9
    %-100
    
    
    5.2
    %-200
    
    
    10.7
    %-300
    
    
    14.3
    %
  28




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
    29




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##### Table of Contents



PART II  OTHER INFORMATION
 ITEM 1. LEGAL PROCEEDINGS
  ITEM 1A. RISK FACTORS
  ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS AND
ISSUER PURCHASES OF EQUITY SECURITIES
   Number of
    
    
    MaximumTotal
    
    
    
    
    
    
    Shares Purchased
    
    
    Number of SharesNumber
    
    
    
    
    
    
    as Part of
    
    
    that may yet beof Shares
    
    
    Average Price
    
    
    Publicly Announced
    
    
    Purchased Under thePurchased
    
    
    Paid Per Share
    
    
    Plans or Programs
    
    
    Plans or ProgramsJuly
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    186,974August
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    186,974September
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    186,974Total
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    186,974
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  ITEM 4 . SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  ITEM 5 . OTHER INFORMATION
  ITEM 6 . EXHIBITS
 Reference toPrior FilingRegulation S-K
    
    
    
    or Exhibit NumberExhibit Number
    
    Document
    
    Attached Hereto31
    
    Rule 13a-14(a)/15d-14(a) Certifications
    
    3132
    
    Section 1350 Certifications
    
    32
 30




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##### Table of Contents



SIGNATURES
  HERITAGE FINANCIAL GROUPDate: November 16, 2009
    By:
    /s/ O. Leonard DormineyO. Leonard DormineyPresident and Chief Executive OfficerDate: November 16, 2009
    By:
    /s/ T. Heath FountainT. Heath FountainSenior Vice President and

Chief Financial Officer 31