The HeritageBank of the South’s holding company it will be closing two branches, including one in Effingham County, and will be offering early retirement to some employees.

Heritage Financial Group intends to close its branch in Collins, which was acquired as part of the acquisition of The Tattnall Bank in 2009, and its branch in Guyton, which was acquired as part of the acquisition of the Citizens Bank of Effingham in 2011. Combined, these branches have loans of approximately $5 million and deposits of $13 million. The company expects that it will not experience a material reduction in customer relationships in these areas and will seek to service these customers from nearby branches.

“It will add to the total bank’s profitability,” said Mike Gay, Effingham market president for HeritageBank of the South.

The Guyton branch has a staff of three and they are expected to be placed elsewhere in the company.

“Hopefully, we will be able to incorporate those individuals in other branches in the market,” Gay said.

They also may opt to go to another HeritageBank of the South branch outside the market, Gay added.

The company expects these branches to close in the fourth quarter of 2012, subject to customary regulatory conditions, and anticipates expense savings of approximately $500,000 per year related to these closures.

The company also announced second quarter net income of $1.4 million.

“Our bank is extremely well-capitalized and we’re positioned to grow, either internally or by future acquisitions,” Gay said. “The bank is capitalized to almost twice what regulators say a well-capitalized bank needs to be. The bank is extremely strong.”

The company is expected to pursue several other initiatives. Among these, the company has offered an early retirement program to certain employees. Company-wide, early retirement was offered to 21 people, and only one in the Effingham market was eligible for the offer.