Third Quarter 2024 Highlights
- Net income was $11.4 million, or
$0.33 per diluted share, compared to
$14.2 million, or $0.41 per diluted share, for the second quarter
of 2024.
- Results include a pre-tax loss on sale of securities of
$6.9 million, or $0.16 per diluted share on an after-tax
basis.
- Loans receivable increased $146.9
million, or 3.2% (12.9% annualized).
- Deposits increased $192.8
million, or 3.5% (13.9% annualized).
- Non-interest bearing deposits increased $82.9 million, or 5.2% (20.6% annualized).
- Net interest margin was 3.33%, compared to 3.29% for the second
quarter of 2024.
- Cost of total deposits was 1.42%, compared to 1.34% for the
second quarter of 2024.
- Noninterest expense to average total assets was 2.18%, compared
to 2.21% for the second quarter of 2024.
- Declared a regular cash dividend of $0.23 per share on October 23, 2024.
OLYMPIA,
Wash., Oct. 24, 2024 /PRNewswire/ -- Heritage
Financial Corporation (Nasdaq GS: HFWA) (the "Company", "we," or
"us"), the parent company of Heritage Bank (the "Bank"), today
reported net income of $11.4 million
for the third quarter of 2024 compared to $14.2 million for the second quarter of 2024 and
$18.2 million for the third quarter
of 2023. Diluted earnings per share for the third quarter of 2024
were $0.33 compared to $0.41 for the second quarter of 2024 and
$0.51 for the third quarter of
2023.
In the third quarter of 2024, the Company incurred a pre-tax
loss of $6.9 million on the sale of
investment securities due to the strategic repositioning of
its balance sheet, which decreased diluted earnings per share by
$0.16 for the quarter. The Company
sold $78.0 million of investment
securities with an estimated weighted average book yield of 1.88%.
Proceeds were used to fund higher yielding loan growth for the
quarter.
Jeff Deuel, Chief Executive
Officer of the Company, commented, "We are very pleased with our
operating results for the third quarter, which included strong loan
and deposit growth, margin expansion, and continued benefits from
expense management measures. The increases in average earning
assets and net interest margin resulted in an improvement in net
interest income of $1.8 million, or
3.6%, from the prior quarter. Although we experienced a
charge-off during the quarter related to an owner-occupied
commercial real estate loan previously downgraded to Substandard,
we believe our overall credit quality remains very strong. We
are optimistic that the combination of core balance sheet growth
and prudent risk management will continue to benefit our core
profitability."
Financial Highlights
The following table provides financial highlights at the dates
and for the periods indicated:
|
As of or for the
Quarter Ended
|
|
September
30,
2024
|
|
June 30,
2024
|
|
September
30,
2023
|
|
(Dollars in
thousands, except per share amounts)
|
|
Net income
|
$
11,423
|
|
$
14,159
|
|
$
18,219
|
|
Pre-tax, pre-provision
income(1)
|
$
15,505
|
|
$
17,263
|
|
$
20,919
|
|
Diluted earnings per
share
|
$
0.33
|
|
$
0.41
|
|
$
0.51
|
|
Return on average
assets(2)
|
0.63 %
|
|
0.80 %
|
|
1.00 %
|
|
Pre-tax, pre-provision
return on average assets(1)(2)
|
0.86 %
|
|
0.98 %
|
|
1.15 %
|
|
Return on average
common equity(2)
|
5.30 %
|
|
6.75 %
|
|
8.80 %
|
|
Return on average
tangible common equity(1)(2)
|
7.62 %
|
|
9.74 %
|
|
12.90 %
|
|
Adjusted return on
average tangible common equity(1)(2)
|
10.42 %
|
|
10.74 %
|
|
13.62 %
|
|
Net interest
margin(2)
|
3.33 %
|
|
3.29 %
|
|
3.47 %
|
|
Cost of total
deposits(2)
|
1.42 %
|
|
1.34 %
|
|
0.83 %
|
|
Efficiency
ratio
|
71.7 %
|
|
69.4 %
|
|
66.2 %
|
|
Adjusted efficiency
ratio(1)
|
65.2 %
|
|
67.1 %
|
|
64.8 %
|
|
Noninterest expense to
average total assets(2)
|
2.18 %
|
|
2.21 %
|
|
2.25 %
|
|
Total assets
|
$ 7,153,363
|
|
$ 7,059,857
|
|
$ 7,150,588
|
|
Loans receivable,
net
|
$ 4,628,088
|
|
$ 4,481,396
|
|
$ 4,219,911
|
|
Total
deposits
|
$ 5,708,492
|
|
$ 5,515,652
|
|
$ 5,635,187
|
|
Loan to deposit
ratio(3)
|
82.0 %
|
|
82.2 %
|
|
75.7 %
|
|
Book value per
share
|
$
25.61
|
|
$
24.66
|
|
$
23.31
|
|
Tangible book value per
share(1)
|
$
18.45
|
|
$
17.56
|
|
$
16.25
|
|
|
|
(1)
|
Represents a non-GAAP
financial measure. See "Non-GAAP Financial Measures" section for a
reconciliation to the comparable GAAP financial measure.
|
|
(2)
|
Annualized.
|
|
(3)
|
Loans receivable
divided by total deposits.
|
Balance Sheet
Cash and cash equivalents increased $61.8
million, or 54.3%, to $175.6
million at September 30, 2024
from $113.8 million at June 30, 2024 primarily due to an increase in
deposits.
Total investment securities decreased $86.4 million, or 5.2%, to $1.57 billion at September
30, 2024 from $1.66 billion at
June 30, 2024. As previously noted,
the Company sold $78.0 million of
investment securities at a pre-tax loss of $6.9 million as part of its strategic balance
sheet repositioning. In addition, there were investment maturities
and repayments of $43.3 million
during the third quarter of 2024. These impacts were offset
partially by a $34.7 million decrease
in unrealized losses on available for sale securities, due
primarily to changes in market rates.
The following table summarizes the composition of the Company's
investment securities portfolio at the dates indicated:
|
September 30,
2024
|
|
June 30,
2024
|
|
Change
|
|
Balance
|
|
% of
Total
|
|
Balance
|
|
% of
Total
|
|
$
|
|
%
|
|
(Dollars in
thousands)
|
|
Investment
securities available for sale, at fair value:
|
|
U.S. government and
agency securities
|
$
13,054
|
|
0.8 %
|
|
$
12,474
|
|
0.8 %
|
|
$
580
|
|
4.6 %
|
|
Municipal
securities
|
61,263
|
|
3.9
|
|
69,720
|
|
4.2
|
|
(8,457)
|
|
(12.1)
|
|
Residential CMO and
MBS(1)
|
427,048
|
|
27.2
|
|
446,468
|
|
26.9
|
|
(19,420)
|
|
(4.3)
|
|
Commercial CMO and
MBS(1)
|
328,861
|
|
20.9
|
|
378,768
|
|
22.8
|
|
(49,907)
|
|
(13.2)
|
|
Corporate
obligations
|
11,706
|
|
0.7
|
|
11,384
|
|
0.7
|
|
322
|
|
2.8
|
|
Other asset-backed
securities
|
10,847
|
|
0.7
|
|
12,434
|
|
0.7
|
|
(1,587)
|
|
(12.8)
|
|
Total
|
$
852,779
|
|
54.2 %
|
|
$
931,248
|
|
56.1 %
|
|
$
(78,469)
|
|
(8.4) %
|
|
Investment
securities held to maturity, at amortized cost:
|
|
U.S. government and
agency securities
|
$
151,181
|
|
9.6 %
|
|
$
151,146
|
|
9.1 %
|
|
$
35
|
|
— %
|
|
Residential CMO and
MBS(1)
|
249,589
|
|
15.9
|
|
256,742
|
|
15.5
|
|
(7,153)
|
|
(2.8)
|
|
Commercial CMO and
MBS(1)
|
318,630
|
|
20.3
|
|
319,454
|
|
19.3
|
|
(824)
|
|
(0.3)
|
|
Total
|
$
719,400
|
|
45.8 %
|
|
$
727,342
|
|
43.9 %
|
|
$
(7,942)
|
|
(1.1) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment
securities
|
$
1,572,179
|
|
100.0 %
|
|
$
1,658,590
|
|
100.0 %
|
|
$
(86,411)
|
|
(5.2) %
|
|
|
|
(1)
|
U.S. government agency
and government-sponsored enterprise CMO and MBS
|
Loans receivable increased $146.9 million, or 3.2%, to
$4.68 billion at September 30, 2024 from $4.53 billion at June 30,
2024. New loans funded in the third quarter and second
quarter of 2024 totaled $176.9
million and $166.7 million,
respectively. Loan prepayments decreased slightly during the third
quarter of 2024 to $44.8 million,
compared to $48.5 million during the
prior quarter.
Commercial and industrial loans increased $44.6 million, or 5.7%, due primarily to new loan
production of $76.0 million during
the quarter, offset by pay downs on outstanding balances.
Owner-occupied commercial real estate ("CRE") loans increased
$33.6 million, or 3.5%, due primarily
to new loan production of $41.8
million during the third quarter of 2024 offset partially by
pay downs on outstanding balances. Non-owner occupied CRE loans
increased $76.0 million, or 4.3%, due
primarily to new loan production of $44.2
million during the third quarter of 2024 and advances on
outstanding commitments.
The following table summarizes the Company's loans receivable,
net at the dates indicated:
|
September 30,
2024
|
|
June 30,
2024
|
|
Change
|
|
Balance
|
|
% of
Total
|
|
Balance
|
|
% of
Total
|
|
$
|
|
%
|
|
(Dollars in
thousands)
|
|
Commercial
business:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
$
824,134
|
|
17.6 %
|
|
$
779,495
|
|
17.2 %
|
|
$
44,639
|
|
5.7 %
|
|
Owner-occupied
CRE
|
987,084
|
|
21.1
|
|
953,518
|
|
21.0
|
|
33,566
|
|
3.5
|
|
Non-owner occupied
CRE
|
1,835,609
|
|
39.3
|
|
1,759,605
|
|
38.8
|
|
76,004
|
|
4.3
|
|
Total commercial
business
|
3,646,827
|
|
78.0
|
|
3,492,618
|
|
77.0
|
|
154,209
|
|
4.4
|
|
Residential real
estate
|
408,982
|
|
8.7
|
|
413,358
|
|
9.1
|
|
(4,376)
|
|
(1.1)
|
|
Real estate
construction and land development:
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
79,325
|
|
1.7
|
|
80,451
|
|
1.8
|
|
(1,126)
|
|
(1.4)
|
|
Commercial and
multifamily
|
378,322
|
|
8.1
|
|
378,695
|
|
8.4
|
|
(373)
|
|
(0.1)
|
|
Total real estate
construction and land
development
|
457,647
|
|
9.8
|
|
459,146
|
|
10.2
|
|
(1,499)
|
|
(0.3)
|
|
Consumer
|
166,023
|
|
3.5
|
|
167,493
|
|
3.7
|
|
(1,470)
|
|
(0.9)
|
|
Loans
receivable
|
4,679,479
|
|
100.0 %
|
|
4,532,615
|
|
100.0 %
|
|
146,864
|
|
3.2
|
|
Allowance for credit
losses on loans
|
(51,391)
|
|
|
|
(51,219)
|
|
|
|
(172)
|
|
0.3
|
|
Loans receivable,
net
|
$
4,628,088
|
|
|
|
$
4,481,396
|
|
|
|
$
146,692
|
|
3.3 %
|
Total deposits increased $192.8
million, or 3.5%, to $5.71
billion at September 30, 2024
from $5.52 billion at June 30, 2024. Noninterest bearing demand
deposits increased by $82.9 million,
or 5.2%, due to new accounts of $30.0
million and an increase in existing deposit balances
primarily to business customers. Money market accounts increased
$49.9 million primarily due to new
accounts of $47.3 million opened
during the quarter. Certificates of deposit increased $62.3 million, or 7.1%, to $945.6 million at September 30, 2024 from $883.2 million at June 30,
2024, primarily due to new accounts opened during the
quarter. Brokered deposits declined by $10
million.
The following table summarizes the Company's total deposits at
the dates indicated:
|
September 30,
2024
|
|
June 30,
2024
|
|
Change
|
|
Balance
|
|
% of
Total
|
|
Balance
|
|
% of
Total
|
|
$
|
|
%
|
|
(Dollars in
thousands)
|
|
Noninterest demand
deposits
|
$
1,682,219
|
|
29.5 %
|
|
$
1,599,367
|
|
29.0 %
|
|
$
82,852
|
|
5.2 %
|
|
Interest bearing demand
deposits
|
1,489,316
|
|
26.1
|
|
1,487,670
|
|
27.0
|
|
1,646
|
|
0.1
|
|
Money market
accounts
|
1,148,720
|
|
20.1
|
|
1,098,821
|
|
19.9
|
|
49,899
|
|
4.5
|
|
Savings
accounts
|
442,677
|
|
7.8
|
|
446,583
|
|
8.1
|
|
(3,906)
|
|
(0.9)
|
|
Total non-maturity
deposits
|
4,762,932
|
|
83.5
|
|
4,632,441
|
|
84.0
|
|
130,491
|
|
2.8
|
|
Certificates of
deposit
|
945,560
|
|
16.5
|
|
883,211
|
|
16.0
|
|
62,349
|
|
7.1
|
|
Total
deposits
|
$
5,708,492
|
|
100.0 %
|
|
$
5,515,652
|
|
100.0 %
|
|
$
192,840
|
|
3.5 %
|
Total borrowings decreased $118.0
million to $382.0
million at September 30, 2024
from $500.0 million at June 30, 2024 due to pay downs during the
quarter. All outstanding borrowings mature within one year.
Total stockholders' equity increased $24.0 million, or 2.8%, to $874.5 million at September 30, 2024 compared to $850.5 million at June 30,
2024 due primarily to a $27.0
million decrease in other comprehensive loss as a
result of changes in market rates and $11.4
million of net income recognized for the quarter, partially
offset by $8.0 million in dividends
paid to common shareholders and $7.5
million in common stock repurchases.
The Company and Bank continued to maintain capital levels in
excess of the applicable regulatory requirements for them both to
be categorized as "well-capitalized" at September 30, 2024.
The following table summarizes the capital ratios for the
Company at the dates indicated:
|
September
30,
2024
|
|
June 30,
2024
|
|
Stockholders' equity to
total assets
|
12.2 %
|
|
12.0 %
|
|
Tangible common equity
to tangible assets (1)
|
9.1
|
|
8.9
|
|
Common equity tier 1
capital ratio (2)
|
12.3
|
|
12.6
|
|
Leverage ratio
(2)
|
9.9
|
|
10.1
|
|
Tier 1 capital ratio
(2)
|
12.7
|
|
13.0
|
|
Total capital ratio
(2)
|
13.6
|
|
13.9
|
|
|
|
(1)
|
Represents a non-GAAP
financial measure. See "Non-GAAP Financial Measures" section for a
reconciliation to the comparable GAAP financial measure.
|
|
(2)
|
Current quarter ratios
are estimates pending completion and filing of the Company's
regulatory reports.
|
Allowance for Credit Losses and Provision for Credit
Losses
The allowance for credit losses ("ACL") on loans as a percentage
of loans receivable was 1.10% at September
30, 2024 compared to 1.13% at June
30, 2024. During the third quarter of 2024, the Company
recorded a $2.7 million provision for
credit losses on loans, compared to a $1.5
million provision for credit losses on loans during the
second quarter of 2024. The company recorded net charge-offs of
$2.5 million during the quarter
primarily from one owner-occupied CRE loan that was added to
nonaccrual loans during the quarter. This loan was rated
Substandard at the time of the charge-off and has been managed by
our Special Assets Departments since December 2022.
During the third quarter of 2024, the Company recorded a
$266,000 reversal of provision for
credit losses on unfunded commitments compared to a $202,000 reversal of provision for credit losses
on unfunded commitments during the second quarter of 2024. The
reversal of provision for credit losses on unfunded commitments
during the third quarter of 2024 was due primarily to a decrease in
the unfunded exposure on construction loans.
The following table provides detail on the changes in the ACL on
loans and the ACL on unfunded commitments, and the related
provision for (reversal of) credit losses for the periods
indicated:
|
As of or for the
Quarter Ended
|
|
September 30,
2024
|
|
June 30,
2024
|
|
September 30,
2023
|
|
ACL on
Loans
|
|
ACL on
Unfunded
|
|
Total
|
|
ACL on
Loans
|
|
ACL on
Unfunded
|
|
Total
|
|
ACL on
Loans
|
|
ACL on
Unfunded
|
|
Total
|
|
(Dollars in
thousands)
|
|
Balance, beginning
of
period
|
$ 51,219
|
|
$
774
|
|
$ 51,993
|
|
$ 49,736
|
|
$
976
|
|
$ 50,712
|
|
$ 46,408
|
|
$ 1,777
|
|
$ 48,185
|
|
Provision for (reversal
of)
credit losses
|
2,705
|
|
(266)
|
|
2,439
|
|
1,470
|
|
(202)
|
|
1,268
|
|
(635)
|
|
(243)
|
|
(878)
|
|
Net recoveries (net
charge-offs)
|
(2,533)
|
|
—
|
|
(2,533)
|
|
13
|
|
—
|
—
|
13
|
|
1,174
|
|
—
|
|
1,174
|
|
Balance, end of
period
|
$ 51,391
|
|
$
508
|
|
$ 51,899
|
|
$ 51,219
|
|
$
774
|
|
$ 51,993
|
|
$ 46,947
|
|
$ 1,534
|
|
$ 48,481
|
Credit Quality
The percentage of classified loans to loans receivable decreased
to 1.5% at September 30, 2024,
compared to 1.8% at June 30, 2024.
Classified loans include loans rated substandard or worse. The
decrease was due primarily to payoffs and principal payments on
substandard loans. Total loans designated as special mention
increased by $5.4 million to
$99.1 million at September 30, 2024, compared to $93.7 million at June 30,
2024.
The following table illustrates total loans by risk rating and
their respective percentage of total loans at the dates
indicated:
|
September 30,
2024
|
|
June 30,
2024
|
|
Balance
|
|
% of
Total
|
|
Balance
|
|
% of
Total
|
|
(Dollars in
thousands)
|
|
Risk Rating:
|
|
|
|
|
|
|
|
|
Pass
|
$
4,508,424
|
|
96.4 %
|
|
$
4,356,425
|
|
96.1 %
|
|
Special
Mention
|
99,078
|
|
2.1
|
|
93,694
|
|
2.1
|
|
Substandard
|
71,977
|
|
1.5
|
|
82,496
|
|
1.8
|
|
Total
|
$
4,679,479
|
|
100.0 %
|
|
$
4,532,615
|
|
100.0 %
|
Nonaccrual loans to loans receivable were 0.09% and 0.08% at
September 30, 2024 and June 30, 2024, respectively. The increase in
nonaccrual loans was primarily due to the addition of one
owner-occupied CRE loan moving to nonaccrual, a portion of which
was charged-off during the quarter. This increase was
partially offset by the payoff of two commercial and industrial
loans. Changes in nonaccrual loans during the periods indicated
were as follows:
|
Quarter
Ended
|
|
September
30,
2024
|
|
June 30,
2024
|
|
September
30,
2023
|
|
(Dollars in
thousands)
|
|
Balance, beginning of
period
|
$
3,826
|
|
$
4,792
|
|
$
4,630
|
|
Additions
|
4,990
|
|
549
|
|
440
|
|
Net principal payments
and transfers to accruing status
|
(173)
|
|
(483)
|
|
(81)
|
|
Payoffs
|
(1,832)
|
|
(769)
|
|
(1,924)
|
|
Charge-offs
|
(2,510)
|
|
(263)
|
|
—
|
|
Balance, end of
period
|
$
4,301
|
|
$
3,826
|
|
$
3,065
|
Liquidity
Total liquidity sources available at September 30, 2024 were $2.52 billion. This includes on- and off-balance
sheet liquidity. The Company has access to Federal Home Loan Bank
("FHLB") advances and the Federal Reserve Bank ("FRB") Discount
Window. The Company's available liquidity sources at September 30, 2024 represented a coverage ratio
of 44.2% of total deposits and 112.6% of estimated uninsured
deposits.
The following table summarizes the Company's available
liquidity:
|
Quarter
Ended
|
|
September
30,
2024
|
|
June 30,
2024
|
|
(Dollars in
thousands)
|
|
On-balance sheet
liquidity
|
|
|
|
|
Cash and cash
equivalents
|
$
175,572
|
|
$
113,757
|
|
Unencumbered
investment securities available for sale (1)
|
848,224
|
|
926,822
|
|
Total on-balance sheet
liquidity
|
$
1,023,796
|
|
$
1,040,579
|
|
Off-balance sheet
liquidity
|
|
|
|
|
FRB borrowing
availability
|
$
287,739
|
|
$
278,632
|
|
FHLB borrowing
availability (2)
|
1,068,085
|
|
943,492
|
|
Fed funds line
borrowing availability with correspondent banks
|
145,000
|
|
145,000
|
|
Total off-balance
sheet liquidity
|
$
1,500,824
|
|
$
1,367,124
|
|
Total available
liquidity
|
$
2,524,620
|
|
$
2,407,703
|
|
|
|
(1)
|
Investment securities
available for sale at fair value.
|
|
(2)
|
Includes FHLB total
borrowing availability of $1.35 billion at September 30, 2024
based on pledged assets, however, maximum credit capacity is 45% of
the Bank's total assets one quarter in arrears or
$3.17 billion.
|
Net Interest Income and Net Interest Margin
Net interest income increased $1.8
million, or 3.6%, during the third quarter of 2024 compared
to the second quarter of 2024, due primarily to a $3.2 million increase in interest income offset
partially by a $1.4 million increase
in interest expense. Net interest margin increased four basis
points to 3.33% during the third quarter of 2024 from 3.29% during
the second quarter of 2024.
The yield on interest earning assets increased 9 basis points to
5.02% for the third quarter of 2024, compared to 4.93% for the
second quarter of 2024. The yield on loans receivable, net,
increased 8 basis points to 5.60% during the third quarter of 2024
compared to 5.52% during the second quarter of 2024 due primarily
to higher rates on new and renewed loans.
The cost of interest bearing deposits increased 13 basis points
to 2.02% for the third quarter of 2024 from 1.89% for the second
quarter of 2024. This increase was primarily due to an increase in
deposit rates during the quarter and an increase in certificate of
deposit average balances of $68.5
million which carry higher rates than other interest bearing
deposits.
Net interest income decreased $2.7
million, or 4.8%, during the third quarter of 2024 compared
to the third quarter of 2023 and the net interest margin decreased
14 basis points to 3.33% from 3.47% during this same period. The
decrease was due primarily to an increase in interest expense
resulting from increased deposit rates and borrowing expense,
partially offset by an increase in yields earned on interest
earning assets following increases in market interest rates.
The following table provides relevant net interest income
information for the periods indicated:
|
Quarter
Ended
|
|
September 30,
2024
|
|
June 30,
2024
|
|
September 30,
2023
|
|
Average
Balance
|
|
Interest
Earned/
Paid
|
|
Average
Yield/
Rate(1)
|
|
Average
Balance
|
|
Interest
Earned/
Paid
|
|
Average
Yield/
Rate(1)
|
|
Average
Balance
|
|
Interest
Earned/
Paid
|
|
Average
Yield/
Rate(1)
|
|
(Dollars in
thousands)
|
|
Interest Earning
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable, net
(2)(3)
|
$ 4,555,090
|
|
$ 64,138
|
|
5.60 %
|
|
$ 4,415,790
|
|
$ 60,608
|
|
5.52 %
|
|
$ 4,201,554
|
|
$ 56,119
|
|
5.30 %
|
|
Taxable
securities
|
1,604,529
|
|
13,472
|
|
3.34
|
|
1,685,795
|
|
14,156
|
|
3.38
|
|
1,931,649
|
|
14,590
|
|
3.00
|
|
Nontaxable securities
(3)
|
17,482
|
|
159
|
|
3.62
|
|
18,812
|
|
165
|
|
3.53
|
|
60,654
|
|
448
|
|
2.93
|
|
Interest earning
deposits
|
150,384
|
|
2,048
|
|
5.42
|
|
121,539
|
|
1,653
|
|
5.47
|
|
169,186
|
|
2,310
|
|
5.42
|
|
Total interest earning
assets
|
6,327,485
|
|
79,817
|
|
5.02 %
|
|
6,241,936
|
|
76,582
|
|
4.93 %
|
|
6,363,043
|
|
73,467
|
|
4.58 %
|
|
Noninterest earning
assets
|
855,436
|
|
|
|
|
|
864,855
|
|
|
|
|
|
849,689
|
|
|
|
|
|
Total
assets
|
$ 7,182,921
|
|
|
|
|
|
$ 7,106,791
|
|
|
|
|
|
$ 7,212,732
|
|
|
|
|
|
Interest Bearing
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of
deposit
|
$
906,743
|
|
$ 10,052
|
|
4.41 %
|
|
$
838,285
|
|
$
9,128
|
|
4.38 %
|
|
$
553,015
|
|
$
4,585
|
|
3.29 %
|
|
Savings
accounts
|
445,926
|
|
220
|
|
0.20
|
|
453,099
|
|
190
|
|
0.17
|
|
523,882
|
|
172
|
|
0.13
|
|
Interest bearing demand
and
money market accounts
|
2,644,827
|
|
9,984
|
|
1.50
|
|
2,625,593
|
|
9,135
|
|
1.40
|
|
2,764,251
|
|
7,120
|
|
1.02
|
|
Total interest bearing
deposits
|
3,997,496
|
|
20,256
|
|
2.02
|
|
3,916,977
|
|
18,453
|
|
1.89
|
|
3,841,148
|
|
11,877
|
|
1.23
|
|
Junior subordinated
debentures
|
21,946
|
|
541
|
|
9.81
|
|
21,874
|
|
539
|
|
9.91
|
|
21,649
|
|
540
|
|
9.90
|
|
Securities sold under
agreement
to repurchase
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
31,729
|
|
38
|
|
0.48
|
|
Borrowings
|
452,364
|
|
6,062
|
|
5.33
|
|
500,230
|
|
6,477
|
|
5.21
|
|
451,032
|
|
5,394
|
|
4.74
|
|
Total interest
bearing
liabilities
|
4,471,806
|
|
26,859
|
|
2.39 %
|
|
4,439,081
|
|
25,469
|
|
2.31 %
|
|
4,345,558
|
|
17,849
|
|
1.63 %
|
|
Noninterest demand
deposits
|
1,677,984
|
|
|
|
|
|
1,638,262
|
|
|
|
|
|
1,859,374
|
|
|
|
|
|
Other noninterest
bearing
liabilities
|
175,332
|
|
|
|
|
|
186,010
|
|
|
|
|
|
186,306
|
|
|
|
|
|
Stockholders'
equity
|
857,799
|
|
|
|
|
|
843,438
|
|
|
|
|
|
821,494
|
|
|
|
|
|
Total liabilities
and
stockholders' equity
|
$ 7,182,921
|
|
|
|
|
|
$ 7,106,791
|
|
|
|
|
|
$ 7,212,732
|
|
|
|
|
|
Net interest income and
spread
|
|
|
$ 52,958
|
|
2.63 %
|
|
|
|
$ 51,113
|
|
2.62 %
|
|
|
|
$ 55,618
|
|
2.95 %
|
|
Net interest
margin
|
|
|
|
|
3.33 %
|
|
|
|
|
|
3.29 %
|
|
|
|
|
|
3.47 %
|
|
|
|
(1)
|
Annualized; average
balances are calculated using daily balances.
|
|
(2)
|
Average loans
receivable, net includes loans held for sale and loans classified
as nonaccrual, which carry a zero yield. Interest earned on loans
receivable, net includes the amortization of net deferred loan fees
of $938,000, $971,000 and $940,000 for the third quarter of 2024,
second quarter of 2024 and third quarter of 2023,
respectively.
|
|
(3)
|
Yields on tax-exempt
loans and securities have not been stated on a tax-equivalent
basis.
|
Noninterest Income
Noninterest income decreased $3.4
million to $1.8 million during
the third quarter of 2024 from $5.2
million during the second quarter of 2024. The decrease was
due primarily to the increase in loss resulting from the
above-referenced sale of investment securities recognized in the
third quarter of 2024 as part of the strategic repositioning of the
balance sheet, compared to the prior quarter. The decrease
was partially offset by an increase in gain on sale of other
assets, net which was due to the $1.5
million gain on sale of an administrative building
recognized during the third quarter of 2024.
Noninterest income decreased $4.4
million from the same period in 2023 due primarily to a
$6.9 million pre-tax loss on the sale
of investment securities during the third quarter of 2024, offset
partially by the gain on sale of other assets, net as discussed
previously.
The following table presents the key components of noninterest
income and the change for the periods indicated:
|
Quarter
Ended
|
|
Quarter Over
Quarter Change
|
|
Prior
Year
Quarter
Change
|
|
September
30,
2024
|
|
June 30,
2024
|
|
September
30,
2023
|
|
$
|
|
%
|
|
$
|
|
%
|
|
(Dollars in
thousands)
|
|
Service charges and
other fees
|
$
2,788
|
|
$
2,817
|
|
$
2,856
|
|
$ (29)
|
|
(1.0) %
|
|
$ (68)
|
|
(2.4) %
|
|
Card revenue
|
2,134
|
|
1,930
|
|
2,273
|
|
204
|
|
10.6
|
|
(139)
|
|
(6.1)
|
|
Loss on sale of
investment securities
|
(6,945)
|
|
(1,921)
|
|
(1,940)
|
|
(5,024)
|
|
261.5
|
|
(5,005)
|
|
258.0
|
|
Gain on sale of loans,
net
|
—
|
|
—
|
|
157
|
|
—
|
|
—
|
|
(157)
|
|
(100.0)
|
|
Interest rate swap
fees
|
—
|
|
52
|
|
62
|
|
(52)
|
|
(100.0)
|
|
(62)
|
|
(100.0)
|
|
Bank owned life
insurance income
|
860
|
|
931
|
|
734
|
|
(71)
|
|
(7.6)
|
|
126
|
|
17.2
|
|
Gain on sale of other
assets, net
|
1,480
|
|
49
|
|
—
|
|
1,431
|
|
2,920.4
|
|
1,480
|
|
100.0
|
|
Other income
|
1,520
|
|
1,388
|
|
2,129
|
|
132
|
|
9.5
|
|
(609)
|
|
(28.6)
|
|
Total noninterest
income
|
$
1,837
|
|
$
5,246
|
|
$
6,271
|
|
$
(3,409)
|
|
(65.0) %
|
|
$
(4,434)
|
|
(70.7) %
|
Noninterest Expense
Noninterest expense increased $0.2
million, or 0.5%, during the third quarter of 2024 from the
second quarter of 2024. Data processing expense increased during
the quarter due primarily to timing of expenses and annual rate
increases; however, data processing expense continued to be lower
than the same period in 2023. Professional services expense
decreased compared to the prior quarter, primarily due to timing of
services performed.
Noninterest expense decreased $1.7
million, or 4.1%, during the third quarter of 2024 compared
to the same period in 2023. Compensation and employee benefits
expense decreased due to a reduction in full-time equivalent
employees to 749 at September 30,
2024 from 821 at September 30,
2023. Data processing expense decreased primarily due to a
decline in ongoing costs resulting from prior technology-related
contract renewals and terminations. Marketing expense decreased due
to expense management efforts to reduce spending. Other expense
decreased due to a decrease in customer account loss expense and a
reduction in employee related expense.
The following table presents the key components of noninterest
expense and the change for the periods indicated:
|
Quarter
Ended
|
|
Quarter Over
Quarter Change
|
|
Prior Year
Quarter Change
|
|
September
30,
2024
|
|
June 30,
2024
|
|
September
30,
2023
|
|
$
|
|
%
|
|
$
|
|
%
|
|
(Dollars in
thousands)
|
|
Compensation and
employee
benefits
|
$
24,367
|
|
$
24,448
|
|
$
25,008
|
|
$ (81)
|
|
(0.3) %
|
|
$
(641)
|
|
(2.6) %
|
|
Occupancy and
equipment
|
4,850
|
|
4,765
|
|
4,814
|
|
85
|
|
1.8
|
|
36
|
|
0.7
|
|
Data
processing
|
3,915
|
|
3,535
|
|
4,116
|
|
380
|
|
10.7
|
|
(201)
|
|
(4.9)
|
|
Marketing
|
128
|
|
244
|
|
389
|
|
(116)
|
|
(47.5)
|
|
(261)
|
|
(67.1)
|
|
Professional
services
|
490
|
|
795
|
|
582
|
|
(305)
|
|
(38.4)
|
|
(92)
|
|
(15.8)
|
|
State/municipal
business and use
taxes
|
1,249
|
|
1,160
|
|
1,088
|
|
89
|
|
7.7
|
|
161
|
|
14.8
|
|
Federal deposit
insurance premium
|
824
|
|
812
|
|
818
|
|
12
|
|
1.5
|
|
6
|
|
0.7
|
|
Amortization of
intangible assets
|
399
|
|
421
|
|
595
|
|
(22)
|
|
(5.2)
|
|
(196)
|
|
(32.9)
|
|
Other
expense
|
3,068
|
|
2,916
|
|
3,560
|
|
152
|
|
5.2
|
|
(492)
|
|
(13.8)
|
|
Total noninterest
expense
|
$
39,290
|
|
$
39,096
|
|
$
40,970
|
|
$ 194
|
|
0.5 %
|
|
$
(1,680)
|
|
(4.1) %
|
Income Tax Expense
Income tax expense decreased $193,000 during the third quarter of 2024 to
$1.6 million compared to $1.8 million for the second quarter of 2024. The
decrease in income tax expense during the current quarter compared
to the prior quarter was primarily due to a decrease in pre-tax
income during the third quarter of 2024.
Income tax expense decreased during the third quarter of 2024
compared to same period in 2023 due to lower pre-tax income during
the third quarter of 2024. The effective tax rate declined due to
lower pre-tax income which increased the impact of favorable
permanent tax items such as tax-exempt investments, investments in
bank owned life insurance and tax credits.
The following table presents the income tax expense and related
metrics and the change for the periods indicated:
|
Quarter
Ended
|
|
Change
|
|
September
30,
2024
|
|
June 30,
2024
|
|
September
30,
2023
|
|
Quarter Over
Quarter
|
Prior Year
Quarter
|
|
(Dollars in
thousands)
|
|
Income before income
taxes
|
$
13,066
|
|
$
15,995
|
|
$
21,797
|
|
$
(2,929)
|
|
$
(8,731)
|
|
Income tax
expense
|
$
1,643
|
|
$
1,836
|
|
$
3,578
|
|
$
(193)
|
|
$
(1,935)
|
|
Effective income tax
rate
|
12.6 %
|
|
11.5 %
|
|
16.4 %
|
|
1.1 %
|
|
(3.8) %
|
Dividends
On October 23, 2024, the Company's Board of Directors
declared a quarterly cash dividend of $0.23 per share. The dividend is payable on
November 20, 2024 to shareholders of record as of the close of
business on November 6, 2024.
Earnings Conference Call
The Company will hold a telephone conference call to discuss
this earnings release on Thursday, October 24, 2024 at
10:00 a.m. Pacific time. To access
the call, please dial (833) 470-1428 -- access code 493684 a few
minutes prior to 10:00 a.m. Pacific
time. The call will be available for replay through
October 31, 2024 by dialing (866)
813-9403 -- access code 423520.
About Heritage Financial Corporation
Heritage Financial Corporation is an Olympia, Washington-based bank holding company
with Heritage Bank, a full-service commercial bank, as its sole
wholly-owned banking subsidiary. Heritage Bank has a branch network
of 50 banking offices in Washington, Oregon and Idaho. Heritage Bank does business under the
Whidbey Island Bank name on Whidbey Island, Washington. The Company's stock is
traded on the Nasdaq Global Select Market under the symbol "HFWA."
More information about Heritage Financial Corporation can be found
on its website at www.hf-wa.com and more information about Heritage
Bank can be found on its website at www.heritagebanknw.com.
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements often include words such as "believes,"
"expects," "anticipates," "estimates," "forecasts," "intends,"
"plans," "targets," "potentially," "probably," "projects,"
"outlook" or similar expressions or future or conditional verbs
such as "may," "will," "should," "would," and "could," as well as
the negative of such words. Forward-looking statements are not
historical facts but instead represent management's current
expectations and forecasts regarding future events, many of which
are inherently uncertain and outside of our control. Actual results
may differ, possibly materially, from those currently expected or
projected in these forward-looking statements. Factors that could
cause our actual results to differ materially from those described
in the forward-looking statements include, but are not limited to,
the following: potential adverse impacts to economic conditions
nationally or in our local market areas, other markets where we
have lending relationships, or other aspects of our business
operations or financial markets including, without limitation, as a
result of credit quality deterioration, pronounced and sustained
reductions in real estate market values, employment levels, labor
shortages and the effects of inflation, a potential recession or
slowed economic growth; changes in the interest rate environment
which could adversely affect our revenues and expenses, the value
of assets and obligations, and the availability and cost of capital
and liquidity; the level and impact of inflation and the current
and future monetary policies of the Board of Governors of the
Federal Reserve System in response thereto; the impact of bank
failures or adverse developments at other banks and related
negative publicity about the banking industry in general on
investor and depositor sentiment regarding the stability and
liquidity of banks; legislative or regulatory changes that
adversely affect our business, including changes in banking,
securities, and tax law, regulatory policies and principles, or the
interpretation of regulatory capital or other rules, including as a
result of the upcoming 2024 presidential election; credit and
interest rate risks associated with our business, customers,
borrowings, repayment, investment, and deposit practices;
fluctuations in deposits and deposit concentrations; liquidity
issues, including our ability to borrow funds or raise additional
capital, if necessary; fluctuations in the value of our investment
securities; credit risks and risks from concentrations (by type of
geographic area and industry) within our loan portfolio;
disruptions, security breaches, or other adverse events, failures
or interruptions in, or attacks on, our information technology
systems or on the third-party vendors who perform several of our
critical processing functions for our business, including as a
result of sophisticated attacks using artificial intelligence and
similar tools; rapid technological change in the financial services
industry; increased competition in the financial services industry
from non-banks such as credit unions and Fintech companies,
including digital asset service providers; our ability to adapt
successfully to technological changes to compete effectively in the
marketplace, including as a result of competition from other
commercial banks, mortgage banking firms, credit unions, securities
brokerage firms, insurance companies, and financial technology
companies; effects of critical accounting policies and judgments,
including the use of estimates in determining fair value of certain
of our assets, which estimates may prove to be incorrect and result
in significant declines in valuation; the commencement and outcome
of litigation and other legal proceedings and regulatory actions
against us or to which we may become subject; the effects of
climate change, severe weather events, natural disasters,
pandemics, epidemics and other public health crises, acts of war or
terrorism, and other external events on our business and the
businesses of our clients; our success at managing the risks
involved in the foregoing items; and other factors described in our
latest Annual Report on Form 10-K and Quarterly Reports on Form
10-Q and other documents filed with or furnished to the Securities
and Exchange Commission (the "SEC") which are available on our
website at www.heritagebanknw.com and on the SEC's website at
www.sec.gov. We caution readers not to place undue reliance on any
forward-looking statements. Moreover, any of the forward-looking
statements that we make in this press release or the documents we
file with or furnish to the SEC are based only on information then
actually known to us and upon management's beliefs and assumptions
at the time they are made which may turn out to be wrong because of
inaccurate assumptions we might make, because of the factors
described above or because of other factors that we cannot foresee.
We do not undertake and specifically disclaim any obligation to
revise any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date
of such statements.
|
HERITAGE FINANCIAL
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Dollars in
thousands, except shares)
|
|
|
September
30,
2024
|
|
June 30,
2024
|
|
December 31,
2023
|
|
Assets
|
|
|
|
|
|
|
Cash on hand and in
banks
|
$
78,068
|
|
$
55,469
|
|
$
55,851
|
|
Interest earning
deposits
|
97,504
|
|
58,288
|
|
169,122
|
|
Cash and cash
equivalents
|
175,572
|
|
113,757
|
|
224,973
|
|
Investment securities
available for sale, at fair value (amortized cost of
$909,023, $1,022,211 and $1,227,787, respectively)
|
852,779
|
|
931,248
|
|
1,134,353
|
|
Investment securities
held to maturity, at amortized cost (fair value of
$661,696, $642,051 and $662,450, respectively)
|
719,400
|
|
727,342
|
|
739,442
|
|
Total investment
securities
|
1,572,179
|
|
1,658,590
|
|
1,873,795
|
|
Loans
receivable
|
4,679,479
|
|
4,532,615
|
|
4,335,627
|
|
Allowance for credit
losses on loans
|
(51,391)
|
|
(51,219)
|
|
(47,999)
|
|
Loans receivable,
net
|
4,628,088
|
|
4,481,396
|
|
4,287,628
|
|
Premises and equipment,
net
|
72,500
|
|
73,218
|
|
74,899
|
|
Federal Home Loan Bank
stock, at cost
|
16,993
|
|
22,303
|
|
4,186
|
|
Bank owned life
insurance
|
127,248
|
|
126,420
|
|
125,655
|
|
Accrued interest
receivable
|
20,102
|
|
19,855
|
|
19,518
|
|
Prepaid expenses and
other assets
|
296,190
|
|
319,428
|
|
318,571
|
|
Other intangible
assets, net
|
3,552
|
|
3,951
|
|
4,793
|
|
Goodwill
|
240,939
|
|
240,939
|
|
240,939
|
|
Total
assets
|
$
7,153,363
|
|
$
7,059,857
|
|
$
7,174,957
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Non-interest bearing
deposits
|
$
1,682,219
|
|
$
1,599,367
|
|
$
1,715,847
|
|
Interest bearing
deposits
|
4,026,273
|
|
3,916,285
|
|
3,884,025
|
|
Total
deposits
|
5,708,492
|
|
5,515,652
|
|
5,599,872
|
|
Borrowings
|
382,000
|
|
500,000
|
|
500,000
|
|
Junior subordinated
debentures
|
21,985
|
|
21,912
|
|
21,765
|
|
Accrued expenses and
other liabilities
|
166,372
|
|
171,786
|
|
200,059
|
|
Total
liabilities
|
6,278,849
|
|
6,209,350
|
|
6,321,696
|
|
|
|
|
|
|
|
Common stock
|
534,917
|
|
541,294
|
|
549,748
|
|
Retained
earnings
|
383,127
|
|
379,714
|
|
375,989
|
|
Accumulated other
comprehensive loss, net
|
(43,530)
|
|
(70,501)
|
|
(72,476)
|
|
Total stockholders'
equity
|
874,514
|
|
850,507
|
|
853,261
|
|
Total liabilities and
stockholders' equity
|
$
7,153,363
|
|
$
7,059,857
|
|
$
7,174,957
|
|
|
|
|
|
|
|
Shares
outstanding
|
34,153,539
|
|
34,496,197
|
|
34,906,233
|
|
HERITAGE FINANCIAL
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in
thousands, except per share amounts)
|
|
|
Quarter
Ended
|
|
Nine Months
Ended
|
|
September
30,
2024
|
|
June 30,
2024
|
|
September
30,
2023
|
|
September
30,
2024
|
|
September
30,
2023
|
|
Interest
Income
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
64,138
|
|
$
60,608
|
|
$
56,119
|
|
$
182,608
|
|
$
160,192
|
|
Taxable interest on
investment securities
|
13,472
|
|
14,156
|
|
14,590
|
|
42,462
|
|
44,021
|
|
Nontaxable interest on
investment securities
|
159
|
|
165
|
|
448
|
|
505
|
|
1,554
|
|
Interest on interest
earning deposits
|
2,048
|
|
1,653
|
|
2,310
|
|
5,177
|
|
4,436
|
|
Total interest
income
|
79,817
|
|
76,582
|
|
73,467
|
|
230,752
|
|
210,203
|
|
Interest
Expense
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
20,256
|
|
18,453
|
|
11,877
|
|
55,097
|
|
25,012
|
|
Junior subordinated
debentures
|
541
|
|
539
|
|
540
|
|
1,627
|
|
1,521
|
|
Securities sold under
agreement to
repurchase
|
—
|
|
—
|
|
38
|
|
—
|
|
148
|
|
Borrowings
|
6,062
|
|
6,477
|
|
5,394
|
|
18,427
|
|
12,238
|
|
Total interest
expense
|
26,859
|
|
25,469
|
|
17,849
|
|
75,151
|
|
38,919
|
|
Net interest
income
|
52,958
|
|
51,113
|
|
55,618
|
|
155,601
|
|
171,284
|
|
Provision for
(reversal of) credit losses
|
2,439
|
|
1,268
|
|
(878)
|
|
5,099
|
|
2,856
|
|
Net interest income
after provision for (reversal of) credit losses
|
50,519
|
|
49,845
|
|
56,496
|
|
150,502
|
|
168,428
|
|
Noninterest
Income
|
|
|
|
|
|
|
|
|
|
|
Service charges and
other fees
|
2,788
|
|
2,817
|
|
2,856
|
|
8,393
|
|
8,162
|
|
Card revenue
|
2,134
|
|
1,930
|
|
2,273
|
|
5,903
|
|
6,396
|
|
Loss on sale of
investment securities, net
|
(6,945)
|
|
(1,921)
|
|
(1,940)
|
|
(18,839)
|
|
(2,226)
|
|
Gain on sale of loans,
net
|
—
|
|
—
|
|
157
|
|
26
|
|
307
|
|
Interest rate swap
fees
|
—
|
|
52
|
|
62
|
|
52
|
|
230
|
|
Bank owned life
insurance income
|
860
|
|
931
|
|
734
|
|
2,711
|
|
2,280
|
|
Gain on sale of other
assets, net
|
1,480
|
|
49
|
|
—
|
|
1,529
|
|
2
|
|
Other income
|
1,520
|
|
1,388
|
|
2,129
|
|
4,408
|
|
6,659
|
|
Total noninterest
income
|
1,837
|
|
5,246
|
|
6,271
|
|
4,183
|
|
21,810
|
|
Noninterest
Expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
24,367
|
|
24,448
|
|
25,008
|
|
74,291
|
|
75,325
|
|
Occupancy and
equipment
|
4,850
|
|
4,765
|
|
4,814
|
|
14,547
|
|
14,372
|
|
Data
processing
|
3,915
|
|
3,535
|
|
4,116
|
|
10,732
|
|
12,427
|
|
Marketing
|
128
|
|
244
|
|
389
|
|
583
|
|
1,232
|
|
Professional
services
|
490
|
|
795
|
|
582
|
|
1,852
|
|
1,961
|
|
State/municipal
business and use taxes
|
1,249
|
|
1,160
|
|
1,088
|
|
3,709
|
|
3,150
|
|
Federal deposit
insurance premium
|
824
|
|
812
|
|
818
|
|
2,431
|
|
2,465
|
|
Amortization of
intangible assets
|
399
|
|
421
|
|
595
|
|
1,241
|
|
1,841
|
|
Other
expense
|
3,068
|
|
2,916
|
|
3,560
|
|
9,370
|
|
11,127
|
|
Total noninterest
expense
|
39,290
|
|
39,096
|
|
40,970
|
|
118,756
|
|
123,900
|
|
Income before income
taxes
|
13,066
|
|
15,995
|
|
21,797
|
|
35,929
|
|
66,338
|
|
Income tax
expense
|
1,643
|
|
1,836
|
|
3,578
|
|
4,599
|
|
10,816
|
|
Net income
|
$
11,423
|
|
$
14,159
|
|
$
18,219
|
|
$
31,330
|
|
$
55,522
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
0.33
|
|
$
0.41
|
|
$
0.52
|
|
$
0.91
|
|
$
1.58
|
|
Diluted earnings per
share
|
$
0.33
|
|
$
0.41
|
|
$
0.51
|
|
$
0.90
|
|
$
1.57
|
|
Dividends declared per
share
|
$
0.23
|
|
$
0.23
|
|
$
0.22
|
|
$
0.69
|
|
$
0.66
|
|
Average shares
outstanding - basic
|
34,322,069
|
|
34,609,900
|
|
35,022,676
|
|
34,584,851
|
|
35,062,760
|
|
Average shares
outstanding - diluted
|
34,658,674
|
|
34,919,395
|
|
35,115,165
|
|
35,002,375
|
|
35,305,456
|
|
HERITAGE FINANCIAL
CORPORATION
FINANCIAL STATISTICS
(Unaudited)
(Dollars in
thousands)
|
|
Average Balances,
Yields, and Rates Paid:
|
|
|
Nine Months Ended
September 30,
|
|
2024
|
|
2023
|
|
Average
Balance
|
|
Interest
Earned/
Paid
|
|
Average
Yield/
Rate(1)
|
|
Average
Balance
|
|
Interest
Earned/
Paid
|
|
Average
Yield/
Rate(1)
|
|
Interest Earning
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable,
net(2)(3)
|
$ 4,425,234
|
|
$
182,608
|
|
5.51 %
|
|
$ 4,129,429
|
|
$
160,192
|
|
5.19 %
|
|
Taxable
securities
|
1,699,995
|
|
42,462
|
|
3.34
|
|
1,975,818
|
|
44,021
|
|
2.98
|
|
Nontaxable
securities(3)
|
19,193
|
|
505
|
|
3.51
|
|
71,702
|
|
1,554
|
|
2.90
|
|
Interest earning
deposits
|
126,970
|
|
5,177
|
|
5.45
|
|
114,753
|
|
4,436
|
|
5.17
|
|
Total interest earning
assets
|
6,271,392
|
|
230,752
|
|
4.91 %
|
|
6,291,702
|
|
210,203
|
|
4.47 %
|
|
Noninterest earning
assets
|
856,198
|
|
|
|
|
|
848,035
|
|
|
|
|
|
Total
assets
|
$ 7,127,590
|
|
|
|
|
|
$ 7,139,737
|
|
|
|
|
|
Interest Bearing
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of
deposit
|
$
826,575
|
|
$ 26,852
|
|
4.34 %
|
|
$
442,301
|
|
$
8,292
|
|
2.51 %
|
|
Savings
accounts
|
457,989
|
|
640
|
|
0.19
|
|
558,467
|
|
471
|
|
0.11
|
|
Interest bearing demand
and money market accounts
|
2,643,478
|
|
27,605
|
|
1.39
|
|
2,791,695
|
|
16,249
|
|
0.78
|
|
Total interest bearing
deposits
|
3,928,042
|
|
55,097
|
|
1.87
|
|
3,792,463
|
|
25,012
|
|
0.88
|
|
Junior subordinated
debentures
|
21,874
|
|
1,627
|
|
9.94
|
|
21,576
|
|
1,521
|
|
9.43
|
|
Securities sold under
agreement to repurchase
|
—
|
|
—
|
|
—
|
|
38,187
|
|
148
|
|
0.52
|
|
Borrowings
|
484,300
|
|
18,427
|
|
5.08
|
|
339,296
|
|
12,238
|
|
4.82
|
|
Total interest bearing
liabilities
|
4,434,216
|
|
75,151
|
|
2.26 %
|
|
4,191,522
|
|
38,919
|
|
1.24 %
|
|
Noninterest demand
deposits
|
1,657,867
|
|
|
|
|
|
1,942,134
|
|
|
|
|
|
Other noninterest
bearing liabilities
|
186,081
|
|
|
|
|
|
186,469
|
|
|
|
|
|
Stockholders'
equity
|
849,426
|
|
|
|
|
|
819,612
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$ 7,127,590
|
|
|
|
|
|
$ 7,139,737
|
|
|
|
|
|
Net interest income and
spread
|
|
|
$
155,601
|
|
2.65 %
|
|
|
|
$
171,284
|
|
3.23 %
|
|
Net interest
margin
|
|
|
|
|
3.31 %
|
|
|
|
|
|
3.64 %
|
|
|
|
(1)
|
Average balances are
calculated using daily balances.
|
|
(2)
|
Average loans
receivable, net includes loans held for sale and loans classified
as nonaccrual, which carry a zero yield. Interest earned on loans
receivable, net includes the amortization of net deferred loan fees
of $2.7 million and $2.4 million for the nine months ended
September 30, 2024 and 2023, respectively.
|
|
(3)
|
Yields on tax-exempt
loans and securities have not been stated on a tax-equivalent
basis.
|
|
HERITAGE FINANCIAL
CORPORATION
FINANCIAL STATISTICS
(Unaudited)
(Dollars in
thousands)
|
|
Nonperforming Assets
and Credit Quality Metrics:
|
|
|
|
|
Quarter
Ended
|
|
Nine Months
Ended
|
|
September
30,
2024
|
|
June 30,
2024
|
|
September
30,
2023
|
|
September
30,
2024
|
|
September
30,
2023
|
|
Allowance for Credit
Losses on Loans:
|
|
|
|
|
|
Balance, beginning of
period
|
$
51,219
|
|
$
49,736
|
|
$
46,408
|
|
$
47,999
|
|
$
42,986
|
|
Provision for credit
losses on loans
|
2,705
|
|
1,470
|
|
(635)
|
|
5,879
|
|
3,066
|
|
Charge-offs:
|
|
|
|
|
|
|
|
|
|
|
Commercial
business
|
(2,560)
|
|
(312)
|
|
(15)
|
|
(2,949)
|
|
(176)
|
|
Consumer
|
(85)
|
|
(238)
|
|
(123)
|
|
(446)
|
|
(420)
|
|
Total
charge-offs
|
(2,645)
|
|
(550)
|
|
(138)
|
|
(3,395)
|
|
(596)
|
|
Recoveries:
|
|
|
|
|
|
|
|
|
|
|
Commercial
business
|
72
|
|
518
|
|
1,253
|
|
807
|
|
1,342
|
|
Consumer
|
40
|
|
45
|
|
59
|
|
101
|
|
149
|
|
Total
recoveries
|
112
|
|
563
|
|
1,312
|
|
908
|
|
1,491
|
|
Net recoveries
(charge-offs)
|
(2,533)
|
|
13
|
|
1,174
|
|
(2,487)
|
|
895
|
|
Balance, end of
period
|
$
51,391
|
|
$
51,219
|
|
$
46,947
|
|
$
51,391
|
|
$
46,947
|
|
Net charge-offs
(recoveries) on loans
to average loans receivable, net
annualized
|
0.22 %
|
|
— %
|
|
(0.11) %
|
|
0.08 %
|
|
(0.03) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
2024
|
|
June 30,
2024
|
|
December 31,
2023
|
|
Nonperforming
Assets:
|
|
|
|
|
|
|
Nonaccrual
loans:
|
|
|
|
|
|
|
Commercial
business
|
$
4,301
|
|
$
3,826
|
|
$
4,468
|
|
Total nonaccrual
loans
|
4,301
|
|
3,826
|
|
4,468
|
|
Accruing loans past due
90 days or more
|
5,347
|
|
4,296
|
|
1,293
|
|
Total nonperforming
loans
|
9,648
|
|
8,122
|
|
5,761
|
|
Other real estate
owned
|
—
|
|
—
|
|
—
|
|
Nonperforming
assets
|
$
9,648
|
|
$
8,122
|
|
$
5,761
|
|
|
|
|
|
|
|
ACL on loans
to:
|
|
|
|
|
|
|
Loans
receivable
|
1.10 %
|
|
1.13 %
|
|
1.11 %
|
|
Nonaccrual
loans
|
1,194.86 %
|
|
1,338.71 %
|
|
1,074.28 %
|
|
Nonaccrual loans to
loans receivable
|
0.09 %
|
|
0.08 %
|
|
0.10 %
|
|
Nonperforming loans to
loans receivable
|
0.21 %
|
|
0.18 %
|
|
0.13 %
|
|
Nonperforming assets to
total assets
|
0.13 %
|
|
0.12 %
|
|
0.08 %
|
|
HERITAGE FINANCIAL
CORPORATION
QUARTERLY FINANCIAL
STATISTICS (Unaudited)
(Dollars in
thousands, except per share amounts)
|
|
|
Quarter
Ended
|
|
September
30,
2024
|
|
June 30,
2024
|
|
March 31,
2024
|
|
December 31,
2023
|
|
September
30,
2023
|
|
Earnings:
|
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
$
52,958
|
|
$
51,113
|
|
$
51,530
|
|
$
53,871
|
|
$
55,618
|
|
Provision for (reversal
of) credit losses
|
2,439
|
|
1,268
|
|
1,392
|
|
1,424
|
|
(878)
|
|
Noninterest income
(loss)
|
1,837
|
|
5,246
|
|
(2,900)
|
|
(3,147)
|
|
6,271
|
|
Noninterest
expense
|
39,290
|
|
39,096
|
|
40,370
|
|
42,723
|
|
40,970
|
|
Net income
|
11,423
|
|
14,159
|
|
5,748
|
|
6,233
|
|
18,219
|
|
Pre-tax, pre-provision
net income (1)
|
15,505
|
|
17,263
|
|
8,260
|
|
8,001
|
|
20,919
|
|
Basic earnings per
share
|
$
0.33
|
|
$
0.41
|
|
$
0.17
|
|
$
0.18
|
|
$
0.52
|
|
Diluted earnings per
share
|
$
0.33
|
|
$
0.41
|
|
$
0.16
|
|
$
0.18
|
|
$
0.51
|
|
Average
Balances:
|
|
|
|
|
|
|
|
|
|
|
Loans receivable, net
(2)
|
$
4,555,090
|
|
$
4,415,790
|
|
$
4,303,394
|
|
$
4,233,743
|
|
$
4,201,554
|
|
Total investment
securities
|
1,622,011
|
|
1,704,607
|
|
1,832,011
|
|
1,861,587
|
|
1,992,303
|
|
Total interest earning
assets
|
6,327,485
|
|
6,241,936
|
|
6,244,138
|
|
6,269,805
|
|
6,363,043
|
|
Total assets
|
7,182,921
|
|
7,106,791
|
|
7,092,452
|
|
7,140,876
|
|
7,212,732
|
|
Total interest bearing
deposits
|
3,997,496
|
|
3,916,977
|
|
3,868,890
|
|
3,849,067
|
|
3,841,148
|
|
Total noninterest
demand deposits
|
1,677,984
|
|
1,638,262
|
|
1,657,132
|
|
1,772,261
|
|
1,859,374
|
|
Stockholders'
equity
|
857,799
|
|
843,438
|
|
846,947
|
|
813,383
|
|
821,494
|
|
Financial
Ratios:
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets (3)
|
0.63 %
|
|
0.80 %
|
|
0.33 %
|
|
0.35 %
|
|
1.00 %
|
|
Pre-tax, pre-provision
return on
average assets (1)(3)
|
0.86
|
|
0.98
|
|
0.47
|
|
0.44
|
|
1.15
|
|
Return on average
common
equity (3)
|
5.30
|
|
6.75
|
|
2.73
|
|
3.04
|
|
8.80
|
|
Return on average
tangible common equity (1)(3)
|
7.62
|
|
9.74
|
|
4.07
|
|
4.69
|
|
12.90
|
|
Adjusted return on
average tangible
common equity (1)(3)
|
10.42
|
|
10.74
|
|
9.34
|
|
10.21
|
|
13.62
|
|
Efficiency
ratio
|
71.7
|
|
69.4
|
|
83.0
|
|
84.2
|
|
66.2
|
|
Adjusted efficiency
ratio (1)
|
65.2
|
|
67.1
|
|
68.9
|
|
70.4
|
|
64.8
|
|
Noninterest expense to
average total assets (3)
|
2.18
|
|
2.21
|
|
2.29
|
|
2.37
|
|
2.25
|
|
Net interest spread
(3)
|
2.63
|
|
2.62
|
|
2.70
|
|
2.84
|
|
2.95
|
|
Net interest margin
(3)
|
3.33
|
|
3.29
|
|
3.32
|
|
3.41
|
|
3.47
|
|
|
|
(1)
|
Represents a non-GAAP
financial measure. See "Non-GAAP Financial Measures" section for a
reconciliation to the comparable GAAP financial measure.
|
|
(2)
|
Average loans
receivable, net includes loans held for sale.
|
|
(3)
|
Annualized.
|
|
HERITAGE FINANCIAL
CORPORATION
QUARTERLY FINANCIAL
STATISTICS (Unaudited)
(Dollars in
thousands, except per share amounts)
|
|
|
As of or for the
Quarter Ended
|
|
September
30,
2024
|
|
June 30,
2024
|
|
March 31,
2024
|
|
December 31,
2023
|
|
September
30,
2023
|
|
Select Balance
Sheet:
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
7,153,363
|
|
$
7,059,857
|
|
$
7,091,283
|
|
$
7,174,957
|
|
$
7,150,588
|
|
Loans receivable,
net
|
4,628,088
|
|
4,481,396
|
|
4,378,429
|
|
4,287,628
|
|
4,219,911
|
|
Total investment
securities
|
1,572,179
|
|
1,658,590
|
|
1,730,516
|
|
1,873,795
|
|
1,894,392
|
|
Total
deposits
|
5,708,492
|
|
5,515,652
|
|
5,532,327
|
|
5,599,872
|
|
5,635,187
|
|
Noninterest demand
deposits
|
1,682,219
|
|
1,599,367
|
|
1,637,111
|
|
1,715,847
|
|
1,789,293
|
|
Stockholders'
equity
|
874,514
|
|
850,507
|
|
847,580
|
|
853,261
|
|
813,546
|
|
Financial
Measures:
|
|
|
|
|
|
|
|
|
|
|
Book value per
share
|
$
25.61
|
|
$
24.66
|
|
$
24.43
|
|
$
24.44
|
|
$
23.31
|
|
Tangible book value per
share (1)
|
18.45
|
|
17.56
|
|
17.36
|
|
17.40
|
|
16.25
|
|
Stockholders' equity to
total assets
|
12.2 %
|
|
12.0 %
|
|
12.0 %
|
|
11.9 %
|
|
11.4 %
|
|
Tangible common equity
to tangible
assets (1)
|
9.1
|
|
8.9
|
|
8.8
|
|
8.8
|
|
8.2
|
|
Loans to deposits
ratio
|
82.0
|
|
82.2
|
|
80.0
|
|
77.4
|
|
75.7
|
|
Regulatory Capital
Ratios:(2)
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1
capital ratio
|
12.3 %
|
|
12.6 %
|
|
12.6 %
|
|
12.9 %
|
|
12.9 %
|
|
Leverage
ratio
|
9.9
|
|
10.1
|
|
10.0
|
|
10.0
|
|
9.9
|
|
Tier 1 capital
ratio
|
12.7
|
|
13.0
|
|
13.0
|
|
13.3
|
|
13.3
|
|
Total capital
ratio
|
13.6
|
|
13.9
|
|
13.9
|
|
14.1
|
|
14.1
|
|
Credit Quality
Metrics:
|
|
|
|
|
|
|
|
|
|
|
ACL on
loans to:
|
|
|
|
|
|
|
|
|
|
|
Loans
receivable
|
1.10 %
|
|
1.13 %
|
|
1.12 %
|
|
1.11 %
|
|
1.10 %
|
|
Nonperforming
loans
|
1,194.9
|
|
1,338.7
|
|
1,037.9
|
|
1,074.3
|
|
1,531.7
|
|
Nonaccrual loans to
loans receivable
|
0.09
|
|
0.08
|
|
0.11
|
|
0.10
|
|
0.07
|
|
Nonperforming loans to
loans
receivable
|
0.21
|
|
0.18
|
|
0.17
|
|
0.13
|
|
0.12
|
|
Nonperforming assets to
total assets
|
0.13
|
|
0.12
|
|
0.10
|
|
0.08
|
|
0.07
|
|
Net charge-offs
(recoveries) on loans
to average loans receivable, net(3)
|
0.22
|
|
0.00
|
|
0.00
|
|
0.06
|
|
(0.11)
|
|
Criticized Loans by
Credit Quality Rating:
|
|
Special
mention
|
$
99,078
|
|
$
93,694
|
|
$
102,232
|
|
$
79,977
|
|
$
72,152
|
|
Substandard
|
71,977
|
|
82,496
|
|
70,183
|
|
69,757
|
|
62,653
|
|
Other
Metrics:
|
|
|
|
|
|
|
|
|
|
|
Number of banking
offices
|
50
|
|
50
|
|
50
|
|
50
|
|
50
|
|
Deposits per
branch
|
$
114,170
|
|
$
110,313
|
|
$
110,647
|
|
$
111,997
|
|
$
112,704
|
|
Average number of
full-time equivalent
employees
|
749
|
|
748
|
|
765
|
|
803
|
|
821
|
|
Average assets per
full-time
equivalent employee
|
9,590
|
|
9,501
|
|
9,271
|
|
8,893
|
|
8,785
|
|
|
|
(1)
|
See Non-GAAP Financial
Measures section herein.
|
|
(2)
|
Current quarter ratios
are estimates pending completion and filing of the Company's
regulatory reports.
|
|
(3)
|
Annualized.
|
HERITAGE FINANCIAL CORPORATION
NON-GAAP FINANCIAL MEASURES (Unaudited)
(Dollars in
thousands, except per share amounts)
This earnings release contains certain financial measures not
presented in accordance with U.S. Generally Accepted Accounting
Principles ("GAAP") in addition to financial measures presented in
accordance with GAAP. The Company has presented these non-GAAP
financial measures in this earnings release because it believes
that they provide useful and comparative information to assess
trends in the Company's capital, performance and asset quality
reflected in the current quarter and comparable period results and
to facilitate comparison of its performance with the performance of
its peers. These non-GAAP financial measures have inherent
limitations, are not required to be uniformly applied and are not
audited. They should not be considered in isolation or as a
substitute for financial measures presented in accordance with
GAAP. These non-GAAP financial measures may not be comparable to
similarly titled measures reported by other companies.
Reconciliations of the non-GAAP financial measures used in this
earnings release to the comparable GAAP financial measures are
presented below.
The Company considers the tangible common equity to tangible
assets ratio and tangible book value per share to be useful
measurements of the adequacy of the Company's capital levels.
|
September
30,
2024
|
|
June 30,
2024
|
|
March 31,
2024
|
|
December 31,
2023
|
|
September
30,
2023
|
|
Tangible Common
Equity to Tangible Assets and Tangible Book Value Per
Share:
|
|
Total stockholders'
equity (GAAP)
|
$
874,514
|
|
$
850,507
|
|
$
847,580
|
|
$
853,261
|
|
$
813,546
|
|
Exclude intangible
assets
|
(244,491)
|
|
(244,890)
|
|
(245,311)
|
|
(245,732)
|
|
(246,325)
|
|
Tangible common equity
(non-GAAP)
|
$
630,023
|
|
$
605,617
|
|
$
602,269
|
|
$
607,529
|
|
$
567,221
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
(GAAP)
|
$
7,153,363
|
|
$
7,059,857
|
|
$
7,091,283
|
|
$
7,174,957
|
|
$
7,150,588
|
|
Exclude intangible
assets
|
(244,491)
|
|
(244,890)
|
|
(245,311)
|
|
(245,732)
|
|
(246,325)
|
|
Tangible assets
(non-GAAP)
|
$
6,908,872
|
|
$
6,814,967
|
|
$
6,845,972
|
|
$
6,929,225
|
|
$
6,904,263
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity to
total assets (GAAP)
|
12.2 %
|
|
12.0 %
|
|
12.0 %
|
|
11.9 %
|
|
11.4 %
|
|
Tangible common equity
to tangible assets (non-GAAP)
|
9.1 %
|
|
8.9 %
|
|
8.8 %
|
|
8.8 %
|
|
8.2 %
|
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding
|
34,153,539
|
|
34,496,197
|
|
34,689,843
|
|
34,906,233
|
|
34,901,076
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share
(GAAP)
|
$
25.61
|
|
$
24.66
|
|
$
24.43
|
|
$
24.44
|
|
$
23.31
|
|
Tangible book value per
share (non-GAAP)
|
$
18.45
|
|
$
17.56
|
|
$
17.36
|
|
$
17.40
|
|
$
16.25
|
HERITAGE FINANCIAL CORPORATION
NON-GAAP FINANCIAL MEASURES (Unaudited)
(Dollars in
thousands, except per share amounts)
The Company considers the return on average tangible common
equity ratio to be a useful measurement of the Company's ability to
generate returns for its common shareholders. By removing the
impact of intangible assets and their related amortization and tax
effects, the performance of the Company's ongoing business
operations can be evaluated. The Company believes that presenting
an adjusted return on tangible common equity ratio, which excludes
certain non-recurring items is useful in measuring performance of
the Company's ongoing business operations by removing the
volatility of these non-recurring items.
|
Quarter
Ended
|
|
September
30,
2024
|
|
June 30,
2024
|
|
March 31,
2024
|
|
December 31,
2023
|
|
September
30,
2023
|
|
Return on Average
Tangible Common Equity, annualized:
|
|
Net income
(GAAP)
|
$
11,423
|
|
$
14,159
|
|
$
5,748
|
|
$
6,233
|
|
$
18,219
|
|
Add amortization of
intangible
assets
|
399
|
|
421
|
|
421
|
|
593
|
|
595
|
|
Exclude tax effect of
adjustment
|
(84)
|
|
(88)
|
|
(88)
|
|
(125)
|
|
(125)
|
|
Tangible net income
(non-GAAP)
|
$
11,738
|
|
$
14,492
|
|
$
6,081
|
|
$
6,701
|
|
$
18,689
|
|
|
|
|
|
|
|
|
|
|
|
Tangible net income
(non-GAAP)
|
$
11,738
|
|
$
14,492
|
|
$
6,081
|
|
$
6,701
|
|
$
18,689
|
|
Exclude loss on sale
of
investment securities, net
|
6,945
|
|
1,921
|
|
9,973
|
|
10,005
|
|
1,940
|
|
Exclude gain on sale
of branch
including related deposits, net
|
—
|
|
—
|
|
—
|
|
—
|
|
(610)
|
|
Exclude gain on sale
of premises
and equipment
|
(1,480)
|
|
(49)
|
|
—
|
|
—
|
|
—
|
|
Exclude tax effect of
adjustment
|
(1,148)
|
|
(393)
|
|
(2,094)
|
|
(2,101)
|
|
(279)
|
|
Adjusted tangible net
income (non-
GAAP)
|
$
16,055
|
|
$
15,971
|
|
$
13,960
|
|
$
14,605
|
|
$
19,740
|
|
|
|
|
|
|
|
|
|
|
|
Average stockholders'
equity (GAAP)
|
$
857,799
|
|
$
843,438
|
|
$
846,947
|
|
$
813,383
|
|
$
821,494
|
|
Exclude average
intangible assets
|
(244,706)
|
|
(245,106)
|
|
(245,536)
|
|
(246,022)
|
|
(246,663)
|
|
Average tangible
common
stockholders' equity (non-GAAP)
|
$
613,093
|
|
$
598,332
|
|
$
601,411
|
|
$
567,361
|
|
$
574,831
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
common equity,
annualized (GAAP)
|
5.30 %
|
|
6.75 %
|
|
2.73 %
|
|
3.04 %
|
|
8.80 %
|
|
Return on average
tangible common
equity, annualized (non-GAAP)
|
7.62 %
|
|
9.74 %
|
|
4.07 %
|
|
4.69 %
|
|
12.90 %
|
|
Adjusted return on
average tangible
common equity, annualized (non-
GAAP)
|
10.42 %
|
|
10.74 %
|
|
9.34 %
|
|
10.21 %
|
|
13.62 %
|
The Company believes that presenting pre-tax pre-provision
income, which reflects its profitability before income taxes and
provision for credit losses, and the pre-tax, pre-provision return
on average assets are useful measurements in assessing its
operating income and expenses by removing the volatility that may
be associated with credit loss provisions.
|
Quarter
Ended
|
|
September
30,
2024
|
|
June 30,
2024
|
|
March 31,
2024
|
|
December 31,
2023
|
|
September
30,
2023
|
|
Pre-tax,
Pre-provision Income and Pre-tax, Pre-provision Return on Average
Assets, annualized:
|
|
Net income
(GAAP)
|
$
11,423
|
|
$
14,159
|
|
$
5,748
|
|
$
6,233
|
|
$
18,219
|
|
Add income tax
expense
|
1,643
|
|
1,836
|
|
1,120
|
|
344
|
|
3,578
|
|
Add (subtract)
provision for
(reversal of) credit losses
|
2,439
|
|
1,268
|
|
1,392
|
|
1,424
|
|
(878)
|
|
Pre-tax, pre-provision
income (non-
GAAP)
|
$
15,505
|
|
$
17,263
|
|
$
8,260
|
|
$
8,001
|
|
$
20,919
|
|
|
|
|
|
|
|
|
|
|
|
Average total assets
(GAAP)
|
$
7,182,921
|
|
$
7,106,791
|
|
$
7,092,452
|
|
$
7,140,876
|
|
$
7,212,732
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets, annualized
(GAAP)
|
0.63 %
|
|
0.80 %
|
|
0.33 %
|
|
0.35 %
|
|
1.00 %
|
|
Pre-tax, pre-provision
return on
average assets (non-GAAP)
|
0.86 %
|
|
0.98 %
|
|
0.47 %
|
|
0.44 %
|
|
1.15 %
|
The Company believes that presenting an adjusted efficiency
ratio, which excludes certain non-recurring items is useful in
measuring operating income and expenses by removing the volatility
of these non-recurring items.
|
Quarter
Ended
|
|
September
30,
2024
|
|
June 30,
2024
|
|
March 31,
2024
|
|
December 31,
2023
|
|
September
30,
2023
|
|
Adjusted Efficiency
Ratio :
|
|
Total noninterest
expense (GAAP)
|
$
39,290
|
|
$
39,096
|
|
$
40,370
|
|
$
42,723
|
|
$
40,970
|
|
Net interest income
(GAAP)
|
$
52,958
|
|
$
51,113
|
|
$
51,530
|
|
$
53,871
|
|
$
55,618
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest
income (GAAP)
|
$
1,837
|
|
$
5,246
|
|
$
(2,900)
|
|
$
(3,147)
|
|
$
6,271
|
|
Exclude (gain) loss on
sale of
investment securities, net
|
6,945
|
|
1,921
|
|
9,973
|
|
10,005
|
|
1,940
|
|
Exclude gain on sale
of branch
including related deposits,
net
|
—
|
|
—
|
|
—
|
|
—
|
|
(610)
|
|
Exclude gain on sale
of premises
and equipment
|
(1,480)
|
|
(49)
|
|
—
|
|
—
|
|
—
|
|
Adjusted total
noninterest income
(non-GAAP)
|
$
7,302
|
|
$
7,118
|
|
$
7,073
|
|
$
6,858
|
|
$
7,601
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
(GAAP)
|
71.7 %
|
|
69.4 %
|
|
83.0 %
|
|
84.2 %
|
|
66.2 %
|
|
Adjusted efficiency
ratio (non-GAAP)
|
65.2 %
|
|
67.1 %
|
|
68.9 %
|
|
70.4 %
|
|
64.8 %
|
View original
content:https://www.prnewswire.com/news-releases/heritage-financial-announces-third-quarter-2024-results-and-declares-regular-cash-dividend-of-0-23-per-share-302285454.html
SOURCE Heritage Financial Corporation