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Sep 30, 2020
Heritage Financial Q3 2020 Earnings Report
Heritage Financial's financial performance improved with a net income of $16.6 million and earnings per share of $0.46.
Key Takeaways
Heritage Financial Corporation reported a net income of $16.6 million for the quarter ended September 30, 2020, a significant improvement compared to the net loss of $6.1 million in the previous quarter. Diluted earnings per share were $0.46, and the company declared a regular cash dividend of $0.20 per common share.
Net income was $16.6 million, or $0.46 per diluted share.
Total deposits increased by $121.3 million, or 2.2%, reaching $5.69 billion.
Provision for credit losses decreased to $2.7 million compared to $28.6 million in the linked quarter.
The company announced a plan to consolidate nine branches, resulting in a 15% decrease in total branch locations.
Heritage Financial
Heritage Financial
Forward Guidance
Heritage Financial Corporation plans to consolidate nine branches to create a more efficient branch footprint. The Company anticipates annual expense savings of approximately $2.3 million as a result of these consolidations and expects to incur total pre-tax expense related to the consolidations of $1.6 million.
Positive Outlook
- Expense savings of approximately $2.3 million annually from branch consolidations.
- Improved efficiency through branch footprint optimization.
- Increased focus on digital banking channels to meet client usage trends.
- Branch consolidation creates a more efficient branch footprint.
- Integration of consolidated locations into other branches within the network.
Challenges Ahead
- Incurrence of $1.6 million in pre-tax expenses related to branch consolidations.
- Decrease of 15% in the number of total branches.
- Potential customer disruption during the transition.
- Possible negative impact on employee morale due to branch closures.
- Risk of losing customers who prefer physical branch locations.