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Sep 30, 2024
Heritage Financial Q3 2024 Earnings Report
Heritage Financial's performance declined due to a pre-tax loss on the sale of securities, while experiencing growth in loans and deposits.
Key Takeaways
Heritage Financial Corporation reported a net income of $11.4 million for the third quarter of 2024, a decrease compared to $14.2 million for the second quarter of 2024 and $18.2 million for the third quarter of 2023. The results include a pre-tax loss on the sale of securities of $6.9 million. However, the company saw positive growth in loans and deposits, with a net interest margin of 3.33%.
Net income was $11.4 million, or $0.33 per diluted share, down from $14.2 million, or $0.41 per diluted share in Q2 2024.
Loans receivable increased by $146.9 million, representing a 3.2% increase (12.9% annualized).
Deposits increased by $192.8 million, a 3.5% increase (13.9% annualized).
Net interest margin was 3.33%, an increase from 3.29% in the prior quarter.
Forward Guidance
Heritage Financial Corporation is optimistic about future core profitability through balance sheet growth and prudent risk management.
Positive Outlook
- Strong loan and deposit growth.
- Net interest margin expansion.
- Continued benefits from expense management measures.
- Increase 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.
- Overall credit quality remains very strong.
Challenges Ahead
- Experienced a charge-off during the quarter related to an owner-occupied commercial real estate loan previously downgraded to Substandard.
- 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.
- 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
Historical Earnings Impact
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