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Dec 31, 2023
Heritage Financial Q4 2023 Earnings Report
Reported a decrease in net income due to a loss on sale of securities and costs related to expense management measures, but saw strong loan growth and repositioning of the investment portfolio.
Key Takeaways
Heritage Financial Corporation reported a net income of $6.2 million for Q4 2023, a decrease compared to $18.2 million in the previous quarter and $22.5 million in Q4 2022. The results were affected by a loss on sale of securities and expense management costs, but the company saw strong loan growth and repositioned its investment portfolio. The company declared a regular cash dividend of $0.23 per share.
Net income was $6.2 million, or $0.18 per diluted share, for the fourth quarter of 2023, compared to $18.2 million, or $0.51 per diluted share, for the third quarter of 2023.
Significant items in the fourth quarter of 2023 results include a loss on sale of securities totaling $10.0 million, or $0.22 per diluted share, and costs relating to expense management measures totaling $2.0 million, or $0.04 per diluted share.
Loans receivable increased $68.8 million, or 1.6%, during the fourth quarter of 2023.
Declared a regular cash dividend of $0.23 per share on January 24, 2024, an increase of 4.5% from the $0.22 regular cash dividend per share declared in the fourth quarter of 2023.
Forward Guidance
Heritage Financial anticipates enhanced earnings in future periods due to actions taken in Q4, coupled with a strong balance sheet, which will provide sustainable long-term returns for shareholders.
Positive Outlook
- Strong loan growth
- Expense management measures
- Repositioning of investment portfolio
- Strategic repositioning of its investment portfolio is expected to improve annualized interest income by an estimated $5.3 million.
- Annualized cost savings of approximately $5.3 million are expected in future periods due to expense management measures, including contract renewals, cancellations, and severance payments.
Challenges Ahead
- Costs related to expense management activities are impacting current earnings.
- The company incurred a pre-tax loss of $10.0 million on the sale of investment securities due to the strategic repositioning of its investment portfolio.
- Card revenue decreased due to annual incentives recognized in the third quarter of 2023 as well as general declines in income due to lower transaction account volume.
Historical Earnings Impact
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