Core Insights - Heritage Bank is expanding into Spokane, Washington, with the addition of a new branch and a team of experienced bankers [1][2] Company Overview - Heritage Financial Corporation is based in Olympia and operates Heritage Bank as its sole wholly-owned banking subsidiary, which has a network of 50 banking offices in Washington and Oregon [5] Key Personnel - James Krejci, senior vice president and commercial team leader, has a business finance degree and focuses on supporting business expansion and economic growth in the region [2] - Timothy Engh, senior vice president and commercial banking officer, has over 20 years of banking experience and is dedicated to fostering long-term partnerships with businesses [3] - Sean O'Regan, vice president and commercial banking officer, has more than 20 years of experience in commercial banking and private business banking, enhancing his skills through previous roles as a credit analyst and financial controller [4]

Financial Performance - Net income for Q4 2024 was $11.9 million, or $0.34 per diluted share, up from $11.4 million, or $0.33 per diluted share in Q3 2024, and significantly higher than $6.2 million, or $0.18 per diluted share in Q4 2023[2][6] - Income before income taxes for Q4 2024 was $16,330,000, an increase of $3,264,000 (24.8%) compared to Q4 2023[38] - Net income for the quarter ended December 31, 2024, was $11,928,000, compared to $6,233,000 in the same quarter of 2023, an increase of 91.5%[46] - Basic earnings per share for the quarter ended December 31, 2024, was $0.35, up from $0.18 in the same quarter of 2023, indicating an increase of 94.4%[48] - Adjusted tangible net income (non-GAAP) reached $18,187 million, up from $16,055 million in the prior quarter[70] Revenue and Income Sources - Total interest income for the quarter ended December 31, 2024, was $78,960,000, an increase from $74,262,000 in the same quarter of 2023, representing a growth of 6.1%[46] - Net interest income for Q4 2024 was $53.763 million, representing a net interest margin of 3.39%[30] - Noninterest income increased by $1.5 million to $3.3 million in Q4 2024 compared to Q3 2024, primarily due to reduced losses from the sale of investment securities[31] - Noninterest income rose by $6.4 million from Q4 2023, attributed to decreased losses from investment securities sales[32] Expenses and Efficiency - Total noninterest expense for Q4 2024 was $39.540 million, a slight increase of 0.6% from Q3 2024, but a decrease of 7.5% compared to Q4 2023[36] - The efficiency ratio improved to 69.3%, down from 71.7% in Q3 2024, indicating better operational efficiency[7] - Total noninterest expense (GAAP) decreased to $39,540 million from $39,290 million in the previous quarter[71] Assets and Liabilities - Total assets as of December 31, 2024, were $7.149 billion, slightly down from $7.182 billion at the end of Q3 2024[30] - Loans receivable increased by $122.6 million, or 2.6%, to $4.80 billion at December 31, 2024, with new loans funded totaling $181.0 million in Q4 2024[6][12] - Total deposits decreased by $23.9 million, or 0.4%, to $5.68 billion at December 31, 2024, with non-maturity deposits down by $55.6 million, or 1.2%[6][13] - Total stockholders' equity decreased by $11.0 million, or 1.3%, to $863.5 million at December 31, 2024, primarily due to an increase in accumulated other comprehensive loss and dividends paid[15] Credit Quality - The allowance for credit losses on loans was 1.09% at December 31, 2024, compared to 1.10% at September 30, 2024, with a provision for credit losses of $1.1 million recorded during the fourth quarter[17] - Provision for credit losses for the quarter ended December 31, 2024, was $1,183,000, a decrease from $1,424,000 in the same quarter of 2023, indicating improved credit quality[46] - Total nonperforming loans decreased to $5,274,000 from $9,648,000 in the previous quarter, indicating improved credit quality[53] Dividends and Shareholder Returns - The company declared a regular cash dividend of $0.24 per share, a 4.3% increase from the previous dividend of $0.23 per share[6] - Dividends declared per share for the year ended December 31, 2024, were $0.92, compared to $0.88 in 2023, reflecting a growth of 4.5%[48] Future Outlook - The Company will hold an earnings conference call on January 23, 2025, at 10:00 a.m. Pacific time[40]

Financial Data and Key Metrics Changes - The company announced a CEO transition plan that has been in place since July 2024, aiming for a smooth transition for all stakeholders [4] - The current CEO will retire on May 5, 2025, and the CEO of Heritage Bank will also take on the role of CEO of the holding company at that time [4][5] Business Line Data and Key Metrics Changes - Specific financial data and metrics for the fourth quarter earnings were not detailed in the provided content [6] Market Data and Key Metrics Changes - No specific market data or metrics were provided in the content [6] Company Strategy and Development Direction and Industry Competition - The company is focused on ensuring a smooth leadership transition, which is critical for maintaining stability and confidence among employees, customers, and investors [4] Management's Comments on Operating Environment and Future Outlook - Management has not provided specific comments on the operating environment or future outlook in the available content [6] Other Important Information - The Chief Financial Officer was unable to attend the call due to health reasons, and the Chief Accounting Officer participated in their place [3] Q&A Session All Questions and Answers - No questions or answers from the Q&A session were included in the provided content [6]

Financial Highlights - Heritage Financial Corporation's assets reached $7.1 billion[13] - Deposits totaled $5.7 billion[13] - Loans receivable amounted to $4.8 billion[13] - Net income was $11.9 million[13] - The net interest margin stood at 3.39%[13] Profitability Improvement Measures - The company sold investments with a book value of $458.2 million[19] - The weighted average book yield of these sales was 2.29%[19] - Investments purchased amounted to $173.8 million with a weighted average book yield of 6.07%[19] - The estimated annualized pre-tax financial impact is an improvement of $17.3 million[19] Loan Portfolio - Commercial Real Estate (CRE) loans make up a significant portion of the loan portfolio, totaling $2.912 billion[49] - Real estate, rental, and leasing account for $2.050 billion of commercial business loans[47] Deposits - Noninterest demand deposits represent 29.1% of total deposits[16] - The cost of total deposits is 1.39%[16]

Core Insights - Heritage Financial (HFWA) reported a revenue of $60.96 million for the quarter ended December 2024, reflecting a year-over-year increase of 20.2% [1] - The earnings per share (EPS) for the quarter was $0.51, up from $0.47 in the same quarter last year, surpassing the consensus estimate of $0.46 by 10.87% [1] Financial Performance Metrics - The efficiency ratio was reported at 69.3%, higher than the average estimate of 66.7% from three analysts [4] - The net interest margin stood at 3.4%, slightly above the average estimate of 3.3% from three analysts [4] - Total nonperforming assets were $5.27 million, significantly lower than the average estimate of $8.88 million from two analysts [4] - Total nonaccrual loans were reported at $4.08 million, compared to the average estimate of $6.13 million from two analysts [4] - The average balance of total interest-earning assets was $6.31 billion, close to the estimated $6.33 billion from two analysts [4] - Net charge-offs on loans to average loans receivable were 0%, better than the estimated 0.1% from two analysts [4] - Total noninterest income was $3.29 million, falling short of the average estimate of $7.40 million from three analysts [4] - Net interest income was reported at $53.76 million, exceeding the average estimate of $53.17 million from three analysts [4] Stock Performance - Heritage Financial's shares returned +0.6% over the past month, underperforming the Zacks S&P 500 composite's +2.7% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Company Performance - Heritage Financial (HFWA) reported quarterly earnings of $0.51 per share, exceeding the Zacks Consensus Estimate of $0.46 per share, and up from $0.47 per share a year ago, representing an earnings surprise of 10.87% [1] - The company posted revenues of $60.96 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.75%, and an increase from year-ago revenues of $50.72 million [2] - Over the last four quarters, Heritage Financial has surpassed consensus EPS estimates two times and topped consensus revenue estimates once [2] Future Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the coming quarter is $0.42 on revenues of $60.13 million, and for the current fiscal year, it is $1.92 on revenues of $248.67 million [7] - The estimate revisions trend for Heritage Financial is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Financial - Savings and Loan industry, to which Heritage Financial belongs, is currently in the top 11% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]

Fourth Quarter 2024 Highlights Net income was $11.9 million, or $0.34 per diluted share, compared to $11.4 million, or $0.33 per diluted share, for the third quarter of 2024. Results included a pre-tax loss on sale of securities of $3.9 million and $2.9 million in total after-tax costs related to BOLI restructuring, resulting in an aggregate negative impact of $0.17 per diluted share. Loans receivable increased $122.6 million, or 2.6% (10.5% annualized). Net interest margin increased to 3.39%, from 3.33% f ...

Wall Street analysts forecast that Heritage Financial (HFWA) will report quarterly earnings of $0.46 per share in its upcoming release, pointing to a year-over-year decline of 2.1%. It is anticipated that revenues will amount to $59.73 million, exhibiting an increase of 17.8% compared to the year-ago quarter.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during th ...

For the quarter ended September 2024, Heritage Financial (HFWA) reported revenue of $54.8 million, down 11.5% over the same period last year. EPS came in at $0.33, compared to $0.51 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $58.17 million, representing a surprise of -5.80%. The company delivered an EPS surprise of -21.43%, with the consensus EPS estimate being $0.42.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings ...

Heritage Financial (HFWA) came out with quarterly earnings of $0.33 per share, missing the Zacks Consensus Estimate of $0.42 per share. This compares to earnings of $0.51 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -21.43%. A quarter ago, it was expected that this bank holding company would post earnings of $0.41 per share when it actually produced earnings of $0.45, delivering a surprise of 9.76%.Over the last four quarte ...