Heritage Financial (HFWA) - 2024 Q4 - Annual Results

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]