Heritage Financial (US:HFWA)2025-04-24 18:06Financial Performance - Net income for Q1 2025 was $13.9 million, or $0.40 per diluted share, up from $11.9 million, or $0.34 per diluted share in Q4 2024[3][6] - Net income for the quarter ended March 31, 2025, was $13,911 thousand, up 16.5% from $11,928 thousand in the previous quarter[44] - Basic earnings per share increased to $0.41 for the quarter ended March 31, 2025, compared to $0.35 in the previous quarter, representing a growth of 17.14%[44] - Net income increased to $13,911,000, compared to $11,928,000 in the previous quarter, reflecting a growth of 16.6%[48] - Noninterest income increased by $613,000 to $3.9 million in Q1 2025 compared to $3.3 million in Q4 2024, primarily due to an increase in bank owned life insurance income[30] - Noninterest income increased by $6.8 million compared to Q1 2024, mainly due to a decrease in losses from the sale of investment securities[31] Asset and Deposit Growth - Total deposits rose by $160.7 million, or 2.8%, to $5.85 billion, with non-maturity deposits increasing by $152.7 million, or 3.2%[6][12] - Total deposits increased by $160.7 million, or 2.8%, to $5,845,335 thousand as of March 31, 2025, compared to $5,684,613 thousand on December 31, 2024[42] - Total assets increased to $7,129,862 thousand as of March 31, 2025, compared to $7,106,278 thousand on December 31, 2024, reflecting a growth of 0.33%[42] - Total stockholders' equity rose by $18.0 million, or 2.1%, to $881.5 million at March 31, 2025, driven by $13.9 million of net income for the quarter[15] - Total stockholders' equity (GAAP) increased to $881,515 thousand as of March 31, 2025, up from $863,527 thousand in December 31, 2024, representing a growth of 1.1%[54] Loan and Investment Activity - Loans receivable decreased by $37.3 million, or 0.8%, to $4.76 billion, with new loans funded declining to $95.8 million from $181.0 million in Q4 2024[11][12] - Total investment securities decreased by $53.8 million, or 3.7%, to $1.41 billion, following the strategic sale of $60.9 million in securities[9][11] - Total loans receivable decreased to $4,764,848,000 from $4,802,123,000 in the previous quarter[50] Efficiency and Cost Management - The efficiency ratio was reported at 71.9%, compared to 69.3% in Q4 2024[7] - Noninterest expense rose by $1.8 million, or 4.7%, in Q1 2025 from Q4 2024, mainly due to higher compensation and employee benefits[33] - Noninterest expense increased to $41,383 thousand for the quarter ended March 31, 2025, compared to $39,540 thousand in the previous quarter, a rise of 4.66%[44] - The efficiency ratio for the quarter was 71.9%, compared to 69.3% in the previous quarter, indicating a decline in operational efficiency[48] - Adjusted efficiency ratio (non-GAAP) improved to 67.3% from 64.4% in the previous quarter, indicating enhanced operational efficiency[62] Capital and Liquidity - The common equity tier 1 capital ratio improved to 12.2% at March 31, 2025, up from 12.0% at December 31, 2024[16] - Total liquidity sources available were $2.54 billion at March 31, 2025, representing a coverage ratio of 43.5% of total deposits[21] - Tangible common equity (non-GAAP) rose to $637,726 thousand, compared to $619,435 thousand in the previous quarter, reflecting a 1.9% increase[54] - Return on average tangible common equity (annualized, non-GAAP) improved to 9.22% for the quarter ended March 31, 2025, up from 7.81% in the previous quarter[58] Dividend Information - A regular cash dividend of $0.24 per share was declared on April 23, 2025[6] - The Company declared a quarterly cash dividend of $0.24 per share, payable on May 21, 2025[37] - Dividends declared per share increased to $0.24 for the quarter ended March 31, 2025, compared to $0.23 in the previous quarter, reflecting a growth of 4.35%[44] Tax and Provision for Credit Losses - Income tax expense decreased by $2.2 million to $2.2 million in Q1 2025 compared to $4.4 million in Q4 2024, attributed to additional tax expense related to BOLI restructuring in the previous quarter[35] - The effective income tax rate for Q1 2025 was 13.9%, down from 27.0% in Q4 2024[36] - The allowance for credit losses on loans was 1.09% of loans receivable as of March 31, 2025, with a reversal of provision for credit losses of $9,000 during the first quarter[17] - The provision for credit losses was $51 thousand for the quarter ended March 31, 2025, significantly lower than $1,183 thousand in the previous quarter[44]