Prnewswire·2025-04-24 12:00Core Insights - Heritage Financial Corporation reported a net income of $13.9 million for Q1 2025, an increase from $11.9 million in Q4 2024 and $5.7 million in Q1 2024, with diluted earnings per share rising to $0.40 from $0.34 and $0.16 respectively [2][10] - The company incurred a pre-tax loss of $3.9 million on the sale of investment securities, impacting diluted earnings per share by $0.09 [3][10] - The CEO expressed optimism about future profitability despite current earnings impacts due to strategic balance sheet repositioning and investment in new production teams [4] Financial Performance - Net interest margin increased to 3.44% from 3.36% in Q4 2024 and 3.29% in Q1 2024 [10][30] - Total assets reached $7.13 billion, with loans receivable decreasing to $4.76 billion, a decline of 0.8% from Q4 2024 [5][13] - Total deposits increased by $160.7 million, or 2.8%, to $5.85 billion, with non-maturity deposits growing by 3.2% [14] Balance Sheet and Liquidity - Cash and cash equivalents rose by $131.6 million to $248.7 million, primarily due to deposit growth [7] - Total investment securities decreased by $53.8 million, or 3.7%, to $1.41 billion, influenced by the sale of securities and maturities [8] - Total liquidity sources available were $2.54 billion, representing a coverage ratio of 43.5% of total deposits [23][24] Credit Quality - The allowance for credit losses on loans was stable at 1.09%, with a reversal of provision for credit losses recorded during Q1 2025 [19] - The percentage of classified loans remained stable at 1.4% [22] - Nonaccrual loans increased to $4.44 million, representing 0.09% of loans receivable [22] Noninterest Income and Expense - Noninterest income increased to $3.9 million, up from $3.3 million in Q4 2024, primarily due to higher bank-owned life insurance income [35] - Noninterest expense rose by $1.8 million, or 4.7%, driven by increased compensation and employee benefits [38] Dividends - The Board of Directors declared a quarterly cash dividend of $0.24 per share, payable on May 21, 2025 [42]