NASDAQ$HFWA

Heritage Financial Corporation · Q1 2024 earnings

Q1 2024 earnings · · Investor relations

Briefing

Announced first quarter 2024 results, which included net income of $5.7 million and earnings per diluted share of $0.16.

Heritage Financial Corporation reported a net income of $5.7 million for the first quarter of 2024, a decrease compared to both the previous quarter and the same quarter last year. The results were impacted by a loss on the sale of securities and costs related to expense management measures, though the company saw strong loan growth and balance sheet repositioning.

  • Net income was $5.7 million, or $0.16 per diluted share, for the first quarter of 2024.
  • Loans receivable increased $92.5 million, or 2.1%, during the first quarter of 2024.
  • Net interest margin was 3.32% for the first quarter of 2024.
  • The Board of Directors authorized the repurchase of up to 5% of the Company's outstanding common shares or approximately 1.7 million shares.

Headline financials

Total Revenue

$48.6M

Previous: $68.1M-28.6%
EPS

$0.16

Previous: $0.58-72.4%
ROAA

0.3%

No prior period
ROAE

2.7%

No prior period
ROATCE

4.1%

No prior period
Net Interest Margin

3.3%

Previous: 3.9%-15.9%
Cost of Total Deposits

1.2%

Previous: 0.3%+283.9%
Efficiency Ratio

83.0%

Previous: 61.1%+35.8%
Adjusted Efficiency Ratio

68.9%

No prior period
Noninterest Exp./Avg Assets

2.3%

No prior period
Loans to Deposits

80.0%

No prior period
Book Value/Share

$24.43

No prior period
Tangible BV/Share

$17.36

No prior period
Equity to Total Assets

12.0%

No prior period
TCE to Tangible Assets

8.8%

No prior period
CET1 Ratio

12.6%

No prior period
Tier 1 Capital Ratio

13.0%

No prior period
Total Capital Ratio

13.9%

No prior period
ACL to Loans

1.1%

No prior period
Net Charge-Offs to Avg Loans

0.0%

No prior period
Nonaccrual Loans to Loans

0.1%

No prior period
NPLs to Loans

0.2%

No prior period
NPAs to Total Assets

0.1%

No prior period
Net Interest Spread

2.7%

No prior period
Capital Expenditures

-$893K

Previous: -$4.65M+80.8%
Free Cash Flow

$4.86M

Previous: $15.8M-69.3%
Net Income

$5.75M

Previous: $20.5M-71.9%
Operating Income

$13.4M

Previous: $47.6M-71.7%
Gross Profit

$45.9M

Previous: $66.3M-30.7%
Cash & Equivalents

$190M

Previous: $301M-37.1%
Total Assets

$7.09B

Previous: $7.24B-2.0%

Revenue & EPS history

Heritage Financial · Revenue · Quarterly

$48.6M

Q1 2024-28.6%vs Q1 2023
Beat estimate in 5 of 14 quarters(36%)
ActualEstimate

Revenue by segment

Heritage Financial · $3.43B total across 4 segments · Q1 2020

  • Non-Owner Occupied CRE
    $1.31B
  • Commercial & Industrial
    $890M
  • Owner-Occupied CRE
    $806M
  • Consumer
    $421M

Forward guidance

Company anticipates an estimated annualized improvement of $4.6 million in interest income as a result of recent balance sheet repositioning.

Tailwinds

  • Strong loan growth
  • Repositioning of our balance sheet
  • Expense management measures, which will strengthen our earnings in future periods.
  • Actions will enhance our sustainable long-term returns for our shareholders.
  • Company and Bank continue to maintain capital levels in excess of the applicable regulatory requirements for them both to be categorized as “well-capitalized.”

Headwinds

  • Loss on sale of securities negatively impacted current earnings
  • Approximately $1.1 million of severance costs were incurred in the first quarter of 2024 as part of expense management initiatives, which affected diluted earnings per share by $0.02 for the quarter.
  • Total deposits decreased $67.5 million, or 1.2%, to $5.53 billion at March 31, 2024 from $5.60 billion at December 31, 2023.
  • Net interest income decreased $2.3 million, or 4.3%, during the first quarter of 2024 compared to the fourth quarter of 2023 due primarily to an increase of $2.4 million in interest expense.
  • Net interest margin decreased nine basis points to 3.32% during the first quarter of 2024 from 3.41% during the fourth quarter of 2023.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2024

Historical avgQ1 2024

-0.6%

Avg return

Earnings day

-1.2%

Avg return

5 days after

+1.1%

Avg return

30 days after

42%

28 / 66 earnings

Positive

+7.3%

Q4 2025

Best reaction

-10.7%

Q1 2020

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+1.0%+0.9%-0.6%
Q4 2025+7.3%-1.0%+7.7%
Q3 2025+0.5%+1.7%+1.3%
Q2 2025-0.8%-2.8%+2.1%
Q1 2025+0.0%-0.2%+0.5%
Q4 2024+1.0%+2.6%-1.8%
Q3 2024+2.1%+5.1%+21.2%
Q2 2024+6.0%+6.2%+5.5%
Q1 2024-4.0%-4.7%-1.8%
Q4 2023-1.8%-3.2%-11.4%
Q3 2023+3.3%-1.9%+9.7%
Q2 2023-7.4%-3.4%-5.4%
Q1 2023-1.2%-12.0%-19.7%
Q4 2022+0.5%+1.3%+0.4%
Q3 2022-0.2%+1.5%+5.0%
Q2 2022-4.5%-2.8%+1.8%
Q1 2022+1.3%-0.1%-4.1%
Q4 2021-3.9%-2.6%+4.4%
Q3 2021+1.6%+0.4%-0.2%
Q2 2021-1.6%+0.8%+7.6%
Q1 2021+3.7%+3.7%+6.7%
Q4 2020-1.6%+0.0%+8.0%
Q3 2020+4.1%+1.0%+16.0%
Q2 2020-1.1%-3.1%-4.9%
Q1 2020-10.7%-14.5%-12.7%
Q4 2019-2.0%-4.1%-2.3%
Q3 2019-1.5%+0.9%-1.1%
Q2 2019-4.7%-5.3%-13.1%
Q1 2019-3.0%-3.4%-5.5%
Q4 2018+0.3%+0.5%+5.2%
Q3 2018+5.0%+8.9%+13.7%
Q2 2018-1.5%-5.7%-2.0%
Q1 2018-5.2%-5.2%+2.2%
Q4 2017+2.6%-0.5%+1.6%
Q3 2017+0.3%-1.6%-1.0%
Q2 2017+0.9%+1.9%-0.7%
Q1 2017+3.8%+0.4%-8.0%
Q4 2016-3.0%-4.7%-5.4%
Q3 2016+1.4%+2.8%+27.3%
Q2 2016-3.7%-5.2%-0.5%
Q1 2016+0.5%
Q4 2015+5.0%
Q3 2015-1.3%
Q2 2015-5.9%
Q1 2015-0.2%
Q4 2014-0.1%
Q3 2014-0.8%
Q2 2014+0.8%
Q1 2014-0.3%
Q4 2013-2.5%
Q3 2013+2.7%
Q2 2013-2.6%
Q1 2013-2.1%
Q4 2011+0.8%
Q4 2012-3.9%
Q3 2012-1.3%
Q2 2012+5.0%
Q1 2011+0.7%
Q1 2012+4.3%
Q4 2009-3.7%
Q3 2011-1.6%
Q3 2010-1.6%
Q2 2011-3.5%
Q2 2010-3.5%
Q4 2010-3.5%
Q1 2010-2.2%

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