NASDAQ$HFWA

Heritage Financial Corporation · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Heritage Financial's financial performance improved with a net income of $16.6 million and earnings per share of $0.46.

Heritage Financial Corporation reported a net income of $16.6 million for the quarter ended September 30, 2020, a significant improvement compared to the net loss of $6.1 million in the previous quarter. Diluted earnings per share were $0.46, and the company declared a regular cash dividend of $0.20 per common share.

  • Net income was $16.6 million, or $0.46 per diluted share.
  • Total deposits increased by $121.3 million, or 2.2%, reaching $5.69 billion.
  • Provision for credit losses decreased to $2.7 million compared to $28.6 million in the linked quarter.
  • The company announced a plan to consolidate nine branches, resulting in a 15% decrease in total branch locations.

Headline financials

Total Revenue

$57.9M

Previous: $58.7M-1.4%
EPS (adj)

$0.46

Previous: $0.48-4.2%
ROAA

1.0%

No prior period
Total Capital Ratio

13.4%

No prior period
Capital Expenditures

$4.4M

Previous: -$10.5M+141.8%
Free Cash Flow

-$70K

Previous: $7.37M-100.9%
Net Income

$16.6M

Previous: $17.9M-7.0%
Operating Income

$19.1M

Previous: $43.6M-56.1%
Cash & Equivalents

$576M

Previous: $237M+143.2%
Total Assets

$6.69B

Previous: $5.52B+21.2%

Revenue & EPS history

Heritage Financial · Revenue · Quarterly

$57.9M

Q3 2020-1.4%vs Q3 2019
Beat estimate in 9 of 16 quarters(56%)
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

Heritage Financial Corporation plans to consolidate nine branches to create a more efficient branch footprint. The Company anticipates annual expense savings of approximately $2.3 million as a result of these consolidations and expects to incur total pre-tax expense related to the consolidations of $1.6 million.

Tailwinds

  • Expense savings of approximately $2.3 million annually from branch consolidations.
  • Improved efficiency through branch footprint optimization.
  • Increased focus on digital banking channels to meet client usage trends.
  • Branch consolidation creates a more efficient branch footprint.
  • Integration of consolidated locations into other branches within the network.

Headwinds

  • Incurrence of $1.6 million in pre-tax expenses related to branch consolidations.
  • Decrease of 15% in the number of total branches.
  • Potential customer disruption during the transition.
  • Possible negative impact on employee morale due to branch closures.
  • Risk of losing customers who prefer physical branch locations.

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 Q3 2020

Historical avgQ3 2020

-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%

Discussion

Share your read of this quarter. Sign-in carries your eToro identity.

Join the conversation

Sign in with eToro to post your read of this quarter and vote on others'.

Sign in with eToro