NASDAQ$HFWA

Heritage Financial Corporation · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Reported net income of $18.2 million, an increase compared to the previous quarter, driven by growth in loans and deposits, while maintaining strong capital ratios and managing expenses effectively.

Heritage Financial Corporation reported a net income of $18.2 million for Q3 2023, an increase from $16.8 million in Q2 2023. The company saw growth in loans and deposits, maintained strong capital ratios, and focused on prudent risk and expense management. The bank is also partnering on an affordable housing project in Vancouver, Washington.

  • Net income for Q3 2023 was $18.2 million, or $0.51 per diluted share, compared to $16.8 million, or $0.48 per diluted share, for Q2 2023.
  • Return on average equity increased to 8.80% for Q3 2023, compared to 8.19% for Q2 2023.
  • Loans receivable increased by $15.5 million during Q3 2023.
  • Total deposits increased by $39.6 million in Q3 2023.

Headline financials

Total Revenue

$61.9M

Previous: $66.7M-7.3%
EPS (adj)

$0.51

Previous: $0.59-13.6%
Net Interest Margin

3.5%

Previous: 3.6%-2.8%
Cost of Total Deposits

0.8%

Previous: 0.1%+822.2%
Leverage Ratio

9.9%

No prior period
Capital Expenditures

-$9.25M

Previous: -$2.3M-303.1%
Free Cash Flow

$8.97M

Previous: $18.7M-52.0%
Net Income

$18.2M

Previous: $21M-13.2%
Operating Income

$29.4M

Previous: $52M-43.6%
Gross Profit

$57.9M

Previous: $64.8M-10.6%
Cash & Equivalents

$221M

Previous: $407M-45.9%
Total Assets

$7.15B

Previous: $7.2B-0.7%

Revenue & EPS history

Heritage Financial · Revenue · Quarterly

$61.9M

Q3 2023-7.3%vs Q3 2022
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

The company focuses on prudent risk management and expense management, coupled with strategic and measured growth, will provide sustainable long-term returns for their shareholders.

Tailwinds

  • Maintaining a strong balance sheet with ample liquidity.
  • Solid foundation of our core deposit franchise.
  • Steadfast focus on prudent risk management.
  • Strategic and measured growth.
  • Focus on expense management.

Headwinds

  • Ongoing challenges in the current rate environment.
  • Increase of $15.2 million in accumulated other comprehensive loss as a result of declining fair values of investment securities available for sale
  • Noninterest income decreased during the third quarter of 2023 from the second quarter of 2023 and the same period in 2022 due primarily to a $1.9 million loss on sale of investment securities available for sale partially offset by a $610,000 gain on sale of the Ellensburg branch and related deposits which is included in other income.
  • Net interest income decreased $3.7 million, or 6.2%, during the third quarter of 2023 compared to the third quarter of 2022
  • Net interest margin decreased ten basis points from 3.57% during this same period.

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 2023

Historical avgQ3 2023

-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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