Heritage Financial Corp Q3 Assets Top $10.7B

TL;DR

HFWA Q3 assets hit $10.7B, net interest income $234.9M YTD. Solid.

AI Summary

Heritage Financial Corp /WA/ reported its Q3 2024 results, with total assets reaching $10.7 billion as of September 30, 2024. Net interest income for the nine months ended September 30, 2024, was $234.9 million. The company's fiscal year ends on December 31st.

Why It Matters

This filing provides insight into the financial health and performance of Heritage Financial Corp, a key indicator for investors and stakeholders in the banking sector.

Risk Assessment

Risk Level: low — The filing is a routine quarterly report with no immediate red flags indicating significant new risks.

Key Numbers

• $10.7B — Total Assets (As of September 30, 2024)
• $234.9M — Net Interest Income (Nine months ended September 30, 2024)

Key Players & Entities

• HERITAGE FINANCIAL CORP /WA/ (company) — Filer
• 20240930 (date) — Reporting Period End Date
• $10.7 billion (dollar_amount) — Total Assets as of September 30, 2024
• $234.9 million (dollar_amount) — Net Interest Income for the nine months ended September 30, 2024
• 1231 (date) — Fiscal Year End

FAQ

Filing Documents

• hfwa-20240930.htm (10-Q) — 3307KB
• ex-311q324.htm (EX-31.1) — 8KB
• ex-312q324.htm (EX-31.2) — 8KB
• ex-321q324.htm (EX-32) — 6KB
• 0001046025-24-000179.txt ( ) — 14691KB
• hfwa-20240930.xsd (EX-101.SCH) — 41KB
• hfwa-20240930_cal.xml (EX-101.CAL) — 94KB
• hfwa-20240930_def.xml (EX-101.DEF) — 340KB
• hfwa-20240930_lab.xml (EX-101.LAB) — 733KB
• hfwa-20240930_pre.xml (EX-101.PRE) — 556KB
• hfwa-20240930_htm.xml (XML) — 3601KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 6

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS 6 CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) AS OF SE PTEMBER 30, 2024 AND DECEMBER 31, 2023 6 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) FOR THE THREE AND NIN E MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 7 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) FOR THE THREE AND NIN E MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 9 CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) FOR THE THREE AND NIN E MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 10 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 12 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 14 NOTE 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, SIGNIFICANT ACCOUNTING POLICIES AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS 14 NOTE 2. INVESTMENT SECURITIES 15 NOTE 3. LOANS RECEIVABLE 18 NOTE 4. ALLOWANCE FOR CREDIT LOSSES ON LOANS 28 NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS 30 NOTE 6. DERIVATIVE FINANCIAL INSTRUMENTS 31 NOTE 7. STOCKHOLDERS' EQUITY 31 NOTE 8. FAIR VALUE MEASUREMENTS 32 NOTE 9. INCOME TAXES 36 NOTE 10. COMMITMENTS AND CONTINGENCIES 37

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 37 OVERVIEW 37 RESULTS OF OPERATIONS 38 NET INCOME OVERVIEW 38 NET INTEREST INCOME AND MARGIN OVERVIEW 39 PROVISION FOR CREDIT LOSSES OVERVIEW 42 NONINTEREST INCOME OVERVIEW 43 NONINTEREST EXPENSE OVERVIEW 44 INCOME TAX EXPENSE OVERVIEW 45 FINANCIAL CONDITION OVERVIEW 46 INVESTMENT ACTIVITIES OVERVIEW 46 LOAN PORTFOLIO OVERVIEW 47 ALLOWANCE FOR CREDIT LOSSES ON LOANS OVERVIEW 49 DEPOSITS OVERVIEW 50 BORROWINGS OVERVIEW 50 STOCKHOLDERS' EQUITY OVERVIEW 51 REGULATORY REQUIREMENTS OVERVIEW 51 LIQUIDITY AND CAPITAL RESOURCES 52 CRITICAL ACCOUNTING ESTIMATES 53

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 53

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES 54 2 Table of Contents

OTHER INFORMATION

PART II. OTHER INFORMATION 54

LEGAL PROCEEDINGS

ITEM 1. LEGAL PROCEEDINGS 54

RISK FACTORS

ITEM 1A. RISK FACTORS 54

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 54

DEFAULTS UPON SENIOR SECURITIES

ITEM 3. DEFAULTS UPON SENIOR SECURITIES 55

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES 55

OTHER INFORMATION

ITEM 5. OTHER INFORMATION 55

EXHIBITS

ITEM 6. EXHIBITS 55

SIGNATURES

SIGNATURES 56 GLOSSARY OF ACRONYMS, ABBREVIATIONS, AND TERMS The acronyms, abbreviations, and terms listed below are used in various sections of this Form 10-Q. As used throughout this report, the terms "Heritage," "we," "our," "us" or the "Company" refer to Heritage Financial Corporation and its consolidated subsidiaries, unless the context otherwise requires. 2023 Annual Form 10-K Company's Annual Report on Form 10-K for the year ended December 31, 2023 ACL Allowance for Credit Losses AOCI Accumulated Other Comprehensive Income (loss), net ASU Accounting Standards Update Bank Heritage Bank BOLI Bank Owned Life Insurance BTFP Bank Term Funding Program CECL Current Expected Credit Loss CMO Collateralized Mortgage Obligations CRA Community Reinvestment Act CRE Commercial Real Estate Exchange Act Securities Exchange Act of 1934, as amended FASB Financial Accounting Standards Board FDIC Federal Deposit Insurance Corporation Federal Reserve Board of Governors of the Federal Reserve System FHLB Federal Home Loan Bank of Des Moines FRB Federal Reserve Bank of San Francisco GAAP U.S. Generally Accepted Accounting Principles LIBOR London Interbank Offering Rate LIHTC Low-Income Housing Tax Credit MBS Mortgage-Backed Securities SEC Securities and Exchange Commission SM Special Mention SS Substandard CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, are based on certain assumptions and often include the words "believes," "expects," "anticipates," "estimates," "forecasts," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook" or similar expressions or future or conditional verbs such as "may," "will," "should," "would" and "could." These statements relate to our financial condition, results of op

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS HERITAGE FINANCIAL CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited) (Dollars in thousands, except share data) September 30, 2024 December 31, 2023 ASSETS Cash on hand and in banks $ 78,068 $ 55,851 Interest earning deposits 97,504 169,122 Cash and cash equivalents 175,572 224,973 Investment securities available for sale, at fair value, net (amortized cost of $ 909,023 and $ 1,227,787 , respectively) 852,779 1,134,353 Investment securities held to maturity, at amortized cost, net (fair value of $ 661,696 and $ 662,450 , respectively) 719,400 739,442 Total investment securities 1,572,179 1,873,795 Loans receivable 4,679,479 4,335,627 Allowance for credit losses on loans ( 51,391 ) ( 47,999 ) Loans receivable, net 4,628,088 4,287,628 Premises and equipment, net 72,500 74,899 Federal Home Loan Bank stock, at cost 16,993 4,186 Bank owned life insurance 127,248 125,655 Accrued interest receivable 20,102 19,518 Prepaid expenses and other assets 296,190 318,571 Other intangible assets, net 3,552 4,793 Goodwill 240,939 240,939 Total assets $ 7,153,363 $ 7,174,957 LIABILITIES AND STOCKHOLDERS' EQUITY Non-interest bearing deposits $ 1,682,219 $ 1,715,847 Interest bearing deposits 4,026,273 3,884,025 Total deposits 5,708,492 5,599,872 Borrowings 382,000 500,000 Junior subordinated debentures 21,985 21,765 Accrued expenses and other liabilities 166,372 200,059 Total liabilities 6,278,849 6,321,696 Commitments and contingencies (Note 11) Stockholders' equity: Preferred stock, no par value, 2,500,000 shares authorized; no shares issued and outstanding, respectively — — Common stock, no par value, 50,000,000 shares authorized; 34,153,539 and 34,906,233 shares issued and outstanding, respectively 534,917 549,748 Retained earnings 383,127 375,989 Accumulated other comprehensive loss, net ( 43,530 ) ( 72,476 ) Total stockholders' equity 874,514 853,261 Total li

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