Heritage Financial Corp (HFWA) Announces Q3 2023 Earnings: Net Income Rises to $18.2 Million
Net income for Q3 2023 was $18.2 million, a rise from $16.8 million in Q2 2023.
Return on average equity increased to 8.80% for Q3 2023, up from 8.19% in Q2 2023.
Loans receivable increased by $15.5 million in Q3 2023.
Nonaccrual loans declined to 0.07% of total loans receivable at the end of Q3 2023.
Heritage Financial Corp (NASDAQ:HFWA) released its earnings report for the third quarter of 2023 on October 19, 2023. The company reported a net income of $18.2 million, or $0.51 per diluted share, compared to $16.8 million, or $0.48 per diluted share, for the second quarter of 2023. The return on average equity increased to 8.80% for the third quarter of 2023 compared to 8.19% for the second quarter of 2023.
Financial Performance
Heritage Financial Corp (NASDAQ:HFWA) maintained a strong capital position with a leverage ratio of 9.9% and a total capital ratio of 14.1% at the end of September 2023. Loans receivable increased by $15.5 million in the third quarter of 2023, and nonaccrual loans declined to 0.07% of total loans receivable. The net interest margin was 3.47% for the third quarter of 2023 compared to 3.56% for the second quarter of 2023.
Income Statement Highlights
The company's net income increased by $1.4 million from the second quarter of 2023 to the third quarter of 2023. This increase was primarily driven by a rise in return on average equity and a decrease in nonaccrual loans. The company also declared a regular cash dividend of $0.22 per share on October 18, 2023.
Balance Sheet and Cash Flow Statement
Heritage Financial Corp (NASDAQ:HFWA) reported a strong balance sheet with total assets of $7.15 billion as of September 30, 2023. The company's loans receivable, net, increased to $4.22 billion, and total deposits increased by $39.6 million in the third quarter of 2023. The cost of total deposits was 0.83% for the third quarter of 2023 compared to 0.61% for the second quarter of 2023.
Company's Commentary
Jeffrey J. Deuel, President and Chief Executive Officer of Heritage, commented,
We are pleased with our earnings for the third quarter, especially with the ongoing challenges in the current rate environment. We are maintaining a strong balance sheet with ample liquidity. The solid foundation of our core deposit franchise and credit culture continues to serve us well. We believe our steadfast focus on prudent risk management and expense management, coupled with strategic and measured growth, will provide sustainable long-term returns for our shareholders."
Conclusion
In conclusion, Heritage Financial Corp (NASDAQ:HFWA) reported a strong third quarter in 2023 with an increase in net income and a strong capital position. The company's focus on prudent risk management and expense management, along with strategic growth, is expected to provide sustainable long-term returns for its shareholders.
This article first appeared on GuruFocus.
