Heritage Financial Corporation announced its second-quarter 2025 results, reporting a net income of $12.2 million, down from $13.9 million in the first quarter of 2025 and $14.2 million in the second quarter of 2024. The diluted earnings per share for the second quarter of 2025 were $0.36, compared to $0.40 for the first quarter of 2025 and $0.41 for the second quarter of 2024. The company reported a pre-tax loss of $6.9 million on the sale of investment securities during the quarter, impacting diluted earnings per share by $0.15.
The net interest margin increased to 3.51% from 3.44% in the first quarter of 2025, while the yield on loans increased to 5.50% from 5.45% for the same period. The cost of interest-bearing deposits also saw a slight increase to 1.94% from 1.92% in the first quarter of 2025.
The company declared a regular cash dividend of $0.24 per share on July 23, 2025.
Key financial highlights for the second quarter of 2025 include: Net income: $12.2 million Diluted earnings per share: $0.36 Return on average assets: 0.70% Return on average common equity: 5.57% Net interest margin: 3.51% Total assets: $7.07 billion Loans receivable: $4.77 billion Total deposits: $5.78 billion Book value per share: $26.16 Tangible book value per share: $18.99
The company strategically repositioned its balance sheet, resulting in a decrease in total investment securities by $67.6 million. Loans receivable increased by $10.0 million, and total deposits decreased by $60.9 million. Total stockholders' equity increased to $888.2 million.
The company maintained capital levels well above regulatory requirements, with stockholders' equity to total assets at 12.6% and a tangible common equity to tangible assets ratio of 9.4%.
The allowance for credit losses on loans as a percentage of loans receivable was 1.10% at June 30, 2025, compared to 1.09% at March 31, 2025. Classified loans increased, resulting in the percentage of classified loans to loans receivable increasing to 2.1% at June 30, 2025, compared to 1.4% at March 31, 2025.
Nonaccrual loans increased by $5.4 million during the second quarter of 2025. The company's available liquidity sources at June 30, 2025, represented a coverage ratio of 41.1% of total deposits and 100.4% of estimated uninsured deposits.
The press release does not provide a comparison of the total dividend amount declared in the second quarter of 2025 with the first quarter of 2025 or the second quarter of 2024. Following these announcements, the company's shares moved -5.03%, and are now trading at a price of $23.705. Check out the company's full 8-K submission here.
