Photos
For the quarter, Heritage Financial Corp. earned net income of $1.84 million or 12 cents a share, compared to net income of $1.71 million or 15 cents a share in the third quarter of 2010.
"Overall, it was a good, solid quarter, and I'm comfortable with the progress we're making," Chief Executive Brian Vance said Friday.
Earnings per share were lower this quarter because of the increased number of shares outstanding, he said. The number of shares outstanding increased to 15.5 million shares in the third quarter from 11.1 million shares in the third quarter last year because of a recent public stock offering, Vance said.
Loan growth increased $20.4 million in the quarter, which was primarily lifted by commercial loan activity, including loans to Boeing suppliers, those purchasing warehouses, some multifamily loans and medical facility loans.
Although commercial loan activity was strong, Vance still has concerns about the economy and single-family home values, which continue to fall. Until single-family residential values improve, there "won't be a lot of measurable improvements in the economy," he said.
Expenses tied to two recent bank acquisitions -- Cowlitz Bank in Longview and Pierce Commercial Bank in Tacoma -- also were down a bit, he said, as were provision for loan losses on originated loans -- the amount of money set aside to cover potentially bad loans. That fell to $395,000 from $2.1 million in the third quarter of 2010.
The provision for loans losses on purchased loans -- those acquired as part of the bank acquisitions -- rose to $2.8 million from $1.5 million at the end of the second quarter. "That's pretty much to expectation," Vance said about the increase.
Heritage Financial Corp. also announced Friday that it will pay a five-cent dividend on Nov. 23 to shareholders of record as of Nov. 10. This is the third consecutive dividend since the company reinstated it at the beginning of the year. It started at three cents, then was increased to five cents. Heritage had halted the cash dividend payment to control expenses at one point.
Heritage's stock, which trades under the ticker symbol HFWA, fell 17 cents Friday to close at $13.29 a share. In the past 52 weeks, the stock has traded from $12.63 a share to $13.47 a share.
