OLYMPIA - Heritage Bank parent Heritage Financial Corp. earned $764,000 in the first quarter, a decline in earnings from the fourth quarter of 2010 that company officials said was due to the financial boost tied to last year's acquisition of Pierce Commercial Bank.
The company earned a $9.1 million profit in the fourth quarter.
Still, Heritage Financial earned net income of $764,000 in the first quarter, or 5 cents a diluted share, compared to net income of $696,000, or 3 cents a diluted share, from the first quarter a year ago.
“While our first-quarter 2011 performance was somewhat muted by ongoing expenses related to our acquisitions, we are pleased with our overall core performance,” President and Chief Executive Brian Vance said.
Heritage also announced Tuesday that it will pay a 3 cent dividend to shareholders, something the company last paid in the first quarter of 2009 before deciding to cancel it as a way to control expenses following the economic meltdown in fall 2008. The company last paid a dividend, 10 cents, in February 2009.
The 3-cent dividend will be paid May 27 to all shareholders of record as of May 13.
Vance had said the company would resume paying a dividend once it saw “sustainable and measurable” profitability. “I’m comfortable that we have achieved the sustainability side of that,” he said.
It was a busy first quarter for Heritage.
The company opened a branch in Gig Harbor, announced a deal to acquire the Kent-based branch of Charter Private Bank and still has plans to open one to two branches a year, Vance told analysts Tuesday morning during a conference call.
He said the company will consider new branches in markets where it does not see acquisition opportunities.
At the same time, Heritage still is interested in acquiring banks with the assistance of the Federal Deposit Insurance Corp., such as it did with Pierce Commercial Bank and Cowlitz Bank last year. Or, he said, it might take over banks in the $300-million asset size that might be struggling but aren’t being closed by regulators.
Vance said he still expects some bank consolidation in the Pacific Northwest over the next 18 months.
Meanwhile, potential problem loans in the year-over-year March period largely were unchanged at about $50 million. Although the economy has improved in some ways, it also continues to exhibit “stubborn pockets of recession,” Vance said.
Also in the year-over-year March period:
• Total deposits rose to $1.09 billion from $835.8 million.
• Total loans rose to $988.7 million from $757.9 million.
• Total assets rose to $1.33 billion from $1.01 billion.
Heritage stock, which trades under the ticker symbol HFWA, fell 38 cents Tuesday to close at $13.90 a share. In the past 52 weeks, the stock has traded between $16.46 and $12.32 a share.
Rolf Boone: 360-754-5403