HERITAGE FINANCIAL CORP WA
For the period ended Mar 31, 2024. Filed May 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 7, 2024
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INVESTMENT ACTIVITIES OVERVIEW
Our investment policy is established by the Company's Board of Directors and monitored by the Risk Committee of the Board of Directors. It is designed primarily to provide and maintain liquidity, generate a favorable return on investments without incurring undue interest rate and credit risk, and complements the Company's lending activities. The policy permits investment in various types of liquid assets permissible under applicable regulations. Investments in non-investment grade bonds and stripped mortgage-backed securities are not permitted under the policy.
The following table provides information regarding our investment securities at the dates indicated:
| March 31, 2024 · December 31, 2023 · Change | ||||||
|---|---|---|---|---|---|---|
| Balance | % ofTotal | Balance | % ofTotal | $ | % | |
| (Dollars in thousands) | ||||||
| Investment securities available for sale, at fair value: | ||||||
| U.S. government and agency securities | $13,417 | 0.8% | $13,750 | 0.7% | $(333) | (2.4)% |
| Municipal securities | 71,955 | 4.2 | 79,525 | 4.2 | (7,570) | (9.5) |
| Residential CMO and MBS(1) | 476,742 | 27.5 | 512,049 | 27.3 | (35,307) | (6.9) |
| Commercial CMO and MBS(1) | 409,468 | 23.7 | 504,258 | 27.0 | (94,790) | (18.8) |
| Corporate obligations | 11,191 | 0.6 | 7,613 | 0.4 | 3,578 | 47.0 |
| Other asset-backed securities | 13,737 | 0.8 | 17,158 | 0.9 | (3,421) | (19.9) |
| Total | $996,510 | 57.6% | $1,134,353 | 60.5% | $(137,843) | (12.2)% |
| Investment securities held to maturity, at amortized cost: | ||||||
| U.S. government and agency securities | $151,110 | 8.7% | $151,075 | 8.1% | $35 | 0.02% |
| Residential CMO and MBS(1) | 262,359 | 15.2 | 267,204 | 14.3 | (4,845) | (1.8) |
| Commercial CMO and MBS(1) | 320,537 | 18.5 | 321,163 | 17.1 | (626) | (0.2) |
| Total | $734,006 | 42.4% | $739,442 | 39.5% | $(5,436) | (0.7)% |
| Total investment securities | $1,730,516 | 100.0% | $1,873,795 | 100.0% | $(143,279) | (7.6)% |
(1)U.S. government agency and government-sponsored enterprise CMO and MBS obligations.
Total investment securities decreased $143.3 million, or 7.6%, to $1.73 billion at March 31, 2024 from $1.87 billion at December 31, 2023. As previously discussed, the Company sold $144.0 million in investment securities at a loss of $10.0 million during the three months ended March 31, 2024. These funds were redeployed in $33.1 million of investment purchases, as well as in loans and interest earning deposits.
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