HERITAGE FINANCIAL CORP WA
For the period ended Jun 30, 2024. Filed Aug 9, 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.
Jun 30, 2024 · Filed Aug 9, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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NONINTEREST EXPENSE OVERVIEW
Comparison of three months ended June 30, 2024 to the comparable period in the prior year
The following table presents changes in the key components of noninterest expense for the periods indicated:
| Three Months EndedJune 30, · Change | ||||
|---|---|---|---|---|
| 2024 | 2023 | $ | % | |
| (Dollars in thousands) | ||||
| Compensation and employee benefits | $24,448 | $24,781 | $(333) | (1.3)% |
| Occupancy and equipment | 4,765 | 4,666 | 99 | 2.1 |
| Three Months EndedJune 30, · Change | ||||
|---|---|---|---|---|
| 2024 | 2023 | $ | % | |
| (Dollars in thousands) | ||||
| Data processing | 3,785 | 4,500 | (715) | (15.9) |
| Marketing | 244 | 441 | (197) | (44.7) |
| Professional services | 795 | 751 | 44 | 5.9 |
| State/municipal business and use taxes | 1,160 | 1,054 | 106 | 10.1 |
| Federal deposit insurance premium | 812 | 797 | 15 | 1.9 |
| Amortization of intangible assets | 421 | 623 | (202) | (32.4) |
| Other expense | 2,666 | 3,712 | (1,046) | (28.2) |
| Total noninterest expense | $39,096 | $41,325 | $(2,229) | (5.4)% |
Noninterest expense decreased $2.2 million, or 5.4%, during the three months ended June 30, 2024 compared to the same period in 2023, primarily due to a decrease in data processing and other expense. Data processing decreased primarily due to a decline in ongoing costs resulting from prior technology-related contract renewals and terminations. Other expense decreased due to a decline in customer account loss expense and a reduction in employee related expenses which included additional expenses in the second quarter of 2024 related to newly added teams. Compensation and employee benefits decreased due to a reduction in full-time equivalent employees to 748 at June 30, 2024 from 813 at June 30, 2023, as a result of management's expense management initiatives.
Comparison of the six months ended June 30, 2024 to the comparable period in the prior year
The following table presents changes in the key components of noninterest expense for the periods indicated:
| Six Months EndedJune 30, · Change | ||||
|---|---|---|---|---|
| 2024 | 2023 | $ | % | |
| (Dollars in thousands) | ||||
| Compensation and employee benefits | $49,924 | $50,317 | $(393) | (0.8)% |
| Occupancy and equipment | 9,697 | 9,558 | 139 | 1.5 |
| Data processing | 7,322 | 8,842 | (1,520) | (17.2) |
| Marketing | 455 | 843 | (388) | (46.0) |
| Professional services | 1,362 | 1,379 | (17) | (1.2) |
| State/municipal business and use taxes | 2,460 | 2,062 | 398 | 19.3 |
| Federal deposit insurance premium | 1,607 | 1,647 | (40) | (2.4) |
| Amortization of intangible assets | 842 | 1,246 | (404) | (32.4) |
| Other expense | 5,797 | 7,036 | (1,239) | (17.6) |
| Total noninterest expense | $79,466 | $82,930 | $(3,464) | (4.2)% |
Noninterest expense decreased $3.5 million, or 4.2%, during the six months ended June 30, 2024 compared to the same period in 2023 due primarily to an decrease in data processing and other expense. Data processing decreased primarily due to a decline in ongoing costs resulting from technology-related contract renewals and terminations. Other expense decreased due to a decline in customer deposit loss expense and employee related expenses, which included additional expenses related to calling efforts for the newly added teams, as well as a general increase in operating costs incurred during the six months ended June 30, 2023. Amortization of intangible assets decreased due to the full amortization of the core deposit intangible from one acquisition. Compensation and employee benefits decreased due to a decline in the average number of full-time equivalent employees as a result of management's expense management initiatives during the six months ended June 30, 2024. This was offset partially by an increase in state/municipal business and use tax due primarily to an increase in gross revenue.
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