HERITAGE FINANCIAL CORP WA
For the period ended Dec 31, 2024. Filed Feb 27, 2025.
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FY2024 · Filed Feb 27, 2025
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NONINTEREST INCOME OVERVIEW
The following table presents the change in the key components of noninterest income for the periods indicated:
| Year Ended December 31, · Change | ||||
|---|---|---|---|---|
| 2024 | 2023 | $ | % | |
| (Dollars in thousands) | ||||
| Service charges and other fees | $11,285 | $10,966 | $319 | 2.9% |
| Card revenue | 7,752 | 8,340 | (588) | (7.1) |
| Loss on sale of investment securities, net | (22,742) | (12,231) | (10,511) | 85.9 |
| Gain on sale of loans, net | 26 | 343 | (317) | (92.4) |
| Interest rate swap fees | 409 | 230 | 179 | 77.8 |
| Bank owned life insurance income | 2,967 | 2,934 | 33 | 1.1 |
| Gain on sale of other assets, net | 1,552 | 2 | 1,550 | 77,500.0 |
| Other income | 6,224 | 8,079 | (1,855) | (23.0) |
| Total noninterest income | $7,473 | $18,663 | $(11,190) | (60.0)% |
Noninterest income decreased $11.2 million, or 60.0%, during the year ended December 31, 2024 compared to the same period in 2023. This decline was primarily driven by a pre-tax loss of $22.7 million incurred on the sale of investment securities available for sale during the year ended December 31, 2024, compared to a pre-tax loss of $12.2 million incurred during the same period in 2023. The loss on the sale of investment securities in 2024 was a consequence of strategically repositioning the Company's investment portfolio, involving the sale of $296.4 million in investment securities, with the aim of enhancing future earnings. Card revenue declined due to lower deposit transaction volumes. The decrease in other income during the year ended December 31, 2024 was primarily due to a one-time sale of Visa Inc. Class B common stock of $1.6 million and a $610,000 gain on sale of the Ellensburg branch recognized during the year ended December 31, 2023. Gain on sale of loans, net declined as the Company is no longer originating mortgage loans for sale.
These decreases were partially offset by an increase in the gain on sale of other assets, net due to a $1.5 million gain on the sale of an administrative building recognized during the year ended December 31, 2024 and an increase in service charges due primarily to an increase in service charge income on commercial deposit accounts.
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