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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PROVISION FOR CREDIT LOSSES OVERVIEW
The aggregate of the provision for (reversal of) credit losses on loans and on unfunded commitments is presented in the Consolidated Statements of Income as the "Provision for (reversal of) credit losses." The ACL on unfunded commitments is included in the Consolidated Statements of Financial Condition within "Accrued expenses and other liabilities."
The following table presents the provision for (reversal of) credit losses for the periods indicated:
| Year Ended December 31, · Change | ||||
|---|---|---|---|---|
| 2024 | 2023 | $ | % | |
| (Dollars in thousands) | ||||
| Provision for credit losses on loans | $6,983 | $4,736 | $2,247 | 47.4% |
| Reversal of provision for credit losses on unfunded commitments | (701) | (456) | (245) | 53.7 |
| Provision for credit losses | $6,282 | $4,280 | $2,002 | 46.8% |
The provision for credit losses on loans recognized during the year ended December 31, 2024 was due primarily to growth in balances of collectively evaluated loans. The ACL on loans to loans receivable decreased to 1.09% at December 31, 2024, compared to 1.11% at December 31, 2023 due to changes in the loan mix as loan growth occurred in segments requiring a lower calculated reserve as a percentage of loans. The reversal of provision for credit losses on unfunded commitments recognized during the year ended December 31, 2024 was due primarily to an increase in utilization rates on lines of credit and a decrease in the unfunded exposure on construction loans.
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