HERITAGE FINANCIAL CORP /WA/
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
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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, 2025 · Filed Aug 8, 2025
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ALLOWANCE FOR CREDIT LOSSES ON LOANS OVERVIEW
Allowance for Credit Losses on Loans
The following table provides information regarding our ACL on loans for the periods indicated:
| At or For the Six Months Ended June 30, | |||
|---|---|---|---|
| 2025 | 2024 | Change | |
| (Dollars in thousands) | |||
| ACL on loans at the end of period | $52,529 | $51,219 | $1,310 |
| Credit quality ratios: | |||
| ACL on loans to loans receivable | 1.10% | 1.13% | (0.03)% |
| ACL on loans to nonaccrual loans | 532.48 | 1,338.71 | (806.23) |
| Net charge-offs (recoveries) | $793 | $(46) | $839 |
| Average balance of loans receivable during the period | 4,781,167 | 4,409,315 | 371,852 |
| Net charge-offs (recoveries) on loans to average loans receivable annualized | 0.03% | —% | 0.03% |
The ACL on loans as a percentage of loans receivable was 1.10% at June 30, 2025 compared to 1.09% at December 31, 2024. The ACL on loans increased $61,000, or 0.1%, to $52.5 million at June 30, 2025, compared to December 31, 2024.
The ACL on loans as a percentage of loans receivable declined 3 basis points to 1.10% at June 30, 2025 from 1.13% at June 30,
2024 due primarily to a change in the mix of loans from real estate construction and land development loans requiring a larger ACL to commercial business loans.
The following table presents the ACL on loans by loan portfolio segment at the dates indicated:
| June 30, 2025 | December 31, 2024 | |||||
|---|---|---|---|---|---|---|
| ACL on Loans | ACL as a % of Loans in Loan Category | % of Loans in Loan Category toTotal Loans | ACL on Loans | ACL as a % of Loans in Loan Category | % of Loans in Loan Category toTotal Loans | |
| (Dollars in thousands) | ||||||
| Commercial business | $38,353 | 1.01% | 79.4% | $38,293 | 1.02% | 78.3% |
| Residential real estate | 3,942 | 1.03 | 8.0 | 3,464 | 0.86 | 8.4 |
| Real estate construction and land development | 8,316 | 1.92 | 9.0 | 8,656 | 1.81 | 9.9 |
| Consumer | 1,918 | 1.12 | 3.6 | 2,055 | 1.25 | 3.4 |
| Total ACL on loans | $52,529 | 1.10% | 100.0% | $52,468 | 1.09% | 100.0% |
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