HERITAGE FINANCIAL CORP /WA/
For the period ended Sep 30, 2025. Filed Nov 7, 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.
Sep 30, 2025 · Filed Nov 7, 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 Nine Months Ended September 30, | |||
|---|---|---|---|
| 2025 | 2024 | Change | |
| (Dollars in thousands) | |||
| ACL on loans at the end of period | $53,974 | $51,391 | $2,583 |
| Credit quality ratios: | |||
| ACL on loans to loans receivable | 1.13% | 1.10% | 0.03% |
| ACL on loans to nonaccrual loans | 306.46 | 1,194.86 | (888.40) |
| Net charge-offs (recoveries) | $911 | $2,487 | $(1,576) |
| Average balance of loans receivable during the period | 4,774,926 | 4,475,642 | 299,284 |
| Net charge-offs (recoveries) on loans to average loans receivable annualized | 0.03% | 0.07% | (0.04)% |
The ACL on loans as a percentage of loans receivable was 1.13% at September 30, 2025 compared to 1.09% at December 31, 2024. The ACL on loans increased $1.5 million, or 2.9%, to $54.0 million at September 30, 2025, compared to $52.5 million at December 31, 2024.
The ACL on loans as a percentage of loans receivable increased 3 basis points to 1.13% at September 30, 2025 from 1.10% at September 30, 2024 due primarily to an increase in the weighted average life of residential real estate and real estate construction and land development loans which increased the calculated reserves for these segments.
The following table presents the ACL on loans by loan portfolio segment at the dates indicated:
| September 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 | $38,346 | 1.01% | 79.2% | $38,293 | 1.02% | 78.3% |
| Residential real estate | 4,083 | 1.09 | 7.9 | 3,464 | 0.86 | 8.4 |
| Real estate construction and land development | 9,656 | 2.19 | 9.3 | 8,656 | 1.81 | 9.9 |
| Consumer | 1,889 | 1.09 | 3.6 | 2,055 | 1.25 | 3.4 |
| Total ACL on loans | $53,974 | 1.13% | 100.0% | $52,468 | 1.09% | 100.0% |
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