Heritage Bank today was a model of consistency in its 2017 year-end earnings report, posting a net income of $38.8 million for the year after recording $38.9 million in 2016.
The bank also shared its fourth quarter results, reporting a net income of $7.0 million. That’s down both from the $9.9 million for the quarter ended Dec. 31, 2016, and $10.6 million for the linked-quarter ended September 30, 2017.
“We are pleased with our overall performance for 2017,” said president and CEO Brian L. Vance. “We achieved some important milestones this past year. During 2017, we surpassed the $4.0 billion mark in total assets; we set all-time highs in our stock price; Heritage Bank celebrated its 90th anniversary and the Company celebrated 20 years of being listed on Nasdaq by ringing the opening bell on January 9, 2018; we announced the hiring of a new team of bankers in Portland, Ore.; and we entered into a merger agreement with Puget Sound Bancorp, Inc. (our sixth th acquisition since 2010) which we closed on Jan. 16, 2018.
“We are also pleased with our financial performance during the year where we posted annual loan growth of 7.9 percent; we continued improvement in our overhead ratio that culminated with an overhead ratio of 2.66 percent during the 4th quarter of 2017; and, even with an unfavorable impact of $0.19 per share related to the estimated revaluation of net deferred tax assets in 2017, we recognized diluted earnings per share of $1.29 in 2017 compared to $1.30 in 2016.”
The current quarter results were impacted by the Tax Cuts and Jobs Act enacted in late December, which required a revaluation of Heritage’s deferred tax assets and liabilities to account for the future impact of the decrease in corporate tax rate to 21 percent from 35 percent and other provisions of the legislation. As a result of the estimated revaluation of the net deferred tax asset, income tax expense increased $5.6 million.