Loan growth and improving credit quality translated into another profitable quarter for Heritage Financial Corp., the parent company to Heritage Bank.
Heritage Financial earned net income of $3 million in the fourth quarter, or 20 cents a share, compared with net income of $2.2 million, or 14 cents a share in the fourth quarter of 2011, according to the company’s fourth-quarter earnings announcement released Thursday.
For the year, Heritage earned net income of $13.3 million, or 87 cents a share, compared to net income of $6.5 million, or 42 cents a share in 2011.
Small business lending was a key sector for Heritage in the fourth quarter, the data show. Total originated loans grew $36.6 million, or 4.4 percent, in the year-over-year fourth-quarter period.
A loan growth rate of 4.4 percent is a pretty good number in a slow-growth economy, Heritage President and Chief Executive Brian Vance said Thursday, adding that the 2012 economy showed improvement over 2011, but still is nowhere near where it was before 2008.
Prior to 2008, the company’s loan growth rate was in the 8 percent range, he said.
Nonperforming originated loans, assets and loan loss provisions — credit quality examples — all fell in the quarter.
Also announced Thursday:
• The company has completed its acquisition of Northwest Commercial Bank of Lakewood.
• The company will pay an 8-cent cash dividend on Feb. 22 to all shareholders of record as of Feb. 8.
• Heritage will begin work on a new branch in east Vancouver, Wash., and in Kent during the first quarter, and expects to begin work on a new branch in Tumwater during the second quarter. Existing branches in Kent and Tumwater will move into the new branches.
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