Heritage Financial Corporation (NASDAQ:HFWA) Q2 2020 Earnings Conference Call - Final Transcript

Jul 23, 2020 • 02:00 pm ET

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Heritage Financial Corporation (NASDAQ:HFWA) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Heritage Financial Second Quarter Earnings Conference Call. [Operator Instructions]

I would like to now turn the conference over to our host, President and CEO, Mr. Jeff Deuel. Please go ahead, sir.

Executive
Jeffrey J. Deuel

Thank you, Selena. Welcome to all who called in and those who may listen in later. This is Jeff Deuel. Attending with me are Don Hinson, Chief Financial Officer; Bryan McDonald, Chief Operating Officer; and Tony Chalfant, Chief Credit Officer. You will recall, Tony took over as Chief Credit Officer effective July 1, following the long planned for retirement of Dave Spurling. We're pleased to have Tony join the executive team and bring his deep credit experience to the table. Also, we're pleased to have Dave remaining with us on a part-time basis through January to provide extra capacity on the credit team while we sort out the effects of COVID-19.

Our earnings release went out this morning pre-market, and hopefully you've had an opportunity to review it prior to the call. We have also posted a Q2 investor presentation on the Investor Relations portion of our website. Please refer to the forward-looking statements in the press release.

It's good to have another COVID-19 quarter behind us. We continue to operate the Bank effectively with all but three branch lobbies closed. When Whidbey Island move to Phase III, we opened lobbies in three of the six locations there. The experience has been okay, but uncertainty around infection rates in our parts -- in other parts of the footprint are causing us to move cautiously from here. About 40% of the team is still working remotely and we're not rushing to bring them back into the Bank. About 90 days ago, the Washington and Oregon governors implemented staged approaches to reopening the economy in each state. They are not identical plans, but fairly similar. And as it stands now, many businesses are operating in the more rural parts of both states, whereas the metro areas of Seattle Bellevue and Portland have been slow to reopen, and many companies still have employees working remotely.

We've learned a lot about ourselves and the habits of our customers during the last five months. We are in the process of reassessing our branch heavy model as a result, we're also formulating policies for remote workers post COVID-19, and we are using the current environment to continue to optimize our operations by integrating systems with automation which we -- which will also allow us to do more with the same people and to better serve our customers as we move forward into the future.

We'll now move to Don Hinson, who will take a few minutes to cover our financial results including color on our core operating metrics with some specific comments about credit quality.

Executive
Donald J. Hinson

Thank you, Jeff. As reported in our earnings release, we recognized a loss of $0.17 a share in Q2, due primarily to a $28.6 million provision for credit losses.