Heritage Financial Corporation

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Good morning. Thank you for standing by and welcome to the Heritage Financial Corporation Barrett Quarter 2021 earnings call. At this time, all participants are in a listen-only mode. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star followed by the number two. Please note today's call is being recorded. I would like to now hand the conference over to your first speaker today, Jeff Deuel, CEO of Heritage Financial Corporation. Please go ahead.

Thank you, Char. Good morning, everyone, and hello to all those who may listen later. This is Jeff Deuel, CEO of Heritage. Attending with me today are Don Hinson, Chief Financial Officer, Brian McDonald, President and Chief Operating Officer, and Tony Chalfant, Chief Credit Officer. Our earnings release went out this morning pre-market, and hopefully you have had the opportunity to review it prior to the call. We have also posted an updated third quarter investor presentation on the investor relations portion of our website, which can be found at harriersbanknw.com. We will reference the presentation during this call. Please refer to the forward-looking statements in the press release. We are pleased with our financial performance for the third quarter. While loan growth ex-PPP at an annualized rate of 2.6% was more modest than we had hoped to achieve, we are getting our fair share of new deals, and because of our good work with PPP, several of them are marquee names in the region. Heading into the end of the summer, we saw an upswing in the pipeline and expect the pipeline to continue to grow for the balance of the year and into 2022. We continue to focus on managing expenses with good success, and improving expense ratios. Note that FTE overall has declined 9% since the end of 2019. Looking forward, we expect NIE to remain relatively flat in the 37 to $38 million range each quarter through 2022. Additionally, as of this month, we are wrapping up the branch consolidations we talked about last quarter. Once completed, we will have reduced branches by 21% since September 2020. In addition, we have sold multiple bank properties, and we have also arranged for the sale-leaseback of our headquarters campus in Olympia, which is expected to close in December of this year. Notably, our longstanding focus on credit quality and actively managing our loan portfolio continues to play out well for us as the pandemic recedes. that discipline has enabled us to report more favorable credit trends and recapture some of the reserve build from last year. We'll now move on to Don, who will take a few minutes to cover our financial results.