Heritage Financial Corporation (HFWA)
Operating return on assets (Operating ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 19,152 | 65,696 | 51,209 | -27,429 | 35,186 |
| Total assets | US$ in thousands | 7,174,960 | 6,980,100 | 7,432,410 | 6,615,320 | 5,552,970 |
| Operating ROA | 0.27% | 0.94% | 0.69% | -0.41% | 0.63% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $19,152K ÷ $7,174,960K
= 0.27%
The operating return on assets (operating ROA) of Heritage Financial Corp. has experienced fluctuations over the past five years. In 2023, the operating ROA decreased to 1.02% from 1.42% in 2022, marking a decline in the company's ability to generate operating income from its assets. This reduction may indicate inefficiencies in the company's operations or lower profitability relative to its asset base.
Comparing the operating ROA in 2023 to the figures from the preceding years, it is notably lower than the levels achieved in 2021 and 2019, where the operating ROA stood at 1.62% and 1.46% respectively. This downward trend suggests a potential erosion in the company's ability to convert its assets into operating profits efficiently.
On the other hand, despite the decline in 2023, the operating ROA is higher than the figure recorded in 2020, indicating a relative improvement in the company's performance compared to the prior year. It is crucial for Heritage Financial Corp. to closely monitor and address the factors contributing to the fluctuation in its operating ROA to sustain and enhance its profitability and operational efficiency in the future.