Heritage Financial Corporation (HFWA)

Pretax margin

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before tax but after interest (EBT) (ttm)	US$ in thousands	72,915	94,227	98,077	100,767	99,436	95,866	95,808	113,400	120,507	124,499	118,023	70,795	53,180	45,440	47,843	74,104	81,045	81,773	78,907	73,581
Revenue (ttm)	US$ in thousands	240,902	261,588	267,624	267,038	259,556	252,619	247,108	263,310	271,408	274,840	266,804	220,033	202,681	192,376	195,892	222,867	229,009	231,013	230,880	223,672
Pretax margin		30.27%	36.02%	36.65%	37.74%	38.31%	37.95%	38.77%	43.07%	44.40%	45.30%	44.24%	32.17%	26.24%	23.62%	24.42%	33.25%	35.39%	35.40%	34.18%	32.90%

December 31, 2023 calculation

Pretax margin = EBT (ttm) ÷ Revenue (ttm)
= $72,915K ÷ $240,902K
= 30.27%

The pretax margin of Heritage Financial Corp. has exhibited a declining trend over the past eight quarters. It decreased from 46.87% in Q1 2022 to 24.05% in Q4 2023. This decline indicates that the company's profitability before taxation has been eroding gradually. Factors such as increasing operating expenses, lower revenue generation, or inefficiencies in cost management may contribute to this downward trend. Management should closely monitor and address the underlying issues affecting the pretax margin to ensure sustainable profitability in the future.