Heritage Financial Corporation

Heritage Financial reported second-quarter 2026 net income of $17.5 million, or $0.42 per diluted share, down from $18.9 million in the first quarter. The net interest margin expanded 3 basis points to 3.99%, or 8 basis points when excluding a prior-quarter interest recovery on nonaccrual loans, driven by higher investment portfolio yields and lower deposit costs. Total loans grew $26 million to $5.75 billion, while commercial loan commitments more than doubled to $339 million, though elevated prepayments of $152.4 million limited net growth. Total deposits fell $209.8 million to $7.04 billion due to seasonal tax outflows and a single $67 million relationship withdrawal, and the cost of interest-bearing deposits declined to 1.67%. Noninterest expense rose to $64.3 million, including $7.5 million in merger-related costs, and management guided to $64–$65 million in the third quarter before a drop to $56–$57 million in the fourth quarter following the Olympic Bancorp systems conversion. Credit quality remained strong with net charge-offs of just $234,000 and nonperforming assets at 0.19% of total assets, while the tangible common equity ratio ticked up to 9.7%.

Heritage Financial's chief information officer William Glasby disposed of 3,379 shares at $30.52 per share for a total value of approximately $103,000 on July 17, 2026. The transaction was a non-discretionary sell-to-cover executed to satisfy tax withholding obligations following an option exercise, and Glasby continues to hold 22,344 shares directly. Heritage Financial, a regional bank holding company with a market capitalization of $1.0 billion, reported trailing twelve-month revenue of $266.5 million and net income of $72.6 million, with the stock delivering a 20% gain over the preceding year. The company recently closed its acquisition of Olympic Bancorp and Kitsap Bank on January 31, and first-quarter net income dipped to $18.9 million, weighed down by $5.2 million in merger costs, with management expecting elevated expenses until a core systems conversion wraps in the third quarter.