Heritage Financial Corporation (HFWA) reported fourth-quarter earnings of $0.66 per share, surpassing the Zacks Consensus Estimate of $0.57 by 15.8% and marking a 29.4% increase from the $0.51 posted in the year-ago quarter. The bank benefited from a 12 basis-point expansion in its net interest margin, which rose to 3.45%, driven by a combination of higher loan yields and disciplined funding costs. Noninterest income grew 8% year-over-year, supported by fee income from mortgage banking and wealth management services, while noninterest expenses remained largely flat, resulting in a cost-to-income ratio of 58.2%, an improvement of 220 basis points from Q4 2024. Asset quality remained strong, with nonperforming assets representing just 0.18% of total loans, down from 0.22% a year earlier, and the provision for credit losses declined by 15% as management released reserves in light of continued portfolio performance.