Heritage Financial reported net income of $22.2 million for Q4 2025, up from $19.2 million in Q3 2025 and $11.9 million in Q4 2024. Diluted earnings per share rose to $0.65, compared with $0.55 in the prior quarter and $0.34 a year earlier, while adjusted diluted EPS reached $0.66 versus $0.56 in Q3 2025 and $0.51 in Q4 2024. Return on average assets increased to 1.27% from 1.09% in Q3, and return on average common equity climbed to 9.68% from 8.52%, reflecting both improved operating leverage and margin expansion during the period.

Net interest income grew by $1.0 million, or 1.7% sequentially (annualized 6.8%), driven by an 8 basis-point expansion in net interest margin to 3.72% from 3.64% in Q3. Cost of interest-bearing deposits declined to 1.83% from 1.89%, supporting the margin lift. Total deposits increased by $62.7 million, or 1.1% quarter-over-quarter (4.2% annualized), to $5.92 billion, led by a $100.6 million increase in interest-bearing demand balances, partially offset by a $12.4 million decline in certificates of deposit.

Loans receivable edged up by $14.1 million, or 0.3%, to $4.78 billion, supported by $173.1 million of new originations and modest prepayments. Commercial real estate balances grew 4.7% to $3.09 billion, while consumer and residential portfolios remained stable. Investment securities declined by $31.2 million to $1.28 billion, reflecting $37.7 million of maturities and repayments, partially offset by $3.5 million of purchases. Heritage received regulatory and shareholder approval to acquire Olympic Bancorp, including Kitsap Bank, with closing expected on January 31, 2026, a deal projected to enhance scale in the Puget Sound market and deliver cost synergies over the next 12–18 months.