Heritage Financial Corp. Acquires Olympic Bancorp, Inc. in All-Stock Deal

By Philip Seaworth • Friday, September 26 15:29 • Permanent Link

Heritage Financial Corporation announced its acquisition of Olympic Bancorp, Inc. in an all-stock transaction. The combined entity will have total assets of approximately $8.8 billion, total loans of approximately $5.7 billion, and total deposits of approximately $7.2 billion. This acquisition is expected to enhance Heritage's pro forma financial metrics, improving profitability and efficiency ratios while also improving balance sheet liquidity.

Kitsap Bank, the wholly-owned subsidiary of Olympic Bancorp, Inc., has 17 banking offices with $1.7 billion in total assets, $941.6 million in total loans, and $1.4 billion in total deposits as of June 30, 2025. After the transaction, Heritage will become the second largest community bank serving the Kitsap and Olympic Peninsulas with approximately 14% combined deposit market share.

Under the terms of the merger agreement, Olympic shareholders will receive 45.0 shares of Heritage common stock for each share of Olympic common stock, based on a fixed exchange ratio. The implied total deal value is approximately $176.6 million based on the closing price of Heritage common stock of $24.64 on September 24, 2025.

The acquisition is expected to result in approximately 18% earnings per share accretion following the full realization of operating efficiencies. The merger is subject to regulatory approvals, approval by Olympic and Heritage shareholders, and certain other customary closing conditions, and is expected to close in the first quarter of 2026.

The acquisition is seen as a strategic expansion for Heritage Bank in the Puget Sound region, providing a natural geographic extension that builds density and scale in the combined market footprint. Heritage Bank plans to continue operating with the Kitsap Bank name in certain markets on the Kitsap and Olympic Peninsulas.

The announcement of this acquisition reflects Heritage Financial Corporation's commitment to expanding its presence and enhancing its financial metrics through strategic acquisitions. Following these announcements, the company's shares moved 0.77%, and are now trading at a price of $24.79. Check out the company's full 8-K submission here.

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