Heritage Financial Corporation has announced its acquisition of Olympic Bancorp, Inc. in an all-stock transaction. As of June 30, 2025, Olympic Bancorp, Inc.'s subsidiary Kitsap Bank had $1.7 billion in total assets, $941.6 million in total loans, and $1.4 billion in total deposits. Following the acquisition, Heritage's total assets are expected to reach approximately $8.8 billion, with total loans of approximately $5.7 billion and total deposits of approximately $7.2 billion.
The acquisition is projected to significantly enhance Heritage's pro forma financial metrics, with anticipated improvements in profitability and efficiency ratios, as well as balance sheet liquidity. After the completion of the transaction, Heritage will become the second largest community bank serving the Kitsap and Olympic Peninsulas, holding approximately 14% combined deposit market share.
Heritage expects approximately 18% earnings per share accretion after realizing operating efficiencies. 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 based on the closing price of Heritage common stock is approximately $176.6 million.
The acquisition is subject to regulatory approvals, approval by Olympic and Heritage shareholders, and other customary closing conditions, with an expected completion in the first quarter of 2026. Heritage has appointed D.A. Davidson & Co. as its financial advisor and legal counsel, while Olympic has engaged Piper Sandler & Co. as its financial advisor and Otteson Shapiro LLP as legal counsel.
As a result of this acquisition, Heritage will host a conference call on September 26, 2025, to discuss the transaction. Interested parties can access a slide presentation from Heritage's Form 8-K filing with the Securities and Exchange Commission or on Heritage's website.
This acquisition marks a significant strategic expansion for Heritage Bank in the Puget Sound region, creating a more robust banking platform for communities across the area. With the combination of the two organizations, Heritage aims to maintain the high-touch community bank approach while leveraging the scale and capabilities of a larger bank. Following these announcements, the company's shares moved -0.16%, and are now trading at a price of $24.60. If you want to know more, read the company's complete 8-K report here.
