Heritage Financial Corporation has announced its third quarter 2025 results, reporting a net income of $19.2 million, or $0.55 per diluted share. This is a significant increase from the second quarter of 2025, during which the company reported a net income of $12.2 million, or $0.36 per diluted share. The company's net interest income increased by $2.4 million, or 4.3%, from the second quarter of 2025, and its net interest margin increased to 3.64%, up by 13 basis points from the previous quarter.
The yield on loans increased to 5.53%, reflecting a 3 basis point increase from the second quarter of 2025. Additionally, the cost of interest-bearing deposits decreased to 1.89%, down by 5 basis points from the previous quarter.
The company also declared a regular cash dividend of $0.24 per share.
Heritage Financial Corporation's total assets decreased to $7.01 billion at September 30, 2025, from $7.07 billion at June 30, 2025, while total deposits increased by $73.1 million, or 1.3%, during the same period.
The company's loans receivable decreased by $5.7 million, or 0.1%, during the third quarter of 2025, primarily due to an elevated level of prepaid and closed loans. However, new loan production increased to $174.5 million, compared to $139.9 million during the second quarter of 2025.
Total deposits increased by $73.1 million, or 1.3%, to $5.86 billion at September 30, 2025, from $5.78 billion at June 30, 2025. This increase was driven by a $104.5 million, or 2.2%, rise in non-maturity deposits, partially offset by a decrease of $31.4 million in certificates of deposit accounts.
The company's total borrowings decreased by $125.2 million to $138.0 million at September 30, 2025, from $263.2 million at June 30, 2025.
Heritage Financial Corporation's total stockholders' equity increased by $15.9 million, or 1.8%, to $904.1 million at September 30, 2025, compared to $888.2 million at June 30, 2025.
The company's allowance for credit losses on loans as a percentage of loans receivable was 1.13% at September 30, 2025, compared to 1.10% at June 30, 2025. Additionally, the company recorded a $1.6 million provision for credit losses on loans during the third quarter of 2025, compared to a $0.9 million provision during the second quarter of 2025.
Heritage Financial Corporation's net interest margin increased by 13 basis points to 3.64% during the third quarter of 2025 from 3.51% during the second quarter of 2025. The yield on interest-earning assets also increased by three basis points to 5.04% for the third quarter of 2025 compared to 5.01% for the second quarter of 2025. Following these announcements, the company's shares moved 0.48%, and are now trading at a price of $22.98. Check out the company's full 8-K submission here.
