$HFWA

HERITAGE FINANCIAL CORP /WA/

CIK:0001046025|SEC Filings

Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025	Jun. 30, 2026	Jun. 30, 2025
INTEREST INCOME:
Interest and fees on loans	$ 81,935	$ 65,373	$ 158,380	$ 129,809
Taxable interest on investment securities	14,464	11,579	27,034	23,318
Nontaxable interest on investment securities	128	137	257	276
Interest on interest earning deposits	1,147	1,411	2,678	2,463
Total interest income	97,674	78,500	188,349	155,866
INTEREST EXPENSE:
Deposits	21,391	20,150	42,138	39,639
Junior subordinated debentures	431	472	861	943
Borrowings	1,036	2,895	1,315	6,611
Interest Expense, Operating, Total	22,858	23,517	44,314	47,193
Net interest income	74,816	54,983	144,035	108,673
(Reversal of) provision for credit losses	(921)	956	(1,951)	1,007
Net interest income after (reversal of) provision for credit losses	75,737	54,027	145,986	107,666
NONINTEREST INCOME:
Loss on sale of investment securities, net	(217)	(6,854)	(217)	(10,741)
Interest rate swap fees	3	19	3	19
Bank owned life insurance income	1,485	1,280	2,604	2,198
Gain on sale of other assets, net	0	5	0	8
Other income	1,853	2,127	3,963	4,288
Total noninterest income	9,311	1,517	18,010	5,420
NONINTEREST EXPENSE:
Compensation and employee benefits	35,769	25,467	69,741	51,266
Occupancy and equipment	6,014	4,840	11,344	9,766
Data processing	10,218	3,666	15,311	7,563
Marketing	437	336	820	671
Professional services	939	1,122	3,781	1,856
State/municipal business and use taxes	1,801	1,205	3,475	2,425
Federal deposit insurance premium	881	810	1,918	1,622
Foreclosed Real Estate Expense	44	0	48	0
Amortization of intangible assets	2,957	302	5,015	605
Other expense	5,264	3,337	9,422	6,694
Total noninterest expense	64,324	41,085	120,875	82,468
Income before income taxes	20,724	14,459	43,121	30,618
Income tax expense	3,178	2,244	6,628	4,492
Net income	$ 17,546	$ 12,215	$ 36,493	$ 26,126
Basic earnings per share (in dollars per share)	$ 0.42	$ 0.36	$ 0.91	$ 0.77
Diluted earnings per share (in dollars per share)	0.42	0.36	0.90	0.76
Dividends declared per share (in dollars per share)	$ 0.24	$ 0.24	$ 0.48	$ 0.48
Average Number of Basic Common Shares Outstanding (in shares)	41,079,781	34,028,592	39,888,198	34,037,067
Average number of diluted shares outstanding (in shares)	41,541,763	34,446,710	40,364,364	34,512,260
Net Income	$ 17,546	$ 12,215	$ 36,493	$ 26,126
Service charges and other fees
NONINTEREST INCOME:
Service charges, other fees and card revenue	3,592	2,932	6,959	5,907
Card revenue
NONINTEREST INCOME:
Service charges, other fees and card revenue	$ 2,595	$ 2,008	$ 4,698	$ 3,741

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025
Cash flows from operating activities:
Net income	$ 36,493	$ 26,126
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion, net	(2,413)	637
(Reversal of) provision for credit losses	(1,951)	1,007
Stock-based compensation expense	2,865	2,533
Amortization of intangible assets	5,015	605
Tax Credit, Investment, Amortization Cash Flow	11,793	11,894
Bank owned life insurance income	(2,604)	(2,198)
Deferred Income Tax Expense (Benefit)	(11,104)	895
Loss on sale of investment securities available for sale, net	217	10,741
Other	(1,254)	(10,473)
Net cash provided by operating activities	37,057	41,767
Cash flows from investing activities:
Loan originations and purchases, net of payments	6,529	(28,359)
Maturities and repayments of investment securities available for sale	68,399	64,534
Maturities and repayments of investment securities held to maturity	11,974	13,068
Purchase of investment securities available for sale	(359,931)	(84,669)
Purchase of premises and equipment	(3,296)	(2,770)
Purchase of bank owned life insurance	(39)	(39)
Proceeds from bank owned life insurance death benefit	759	502
Purchases of Federal Home Loan Bank stock	(28,610)	(13,795)
Proceeds from surrender of bank owned life insurance	0	5,091
Proceeds from sales of investment securities available for sale	231,633	141,682
Proceeds from redemption of Federal Home Loan Bank stock	22,119	19,226
Proceeds from sales of premises and equipment	0	52
Capital contributions to tax credit partnerships	(4,062)	(34,213)
Cash Acquired from Acquisition	155,167	0
Net cash provided by investing activities	87,584	137,028
Cash flows from financing activities:
Net (decrease) increase in deposits	(270,489)	99,800
Proceeds from borrowings	635,750	306,500
Repayment of borrowings	489,500	426,300
Common stock cash dividends paid	(18,044)	(16,350)
Repurchase of common stock	(11,072)	(5,449)
Net cash used by financing activities	(153,355)	(41,799)
Net increase (decrease) in cash and cash equivalents	(28,714)	136,996
Cash and cash equivalents at beginning of period	233,089	117,100
Cash and cash equivalents at end of period	204,375	254,096
Supplemental disclosures of cash flow information:
Cash paid for interest	43,025	47,540
Cash paid for income taxes, net of refunds	3,400	800
Supplemental non-cash disclosures of cash flow information:
Transfers of loans receivable to other real estate owned	755	0
Investment in LIHTC partnership and related funding commitment	35	142
Right of use assets obtained in exchange for new operating lease liabilities	1,034	2,653
Transfers of premises and equipment classified as held for sale to prepaid expenses and other assets from premises and equipment, net	1,790	93
Transfer of Bank Owned Life Insurance to Prepaid Expenses and Other Assets Due to Surrender	0	8,463
Business Combination, Recognized Asset Acquired, Asset	1,552,469	0
Business Combination, Recognized Liability Assumed, Liability	(1,405,563)	0
Business Combination, Recognized Asset Acquired to Liability Assumed, Excess (Less)	$ 146,906	$ 0

Condensed Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
ASSETS
Cash on hand and in banks	$ 102,555	$ 52,587
Interest earning deposits	101,820	180,502
Cash and cash equivalents	204,375	233,089
Investment securities available for sale, at fair value, net (amortized cost of $1,020,125 and $647,505, respectively)	971,437	607,522
Investment securities held to maturity, at amortized cost, net (fair value of $607,782 and $625,287, respectively)	661,839	674,107
Debt Securities, Available-for-Sale and Held-to-Maturity, after Allowance for Credit Loss, Total	1,633,276	1,281,629
Loans receivable	5,747,741	4,783,266
Allowance for credit losses on loans	(59,473)	(52,584)
Loans receivable, net	5,688,268	4,730,682
Premises and equipment, net	98,034	74,690
Federal Home Loan Bank stock, at cost	12,653	5,163
Bank owned life insurance	146,350	105,974
Accrued interest receivable	23,056	19,280
Prepaid expenses and other assets	297,501	273,925
Other intangible assets, net	47,269	1,979
Goodwill	279,029	240,939
Total assets	8,430,566	6,967,350
Noninterest-Bearing Deposit Liabilities	1,972,702	1,597,650
Interest-Bearing Deposit Liabilities	5,066,004	4,322,549
LIABILITIES AND STOCKHOLDERS' EQUITY
Total deposits	7,038,706	5,920,199
Borrowings	166,250	20,000
Junior subordinated debentures	22,497	22,350
Accrued expenses and other liabilities	93,421	83,297
Total liabilities	7,320,874	6,045,846
Stockholders’ equity:
Preferred stock, no par value, 2,500,000 shares authorized; no shares issued and outstanding, respectively	0	0
Common stock, no par value, 50,000,000 shares authorized; 40,906,122 and 33,963,500 shares issued and outstanding, respectively	707,889	531,100
Retained earnings	439,799	421,619
Accumulated other comprehensive loss, net	(37,996)	(31,215)
Total stockholders’ equity	1,109,692	921,504
Total liabilities and stockholders’ equity	8,430,566	6,967,350
Other Real Estate, Foreclosed Assets, and Repossessed Assets	$ 755	$ 0