Heritage Bank Expands Into the Spokane, Washington, Market

Rhea-AI Summary

Heritage Bank (NASDAQ: HFWA) has announced its expansion into the Spokane, Washington market, pending regulatory approvals. The bank has appointed three experienced commercial banking professionals: James Krejci as Senior VP and Commercial Team Leader, Timothy Engh as Senior VP Commercial Banking Officer, and Sean O'Regan as VP Commercial Banking Officer.

The expansion includes plans to open a new branch in Spokane, subject to regulatory approval. CEO Bryan McDonald emphasized that Heritage Bank's size, culture, services, and local support align with Spokane's community needs. The appointed team brings significant experience: Krejci has been in commercial banking since 2011, Engh has over 20 years of industry experience, and O'Regan brings more than 20 years of commercial and private business banking expertise.

Positive

• Geographic expansion into new market (Spokane)
• Strategic hiring of experienced commercial banking team
• Planned branch network expansion

Negative

• None.

Insights

Financial Services Analyst

Heritage Bank's expansion into Spokane marks a significant strategic development that warrants careful analysis. The Spokane-Coeur d'Alene metropolitan area, with its population of over 750,000, represents a substantial untapped market for Heritage, which has traditionally focused on Western Washington and Oregon markets.

The bank's approach to market entry is particularly noteworthy. By leading with experienced commercial banking professionals who have deep local connections and expertise in business lending, Heritage is positioning itself to capture the higher-margin commercial banking segment rather than focusing initially on retail banking. This strategy typically yields higher returns on investment and allows for more efficient capital deployment compared to a traditional branch-first approach.

The timing of this expansion is strategic, as Spokane's economy has shown resilience with strong growth in healthcare, education and technology sectors. The market has also seen increased business formation rates and commercial real estate development, creating natural demand for commercial banking services. Additionally, recent consolidation in the regional banking sector has created potential opportunities for mid-sized banks like Heritage to capture market share.

From a competitive standpoint, while Spokane is served by large national banks and several regional players, Heritage's size ($7+ billion in assets) positions it well to compete by offering more personalized service than larger institutions while maintaining sophisticated product capabilities. The bank's experience in similar markets in Western Washington provides a proven operational template for success.

The financial impact of this expansion should be viewed as a long-term investment. While initial costs for talent acquisition, regulatory approvals and eventual branch establishment will impact near-term expenses, the potential for loan growth and fee income in a major metropolitan market could provide meaningful revenue diversification over time. The bank's strong capital position and existing operational infrastructure in Washington state should support efficient scaling of this new market presence.

OLYMPIA, Wash., Jan. 27, 2025 /PRNewswire/ -- Heritage Bank ("Heritage" or "bank"), a wholly-owned subsidiary of Heritage Financial Corporation (Nasdaq: HFWA), is pleased to announce its expansion into Spokane, Wash., with the addition of James Krejci, senior vice president, commercial team leader; Timothy Engh, senior vice president, commercial banking officer; and Sean O'Regan, vice president, commercial banking officer. Subject to the completion of certain conditions, including receipt of the necessary regulatory approvals, Heritage plans to open a branch in Spokane.

Bryan McDonald, president and chief executive officer, commented, "We are excited to expand into the Spokane market with these talented and experienced bankers. Heritage Bank provides the size, culture, services, and local support that aligns well with the priorities and needs of the Spokane community. The new Spokane team is ready to welcome customers and deliver an expanded set of high-quality banking services."

Krejci, an Idaho native, began his commercial banking career in 2011. He has a business finance degree from University of Idaho and is a graduate of Pacific Coast Banking School. Krejci's main focus is supporting the expansion of healthy businesses and economic growth throughout the region. He is currently the secretary for Family Promise of Spokane, is on the board of SNAP Financial Access, and serves on the loan committee for the Ignite loan fund.

Engh has over two decades of experience in the banking industry. He holds a degree from Eastern Washington University, where his academic pursuits were centered around business and economics. He is committed to fostering long-term partnerships with businesses to assist them in achieving their short- and long-term objectives. Outside of his professional responsibilities, Tim dedicates his time to volunteering with the Arc of Spokane and Riverview Retirement Community, where he serves on their respective boards.

O'Regan graduated from Eastern Washington University with a degree in economics. He has more than 20 years of experience in commercial banking and private business banking. He spent the first 10 years of his banking career as a credit analyst and relationship manager before transitioning to financial controller for a private company, an experience he feels made him a better banker when he came back to the banking industry.

About Heritage
Heritage Financial Corporation is an Olympia-based bank holding company with Heritage Bank, a full-service commercial bank, as its sole wholly-owned banking subsidiary. Heritage Bank has a branching network of 50 banking offices in Washington and Oregon. Heritage Bank also does business under the Whidbey Island Bank name on Whidbey Island. Heritage's stock is traded on the NASDAQ Global Select Market under the symbol "HFWA." More information about Heritage Financial Corporation can be found on its website at www.hf-wa.com and more information about Heritage Bank can be found on its website at www.heritagebanknw.com.

View original content:https://www.prnewswire.com/news-releases/heritage-bank-expands-into-the-spokane-washington-market-302361085.html

SOURCE Heritage Financial Corporation

FAQ

When will Heritage Bank (HFWA) open its Spokane branch?

The opening date is pending regulatory approvals and completion of certain conditions, as announced in January 2025.

Who are the key appointments for Heritage Bank's (HFWA) Spokane expansion?

Heritage Bank appointed James Krejci as SVP Commercial Team Leader, Timothy Engh as SVP Commercial Banking Officer, and Sean O'Regan as VP Commercial Banking Officer.

How many branches does Heritage Bank (HFWA) currently operate?

Heritage Bank operates a network of 50 banking offices across Washington and Oregon.

What is Heritage Bank's (HFWA) strategy for the Spokane market expansion?

The strategy involves establishing a local branch, hiring experienced commercial bankers, and delivering expanded banking services aligned with Spokane community needs.