Heritage Financial Corporation Announces Completion of Acquisition of Olympic Bancorp, Inc.

Rhea-AI Summary

Heritage Financial Corporation (Nasdaq: HFWA) completed its merger to acquire Olympic Bancorp, Inc., effective January 31, 2026. Heritage will issue an aggregate of 7,167,600 shares of common stock and Olympic shareholders will receive 45.0 shares of Heritage common stock each, with cash for fractional shares.

The acquisition folds Kitsap Bank into Heritage Bank and extends Heritage's branch network under the Kitsap Bank and Whidbey Island Bank names across Washington, Oregon, and Idaho.

Positive

• Merger completed effective January 31, 2026
• Heritage issued 7,167,600 shares as merger consideration
• Olympic shareholders to receive 45.0 shares of Heritage common stock per holder

Negative

• Issuance of 7,167,600 shares may dilute existing Heritage shareholders

News Market Reaction – HFWA

+2.48%

1 alert

+2.48% News Effect

On the day this news was published, HFWA gained 2.48%, reflecting a moderate positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Shares issued: 7,167,600 shares Exchange ratio: 45.0 shares Deal value: $176.6 million +5 more

8 metrics

Shares issued 7,167,600 shares Heritage common stock issued in Olympic Bancorp merger

Exchange ratio 45.0 shares Heritage shares per Olympic share under merger terms

Deal value $176.6 million All-stock Olympic Bancorp acquisition value (September 2025 announcement)

Combined assets $8.8 billion Pro forma combined assets at deal announcement

Combined deposits $7.2 billion Pro forma combined deposits at deal announcement

EPS accretion 18% Expected earnings per share accretion after full efficiencies

Olympic assets $1.7 billion Olympic total assets as of September 30, 2025

Heritage assets post-deal $8.7 billion Expected Heritage total assets after acquiring Olympic

Market Reality Check

Price: $25.76 Vol: Volume 281,053 is 1.05x t...

normal vol

$25.76 Last Close

Volume Volume 281,053 is 1.05x the 20-day average of 268,722, indicating only modest pickup ahead of the merger close. normal

Technical Shares trade above the 200-day MA, with price at 25.81 versus 200-day MA of 23.83 before this announcement.

Peers on Argus

Key regional bank peers like EQBK, HBT, CFFN, CPF, and SBSI showed small gains o...

Key regional bank peers like EQBK, HBT, CFFN, CPF, and SBSI showed small gains of 0.06–3.00%, and no peers appeared in the momentum scanner, suggesting this merger completion was more company-specific than sector-driven.

Previous Acquisition Reports

2 past events · Latest: 2025-12-29 (Positive)

Same Type Pattern 2 events

Date	Event	Sentiment	Move	Catalyst
2025-12-29	Acquisition approvals	Positive	-0.5%	Regulatory approvals received for Olympic Bancorp acquisition and Kitsap Bank merger.
2025-09-25	Acquisition announcement	Positive	+1.0%	Announced all-stock Olympic Bancorp acquisition and pro forma scale, assets, and EPS accretion.

Pattern Detected

Prior Olympic-related acquisition headlines produced small price moves with a mix of slight gains and losses.

Recent Company History

Recent news for Heritage has centered on the Olympic Bancorp acquisition. On 2025-09-25, the company announced the all‑stock deal valued at $176.6 million, outlining combined assets of $8.8 billion and anticipated 18% EPS accretion after efficiencies. On 2025-12-29, Heritage received all required regulatory approvals, with closing expected around January 31, 2026. Today’s announcement confirms that closing, marking the transition from planning and approvals to integration of Olympic and Kitsap Bank operations.

Historical Comparison

+0.7% avg move · Over the past two acquisition-related announcements, HFWA moved on average about 0.73%. The current ...

acquisition

+0.7%

Average Historical Move acquisition

Over the past two acquisition-related announcements, HFWA moved on average about 0.73%. The current pre-news move of 1.3% sits within that historical range for Olympic Bancorp headlines.

Acquisition news has progressed from announcing the Olympic Bancorp deal, to securing regulatory approvals, and now to final closing and integration of Olympic and Kitsap Bank into Heritage.

Market Pulse Summary

This announcement confirms the closing of Heritage’s all‑stock acquisition of Olympic Bancorp and th...

Analysis

This announcement confirms the closing of Heritage’s all‑stock acquisition of Olympic Bancorp and the merger of Kitsap Bank into Heritage Bank. It follows earlier milestones that outlined a $176.6 million deal, expected 18% EPS accretion, and pro forma assets near $8.7–8.8 billion. Historically, Olympic-related acquisition news produced only small price moves, suggesting the market had largely anticipated this step. Investors may watch post-close integration updates, credit quality trends, and revised financial targets to gauge whether the projected benefits materialize.

Key Terms

merger, fractional shares, bank holding company, wholly-owned

4 terms

merger financial

"it completed its previously announced merger (the "Merger") of Olympic Bancorp, Inc."

A merger is when two companies combine into a single business, with ownership and control reorganized so they operate as one entity. For investors it matters because mergers can change the value and risk of holdings—shares may be exchanged, diluted, or rise if the combined company saves costs or gains market power, and the deal often depends on regulatory approval and successful integration like two households joining resources and routines.

fractional shares financial

"with cash to be paid in lieu of any fractional shares."

Fractional shares are portions of a whole share of a stock or fund, allowing investors to own less than one full unit. They make it possible to invest a specific dollar amount rather than buy whole shares, like buying a slice of a pizza instead of the entire pie. For investors this lowers the cost barrier, helps with diversification, and lets you reinvest dividends or purchase expensive stocks in small, precise amounts.

bank holding company financial

"Heritage Financial Corporation is an Olympia-based bank holding company with Heritage Bank"

A bank holding company is a parent corporation that owns one or more banks and other financial businesses, like a household that controls several shops under the same roof. Investors care because this structure determines how the business is regulated, how it raises capital, pays dividends, and absorbs losses; it can make a banking group safer or riskier and affects the value and liquidity of the company’s shares.

wholly-owned financial

"Heritage Bank, a full-service commercial bank, as its sole wholly-owned banking subsidiary."

A wholly-owned business is one that is 100% owned by another company, meaning the parent holds all shares and controls decisions. For investors, this matters because the parent company must include the wholly-owned business’s results and liabilities in its own financial picture, so any profits, losses or risks from that unit directly affect the parent’s value—like owning an entire rental property rather than sharing it with partners.

AI-generated analysis. Not financial advice.

OLYMPIA, Wash., Feb. 2, 2026 /PRNewswire/ -- Heritage Financial Corporation ("Heritage") (Nasdaq: HFWA) announced that effective January 31, 2026, it completed its previously announced merger (the "Merger") of Olympic Bancorp, Inc. ("Olympic") with and into Heritage, and the merger of Kitsap Bank with and into Heritage Bank.

"We welcome Kitsap Bank's customers and employees to Heritage Bank and look forward to continuing to provide them with excellent service and quality products," said Bryan McDonald, Heritage President and CEO.

Heritage will issue an aggregate of 7,167,600 shares of its common stock in the transaction. Under the terms of the merger agreement, shareholders of Olympic immediately prior to the merger will receive 45.0 shares of Heritage's common stock with cash to be paid in lieu of any fractional shares. Olympic shareholders will receive information shortly on how to exchange their Olympic shares for Heritage shares.

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 in Washington, Oregon, and Idaho. Heritage Bank also does business under the Whidbey Island Bank name on Whidbey Island and the Kitsap Bank name for branches acquired in the merger. 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.

Contact
Bryan D. McDonald, President and Chief Executive Officer, (360) 943-1500

Cautionary Note Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements often include words such as "believes," "expects," "anticipates," "estimates," "forecasts," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook" or similar expressions or future or conditional verbs such as "may," "will," "should," "would," and "could," as well as the negative of such words. Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements. In addition to factors disclosed in reports filed by Heritage with the Securities and Exchange Commission (the "SEC"), risks and uncertainties for Heritage, Olympic and the combined company that may cause actual results or outcomes to differ materially from those anticipated include, but are not limited to: (1) the possibility that any of the anticipated benefits of the Merger will not be realized or will not be realized within the expected time period; (2) the risk that integration of Olympic's operations with those of Heritage will be materially delayed or will be more costly or difficult than expected; (3) the challenges of integrating and retaining key employees from Olympic; (4) the dilution caused by Heritage's issuance of additional shares of Heritage's common stock in connection with the Merger; and (5) changes in the global economy and financial market conditions and the business, results of operations and financial condition of Heritage. Please refer to each of Heritage's Annual Report on Form 10-K for the year ended December 31, 2024, as well as Heritage's other filings with the SEC, for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements.

Any forward-looking statement included in this press release are based only on information currently available to management and speaks only as of the date on which it is made. Heritage undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

View original content:https://www.prnewswire.com/news-releases/heritage-financial-corporation-announces-completion-of-acquisition-of-olympic-bancorp-inc-302675372.html

SOURCE Heritage Financial Corporation

FAQ

When did Heritage (HFWA) complete the acquisition of Olympic Bancorp?

Heritage completed the acquisition effective January 31, 2026. According to the company, the merger of Olympic Bancorp into Heritage and Kitsap Bank into Heritage Bank became effective on that date.

How many Heritage (HFWA) shares were issued in the Olympic Bancorp merger?

Heritage issued an aggregate of 7,167,600 shares in the transaction. According to the company, those shares constitute the equity consideration paid to Olympic shareholders under the merger agreement.

What will Olympic Bancorp shareholders receive for each share in the HFWA merger?

Olympic shareholders will receive 45.0 shares of Heritage common stock per Olympic share. According to the company, cash will be paid in lieu of any fractional shares resulting from the exchange.

How does the Olympic acquisition change Heritage Bank's branch branding and footprint?

The acquisition brings Kitsap Bank branches into Heritage Bank, operating under the Kitsap Bank name. According to the company, Heritage continues to serve Washington, Oregon, and Idaho and will use regional names on acquired branches.

Will HFWA shareholders face dilution from the Olympic Bancorp merger?

The issuance of 7,167,600 shares represents a dilution risk for existing shareholders. According to the company, those shares were issued as merger consideration, which can increase the total share count outstanding.