Heritage Financial Corporation (HFWA) SEC Filings & Earnings Calls

Merger-related expenses of $5.2M in Q3 2026 from Kitsap Bank conversion; integration risk persists.

“Recognized Merger-related expenses of $5.2 million in the third quarter of 2026.” · word for word

Unrealized losses on AFS securities increased $32.4M, indicating interest rate sensitivity.

“$32.4 million increase in unrealized losses on available for sale securities during the third quarter of 2026.” · word for word

Merger integration and expense risk

“Total Merger-related expenses incurred during the three months ended June 30, 2026 were $7.5 million and consisted of severance expense, professional fees, core conversion costs and contract termination costs.” · word for word

Interest rate sensitivity

“Our net interest income is significantly affected by general and local economic conditions, particularly changes in market interest rates, and by governmental policies and actions of regulatory agencies.” · word for word

Credit risk from CRE concentration

“Office loans represented the largest segment of owner-occupied and non-owner occupied CRE loans, totaling $685.0 million, or 18.3% of total CRE loans, at June 30, 2026.”

Merger-related expenses of $7.5M in Q2 2026; integration risk remains.

“Merger-related expenses of $7.5 million in the second quarter of 2026, compared to $5.2 million in the first quarter of 2026.” · word for word

Merger integration costs

“Total Merger-related expenses incurred during the three months ended March 31, 2026 were $5.2 million and consisted of severance expense, professional fees, core conversion costs and contract termination costs.” · word for word

Office CRE concentration

“Office loans represented the largest segment of owner-occupied and non-owner occupied CRE loans, totaling $675.7 million, or 18.4% of total CRE loans, at March 31, 2026.”

Potential data breach liability, regulatory scrutiny, and remediation costs

“Incident involves personal information; investigation ongoing; insurance coverage mentioned”

Balance sheet restructuring losses

“2025 pre-tax net income was reduced by $10.7 million in pre-tax losses in connection with the sale of investment securities.” · word for word

Merger integration risk

“Heritage incurred $1.0 million in pre-tax merger-related costs during 2025.” · word for word

Loan portfolio contraction

“Total Loans, Net $4.73 billion vs $4.75 billion prior year, (0.4)% change.”

Credit Quality Deterioration

“Nonaccrual loans increased $16.9 million, or 414.2%, due primarily to the migration of two residential construction loans totaling $6.7 million, one $6.0 million commercial and multifamily construction loan, one $1.7 million commercial and industrial loan, and three non-owner occupied CRE loans totaling $3.9 million during the year ended December 31, 2025.” · word for word

CRE Concentration Risk

“Commercial business loans (81.7% of portfolio) grew 4.1%; CRE loans increased 6.2% driven by multi-family (+25.5%).”

Interest Rate Risk

“Net interest income is significantly affected by general and local economic conditions, particularly changes in market interest rates.” · word for word

Integration risk and dilution from share issuance.

“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; the dilution caused by Heritage’s issuance of additional shares.” · word for word

Loan portfolio slightly declined; potential credit risk in commercial real estate.

“Loans receivable decreased $18.9M QoQ; loan-to-deposit ratio 80.8%.”

Investment securities portfolio decreased; unrealized losses partially offset.

“Total investment securities decreased $31.2M; $2.9M decrease in unrealized losses on AFS securities.”

Credit quality deterioration

“Nonaccrual loans increased $13.5 million to $17.6 million at September 30, 2025, compared to $4.1 million at December 31, 2024.” · word for word

Merger integration risk

“Professional services increased due primarily to merger-related costs associated with the ongoing acquisition of Olympic incurred during the three months ended September 30, 2025.” · word for word