Heritage Financial Corporation reported net income of $18.7 million for the third quarter of 2026, a slight increase from the $17.5 million recorded in the prior quarter. Diluted earnings per share (GAAP) were $0.46 for the third quarter, compared to $0.42 in the second quarter. The company noted that the quarter included $5.2 million in merger-related expenses associated with the core conversion of Kitsap Bank accounts.
Financial metrics showed improvement in net interest income, which increased by $2.4 million, or 3.3%, from the second quarter. The net interest margin rose to 4.05%, up 6 basis points from the prior quarter. The yield on loans increased to 5.76%, while the cost of interest-bearing deposits decreased to 1.65%.
Asset growth was notable, with loans receivable increasing by $133.5 million, or 2.3%, and total deposits growing by $148.2 million, or 2.1%. The company also announced a new stock repurchase program authorizing the repurchase of up to 5% of its outstanding shares, or approximately 2.0 million shares.
Heritage declared a regular quarterly cash dividend of $0.25 per common share. The dividend is payable on November 18, 2026, to shareholders of record as of the close of business on November 4, 2026.
