Heritage Financial Corporation announced its third‑quarter 2025 financial results on October 23, 2025. The bank reported net income of $19.2 million, up 57% from the $12.2 million earned in the second quarter, and diluted earnings per share of $0.55, compared with $0.36 in Q2. Net interest income rose 8.3% from the same quarter a year earlier, reflecting higher loan yields and a lower cost of deposits.
Total deposits increased 1.3% to $5.86 billion, driven by a 2.2% rise in non‑maturity deposits, while the loan portfolio grew modestly to $4.77 billion. Net interest margin expanded to 3.64%, up 13 basis points from 3.51% in Q2, and the cost of total deposits fell to 1.37% from 1.40% in the prior quarter. The company also reduced borrowings by $245 million year‑to‑date, strengthening its balance‑sheet leverage.
Capital ratios remained well above regulatory thresholds, with tangible common equity to tangible assets at 9.8% and total capital ratio at 13.8%. The bank repurchased 193,700 shares at a cost of $4.5 million during the quarter, returning value to shareholders. The company also announced a regular cash dividend of $0.24 per share, continuing its dividend policy.
These results underscore the effectiveness of Heritage’s strategic balance‑sheet repositioning and disciplined expense management, delivering a robust earnings beat and margin expansion. The growth in deposits and loan yields, coupled with a strong capital position, positions the bank to pursue further expansion and potential acquisitions, such as the pending Olympic Bancorp transaction. Investors view the earnings as a positive sign of continued profitability and financial strength.
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