Heritage Financial Corporation announced that it has received all required regulatory approvals to complete its merger with Olympic Bancorp, Inc., the holding company of Kitsap Bank. The approval, granted on December 29 2025, clears the way for the transaction to close on or about January 31 2026, subject to shareholder approval from both companies.
The all‑stock deal values Olympic Bancorp at approximately $176.6 million. Under the terms, each Olympic share will be exchanged for 45 shares of Heritage common stock, giving Olympic shareholders a 17.4 % stake in the combined company. The merger will lift Heritage’s asset base to roughly $8.8 billion and add 17 Kitsap Bank branches, strengthening the bank’s footprint in the Puget Sound region and positioning it as the second‑largest community bank serving the Kitsap and Olympic Peninsulas.
Strategically, the transaction blends Heritage’s broad commercial and retail banking capabilities with Kitsap Bank’s long‑standing relationship‑banking model. Management projects an 18 % earnings‑per‑share accretion once operating efficiencies are realized, while cost savings are expected to equal about 35 % of Olympic’s operating expense base. The combined entity will benefit from cross‑selling opportunities, a larger deposit base, and a more diversified geographic presence.
Integration will begin with the legal change of control on January 31 2026. The core banking system conversion is slated for September 18 2026, after which customers will see a unified platform and a gradual rebranding of Kitsap Bank locations to reflect the Heritage identity. The plan also includes a phased consolidation of overlapping branches to optimize the network.
Shareholder approval is the remaining hurdle. Both companies have scheduled shareholder meetings for early February 2026, with the expectation that votes will be cast within a two‑week window. Management has expressed confidence that the approvals will be secured in a timely manner, citing strong support from both boards and the alignment of the transaction with long‑term strategic goals.
Bryan McDonald, President and CEO of Heritage, said the regulatory approval “marks a critical milestone in our growth strategy and demonstrates the confidence regulators have in our plan to deliver a stronger, more customer‑focused bank.” He added that the merger will “create a more robust platform for serving the communities of the Puget Sound.”
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