Overview

• U.S. regional bank's Q1 net income and adjusted EPS rose yr/yr, aided by Olympic Bancorp deal

• Net interest margin increased to 3.96% from 3.44% a year earlier

• Company completed Olympic Bancorp acquisition, boosting assets and deposits

Outlook

• Company expects Olympic Bancorp system conversion by end of Q3 2026, with further cost savings

• Heritage Financial says focus remains on sustainable growth and prudent risk management

Result Drivers

• MERGER IMPACT - Acquisition of Olympic Bancorp drove increases in assets, loans, deposits, and contributed to higher net interest income and margin

• LOAN YIELD AND ACCRETION - Higher loan yields and incremental accretion on purchased loans boosted interest income

• MERGER-RELATED EXPENSES - Noninterest expense rose due to merger-related costs, increased headcount, and higher amortization of intangible assets

Company press release: ID:nPnb8ZVv3a

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "hold"

• Wall Street's median 12-month price target for Heritage Financial Corp is $30.00, about 9.7% above its April 22 closing price of $27.34

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 11 three months ago

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