- Heritage Financial has secured all regulatory approvals to acquire Olympic Bancorp (Kitsap Bank) and expects to close around January 31, 2026, pending shareholder votes and customary conditions.
- The $176.6 million all-stock deal uses a fixed 45:1 exchange ratio, implying about $24.64 per Olympic share and 17.4% ownership for Olympic shareholders in the combined company.
- The merger adds 17 branches and about $1.7B in assets and is projected to deliver roughly 18% EPS accretion once cost saves are realized.
- Heritage also strengthens its low-cost deposit base and regional position (about 14% deposit share on the Kitsap/Olympic Peninsulas) while retaining some Kitsap Bank branding.
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Heritage Financial Corporation’s deal to acquire Olympic Bancorp, Inc., owner of Kitsap Bank, represents a strategically significant consolidation in Washington State banking, especially in the Puget Sound and Olympic Peninsulas markets. By receiving all regulatory approvals by December 29, 2025, Heritage cleared a major regulatory hurdle, positioning it to close the transaction on approximately January 31, 2026, subject to shareholder votes and other usual conditions.
The transaction is valued at roughly $176.6 million in an all-stock swap where Heritage will issue 45 shares per Olympic share, giving Olympic shareholders about 17.4% ownership in the combined entity. Kitsap’s financials—about $1.7 billion in total assets, $1.4 billion in deposits, and approximately $941 million in loans—add scale to Heritage’s existing base, moving the combined assets to around $8.8 billion.
EPS accretion is expected to reach ~18% post-synergies once Heritage realizes cost savings, projected at $8.1 million in 2026 and $18.7 million in 2027. The deal’s appeal lies in Olympic’s
Supporting Notes
- Heritage has received all necessary regulatory approvals to complete the merger and the planned consolidation of Kitsap Bank into Heritage Bank.
- The deal is expected to close on or about January 31, 2026, pending shareholder approval and other customary closing conditions.
- The transaction is an all-stock agreement valued at approximately $176.6 million, with a fixed exchange ratio of 45 Heritage shares for each Olympic share.
- Upon closing, Olympic shareholders will own about 17.4% of the combined company.
- Financials of Kitsap Bank: ~$1.7B in assets, $1.4B in deposits, ~$941M in loans.
- Expected cost savings: ~$8.1M in 2026 and ~$18.7M in 2027; full EPS accretion of ~18% once efficiencies are realized.
- Post-merger market share on Kitsap/Olympic Peninsulas: ~14% in deposits; Heritage becomes the second-largest community bank in those regions.
- Heritage operates 51 banking offices across WA, OR, and ID; will keep some branches under the Kitsap Bank name to preserve local identity.