HERITAGE FINANCIAL CORP /WA/
For the period ended Mar 31, 2026. Filed May 8, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
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NONINTEREST EXPENSE OVERVIEW
Noninterest Expense
Comparison of three months ended March 31, 2026 to the comparable period in the prior year
The following table presents changes in the key components of noninterest expense for the periods indicated:
| Three Months EndedMarch 31, · Change | ||||
|---|---|---|---|---|
| 2026 | 2025 | $ | % | |
| (Dollars in thousands) | ||||
| Compensation and employee benefits | $33,972 | $25,799 | $8,173 | 31.7% |
| Occupancy and equipment | 5,330 | 4,926 | 404 | 8.2 |
| Data processing | 5,093 | 3,897 | 1,196 | 30.7 |
| Marketing | 383 | 335 | 48 | 14.3 |
| Professional services | 2,842 | 734 | 2,108 | 287.2 |
| State/municipal business and use taxes | 1,674 | 1,220 | 454 | 37.2 |
| Federal deposit insurance premium | 1,037 | 812 | 225 | 27.7 |
| Other real estate owned, net | 4 | — | 4 | 100.0 |
| Amortization of intangible assets | 2,058 | 303 | 1,755 | 579.2 |
| Other expense | 4,158 | 3,357 | 801 | 23.9 |
| Total noninterest expense | $56,551 | $41,383 | $15,168 | 36.7% |
Noninterest expense increased $15.2 million, or 36.7%, to $56.6 million during the three months ended March 31, 2026, compared to $41.4 million during the same period in 2025. The increases were primarily due to expenses from the Merger, including increases related to compensation and employee benefits due to increased headcount, severance expense, occupancy and equipment expense primarily due to additional rent expense, and additional data processing expense due to an increase in transactional accounts and balances. Noninterest expense also increased due to an increase in the amortization of intangible assets of $1.8 million, relating to the Merger. Professional fees increased due primarily to Merger-related costs recognized during the three months ended March 31, 2026. Total Merger-related expenses incurred during the three months ended March 31, 2026 were $5.2 million and consisted of severance expense, professional fees, core conversion costs and contract termination costs.
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