Heritage shares fall 10.17% intraday after completing Olympic Bancorp merger with 7.1M share issuance causing dilution concerns.

Heritage Financial Corporation fell 10.17% intraday following the announcement of its completed merger with Olympic Bancorp, Inc. and Kitsap Bank. The transaction involved issuing 7.17 million new shares of Heritage common stock, with Olympic shareholders receiving 45 shares per Olympic share. This significant equity issuance, highlighted in multiple press releases, likely triggered investor concerns over share dilution and potential earnings per share (EPS) compression. While the merger expands Heritage’s branch network, the market reacted negatively to the large-scale stock offering and associated integration risks, such as operational challenges and dilution. The move aligns with the bearish price action, as the dilutive impact outweighed the strategic growth narrative.