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DATE
Oct. 23, 2025, 1 p.m. ET
CALL PARTICIPANTS
President and Chief Executive Officer — Bryan McDonald
Executive Vice President and Chief Financial Officer — Donald J. Hinson
Executive Vice President and Chief Credit Officer — Anthony W. Chalfant
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RISKS
Provision for credit losses increased to $1.8 million in Q3 2025 from $956,000 in Q2 2025, primarily due to a longer weighted average life in the construction loan portfolio.
Non-accrual loans rose to $17.6 million, representing 0.37% of total loans in Q3 2025, up from 0.21% at the end of Q2, mainly due to two loans secured by a nearly complete townhome construction project.
State revenue tax rate increase will add approximately $300,000 to non-interest expense per quarter going forward.
Expected continued inactivity in stock buybacks for the remainder of the calendar year due to capital preservation for the pending Olympic Bank Corp. merger.
TAKEAWAYS
Adjusted EPS Growth -- Adjusted earnings per share increased 5.7% sequentially and 24.4% year-over-year in Q3 2025, supporting earnings momentum.
Return on Assets (ROA) -- Adjusted ROA improved to 1.11% in Q3 2025, compared to 0.87% in Q3 2024, reflecting stronger core profitability.
Total Loan Balances -- Loans decreased by $5.7 million in Q3 2025, as elevated payoffs and prepayments offset higher originations and contributed to lower utilization rates.
Loan Yield -- Portfolio yield rose to 5.53%, up three basis points sequentially in Q3 2025, driven by higher origination rates and adjustable-rate repricing.
Total Deposits -- Deposits increased by $73 million, including a $33.7 million gain in non-interest-bearing balances, net of a $31.4 million decline in certificates of deposit (including a $25 million brokered CD reduction) in Q3 2025.
Interest-Bearing Deposit Cost -- Cost of interest-bearing deposits declined to 1.89% from 1.94% quarter-over-quarter in Q3 2025, with further decreases anticipated following a September rate cut.
Investment Balances -- Investments declined by $33 million in Q3 2025, primarily from expected principal portfolio cash flows, with no new securities purchased and all trade activity halted to preserve capital for the merger.
Net Interest Income -- Net interest income grew by $2.4 million, or 4.3%, from Q2 2025, mainly due to a higher net interest margin.
Net Interest Margin (NIM) -- NIM increased to 3.64%, up from 3.51% in Q2 2025 and 3.30% in Q3 2024; the monthly September NIM was 3.66%.
Provision for Credit Losses -- $1.8 million was recognized, up from $956,000, due to increased average life in the construction loan book as new construction loans reduced utilization rates in Q3 2025.
Credit Quality -- Non-performing loans increased to 0.44% of total loans, while criticized loans declined by more than $19 million to $194.5 million, with substandard and special mention categories down 5% and 12%, respectively, in Q3 2025.
Net Charge-Offs -- Net charge-offs totaled $118,000 in Q3 2025, annualizing at 0.03% of total loans, down from 0.06% in 2024.
Tangible Common Equity (TCE) Ratio -- The TCE ratio increased to 9.8% from 9.4% last quarter in Q3 2025, remaining above well-capitalized regulatory thresholds.
Commercial Loan Commitments -- The commercial lending group closed $317 million in new commitments in Q3 2025, up from $248 million in Q2 2025 and $253 million in Q3 2024, with the pipeline at $511 million at period end.
Commercial Loan Rates -- The average new commercial loan rate reached 6.67%, a 12-basis-point sequential increase, and the average for all new loans was 6.71% in Q3 2025.
Deposit Pipeline -- The pipeline ended at $149 million in Q3 2025, up from $132 million in Q2 2025, with new account balances averaging $40 million compared to $72 million previously.
Expenses -- Non-interest expenses rose by $530,000 quarter-over-quarter in Q3 2025, including $635,000 in merger-related costs, and are expected to trend from the low-$41 million to mid-$41 million per quarter, excluding further merger activity.
Olympic Bank Corp. Merger Progress -- Integration is proceeding on schedule, with an expected closing at the beginning of Q1 and no deviation from original plans.
SUMMARY
Heritage Financial Corporation (HFWA +0.43%) sustained core profitability growth in Q3 2025, reporting sequential and annual gains in both adjusted EPS and net interest margin. Deposit growth outpaced planned reductions in more costly funding sources, while commercial loan production and rates rose, despite a flat overall loan balance due to elevated payoffs in Q3 2025. Management cited disciplined credit quality, declining criticized loans, and limited charge-offs, even with a higher provision related to construction loan portfolio duration in Q3 2025. Expenses remain controlled, though higher due to merger and regulatory costs in Q3 2025. Capital levels increased, while stock buybacks stayed on hold to support the Olympic Bank Corp. acquisition.
Donald J. Hinson stated, "all of our regulatory capital ratios remain comfortably above well-capitalized thresholds."
Bryan McDonald projected a return to mid to high single-digit organic loan growth in 2026 as payoffs moderate and advance activity turns positive.
Interest-bearing deposit pricing remains a near-term margin lever, with targeted reductions in $1 billion of exception-priced deposits currently costing close to 3%.
Operating cost run rate will be affected by a state revenue tax increase, as well as ongoing merger integration, with additional acquisition-related expenses anticipated in coming quarters.
Cautious stance on capital deployment and loan-to-deposit ratio targets persists until after completion and integration of the Olympic Bank Corp. transaction.
INDUSTRY GLOSSARY
Non-accrual Loans: Loans on which the bank has stopped accruing interest due to borrower delinquency or financial stress, carried at their net realizable value.
Brokered CDs: Certificates of deposit sourced through third-party brokers, often at higher rates, used to supplement core deposit funding.
Criticized Loans (Special Mention/Substandard): Loans flagged internally as higher risk, with "special mention" signaling potential issues and "substandard" representing more severe findings below pass credit quality.
Net Advances: Net change in loan fundings versus paydowns over a stated period.
Full Conference Call Transcript
Improving net interest margin and tight controls on non-interest expense growth continue to incrementally drive earnings higher in the third quarter. On an adjusted basis, earnings per share was up 5.7% versus last quarter and up 24.4% versus the third quarter of 2024. On the same adjusted basis, our ROA improved to 1.11% versus 0.87% in the third quarter of 2024. We are excited about the pending merger with Olympic Bank Corp. Their addition to the Heritage franchise will add to the profitability of our operations and better position our company for growth in the Puget Sound market. We'll now move to Don, who will take a few minutes to cover our financial results.
Donald J. Hinson: Thank you, Bryan. I will be reviewing some of the main drivers of our performance for Q3. As I walk through our financial results, unless otherwise noted, all of the prior period comparisons will be with the second quarter of 2025. Starting with the balance sheet, total loan balances are relatively flat in Q3, decreasing by $5.7 million. Although loan originations increased from Q2 levels, payoffs and prepayments also increased in Q3, while utilization rates decreased. Yields in the loan portfolio were 5.53%, which was three basis points higher than Q2. This was due primarily to new loans being originated at higher rates and adjustable rate loans repricing higher.
Bryan McDonald will have an update on loan production and yields in a few minutes. Total deposits increased $73 million in Q3, and non-interest-bearing deposits increased $33.7 million. The increase in total deposits was net of a $31.4 million decrease in certificate of deposit accounts, most of which was the result of a decrease of $25 million in brokered CDs. The cost of interest-bearing deposits decreased to 1.89% from 1.94% in the prior quarter. As a result of the rate cut in September, we expect to see continued decreases in the cost of deposits. Investment balances decreased $33 million, due primarily to expected principal cash flows on the portfolio.
Due to the desire to preserve capital for the pending acquisition, we halted lost trade activity in Q3. We also did not purchase any securities in Q3. Moving on to the income statement, net interest income increased $2.4 million, or 4.3% from the prior quarter, due primarily to a higher net interest margin. The net interest margin increased to 3.64% from 3.51% in the prior quarter and from 3.30% in the third quarter of 2024. We recognize the provision for credit losses in the amount of $1.8 million, up from $956,000 in the prior quarter, due primarily to an increase in the weighted average life of the construction loan portfolio.
New construction loans increase the average life of the portfolio, as well as reduce portfolio utilization rates. Net charge-offs remain at very low levels. Tony will have additional information on credit quality metrics in a few moments. Non-interest expense increased $530,000 from the prior quarter, due mostly to increased comp and benefits expense, as well as professional services. We recognize $635,000 of merger-related expenses in Q3, most of which was included in the professional services category. Comp and benefits expense was higher primarily due to increased incentive compensation accrual. Finally, moving on to capital, all of our regulatory capital ratios remain comfortably above well-capitalized thresholds, and our TCE ratio was 9.8%, up from 9.4% in the prior quarter.
Similar to our inactivity in lost trades on investments, we were also inactive in stock buybacks in Q3 and are unlikely to resume stock buybacks this calendar year. I will now pass the call to Tony, who will have an update on our credit quality.
Anthony W. Chalfant: Thank you, Don. Through the first three quarters of the year, I'm pleased to report that credit quality remains strong and stable. Non-accrual loans totaled $17.6 million at quarter-end, and we do not hold any OREO. This represents 0.37% of total loans and compares to 0.21% at the end of the second quarter. The largest addition during the quarter came from two loans totaling $6.7 million that are primarily secured by a townhome construction project. That project is nearly complete, and the unit should be listed for sale before year-end. There is currently no loss expected on these loans, and the non-accrual decision was primarily tied to the delinquency status.
Also, within our non-accrual loan portfolio, we have just over $2.8 million in government guarantees. Non-performing loans increased modestly from 0.39% of total loans at the end of the second quarter to the current level of 0.44%. This increase was primarily tied to the previously mentioned increase to non-accrual loans. Criticized loans moved lower during the quarter. These loans rated special mention or substandard total just under $194.5 million at quarter-end, declining by just over $19 million during the quarter. Substandard and special mention loans were down by 5% and 12% respectively during the quarter from a combination of payoffs and upgrades.
At 2% of total loans, substandard loans remain at a manageable level and in line with our longer-term historical performance. Page 19 in our investor presentation provides more detail on the composition of our criticized loans and reflects the stability we've seen in this portfolio over the past two years. During the quarter, we experienced total charge-offs of $374,000 that were split evenly between consumer and commercial loans. The losses were partially offset by $256,000 in recoveries, leading to net charge-offs of $118,000 for the quarter. For the first nine months of the year, net charge-offs remain low at $911,000.
This represents 0.03% of total loans on an annualized basis and compares favorably to the 0.06% we reported for the full year 2024. Page 20 of the investor presentation shows our history of low credit losses and how we compare favorably to our peer group. We are pleased with the strength and stability of our credit metrics for both the quarter and through the first nine months of the year. While we are closely watching the increase in our non-performing loans, it is important to note they remain at a low level when compared to our historical trends. While there has been some economic volatility this year, we have yet to see any material impact on our credit quality.
We remain confident that our consistent and disciplined approach to credit underwriting will serve us well should the economy show any material deterioration in the coming quarters. I'll now turn the call over to Bryan for an update on our production.
Bryan McDonald: Thanks, Tony. I'm going to provide detail on our third quarter production results, starting with our commercial lending group. For the quarter, our commercial teams closed $317 million in new loan commitments, up from $248 million last quarter and up from $253 million closed in the third quarter of 2024. Please refer to page 13 in the investor presentation for additional detail on new originated loans over the past five quarters. The commercial loan pipeline ended the third quarter at $511 million, up from $473 million last quarter and up modestly from $491 million at the end of the third quarter of 2024.
As we look ahead to the fourth quarter, we are estimating new commercial team loan commitments of $320 million, which is very similar to Q3 levels. As anticipated, loan balances were fairly flat quarter over quarter, with a $6 million decline in the quarter. Although total loan production was up $81 million, or 30%, versus last quarter, we continued to see elevated payoffs and prepaids, and similar to last quarter, the mix of loans closed during the quarter resulted in lower outstanding balances.
Looking year over year, prepayments and payoffs are $124 million higher than last year, and net advances on loans have swung from a positive $142 million last year to a negative $75 million year to date in 2025. Please see slides 14 and 16 of the investor presentation for further detail on the change in loans during the quarter. Looking ahead to the fourth quarter, we expect loan balances to remain near Q3 levels, then resume growth to more normal levels in 2026 as loan payoffs moderate and the net advances move back to a positive position. Deposits increased $73 million during the quarter and are up $173 million year to date.
The deposit pipeline ended the quarter at $149 million, compared to $132 million in the second quarter. Average balances on new accounts open during the quarter are estimated at $40 million, compared to $72 million in the second quarter. Moving to interest rates, our average third quarter interest rate for new commercial loans was 6.67%, which is up 12 basis points from the 6.55% average for last quarter. In addition, the third quarter rate for all new loans was 6.71%, up 13 basis points from 6.58% last quarter. In closing, as mentioned earlier, we are pleased with our solid performance in the third quarter.
Deposit growth has allowed us to pay down borrowings and broker deposits while our loans have continued to reprice upward. These factors drove our net interest income up $2.4 million versus last quarter and $4.4 million versus the third quarter of 2024. The combination with Olympic Bank Corp and its subsidiary Kitsap Bank will add to this positive momentum in a significant way. We look forward to having the exceptional bankers at Kitsap join the Heritage Bank family and are excited about what we can accomplish together. Overall, we believe we are well positioned to navigate what is ahead and to take advantage of various opportunities to continue to grow the bank.
With that said, Emily, we can now open the line for questions from call attendees.
Operator: Thank you. We will now begin the question and answer session. As a reminder, if you would like to ask a question today, please do so now by pressing STAR followed by the number one on your telephone keypad. If you change your mind or you feel like your question has already been answered, you can press STAR followed by two to withdraw yourself from the queue. Our first question today comes from Matthew Clark with Piper Sandler. Matthew, please go ahead.
Adam Kroll: Hi, this is Adam Kroll on for Matthew Clark, and thank you for taking my questions.
Donald J. Hinson: Sure. Morning, Adam.
Adam Kroll: Yes. Maybe just starting off on the margin, I was wondering if you had the spot cost of deposits at September 30th and maybe the NIM for the month of September.
Donald J. Hinson: Sure. I've got that done. Yes. Yeah. Spot rate on cost of deposits was the interest-bearing was 1.87%, and that was, of course, compared to 1.89% for the quarter. For total cost of deposits of 1.35%, the NIM for September was 3.66% compared to 3.64% for the quarter.
Adam Kroll: Got it. That's super helpful. Just on deposit costs, I guess, how much opportunity do you still see to reduce rates on the non-maturity side?
Donald J. Hinson: I think where it comes into play is mostly close to the approximately $1 billion we have in exception price that are costing us currently close to 3%. We will continue to, as rates are cut, work those down over time. It's a process, and it doesn't happen all at once, but we have been working them down some. I will say also, a lot of the new, if we bring on new accounts, though, they tend to be at the higher than the overall portfolio rate, so that mitigates some of the help of the rate cuts. I do expect that we will continue to be able to work that down over time.
Adam Kroll: Got it. I appreciate the color there. Maybe just one last one for me is, I was wondering if you could just expand on how you're thinking about organic loan growth in 2026, and do you have any visibility into payoffs and when they might normalize lower?
Bryan McDonald: Sure, Adam. We're expecting to move back to more of our traditional range, mid to high single digits next year. On the second quarter call, I had mentioned anticipated growth hitting in the fourth quarter, and we have several additional larger payoffs we're now expecting here in the fourth quarter. We're expecting to be flat again. There are kind of two things going on. One is the cycling of some construction loans we've booked over the last few years that are reaching perm and paying off. You can see that on page 14 in the investor presentation, just with the utilization rates on the construction loans.
As those go to perm and pay off, a lot of the new bookings over the last couple of quarters have been in that construction bucket, so our fundings have been lower. If you look at the detail on the change in loans during the quarter, you can see our net advances on construction loans, or actually on all of our lines, is down this year versus up last year. We expect as we get into 2026, working our way through the rest of these payoffs, that we'll have positive net advances on those loans. That will be a bit of a tailwind versus the headwind that we had this year.
The productions continue to be strong at over $300 million this last quarter and expecting again $300 million in Q4, over $300 million in Q4. It's a little harder for me to see out into 2026 because our pipeline is really accurate out 90 days. It's hard to anticipate loan demand in 2026, although I would say things have been strengthening since the summer. Based on that, I'm not seeing anything at this point that would cause loan demand to dip and the pipeline to shrink, beyond all the obvious things that could drive that. We're seeing the trend move in the other direction right now.
Adam Kroll: Got it. Thanks for taking my questions.
Bryan McDonald: Sure.
Operator: Thank you. Our next question comes from Jeffrey Allen Rulis with D.A. Davidson. Jeff, please go ahead.
Jeffrey Allen Rulis: Thanks. Good morning. Maybe staying on the payoff front, just to follow up. Are any of that kind of managed by you or encouraged balance reductions for credit-related reasons?
Bryan McDonald: Yeah, Jeff, I would say the kind of the change in the fourth quarter is several larger payoffs that are for adversely classified credits. Not necessarily a circumstance where we're working them out of the bank, but ones where the customers have decided to sell the assets and pay it off. That's the difference versus last quarter. We've got a few in that bucket and then one additional construction loan that's going to pay off in Q4. We're expecting Q4 versus previously we thought it'd push into 2026. That's the change for Q3. Not a huge number of loans, but a couple of chunky ones in there.
Jeffrey Allen Rulis: Sure, that's helpful just to kind of get the whole picture that, on the edges, maybe some of that activity is positive. I wanted to talk about the deposit success in the quarter, pretty good core deposit growth. Is that a bit of seasonal factors in play, or is this just execution with the team, a bit of both? Just trying to see, unpack that a little bit.
Bryan McDonald: Yeah, it is a bit of both. Third quarter is traditionally our strongest deposit growth quarter during the year, and that was the case last year, and we saw it this year. The years previously, it was hard to see it, of course, because, you know, of all the rate changes and the outflow of excess deposits. Yes, seasonal increase. We've had good additions from the new account activity side, and so those are driving the balances, as well as, you know, some accumulation in customer accounts, again, more related to that seasonality.
Jeffrey Allen Rulis: Gotcha. Maybe Don, on the margin, I guess, you know, it sounds as if those deposit costs or spot rate and margin, you know, trending well. Is there a bit of a carryover or a declining benefit from the lost trades? I guess anything you could put to takes on margin, particularly in light of cuts as well, rate cuts. Where would you sort of position the margin, ahead?
Donald J. Hinson: Yeah, I don't think we're going to get the margin growth, but based off the rate cut we had in, you know, mid-September, which we didn't, you know, feel the full effect of or experience the full effect of, and kind of expecting one next week. I think we're going to continue to get, again, help on the deposit side, but I think the loan yields are going to be, you know, fairly flattish this quarter. We're going to continue to be able to reprice, you know, adjustable rate loans higher, and new loans going on will be higher. Those rate cuts, you know, when we have, I think it's 22%, 23% fully floating, that also impacts it.
Having a flattish loan yields for the quarter, and maybe some help on the deposit side, I think it's, I think we might continue to see some, you know, NIM improvement, but it'll be muted compared to last quarter.
Jeffrey Allen Rulis: Yeah, okay. Thank you.
Operator: Thank you. Our next question comes from Liam Joseph Coohill with Raymond James. Please go ahead, Liam.
Liam Joseph Coohill: Hey, guys. Good morning. Thank you for the question. This is Liam on for David.
Bryan McDonald: Sure.
Liam Joseph Coohill: We've talked a lot about the deposit success in the quarter, and I was curious, you know, how has competition been trending in your markets, especially with a lot of banks targeting high levels of loan growth? Where are you seeing the most opportunity for gathering those deposits, even in a seasonally stronger quarter?
Bryan McDonald: Yeah, Liam, really, it's the same strategy we've deployed in the past, you know, going after the operating relationships, you know, accounts that look for strong, you know, strong servicing. Don mentioned in his deposit comments that some of the new relationships we're bringing on have a little higher average cost than the bank's average. That's because, you know, for those excess deposits, to the extent the customers are shopping between a few banks, we're having to pay up on those excess deposits, maybe a little bit more so than we are within the portfolio on average. Of course, we're getting strong demand balances along the way. We still see competition in our market, strong pricing competition on deposits.
It's kind of varied from one local geography to another in terms of who the players are that are being particularly aggressive with deposits. That continues to be a factor. If you're going after the operating relationships, it's a different driver than price on that piece. That's the key.
Liam Joseph Coohill: I appreciate that. Thank you. On the acquisition of Olympic, how has progress in the pending deal been trending, and what are the most pressing priorities from your view post-deal approval and integration?
Bryan McDonald: Yeah, Liam, everything is progressing right as planned. We have a project plan and timeline, and everything is going smoothly. We're not seeing anything at this point that would change kind of our estimated closing date, beginning of Q1. We're on track for that. Of course, coordinating closely with the Olympic team to make sure everything goes smoothly. That's also been going very well. Nothing at this point of concern, just going just as we had anticipated.
Liam Joseph Coohill: Great. Last one for me. I mean, asset quality remains pretty strong broadly, and it's great to hear that credit migration is likely going to be resolved without loss in 4Q. With classifieds down quarter over quarter, is there anything you're watching more closely moving forward, or is all seemingly quiet?
Anthony W. Chalfant: Yeah, Liam, it's a good question. I think what we're seeing is that the impact from some of the economic volatility has been sort of spotty through the portfolio, nothing really systemic. We have a few loans or relationships that we're looking at that have been impacted somewhat by that. Generally speaking, it's just kind of the normal ins and outs into the classified criticized buckets that we typically see. No real particular trends we're watching. As Bryan mentioned, we do have some positive momentum in the substandard category that may play out in the fourth quarter or should play out in the fourth quarter.
The loans that are in our non-performing bucket right now, we're just not seeing a lot of material loss potential there as of right now.
Liam Joseph Coohill: Thank you very much. I'll step back.
Bryan McDonald: Thanks, Liam.
Operator: Thank you. Our next question comes from Jackson Laurent with Stephens. Please go ahead.
Jackson Laurent: Hey, good morning. This is Jackson on for Andrew Terrell.
Bryan McDonald: Morning, Jackson.
Jackson Laurent: If I could just hit on expenses first and apologize if I missed it. Adjusting for the merger costs in the quarter, expenses were right at the bottom end of the previously guided $41 to $42 million expense guide. Just wondering if that's a good run rate that we should be looking for going forward.
Donald J. Hinson: Sure, I'll take that, Bryan. The one impact to this quarter that we haven't had is the state raised their revenue tax rate, and that's going to impact us by about $300,000 per quarter. Other than that, I expect it to be pretty similar. You know, we fluctuate some, right? I still would say in the low 41s core, and now we also have this $300,000 that we'll be dealing with. It may bump up more into the mid 41s as a result. I think it still is a pretty good run rate overall. We'll still have some acquisition-related costs, which I'm not sure exactly when they're all going to hit.
We're going to have some, again, this quarter, but there will also be some next quarter and, of course, over the conversion post-acquisition.
Jackson Laurent: Got it. That's helpful. Thank you. Just last one for me. I know the primary focus has been on closing the current pending deal, integrating the franchise, but it seems like the M&A space has been heating up a little bit. Just wondering how you guys are thinking about M&A post-deal close and honestly how conversations have been trending recently.
Bryan McDonald: Obviously, our first priority is to work through the transaction with Olympic and get that closed. We're anticipating early Q1 for the closure. We're continuing our discussions just like we always have. If there was an opportunity that came up, we would consider it. Again, focus is on the Olympic deal and getting it closed. Looking ahead to next year, if the right opportunity came along, we'd certainly be open to taking a look.
Jackson Laurent: Got it. That's all I had. Thank you for taking the questions.
Bryan McDonald: Okay. Thanks, Jackson.
Operator: Thank you. Our next question comes from Kelly Motta with KBW. Please go ahead, Kelly.
Charlie: Hi. This is Charlie on for Kelly Motta.
Bryan McDonald: Morning, Charlie.
Charlie: I guess just kind of piggybacking on that last question, just wondering how you're thinking about capital from here. You mentioned you're likely to pause the buybacks for the remainder of the year. Once the Kitsap deal is closed and integrated successfully, do you expect capital priorities to change in any meaningful way going forward as a combined bank?
Donald J. Hinson: Sure. It's kind of hard to comment on this until we get through it and see exactly where we're coming out. Obviously, we modeled certain things, but we'll probably be preserving some capital as we're experiencing the transaction costs associated with it in addition to the upfront dilution. We do expect to be earning quite a bit of capital back over time. It's kind of hard to comment if we're going to be involved in any sort of buybacks at this point. I really have a hard time commenting on that. We're just going to kind of wait and see. I wouldn't plan on anything in your model at this point.
Charlie: Understood. Thank you. In terms of how you're thinking about the loan-to-deposit ratio, it came down a bit this quarter. I know you expect some liquidity from the Olympic deal. Just wondering high-level how you're thinking about managing that ratio moving forward.
Donald J. Hinson: Yeah. High-level, we'd like to get it back up to 85%, and we'd be comfortable a bit above that as well. We're continuing to look for loan opportunities to deploy more of our assets into loans. Our goal is to move it up to 85% and be comfortable a bit higher than that.
Charlie: Got it. Thanks for taking my question.
Bryan McDonald: Sure. Thanks, Charlie.
Operator: Thank you. As a final reminder, if you would like to ask a question today, please do so now by pressing STAR followed by the number one on your telephone keypad. With that, we have not received any further questions, and I'll turn the call back over to Bryan McDonald for any closing comments.
Bryan McDonald: Thanks, Emily. If there are no more questions, then we'll wrap up this quarter's earnings call. We thank you for your time, your support, and your interest in our ongoing performance. We look forward to talking to many of you in the coming weeks. Goodbye.
Operator: Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your lines.