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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
Date of Report (Dated of earliest event reported): July 25, 2024
HERITAGE FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter) 
 
Commission File Number 000-29480
Washington 91-1857900
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification No.)
201 Fifth Avenue SW,OlympiaWA 98501
(Address of principal executive offices) (Zip Code)
(360) 943-1500
(Registrant’s telephone number, including area code) 

Not applicable
(Former name or former address, if changed since last report) 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12 (b) of the Act:
Title of each classTrading symbolName of each exchange on which registered
Common stock, no par valueHFWAThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1934 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02    Results of Operations and Financial Condition
On July 25, 2024, Heritage Financial Corporation (“Heritage”) issued a press release announcing its second quarter 2024 financial results.
A copy of the release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The information furnished pursuant to this Item and the related exhibit is being “furnished” and will not, except to the extent required by applicable law or regulation, be deemed “filed” by Heritage for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 7.01    Regulation FD Disclosure
Heritage is filing an investor presentation that it reviewed in conjunction with its earnings release conference call on July 25, 2024.
A copy of the presentation materials is attached hereto as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference. The information furnished pursuant to this Item and the related exhibit is being “furnished” and will not, except to the extent required by applicable law or regulation, be deemed “filed” by Heritage for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 8.01    Other Events
On July 25, 2024, Heritage issued a press release announcing a regular quarterly cash dividend of $0.23 per common share. The dividend will be paid on August 21, 2024 to shareholders of record at the close of business on August 7, 2024.
A copy of the release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01     Financial Statements and Exhibits
(d) Exhibits
Exhibit 99.1 
Exhibit 99.2
104Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HERITAGE FINANCIAL CORPORATION
Date:
July 25, 2024
/S/ JEFFREY J. DEUEL
Jeffrey J. Deuel
Chief Executive Officer
(Duly Authorized Officer)



hfwarevisedlogoa01a02.jpg
FOR IMMEDIATE RELEASE
DATE: July 25, 2024

HERITAGE FINANCIAL ANNOUNCES SECOND QUARTER 2024 RESULTS AND DECLARES REGULAR CASH DIVIDEND

Second Quarter 2024 Highlights
•Net income was $14.2 million, or $0.41 per diluted share, for the second quarter compared to $5.7 million, or $0.16 per diluted share, for the first quarter.
•The second quarter results include a loss on sale of securities of $1.9 million, or $0.04 per diluted share.
•Loans receivable increased $104.5 million, or 2.4% (9.5% annualized), during the second quarter.
•Net interest margin was 3.29% for the second quarter compared to 3.32% for the first quarter.
•Cost of total deposits was 1.34% for the second quarter compared to 1.19% for the first quarter.
•Noninterest expense to average total assets was 2.21% for the second quarter compared to 2.29% for the first quarter.
•Declared a regular cash dividend of $0.23 per share on July 24, 2024.
•Announced CEO succession plan, with Bryan McDonald named as President of Heritage Financial Corporation and as Chief Executive Officer of Heritage Bank effective July 1, 2024; Jeff Deuel will continue as Chief Executive Officer of Heritage Financial Corporation until May 6, 2025.

Olympia, WA - Heritage Financial Corporation (Nasdaq GS: HFWA) (the “Company”), the parent company of Heritage Bank (the "Bank"), today reported net income of $14.2 million for the second quarter of 2024 compared to $5.7 million for the first quarter of 2024 and $16.8 million for the second quarter of 2023. Diluted earnings per share for the second quarter of 2024 were $0.41 compared to $0.16 for the first quarter of 2024 and $0.48 for the second quarter of 2023.
In the second quarter of 2024, the Company incurred a pre-tax loss of $1.9 million on the sale of investment securities due to the strategic repositioning of its balance sheet, which decreased diluted earnings per share by $0.04 for the quarter. The Company sold $38.7 million in investment securities with an estimated weighted average book yield of 2.73%. The proceeds from sales were used to fund loan growth for the quarter.
Jeff Deuel, Chief Executive Officer of the Company, commented, "We are pleased with our accomplishments for the second quarter including recognizing strong loan growth and we are seeing greater benefit from our ongoing expense management measures. Although we continue to experience modest margin compression, we expect our strategies will result in improved profitability as we transition into a more normalized rate environment."
1

Financial Highlights
The following table provides financial highlights at the dates and for the periods indicated:
As of or for the Quarter Ended
June 30,
2024		March 31,
2024		June 30,
2023
(Dollars in thousands, except per share amounts)
Net income$14,159 $5,748 $16,846 
Pre-tax, pre-provision income(1)
$17,263 $8,260 $21,780 
Diluted earnings per share$0.41 $0.16 $0.48 
Return on average assets(2)
0.80 %0.33 %0.95 %
Pre-tax, pre-provision return on average assets(1)(2)
0.98 %0.47 %1.22 %
Return on average common equity(2)
6.75 %2.73 %8.19 %
Return on average tangible common equity(1)(2)
9.74 %4.07 %12.04 %
Adjusted return on average tangible common equity(1)(2)
10.76 %9.34 %12.04 %
Net interest margin(2)
3.29 %3.32 %3.56 %
Cost of total deposits(2)
1.34 %1.19 %0.61 %
Efficiency ratio69.4 %83.0 %65.5 %
Adjusted efficiency ratio(1)
67.1 %68.9 %65.5 %
Noninterest expense to average total assets(2)
2.21 %2.29 %2.32 %
Total assets$7,059,857 $7,091,283 $7,115,410 
Loans receivable, net$4,481,396 $4,378,429 $4,204,936 
Total deposits$5,515,652 $5,532,327 $5,595,543 
Loan to deposit ratio(3)
82.2 %80.0 %76.0 %
Book value per share$24.66 $24.43 $23.39 
Tangible book value per share(1)
$17.56 $17.36 $16.34 
(1) Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” section for a reconciliation to the comparable GAAP financial measure.
(2) Annualized.
(3) Loans receivable divided by total deposits.

Balance Sheet
Cash and cash equivalents decreased $75.9 million, or 40.0%, to $113.8 million at June 30, 2024 from $189.6 million at March 31, 2024 primarily due to an increase in loans.
Total investment securities decreased $71.9 million, or 4.2%, to $1.66 billion at June 30, 2024 from $1.73 billion at March 31, 2024. As previously discussed, the Company sold $38.7 million in investment securities at a loss of $1.9 million as part of its ongoing strategic balance sheet repositioning, in addition to which there were investment maturities and repayments of $33.6 million during the second quarter of 2024.
The following table summarizes the composition of the Company's investment securities portfolio at the dates indicated:
 June 30, 2024March 31, 2024Change
 Balance% of
Total		Balance% of
Total		$%
 (Dollars in thousands)
Investment securities available for sale, at fair value:
U.S. government and agency securities$12,474 0.8 %$13,417 0.8 %$(943)(7.0)%
Municipal securities69,720 4.2 71,955 4.2 (2,235)(3.1)
Residential CMO and MBS446,468 26.9 476,742 27.5 (30,274)(6.4)
Commercial CMO and MBS378,768 22.8 409,468 23.7 (30,700)(7.5)
Corporate obligations11,384 0.7 11,191 0.6 193 1.7 
Other asset-backed securities12,434 0.7 13,737 0.8 (1,303)(9.5)
Total$931,248 56.1 %$996,510 57.6 %$(65,262)(6.5)%
2

 June 30, 2024March 31, 2024Change
 Balance% of
Total		Balance% of
Total		$%
 (Dollars in thousands)
Investment securities held to maturity, at amortized cost:
U.S. government and agency securities$151,146 9.1 %$151,110 8.7 %$36 — %
Residential CMO and MBS256,742 15.5 262,359 15.2 (5,617)(2.1)
Commercial CMO and MBS319,454 19.3 320,537 18.5 (1,083)(0.3)
Total$727,342 43.9 %$734,006 42.4 %$(6,664)(0.9)%
Total investment securities$1,658,590 100.0 %$1,730,516 100.0 %$(71,926)(4.2)%

Loans receivable increased $104.5 million, or 2.4%, to $4.53 billion at June 30, 2024 from $4.43 billion at March 31, 2024. New loans funded in the second quarter of 2024 and first quarter of 2024 totaled $166.7 million and $101.7 million, respectively. Loan prepayments increased slightly during the second quarter of 2024 to $48.5 million, compared to $39.1 million during the prior quarter.
Non-owner occupied CRE increased $56.9 million, or 3.3%, due primarily to new loan production of $40.7 million during the second quarter of 2024 and advances on outstanding commitments. Residential real estate loans increased $27.0 million, or 7.0%, due primarily to residential loan purchases. Commercial and industrial loans increased $19.1 million, or 2.5%, due primarily to new loan production of $62.8 million during the quarter, offset by pay downs on outstanding commitments.
The following table summarizes the Company's loans receivable, net at the dates indicated:
June 30, 2024March 31, 2024Change
Balance% of TotalBalance% of Total$%
(Dollars in thousands)
Commercial business:
Commercial and industrial$779,495 17.2 %$760,391 17.2 %$19,104 2.5 %
Owner-occupied commercial real estate ("CRE")953,518 21.0 951,583 21.5 1,935 0.2 
Non-owner occupied CRE1,759,605 38.8 1,702,665 38.4 56,940 3.3 
Total commercial business3,492,618 77.0 3,414,639 77.1 77,979 2.3 
Residential real estate
413,358 9.1 386,357 8.7 27,001 7.0 
Real estate construction and land development:
Residential
80,451 1.8 84,081 1.9 (3,630)(4.3)
Commercial and multifamily
378,695 8.4 372,532 8.4 6,163 1.7 
Total real estate construction and land development459,146 10.2 456,613 10.3 2,533 0.6 
Consumer167,493 3.7 170,556 3.9 (3,063)(1.8)
Loans receivable4,532,615 100.0 %4,428,165 100.0 %104,450 2.4 
Allowance for credit losses on loans(51,219)(49,736)(1,483)3.0 
Loans receivable, net$4,481,396 $4,378,429 $102,967 2.4 %
Total deposits decreased $16.7 million, or 0.3%, to $5.52 billion at June 30, 2024 from $5.53 billion at March 31, 2024. Certificates of deposit increased $103.5 million, or 13.3%, to $883.2 million at June 30, 2024 from $779.7 million at March 31, 2024 primarily due to transfers from non-maturity deposit accounts as customers moved balances to higher yielding accounts. Average total deposits increased $29.2 million to $5.56 billion for the second quarter of 2024, from $5.53 billion for the first quarter of 2024.
3

The following table summarizes the Company's total deposits at the dates indicated:
June 30, 2024March 31, 2024Change
Balance
% of TotalBalance% of Total$%
(Dollars in thousands)
Noninterest demand deposits$1,599,367 29.0 %$1,637,111 29.5 %$(37,744)(2.3)%
Interest bearing demand deposits1,487,670 27.0 1,552,584 28.1 (64,914)(4.2)
Money market accounts1,098,821 19.9 1,099,983 19.9 (1,162)(0.1)
Savings accounts446,583 8.1 462,974 8.4 (16,391)(3.5)
Total non-maturity deposits4,632,441 84.0 4,752,652 85.9 (120,211)(2.5)
Certificates of deposit883,211 16.0 779,675 14.1 103,536 13.3 
Total deposits$5,515,652 100.0 %$5,532,327 100.0 %$(16,675)(0.3)%
Total borrowings were $500 million at June 30, 2024 and March 31, 2024. Federal Reserve Bank ("FRB") Bank Term Funding Program borrowings totaling $400 million matured in May 2024 and were replaced with $400 million in borrowings from the Federal Home Loan Bank ("FHLB") during the second quarter of 2024.
Total stockholders' equity increased $2.9 million, or 0.3%, to $850.5 million at June 30, 2024 compared to $847.6 million at March 31, 2024 due primarily to $14.2 million of net income recognized for the quarter, partially offset by $8.1 million in dividends paid to common shareholders and $4.4 million in common stock repurchases.
On April 24, 2024, the Company's Board of Directors authorized the repurchase of up to 5% of the Company's outstanding common stock or approximately 1.7 million shares. The new stock repurchase program superseded the previous stock repurchase program, which was authorized in March 2020 and allowed for the buyback of approximately 1.8 million shares. The previous program was substantially completed during the quarter ended March 31, 2024. During the second quarter of 2024, the Company repurchased 240,153 shares.
The Company and Bank continued to maintain capital levels in excess of the applicable regulatory requirements for them both to be categorized as “well-capitalized” at June 30, 2024.
The following table summarizes the capital ratios for the Company at the dates indicated:
June 30,
2024		March 31,
2024
Stockholders' equity to total assets12.0%12.0%
Tangible common equity to tangible assets (1)
8.98.8
Common equity tier 1 capital ratio (2)
12.612.6
Leverage ratio (2)
10.110.0
Tier 1 capital ratio (2)
13.013.0
Total capital ratio (2)
13.913.9
(1) Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” section for a reconciliation to the comparable GAAP financial measure.
(2) Current quarter ratios are estimates pending completion and filing of the Company’s regulatory reports.

Allowance for Credit Losses and Provision for Credit Losses
The allowance for credit losses ("ACL") on loans as a percentage of loans receivable was 1.13% at June 30, 2024 compared to 1.12% at March 31, 2024. During the second quarter of 2024, the Company recorded a $1.5 million provision for credit losses on loans, compared to a $1.7 million provision for credit losses on loans during the first quarter of 2024. The provision for credit losses on loans during the second quarter of 2024 was primarily driven by loan growth during the quarter.
During the second quarter of 2024, the Company recorded a $202,000 reversal of provision for credit losses on unfunded commitments compared to a $312,000 reversal of provision for credit losses on unfunded commitments during the first quarter of 2024. The reversal of provision for credit losses on unfunded commitments during the second quarter of 2024 was due primarily to a decrease in the unfunded exposure on loans and an increase in utilization rates.
4

The following table provides detail on the changes in the ACL on loans and the ACL on unfunded commitments, and the related provision for (reversal of) credit losses for the periods indicated:
As of or for the Quarter Ended
June 30, 2024March 31, 2024June 30, 2023
ACL on LoansACL on UnfundedTotalACL on LoansACL on UnfundedTotalACL on LoansACL on UnfundedTotal
(Dollars in thousands)
Balance, beginning of period$49,736 $976 $50,712 $47,999 $1,288 $49,287 $44,469 $1,856 $46,325 
Provision for (reversal of) credit losses1,470 (202)1,268 1,704 (312)1,392 1,988 (79)1,909 
Net recoveries (net charge-offs)13 — 13 33 — — 33 (49)— (49)
Balance, end of period$51,219 $774 $51,993 $49,736 $976 $50,712 $46,408 $1,777 $48,185 

Credit Quality
The percentage of classified loans to loans receivable increased to 1.8% at June 30, 2024, compared to 1.6% at March 31, 2024. Classified loans include loans rated substandard or worse. The increase was due primarily to the downgrade of a single $15.1 million commercial and multifamily construction loan to substandard from special mention. Total loans designated as special mention decreased by $8.5 million to $93.7 million at June 30, 2024, compared to $102.2 million at March 31, 2024.
The following table illustrates total loans by risk rating and their respective percentage of total loans at the dates indicated:
June 30, 2024March 31, 2024
Balance% of TotalBalance% of Total
(Dollars in thousands)
Risk Rating:
Pass$4,356,425 96.1 %$4,255,750 96.1 %
Special Mention93,694 2.1 102,232 2.3 
Substandard82,496 1.8 70,183 1.6 
Total$4,532,615 100.0 %$4,428,165 100.0 %
Nonaccrual loans to loans receivable were 0.08% and 0.11% at June 30, 2024 and March 31, 2024, respectively. Changes in nonaccrual loans during the periods indicated were as follows:
Quarter Ended
June 30,
2024		March 31,
2024		June 30,
2023
(Dollars in thousands)
Balance, beginning of period$4,792 $4,468 $4,815 
Additions549 593 — 
Net principal payments and transfers to accruing status(483)(269)(185)
Payoffs(769)— — 
Charge-offs(263)— — 
Balance, end of period$3,826 $4,792 $4,630 

Liquidity
Total liquidity sources available at June 30, 2024 were $2.41 billion. This includes on- and off-balance sheet liquidity. The Company has access to FHLB advances and the FRB Discount Window. The Company's available liquidity sources at June 30, 2024 represented a coverage ratio of 43.7% of total deposits and 116.1% of estimated uninsured deposits.
5

The following table summarizes the Company's available liquidity:
Quarter Ended
June 30,
2024		March 31,
2024
(Dollars in thousands)
On-balance sheet liquidity
Cash and cash equivalents$113,757 $189,647 
Unencumbered investment securities available for sale (1)
926,822 708,378 
Total on-balance sheet liquidity
$1,040,579 $898,025 
Off-balance sheet liquidity
FRB borrowing availability$278,632 $71,300 
FHLB borrowing availability (2)
943,492 1,384,631 
Fed funds line borrowing availability with correspondent banks145,000 145,000 
Total off-balance sheet liquidity
$1,367,124 $1,600,931 
Total available liquidity$2,407,703 $2,498,956 
(1) Investment securities available for sale at fair value.
(2) Includes FHLB total borrowing availability of $1.34 billion at June 30, 2024 based on pledged assets, however, maximum credit capacity is 45% of the Bank's total assets one quarter in arrears or $3.19 billion.

Net Interest Income and Net Interest Margin
Net interest income decreased $417,000, or 0.8%, during the second quarter of 2024 compared to the first quarter of 2024 due primarily to an increase of $2.6 million in interest expense offset partially by a $2.2 million increase in interest income. Net interest margin decreased three basis points to 3.29% during the second quarter of 2024 from 3.32% during the first quarter of 2024.
The cost of interest bearing deposits increased 19 basis points to 1.89% for the second quarter of 2024 from 1.70% for the first quarter of 2024. This increase was primarily due to customers transferring balances from non-maturity deposits to higher rate certificates of deposit.
The yield on interest earning assets increased 14 basis points to 4.93% for the second quarter of 2024, compared to 4.79% for the first quarter of 2024. The yield on loans receivable, net, increased 11 basis points to 5.52% during the second quarter of 2024 compared to 5.41% during the first quarter of 2024 due primarily to higher rates on new and renewed loans. The impact to loan yield from recoveries of interest and fees on loans classified as nonaccrual was three basis points during the second quarter of 2024, compared to no impact during the first quarter of 2024. The yield on taxable securities increased nine basis points to 3.38% during the second quarter of 2024 compared to 3.29% during the first quarter of 2024 due primarily to sales of lower yielding investments during the first and second quarters of 2024.
Net interest income decreased $4.7 million, or 8.4%, during the second quarter of 2024 compared to the second quarter of 2023 and the net interest margin decreased 27 basis points to 3.29% from 3.56% during this same period. The decrease was due primarily to an increase in interest expense resulting from increased deposit rates and borrowing expense, partially offset by an increase in yields earned on interest earning assets following increases in market interest rates.
The following table provides relevant net interest income information for the periods indicated:
 Quarter Ended
 June 30, 2024March 31, 2024June 30, 2023
 Average
Balance		Interest
Earned/
Paid
Average
Yield/
Rate (1)
Average
Balance		Interest
Earned/
Paid
Average
Yield/
Rate (1)
Average
Balance		Interest
Earned/
Paid
Average
Yield/
Rate (1)
(Dollars in thousands)
Interest Earning Assets:
Loans receivable, net (2)(3)
$4,415,790 $60,608 5.52 %$4,303,394 $57,862 5.41 %$4,145,556 $53,623 5.19 %
Taxable securities1,685,795 14,156 3.38 1,810,709 14,834 3.29 1,989,297 14,774 2.98 
Nontaxable securities (3)
18,812 165 3.53 21,302 181 3.42 71,803 520 2.90 
Interest earning deposits121,539 1,653 5.47 108,733 1,476 5.46 90,754 1,154 5.10 
Total interest earning assets6,241,936 76,582 4.93 %6,244,138 74,353 4.79 %6,297,410 70,071 4.46 %
Noninterest earning assets864,855 848,314 845,455 
Total assets$7,106,791 $7,092,452 $7,142,865 
Interest Bearing Liabilities:
Certificates of deposit$838,285 $9,128 4.38 %$733,816 $7,671 4.20 %$421,451 $2,483 2.36 %
6

 Quarter Ended
 June 30, 2024March 31, 2024June 30, 2023
 Average
Balance		Interest
Earned/
Paid
Average
Yield/
Rate (1)
Average
Balance		Interest
Earned/
Paid
Average
Yield/
Rate (1)
Average
Balance		Interest
Earned/
Paid
Average
Yield/
Rate (1)
(Dollars in thousands)
Savings accounts453,099 190 0.17 475,075 230 0.19 551,201 157 0.11 
Interest bearing demand and money market accounts2,625,593 9,135 1.40 2,659,999 8,487 1.28 2,782,353 5,967 0.86 
Total interest bearing deposits3,916,977 18,453 1.89 3,868,890 16,388 1.70 3,755,005 8,607 0.92 
Junior subordinated debentures21,874 539 9.91 21,800 547 10.09 21,577 499 9.28 
Securities sold under agreement to repurchase— — — — — — 39,755 63 0.64 
Borrowings500,230 6,477 5.21 500,660 5,888 4.73 417,896 5,078 4.87 
Total interest bearing liabilities4,439,081 25,469 2.31 %4,391,350 22,823 2.09 %4,234,233 14,247 1.35 %
Noninterest demand deposits1,638,262 1,657,132 1,900,640 
Other noninterest bearing liabilities186,010 197,023 183,250 
Stockholders’ equity843,438 846,947 824,742 
Total liabilities and stockholders’ equity$7,106,791 $7,092,452 $7,142,865 
Net interest income and spread$51,113 2.62 %$51,530 2.70 %$55,824 3.11 %
Net interest margin3.29 %3.32 %3.56 %
(1) Annualized; average balances are calculated using daily balances.
(2) Average loans receivable, net includes loans held for sale and loans classified as nonaccrual, which carry a zero yield. Interest earned on loans receivable, net includes the amortization of net deferred loan fees of $971,000, $809,000 and $726,000 for the second quarter of 2024, first quarter of 2024 and second quarter of 2023, respectively.
(3) Yields on tax-exempt loans and securities have not been stated on a tax-equivalent basis.

Noninterest Income
Noninterest income increased $8.1 million to $5.2 million during the second quarter of 2024 from a loss of $2.9 million during the first quarter of 2024. The increase was due primarily to the reduction of loss resulting from the sale of investment securities recognized in the second quarter of 2024 compared to the prior quarter.
Noninterest income decreased $2.0 million from the same period in 2023 due primarily to a $1.9 million pre-tax loss on the sale of investment securities during the second quarter of 2024. Card revenue declined modestly due to a reduction in card activity as non-maturity deposit balances have declined.
The following table presents the key components of noninterest income and the change for the periods indicated:
Quarter EndedQuarter Over Quarter Change
Prior Year
Quarter Change
June 30,
2024		March 31,
2024		June 30,
2023		$% $%
(Dollars in thousands)
Service charges and other fees$2,817 $2,788 $2,682 $29 1.0 %$135 5.0 %
Card revenue1,930 1,839 2,123 91 4.9 (193)(9.1)
Loss on sale of investment securities(1,921)(9,973)— 8,052 (80.7)(1,921)(100.0)
Gain on sale of loans, net— 26 101 (26)(100.0)(101)(100.0)
Interest rate swap fees52 — 115 52 — (63)(54.8)
Bank owned life insurance income931 920 837 11 1.2 94 11.2 
Gain on sale of other assets, net49 — — 49 — 49 100.0 
Other income1,388 1,500 1,423 (112)(7.5)(35)(2.5)
Total noninterest income (loss)
$5,246 $(2,900)$7,281 $8,146 (280.9)%$(2,035)(27.9)%

Noninterest Expense
Noninterest expense decreased $1.3 million, or 3.2%, during the second quarter of 2024 from the first quarter of 2024 due primarily to a decline in compensation and employee benefits. Compensation and employee benefits declined due primarily to severance costs resulting from staff reductions of $1.1 million recognized during the first quarter of 2024 offset partially by an increase in salary expense due to annual merit increases in base pay. Occupancy and equipment declined due primarily to a
7

decrease in maintenance costs related to winter weather conditions experienced in the first quarter of 2024. Data processing increased during the quarter due to a non-recurring $230,000 refund recognized in the first quarter of 2024 related to a contract termination.
Noninterest expense decreased $2.2 million, or 5.4%, during the second quarter of 2024 compared to the same period in 2023, primarily due to a decrease in data processing and other expense. Data processing decreased primarily due to a decline in ongoing costs resulting from prior technology-related contract renewals and terminations. Other expense decreased due to a decrease in customer account loss expense and a reduction in employee related expenses which included additional expenses in the second quarter of 2024 related to newly added teams. Compensation and employee benefits decreased due to a reduction in full-time equivalent employees to 748 at June 30, 2024 from 813 at June 30, 2023.
The following table presents the key components of noninterest expense and the change for the periods indicated:
Quarter EndedQuarter Over Quarter ChangePrior Year Quarter Change
June 30,
2024		March 31,
2024		June 30,
2023		$%$%
(Dollars in thousands)
Compensation and employee benefits$24,448 $25,476 $24,781 $(1,028)(4.0)%$(333)(1.3)%
Occupancy and equipment4,765 4,932 4,666 (167)(3.4)99 2.1 
Data processing3,785 3,537 4,500 248 7.0 (715)(15.9)
Marketing244 211 441 33 15.6 (197)(44.7)
Professional services795 567 751 228 40.2 44 5.9 
State/municipal business and use taxes
1,160 1,300 1,054 (140)(10.8)106 10.1 
Federal deposit insurance premium812 795 797 17 2.1 15 1.9 
Amortization of intangible assets421 421 623 — — (202)(32.4)
Other expense2,666 3,131 3,712 (465)(14.9)(1,046)(28.2)
Total noninterest expense$39,096 $40,370 $41,325 $(1,274)(3.2)%$(2,229)(5.4)%

Income Tax Expense
Income tax expense increased $716,000 during the second quarter of 2024 to $1.8 million compared to $1.1 million for the first quarter of 2024. The increase in income tax expense during the current quarter compared to the prior quarter was primarily due to an increase in pre-tax income during the second quarter of 2024. The effective tax rate declined during the second quarter of 2024 compared to the prior quarter due to recognition of a discrete tax expense item related to restricted stock awards in the first quarter of 2024 and a reduction in forecasted pre-tax income which caused a downward adjustment to the annualized effective tax rate.
Income tax expense decreased during the second quarter of 2024 compared to the second quarter of 2023 due to lower pre-tax income during the second quarter of 2024. The effective tax rate declined due to lower pre-tax income which increased the impact of favorable permanent tax items such as tax-exempt investments, investments in bank owned life insurance and tax credits.
The following table presents the income tax expense and related metrics and the change for the periods indicated:
Quarter EndedChange
June 30,
2024		March 31,
2024		June 30,
2023
Quarter Over Quarter
Prior Year Quarter
(Dollars in thousands)
Income before income taxes$15,995 $6,868 $19,871 $9,127 $(3,876)
Income tax expense$1,836 $1,120 $3,025 $716 $(1,189)
Effective income tax rate11.5 %16.3 %15.2 %(4.8)%(3.7)%

Dividends
On July 24, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.23 per share. The dividend is payable on August 21, 2024 to shareholders of record as of the close of business on August 7, 2024.
Earnings Conference Call
The Company will hold a telephone conference call to discuss this earnings release on Thursday, July 25, 2024 at 10:00 a.m. Pacific time. To access the call, please dial (833) 470-1428 -- access code 281184 a few minutes prior to 10:00 a.m. Pacific time. The call will be available for replay through August 1, 2024 by dialing (866) 813-9403 -- access code 638306.
8

About Heritage Financial Corporation
Heritage Financial Corporation is an Olympia, Washington-based bank holding company with Heritage Bank, a full-service commercial bank, as its sole wholly-owned banking subsidiary. Heritage Bank has a branch network of 50 banking offices in Washington, Oregon and Idaho. Heritage Bank does business under the Whidbey Island Bank name on Whidbey Island, Washington. The Company's stock is traded on the Nasdaq Global Select Market under the symbol “HFWA.” More information about Heritage Financial Corporation can be found on its website at www.hf-wa.com and more information about Heritage Bank can be found on its website at www.heritagebanknw.com.
Contact
Jeff Deuel, Chief Executive Officer, (360) 943-1500
Don Hinson, Executive Vice President and Chief Financial Officer, (360) 943-1500

Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements often include words such as "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements. Factors that could cause our actual results to differ materially from those described in the forward-looking statements include, but are not limited to, the following: changes in general economic conditions generally, and in the financial services industry, nationally or in our local market areas, other markets where our lending relationships, or other aspects of our business operations or financial markets including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth, or increased political instability due to acts of war or terrorism; changes in the interest rate environment, including prior increases in the Board of Governors of the Federal Reserve System (the “Federal Reserve”) benchmark rate and duration at which such increased interest rate levels are maintained, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; the impact of continuing elevated inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short-period of time that resulted in a number of bank failures; the impact of recent bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; the extensive regulatory framework that applies to us; potential changes in federal policy and at regulatory agencies as a result of the upcoming 2024 presidential election; changes in the interest rate environment; the quality and composition of our securities portfolio and the impact of any adverse changes including market liquidity within the securities markets; legislative and regulatory changes, including changes in banking, securities and tax law, in regulatory policies and principles, or the interpretation of regulatory capital or other rules; risks related to climate change and the negative impact it may have on our customers and their businesses; severe weather, natural disasters, widespread disease or pandemics; credit and interest rate risks associated with our business, customers, borrowings, repayment, investment, and deposit practices; fluctuations in deposits; the concentration of large deposits from certain clients, who have balances above current Federal Deposit Insurance Corporation insurance limits; liquidity issues, including our ability to borrow funds or raise additional capital, if necessary; the overall health of local and national real estate markets; concentrations within our loan portfolio; the level of nonperforming assets on our balance sheet; disruptions, fraudulent activity, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions, including as a result of sophisticated attacks using artificial intelligence and similar tools; rapid technological change in the financial services industry; increased competition in the financial services industry from non-banks such as credit unions and Fintech companies, including digital asset service providers; the composition of our executive management team and our ability to attract and retain key personnel; effects of critical accounting policies and judgments or new and revised accounting policies, including the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us or to which we may become subject; our success at managing the risks involved in the foregoing items; and other factors described in our latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”) which are available on our website at www.heritagebanknw.com and on the SEC's website at www.sec.gov. We caution readers not to place undue reliance on any forward-looking statements. Moreover, any of the forward-looking statements that we make in this press release or the documents we file with or furnish to the SEC are based only on information then actually known to us and upon management's beliefs and assumptions at the time they are made which may turn out to be wrong because of inaccurate assumptions we might make, because of the factors described above or because of other factors that we cannot foresee. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
9

HERITAGE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
(Dollars in thousands, except shares)
June 30,
2024		March 31,
2024		December 31,
2023
Assets
Cash on hand and in banks$55,469 $52,947 $55,851 
Interest earning deposits 58,288 136,700 169,122 
Cash and cash equivalents113,757 189,647 224,973 
Investment securities available for sale, at fair value (amortized cost of $1,022,211, $1,087,789 and $1,227,787, respectively)
931,248 996,510 1,134,353 
Investment securities held to maturity, at amortized cost (fair value of $642,051, $649,001 and $662,450, respectively)
727,342 734,006 739,442 
Total investment securities1,658,590 1,730,516 1,873,795 
Loans receivable4,532,615 4,428,165 4,335,627 
Allowance for credit losses on loans(51,219)(49,736)(47,999)
Loans receivable, net4,481,396 4,378,429 4,287,628 
Premises and equipment, net73,218 74,092 74,899 
Federal Home Loan Bank stock, at cost22,303 4,303 4,186 
Bank owned life insurance126,420 125,615 125,655 
Accrued interest receivable19,855 19,898 19,518 
Prepaid expenses and other assets319,428 323,472 318,571 
Other intangible assets, net3,951 4,372 4,793 
Goodwill 240,939 240,939 240,939 
Total assets$7,059,857 $7,091,283 $7,174,957 
Liabilities and Stockholders' Equity
Non-interest bearing deposits
$1,599,367 $1,637,111 $1,715,847 
Interest bearing deposits
3,916,285 3,895,216 3,884,025 
Total deposits5,515,652 5,532,327 5,599,872 
Borrowings500,000 500,000 500,000 
Junior subordinated debentures21,912 21,838 21,765 
Accrued expenses and other liabilities171,786 189,538 200,059 
Total liabilities6,209,350 6,243,703 6,321,696 
Common stock541,294 544,636 549,748 
Retained earnings379,714 373,629 375,989 
Accumulated other comprehensive loss, net(70,501)(70,685)(72,476)
Total stockholders' equity850,507 847,580 853,261 
Total liabilities and stockholders' equity$7,059,857 $7,091,283 $7,174,957 
Shares outstanding34,496,197 34,689,843 34,906,233 

10

HERITAGE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)
Quarter EndedSix Months Ended
June 30,
2024		March 31,
2024		June 30,
2023		June 30,
2024		June 30,
2023
Interest Income
Interest and fees on loans$60,608 $57,862 $53,623 $118,470 $104,073 
Taxable interest on investment securities14,156 14,834 14,774 28,990 29,431 
Nontaxable interest on investment securities165 181 520 346 1,106 
Interest on interest earning deposits1,653 1,476 1,154 3,129 2,126 
Total interest income76,582 74,353 70,071 150,935 136,736 
Interest Expense
Deposits18,453 16,388 8,607 34,841 13,135 
Junior subordinated debentures539 547 499 1,086 981 
Securities sold under agreement to repurchase— — 63 — 110 
Borrowings6,477 5,888 5,078 12,365 6,844 
Total interest expense25,469 22,823 14,247 48,292 21,070 
Net interest income51,113 51,530 55,824 102,643 115,666 
Provision for credit losses1,268 1,392 1,909 2,660 3,734 
Net interest income after provision for credit losses49,845 50,138 53,915 99,983 111,932 
Noninterest Income
Service charges and other fees2,817 2,788 2,682 5,605 5,306 
Card revenue1,930 1,839 2,123 3,769 4,123 
Loss on sale of investment securities, net(1,921)(9,973)— (11,894)(286)
Gain on sale of loans, net— 26 101 26 150 
Interest rate swap fees52 — 115 52 168 
Bank owned life insurance income931 920 837 1,851 1,546 
Gain on sale of other assets, net49 — — 49 2 
Other income1,388 1,500 1,423 2,888 4,530 
Total noninterest income (loss)
5,246 (2,900)7,281 2,346 15,539 
Noninterest Expense
Compensation and employee benefits24,448 25,476 24,781 49,924 50,317 
Occupancy and equipment4,765 4,932 4,666 9,697 9,558 
Data processing3,785 3,537 4,500 7,322 8,842 
Marketing244 211 441 455 843 
Professional services795 567 751 1,362 1,379 
State/municipal business and use taxes1,160 1,300 1,054 2,460 2,062 
Federal deposit insurance premium812 795 797 1,607 1,647 
Amortization of intangible assets421 421 623 842 1,246 
Other expense2,666 3,131 3,712 5,797 7,036 
Total noninterest expense39,096 40,370 41,325 79,466 82,930 
Income before income taxes15,995 6,868 19,871 22,863 44,541 
Income tax expense1,836 1,120 3,025 2,956 7,238 
Net income$14,159 $5,748 $16,846 $19,907 $37,303 
11

Quarter EndedSix Months Ended
June 30,
2024		March 31,
2024		June 30,
2023		June 30,
2024		June 30,
2023
Basic earnings per share$0.41 $0.17 $0.48 $0.58 $1.06 
Diluted earnings per share$0.41 $0.16 $0.48 $0.57 $1.06 
Dividends declared per share$0.23 $0.23 $0.22 $0.46 $0.44 
Average shares outstanding - basic34,609,90034,825,47135,058,15534,717,68535,083,133
Average shares outstanding - diluted34,919,39535,227,13835,126,59035,127,40735,348,268
12

HERITAGE FINANCIAL CORPORATION
FINANCIAL STATISTICS (Unaudited)
(Dollars in thousands)
Average Balances, Yields, and Rates Paid:
Six Months Ended June 30,
20242023
Average
Balance		Interest
Earned/
Paid
Average
Yield/
Rate (1)
Average
Balance		Interest
Earned/
Paid
Average
Yield/
Rate (1)
Interest Earning Assets:
Loans receivable, net(2)(3)
$4,359,592 $118,470 5.46 %$4,092,769 $104,073 5.13 %
Taxable securities1,748,252 28,990 3.33 1,998,268 29,431 2.97 
Nontaxable securities(3)
20,057 346 3.47 77,317 1,106 2.88 
Interest earning deposits115,136 3,129 5.47 87,086 2,126 4.92 
Total interest earning assets6,243,037 150,935 4.86 %6,255,440 136,736 4.41 %
Noninterest earning assets856,584 847,195 
Total assets$7,099,621 $7,102,635 
Interest Bearing Liabilities:
Certificates of deposit$786,050 $16,799 4.30 %$386,026 $3,707 1.94 %
Savings accounts464,087 420 0.18 576,046 299 0.10 
Interest bearing demand and money market accounts2,642,796 17,622 1.34 2,805,645 9,129 0.66 
Total interest bearing deposits3,892,933 34,841 1.80 3,767,717 13,135 0.70 
Junior subordinated debentures21,837 1,086 10.00 21,539 981 9.18 
Securities sold under agreement to repurchase— — — 41,469 110 0.53 
Borrowings500,445 12,365 4.97 282,502 6,844 4.89 
Total interest bearing liabilities4,415,215 48,292 2.20 %4,113,227 21,070 1.03 %
Noninterest demand deposits1,647,697 1,984,200 
Other noninterest bearing liabilities191,516 186,553 
Stockholders’ equity845,193 818,655 
Total liabilities and stockholders’ equity$7,099,621 $7,102,635 
Net interest income and spread$102,643 2.66 %$115,666 3.38 %
Net interest margin3.31 %3.73 %
(1) Average balances are calculated using daily balances.
(2) Average loans receivable, net includes loans held for sale and loans classified as nonaccrual, which carry a zero yield. Interest earned on loans receivable, net includes the amortization of net deferred loan fees of $1.8 million and $1.5 million for the six months ended June 30, 2024 and 2023, respectively.
(3) Yields on tax-exempt loans and securities have not been stated on a tax-equivalent basis.
13

HERITAGE FINANCIAL CORPORATION
FINANCIAL STATISTICS (Unaudited)
(Dollars in thousands)
Nonperforming Assets and Credit Quality Metrics:
Quarter EndedSix Months Ended
June 30,
2024		March 31,
2024		June 30,
2023		June 30,
2024		June 30,
2023
Allowance for Credit Losses on Loans:
Balance, beginning of period$49,736 $47,999 $44,469 $47,999 $42,986 
Provision for credit losses on loans
1,470 1,704 1,988 3,174 3,701 
Charge-offs:
Commercial business(312)(77)— (389)(161)
Consumer(238)(123)(144)(361)(297)
Total charge-offs(550)(200)(144)(750)(458)
Recoveries:
Commercial business518 217 38 735 89 
Consumer45 16 57 61 90 
Total recoveries563 233 95 796 179 
Net recoveries (charge-offs)13 33 (49)46 (279)
Balance, end of period$51,219 $49,736 $46,408 $51,219 $46,408 
Net charge-offs (recoveries) on loans to average loans receivable, net(1)
— %— %— %— %0.01 %
(1) Annualized.
June 30,
2024		March 31,
2024		December 31,
2023
Nonperforming Assets:
Nonaccrual loans:
Commercial business$3,826 $4,792 $4,468 
Total nonaccrual loans3,826 4,792 4,468 
Accruing loans past due 90 days or more
4,296 2,628 1,293 
Total nonperforming loans
8,122 7,420 5,761 
Other real estate owned— — — 
Nonperforming assets$8,122 $7,420 $5,761 
ACL on loans to:
Loans receivable1.13 %1.12 %1.11 %
Nonaccrual loans1,338.71 %1,037.90 %1,074.28 %
Nonaccrual loans to loans receivable
0.08 %0.11 %0.10 %
Nonperforming loans to loans receivable
0.18 %0.17 %0.13 %
Nonperforming assets to total assets0.12 %0.10 %0.08 %

14

HERITAGE FINANCIAL CORPORATION
QUARTERLY FINANCIAL STATISTICS (Unaudited)
(Dollars in thousands, except per share amounts)
 Quarter Ended
 June 30,
2024		March 31,
2024		December 31,
2023		September 30,
2023		June 30,
2023
Earnings:    
Net interest income$51,113 $51,530 $53,871 $55,618 $55,824 
Provision for (reversal of) credit losses1,268 1,392 1,424 (878)1,909 
Noninterest income (loss)
5,246 (2,900)(3,147)6,271 7,281 
Noninterest expense39,096 40,370 42,723 40,970 41,325 
Net income14,159 5,748 6,233 18,219 16,846 
Pre-tax, pre-provision net income (1)
17,263 8,260 8,001 20,919 21,780 
Basic earnings per share$0.41 $0.17 $0.18 $0.52 $0.48 
Diluted earnings per share$0.41 $0.16 $0.18 $0.51 $0.48 
Average Balances:  
Loans receivable, net (2)
$4,415,790 $4,303,394 $4,233,743 $4,201,554 $4,145,556 
Total investment securities1,704,607 1,832,011 1,861,587 1,992,303 2,061,100 
Total interest earning assets6,241,936 6,244,138 6,269,805 6,363,043 6,297,410 
Total assets7,106,791 7,092,452 7,140,876 7,212,732 7,142,865 
Total interest bearing deposits3,916,977 3,868,890 3,849,067 3,841,148 3,755,005 
Total noninterest demand deposits1,638,262 1,657,132 1,772,261 1,859,374 1,900,640 
Stockholders' equity843,438 846,947 813,383 821,494 824,742 
Financial Ratios:  
Return on average assets (3)
0.80 %0.33 %0.35 %1.00 %0.95 %
Pre-tax, pre-provision return on average assets (1)(3)
0.98 0.47 0.44 1.15 1.22 
Return on average common equity (3)
6.75 2.73 3.04 8.80 8.19 
Return on average tangible common equity (1)(3)
9.74 4.07 4.69 12.90 12.04 
Adjusted return on average tangible common equity (1)(3)
10.76 9.34 10.21 13.62 12.04 
Efficiency ratio69.4 83.0 84.2 66.2 65.5 
Adjusted efficiency ratio67.1 68.9 70.4 64.8 65.5 
Noninterest expense to average total assets (3)
2.21 2.29 2.37 2.25 2.32 
Net interest spread (3)
2.62 2.70 2.84 2.95 3.11 
Net interest margin (3)
3.29 3.32 3.41 3.47 3.56 
(1) Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” section for a reconciliation to the comparable GAAP financial measure.
(2) Average loans receivable, net includes loans held for sale.
(3) Annualized.










15

HERITAGE FINANCIAL CORPORATION
QUARTERLY FINANCIAL STATISTICS (Unaudited)
(Dollars in thousands, except per share amounts)
 As of or for the Quarter Ended
 June 30,
2024		March 31,
2024		December 31,
2023		September 30,
2023		June 30,
2023
Select Balance Sheet:   
Total assets$7,059,857 $7,091,283 $7,174,957 $7,150,588 $7,115,410 
Loans receivable, net4,481,396 4,378,429 4,287,628 4,219,911 4,204,936 
Total investment securities1,658,590 1,730,516 1,873,795 1,894,392 2,030,826 
Total deposits5,515,652 5,532,327 5,599,872 5,635,187 5,595,543 
Noninterest demand deposits1,599,367 1,637,111 1,715,847 1,789,293 1,857,492 
Stockholders' equity850,507 847,580 853,261 813,546 819,733 
Financial Measures: 
Book value per share$24.66 $24.43 $24.44 $23.31 $23.39 
Tangible book value per share (1)
17.56 17.36 17.40 16.25 16.34 
Stockholders' equity to total assets12.0 %12.0 %11.9 %11.4 %11.5 %
Tangible common equity to tangible assets (1)
8.9 8.8 8.8 8.2 8.3 
Loans to deposits ratio82.2 80.0 77.4 75.7 76.0 
Regulatory Capital Ratios:(2)
Common equity tier 1 capital ratio
12.6 %12.6 %12.9 %12.9 %12.8 %
Leverage ratio
10.1 10.0 10.0 9.9 9.9 
Tier 1 capital ratio
13.0 13.0 13.3 13.3 13.2 
Total capital ratio
13.9 13.9 14.1 14.1 14.1 
Credit Quality Metrics: 
ACL on loans to:
Loans receivable1.13 %1.12 %1.11 %1.10 %1.09 %
Nonperforming loans1,338.7 1,037.9 1,074.3 1,531.7 1,002.3 
Nonaccrual loans to loans receivable
0.08 0.11 0.10 0.07 0.11 
Nonperforming loans to loans receivable0.18 0.17 0.13 0.12 0.16 
Nonperforming assets to total assets0.12 0.10 0.08 0.07 0.10 
Net charge-offs (recoveries) on loans to average loans receivable, net(3)
0.00 0.00 0.06 (0.11)0.00 
Criticized Loans by Credit Quality Rating:
Special mention$93,694 $102,232 $79,977 $72,152 $84,623 
Substandard82,496 70,183 69,757 62,653 58,653 
Other Metrics:
Number of banking offices50 50 50 50 51 
Deposits per branch$110,313 $110,647 $111,997 $112,704 $109,717 
Average number of full-time equivalent employees748 765 803 821 813 
Average assets per full-time equivalent employee9,501 9,271 8,893 8,785 8,786 
(1) See Non-GAAP Financial Measures section herein.
(2) Current quarter ratios are estimates pending completion and filing of the Company’s regulatory reports.
(3) Annualized.
16

HERITAGE FINANCIAL CORPORATION
NON-GAAP FINANCIAL MEASURES (Unaudited)
(Dollars in thousands, except per share amounts)

This earnings release contains certain financial measures not presented in accordance with Generally Accepted Accounting Principles ("GAAP") in addition to financial measures presented in accordance with GAAP. The Company has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in the Company’s capital, performance and asset quality reflected in the current quarter and comparable period results and to facilitate comparison of its performance with the performance of its peers. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for financial measures presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of the non-GAAP measures used in this earnings release to the comparable GAAP measures are presented below.
The Company considers the tangible common equity to tangible assets ratio and tangible book value per share to be useful measurements of the adequacy of the Company’s capital levels.
June 30,
2024		March 31,
2024		December 31,
2023		September 30,
2023		June 30,
2023
Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share:
Total stockholders' equity (GAAP)$850,507 $847,580 $853,261 $813,546 $819,733 
Exclude intangible assets(244,890)(245,311)(245,732)(246,325)(246,920)
Tangible common equity (non-GAAP)$605,617 $602,269 $607,529 $567,221 $572,813 
Total assets (GAAP)$7,059,857 $7,091,283 $7,174,957 $7,150,588 $7,115,410 
Exclude intangible assets(244,890)(245,311)(245,732)(246,325)(246,920)
Tangible assets (non-GAAP)$6,814,967 $6,845,972 $6,929,225 $6,904,263 $6,868,490 
Stockholders' equity to total assets (GAAP)12.0 %12.0 %11.9 %11.4 %11.5 %
Tangible common equity to tangible assets (non-GAAP)
8.9 %8.8 %8.8 %8.2 %8.3 %
Shares outstanding34,496,197 34,689,843 34,906,233 34,901,076 35,047,800 
Book value per share (GAAP)$24.66 $24.43 $24.44 $23.31 $23.39 
Tangible book value per share (non-GAAP)$17.56 $17.36 $17.40 $16.25 $16.34 























17

HERITAGE FINANCIAL CORPORATION
NON-GAAP FINANCIAL MEASURES (Unaudited)
(Dollars in thousands, except per share amounts)
The Company considers the return on average tangible common equity ratio to be a useful measurement of the Company’s ability to generate returns for its common shareholders. By removing the impact of intangible assets and their related amortization and tax effects, the performance of the Company's ongoing business operations can be evaluated. The Company believes that presenting an adjusted return on tangible common equity ratio, which excludes certain non-recurring items is useful in measuring performance of the Company's ongoing business operations by removing the volatility of these non-recurring items.
Quarter Ended
June 30,
2024		March 31,
2024		December 31,
2023		September 30,
2023		June 30,
2023
Return on Average Tangible Common Equity, annualized:
Net income (GAAP)$14,159 $5,748 $6,233 $18,219 $16,846 
Add amortization of intangible assets421 421 593 595 623 
Exclude tax effect of adjustment(88)(88)(125)(125)(131)
Tangible net income (non-GAAP)$14,492 $6,081 $6,701 $18,689 $17,338 
Tangible net income (non-GAAP)$14,492 $6,081 $6,701 $18,689 $17,338 
Exclude loss on sale of investment securities, net
1,921 9,973 10,005 1,940 — 
Exclude gain on sale of branch including related deposits, net— — — (610)— 
Exclude tax effect of adjustment(403)(2,094)(2,101)(279)— 
Adjusted tangible net income (non-GAAP)$16,010 $13,960 $14,605 $19,740 $17,338 
Average stockholders' equity (GAAP)$843,438 $846,947 $813,383 $821,494 $824,742 
Exclude average intangible assets(245,106)(245,536)(246,022)(246,663)(247,278)
Average tangible common stockholders' equity (non-GAAP)$598,332 $601,411 $567,361 $574,831 $577,464 
Return on average common equity, annualized (GAAP)6.75 %2.73 %3.04 %8.80 %8.19 %
Return on average tangible common equity, annualized (non-GAAP)9.74 %4.07 %4.69 %12.90 %12.04 %
Adjusted return on average tangible common equity, annualized (non-GAAP)10.76 %9.34 %10.21 %13.62 %12.04 %
The Company believes that presenting pre-tax pre-provision income, which reflects its profitability before income taxes and provision for credit losses, and the pre-tax, pre-provision return on average assets are useful measurements in assessing its operating income and expenses by removing the volatility that may be associated with credit loss provisions.
Quarter Ended
June 30,
2024		March 31,
2024		December 31,
2023		September 30,
2023		June 30,
2023
Pre-tax, Pre-provision Income and Pre-tax, Pre-provision Return on Average Assets, annualized:
Net income (GAAP)$14,159 $5,748 $6,233 $18,219 $16,846 
Add income tax expense1,836 1,120 344 3,578 3,025 
Add (subtract) provision for (reversal of) credit losses1,268 1,392 1,424 (878)1,909 
Pre-tax, pre-provision income (non-GAAP)$17,263 $8,260 $8,001 $20,919 $21,780 
Average total assets (GAAP)$7,106,791 $7,092,452 $7,140,876 $7,212,732 $7,142,865 
18

Quarter Ended
June 30,
2024		March 31,
2024		December 31,
2023		September 30,
2023		June 30,
2023
Pre-tax, Pre-provision Income and Pre-tax, Pre-provision Return on Average Assets, annualized:
Return on average assets, annualized (GAAP)0.80 %0.33 %0.35 %1.00 %0.95 %
Pre-tax, pre-provision return on average assets (non-GAAP)0.98 %0.47 %0.44 %1.15 %1.22 %
The Company believes that presenting an adjusted efficiency ratio, which excludes certain non-recurring items is useful in measuring operating income and expenses by removing the volatility of these non-recurring items.
Quarter Ended
June 30,
2024		March 31,
2024		December 31,
2023		September 30,
2023		June 30,
2023
Adjusted Efficiency Ratio :
Total noninterest expense (GAAP)$39,096 $40,370 $42,723 $40,970 $41,325 
Net interest income (GAAP)$51,113 $51,530 $53,871 $55,618 $55,824 
Total noninterest income (GAAP)$5,246 $(2,900)$(3,147)$6,271 $7,281 
Exclude (gain) loss on sale of investment securities, net1,921 9,973 10,005 1,940 — 
Exclude gain on sale of branch including related deposits, net— — — (610)— 
Adjusted total noninterest income (non-GAAP)$7,167 $7,073 $6,858 $7,601 $7,281 
Efficiency ratio (GAAP)69.4 %83.0 %84.2 %66.2 %65.5 %
Adjusted efficiency ratio (non-GAAP)67.1 %68.9 %70.4 %64.8 %65.5 %

19
INVESTOR PRESENTATION Q2 2024

 
2 This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, are based on certain assumptions and often include the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could,” as well as negative of such words. These statements relate to Heritage Financial Corporation’s (“we”, “us”, “our”, or the “Company”) financial condition, results of operations, beliefs, plans, objectives, goals, expectations, assumptions and statements about future performance or business. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results for future periods to differ materially from those expressed in any forward-looking statements by, or on behalf of, the Company and could negatively affect the Company’s operating results and stock price performance. Factors that may cause such a difference include, but are not limited to: • potential adverse impacts to economic conditions nationally or in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth; • changes in the interest rate environment, including past increases in the Federal Reserve benchmark rate and the duration at which increased interest rate levels are maintained, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; • the impact of continuing inflation and the current and future monetary policies of the Board of Governors of the Federal Reserve System in response thereto; • the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment regarding the stability and liquidity of banks; • the effects of any federal government shutdown; • legislative or regulatory changes that adversely affect our business, including changes in banking, securities and tax law, in regulatory policies and principles, or the interpretation of regulatory capital or other rules, and including as a result of the upcoming 2024 presidential election; • credit and interest rate risks associated with the Company’s businesses, customers, borrowings, repayment, investment, and deposit practices; • fluctuations in deposits; • liquidity issues, including our ability to borrow funds or raise additional capital, if necessary; • disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; • effects of critical accounting policies and judgments, including the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; and • the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business and the businesses of our clients. Further you should also consider the risks, assumptions and uncertainties set forth in the “Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2023, as well as those set forth in other reports we file with or furnish to the Securities and Exchange Commission. These risks, assumptions and uncertainties should be considered in evaluating any forward-looking statements, and undue reliance should not be placed on such statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update any forward-looking statement, whether to reflect events or circumstances after the date on which the statement is made, to reflect new information or the occurrence of unanticipated events, or otherwise. Except as otherwise indicated, this presentation speaks as of the date hereof. The delivery of this presentation shall not, under any circumstances, create any implication that there has been no change in the affairs of the Company after the date hereof. Certain of the information contained herein may be derived from information provided by industry sources. We believe that such information is accurate and that the sources from which it has been obtained are reliable. We cannot guarantee the accuracy of such information, however, and we have not independently verified such information. Non-GAAP Financial Information The Company reports its results in accordance with United States generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP performance measures used in managing the business may provide meaningful information about underlying trends in its business. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. Slides containing a discussion and reconciliation of non-GAAP financial measures are contained in the Appendix - Reconciliation of Non-GAAP Financial measures and Quarterly Financial Statistics.. All dollars throughout the entire presentation are in millions unless otherwise noted, except per share amounts. Percentages presented may not total 100% due to rounding. All tables and charts are as of June 30, 2024 unless otherwise noted. FORWARD LOOKING STATEMENTS

 
HERITAGE FINANCIAL CORPORATION OVERVIEW

 
4 OVERVIEW General Overview Nasdaq symbol HFWA Stock price(2) $20.82 Market capitalization(2) $722 million Institutional ownership(2) 82.4% Headquarters Olympia, WA # of branches 50 Year established 1927 Q2 2024 Financial Highlights Assets $7.1 billion Deposits $5.5 billion Loans receivable $4.5 billion Net income $14.2 million Net interest margin 3.29% ROAE(3) 6.75% ROATCE(1)(4) 9.74% Adjusted ROATCE(1)(4) 10.76% Efficiency ratio 69.4% Adjusted efficiency ratio(1) 67.1% Leverage ratio 10.1% Total capital ratio 13.9% Map obtained from S&P Global Market Intelligence; certain locations of branches overlap on the map. (1) Represents a non-GAAP financial measure (2) Market information as of July 16, 2024. (3) Return on average equity (4) Return on average tangible common equity Metropolitan Statistical Areas Seattle-Tacoma-Bellevue, WA Portland-Vancouver-Hillsboro, OR-WA Eugene-Springfield, OR Boise–Nampa, ID Heritage Branch

 
5 COMPANY STRATEGY Allocate capital to organically grow our core banking business Ÿ Recent successful hiring of individuals and teams of bankers in high-growth and dynamic Seattle and Portland markets as well as other key markets in and adjacent to our current footprint including our recent branch openings in Eugene, Oregon and Boise, Idaho Ÿ Disciplined approach to concentration risk and active portfolio management Improve operational efficiencies and rationalize branch network Ÿ Focused on achieving increased efficiencies with operational scale, internal focus on improving processes and technology solutions Ÿ Closed/Consolidated 36 branches since the beginning of 2010, including 12 branches in 2021 and one branch in 2023 Ÿ Full-time equivalent employee decreased to 748 at June 30, 2024 compared to 803 at December 31, 2023 Ÿ Reduced noninterest expense to average assets to 2.21% in Q2 2024 as compared to 2.32% in Q2 2023 Generate stable profitability and risk adjusted returns Ÿ Return on average tangible common equity(1) ("ROATCE") averaged 14.1% from 2021 to 2023. Ÿ Five-year growth in tangible book value(1) of $3.00, or 20.6%, to $17.56 at June 30, 2024 from $14.56 at June 30, 2019 Remain active and disciplined in M&A Ÿ Five acquisitions in Washington and Oregon since 2013 Ÿ Target metrics = IRR of >15% with earnbacks < 3 years Maintain conservative underwriting standards and actively manage the loan portfolio Ÿ Long track record of strong underwriting with conservative risk profile Ÿ Disciplined approach to concentration risk Ÿ Nonaccrual loans to loans receivable at 0.08% at June 30, 2024 Focus on core deposits to increase franchise value over the long term Ÿ 29.0% noninterest demand deposits to total deposits at June 30, 2024 Ÿ 1.34% cost of total deposits; top 10% performance among US publicly traded banks in Q1 2024 Engage in proactive capital management Ÿ History of increasing regular dividends and utilizing special dividends to manage capital Ÿ In April 2024, approved a new stock repurchase plan up to 5% of the Company's outstanding common shares or approximately 1.7 million shares Ÿ Strong capital ratios: leverage ratio(3) = 10.1%; total capital ratio(3) = 13.9% (1) Represents a non-GAAP financial measure (2) Comparable cost of total deposits provided by S&P Global Market Intelligence for the first quarter of 2024 and includes banks nationwide with shares on Nasdaq or NYSE with total assets less than $100 billion excluding pending merger targets (3) Current quarter capital ratios are estimates pending completion and filing of the Company's regulatory reports

 
6 PROFITABILITY IMPROVEMENT MEASURES Q4 2023 Q1 2024 Q2 2024 TOTAL Quarterly Impact Investments Sold $151.8 $144.0 $38.8 $334.6 Weighted Average Book Yield of Sales 2.41% 2.37% 2.73% 2.43% Investments Purchased $140.7 $33.1 $— $173.8 Weighted Average Book Yield of Purchases 6.08% 6.05% —% 6.07% Loss on Sale of Investments $10.0 $10.0 $1.9 $21.9 Quarterly Estimated EPS Impact $(0.22) $(0.22) $(0.04) $(0.48) Estimated Annualized Profitability Improvement Estimated Annualized Pre-Tax Financial Impact $5.3 $4.6 $1.0 $10.9 Estimated Annualized EPS Impact $0.12 $0.10 $0.02 $0.24 Balance Sheet Repositioning The Company has completed investment sales over the past several quarters as part of strategic repositioning of the balance sheet. Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Noninterest expense 41,325 40,970 42,723 40,370 39,096 FTE 813 821 803 765 748 Overhead ratio 2.32 % 2.25 % 2.37 % 2.29 % 2.21 % Expense Management Measures Costs relating to expense management measures totaling $2.0 million were recognized in Q4 2023 relating to contract renewal negotiations, contract cancellations and severance payments. In the Q1 2024, an additional $1.1 million of severance costs were recognized due to staff reductions. This has resulted in a decrease in noninterest expense. See below for additional details. 41,325 40,970 42,723 40,370 39,096 2.32% 2.25% 2.37% 2.29% 2.21% Overhead ratio Noninterest expense Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024

 
7 $106,526 $88,444 $75,384 $73,503 Median household income 4.5% 4.0% 16.2% 3.8% 3.9% 12.9% 3.2% 7.2% 18.9% 4.0% 2.1% 13.4% Seattle MSA Portland MSA Boise MSA USA Unemployment rate 2023-2028 Projected Population Growth 2023-2028 Projected Median Household Income Growth STRONG AND DIVERSE ECONOMIC LANDSCAPE Major Employers in the Pacific Northwest Data obtained from www.bls.gov, www.bea.gov and S&P Global Market Intelligence Unemployment data reflects the BLS's latest monthly Economic New Release - Employment & Unemployment Economic data as of May 2024 MSA Tie-out of websites used: https://www.bls.gov/web/metro/laulrgma.htm https://www.bls.gov/web/laus/laumstcm.htm https://data.bls.gov/timeseries/LNS14000000 https://www.zippia.com/advice/largest-companies-in-washington/https://www.zippia.com/advice/largest-companies-in-oregon/

 
8 LOANS AND DEPOSITS BY LOCATION MSA = Metropolitan or Micropolitan Statistical Area Location based upon branch or office location Loans by MSA Seattle WA $2,167 47.8% Portland OR-WA $655 14.4% Mount Vernon WA $253 5.6% Olympia WA $180 4.0% Yakima WA $108 2.4% Bellingham WA $261 5.8% Other $909 20.1% Deposits by MSA Seattle WA $2,425 44.0% Portland OR-WA $786 14.2% Mount Vernon WA $297 5.4% Olympia WA $488 8.8% Oak Harbor WA $158 2.9% Longview WA $533 9.7% Yakima WA $219 4.0% Bellingham WA $173 3.1% Other $437 7.9%

 
9 POTENTIAL GROWTH OPPORTUNITIES Map obtained from S&P Global Market Intelligence Certain locations of bank headquarters overlap on the map Financial information as of the most recent quarter publicly available • Long-term goal to build a Pacific Northwest ("PNW") regional commercial community bank; potential opportunities for M&A and production team lift-outs in WA, OR and ID. • Significant number of banks remaining in HFWA footprint; further consolidation is expected. – 11 banks between $200 million and $500 million in assets – 17 banks between $500 million and $1.0 billion in assets – 17 banks between $1.0 billion and $3.5 billion in assets • Target metrics include 15% IRR and earnback of < 3 years. Bank headquarters

 
10 $1,712 $3,651 $3,879 $4,113 $4,238 $5,553 $6,615 $7,432 $6,980 $7,175 $7,091 $7,060 $1,747 $1,079 $15.02 $15.68 $16.08 $16.88 $20.63 $22.10 $22.85 $24.34 $22.73 $24.44 $24.43 $24.66 $10.73 $11.41 $11.86 $12.70 $13.54 $15.07 $15.77 $17.19 $15.66 $17.40 $17.36 $17.56 Organic Assets Acquired Assets Book value per share Tangible book value per share (1) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q1 2024 Q2 2024 Acquired Puget Sound Bancorp $639MM in assets Premier Commercial Bancorp $440MM in assets HISTORICAL GROWTH ORGANIC AND ACQUISITIVE Merged with Washington Banking Company $1.7B in assets (1) Represents a non-GAAP financial measure

 
11 GROWTH STRATEGY YEAR ACTIVITY 2013 • Acquired Valley Community Bancshares - $254MM in assets • Acquired Northwest Commercial Bank - $65MM in assets 2014 • Merged with Washington Banking Company - $1.7B in assets 2015 • Added a commercial banking team in Seattle, Washington • Formed Capital Markets Group as result of the added expertise 2017 • Added commercial banking team in the greater Portland, Oregon area • Expanded expertise in non-profit lending and added a commercial position focused on deposit production 2018 • Acquired Puget Sound Bancorp - $639MM in assets • Acquired Premier Commercial Bancorp - $440MM in assets 2019 • Added commercial banking team in the greater Portland, Oregon area • Expanded expertise in the dental and healthcare fields 2022 • Added new commercial banking team in Vancouver, Washington • Added new commercial banking team in Portland, Oregon • Expanded into a new market with addition of commercial banking team and full service branch in Eugene, Oregon (branch opened August 2022) 2023 • Expanded into a new market with addition of commercial banking team and full service branch in Boise, Idaho (branch opened January 2023) 2024 • Expanded Builder Banking team with hiring of new SVP, Director of Builder Banking. Future plans include addition of sales positions in greater Seattle, Washington and Boise, Idaho areas. Bank Acquisitions and Team Additions Bank Acquisition Team Addition

 
FINANCIAL UPDATE

 
13 LOAN PORTFOLIO Loan Portfolio Composition $232 $196 $171 $171 $167$165 $344 $375 $386 $413 $227 $294 $414 $457 $459 $768 $693 $718 $760 $779 $2,424 $2,524 $2,657 $2,655 $2,714 Consumer Residential real estate Construction & land development Commercial and Industrial (C&I) Commercial real estate (CRE) 2021 2022 2023 Q1 2024 Q2 2024 New Loan Commitments $23 $17 $18 $20 $25$27 $11 $3 $14 $27 $81 $91 $57 $39 $63 $58 $42 $81 $60 $87 $73 $84 $49 $34 $68 Consumer Residential real estate Construction & land development Commercial and Industrial (C&I) Commercial Real Estate (CRE) Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024

 
14 Construction Commitments $488 $686 $769 $762 $730 $227 $294 $414 $457 $459 $261 $392 $355 $305 $271 Outstanding Balance Available Credit 2021 2022 2023 Q1 2024 Q2 2024 LOC Utilization Rates 25.2% 29.8% 28.2% 31.9% 30.4% 46.5% 42.9% 53.8% 60.0% 62.9% 31.4% 31.1% 31.1% 31.7% 31.6% Utilization Rate - Consumer LOCs Utilization Rate - Construction LOCs Utilization Rate - C&I LOCs 2021 2022 2023 Q1 2024 Q2 2024 LINE OF CREDIT ("LOC") UTILIZATION

 
15 COMMERCIAL LOAN EXPOSURE Commercial Business Loans by Industry Exposure Industry Amount WARR at 6/30/24 Real estate, rental and leasing $1,901 4.4 Health care and social assistance 338 4.3 Accommodation and food services 186 5.0 Retail trade 147 4.5 Construction 137 4.7 Other services (except Public administration) 105 4.7 Manufacturing 86 4.8 All other industries 593 4.4 Total $3,493 4.5 CRE Loans only by Collateral Type Collateral Type Amount WARR at 6/30/24 Office $552 4.3 Industrial 433 4.4 Retail store / shopping center 293 4.5 Multi-family 343 4.5 Mixed use property 157 4.5 Motel / hotel 145 4.9 Single purpose 117 4.6 Warehouse 139 4.6 Mini-storage 174 4.2 Recreational / school 70 5.0 Other 289 4.6 Total $2,713 4.5 WARR = Weighted average risk rating Categorized by NAICS code. Office - Owner-occupied CRE 10.3% Office - Non-owner occupied CRE 10.1% Industrial 16.0% Retail store / shopping center 10.8% Multi-family 12.6% Mixed use property 5.8% Motel / hotel 5.4% Single purpose 4.3% Warehouse 5.1% Mini-storage 6.4% Recreational / school 2.6% Other 10.6% Real estate, rental and leasing 54.4% Health care and social assistance 9.7% Accommodation and food services 5.3% Retail trade 4.2% Construction 3.9% Other Services (except Public administration) 3.0% Manufacturing 2.5% All other industries 17.0%

 
16 CHANGES IN LOANS RECEIVABLE $4,428 $167 $(49) $(57) $44 $4,533 Loans receivable at March 31, 2024 Loans originated Prepayments Maturities / Payoffs Net advances/ payments Loans receivable at June 30, 2024 $4,336 $102 $(39) $(33) $62 $4,428 Loans receivable at December 31, 2023 Loans originated Prepayments Payoffs Net advances/ payments Loans receivable at March 31, 2024 Change in loans - Q2 2024 Change in loans - Q1 2024

 
17 CRE OFFICE CRE Office Loans by Size Size WARR(2) # of Loans Total Balance(1) Average Balance Per Loan(1) >$10 Million 3.3 5 $ 76,432 $ 15,286 $5-$10 Million 4.2 15 92,530 6,169 $2-$5 Million 4.4 43 128,630 2,991 <$2 Million 4.6 453 254,646 562 TOTAL 4.3 516 $ 552,238 $ 1,070 Quality of CRE Office Portfolio: • 82.0% of loans have recourse to owner • 50.5% of loans are owner occupied which are considered to have a lower risk profile • 23.8% of loans are borrowers in the health care and social assistance sectors, who are less likely to reduce office space CRE Office Loans by Industry Type Health Care and Social Assistance 23.8% Professional, Scientific, and Technical Services 3.3% Finance and Insurance 2.9% Other Services (except Public Administration) 2.4% Accommodation and Food Services 1.1% All Other 66.5% (1) Dollars in thousands (2) Weighted average risk rating

 
18 Net charge-offs (recoveries) on loans to average loans, annualized 0.01% (0.03)% (0.01)% 0.00% (0.11)% 0.06% 0.00% 0.00% 2021 2022 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 (0.15)% (0.10)% (0.05)% 0.00% 0.05% 0.10% Nonaccrual Loans $24 $6 $4 $5 $4 Nonaccrual loans Nonaccrual loans to loans receivable 2021 2022 2023 Q1 2024 Q2 2024 0.62% 0.15% 0.10% 0.11% 0.08% NONACCRUAL LOANS AND NET CHARGE-OFFS

 
19 CRITICIZED LOANS $183 $135 $150 $172 $176 $24 $89 $60 $65 $65 $78 $71 $69 $80 $102 $94 Substandard - nonaccrual Substandard - accrual Special mention 2021 2022 2023 Q1 2024 Q2 2024 Criticized Loans by Loan Segment Commercial & industrial 32.5% Owner- occupied CRE 19.0% Non-owner occupied CRE 28.7% Residential real estate 0.5% Construction & land development 18.5% Consumer 0.8% Criticized Loans by Collateral Type Motel/Hotel 11.5% Office 10.7% Multi-Family 11.2% Retail Store/Shopping Center 6.0% Mixed Use Property 8.1% Elder Care 7.6% Farm-Bldgs/Land 4.1% Industrial 3.5% Duplex/Tri-Plex/4-Plex 3.2% Other CRE 14.5% Non-CRE 19.6% $6 $4 $5 $4

 
20 ACL on Loans $42,361 $42,986 $47,999 $49,736 $51,219 1.11% 1.06% 1.11% 1.12% 1.13% ACL on loans ($) ACL on loans / Loans (%) 2021 2022 2023 Q1 2024 Q2 2024 ALLOWANCE FOR CREDIT LOSSES ("ACL") ON LOANS $49,736 $1,388 $(42) $163 $(26) $51,219 March 31, 2024 Change in loan balance Change in collective rate Change in rate and balance Individually evaluated loans June 30, 2024 Change in ACL on Loans - Q2 2024 Dollars in thousands

 
21 CRITICIZED LOANS AND NET CHARGE-OFF HISTORY Criticized Loans to Total Loans 3.63% 3.79% 6.50% 4.81% 3.34% 3.45% 3.89% 2.19% 2.05% 3.47% 2.63% 1.96% 2.32% 2.51% Heritage Peer Median 2018 2019 2020 2021 2022 2023 Q1 2024 Net Chargeoffs to Average Loans 0.06% 0.09% 0.07% 0.01% (0.03)% (0.01)% 0.00% 0.07% 0.11% 0.05% 0.03% 0.02% 0.07% 0.07% Heritage Peer Median 2018 2019 2020 2021 2022 2023 Q1 2024 (1) Criticized loans includes loans graded special mention or worse (2) Peer Median is the median of 17 identified peer banks ranging in asset size from $4 billion to $15 billion and is as of March 31, 2024 Proactive Credit Management • Heritage proactively downgrades loans that are experiencing financial difficulty. • Criticized loans(1) to total loans higher than peer median(2) since 2018 • NCOs recognized during the same period were lower than peer median.

 
22 Average Deposit Balances and Cost of Total Deposits $6,090 $6,322 $5,706 $5,541 $5,656 $5,701 $5,621 $5,526 $5,555 0.10% 0.11% 0.69% 1.26% 0.61% 0.83% 1.01% 1.19% 1.34% 0.92% 1.23% 1.48% 1.70% 1.89% 0.16% 0.17% 1.03% 1.80% Average deposits Cost of total deposits Cost of int-bearing deposits 2021 2022 2023 2024 YTD Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 DEPOSITS Deposit Composition 36.7% 35.5% 30.6% 29.5% 29.0% 30.4% 30.9% 28.7% 28.1% 27.0% 17.5% 17.9% 19.5% 19.9% 19.9% 10.0% 10.5% 8.7% 8.4% 8.1% 5.4% 5.2% 12.4% 14.1% 16.0% Noninterest demand deposits Interest bearing demand deposits Money market accounts Savings accounts Certificates of deposit 2021 2022 2023 Q1 2024 Q2 2024

 
23 DEPOSIT COMPOSITION Customer Deposits by Relationship Size $603 $303 $1,307 $1,450 $1,853 Over $10MM $5MM-$10MM $1MM-5MM $250K-$1MM Less than $250K Consumer Accounts vs. Business Accounts 27% 57% 16% Consumer Commercial CDs Insured vs. Uninsured 38% 62% Insured Uninsured Deposit portfolio as of June 30, 2024: • Majority of deposits are to customers with relationships of $1 million or less. • Uninsured deposits at 38% of total deposits. 13% of uninsured deposits are public deposits that are 100% pledged. • Mix of commercial and consumer accounts.

 
24 Investment Balances and Investment Yield $1,278 $2,098 $1,874 $1,659 $2,031 $1,894 $1,874 $1,731 $1,659 $757 $1,203 $178 $33 $141 $33 2.13% 2.48% 3.02% 3.34% 2.98% 2.99% 3.15% 3.30% 3.38% Portfolio yield New purchases 2021 2022 2023 2024 YTD Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 INVESTMENT PORTFOLIO Portfolio Duration 4.85 4.93 4.85 4.81 6.76 4.08 3.37 2.33 4.77 4.82 4.85 4.80 4.81 3.10 3.48 2.33 Duration - total portfolio Duration - new purchases only (1) 2021 2022 2023 2024 YTD Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 (1) No investments were purchased during Q2 2023 and Q2 2024

 
25 $47 $43 $51 $43 $44 $45 $60 $61 $58 $46 $59 $44 $33 $30 $38 $30 $32 $33 $48 $49 $47 $35 $49 $34 $14 $13 $13 $13 $12 $12 $12 $12 $11 $11 $10 $10 Interest Principal Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Q1 2027 Q2 2027 INVESTMENT CASHFLOWS Investment cashflows(1) are estimated to be $601 million through Q2 of 2027. (1) Cashflow estimates based on third-party bond accounting service

 
26 INVESTMENT PORTFOLIO HTM Investment by Type US government and agencies 19.0% Residential CMO and MBS 37.1% Commercial CMO and MBS 43.9% Available for sale ("AFS") and held to maturity ("HTM") investment securities percentages are based on fair value as of June 30, 2024 unless otherwise noted Strong Credit Quality of Portfolio: AFS Securities • 90.1% of AFS in U.S. government and agency securities • Only 1.2% of AFS are rated less than AA HTM Securities • All HTM investments are U.S. government and agency securities • 100% HTM portfolio pledged for public deposits and Federal Reserve Bank borrowings AFS Investments Pledged 0.5% 99.5% Pledged Not pledged AFS Investment by Type US government and agencies 1.3% Municipal securities 7.5% Residential CMO and MBS 47.9% Commercial CMO and MBS 40.8% Corporate obligations 1.2% Other asset-backed securities 1.3%

 
27 Net Interest Margin 3.23% 3.35% 3.58% 3.31% 3.56% 3.47% 3.41% 3.32% 3.29% 2021 2022 2023 2024 YTD Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 NET INTEREST MARGIN Change in Net Interest Margin QTD Q1 2024 vs. QTD Q2 2024 3.32% 0.18% (0.05)% 0.01% (0.13)% (0.04)% 3.29% QTD Q1 2024 Loans Investments Interest earning deposits Deposits Borrowings QTD Q2 2024 3.73% 0.46% (0.03)% 0.03% (0.70)% (0.18)% 3.31% YTD June 30, 2023 Loans Investments Interest earning deposits Deposits Borrowings YTD June 30, 2024 Change in Net Interest Margin YTD Q2 2023 vs. YTD Q2 2024

 
28 Adjustable Rate Loans - Repricing Schedule $942 $142 $208 $204 $206 $249 $154 7.82% 4.47% 3.93% 4.10% 5.78% 6.17% 4.97% 7.88% 7.01% 6.90% 6.84% 6.66% 6.80% 7.22% Floating and Adjustable Rate Loans Wtd Avg Rate (1) Wtd Avg Rate if Repriced (2) < 3 Months 3 - 12 Months 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years > 5 Years LOAN MATURITY AND REPRICING (1) Weighted Average Rate as of June 30, 2024 and repricing period signifies the sooner of the next scheduled reprice date or maturity (2) Weighted Average Rate if Repriced as of June 30, 2024 and assumes same index and margin Adjustable Rate Loans • $2.1 billion in total • 54% tied to FHLB index, 21% tied to Prime, 26% tied to SOFR Fixed Rate Loans - Maturity Schedule $26 $155 $137 $162 $216 $198 $1,528 5.21% 4.59% 5.03% 4.34% 4.75% 5.19% 4.27% Fixed Rate Loans Wtd Avg Rate (1) < 3 Months 3 - 12 Months 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years > 5 Years Fixed Rate Loans • $2.4 billion in total

 
29 $98.0 $81.9 $61.8 $19.9 $91.1 $98.0 $77.2 $25.5 Net income PTPP income (1) 2021 2022 2023 2024 YTD Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 $16.8 $18.2 $6.2 $5.7 $14.2 $21.8 $20.9 $8.0 $8.3 $17.3 PROFITABILITY TRENDS ROAE, ROATCE(1) and Adjusted ROATCE(1) Noninterest Expense/Avg. Assets ROAA and PTPP ROAA(1) 1.38% 1.12% 0.86% 0.56% 0.95% 1.00% 0.35% 0.33% 0.80% 1.28% 1.34% 1.08% 0.72% 1.22% 1.15% 0.44% 0.47% 0.98% ROAA PTPP ROAA (1) 2021 2022 2023 2024 YTD Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Net Income and PTPP Income(1), in millions 16.45% 14.92% 12.76% 10.05% 12.04% 13.62% 10.21% 9.34% 10.76% 17.05% 14.94% 11.15% 6.90% 12.04% 12.90% 4.69% 4.07% 9.74% 11.64% 10.08% 7.55% 4.74% 8.19% 8.80% 3.04% 2.73% 6.75% ROAE ROATCE (1) Adjusted ROATCE (1) 2021 2022 2023 2024 YTD Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 2.09% 2.06% 2.33% 2.25% 2.32% 2.25% 2.37% 2.29% 2.21% 2021 2022 2023 2024 YTD Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 ROAA = Return on average assets PTPP = Pre-tax, pre-provision ROAE = Return on average equity ROATCE = Return on average tangible common equity (1) Represents a non-GAAP financial measure

 
30(1) Represents a non-GAAP financial measure (2) Current quarter ratios are estimates pending completion and filing of the Company's regulatory reports CAPITAL RATIOS Equity Ratios 11.5% 11.4% 11.9% 12.0% 12.0% 8.4% 8.2% 8.8% 8.8% 8.9% Stockholders' equity to total assets (GAAP) Tangible common equity to tangible assets(1) 2021 2022 2023 Q1 2024 Q2 2024 13.5% 12.8% 12.9% 12.6% 12.6% 8.7% 9.7% 10.0% 10.0% 10.1% 14.8% 14.0% 14.1% 13.9% 13.9% Total Risk Based Capital Tier 1 Leverage Ratio Common Equity Tier 1 2021 2022 2023 Q1 2024 Q2 2024 Regulatory Capital Ratios(2)

 
31 LIQUIDITY POSITION (1) Includes FHLB borrowing availability of $1.34 billion at June 30, 2024 based on pledged assets, however, maximum credit capacity is 45% of the Bank's total assets one quarter in arrears or $3.19 billion Liquidity position at June 30, 2024: • Sufficient liquidity to cover estimated uninsured deposits of $2.1 billion. • Access to brokered deposits of $661 million per internal company policy. Liquidity Sources $2,752 $2,721 $2,863 $2,499 $2,408 $1,217 $1,202 $1,418 $1,385 $943 $410 $373 $319 $71 $279 $872 $780 $756 $708 $927 $108 $221 $225 $190 $114 $145 $145 $145 $145 $145 129.5% 131.9% 136.3% 122.3% 116.2% FHLB borrowing availability (1) FRB borrowing availability Unencumbered investment securities available for sale at fair value Cash and cash equivalents Fed funds lines % of uninsured deposits covered by liquidity sources Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024

 
SHAREHOLDER RETURN

 
33 TOTAL SHAREHOLDER RETURN Stock Summary(2) Ticker HFWA Exchange Nasdaq Stock price $20.82 Market capitalization (in millions) $722.2 Dividend yield (regular dividend only) 4.42 % Average Daily Volume (3 month) Average daily volume (shares) 187,899 Average daily volume ($000s) $3,912 52-Week High and Low Price 52-week high (December 14, 2023) $22.55 52-week low (October 25, 2023) $15.50 Per Share Tangible book value per share(1) $17.56 EPS - 2024E $1.54 EPS - 2025E $1.82 Number of research analysts 6 Valuation Ratios Price / Tangible book value(1) 118.6 % Price / 2024E EPS 13.5 Price / 2025E EPS 11.5 Dividends Per Share Declared(3) $0.53 $0.72 $0.61 $0.72 $0.84 $0.80 $0.81 $0.84 $0.88 $0.69 $0.10 $0.11 $0.12 $0.15 $0.18 $0.20 $0.20 $0.21 $0.22 $0.23 $0.11 $0.12 $0.13 $0.15 $0.18 $0.20 $0.20 $0.21 $0.22 $0.23 $0.11 $0.12 $0.13 $0.15 $0.19 $0.20 $0.20 $0.21 $0.22 $0.23 $0.11 $0.12 $0.13 $0.17 $0.19 $0.20 $0.21 $0.21 $0.22 $0.10 $0.25 $0.10 $0.10 $0.10 Q1 Q2 Q3 Q4 Special dividends 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024(1) Represents a non-GAAP financial measure (2) Market information as of July 16, 2024 and earnings per share and valuation ratios are based on analysts consensus (3) Dividend information as of July 24, 2024 DIluted Earnings per Share $1.25 $1.30 $1.39 $1.49 $1.83 $1.29 $2.73 $2.30 $1.75 $0.57 $0.32 $0.30 $0.31 $0.27 $0.45 $0.34 $0.70 $0.56 $0.58 $0.16 $0.29 $0.30 $0.40 $0.35 $0.43 -$0.17 $0.90 $0.52 $0.48 $0.41 $0.32 $0.37 $0.35 $0.42 $0.48 $0.46 $0.58 $0.59 $0.51 $0.32 $0.33 $0.33 $0.45 $0.47 $0.66 $0.55 $0.64 $0.18 Q1 Q2 Q3 Q4 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

 
APPENDIX - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND QUARTERLY FINANCIAL STATISTICS

 
35 NON-GAAP FINANCIAL MEASURES Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Efficiency Ratio and Adjusted Efficiency Ratio Total noninterest expense (GAAP) $ 41,325 $ 40,970 $ 42,723 $ 40,370 $ 39,096 Net interest income (GAAP) $ 55,824 $ 55,618 $ 53,871 $ 51,530 $ 51,113 Total noninterest income (GAAP) $ 7,281 $ 6,271 $ (3,147) $ (2,900) $ 5,246 Exclude (gain) loss on sale of investment securities, net — 1,940 10,005 9,973 1,921 Exclude gain on sale of branch including related deposits, net — (610) — — — Adjusted total non interest income (non-GAAP) $ 7,281 $ 7,601 $ 6,858 $ 7,073 $ 7,167 Efficiency ratio (GAAP) 65.49 % 66.20 % 84.23 % 83.01 % 69.37 % Adjusted efficiency ratio (non-GAAP) 65.49 % 64.81 % 70.35 % 68.89 % 67.08 % Dollars in thousands 2021 2022 2023 YTD 2024 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Pretax Preprovision ("PTPP") Income and PTPP Return on Average Assets ("ROAA"): Net income (GAAP) $ 98,035 $ 81,875 $ 61,755 $ 19,907 $ 16,846 $ 18,219 $ 6,233 $ 5,748 $ 14,159 Exclude income tax expense 22,472 17,561 11,160 2,956 3,025 3,578 344 1,120 1,836 Exclude provision for (reversal of provision for) credit losses (29,372) (1,426) 4,280 2,660 1,909 (878) 1,424 1,392 1,268 PTPP income (non-GAAP) $ 91,135 $ 98,010 $ 77,195 $ 25,523 $ 21,780 $ 20,919 $ 8,001 $ 8,260 $ 17,263 Average total assets $ 7,126,250 $ 7,321,455 $ 7,140,024 $ 7,099,621 $7,142,865 $7,212,732 $7,140,876 $7,092,452 $7,106,791 ROAA, annualized (GAAP) 1.38 % 1.12 % 0.86 % 0.56 % 0.95 % 1.00 % 0.35 % 0.33 % 0.80 % PTPP ROAA, annualized (non-GAAP) 1.28 % 1.34 % 1.08 % 0.72 % 1.22 % 1.15 % 0.44 % 0.47 % 0.98 %

 
36 NON-GAAP FINANCIAL MEASURES 2021 2022 2023 YTD 2024 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Return on Average Tangible Common Equity ("ROATCE") and Adjusted ROATCE Net income (GAAP) $ 98,035 $ 81,875 $ 61,755 $ 19,907 $ 16,846 $ 18,219 $ 6,233 $ 5,748 $ 14,159 Add amortization of intangible assets 3,111 2,750 2,434 842 623 595 593 421 421 Exclude tax effect of adjustment (653) (578) (511) (177) (131) (125) (125) (88) (88) Tangible net income (non-GAAP) $ 100,493 $ 84,047 $ 63,678 $ 20,572 $ 17,338 $ 18,689 $ 6,701 $ 6,081 $ 14,492 Tangible net income (non-GAAP) $ 100,493 $ 84,047 $ 63,678 $ 20,572 $ 17,338 $ 18,689 $ 6,701 $ 6,081 $ 14,492 Exclude (gain) loss on sale of investment securities, net (29) 256 12,231 11,894 — 1,940 10,005 9,973 1,921 Exclude gain on sale of branch including related deposits, net — — (610) — — (610) — — — Exclude gain on sale of premise and equipment (4,440) (403) — — — — — — — Exclude tax effect of adjustment 938 31 (2,440) (2,498) — (279) (2,101) (2,094) (403) Adjusted tangible net income (non-GAAP) $ 96,962 $ 83,931 $ 72,859 $ 29,968 $ 17,338 $ 19,740 $ 14,605 $ 13,960 $ 16,010 Average stockholders' equity (GAAP) $ 842,067 $ 811,942 $ 818,042 $ 845,193 $ 824,742 $ 821,494 $ 813,383 $ 846,947 $ 843,438 Exclude average intangible assets (252,540) (249,566) (246,965) (245,321) (247,278) (246,663) (246,022) (245,536) (245,106) Average tangible common stockholders' equity (non-GAAP) $ 589,527 $ 562,376 $ 571,077 $ 599,872 $ 577,464 $ 574,831 $ 567,361 $ 601,411 $ 598,332 ROAE, annualized (GAAP) 11.64 % 10.08 % 7.55 % 4.74 % 8.19 % 8.80 % 3.04 % 2.73 % 6.75 % ROATCE, annualized (non-GAAP) 17.05 % 14.94 % 11.15 % 6.90 % 12.04 % 12.90 % 4.69 % 4.07 % 9.74 % Adjusted ROATCE, annualized (non- GAAP) 16.45 % 14.92 % 12.76 % 10.05 % 12.04 % 13.62 % 10.21 % 9.34 % 10.76 % Dollars in thousands

 
37 2014 2015 2016 2017 2018 2019 2020 2022 2023 Tangible Book Value Per Share: Total stockholders' equity (GAAP) $ 454,506 $ 469,970 $ 481,763 $ 505,305 $ 760,723 $ 809,311 $ 820,439 $ 797,893 $ 853,261 Exclude intangible assets (129,918) (127,818) (126,403) (125,117) (261,553) (257,552) (254,027) (248,166) (245,732) Tangible common equity (non-GAAP) $ 324,588 $ 342,152 $ 355,360 $ 380,188 $ 499,170 $ 551,759 $ 566,412 $ 549,727 $ 607,529 Shares outstanding 30,259,838 29,975,439 29,954,931 29,927,746 36,874,055 36,618,729 35,912,243 35,106,697 34,906,233 Book value per share (GAAP) $ 15.02 $ 15.68 $ 16.08 $ 16.88 $ 20.63 $ 22.10 $ 22.85 $ 22.73 $ 24.44 Tangible book value per share (non-GAAP) $ 10.73 $ 11.41 $ 11.86 $ 12.70 $ 13.54 $ 15.07 $ 15.77 $ 15.66 $ 17.40 Moved to 2nd slide Tangible Book Value Per Share (cont'd): 2024 Q1 Q2 Total stockholders' equity (GAAP) $ 847,580 $ 850,507 Exclude intangible assets (245,311) (244,890) Tangible common equity (non-GAAP) $ 602,269 $ 605,617 Shares outstanding 34,689,843 34,496,197 Book value per share (GAAP) $ 24.43 $ 24.66 Tangible book value per share (non-GAAP) $ 17.36 $ 17.56 NON-GAAP FINANCIAL MEASURES Dollars in thousands

 
38 As of Period End or for the Three Months Ended June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 Profitability: Net income $ 16,846 $ 18,219 $ 6,233 $ 5,748 $ 14,159 Pre-tax, pre-provision net income(1) $ 21,780 $ 20,919 $ 8,001 $ 8,260 $ 17,263 Diluted earnings per share $ 0.48 $ 0.51 $ 0.18 $ 0.16 $ 0.41 Return on average assets 0.95 % 1.00 % 0.35 % 0.33 % 0.80 % Pre-tax, pre-provision return on average assets(1) 1.22 % 1.15 % 0.44 % 0.47 % 0.98 % Return on average common equity 8.19 % 8.80 % 3.04 % 2.73 % 6.75 % Return on average tangible common equity(1) 12.04 % 12.90 % 4.69 % 4.07 % 9.74 % Net interest margin 3.56 % 3.47 % 3.41 % 3.32 % 3.29 % Efficiency ratio 65.5 % 66.2 % 84.2 % 83.0 % 69.4 % Adjusted efficiency ratio(1) 65.5 % 64.8 % 70.4 % 68.9 % 67.1 % Noninterest expense to average total assets 2.32 % 2.25 % 2.37 % 2.29 % 2.21 % Balance Sheet: Total assets $ 7,115,410 $ 7,150,588 $ 7,174,957 $ 7,091,283 $ 7,059,857 Loans receivable, net $ 4,204,936 $ 4,219,911 $ 4,287,628 $ 4,378,429 $ 4,481,396 Total deposits $ 5,595,543 $ 5,635,187 $ 5,599,872 $ 5,532,327 $ 5,515,652 Loan to deposit ratio 76.0 % 75.7 % 77.4 % 80.0 % 82.2 % Capital: Book value per share $ 23.39 $ 23.31 $ 24.44 $ 24.43 $ 24.66 Tangible book value per share(1) $ 16.34 $ 16.25 $ 17.40 $ 17.36 $ 17.56 Leverage ratio 9.9 % 9.9 % 10.0 % 10.0 % 10.1 % Total capital ratio 14.1 % 14.1 % 14.1 % 13.9 % 13.9 % Credit Quality: Nonperforming assets to total assets 0.10 % 0.07 % 0.08 % 0.10 % 0.12 % ACL on loans to loans receivable 1.09 % 1.10 % 1.11 % 1.12 % 1.13 % Dollars in thousands (1) Represents a non-GAAP financial measure QUARTERLY FINANCIAL STATISTICS

 
v3.24.2
Cover Page Cover Page
Jul. 25, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Jul. 25, 2024
Entity Registrant Name HERITAGE FINANCIAL CORP
Entity File Number 000-29480
Entity Incorporation, State or Country Code WA
Entity Tax Identification Number 91-1857900
Entity Address, Address Line One 201 Fifth Avenue SW,
Entity Address, City or Town Olympia
Entity Address, State or Province WA
Entity Address, Postal Zip Code 98501
City Area Code (360)
Local Phone Number 943-1500
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, no par value
Trading Symbol HFWA
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001046025
Amendment Flag false
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