hfwa-20260122
0001046025False00010460252026-01-222026-01-22

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): January 22, 2026
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 January 22, 2026, Heritage Financial Corporation (“Heritage”) issued a press release announcing its fourth quarter and annual 2025 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 January 22, 2026.
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 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:
January 22, 2026/S/ BRYAN MCDONALD
Bryan McDonald
President and Chief Executive Officer
(Duly Authorized Officer)



hfwarevisedlogoa01a02.jpg
FOR IMMEDIATE RELEASE
DATE: January 22, 2026

Heritage Financial Announces Fourth Quarter and
Annual 2025 Results

Fourth Quarter 2025 Highlights
•Net income was $22.2 million, or $0.65 per diluted share, compared to $19.2 million, or $0.55 per diluted share, for the third quarter of 2025.
•Return on average assets increased to 1.27%, from 1.09% for the third quarter of 2025.
•Net interest income increased $1.0 million, or 1.7% (6.8% annualized), from the third quarter of 2025.
•Net interest margin increased to 3.72%, an increase of 8 basis points from 3.64% for the third quarter of 2025.
•Deposits increased $62.7 million, or 1.1% (4.2% annualized), from the third quarter of 2025.
•Cost of interest bearing deposits decreased to 1.83%, from 1.89% for the third quarter of 2025.
•Declared a regular cash dividend of $0.24 per share on January 16, 2026.
•Received regulatory and shareholder approvals to acquire Olympic Bancorp, Inc. ("Olympic"), which is expected to close on or about January 31, 2026, subject to the satisfaction of customary closing conditions.


Olympia, WA - Heritage Financial Corporation (Nasdaq GS: HFWA) (the “Company", ”we," or "us"), the parent company of Heritage Bank (the "Bank"), today reported net income of $22.2 million for the fourth quarter of 2025, compared to $19.2 million for the third quarter of 2025 and $11.9 million for the fourth quarter of 2024. Diluted earnings per share were $0.65 for the fourth quarter of 2025, compared to $0.55 for the third quarter of 2025 and $0.34 for the fourth quarter of 2024. Adjusted diluted earnings per share(1) were $0.66 for the fourth quarter of 2025, compared to $0.56 for the third quarter of 2025 and $0.51 for the fourth quarter of 2024.
Bryan McDonald, President and Chief Executive Officer of the Company, commented, "We are very pleased with our operating results for the fourth quarter, which included stronger profitability, deposit growth, margin expansion and lower cost of deposits. The improvement in net interest margin provided an 8.6% increase in net interest income over fourth quarter 2024 levels. This quarter showed the strength of our quality banking franchise with 29% growth in adjusted diluted earnings per share from the same period in the prior year. We remain focused on generating long-term financial results for our shareholders."
Mr. McDonald continued, "We are also pleased with the progress made in completing the pending acquisition of Olympic and its subsidiary, Kitsap Bank. Having received both regulatory and shareholder approvals, we look forward to closing the transaction at the end of January and bringing together our two organizations.”









(1) Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” section for a reconciliation to the comparable GAAP financial measure.
1

Financial Highlights
The following table provides financial highlights as of the dates and for the periods indicated:
As of or for the Quarter Ended
December 31,
2025		September 30,
2025		December 31,
2024
(Dollars in thousands, except per share amounts)
Net income$22,237 $19,169 $11,928 
Diluted earnings per share0.65 0.55 0.34 
Adjusted diluted earnings per share (1)
0.66 0.56 0.51 
Return on average assets(2)
1.27 %1.09 %0.66 %
Return on average common equity(2)
9.68 8.52 5.46 
Return on average tangible common equity(1)(2)
13.33 11.86 7.81 
Adjusted return on average tangible common equity(1)(2)
13.51 12.16 11.59 
Net interest margin(2)
3.72 3.64 3.36 
Cost of total deposits(2)
1.32 1.37 1.39 
Efficiency ratio62.5 63.3 69.3 
Adjusted efficiency ratio(1)
61.9 62.4 64.4 
Noninterest expense to average total assets(2)
2.37 2.36 2.20 
Total assets$6,967,350 $7,011,879 $7,106,278 
Loans receivable
4,783,266 4,769,160 4,802,123 
Total deposits5,920,199 5,857,464 5,684,613 
Loan to deposit ratio(3)
80.8 %81.4 %84.5 %
Book value per share$27.13 $26.62 $25.40 
Tangible book value per share(1)
19.98 19.46 18.22 
(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
Total investment securities decreased $31.2 million, or 2.4%, to $1.28 billion at December 31, 2025, from $1.31 billion at September 30, 2025. Investment maturities and repayments totaled $37.7 million during the fourth quarter of 2025. The decrease was partially offset by purchases of $3.5 million and a $2.9 million decrease in unrealized losses on available for sale securities.
The following table summarizes the composition of the Company's investment securities portfolio at the dates indicated:
 December 31, 2025September 30, 2025Change
 Balance% of
Total		Balance% of
Total		$%
 (Dollars in thousands)
Investment securities available for sale, at fair value:
U.S. government and agency securities$11,702 0.9 %$11,642 0.9 %$60 0.5 %
Municipal securities51,423 4.0 51,197 3.9 226 0.4 
Residential CMO and MBS(1)
275,268 21.5 298,737 22.8 (23,469)(7.9)
Commercial CMO and MBS(1)
252,164 19.7 255,995 19.5 (3,831)(1.5)
Corporate obligations10,532 0.8 7,019 0.5 3,513 50.0 
Other asset-backed securities6,433 0.5 6,641 0.5 (208)(3.1)
Total$607,522 47.4 %$631,231 48.1 %$(23,709)(3.8)%
2

 December 31, 2025September 30, 2025Change
 Balance% of
Total		Balance% of
Total		$%
 (Dollars in thousands)
Investment securities held to maturity, at amortized cost:
U.S. government and agency securities$151,319 11.8 %$151,297 11.5 %$22 — %
Residential CMO and MBS(1)
217,707 17.0 224,654 17.1 (6,947)(3.1)
Commercial CMO and MBS(1)
305,081 23.8 305,675 23.3 (594)(0.2)
Total$674,107 52.6 %$681,626 51.9 %$(7,519)(1.1)%
Total investment securities$1,281,629 100.0 %$1,312,857 100.0 %$(31,228)(2.4)%
    (1) U.S. government agency and government-sponsored enterprise CMO and MBS.

Loans receivable increased $14.1 million, or 0.3%, during the fourth quarter of 2025 due to new loan production for the quarter offset partially by an elevated level of prepaid and closed loans. New loans funded during the fourth quarter of 2025 were $173.1 million, compared to $174.5 million during the third quarter of 2025. Loan prepayments increased to $77.2 million during the quarter, compared to $75.6 million during the prior quarter. Loan payoffs increased to $74.5 million, compared to $55.8 million in the prior quarter.
Commercial and industrial loans decreased $1.1 million, or 0.1%, during the fourth quarter of 2025, due primarily to pay downs on outstanding balances, partially offset by new loan production of $28.8 million. Owner-occupied commercial real estate ("CRE") loans increased $12.1 million, or 1.2%, during the fourth quarter of 2025, due primarily to new loan production of $40.0 million, partially offset by pay downs on outstanding balances. Non-owner occupied CRE loans increased $119.7 million, or 6.2%, during the quarter, due primarily to transfers from commercial and multifamily construction loans and new loan production of $76.5 million, partially offset by pay downs on outstanding balances. Residential real estate loans decreased by $16.0 million, or 4.3%, during the quarter, due to loan payoffs. Residential construction loans increased by $4.9 million, or 5.4%, during the quarter, due primarily to new loan production. Commercial and multifamily construction loans decreased $103.2 million, or 29.4%, during the quarter, due primarily to transfers to non-owner occupied CRE loans and paydowns on outstanding balances.
The following table summarizes the Company's loans receivable at the dates indicated:
December 31, 2025September 30, 2025Change
Balance% of TotalBalance% of Total$%
(Dollars in thousands)
Commercial business:
Commercial and industrial$818,000 17.1 %$819,076 17.2 %$(1,076)(0.1)%
Owner-occupied CRE
1,034,829 21.6 1,022,727 21.4 12,102 1.2 
Non-owner occupied CRE2,057,844 43.0 1,938,190 40.6 119,654 6.2 
Total commercial business3,910,673 81.7 3,779,993 79.2 130,680 3.5 
Residential real estate
358,834 7.5 374,875 7.9 (16,041)(4.3)
Real estate construction and land development:
Residential
95,350 2.0 90,440 1.9 4,910 5.4 
Commercial and multifamily
247,975 5.2 351,196 7.4 (103,221)(29.4)
Total real estate construction and land development343,325 7.2 441,636 9.3 (98,311)(22.3)
Consumer170,434 3.6 172,656 3.6 (2,222)(1.3)
Loans receivable$4,783,266 100.0 %$4,769,160 100.0 %$14,106 0.3 

Total deposits increased $62.7 million, or 1.1%, to $5.92 billion at December 31, 2025 from $5.86 billion at September 30, 2025. Non-maturity deposits increased by $75.1 million, or 1.5%, from September 30, 2025, due primarily to an increase in customer balances in interest bearing demand accounts. The increase in non-maturity deposits was partially offset by a decrease of $12.4 million in certificates of deposit accounts.
3

The following table summarizes the Company's total deposits at the dates indicated:
December 31, 2025September 30, 2025Change
Balance
% of TotalBalance% of Total$%
(Dollars in thousands)
Noninterest demand deposits$1,597,650 27.0 %$1,617,909 27.6 %$(20,259)(1.3)%
Interest bearing demand deposits1,627,259 27.5 1,526,685 26.1 100,574 6.6 
Money market accounts1,334,904 22.5 1,332,501 22.7 2,403 0.2 
Savings accounts422,523 7.1 430,127 7.3 (7,604)(1.8)
Total non-maturity deposits4,982,336 84.1 4,907,222 83.7 75,114 1.5 
Certificates of deposit937,863 15.9 950,242 16.3 (12,379)(1.3)
Total deposits$5,920,199 100.0 %$5,857,464 100.0 %$62,735 1.1 %

Total borrowings decreased $118.0 million to $20.0 million at December 31, 2025, from $138.0 million at September 30, 2025. All outstanding borrowings at December 31, 2025 were with the Federal Home Loan Bank ("FHLB") and mature within one year.
Total stockholders' equity increased $17.4 million, or 1.9%, to $921.5 million at December 31, 2025, compared to $904.1 million at September 30, 2025, due primarily to $22.2 million of net income recognized for the quarter and a $2.2 million decrease in accumulated other comprehensive loss. These increases were partially offset by $8.2 million in dividends paid to common shareholders during the quarter.
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 December 31, 2025.
The following table summarizes the capital ratios for the Company at the dates indicated:
December 31,
2025		September 30,
2025
Stockholders' equity to total assets13.2%12.9%
Tangible common equity to tangible assets (1)
10.19.8
Common equity tier 1 capital ratio (2)
12.712.4
Leverage ratio (2)
10.810.5
Tier 1 capital ratio (2)
13.112.8
Total capital ratio (2)
14.113.8

(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 1.10% at December 31, 2025 compared to 1.13% at September 30, 2025. The decrease in the ACL as a percentage of loans was due primarily to a change in the mix of loans due to decreases in the real estate construction and land development segment which has a higher ACL as a percentage of loans, offset by an increase in other segments with a lower ACL as a percentage of loans. During the fourth quarter of 2025, the Company recorded a $0.9 million reversal of provision for credit losses on loans, compared to a $1.6 million provision during the third quarter of 2025.
During the fourth quarter of 2025, the Company recorded a $95,000 provision for credit losses on unfunded commitments compared to a $212,000 provision during the third quarter of 2025. The provision for credit losses on unfunded commitments during the fourth quarter of 2025 was due primarily to a decrease in utilization rates.

4

The following table provides detail on the changes in the ACL on loans and the ACL on unfunded commitments ("ACL on Unfunded"), and the related (reversal of) provision for credit losses for the periods indicated:
As of or for the Quarter Ended
December 31, 2025September 30, 2025December 31, 2024
ACL on LoansACL on UnfundedTotalACL on LoansACL on UnfundedTotalACL on LoansACL on UnfundedTotal
(Dollars in thousands)
Balance, beginning of period$53,974 $952 $54,926 $52,529 $740 $53,269 $51,391 $508 $51,899 
(Reversal of) provision for credit losses(909)95 (814)1,563 212 1,775 1,104 79 1,183 
(Net charge-offs) / recoveries(481)— (481)(118)— (118)(27)— (27)
Balance, end of period$52,584 $1,047 $53,631 $53,974 $952 $54,926 $52,468 $587 $53,055 

Credit Quality
Classified loans (loans rated substandard or worse) increased $22.4 million from the prior quarter, resulting in the percentage of classified loans to loans receivable increasing to 2.4% at December 31, 2025, compared to 2.0% at September 30, 2025.
The following table illustrates total loans by risk rating and their respective percentage of total loans at the dates indicated:
December 31, 2025September 30, 2025
Balance% of TotalBalance% of Total
(Dollars in thousands)
Risk Rating:
Pass$4,595,321 96.1 %$4,574,623 95.9 %
Special Mention71,122 1.5 100,160 2.1 
Substandard116,823 2.4 94,377 2.0 
Total$4,783,266 100.0 %$4,769,160 100.0 %
Nonaccrual loans increased by $3.4 million during the fourth quarter of 2025 due primarily to the migration of three non-owner occupied CRE loans totaling $3.9 million, offset partially by principal payments received. The following table illustrates changes in nonaccrual loans during the periods indicated:
Quarter Ended
December 31,
2025		September 30,
2025		December 31,
2024
(Dollars in thousands)
Balance, beginning of period$17,612 $9,865 $4,301 
Additions4,446 8,288 160 
Net principal payments and transfers to accruing status(1,082)(207)(250)
Payoffs— (137)(132)
Charge-offs— (197)— 
Balance, end of period$20,976 $17,612 $4,079 
Nonaccrual loans to loans receivable0.44 %0.37 %0.08 %

Liquidity
Total liquidity sources available at December 31, 2025 were $2.62 billion. This included on- and off-balance sheet liquidity. The Company has access to FHLB advances and the Federal Reserve Bank ("FRB") Discount Window. The Company's available liquidity sources at December 31, 2025 represented a coverage ratio of 44.2% of total deposits and 107.7% of estimated uninsured deposits.
5

The following table summarizes the Company's available liquidity as of the dates indicated:
Quarter Ended
December 31,
2025		September 30,
2025
(Dollars in thousands)
On-balance sheet liquidity
Cash and cash equivalents$233,089 $245,491 
Unencumbered investment securities available for sale (1)
606,968 630,666 
Total on-balance sheet liquidity
$840,057 $876,157 
Off-balance sheet liquidity
FRB borrowing availability$346,307 $347,119 
FHLB borrowing availability (2)
1,285,640 1,140,425 
Fed funds line borrowing availability with correspondent banks145,000 145,000 
Total off-balance sheet liquidity
$1,776,947 $1,632,544 
Total available liquidity$2,617,004 $2,508,701 
(1) Investment securities available for sale at fair value.
(2) Includes FHLB total borrowing availability of $1.31 billion at December 31, 2025 based on pledged assets, however, maximum credit capacity was 45% of the Bank's total assets one quarter in arrears or $3.15 billion.

Net Interest Margin and Net Interest Income
Net interest margin increased 8 basis points to 3.72% during the fourth quarter of 2025, from 3.64% during the third quarter of 2025.
The yield on interest earning assets decreased one basis point to 5.03% for the fourth quarter of 2025, compared to 5.04% for the third quarter of 2025. The yield on loans receivable increased one basis point to 5.54% during the fourth quarter of 2025, compared to 5.53% during the third quarter of 2025 as new loans were booked and adjustable rate loans repriced at higher rates, partially offset by the impacts of the three fed funds rate cuts occurring during the last four months of the year.
The cost of interest bearing deposits decreased six basis points to 1.83% for the fourth quarter of 2025, from 1.89% for the third quarter of 2025. This decrease was primarily due to a decrease in certificate of deposit rates.
Net interest income increased $1.0 million, or 1.7%, during the fourth quarter of 2025 compared to the third quarter of 2025 due to a decrease in interest expense of $1.6 million, offset partially by a $0.6 million decrease in total interest income.
Net interest margin increased 36 basis points to 3.72% during the fourth quarter of 2025, compared to 3.36% for the same period in the prior year. Net interest income increased $4.6 million, or 8.6%, during the fourth quarter of 2025 compared to the same period in the prior year. The increase was due primarily to a change in the mix of earning assets to higher yielding loan balances and a decrease in deposit and borrowing interest expense due to lower rates and lower borrowing balances.
The following table provides net interest income information for the periods indicated:
 Quarter Ended
 December 31, 2025September 30, 2025December 31, 2024
 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 (2)(3)
$4,770,300 $66,669 5.54 %$4,762,648 $66,422 5.53 %$4,717,748 $64,864 5.47 %
Taxable securities1,285,948 10,546 3.25 1,314,374 11,102 3.35 1,514,210 12,510 3.29 
Nontaxable securities (3)
15,578 135 3.44 15,242 138 3.59 16,138 146 3.60 
Interest earning deposits151,477 1,512 3.96 166,182 1,846 4.41 119,275 1,440 4.80 
Total interest earning assets6,223,303 78,862 5.03 %6,258,446 79,508 5.04 %6,367,371 78,960 4.93 %
Noninterest earning assets730,807 747,694 781,923 
Total assets$6,954,110 $7,006,140 $7,149,294 
Interest Bearing Liabilities:
Certificates of deposit$950,097 $8,425 3.52 %$955,737 $8,822 3.66 %$947,929 $10,070 4.23 %
Savings accounts424,214 277 0.26 428,256 296 0.27 432,287 280 0.26 
6

 Quarter Ended
 December 31, 2025September 30, 2025December 31, 2024
 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 bearing demand and money market accounts2,876,278 10,874 1.50 2,833,048 11,003 1.54 2,631,577 9,622 1.45 
Total interest bearing deposits4,250,589 19,576 1.83 4,217,041 20,121 1.89 4,011,793 19,972 1.98 
Junior subordinated debentures22,312 455 8.09 22,239 474 8.46 22,019 512 9.25 
Borrowings43,228 470 4.31 136,582 1,542 4.48 373,493 4,713 5.02 
Total interest bearing liabilities4,316,129 20,501 1.88 %4,375,862 22,137 2.01 %4,407,305 25,197 2.27 %
Noninterest demand deposits1,635,539 1,625,945 1,703,357 
Other noninterest bearing liabilities90,988 112,053 170,324 
Stockholders’ equity911,454 892,280 868,308 
Total liabilities and stockholders’ equity$6,954,110 $7,006,140 $7,149,294 
Net interest income and spread$58,361 3.15 %$57,371 3.03 %$53,763 2.66 %
Net interest margin3.72 %3.64 %3.36 %
(1) Annualized; average balances are calculated using daily balances.
(2) Average loans receivable includes loans classified as nonaccrual, which carry a zero yield. Interest earned on loans receivable includes the amortization of net deferred loan fees of $1.0 million, $1.1 million and $0.9 million for the fourth quarter of 2025, third quarter of 2025 and fourth quarter of 2024, respectively.
(3) Yields on tax-exempt loans and securities have not been stated on a tax-equivalent basis.

Noninterest Income
Noninterest income decreased $338,000 to $8.0 million during the fourth quarter of 2025 from $8.3 million during the third quarter of 2025. The decrease was due primarily to decreases in card revenue and a decrease in other income, offset partially by an increase in interest rate swap fees due to increased swap activity and an increase in bank owned life insurance ("BOLI") income due to the recognition of a death benefit.
Noninterest income increased $4.7 million during the fourth quarter of 2025 from the same period in 2024 due primarily to a $3.9 million loss recognized in the fourth quarter of 2024 resulting from the sale of investment securities as part of the strategic repositioning of the Company's balance sheet and an increase in BOLI income as the Company incurred $508,000 in costs related to the restructuring of the BOLI portfolio in the fourth quarter of 2024.
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
December 31,
2025		September 30,
2025		December 31,
2024		$% $%
(Dollars in thousands)
Service charges and other fees$3,052 $3,046 $2,892 $6 0.2 %$160 5.5 %
Card revenue1,792 2,209 1,849 (417)(18.9)(57)(3.1)
Loss on sale of investment securities— — (3,903)— — 3,903 100.0 
Interest rate swap fees381 96 357 285 296.9 24 6.7 
BOLI income
1,172 1,008 256 164 16.3 916 357.8 
Gain on sale of other assets, net— — 23 — — (23)(100.0)
Other income1,590 1,966 1,816 (376)(19.1)(226)(12.4)
Total noninterest income (loss)
$7,987 $8,325 $3,290 $(338)(4.1)%$4,697 142.8 %

Noninterest Expense
Noninterest expense decreased $132,000, or 0.3%, to $41.5 million during the fourth quarter of 2025, compared to $41.6 million in the third quarter of 2025. Compensation and employee benefits increased due to an increase in the accrual for incentive compensation. Professional fees decreased due primarily to lower merger related costs recognized in the fourth quarter of 2025 associated with the acquisition of Olympic.
Noninterest expense increased $1.9 million, or 4.9%, during the fourth quarter of 2025 compared to the same period in 2024 due
7

primarily to an increase in compensation and employee benefits due to annual merit increases in base pay, an increase in benefit expense and incentive compensation expense accruals.
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
December 31,
2025		September 30,
2025		December 31,
2024		$%$%
(Dollars in thousands)
Compensation and employee benefits$26,675 $26,082 $24,236 $593 2.3 %$2,439 10.1 %
Occupancy and equipment4,450 4,665 4,742 (215)(4.6)(292)(6.2)
Data processing3,681 3,754 4,020 (73)(1.9)(339)(8.4)
Marketing296 284 405 12 4.2 (109)(26.9)
Professional services1,070 1,332 663 (262)(19.7)407 61.4 
State/municipal business and use taxes
1,247 1,235 1,180 12 1.0 67 5.7 
Federal deposit insurance premium789 796 829 (7)(0.9)(40)(4.8)
Amortization of intangible assets285 284 399 1 0.4 (114)(28.6)
Other expense2,990 3,183 3,066 (193)(6.1)(76)(2.5)
Total noninterest expense$41,483 $41,615 $39,540 $(132)(0.3)%$1,943 4.9 %

Income Tax Expense
Income tax expense increased $305,000 to $3.4 million during the fourth quarter of 2025, compared to $3.1 million during the third quarter of 2025 due to an increase in pre-tax income.
Income tax expense and the effective income tax rate decreased in the fourth quarter of 2025, compared to same period in 2024 due primarily to additional tax expense of $2.4 million related to BOLI restructuring during the fourth quarter of 2024, partially offset by increased income tax expense on higher pre-tax income during the fourth quarter of 2025.
The following table presents the income tax expense and related metrics and the change for the periods indicated:
Quarter EndedChange
December 31,
2025		September 30,
2025		December 31,
2024
Quarter Over Quarter
Prior Year Quarter
(Dollars in thousands)
Income before income taxes$25,679 $22,306 $16,330 $3,373 $9,349 
Income tax expense$3,442 $3,137 $4,402 $305 $(960)
Effective income tax rate13.4 %14.1 %27.0 %(0.7)%(13.6)%

Dividends
On January 16, 2026, the Company’s Board of Directors declared a quarterly cash dividend of $0.24 per share. The dividend is payable on February 11, 2026 to shareholders of record as of the close of business on January 28, 2026.

Earnings Conference Call
The Company will hold a telephone conference call to discuss this earnings release on Thursday, January 22, 2026 at 10:00 a.m. Pacific time. To access the call, please dial (833) 470-1428 -- access code 927284 a few minutes prior to 10:00 a.m. Pacific time. The call will be available for replay through February 5, 2026 by dialing (866) 813-9403 -- access code 715393.
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 network of 50 branches and one loan production office 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.
8

Contact
Bryan McDonald, President and 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 "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 the negative of such words. 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: potential adverse impacts to economic conditions nationally or in our local market areas, other markets where we have lending relationships, or other aspects of our business operations or financial markets, including, without limitation, as a result of credit quality deterioration, pronounced and sustained reductions in real estate market values, employment levels, labor shortages and a potential recession or slowed economic growth; changes in the interest rate environment, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; the level and impact of inflation and the current and future monetary policies of the Board of Governors of the Federal Reserve System in response thereto; 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 and prioritization of such rules and regulations; effects on the U.S. economy resulting from the threat or implementation of, or changes to existing, policies and executive orders, including tariffs, immigration policy, regulatory and other governmental agencies, DEI and ESG initiatives, consumer protection, foreign policy, and tax regulations; credit and interest rate risks associated with our business, customers, borrowings, repayment, investment, and deposit practices; fluctuations in deposits and deposit concentrations; liquidity issues, including our ability to borrow funds or raise additional capital, if necessary; fluctuations in the value of our investment securities; credit risks and risks from concentrations (including by type of geographic area, collateral and industry) within our loan portfolio; disruptions, security breaches, insider fraud, cybersecurity incidents or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform critical processing functions for our business, including sophisticated attacks using artificial intelligence and similar tools; technological changes implemented by us and other parties, including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence; increased competition in the financial services industry from non-banks such as credit unions and financial technology companies, including digital asset service providers; our ability to adapt successfully to technological changes to compete effectively in the marketplace, including as a result of competition from other commercial banks, mortgage banking firms, credit unions, securities brokerage firms, insurance companies, and financial technology companies; our ability to implement our organic and acquisition growth strategies, including the pending acquisition of Olympic, and our ability to successfully integrate Olympic's customers and operations following the acquisition; 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; the commencement, costs, effects and outcome of litigation and other legal proceedings and regulatory actions against us or to which we may become subject; potential impairment to the goodwill we recorded in connection with our past acquisitions, including the pending acquisition of Olympic; loss of, or inability to attract, key personnel; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire, including as a result of the acquisition of Olympic, into our operations and our ability to realize related revenue synergies and cost savings within expected time frames or at all, and any goodwill charges related thereto and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, which might be greater than expected; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, foreign relations, and other external events on our business and the businesses of our clients; 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; our success at managing and responding to 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.hf-wa.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)
December 31,
2025		September 30,
2025		December 31,
2024
Assets
Cash on hand and in banks$52,587 $74,030 $58,821 
Interest earning deposits 180,502 171,461 58,279 
Cash and cash equivalents233,089 245,491 117,100 
Investment securities available for sale, at fair value (amortized cost of $647,505, $674,108 and $835,592, respectively)
607,522 631,231 764,394 
Investment securities held to maturity, at amortized cost (fair value of $625,287, $628,049 and $623,452, respectively)
674,107 681,626 703,285 
Total investment securities1,281,629 1,312,857 1,467,679 
Loans receivable4,783,266 4,769,160 4,802,123 
Allowance for credit losses on loans(52,584)(53,974)(52,468)
Loans receivable, net4,730,682 4,715,186 4,749,655 
Premises and equipment, net74,690 70,382 71,580 
Federal Home Loan Bank stock, at cost5,163 10,473 21,538 
BOLI
105,974 105,464 111,699 
Accrued interest receivable19,280 19,146 19,483 
Prepaid expenses and other assets273,925 289,677 303,452 
Other intangible assets, net1,979 2,264 3,153 
Goodwill 240,939 240,939 240,939 
Total assets$6,967,350 $7,011,879 $7,106,278 
Liabilities and Stockholders' Equity
Non-interest bearing deposits
$1,597,650 $1,617,909 $1,654,955 
Interest bearing deposits
4,322,549 4,239,555 4,029,658 
Total deposits5,920,199 5,857,464 5,684,613 
Borrowings20,000 138,000 383,000 
Junior subordinated debentures22,350 22,277 22,058 
Accrued expenses and other liabilities83,297 90,074 153,080 
Total liabilities6,045,846 6,107,815 6,242,751 
Common stock531,100 529,949 531,674 
Retained earnings421,619 407,561 387,097 
Accumulated other comprehensive loss, net(31,215)(33,446)(55,244)
Total stockholders' equity921,504 904,064 863,527 
Total liabilities and stockholders' equity$6,967,350 $7,011,879 $7,106,278 
Shares outstanding33,963,500 33,956,738 33,990,827 

10

HERITAGE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)
Quarter EndedYear Ended
December 31,
2025		September 30,
2025		December 31,
2024		December 31,
2025		December 31,
2024
Interest Income
Interest and fees on loans$66,669 $66,422 $64,864 $262,900 $247,472 
Taxable interest on investment securities10,546 11,102 12,510 44,966 54,972 
Nontaxable interest on investment securities135 138 146 549 651 
Interest on interest earning deposits1,512 1,846 1,440 5,821 6,617 
Total interest income78,862 79,508 78,960 314,236 309,712 
Interest Expense
Deposits19,576 20,121 19,972 79,336 75,069 
Junior subordinated debentures455 474 512 1,872 2,139 
Borrowings470 1,542 4,713 8,623 23,140 
Total interest expense20,501 22,137 25,197 89,831 100,348 
Net interest income58,361 57,371 53,763 224,405 209,364 
(Reversal of) provision for credit losses(814)1,775 1,183 1,968 6,282 
Net interest income after (reversal of) provision for credit losses59,175 55,596 52,580 222,437 203,082 
Noninterest Income
Service charges and other fees3,052 3,046 2,892 12,005 11,285 
Card revenue1,792 2,209 1,849 7,742 7,752 
Loss on sale of investment securities, net— — (3,903)(10,741)(22,742)
Gain on sale of loans, net— — — — 26 
Interest rate swap fees381 96 357 496 409 
BOLI income
1,172 1,008 256 4,378 2,967 
Gain on sale of other assets, net— — 23 8 1,552 
Other income1,590 1,966 1,816 7,844 6,224 
Total noninterest income (loss)7,987 8,325 3,290 21,732 7,473 
Noninterest Expense
Compensation and employee benefits26,675 26,082 24,236 104,023 98,527 
Occupancy and equipment4,450 4,665 4,742 18,881 19,289 
Data processing3,681 3,754 4,020 14,998 14,899 
Marketing296 284 405 1,251 988 
Professional services1,070 1,332 663 4,258 2,515 
State/municipal business and use taxes1,247 1,235 1,180 4,907 4,889 
Federal deposit insurance premium789 796 829 3,207 3,260 
Amortization of intangible assets285 284 399 1,174 1,640 
Other expense2,990 3,183 3,066 12,867 12,289 
Total noninterest expense41,483 41,615 39,540 165,566 158,296 
Income before income taxes25,679 22,306 16,330 78,603 52,259 
Income tax expense3,442 3,137 4,402 11,071 9,001 
Net income$22,237 $19,169 $11,928 $67,532 $43,258 
Basic earnings per share$0.66 $0.56 $0.35 $1.99 $1.26 
Diluted earnings per share$0.65 $0.55 $0.34 $1.96 $1.24 
Dividends declared per share$0.24 $0.24 $0.23 $0.96 $0.92 
Average shares outstanding - basic33,957,98733,953,81034,109,33933,996,14934,465,323
Average shares outstanding - diluted34,405,79334,413,38634,553,13934,456,90434,899,036
11

HERITAGE FINANCIAL CORPORATION
FINANCIAL STATISTICS (Unaudited)
(Dollars in thousands)
Average Balances, Yields, and Rates Paid:
Year Ended December 31,
20252024
Average
Balance		Interest
Earned/
Paid
Average
Yield/
Rate (1)
Average
Balance		Interest
Earned/
Paid
Average
Yield/
Rate (1)
Interest Earning Assets:
Loans receivable(2)(3)
$4,773,760 $262,900 5.51 %$4,536,499 $247,472 5.46 %
Taxable securities1,350,278 44,966 3.33 1,653,295 54,972 3.32 
Nontaxable securities(3)
15,449 549 3.55 18,425 651 3.53 
Interest earning deposits135,603 5,821 4.29 125,036 6,617 5.29 
Total interest earning assets6,275,090 314,236 5.01 %6,333,255 309,712 4.89 %
Noninterest earning assets752,048 799,791 
Total assets$7,027,138 $7,133,046 
Interest Bearing Liabilities:
Certificates of deposit$966,429 $36,266 3.75 %$857,079 $36,922 4.31 %
Savings accounts426,124 1,154 0.27 451,528 920 0.20 
Interest bearing demand and money market accounts2,796,909 41,916 1.50 2,640,487 37,227 1.41 
Total interest bearing deposits4,189,462 79,336 1.89 3,949,094 75,069 1.90 
Junior subordinated debentures22,201 1,872 8.43 21,910 2,139 9.76 
Borrowings185,544 8,623 4.65 456,448 23,140 5.07 
Total interest bearing liabilities4,397,207 89,831 2.04 %4,427,452 100,348 2.27 %
Noninterest demand deposits1,623,952 1,669,301 
Other noninterest bearing liabilities118,300 182,121 
Stockholders’ equity887,679 854,172 
Total liabilities and stockholders’ equity$7,027,138 $7,133,046 
Net interest income and spread$224,405 2.97 %$209,364 2.62 %
Net interest margin3.58 %3.31 %
(1) Average balances are calculated using daily balances.
(2) Average loans receivable includes loans held for sale and loans classified as nonaccrual, which carry a zero yield. Interest earned on loans receivable includes the amortization of net deferred loan fees of $3.7 million and $3.6 million for the year ended December 31, 2025 and 2024, respectively.
(3) Yields on tax-exempt loans and securities have not been stated on a tax-equivalent basis.
12

HERITAGE FINANCIAL CORPORATION
FINANCIAL STATISTICS (Unaudited)
(Dollars in thousands)
Nonperforming Assets and Credit Quality Metrics:
Quarter EndedYear Ended
December 31,
2025		September 30,
2025		December 31,
2024		December 31,
2025		December 31,
2024
Allowance for Credit Losses on Loans:
Balance, beginning of period$53,974 $52,529 $51,391 $52,468 $47,999 
(Reversal of) provision for credit losses on loans(909)1,563 1,104 1,508 6,983 
Charge-offs:
Commercial business(565)(195)(4)(1,436)(2,953)
Residential real estate
— (27)— (27)— 
Consumer(75)(152)(92)(485)(538)
Total charge-offs(640)(374)(96)(1,948)(3,491)
Recoveries:
Commercial business140 219 48 403 855 
Residential real estate
— 1 — 1 — 
Consumer19 36 21 152 122 
Total recoveries159 256 69 556 977 
Net (charge-offs) recoveries (481)(118)(27)(1,392)(2,514)
Balance, end of period$52,584 $53,974 $52,468 $52,584 $52,468 
Net charge-offs on loans to average loans receivable annualized0.04 %0.01 %— %0.03 %0.06 %


December 31,
2025		September 30,
2025		December 31,
2024
Nonperforming Assets:
Nonaccrual loans:
Commercial business$6,886 $3,418 $3,919 
Residential real estate
1,196 1,290 — 
Real estate construction and land development12,408 12,760 — 
Consumer486 144 160 
Total nonaccrual loans20,976 17,612 4,079 
Accruing loans past due 90 days or more
194 3,338 1,195 
Total nonperforming loans
21,170 20,950 5,274 
Other real estate owned— — — 
Nonperforming assets$21,170 $20,950 $5,274 
ACL on loans to:
Loans receivable1.10 %1.13 %1.09 %
Nonaccrual loans250.69 %306.46 %1,286.30 %
Nonaccrual loans to loans receivable
0.44 %0.37 %0.08 %
Nonperforming loans to loans receivable
0.44 %0.44 %0.11 %
Nonperforming assets to total assets0.30 %0.30 %0.07 %

13

HERITAGE FINANCIAL CORPORATION
QUARTERLY FINANCIAL STATISTICS (Unaudited)
(Dollars in thousands, except per share amounts)
 Quarter Ended
 December 31,
2025		September 30,
2025		June 30,
2025		March 31,
2025		December 31,
2024
Earnings:    
Net interest income$58,361 $57,371 $54,983 $53,690 $53,763 
(Reversal of) provision for credit losses(814)1,775 956 51 1,183 
Noninterest income7,987 8,325 1,517 3,903 3,290 
Noninterest expense41,483 41,615 41,085 41,383 39,540 
Net income22,237 19,169 12,215 13,911 11,928 
Basic earnings per share$0.66 $0.56 $0.36 $0.41 $0.35 
Diluted earnings per share$0.65 $0.55 $0.36 $0.40 $0.34 
Adjusted diluted earnings per share (1)
$0.66 $0.56 $0.53 $0.49 $0.51 
Average Balances:  
Loans receivable
$4,770,300 $4,762,648 $4,768,558 $4,793,917 $4,717,748 
Total investment securities1,301,526 1,329,616 1,390,064 1,443,662 1,530,348 
Total interest earning assets6,223,303 6,258,446 6,286,309 6,333,697 6,367,371 
Total assets6,954,110 7,006,140 7,046,943 7,103,227 7,149,294 
Total interest bearing deposits4,250,589 4,217,041 4,176,052 4,112,343 4,011,793 
Total noninterest demand deposits1,635,539 1,625,945 1,602,987 1,631,268 1,703,357 
Stockholders' equity911,454 892,280 879,808 866,629 868,308 
Financial Ratios:  
Return on average assets (2)
1.27 %1.09 %0.70 %0.79 %0.66 %
Return on average common equity (2)
9.68 8.52 5.57 6.51 5.46 
Return on average tangible common equity (1)(2)
13.33 11.86 7.85 9.22 7.81 
Adjusted return on average tangible common equity (1)(2)
13.51 12.16 11.59 11.21 11.59 
Efficiency ratio62.5 63.3 72.7 71.9 69.3 
Adjusted efficiency ratio (1)
61.9 62.4 64.9 67.3 64.4 
Noninterest expense to average total assets (2)
2.37 2.36 2.34 2.36 2.20 
Net interest spread (2)
3.15 3.03 2.89 2.79 2.66 
Net interest margin (2)
3.72 3.64 3.51 3.44 3.36 
(1) Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” section for a reconciliation to the comparable GAAP financial measure.
(2) Annualized.












14


HERITAGE FINANCIAL CORPORATION
QUARTERLY FINANCIAL STATISTICS (Unaudited)
(Dollars in thousands, except per share amounts)
 As of or for the Quarter Ended
 December 31,
2025		September 30,
2025		June 30,
2025		March 31,
2025		December 31,
2024
Select Balance Sheet:   
Total assets$6,967,350 $7,011,879 $7,070,641 $7,129,862 $7,106,278 
Loans receivable
4,783,266 4,769,160 4,774,855 4,764,848 4,802,123 
Total investment securities1,281,629 1,312,857 1,346,274 1,413,903 1,467,679 
Total deposits5,920,199 5,857,464 5,784,413 5,845,335 5,684,613 
Noninterest demand deposits1,597,650 1,617,909 1,584,231 1,621,890 1,654,955 
Stockholders' equity921,504 904,064 888,212 881,515 863,527 
Financial Measures: 
Book value per share$27.13 $26.62 $26.16 $25.85 $25.40 
Tangible book value per share (1)
19.98 19.46 18.99 18.70 18.22 
Stockholders' equity to total assets13.2 %12.9 %12.6 %12.4 %12.2 %
Tangible common equity to tangible assets (1)
10.1 9.8 9.4 9.3 9.0 
Loans to deposits ratio80.8 81.4 82.5 81.5 84.5 
Regulatory Capital Ratios:(2)
Common equity tier 1 capital ratio
12.7 %12.4 %12.2 %12.2 %12.0 %
Leverage ratio
10.8 10.5 10.3 10.2 10.0 
Tier 1 capital ratio
13.1 12.8 12.6 12.6 12.4 
Total capital ratio
14.1 13.8 13.6 13.6 13.3 
Credit Quality Metrics: 
ACL on loans to:
Loans receivable1.10 %1.13 %1.10 %1.09 %1.09 %
Nonaccrual loans
250.7 306.5 532.5 1,175.3 1,286.3 
Nonaccrual loans to loans receivable
0.44 0.37 0.21 0.09 0.08 
Nonperforming loans to loans receivable0.44 0.44 0.39 0.09 0.11 
Nonperforming assets to total assets0.30 0.30 0.26 0.06 0.07 
Net charge-offs on loans to average loans receivable (3)
0.04 0.01 0.04 0.03 0.00 
Criticized Loans by Credit Quality Rating:
Special mention$71,122 $100,160 $114,146 $113,704 $110,725 
Substandard116,823 94,377 99,715 64,387 68,318 
Other Metrics:
Number of branches50 50 50 50 50 
Deposits per branch$118,404 $117,149 $115,688 $116,907 $113,692 
Average number of full-time equivalent employees742 749 745 757 751 
Average assets per full-time equivalent employee9,372 9,354 9,459 9,383 9,520 
(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.
15

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 U.S. 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 financial 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 financial measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of the non-GAAP financial measures used in this earnings release to the comparable GAAP financial measures are presented below.

The Company believes that presenting the adjusted diluted earnings per share provides useful and comparative information to assess trends in the Company's core operations reflected in the current quarter’s results and facilitate the comparison of our performance with the performance of our peers.

December 31,
2025		September 30,
2025		June 30,
2025		March 31,
2025		December 31,
2024
Diluted Earnings per Share and Adjusted Diluted Earnings per Share:
Net income (GAAP)$22,237 $19,169 $12,215 $13,911 $11,928 
Exclude loss on sale of investment securities, net
— — 6,854 3,887 3,903 
Exclude merger related costs385 635 — — — 
Exclude gain on sale of premises and equipment— — (5)(3)(23)
Exclude tax effect of adjustment(81)(133)(1,438)(816)(815)
Exclude BOLI restructuring costs included in BOLI Income— — — — 508 
Exclude tax expense related to BOLI restructuring— — 515 — 2,371 
Adjusted net income (non-GAAP)
$22,541 $19,671 $18,141 $16,979 $17,872 
Average number of diluted shares outstanding34,405,793 34,413,386 34,446,710 34,506,238 34,553,139 
Diluted earnings per share (GAAP)$0.65 $0.55 $0.36 $0.40 $0.34 
Adjusted diluted earnings per share (non-GAAP)$0.66 $0.56 $0.53 $0.49 $0.51 


















16

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

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.
December 31,
2025		September 30,
2025		June 30,
2025		March 31,
2025		December 31,
2024
Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share:
Total stockholders' equity (GAAP)$921,504 $904,064 $888,212 $881,515 $863,527 
Exclude intangible assets(242,918)(243,203)(243,487)(243,789)(244,092)
Tangible common equity (non-GAAP)$678,586 $660,861 $644,725 $637,726 $619,435 
Total assets (GAAP)$6,967,350 $7,011,879 $7,070,641 $7,129,862 $7,106,278 
Exclude intangible assets(242,918)(243,203)(243,487)(243,789)(244,092)
Tangible assets (non-GAAP)$6,724,432 $6,768,676 $6,827,154 $6,886,073 $6,862,186 
Stockholders' equity to total assets (GAAP)13.2 %12.9 %12.6 %12.4 %12.2 %
Tangible common equity to tangible assets (non-GAAP)
10.1 %9.8 %9.4 %9.3 %9.0 %
Shares outstanding33,963,500 33,956,738 33,953,194 34,105,516 33,990,827 
Book value per share (GAAP)$27.13 $26.62 $26.16 $25.85 $25.40 
Tangible book value per share (non-GAAP)$19.98 $19.46 $18.99 $18.70 $18.22 































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 provides useful and comparative information to assess trends in the Company's core operations reflected in the current quarter’s results and facilitate the comparison of our performance with the performance of our peers.
Quarter Ended
December 31,
2025		September 30,
2025		June 30,
2025		March 31,
2025		December 31,
2024
Return on Average Tangible Common Equity, annualized:
Net income (GAAP)$22,237 $19,169 $12,215 $13,911 $11,928 
Add amortization of intangible assets285 284 302 303 399 
Exclude tax effect of adjustment(60)(60)(63)(64)(84)
Tangible net income (non-GAAP)$22,462 $19,393 $12,454 $14,150 $12,243 
Tangible net income (non-GAAP)$22,462 $19,393 $12,454 $14,150 $12,243 
Exclude loss on sale of investment securities, net
— — 6,854 3,887 3,903 
Exclude merger related costs385 635 — — — 
Exclude gain on sale of premises and equipment— — (5)(3)(23)
Exclude tax effect of adjustment(81)(133)(1,438)(816)(815)
Exclude BOLI restructuring costs included in BOLI Income— — — — 508 
Exclude tax expense related to BOLI restructuring— — 515 — 2,371 
Adjusted tangible net income (non-GAAP)$22,766 $19,895 $18,380 $17,218 $18,187 
Average stockholders' equity (GAAP)$911,454 $892,280 $879,808 $866,629 $868,308 
Exclude average intangible assets(243,069)(243,350)(243,651)(243,945)(244,302)
Average tangible common stockholders' equity (non-GAAP)$668,385 $648,930 $636,157 $622,684 $624,006 
Return on average common equity, annualized (GAAP)9.68 %8.52 %5.57 %6.51 %5.46 %
Return on average tangible common equity, annualized (non-GAAP)13.33 %11.86 %7.85 %9.22 %7.81 %
Adjusted return on average tangible common equity, annualized (non-GAAP)13.51 %12.16 %11.59 %11.21 %11.59 %









18


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

The Company believes that presenting an adjusted efficiency ratio provides useful and comparative information to assess trends in the Company's core operations reflected in the current quarter’s results and facilitate the comparison of our performance with the performance of our peers.
Quarter Ended
December 31,
2025		September 30,
2025		June 30,
2025		March 31,
2025		December 31,
2024
Adjusted Efficiency Ratio :
Total noninterest expense (GAAP)$41,483 $41,615 $41,085 $41,383 $39,540 
Exclude merger related costs$385 $635 $— $— $— 
Adjusted noninterest expense (non-GAAP)$41,098 $40,980 $41,085 $41,383 $39,540 
Net interest income (GAAP)$58,361 $57,371 $54,983 $53,690 $53,763 
Total noninterest income (GAAP)$7,987 $8,325 $1,517 $3,903 $3,290 
Exclude loss on sale of investment securities, net
— — 6,854 3,887 3,903 
Exclude gain on sale of premises and equipment
— — (5)(3)(23)
Exclude BOLI restructuring costs included in BOLI Income— — — — 508 
Adjusted total noninterest income (non-GAAP)$7,987 $8,325 $8,366 $7,787 $7,678 
Efficiency ratio (GAAP)62.5 %63.3 %72.7 %71.9 %69.3 %
Adjusted efficiency ratio (non-GAAP)61.9 %62.4 %64.9 %67.3 %64.4 %

19
INVESTOR PRESENTATION Q4 2025

 
2 This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements often include words such as "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 the negative of such words. 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: • potential adverse impacts to economic conditions nationally or in our local market areas, other markets where Heritage Financial Corporation (the "Company") and its subsidiaries have lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of credit quality deterioration, pronounced and sustained reductions in real estate market values, employment levels, labor shortages and a potential recession or slowed economic growth; • changes in the interest rate environment, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; • the level and impact of inflation and the current and future monetary policies of the Board of Governors of the Federal Reserve System in response thereto; • 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 and prioritization of such rules and regulations; • effects on the U.S. economy resulting from the threat or implementation of, or changes to existing, policies and executive orders, including tariffs, immigration policy, regulatory and other governmental agencies, DEI and ESG initiatives, consumer protection, foreign policy, and tax regulations; • credit and interest rate risks associated with the Company’s businesses, customers, borrowings, repayment, investment, and deposit practices; • fluctuations in deposits and deposit concentrations; • liquidity issues, including our ability to borrow funds or raise additional capital, if necessary; • fluctuations in the value of our investment securities; • credit risks and risks from concentrations (including by type of geographic area, collateral and industry) within our loan portfolio; • disruptions, security breaches, insider fraud, cybersecurity incidents or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform critical processing functions for our business, including sophisticated attacks using artificial intelligence and similar tools; • technological changes implemented by us and other parties, including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence; • increased competition in the financial services industry from non-banks such as credit unions and financial technology companies, including digital asset service providers; • our ability to adapt successfully to technological changes to compete effectively in the marketplace, including as a result of competition from other commercial banks, mortgage banking firms, credit unions, securities brokerage firms, insurance companies, and financial technology companies; • our ability to implement our organic and acquisition growth strategies, including the pending acquisition of Olympic Bancorp, Inc. (“Olympic”), and our ability to successfully integrate Olympic's customers and operations following the acquisition; • 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; • the commencement, costs, effects and outcome of litigation and other legal proceedings and regulatory actions against us or to which the Company may become subject; • potential impairment to the goodwill the Company recorded in connection with our past acquisitions, including the pending acquisition of Olympic; • loss of, or inability to attract, key personnel; • our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire, including as a result of the acquisition of Olympic, into our operations and our ability to realize related revenue synergies and cost savings within expected time frames or at all, and any goodwill charges related thereto and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, which might be greater than expected; • the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, foreign relations, and other external events on our business and the businesses of our clients; • 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; and • our success at managing and responding to the risks involved in the foregoing items. 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, 2024, as well as those set forth in other reports we file with or furnish to the Securities and Exchange Commission (the “SEC”) which are available on our website at www.hf-wa.com and on the SEC's website at www.sec.gov. 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 December 31, 2025. 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 such date. 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 hereto. All dollars amounts presented 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 December 31, 2025, unless otherwise indicated. FORWARD LOOKING STATEMENTS

 
HERITAGE FINANCIAL CORPORATION OVERVIEW

 
4 OVERVIEW General Overview Nasdaq symbol HFWA Stock price(2) $24.85 Market capitalization(2) $844 million Institutional ownership(2) 86.0% Headquarters Olympia, WA # of branches 50 Year established 1927 Q4 2025 Financial Highlights Assets $7.0 billion Deposits $5.9 billion Loans receivable $4.8 billion Net income $22.2 million Net interest margin 3.72% ROAE(3) 9.68% ROATCE(1)(4) 13.33% Adjusted ROATCE(1)(4) 13.51% Efficiency ratio 62.5% Adjusted efficiency ratio(1) 61.9% Leverage ratio 10.8% Total capital ratio 14.1% 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 January 20, 2026. (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 Location Spokane

 
5 COMPANY STRATEGY Allocate capital to organically grow our core banking business Ÿ Successful hiring of individuals and teams of bankers in high-growth and dynamic Seattle and Portland markets as well as other key markets including branch openings in Eugene, Oregon and Boise, Idaho and loan production office in Spokane, Washington 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 742 at December 31, 2025 compared to 803 at December 31, 2023 Generate stable profitability and risk adjusted returns Ÿ Adjusted return on average tangible common equity(1) ("ROATCE") averaged 11.8% from 2023 to 2025. Ÿ Five-year growth in tangible book value(1) of $4.21, or 26.7%, to $19.98 at December 31, 2025 from $15.77 at December 31, 2020 Remain active and disciplined in M&A Ÿ On September 25, 2025, entered into a definitive agreement with Olympic Bancorp, Inc. - $1.7B in assets. Transaction expected to close on or about January 31, 2026. Ÿ Five completed 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 Net charge-offs on loans to average loans remains low at 0.03% for the year ended December 31, 2025 Focus on core deposits to increase franchise value over the long term Ÿ 27.0% noninterest demand deposits to total deposits at December 31, 2025 Ÿ 1.32% cost of total deposits; top 11% performance among US publicly traded banks in Q3 2025 Engage in proactive capital management Ÿ History of increasing regular dividends and utilizing special dividends to manage capital Ÿ Strong capital ratios: leverage ratio(3) = 10.8%; total capital ratio(3) = 14.1% (1) Represents a non-GAAP financial measure (2) Comparable cost of total deposits provided by S&P Global Market Intelligence for the third quarter of 2025 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 MERGER WITH OLYMPIC BANCORP Source: S&P Capital IQ Pro Olympic Bancorp data as of Q3 2025 • Positions HFWA as the leading community bank in the Puget Sound region • Estimated pro forma assets of $8.6 billion at HFWA – would rank as 5th largest bank headquartered in Washington • Entering new markets with strong position – Pro forma rank as #1 market share for a community bank in Kitsap County (Bremerton-Silverdale-Port Orchard MSA) which is a $4.3 billion deposit market • Clean credit portfolio with NPAs / Assets of 0.0% and long track record as conservative underwriter • Low cost, core deposit franchise with 1.02% cost of total deposits and 82% of deposits are non-CDs • Liquid balance sheet will provide HFWA with optionality, post-closing • Compatible and complementary to HFWA – similar banking culture with focus on credit quality, core deposit funding and conservative risk management • Received all regulatory and shareholder approvals • Target close date of January 31, 2026

 
7 $124,630 $104,949 $92,508 $86,867 Median household income 4.9% 3.5% 14.3% 5.0% 1.1% 13.1% 3.3% 7.8% 12.9% 4.4% 2.6% 11.3% Seattle MSA Portland MSA Boise MSA USA Unemployment rate 2026-2031 Projected Population Growth 2026-2031 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 January 2026 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 $2,236 46.7% Portland OR-WA $769 16.1% Mount Vernon WA $239 5.0% Olympia WA $189 3.9% Yakima WA $103 2.2% Bellingham WA $186 3.9% Eugene OR $89 1.9% Boise ID $114 2.4% Other $858 17.9% Deposits by MSA Seattle WA $2,604 44.0% Portland OR-WA $923 15.6% Mount Vernon WA $335 5.7% Olympia WA $491 8.3% Longview WA $163 2.8% Oak Harbor WA $534 9.0% Yakima WA $233 3.9% Bellingham WA $168 2.8% Other $469 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 Excluding banks with pending mergers and acquisitions • 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 – 9 banks between $500 million and $1.0 billion in assets – 14 banks between $1.0 billion and $3.5 billion in assets • Target metrics include 15% IRR and earnback of < 3 years. Bank headquarters On September 25, 2025, entered into a definitive agreement with Olympic Bancorp, Inc. - $1.7B in assets with target close date of January 31, 2026

 
10 $1,712 $3,651 $3,879 $4,113 $4,238 $5,553 $6,615 $7,432 $6,980 $7,175 $7,106 $7,130 $7,071 $7,012 $6,967 $1,747 $1,079 $15.02 $15.68 $16.08 $16.88 $20.63 $22.10 $22.85 $24.34 $22.73 $24.44 $25.40 $25.85 $26.16 $26.62 $27.13 $10.73 $11.41 $11.86 $12.70 $13.54 $15.07 $15.77 $17.19 $15.66 $17.40 $18.22 $18.70 $18.99 $19.46 $19.98 Organic Assets Acquired Assets Book value per share Tangible book value per share (1) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 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 and sales position in greater Seattle, Washington area. 2025 • Expanded into a new market with addition of commercial banking team and loan production office in Spokane, Washington in January 2025 2025 • Entered into a definitive agreement with Olympic Bancorp, Inc. - $1.7B in assets Bank Acquisitions and Team Additions Bank Acquisition Pending Bank Acquisition Team Addition

 
FINANCIAL UPDATE

 
13 LOAN PORTFOLIO Loan Portfolio Composition $196 $171 $165 $167 $172 $173 $170 $344 $375 $403 $393 $384 $375 $359$294 $414 $479 $453 $433 $442 $343 $693 $718 $843 $851 $831 $819 $818 $937 $959 $1,003 $985 $1,015 $1,023 $1,035 $1,587 $1,698 $1,909 $1,916 $1,940 $1,938 $2,058 Consumer Residential real estate Construction & land development Commercial and Industrial (C&I) Owner-occupied CRE Non-owner occupied CRE 2022 2023 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 New Loan Commitments $21 $18 $20 $24 $17 $85 $64 $88 $141 $63 $101 $59 $49 $94 $75 $130 $60 $111 $81 $117 Consumer Construction & land development Commercial and Industrial (C&I) Commercial Real Estate (CRE) Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025

 
14 LOC Utilization Rates 29.8% 28.2% 29.7% 30.7% 32.5% 31.0% 28.8% 42.9% 53.8% 70.2% 68.0% 64.7% 60.8% 57.3% 31.1% 31.1% 31.6% 32.3% 33.9% 34.5% 34.4% Utilization Rate - Consumer LOCs Utilization Rate - Construction LOCs Utilization Rate - C&I LOCs 2022 2023 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Construction Commitments $686 $769 $682 $666 $669 $727 $599 $294 $414 $479 $453 $433 $442 $343 $392 $355 $203 $213 $236 $285 $256 Outstanding Balance Available Credit 2022 2023 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 LINE OF CREDIT ("LOC") UTILIZATION

 
15 COMMERCIAL LOAN EXPOSURE Commercial Business Loans by Industry Exposure Industry Amount WARR at 12/31/25 Real estate, rental and leasing $2,240 4.5 Health care and social assistance 341 4.2 Accommodation and food services 173 5.2 Retail trade 143 4.7 Construction 163 5.0 Other services (except Public administration) 131 4.6 Manufacturing 85 5.1 All other industries 635 4.4 Total $3,911 4.6 CRE Loans only by Collateral Type Collateral Type Amount WARR at 12/31/25 Office $589 4.3 Industrial 542 4.6 Retail store / shopping center 339 4.7 Multi-family 521 4.7 Mixed use property 157 4.6 Motel / hotel 125 5.1 Single purpose 134 4.7 Warehouse 134 4.6 Mini-storage 155 4.2 Recreational / school 83 4.9 Other 314 4.5 Total $3,093 4.6 WARR = Weighted average risk rating Categorized by NAICS code. Office - Owner-occupied CRE 9.3% Office - Non-owner occupied CRE 9.7% Industrial 17.5% Retail store / shopping center 11.0% Multi-family 16.8% Mixed use property 5.1% Motel / hotel 4.0% Single purpose 4.3% Warehouse 4.3% Mini-storage 5.0% Recreational / school 2.7% Other 10.3% Real estate, rental and leasing 57.3% Health care and social assistance 8.7% Accommodation and food services 4.4% Retail trade 3.7% Construction 4.2% Other Services (except Public administration) 3.3% Manufacturing 2.2% All other industries 16.2%

 
16 CHANGES IN LOANS RECEIVABLE $4,769 $173 $(77) $(74) $(8) $4,783 Loans receivable at September 30, 2025 Loans originated Prepayments Maturities / Payoffs Net advances/ payments Loans receivable at December 31, 2025 $4,802 $583 $(292) $(229) $(81) $4,783 Loans receivable at December 31, 2024 Loans originated Prepayments Payoffs Net advances/ payments Loans receivable at December 31, 2025 Change in loans - Q4 2025 Change in loans - 2025

 
17 CRE OFFICE CRE Office Loans by Size Size WARR(2) # of Loans Total Balance(1) Average Balance Per Loan(1) >$10 Million 3.4 6 $ 84,667 $ 14,111 $5-$10 Million 4.0 12 76,710 6,393 $2-$5 Million 4.5 52 162,756 3,130 <$2 Million 4.6 439 264,639 603 TOTAL 4.3 509 $ 588,772 $ 1,157 Quality of CRE Office Portfolio: • 82.0% of loans have recourse to owner • 49.1% of loans are owner occupied which are considered to have a lower risk profile • 24.8% 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 24.8% Professional, Scientific, and Technical Services 3.1% Finance and Insurance 2.3% Other Services (except Public Administration) 2.9% Accommodation and Food Services 1.0% All Other 65.9% (1) Dollars in thousands (2) Weighted average risk rating

 
18 Net charge-offs (recoveries) on loans to average loans, annualized (0.03)% (0.01)% 0.06% 0.03% 0.00% 0.03% 0.04% 0.01% 0.04% 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 (0.05)% (0.03)% 0.00% 0.03% 0.05% 0.08% Nonaccrual Loans $6 $4 $4 $4 $10 $18 $21 Nonaccrual loans Nonaccrual loans to loans receivable 2022 2023 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 0.15% 0.10% 0.08% 0.09% 0.21% 0.37% 0.44% NONACCRUAL LOANS AND NET CHARGE-OFFS

 
19 CRITICIZED LOANS $135 $150 $179 $178 $213 $195 $188 $60 $65 $64 $60 $89 $77 $96 $69 $80 $111 $114 $114 $100 $71 Substandard - nonaccrual Substandard - accrual Special mention 2022 2023 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Criticized Loans by Loan Segment Commercial & industrial 39.4% Owner- occupied CRE 18.9% Non-owner occupied CRE 32.3% Residential real estate 1.2% Construction & land development 7.2% Consumer 1.0% Criticized Loans by Collateral Type Motel/Hotel 7.7% Office 3.6% Multi-Family 5.3% Retail Store/Shopping Center 10.7%Mixed Use Property 5.2% Elder Care 4.1% Farm-Bldgs/Land 6.0% Industrial 4.8% Duplex/Tri-Plex/4-Plex 3.1% Other CRE 20.3% Non-CRE 29.2% $6 $4 $4 $4 $10 $18 $21

 
20 CRITICIZED LOANS AND NET CHARGE-OFF HISTORY Criticized Loans to Total Loans 3.63% 3.79% 6.50% 4.81% 3.34% 3.45% 3.73% 4.08% 2.19% 2.05% 3.47% 2.63% 1.96% 2.32% 2.66% 3.08% Heritage Peer Median 2018 2019 2020 2021 2022 2023 2024 Q3 2025 YTD Net Charge-offs to Average Loans 0.06% 0.09% 0.07% 0.01% (0.03)% (0.01)% 0.06% 0.03% 0.07% 0.11% 0.05% 0.03% 0.02% 0.07% 0.05% 0.06% Heritage Peer Median 2018 2019 2020 2021 2022 2023 2024 Q3 2025 YTD (1) Criticized loans includes loans graded special mention or worse (2) Peer Median is the median of 16 identified peer banks and is as of September 30, 2025 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 generally lower than peer median.

 
21 ACL on Loans $42,986 $47,999 $52,468 $52,160 $52,529 $53,974 $52,584 1.06% 1.11% 1.09% 1.09% 1.10% 1.13% 1.10% ACL on loans ($) ACL on loans / Loans (%) 2022 2023 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 ALLOWANCE FOR CREDIT LOSSES ("ACL") ON LOANS $53,974 $(1,619) $187 $43 $(1) $52,584 September 30, 2025 Change in loan balance Change in collective rate Change in rate and balance Individually evaluated loans December 31, 2025 Change in ACL on Loans - Q4 2025 Dollars in thousands

 
22 Average Deposit Balances and Cost of Total Deposits $6,322 $5,706 $5,618 $5,813 $5,715 $5,744 $5,779 $5,843 $5,886 0.11% 0.69% 1.34% 1.36% 1.39% 1.38% 1.40% 1.37% 1.32% 1.98% 1.92% 1.94% 1.89% 1.83% 0.17% 1.03% 1.90% 1.89% Average deposits Cost of total deposits Cost of int-bearing deposits 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 DEPOSITS Deposit Composition 35.5% 30.6% 29.1% 27.7% 27.4% 27.6% 27.0% 30.9% 28.7% 25.8% 26.1% 25.7% 26.1% 27.5% 17.9% 19.5% 20.5% 21.9% 22.6% 22.7% 22.5% 10.5% 8.7% 7.4% 7.4% 7.3% 7.3% 7.1% 5.2% 12.4% 17.2% 16.9% 17.0% 16.3% 15.9% Noninterest demand deposits Interest bearing demand deposits Money market accounts Savings accounts Certificates of deposit 2022 2023 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025

 
23 DEPOSIT COMPOSITION Customer Deposits by Relationship Size $865 $453 $1,382 $1,473 $1,747 Over $10MM $5MM-$10MM $1MM-5MM $250K-$1MM Less than $250K Consumer Accounts vs. Business Accounts 25% 59% 16% Consumer Commercial CDs Insured vs. Uninsured 41% 59% Insured Uninsured Deposit portfolio as of December 31, 2025: • Majority of deposits are to customers with relationships of $1 million or less. • Uninsured deposits at 41% of total deposits. 12% of uninsured deposits are public deposits that are 100% pledged. • Mix of commercial and consumer accounts.

 
24 Investment Balances and Investment Yield $2,098 $1,874 $1,468 $1,282 $1,468 $1,414 $1,346 $1,313 $1,282 $1,203 $178 $33 $88 $28 $57 $3 2.48% 3.02% 3.33% 3.33% 3.29% 3.34% 3.38% 3.35% 3.26% Portfolio yield New purchases 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 INVESTMENT PORTFOLIO Portfolio Duration 4.93 4.85 4.55 4.30 4.08 3.37 2.33 3.87 4.55 4.59 4.68 4.48 4.30 4.04 3.76 4.18 Duration - total portfolio Duration - new purchases only (1) 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 (1) No investments were purchased during Q4 2024 or Q3 2025

 
25 $53 $39 $39 $33 $56 $40 $32 $26 $55 $84 $52 $53 $43 $29 $29 $24 $47 $31 $24 $18 $47 $77 $45 $47 $10 $10 $10 $9 $9 $9 $8 $8 $8 $7 $7 $6 Interest Principal Q1 2026 Q2 2026 Q3 2026 Q4 2026 Q1 2027 Q2 2027 Q3 2027 Q4 2027 Q1 2028 Q2 2028 Q3 2028 Q4 2028 INVESTMENT CASHFLOWS Investment cashflows(1) are estimated to be $562 million through Q4 of 2028. (1) Cashflow estimates based on third-party bond accounting service

 
26 INVESTMENT PORTFOLIO HTM Investment by Type US government and agencies 20.9% Residential CMO and MBS 33.4% Commercial CMO and MBS 45.7% Available for sale ("AFS") and held to maturity ("HTM") investment securities percentages are based on fair value as of December 31, 2025 unless otherwise noted Strong Credit Quality of Portfolio: AFS Securities • 88.9% of AFS in U.S. government and agency securities • Only 1.7% of AFS are rated less than AA • 99.9% of AFS portfolio are unpledged 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 Investment by Type US government and agencies 1.9% Municipal securities 8.5% Residential CMO and MBS 45.3% Commercial CMO and MBS 41.5% Corporate obligations 1.7% Other asset-backed securities 1.1%

 
27 Net Interest Margin 3.33% 3.56% 3.31% 3.58% 3.36% 3.44% 3.51% 3.64% 3.72% 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 NET INTEREST MARGIN Quarterly Change in Net Interest Margin 3.64% 0.04% (0.03)% (0.02)% 0.02% 0.07% 3.72% QTD Q3 2025 Loans Investments Interest earning deposits Deposits Borrowings QTD Q4 2025 Net Interest Income $219,385 $225,155 $209,364 $224,405 $53,763 $53,690 $54,983 $57,371 $58,361 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025

 
28 Adjustable Rate Loans - Repricing Schedule $1,048 $148 $144 $246 $342 $375 $105 6.41% 4.31% 5.21% 6.17% 6.14% 6.04% 5.12% 6.48% 6.39% 6.12% 6.23% 6.18% 6.17% 6.44% 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 December 31, 2025 and repricing period signifies the sooner of the next scheduled reprice date or maturity (2) Weighted Average Rate if Repriced as of December 31, 2025 and assumes same index and margin Adjustable Rate Loans • $2.4 billion in total • 56% tied to FHLB index, 19% tied to Prime, 24% tied to SOFR Fixed Rate Loans - Maturity Schedule $61 $116 $200 $203 $316 $239 $1,234 5.23% 4.74% 5.16% 5.36% 5.26% 4.69% 4.46% 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 PROFITABILITY TRENDS ROAA and Adjusted ROAA(1) 1.12% 0.86% 0.61% 0.96% 0.66% 0.79% 0.70% 1.09% 1.27% 1.12% 0.99% 0.88% 1.10% 0.99% 0.97% 1.03% 1.11% 1.29% ROAA Adjusted ROAA (1) 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Noninterest Expense/Avg. Assets 2.06% 2.33% 2.22% 2.34% 2.20% 2.36% 2.34% 2.32% 2.34% 2.06% 2.33% 2.22% 2.36% 2.20% 2.36% 2.34% 2.36% 2.37% Noninterest Expense / Avg. Assets Adjusted Noninterest Expense / Avg. Assets (1) 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 ROAA = Return on average assets (1) Represents a non-GAAP financial measure

 
30 $81.9 $61.8 $43.3 $67.5 $81.8 $70.9 $62.9 $77.3 Net income Adjusted Net income (1) 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 $11.9 $13.9 $12.2 $19.2 $22.2$17.9 $17.0 $18.1 $19.7 $22.5 PROFITABILITY TRENDS ROAE, ROATCE(1) and Adjusted ROATCE(1) Net Income and Adjusted Net Income(1), in millions 14.92% 12.76% 10.53% 12.15% 11.59% 11.21% 11.59% 12.16% 13.51% 14.94% 11.15% 7.31% 10.63% 7.81% 9.22% 7.85% 11.86% 13.33% 10.08% 7.55% 5.06% 7.61% 5.46% 6.51% 5.57% 8.52% 9.68% ROAE ROATCE (1) Adjusted ROATCE (1) 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 ROAE = Return on average equity ROATCE = Return on average tangible common equity (1) Represents a non-GAAP financial measure

 
31(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 11.4% 11.9% 12.2% 12.4% 12.6% 12.9% 13.2% 8.2% 8.8% 9.0% 9.3% 9.4% 9.8% 10.1% Stockholders' equity to total assets (GAAP) Tangible common equity to tangible assets(1) 2022 2023 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 12.8% 12.9% 12.0% 12.2% 12.2% 12.4% 12.7% 9.7% 10.0% 10.0% 10.2% 10.3% 10.5% 10.8% 14.0% 14.1% 13.3% 13.6% 13.6% 13.8% 14.1% Total Risk Based Capital Tier 1 Leverage Ratio Common Equity Tier 1 2022 2023 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Regulatory Capital Ratios(2)

 
32 LIQUIDITY POSITION (1) Includes FHLB borrowing availability of $1.31 billion at December 31, 2025 based on pledged assets, however, maximum credit capacity is 45% of the Bank's total assets one quarter in arrears or $3.15 billion Liquidity position at December 31, 2025: • Sufficient liquidity to cover estimated uninsured deposits of $2.4 billion. • Access to brokered deposits of $811 million per internal company policy. Liquidity Sources $2,345 $2,542 $2,379 $2,509 $2,617 $976 $1,084 $978 $1,141 $1,286 $360 $366 $346 $347 $346 $746 $698 $656 $631 $607 $117 $249 $254 $245 $233 $145 $145 $145 $145 $145 103.1% 109.3% 100.4% 100.6% 107.7% 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 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025

 
SHAREHOLDER RETURN

 
34 TOTAL SHAREHOLDER RETURN Stock Summary(2) Ticker HFWA Exchange Nasdaq Stock price $24.85 Market capitalization (in millions) $843.8 Dividend yield (regular dividend only) 3.86 % Average Daily Volume (3 month) Average daily volume (shares) 210,300 Average daily volume ($000s) $5,226 52-Week High and Low Price 52-week high (December 29, 2025) $26.92 52-week low (April 9, 2025.) $19.84 Per Share Tangible book value per share(1) $19.98 EPS - 2026E $2.48 EPS - 2027E $2.84 Number of research analysts 6 Valuation Ratios Price / Tangible book value(1) 124.4 % Price / 2025E EPS 10.0 Price / 2026E EPS 8.8 Dividends Per Share Declared(3) 0.72 0.61 0.72 0.84 0.80 0.81 0.84 0.88 0.92 0.96 0.24 $0.11 $0.12 $0.15 $0.18 $0.20 $0.20 $0.21 $0.22 $0.23 $0.24 $0.24 $0.12 $0.13 $0.15 $0.18 $0.20 $0.20 $0.21 $0.22 $0.23 $0.24 $0.12 $0.13 $0.15 $0.19 $0.20 $0.20 $0.21 $0.22 $0.23 $0.24 $0.12 $0.13 $0.17 $0.19 $0.20 $0.21 $0.21 $0.22 $0.23 $0.24 $0.25 $0.10 $0.10 $0.10 Q1 Q2 Q3 Q4 Special dividends 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026(1) Represents a non-GAAP financial measure (2) Market information as of January 20, 2026 and earnings per share and valuation ratios are based on analysts consensus (3) Dividend information as of January 16, 2026 $2.31 $2.01 $1.80 $2.24 $2.31 $1.75 $1.24 $1.96 $0.51 $0.49 $0.53 $0.56 $0.66 $0.34 $0.40 $0.36 $0.55 $0.65 Diluted EPS Adjusted Diluted EPS(1) 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Diluted EPS and Adjusted Diluted EPS(1)

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

 
36 NON-GAAP FINANCIAL MEASURES Dollars in thousands 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Adjusted Net Income and Adjusted Return on Average Assets ("ROAA"): Net income (GAAP) $ 81,875 $ 61,755 $ 43,258 $ 67,532 $ 11,928 $ 13,911 $ 12,215 $ 19,169 $ 22,237 Exclude (gain) loss on sale of investment securities, net 256 12,231 22,742 10,741 3,903 3,887 6,854 — — Exclude gain on sale of branch including related deposits, net — (610) — — — — — — — Exclude merger related costs — — — 1,020 — — — 635 385 Exclude gain on sale of premise and equipment (403) — (1,552) (8) (23) (3) (5) — — Exclude tax effect of adjustments 31 (2,440) (4,450) (2,468) (815) (816) (1,438) (133) (81) Exclude BOLI restructuring costs included in BOLI Income — — 508 — 508 — — — — Exclude tax expense related to BOLI restructuring — — 2,371 515 2,371 — 515 — — Adjusted net income (non-GAAP) $ 81,759 $ 70,936 $ 62,877 $ 77,332 $ 17,872 $ 16,979 $ 18,141 $ 19,671 $ 22,541 Average ("Avg") total assets $ 7,321,455 $ 7,140,024 $ 7,133,046 $ 7,027,138 $7,149,294 $7,103,227 $7,046,943 $7,006,140 $6,954,110 ROAA, annualized (GAAP) 1.12 % 0.86 % 0.61 % 0.96 % 0.66 % 0.79 % 0.70 % 1.09 % 1.27 % Adjusted ROAA, annualized (non-GAAP) 1.12 % 0.99 % 0.88 % 1.10 % 0.99 % 0.97 % 1.03 % 1.11 % 1.29 % Adjusted Noninterest Expense / Average Assets: Noninterest Expense (GAAP) $ 150,966 $ 166,623 $ 158,296 $ 165,566 $ 39,540 $ 41,383 $ 41,085 $ 41,615 $ 41,483 Exclude merger related costs — — — 1,020 — — — 635 385 Adjusted noninterest expense (non-GAAP) $ 150,966 $ 166,623 $ 158,296 $ 164,546 $ 39,540 $ 41,383 $ 41,085 $ 40,980 $ 41,098 Avg. total assets $ 7,321,455 $ 7,140,024 $ 7,133,046 $ 7,027,138 $7,149,294 $7,103,227 $7,046,943 $7,006,140 $6,954,110 Noninterest Expense/Avg. Assets (GAAP) 2.06 % 2.33 % 2.22 % 2.36 % 2.20 % 2.36 % 2.34 % 2.36 % 2.37 % Noninterest expense/Avg. Assets (non-GAAP) 2.06 % 2.33 % 2.22 % 2.34 % 2.20 % 2.36 % 2.34 % 2.32 % 2.34 %

 
37 NON-GAAP FINANCIAL MEASURES 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Return on Average Tangible Common Equity ("ROATCE") and Adjusted ROATCE: Net income (GAAP) $ 81,875 $ 61,755 $ 43,258 $ 67,532 $ 11,928 $ 13,911 $ 12,215 $ 19,169 $ 22,237 Add amortization of intangible assets 2,750 2,434 1,640 1,174 399 303 302 284 285 Exclude tax effect of adjustment (578) (511) (344) (247) (84) (64) (63) (60) (60) Tangible net income (non-GAAP) $ 84,047 $ 63,678 $ 44,554 $ 68,459 $ 12,243 $ 14,150 $ 12,454 $ 19,393 $ 22,462 Tangible net income (non-GAAP) $ 84,047 $ 63,678 $ 44,554 $ 68,459 $ 12,243 $ 14,150 $ 12,454 $ 19,393 $ 22,462 Exclude (gain) loss on sale of investment securities, net 256 12,231 22,742 10,741 3,903 3,887 6,854 — — Exclude gain on sale of branch including related deposits, net — (610) — — — — — — — Exclude merger related costs — — — 1,020 — — — 635 385 Exclude gain on sale of premise and equipment (403) — (1,552) (8) (23) (3) (5) — — Exclude tax effect of adjustments 31 (2,440) (4,450) (2,468) (815) (816) (1,438) (133) (81) Exclude BOLI restructuring costs included in BOLI Income — — 508 — 508 — — — — Exclude tax expense related to BOLI restructuring — — 2,371 515 2,371 — 515 — — Adjusted tangible net income (non-GAAP) $ 83,931 $ 72,859 $ 64,173 $ 78,259 $ 18,187 $ 17,218 $ 18,380 $ 19,895 $ 22,766 Average stockholders' equity (GAAP) $ 811,942 $ 818,042 $ 854,172 $ 887,679 $ 868,308 $ 866,629 $ 879,808 $ 892,280 $ 911,454 Exclude average intangible assets (249,566) (246,965) (244,910) (243,500) (244,302) (243,945) (243,651) (243,350) (243,069) Average tangible common stockholders' equity (non-GAAP) $ 562,376 $ 571,077 $ 609,262 $ 644,179 $ 624,006 $ 622,684 $ 636,157 $ 648,930 $ 668,385 ROAE, annualized (GAAP) 10.08 % 7.55 % 5.06 % 7.61 % 5.46 % 6.51 % 5.57 % 8.52 % 9.68 % ROATCE, annualized (non-GAAP) 14.94 % 11.15 % 7.31 % 10.63 % 7.81 % 9.22 % 7.85 % 11.86 % 13.33 % Adjusted ROATCE, annualized (non-GAAP) 14.92 % 12.76 % 10.53 % 12.15 % 11.59 % 11.21 % 11.59 % 12.16 % 13.51 % Dollars in thousands

 
38 NON-GAAP FINANCIAL MEASURES 2022 2023 2024 2025 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Diluted Earnings per Share and Adjusted Diluted Earnings per Share: Net income (GAAP) $ 81,875 $ 61,755 $ 43,258 $ 67,532 $ 11,928 $ 13,911 $ 12,215 $ 19,169 $ 22,237 Exclude (gain) loss on sale of investment securities, net 256 12,231 22,742 10,741 3,903 3,887 6,854 — — Exclude gain on sale of branch including related deposits, net — (610) — — — — — — — Exclude merger related costs — — — 1,020 — — — 635 385 Exclude gain on sale of premise and equipment (403) — (1,552) (8) (23) (3) (5) — — Exclude tax effect of adjustments 31 (2,440) (4,450) (2,468) (815) (816) (1,438) (133) (81) Exclude BOLI restructuring costs included in BOLI Income — — 508 — 508 — — — — Exclude tax expense related to BOLI restructuring — — 2,371 515 2,371 — 515 — — Adjusted net income (non-GAAP) $ 81,759 $ 70,936 $ 62,877 $ 77,332 $ 17,872 $ 16,979 $ 18,141 $ 19,671 $ 22,541 Average number of diluted shares outstanding 35,463,896 35,258,189 34,899,036 34,456,904 34,553,139 34,506,238 34,446,710 34,413,386 34,405,793 Diluted earnings per share (GAAP) $ 2.31 $ 1.75 $ 1.24 $ 1.96 $ 0.34 $ 0.40 $ 0.36 $ 0.55 $ 0.65 Adjusted diluted earnings per share (non- GAAP) $ 2.31 $ 2.01 $ 1.80 $ 2.24 $ 0.51 $ 0.49 $ 0.53 $ 0.56 $ 0.66 Dollars in thousands

 
39 2016 2017 2018 2019 2020 2021 2022 2023 2024 Tangible Book Value Per Share: Total stockholders' equity (GAAP) $ 481,763 $ 505,305 $ 760,723 $ 809,311 $ 820,439 $ 854,432 $ 797,893 $ 853,261 $ 863,527 Exclude intangible assets (126,403) (125,117) (261,553) (257,552) (254,027) (250,916) (248,166) (245,732) (244,092) Tangible common equity (non-GAAP) $ 355,360 $ 380,188 $ 499,170 $ 551,759 $ 566,412 $ 603,516 $ 549,727 $ 607,529 $ 619,435 Shares outstanding 29,954,931 29,927,746 36,874,055 36,618,729 35,912,243 35,105,779 35,106,697 34,906,233 33,990,827 Book value per share (GAAP) $ 16.08 $ 16.88 $ 20.63 $ 22.10 $ 22.85 $ 24.34 $ 22.73 $ 24.44 $ 25.40 Tangible book value per share (non-GAAP) $ 11.86 $ 12.70 $ 13.54 $ 15.07 $ 15.77 $ 17.19 $ 15.66 $ 17.40 $ 18.22 Moved to 2nd slide Tangible Book Value Per Share (cont'd): 2025 2025 2025 2025 Q1 Q2 Q3 Q4 Total stockholders' equity (GAAP) $ 881,515 $ 888,212 $ 904,064 $ 921,504 Exclude intangible assets (243,789) (243,487) (243,203) (242,918) Tangible common equity (non-GAAP) $ 637,726 $ 644,725 $ 660,861 $ 678,586 Shares outstanding 34,105,516 33,953,194 33,956,738 33,963,500 Book value per share (GAAP) $ 25.85 $ 26.16 $ 26.62 $ 27.13 Tangible book value per share (non-GAAP) $ 18.70 $ 18.99 $ 19.46 $ 19.98 NON-GAAP FINANCIAL MEASURES Dollars in thousands

 
40 NON-GAAP FINANCIAL MEASURES Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Efficiency Ratio and Adjusted Efficiency Ratio Total noninterest expense (GAAP) $ 39,540 $ 41,383 $ 41,085 $ 41,615 $ 41,483 Exclude merger related costs $ — $ — $ — $ 635 $ 385 Adjusted noninterest expense (non-GAAP) $ 39,540 $ 41,383 $ 41,085 $ 40,980 $ 41,098 Net interest income (GAAP) $ 53,763 $ 53,690 $ 54,983 $ 57,371 $ 58,361 Total noninterest income (GAAP) $ 3,290 $ 3,903 $ 1,517 $ 8,325 $ 7,987 Exclude (gain) loss on sale of investment securities, net 3,903 3,887 6,854 — — Exclude gain on sale of premise and equipment (23) (3) (5) — — Exclude BOLI restructuring costs included in BOLI Income 508 — — — — Adjusted total non interest income (non-GAAP) $ 7,678 $ 7,787 $ 8,366 $ 8,325 $ 7,987 Efficiency ratio (GAAP) 69.3 % 71.9 % 72.7 % 63.3 % 62.5 % Adjusted efficiency ratio (non-GAAP) 64.4 % 67.3 % 64.9 % 62.4 % 61.9 % Dollars in thousands

 
41 As of Period End or for the Three Months Ended December 31, 2024 March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 Profitability: Net income $ 11,928 $ 13,911 $ 12,215 $ 19,169 $ 22,237 Adjusted net income(1) $ 17,872 $ 16,979 $ 18,141 $ 19,671 $ 22,541 Diluted earnings per share $ 0.34 $ 0.40 $ 0.36 $ 0.55 $ 0.65 Adjusted diluted earnings per share (1) $ 0.51 $ 0.49 $ 0.53 $ 0.56 $ 0.66 Return on average assets 0.66 % 0.79 % 0.70 % 1.09 % 1.27 % Adjusted return on average assets(1) 0.99 % 0.97 % 1.03 % 1.11 % 1.29 % Return on average common equity 5.46 % 6.51 % 5.57 % 8.52 % 9.68 % Return on average tangible common equity(1) 7.81 % 9.22 % 7.85 % 11.86 % 13.33 % Adjusted return on average tangible common equity(1) 11.59 % 11.21 % 11.59 % 12.16 % 13.51 % Net interest margin 3.36 % 3.44 % 3.51 % 3.64 % 3.72 % Efficiency ratio 69.3 % 71.9 % 72.7 % 63.3 % 62.5 % Adjusted efficiency ratio(1) 64.4 % 67.3 % 64.9 % 62.4 % 61.9 % Noninterest expense to average total assets 2.20 % 2.36 % 2.34 % 2.36 % 2.37 % Balance Sheet: Total assets $ 7,106,278 $ 7,129,862 $ 7,070,641 $ 7,011,879 $ 6,967,350 Loans receivable $ 4,802,123 $ 4,764,848 $ 4,774,855 $ 4,769,160 $ 4,783,266 Total deposits $ 5,684,613 $ 5,845,335 $ 5,784,413 $ 5,857,464 $ 5,920,199 Loan to deposit ratio 84.5 % 81.5 % 82.5 % 81.4 % 80.8 % Capital: Book value per share $ 25.40 $ 25.85 $ 26.16 $ 26.62 $ 27.13 Tangible book value per share(1) $ 18.22 $ 18.70 $ 18.99 $ 19.46 $ 19.98 Leverage ratio 10.0 % 10.2 % 10.3 % 10.5 % 10.8 % Total capital ratio 13.3 % 13.6 % 13.6 % 13.8 % 14.1 % Credit Quality: Nonperforming assets to total assets 0.07 % 0.06 % 0.26 % 0.30 % 0.30 % ACL on loans to loans receivable 1.09 % 1.09 % 1.10 % 1.13 % 1.10 % Dollars in thousands (1) Represents a non-GAAP financial measure QUARTERLY FINANCIAL STATISTICS