Equibles

8-K

HERITAGE FINANCIAL CORP /WA/ (HFWA)

8-K 2025-07-24 For: 2025-07-24
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Added on April 04, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities and Exchange Act of 1934

Date of Report (Dated of earliest event reported): July 24, 2025

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<br>incorporation or organization) (I.R.S. Employer<br>Identification No.)
201 Fifth Avenue SW, Olympia WA 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 class Trading symbol Name of each exchange on which registered
Common stock, no par value HFWA The Nasdaq Stock Market LLC

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

Emerging Growth Company ☐

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

Item 2.02    Results of Operations and Financial Condition

On July 24, 2025, Heritage Financial Corporation (“Heritage”) issued a press release announcing its second quarter 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 July 24, 2025.

A copy of the presentation materials is attached hereto as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference. The information furnished pursuant to this Item and the related exhibit is being “furnished” and will not, except to the extent required by applicable law or regulation, be deemed “filed” by Heritage for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 8.01    Other Events

On July 24, 2025, Heritage issued a press release announcing a regular quarterly cash dividend of $0.24 per common share. The dividend will be paid on August 20, 2025 to shareholders of record at the close of business on August 6, 2025.

A copy of the release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01     Financial Statements and Exhibits

(d) Exhibits

Exhibit 99.1 Press Release announcing second quarter 2025 results and declares regular cash dividend of $0.24 per share dated July 24, 2025
Exhibit 99.2 Second Quarter 2025 Investor Presentation
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

HERITAGE FINANCIAL CORPORATION
Date:
July 24, 2025 /S/ BRYAN MCDONALD
Bryan McDonald
Chief Executive Officer
(Duly Authorized Officer)

Document

fhfwarevisedlogoa01a02a.jpg

FOR IMMEDIATE RELEASE

DATE: July 24, 2025

HERITAGE FINANCIAL ANNOUNCES SECOND QUARTER 2025 RESULTS AND DECLARES REGULAR CASH DIVIDEND OF $0.24 PER SHARE

Second Quarter 2025 Highlights

•Net income was $12.2 million, or $0.36 per diluted share, compared to $13.9 million, or $0.40 per diluted share, for the first quarter of 2025.

•Results included a pre-tax loss on sale of securities of $6.9 million resulting in a negative impact of $0.15 per diluted share.

•Net interest margin increased to 3.51%, from 3.44% for the first quarter of 2025.

•Yield on loans increased to 5.50%, from 5.45% for the first quarter of 2025.

•Cost of interest bearing deposits increased to 1.94%, from 1.92% for the first quarter of 2025.

•Declared a regular cash dividend of $0.24 per share on July 23, 2025.

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 $12.2 million for the second quarter of 2025, compared to $13.9 million for the first quarter of 2025 and $14.2 million for the second quarter of 2024. Diluted earnings per share for the second quarter of 2025 were $0.36 compared to $0.40 for the first quarter of 2025 and $0.41 for the second quarter of 2024.

In the second quarter of 2025, the Company incurred a pre-tax loss of $6.9 million on the sale of investment securities in connection with the strategic repositioning of its balance sheet, which decreased diluted earnings per share by $0.15 for the quarter. The Company sold $91.6 million of investment securities with an average book yield of 2.63%. Net proceeds from the sale were used to purchase $56.4 million in investment securities with an average book yield of 5.06% and fund new loans originated during the quarter. The Company also incurred pre-tax losses on the sale of investment securities in connection with balance sheet repositioning during the first quarter of 2025 and second quarter of 2024 in the amounts of $3.9 million and $1.9 million, respectively, which decreased diluted earnings per share by $0.09 and $0.04, respectively, for such quarters.

In addition, the Company surrendered $8.5 million of its bank owned life insurance ("BOLI") portfolio during the second quarter of 2025, incurring tax expense related to the surrender of BOLI of $515,000 which decreased diluted earnings per share by $0.02 for the quarter.

Bryan McDonald, Chief Executive Officer of the Company, commented, "We are pleased with the continued growth in core earnings, both compared to the prior quarter and to the same quarter in the prior year. This is partly due to the ongoing expansion of our net interest margin, due mostly to increases in yields on loans and investment securities. Despite a seasonal decline in deposit balances in the second quarter, our total deposits have increased $100 million since year-end 2024. We continue to strategically reposition our balance sheet to improve future profitability and will consider investment in new production teams when favorable opportunities are presented. Although these actions may impact current earnings, we believe future earnings will be enhanced and we are optimistic that the combination of our strong balance sheet and prudent risk management will provide sustainable long-term returns for our shareholders."

Financial Highlights

The following table provides financial highlights at the dates and for the periods indicated:

As of or for the Quarter Ended
June 30,<br>2025 March 31,<br>2025 June 30,<br>2024
(Dollars in thousands, except per share amounts)
Net income $ 12,215 $ 13,911 $ 14,159
Diluted earnings per share $ 0.36 $ 0.40 $ 0.41
Adjusted diluted earnings per share (1) $ 0.53 $ 0.49 $ 0.45
Return on average assets(2) 0.70 % 0.79 % 0.80 %
Return on average common equity(2) 5.57 6.51 6.75
Return on average tangible common equity(1)(2) 7.85 9.22 9.74
Adjusted return on average tangible common equity(1)(2) 11.59 11.21 10.74
Net interest margin(2) 3.51 3.44 3.27
Cost of total deposits(2) 1.40 1.38 1.34
Efficiency ratio 72.7 71.9 69.4
Adjusted efficiency ratio(1) 64.9 67.3 67.1
Noninterest expense to average total assets(2) 2.34 2.36 2.21
Total assets $ 7,070,641 $ 7,129,862 $ 7,059,857
Loans receivable 4,774,855 4,764,848 4,532,615
Total deposits 5,784,413 5,845,335 5,515,652
Loan to deposit ratio(3) 82.5 % 81.5 % 82.2 %
Book value per share $ 26.16 $ 25.85 $ 24.66
Tangible book value per share(1) 18.99 18.70 17.56

(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 $67.6 million, or 4.8%, to $1.35 billion at June 30, 2025 from $1.41 billion at March 31, 2025. As previously noted, the Company sold $91.6 million of investment securities at a pre-tax loss of $6.9 million during the quarter as part of its strategic balance sheet repositioning. In addition, there were investment maturities and repayments of $40.8 million during the second quarter of 2025. The decrease was partially offset by investment security purchases of $56.4 million during the second quarter of 2025 and an $8.0 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:

June 30, 2025 March 31, 2025 Change
Balance % of<br>Total Balance % of<br>Total %
(Dollars in thousands)
Investment securities available for sale, at fair value:
U.S. government and agency securities $ 11,510 0.9 % $ 11,436 0.8 % 0.6 %
Municipal securities 50,215 3.7 50,725 3.6 (510) (1.0)
Residential CMO and MBS(1) 317,214 23.6 356,860 25.2 (39,646) (11.1)
Commercial CMO and MBS(1) 260,720 19.3 275,840 19.6 (15,120) (5.5)
Corporate obligations 10,010 0.7 11,830 0.8 (1,820) (15.4)
Other asset-backed securities 6,783 0.5 9,651 0.7 (2,868) (29.7)
Total $ 656,452 48.7 % $ 716,342 50.7 % (8.4) %

All values are in US Dollars.

June 30, 2025 March 31, 2025 Change
Balance % of<br>Total Balance % of<br>Total %
(Dollars in thousands)
Investment securities held to maturity, at amortized cost:
U.S. government and agency securities $ 151,274 11.2 % $ 151,246 10.7 % — %
Residential CMO and MBS(1) 232,244 17.3 239,351 16.9 (7,107) (3.0)
Commercial CMO and MBS(1) 306,304 22.8 306,964 21.7 (660) (0.2)
Total $ 689,822 51.3 % $ 697,561 49.3 % (1.1) %
Total investment securities $ 1,346,274 100.0 % $ 1,413,903 100.0 % (4.8) %

All values are in US Dollars. (1) U.S. government agency and government-sponsored enterprise CMO and MBS

Loans receivable increased $10.0 million, or 0.2%, to $4.77 billion at June 30, 2025 from $4.76 billion at March 31, 2025. New loans funded increased during the second quarter of 2025 to $139.9 million, compared to $95.8 million during the first quarter of 2025. New loan commitments increased during the second quarter of 2025 to $267.6 million compared to $201.0 million during the first quarter of 2025, reflecting the seasonality of loan originations. Loan prepayments decreased to $58.9 million during the quarter, compared to $79.9 million during the prior quarter. Loan payoffs increased to $51.0 million, compared to $47.5 million in the prior quarter.

Commercial and industrial loans decreased $19.7 million, or 2.3%, during the second quarter, due primarily to pay downs on outstanding balances, partially offset by new loan production of $18.7 million. Owner-occupied commercial real estate ("CRE") loans increased $29.6 million, or 3.0%, during the second quarter, due primarily to new loan production of $49.1 million, offset by pay downs on outstanding balances. Non-owner occupied CRE loans increased $24.0 million, or 1.3%, during the quarter, due primarily to new loan production of $57.8 million, offset by pay downs on outstanding balances. Residential construction and commercial and multifamily construction loans decreased $19.9 million or 4.4%, due primarily to pay downs on outstanding balances.

The following table summarizes the Company's loans receivable at the dates indicated:

June 30, 2025 March 31, 2025 Change
Balance % of Total Balance % of Total %
(Dollars in thousands)
Commercial business:
Commercial and industrial $ 831,096 17.4 % $ 850,764 17.9 % (2.3) %
Owner-occupied CRE 1,014,891 21.3 985,272 20.7 29,619 3.0
Non-owner occupied CRE 1,939,752 40.7 1,915,788 40.1 23,964 1.3
Total commercial business 3,785,739 79.4 3,751,824 78.7 33,915 0.9
Residential real estate 383,927 8.0 393,301 8.3 (9,374) (2.4)
Real estate construction and land development:
Residential 78,070 1.6 76,108 1.6 1,962 2.6
Commercial and multifamily 355,268 7.4 377,100 7.9 (21,832) (5.8)
Total real estate construction and land development 433,338 9.0 453,208 9.5 (19,870) (4.4)
Consumer 171,851 3.6 166,515 3.5 5,336 3.2
Loans receivable $ 4,774,855 100.0 % $ 4,764,848 100.0 % 0.2

All values are in US Dollars.

Total deposits decreased $60.9 million, or 1.0%, to $5.78 billion at June 30, 2025 from $5.85 billion at March 31, 2025. Non-maturity deposits decreased by $57.3 million, or 1.2%, from March 31, 2025 due primarily to a decline in customer balances in noninterest bearing demand and interest bearing demand accounts. The decrease in non-maturity deposits was partially offset by an increase of $27.1 million in money market accounts as customers transferred balances into these higher yielding accounts. Although total deposits at June 30, 2025 decreased from March 31, 2025, average total deposits increased $35.4 million during the second quarter of 2025.

The following table summarizes the Company's total deposits at the dates indicated:

June 30, 2025 March 31, 2025 Change
Balance % of Total Balance % of Total %
(Dollars in thousands)
Noninterest demand deposits $ 1,584,231 27.4 % $ 1,621,890 27.7 % (2.3) %
Interest bearing demand deposits 1,487,208 25.7 1,525,522 26.1 (38,314) (2.5)
Money market accounts 1,308,952 22.6 1,281,891 21.9 27,061 2.1
Savings accounts 422,372 7.3 430,749 7.4 (8,377) (1.9)
Total non-maturity deposits 4,802,763 83.0 4,860,052 83.1 (57,289) (1.2)
Certificates of deposit 981,650 17.0 985,283 16.9 (3,633) (0.4)
Total deposits $ 5,784,413 100.0 % $ 5,845,335 100.0 % (1.0) %

All values are in US Dollars.

Total borrowings decreased $1.2 million to $263.2 million at June 30, 2025 from $264.4 million at March 31, 2025. All outstanding borrowings at June 30, 2025 were with the Federal Home Loan Bank ("FHLB") and mature within one year.

Total stockholders' equity increased $6.7 million, or 0.8%, to $888.2 million at June 30, 2025 compared to $881.5 million at March 31, 2025 due primarily to $12.2 million of net income recognized for the quarter. The increase in total stockholders' equity was also due to a $6.2 million decrease in accumulated other comprehensive loss as a result of losses recognized on sales of investment securities in connection with balance sheet repositioning efforts. These increases were partially offset by $8.3 million in dividends paid to common shareholders and $4.6 million of stock repurchases.

The Company and Bank continued to maintain capital levels in excess of the applicable regulatory requirements for them both to be categorized as “well-capitalized” at June 30, 2025.

The following table summarizes the capital ratios for the Company at the dates indicated:

June 30,<br>2025 March 31,<br>2025
Stockholders' equity to total assets 12.6% 12.4%
Tangible common equity to tangible assets (1) 9.4 9.3
Common equity tier 1 capital ratio (2) 12.2 12.2
Leverage ratio (2) 10.3 10.2
Tier 1 capital ratio (2) 12.6 12.6
Total capital ratio (2) 13.6 13.6

(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 June 30, 2025 compared to 1.09% at March 31, 2025. The increase in the ACL as a percentage of loans was due primarily to changes in the weighted average life of the loans in the real estate construction and land development segment. During the second quarter of 2025, the Company recorded an $863,000 provision for credit losses on loans, compared to a $9,000 reversal of provision for credit losses on loans during the first quarter of 2025. The provision for credit losses on loans recognized during the second quarter of 2025 was due primarily to charge-offs of $494,000 and secondarily to growth in balances of collectively evaluated loans.

During the second quarter of 2025, the Company recorded a $93,000 provision for credit losses on unfunded commitments compared to a $60,000 provision during the first quarter of 2025. The provision for credit losses on unfunded commitments during the second quarter of 2025 was due primarily to an increase in the unfunded exposure on construction loans.

The following table provides detail on the changes in the ACL on loans and the ACL on unfunded commitments, and the related provision for (reversal of) credit losses for the periods indicated:

As of or for the Quarter Ended
June 30, 2025 March 31, 2025 June 30, 2024
ACL on Loans ACL on Unfunded Total ACL on Loans ACL on Unfunded Total ACL on Loans ACL on Unfunded Total
(Dollars in thousands)
Balance, beginning of period $ 52,160 $ 647 $ 52,807 $ 52,468 $ 587 $ 53,055 $ 49,736 $ 976 $ 50,712
Provision for (reversal of) credit losses 863 93 956 (9) 60 51 1,470 (202) 1,268
(Net charge-offs) / recoveries (494) — (494) (299) — (299) 13 — 13
Balance, end of period $ 52,529 $ 740 $ 53,269 $ 52,160 $ 647 $ 52,807 $ 51,219 $ 774 $ 51,993

Credit Quality

Classified loans (loans rated substandard or worse) increased $35.3 million from the prior quarter, resulting in the percentage of classified loans to loans receivable increasing to 2.1% at June 30, 2025 compared to 1.4% at March 31, 2025. The Company downgraded $38.2 million of loans to substandard during the second quarter of 2025, including, non-owner occupied CRE loans of $16.3 million, commercial and industrial loans of $9.7 million, commercial and multifamily construction loans of $6.0 million, and owner occupied CRE loans of $5.7 million.

The following table illustrates total loans by risk rating and their respective percentage of total loans at the dates indicated:

June 30, 2025 March 31, 2025
Balance % of Total Balance % of Total
(Dollars in thousands)
Risk Rating:
Pass $ 4,560,994 95.5 % $ 4,586,757 96.2 %
Special Mention 114,146 2.4 113,704 2.4
Substandard 99,715 2.1 64,387 1.4
Total $ 4,774,855 100.0 % $ 4,764,848 100.0 %

Nonaccrual loans increased by $5.4 million during the second quarter of 2025 due primarily to the migration of a $6.0 million commercial and multifamily construction loan and a $1.7 million commercial and industrial loan. These increases were partially offset by a $2.0 million pay down on a commercial real estate loan. The following table illustrates changes in nonaccrual loans during the periods indicated:

Quarter Ended
June 30,<br>2025 March 31,<br>2025 June 30,<br>2024
(Dollars in thousands)
Balance, beginning of period $ 4,438 $ 4,079 $ 4,792
Additions 7,922 832 549
Net principal payments and transfers to accruing status (2,041) (214) (483)
Payoffs — (38) (769)
Charge-offs (454) (221) (263)
Balance, end of period $ 9,865 $ 4,438 $ 3,826
Nonaccrual loans to loans receivable 0.21 % 0.09 % 0.08 %

Liquidity

Total liquidity sources available at June 30, 2025 were $2.38 billion. This includes 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 June 30, 2025 represented a coverage ratio of 41.1% of total deposits and 100.4% of estimated uninsured deposits.

The following table summarizes the Company's available liquidity:

Quarter Ended
June 30,<br>2025 March 31,<br>2025
(Dollars in thousands)
On-balance sheet liquidity
Cash and cash equivalents $ 254,096 $ 248,660
Unencumbered investment securities available for sale (1) 655,876 698,132
Total on-balance sheet liquidity $ 909,972 $ 946,792
Off-balance sheet liquidity
FRB borrowing availability $ 346,307 $ 365,624
FHLB borrowing availability (2) 977,805 1,084,304
Fed funds line borrowing availability with correspondent banks 145,000 145,000
Total off-balance sheet liquidity $ 1,469,112 $ 1,594,928
Total available liquidity $ 2,379,084 $ 2,541,720

(1) Investment securities available for sale at fair value.

(2) Includes FHLB total borrowing availability of $1.24 billion at June 30, 2025 based on pledged assets, however, maximum credit capacity is 45% of the Bank's total assets one quarter in arrears or $3.21 billion.

Net Interest Margin and Net Interest Income

The net interest margin increased seven basis points to 3.51% during the second quarter of 2025 from 3.44% during the first quarter of 2025.

The yield on interest earning assets increased six basis points to 5.01% for the second quarter of 2025, compared to 4.95% for the first quarter of 2025. The yield on loans receivable increased five basis points to 5.50% during the second quarter of 2025, compared to 5.45% during the first quarter of 2025 as new loans were booked and adjustable rate loans repriced at higher rates.

The cost of interest bearing deposits increased two basis points to 1.94% for the second quarter of 2025 from 1.92% for the first quarter of 2025. This increase was primarily due to an increase in rates on interest bearing demand and money market accounts during the quarter, offset partially by a decrease in certificate of deposit rates.

Net interest income increased $1.3 million, or 2.4%, during the second quarter of 2025 compared to the first quarter of 2025 due to a $1.1 million increase in total interest income and a decrease in interest expense of $0.2 million.

The net interest margin increased 24 basis points to 3.51% from 3.27% compared to the same period in the prior year. Net interest income increased $3.9 million, or 7.6%, during the second quarter of 2025 compared to the second quarter of 2024. The increase was due to a change in the mix of earning assets to higher yielding loan balances and a decrease in borrowing interest expense due to lower average balances, partially offset by an increase in deposit interest expense resulting from increased average balances and rates.

The following table provides relevant net interest income information for the periods indicated:

Quarter Ended
June 30, 2025 March 31, 2025 June 30, 2024
Average<br>Balance Interest<br>Earned/<br>Paid Average<br>Yield/<br>Rate (1) Average<br>Balance Interest<br>Earned/<br>Paid Average<br>Yield/<br>Rate (1) Average<br>Balance Interest<br>Earned/<br>Paid Average<br>Yield/<br>Rate (1)
(Dollars in thousands)
Interest Earning Assets:
Loans receivable (2)(3) $ 4,768,558 $ 65,373 5.50 % $ 4,793,917 $ 64,436 5.45 % $ 4,466,499 $ 60,608 5.46 %
Taxable securities 1,374,770 11,579 3.38 1,427,976 11,739 3.33 1,685,795 14,156 3.38
Nontaxable securities (3) 15,294 137 3.59 15,686 139 3.59 18,812 165 3.53
Interest earning deposits 127,687 1,411 4.43 96,118 1,052 4.44 121,539 1,653 5.47
Total interest earning assets 6,286,309 78,500 5.01 % 6,333,697 77,366 4.95 % 6,292,645 76,582 4.89 %
Noninterest earning assets 760,634 769,530 814,146
Total assets $ 7,046,943 $ 7,103,227 $ 7,106,791
Interest Bearing Liabilities:
Certificates of deposit $ 979,997 $ 9,349 3.83 % $ 980,336 $ 9,670 4.00 % $ 838,285 $ 9,128 4.38 %
Savings accounts 425,703 288 0.27 426,321 293 0.28 453,099 190 0.17
Quarter Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
June 30, 2025 March 31, 2025 June 30, 2024
Average<br>Balance Interest<br>Earned/<br>Paid Average<br>Yield/<br>Rate (1) Average<br>Balance Interest<br>Earned/<br>Paid Average<br>Yield/<br>Rate (1) Average<br>Balance Interest<br>Earned/<br>Paid Average<br>Yield/<br>Rate (1)
(Dollars in thousands)
Interest bearing demand and money market accounts 2,770,352 10,513 1.52 2,705,686 9,526 1.43 2,625,593 9,135 1.40
Total interest bearing deposits 4,176,052 20,150 1.94 4,112,343 19,489 1.92 3,916,977 18,453 1.89
Junior subordinated debentures 22,165 472 8.54 22,086 471 8.65 21,874 539 9.91
Borrowings 245,663 2,895 4.73 320,286 3,716 4.71 500,230 6,477 5.21
Total interest bearing liabilities 4,443,880 23,517 2.12 % 4,454,715 23,676 2.16 % 4,439,081 25,469 2.31 %
Noninterest demand deposits 1,602,987 1,631,268 1,638,262
Other noninterest bearing liabilities 120,268 150,615 186,010
Stockholders’ equity 879,808 866,629 843,438
Total liabilities and stockholders’ equity $ 7,046,943 $ 7,103,227 $ 7,106,791
Net interest income and spread $ 54,983 2.89 % $ 53,690 2.79 % $ 51,113 2.58 %
Net interest margin 3.51 % 3.44 % 3.27 %

(1) Annualized; 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 $903,000, $753,000 and $971,000 for the second quarter of 2025, first quarter of 2025 and second 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 $2.4 million to $1.5 million during the second quarter of 2025 from $3.9 million during the first quarter of 2025. The decrease was due primarily to higher losses resulting from the above-referenced sale of investment securities recognized in the second quarter of 2025 as part of the strategic repositioning of the balance sheet, compared to losses recognized in the prior quarter. The decrease was partially offset by an increase in BOLI income due to death benefit proceeds and an increase in card revenue due to increased card activity.

Noninterest income decreased $3.7 million from the same period in 2024 due primarily to higher losses resulting from the above-referenced sale of investment securities recognized in the second quarter of 2025 as part of the strategic repositioning of the balance sheet, compared to losses recognized in the same quarter in 2024. The decrease was partially offset by an increase in BOLI income as a result of BOLI restructuring which occurred in the fourth quarter of 2024 and an increase in other income primarily due to an increase in FHLB dividend income.

The following table presents the key components of noninterest income and the change for the periods indicated:

Quarter Ended Quarter Over Quarter Change Prior Year Quarter Change
June 30,<br>2025 March 31,<br>2025 June 30,<br>2024 % %
(Dollars in thousands)
Service charges and other fees $ 2,932 $ 2,975 $ 2,817 (1.4) % 4.1 %
Card revenue 2,008 1,733 1,930 275 15.9 78 4.0
Loss on sale of investment securities (6,854) (3,887) (1,921) (2,967) (76.3) (4,933) (256.8)
Interest rate swap fees 19 — 52 19 — (33) (63.5)
Bank owned life insurance income 1,280 918 931 362 39.4 349 37.5
Gain on sale of other assets, net 5 3 49 2 66.7 (44) (89.8)
Other income 2,127 2,161 1,388 (34) (1.6) 739 53.2
Total noninterest income (loss) $ 1,517 $ 3,903 $ 5,246 (61.1) % (71.1) %

All values are in US Dollars.

Noninterest Expense

Noninterest expense decreased $0.3 million, or 0.7%, to $41.1 million during the second quarter of 2025, compared to $41.4 million in the first quarter of 2025, due primarily to a decrease in compensation and employee benefits resulting from a decrease in payroll taxes, offset partially by an increase in salary expense due to annual merit increases in base pay. Data processing

expense decreased primarily due to a decline in ongoing costs resulting from technology-related contract renewals. Professional fees increased due primarily to consulting costs related to technology-related contract renewals.

Noninterest expense increased $2.0 million, or 5.1%, during the second quarter of 2025 compared to the same period in 2024 due primarily to an increase in compensation and employee benefits due to annual merit increases in base pay. Professional fees increased due primarily to consulting costs related to technology-related contract renewals recognized in the second quarter of 2025.

The following table presents the key components of noninterest expense and the change for the periods indicated:

Quarter Ended Quarter Over Quarter Change Prior Year Quarter Change
June 30,<br>2025 March 31,<br>2025 June 30,<br>2024 % %
(Dollars in thousands)
Compensation and employee benefits $ 25,467 $ 25,799 $ 24,448 (1.3) % 4.2 %
Occupancy and equipment 4,840 4,926 4,765 (86) (1.7) 75 1.6
Data processing 3,666 3,897 3,584 (231) (5.9) 82 2.3
Marketing 336 335 244 1 0.3 92 37.7
Professional services 1,122 734 795 388 52.9 327 41.1
State/municipal business and use taxes 1,205 1,220 1,160 (15) (1.2) 45 3.9
Federal deposit insurance premium 810 812 812 (2) (0.2) (2) (0.2)
Amortization of intangible assets 302 303 421 (1) (0.3) (119) (28.3)
Other expense 3,337 3,357 2,867 (20) (0.6) 470 16.4
Total noninterest expense $ 41,085 $ 41,383 $ 39,096 (0.7) % 5.1 %

All values are in US Dollars.

Income Tax Expense

Income tax expense was $2.2 million during the second quarter of 2025 and first quarter of 2025. The Company recognized $515,000 in income tax expense related to the surrender of $8.5 million in BOLI policies during the second quarter of 2025.

Income tax expense increased $0.4 million in the second quarter of 2025 compared to same period in 2024 due primarily to a higher effective tax rate during the second quarter of 2025.

The following table presents the income tax expense and related metrics and the change for the periods indicated:

Quarter Ended Change
June 30,<br>2025 March 31,<br>2025 June 30,<br>2024 Quarter Over Quarter Prior Year Quarter
(Dollars in thousands)
Income before income taxes $ 14,459 $ 16,159 $ 15,995 $ (1,700) $ (1,536)
Income tax expense $ 2,244 $ 2,248 $ 1,836 $ (4) $ 408
Effective income tax rate 15.5 % 13.9 % 11.5 % 1.6 % 4.0 %

Dividends

On July 23, 2025, the Company’s Board of Directors declared a quarterly cash dividend of $0.24 per share. The dividend is payable on August 20, 2025 to shareholders of record as of the close of business on August 6, 2025.

Earnings Conference Call

The Company will hold a telephone conference call to discuss this earnings release on Thursday, July 24, 2025 at 10:00 a.m. Pacific time. To access the call, please dial (833) 470-1428 -- access code 464904 a few minutes prior to 10:00 a.m. Pacific time. The call will be available for replay through July 31, 2025 by dialing (866) 813-9403 -- access code 276171.

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.

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 potential recession or slowed economic growth; effects on the U.S. economy resulting from the threat or implementation of, or changes to existing, policies and executive orders, including the imposition of tariffs, changes to immigration policy, regulatory and other governmental agencies, DEI and ESG initiatives, consumer protection, foreign policy, and tax regulations; 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; 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 (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; rapid technological changes implemented by us and other parties in the financial services industry; including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequence 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 Fintech companies; 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; loss of, or inability to attract, key personnel; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business and the businesses of our clients; 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.

HERITAGE FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(Dollars in thousands, except shares)

June 30,<br>2025 March 31,<br>2025 December 31,<br>2024
Assets
Cash on hand and in banks $ 90,754 $ 89,072 $ 58,821
Interest earning deposits 163,342 159,588 58,279
Cash and cash equivalents 254,096 248,660 117,100
Investment securities available for sale, at fair value (amortized cost of $704,207, $772,086 and $835,592, respectively) 656,452 716,342 764,394
Investment securities held to maturity, at amortized cost (fair value of $629,658, $632,648 and $623,452, respectively) 689,822 697,561 703,285
Total investment securities 1,346,274 1,413,903 1,467,679
Loans receivable 4,774,855 4,764,848 4,802,123
Allowance for credit losses on loans (52,529) (52,160) (52,468)
Loans receivable, net 4,722,326 4,712,688 4,749,655
Premises and equipment, net 71,111 71,079 71,580
Federal Home Loan Bank stock, at cost 16,107 16,160 21,538
Bank owned life insurance 104,456 112,656 111,699
Accrued interest receivable 18,559 19,651 19,483
Prepaid expenses and other assets 294,225 291,276 303,452
Other intangible assets, net 2,548 2,850 3,153
Goodwill 240,939 240,939 240,939
Total assets $ 7,070,641 $ 7,129,862 $ 7,106,278
Liabilities and Stockholders' Equity
Non-interest bearing deposits $ 1,584,231 $ 1,621,890 $ 1,654,955
Interest bearing deposits 4,200,182 4,223,445 4,029,658
Total deposits 5,784,413 5,845,335 5,684,613
Borrowings 263,200 264,400 383,000
Junior subordinated debentures 22,204 22,131 22,058
Accrued expenses and other liabilities 112,612 116,481 153,080
Total liabilities 6,182,429 6,248,347 6,242,751
Common stock 528,758 532,124 531,674
Retained earnings 396,643 392,737 387,097
Accumulated other comprehensive loss, net (37,189) (43,346) (55,244)
Total stockholders' equity 888,212 881,515 863,527
Total liabilities and stockholders' equity $ 7,070,641 $ 7,129,862 $ 7,106,278
Shares outstanding 33,953,194 34,105,516 33,990,827

HERITAGE FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands, except per share amounts)

Quarter Ended Six Months Ended
June 30,<br>2025 March 31,<br>2025 June 30,<br>2024 June 30,<br>2025 June 30,<br>2024
Interest Income
Interest and fees on loans $ 65,373 $ 64,436 $ 60,608 $ 129,809 $ 118,470
Taxable interest on investment securities 11,579 11,739 14,156 23,318 28,990
Nontaxable interest on investment securities 137 139 165 276 346
Interest on interest earning deposits 1,411 1,052 1,653 2,463 3,129
Total interest income 78,500 77,366 76,582 155,866 150,935
Interest Expense
Deposits 20,150 19,489 18,453 39,639 34,841
Junior subordinated debentures 472 471 539 943 1,086
Borrowings 2,895 3,716 6,477 6,611 12,365
Total interest expense 23,517 23,676 25,469 47,193 48,292
Net interest income 54,983 53,690 51,113 108,673 102,643
Provision for credit losses 956 51 1,268 1,007 2,660
Net interest income after provision for credit losses 54,027 53,639 49,845 107,666 99,983
Noninterest Income
Service charges and other fees 2,932 2,975 2,817 5,907 5,605
Card revenue 2,008 1,733 1,930 3,741 3,769
Loss on sale of investment securities, net (6,854) (3,887) (1,921) (10,741) (11,894)
Gain on sale of loans, net — — — — 26
Interest rate swap fees 19 — 52 19 52
Bank owned life insurance income 1,280 918 931 2,198 1,851
Gain on sale of other assets, net 5 3 49 8 49
Other income 2,127 2,161 1,388 4,288 2,888
Total noninterest income (loss) 1,517 3,903 5,246 5,420 2,346
Noninterest Expense
Compensation and employee benefits 25,467 25,799 24,448 51,266 49,924
Occupancy and equipment 4,840 4,926 4,765 9,766 9,697
Data processing 3,666 3,897 3,584 7,563 6,915
Marketing 336 335 244 671 455
Professional services 1,122 734 795 1,856 1,362
State/municipal business and use taxes 1,205 1,220 1,160 2,425 2,460
Federal deposit insurance premium 810 812 812 1,622 1,607
Amortization of intangible assets 302 303 421 605 842
Other expense 3,337 3,357 2,867 6,694 6,204
Total noninterest expense 41,085 41,383 39,096 82,468 79,466
Income before income taxes 14,459 16,159 15,995 30,618 22,863
Income tax expense 2,244 2,248 1,836 4,492 2,956
Net income $ 12,215 $ 13,911 $ 14,159 $ 26,126 $ 19,907
Basic earnings per share $ 0.36 $ 0.41 $ 0.41 $ 0.77 $ 0.58
Diluted earnings per share $ 0.36 $ 0.40 $ 0.41 $ 0.76 $ 0.57
Dividends declared per share $ 0.24 $ 0.24 $ 0.23 $ 0.48 $ 0.46
Average shares outstanding - basic 34,028,592 34,012,490 34,609,900 34,037,067 34,717,685
Average shares outstanding - diluted 34,446,710 34,506,238 34,919,395 34,512,260 35,127,407

HERITAGE FINANCIAL CORPORATION

FINANCIAL STATISTICS (Unaudited)

(Dollars in thousands)

Average Balances, Yields, and Rates Paid:

Six Months Ended June 30,
2025 2024
Average<br>Balance Interest<br>Earned/<br>Paid Average<br>Yield/<br>Rate (1) Average<br>Balance Interest<br>Earned/<br>Paid Average<br>Yield/<br>Rate (1)
Interest Earning Assets:
Loans receivable(2)(3) $ 4,781,167 $ 129,809 5.48 % $ 4,409,315 $ 118,470 5.40 %
Taxable securities 1,401,226 23,318 3.36 1,748,252 28,990 3.33
Nontaxable securities(3) 15,489 276 3.59 20,057 346 3.47
Interest earning deposits 111,990 2,463 4.44 115,136 3,129 5.47
Total interest earning assets 6,309,872 155,866 4.98 % 6,292,760 150,935 4.82 %
Noninterest earning assets 765,058 806,861
Total assets $ 7,074,930 $ 7,099,621
Interest Bearing Liabilities:
Certificates of deposit $ 980,166 $ 19,019 3.91 % $ 786,050 $ 16,799 4.30 %
Savings accounts 426,010 581 0.28 464,087 420 0.18
Interest bearing demand and money market accounts 2,738,197 20,039 1.48 2,642,796 17,622 1.34
Total interest bearing deposits 4,144,373 39,639 1.93 3,892,933 34,841 1.80
Junior subordinated debentures 22,126 943 8.59 21,837 1,086 10.00
Borrowings 282,768 6,611 4.71 500,445 12,365 4.97
Total interest bearing liabilities 4,449,267 47,193 2.14 % 4,415,215 48,292 2.20 %
Noninterest demand deposits 1,617,050 1,647,697
Other noninterest bearing liabilities 135,358 191,516
Stockholders’ equity 873,255 845,193
Total liabilities and stockholders’ equity $ 7,074,930 $ 7,099,621
Net interest income and spread $ 108,673 2.84 % $ 102,643 2.62 %
Net interest margin 3.47 % 3.28 %

(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 $1.7 million and $1.8 million for the six months ended June 30, 2025 and 2024, respectively.

(3) Yields on tax-exempt loans and securities have not been stated on a tax-equivalent basis.

HERITAGE FINANCIAL CORPORATION

FINANCIAL STATISTICS (Unaudited)

(Dollars in thousands)

Nonperforming Assets and Credit Quality Metrics:

Quarter Ended Six Months Ended
June 30,<br>2025 March 31,<br>2025 June 30,<br>2024 June 30,<br>2025 June 30,<br>2024
Allowance for Credit Losses on Loans:
Balance, beginning of period $ 52,160 $ 52,468 $ 49,736 $ 52,468 $ 47,999
Provision for credit losses on loans 863 (9) 1,470 854 3,174
Charge-offs:
Commercial business (454) (222) (312) (676) (389)
Consumer (104) (154) (238) (258) (361)
Total charge-offs (558) (376) (550) (934) (750)
Recoveries:
Commercial business 18 26 518 44 735
Consumer 46 51 45 97 61
Total recoveries 64 77 563 141 796
Net (charge-offs) recoveries (494) (299) 13 (793) 46
Balance, end of period $ 52,529 $ 52,160 $ 51,219 $ 52,529 $ 51,219
Net charge-offs on loans to average loans receivable annualized 0.04 % 0.03 % — % 0.03 % — %
June 30,<br>2025 March 31,<br>2025 December 31,<br>2024
--- --- --- --- --- --- --- --- --- ---
Nonperforming Assets:
Nonaccrual loans:
Commercial business $ 2,916 $ 3,455 $ 3,919
Residential real estate 832 832 —
Real estate construction and land development 5,969 — —
Consumer 148 151 160
Total nonaccrual loans 9,865 4,438 4,079
Accruing loans past due 90 days or more 8,613 — 1,195
Total nonperforming loans 18,478 4,438 5,274
Other real estate owned — — —
Nonperforming assets $ 18,478 $ 4,438 $ 5,274
ACL on loans to:
Loans receivable 1.10 % 1.09 % 1.09 %
Nonaccrual loans 532.48 % 1,175.30 % 1,286.30 %
Nonaccrual loans to loans receivable 0.21 % 0.09 % 0.08 %
Nonperforming loans to loans receivable 0.39 % 0.09 % 0.11 %
Nonperforming assets to total assets 0.26 % 0.06 % 0.07 %

HERITAGE FINANCIAL CORPORATION

QUARTERLY FINANCIAL STATISTICS (Unaudited)

(Dollars in thousands, except per share amounts)

Quarter Ended
June 30,<br>2025 March 31,<br>2025 December 31,<br>2024 September 30,<br>2024 June 30,<br>2024
Earnings:
Net interest income $ 54,983 $ 53,690 $ 53,763 $ 52,958 $ 51,113
Provision for credit losses 956 51 1,183 2,439 1,268
Noninterest income 1,517 3,903 3,290 1,837 5,246
Noninterest expense 41,085 41,383 39,540 39,290 39,096
Net income 12,215 13,911 11,928 11,423 14,159
Basic earnings per share $ 0.36 $ 0.41 $ 0.35 $ 0.33 $ 0.41
Diluted earnings per share $ 0.36 $ 0.40 $ 0.34 $ 0.33 $ 0.41
Adjusted diluted earnings per share (1) $ 0.53 $ 0.49 $ 0.51 $ 0.45 $ 0.45
Average Balances:
Loans receivable $ 4,768,558 $ 4,793,917 $ 4,717,748 $ 4,606,856 $ 4,466,499
Total investment securities 1,390,064 1,443,662 1,530,348 1,622,011 1,704,607
Total interest earning assets 6,286,309 6,333,697 6,367,371 6,379,251 6,292,645
Total assets 7,046,943 7,103,227 7,149,294 7,182,921 7,106,791
Total interest bearing deposits 4,176,052 4,112,343 4,011,793 3,997,496 3,916,977
Total noninterest demand deposits 1,602,987 1,631,268 1,703,357 1,677,984 1,638,262
Stockholders' equity 879,808 866,629 868,308 857,799 843,438
Financial Ratios:
Return on average assets (2) 0.70 % 0.79 % 0.66 % 0.63 % 0.80 %
Return on average common equity (2) 5.57 6.51 5.46 5.30 6.75
Return on average tangible common equity (1)(2) 7.85 9.22 7.81 7.62 9.74
Adjusted return on average tangible common equity (1)(2) 11.59 11.21 11.59 10.42 10.74
Efficiency ratio 72.7 71.9 69.3 71.7 69.4
Adjusted efficiency ratio (1) 64.9 67.3 64.4 65.2 67.1
Noninterest expense to average total assets (2) 2.34 2.36 2.20 2.18 2.21
Net interest spread (2) 2.89 2.79 2.66 2.59 2.58
Net interest margin (2) 3.51 3.44 3.36 3.30 3.27

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

(2) Annualized.

HERITAGE FINANCIAL CORPORATION

QUARTERLY FINANCIAL STATISTICS (Unaudited)

(Dollars in thousands, except per share amounts)

As of or for the Quarter Ended
June 30,<br>2025 March 31,<br>2025 December 31,<br>2024 September 30,<br>2024 June 30,<br>2024
Select Balance Sheet:
Total assets $ 7,070,641 $ 7,129,862 $ 7,106,278 $ 7,153,363 $ 7,059,857
Loans receivable 4,774,855 4,764,848 4,802,123 4,679,479 4,532,615
Total investment securities 1,346,274 1,413,903 1,467,679 1,572,179 1,658,590
Total deposits 5,784,413 5,845,335 5,684,613 5,708,492 5,515,652
Noninterest demand deposits 1,584,231 1,621,890 1,654,955 1,682,219 1,599,367
Stockholders' equity 888,212 881,515 863,527 874,514 850,507
Financial Measures:
Book value per share $ 26.16 $ 25.85 $ 25.40 $ 25.61 $ 24.66
Tangible book value per share (1) 18.99 18.70 18.22 18.45 17.56
Stockholders' equity to total assets 12.6 % 12.4 % 12.2 % 12.2 % 12.0 %
Tangible common equity to tangible assets (1) 9.4 9.3 9.0 9.1 8.9
Loans to deposits ratio 82.5 81.5 84.5 82.0 82.2
Regulatory Capital Ratios:(2)
Common equity tier 1 capital ratio 12.2 % 12.2 % 12.0 % 12.3 % 12.6 %
Leverage ratio 10.3 10.2 10.0 9.9 10.1
Tier 1 capital ratio 12.6 12.6 12.4 12.7 13.0
Total capital ratio 13.6 13.6 13.3 13.6 13.9
Credit Quality Metrics:
ACL on loans to:
Loans receivable 1.10 % 1.09 % 1.09 % 1.10 % 1.13 %
Nonaccrual loans 532.5 1,175.3 1,286.3 1,194.9 1,338.7
Nonaccrual loans to loans receivable 0.21 0.09 0.08 0.09 0.08
Nonperforming loans to loans receivable 0.39 0.09 0.11 0.21 0.18
Nonperforming assets to total assets 0.26 0.06 0.07 0.13 0.12
Net charge-offs on loans to average loans receivable (3) 0.04 0.03 0.00 0.22 0.00
Criticized Loans by Credit Quality Rating:
Special mention $ 114,146 $ 113,704 $ 110,725 $ 99,078 $ 93,694
Substandard 99,715 64,387 68,318 71,977 82,496
Other Metrics:
Number of branches 50 50 50 50 50
Deposits per branch $ 115,688 $ 116,907 $ 113,692 $ 114,170 $ 110,313
Average number of full-time equivalent employees 747 757 751 749 748
Average assets per full-time equivalent employee 9,434 9,383 9,520 9,590 9,501

(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.

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.

June 30,<br>2025 March 31,<br>2025 December 31,<br>2024 September 30,<br>2024 June 30,<br>2024
Diluted Earnings per Share and Adjusted Diluted Earnings per Share:
Net income (GAAP) $ 12,215 $ 13,911 $ 11,928 $ 11,423 $ 14,159
Exclude loss on sale of investment securities, net 6,854 3,887 3,903 6,945 1,921
Exclude gain on sale of premises and equipment (5) (3) (23) (1,480) (49)
Exclude tax effect of adjustment (1,438) (816) (815) (1,148) (393)
Exclude BOLI restructuring costs included in BOLI Income — — 508 — —
Exclude tax expense related to BOLI restructuring 515 — 2,371 — —
Adjusted net income (non-GAAP) $ 18,141 $ 16,979 $ 17,872 $ 15,740 $ 15,638
Average number of diluted shares outstanding 34,446,710 34,506,238 34,553,139 34,658,674 34,919,395
Diluted earnings per share (GAAP) $ 0.36 $ 0.40 $ 0.34 $ 0.33 $ 0.41
Adjusted diluted earnings per share (non-GAAP) $ 0.53 $ 0.49 $ 0.51 $ 0.45 $ 0.45

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.

June 30,<br>2025 March 31,<br>2025 December 31,<br>2024 September 30,<br>2024 June 30,<br>2024
Tangible Common Equity to Tangible Assets and Tangible Book Value Per Share:
Total stockholders' equity (GAAP) $ 888,212 $ 881,515 $ 863,527 $ 874,514 $ 850,507
Exclude intangible assets (243,487) (243,789) (244,092) (244,491) (244,890)
Tangible common equity (non-GAAP) $ 644,725 $ 637,726 $ 619,435 $ 630,023 $ 605,617
Total assets (GAAP) $ 7,070,641 $ 7,129,862 $ 7,106,278 $ 7,153,363 $ 7,059,857
Exclude intangible assets (243,487) (243,789) (244,092) (244,491) (244,890)
Tangible assets (non-GAAP) $ 6,827,154 $ 6,886,073 $ 6,862,186 $ 6,908,872 $ 6,814,967
Stockholders' equity to total assets (GAAP) 12.6 % 12.4 % 12.2 % 12.2 % 12.0 %
Tangible common equity to tangible assets (non-GAAP) 9.4 % 9.3 % 9.0 % 9.1 % 8.9 %
Shares outstanding 33,953,194 34,105,516 33,990,827 34,153,539 34,496,197
Book value per share (GAAP) $ 26.16 $ 25.85 $ 25.40 $ 25.61 $ 24.66
Tangible book value per share (non-GAAP) $ 18.99 $ 18.70 $ 18.22 $ 18.45 $ 17.56

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
June 30,<br>2025 March 31,<br>2025 December 31,<br>2024 September 30,<br>2024 June 30,<br>2024
Return on Average Tangible Common Equity, annualized:
Net income (GAAP) $ 12,215 $ 13,911 $ 11,928 $ 11,423 $ 14,159
Add amortization of intangible assets 302 303 399 399 421
Exclude tax effect of adjustment (63) (64) (84) (84) (88)
Tangible net income (non-GAAP) $ 12,454 $ 14,150 $ 12,243 $ 11,738 $ 14,492
Tangible net income (non-GAAP) $ 12,454 $ 14,150 $ 12,243 $ 11,738 $ 14,492
Exclude loss on sale of investment securities, net 6,854 3,887 3,903 6,945 1,921
Exclude gain on sale of premises and equipment (5) (3) (23) (1,480) (49)
Exclude tax effect of adjustment (1,438) (816) (815) (1,148) (393)
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) $ 18,380 $ 17,218 $ 18,187 $ 16,055 $ 15,971
Average stockholders' equity (GAAP) $ 879,808 $ 866,629 $ 868,308 $ 857,799 $ 843,438
Exclude average intangible assets (243,651) (243,945) (244,302) (244,706) (245,106)
Average tangible common stockholders' equity (non-GAAP) $ 636,157 $ 622,684 $ 624,006 $ 613,093 $ 598,332
Return on average common equity, annualized (GAAP) 5.57 % 6.51 % 5.46 % 5.30 % 6.75 %
Return on average tangible common equity, annualized (non-GAAP) 7.85 % 9.22 % 7.81 % 7.62 % 9.74 %
Adjusted return on average tangible common equity, annualized (non-GAAP) 11.59 % 11.21 % 11.59 % 10.42 % 10.74 %

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
June 30,<br>2025 March 31,<br>2025 December 31,<br>2024 September 30,<br>2024 June 30,<br>2024
Adjusted Efficiency Ratio :
Total noninterest expense (GAAP) $ 41,085 $ 41,383 $ 39,540 $ 39,290 $ 39,096
Net interest income (GAAP) $ 54,983 $ 53,690 $ 53,763 $ 52,958 $ 51,113
Total noninterest income (GAAP) $ 1,517 $ 3,903 $ 3,290 $ 1,837 $ 5,246
Exclude loss on sale of investment securities, net 6,854 3,887 3,903 6,945 1,921
Exclude gain on sale of premises and equipment (5) (3) (23) (1,480) (49)
Exclude BOLI restructuring costs included in BOLI Income — — 508 — —
Adjusted total noninterest income (non-GAAP) $ 8,366 $ 7,787 $ 7,678 $ 7,302 $ 7,118
Efficiency ratio (GAAP) 72.7 % 71.9 % 69.3 % 71.7 % 69.4 %
Adjusted efficiency ratio (non-GAAP) 64.9 % 67.3 % 64.4 % 65.2 % 67.1 %

19

investorpresentationq225

INVESTOR PRESENTATION Q2 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") has 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 (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 Fintech 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; • 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; • loss of, or inability to attract, key personnel; • the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business and the businesses of our clients; • 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 June 30, 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 June 30, 2025 unless otherwise indicated. FORWARD LOOKING STATEMENTS

HERITAGE FINANCIAL CORPORATION OVERVIEW

4 OVERVIEW General Overview Nasdaq symbol HFWA Stock price(2) $25.31 Market capitalization(2) $863 million Institutional ownership(2) 83.9% Headquarters Olympia, WA # of branches 50 Year established 1927 Q2 2025 Financial Highlights Assets $7.1 billion Deposits $5.8 billion Loans receivable $4.8 billion Net income $12.2 million Net interest margin 3.51% ROAE(3) 5.57% ROATCE(1)(4) 7.85% Adjusted ROATCE(1)(4) 11.59% Efficiency ratio 72.7% Adjusted efficiency ratio(1) 64.9% Leverage ratio 10.3% Total capital ratio 13.6% Map obtained from S&P Global Market Intelligence; certain locations of branches overlap on the map. (1) Represents a non-GAAP financial measure (2) Market information as of July 7, 2025. (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 our recent 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 747 at June 30, 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 12.7% from 2022 to 2024. Ÿ Five-year growth in tangible book value(1) of $4.01, or 26.8%, to $18.99 at June 30, 2025 from $14.98 at June 30, 2020 Remain active and disciplined in M&A Ÿ Five acquisitions in Washington and Oregon since 2013 Ÿ Target metrics = IRR of >15% with earnbacks < 3 years Maintain conservative underwriting standards and actively manage the loan portfolio Ÿ Long track record of strong underwriting with conservative risk profile Ÿ Disciplined approach to concentration risk Ÿ Net charge-offs on loans to average loans remains low at 0.03%, annualized through June 30, 2025 Focus on core deposits to increase franchise value over the long term Ÿ 27.4% noninterest demand deposits to total deposits at June 30, 2025 Ÿ 1.40% cost of total deposits; top 11% performance among US publicly traded banks in Q1 2025 Engage in proactive capital management Ÿ History of increasing regular dividends and utilizing special dividends to manage capital Ÿ In April 2024, approved a stock repurchase plan up to 5% of the Company's outstanding common shares or approximately 1.7 million shares Ÿ Strong capital ratios: leverage ratio(3) = 10.3%; total capital ratio(3) = 13.6% (1) Represents a non-GAAP financial measure (2) Comparable cost of total deposits provided by S&P Global Market Intelligence for the first quarter of 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 PROFITABILITY IMPROVEMENT MEASURES 2023 TOTAL 2024 TOTAL Q1 2025 Q2 2025 2025 YTD TOTAL GRAND TOTAL Quarterly Impact Investments Sold (Book Value) $161.8 $296.4 $60.9 $91.6 $152.5 $610.7 Weighted Average Book Yield of Sales 2.41% 2.23% 2.60% 2.63% 2.62% 2.38% Investments Purchased $140.7 $33.1 $28.2 $56.4 $84.6 $258.4 Weighted Average Book Yield of Purchases 6.08% 6.05% 4.55% 5.06% 4.89% 5.68% Loss on Sale of Investments $10.0 $22.7 $3.9 $6.9 $10.8 $43.5 Quarterly Estimated EPS Impact $(0.22) $(0.51) $(0.09) $(0.15) $(0.24) $(0.97) Estimated Annualized Profitability Improvement Estimated Annualized Pre-Tax Financial Impact $5.4 $11.9 $1.7 $2.3 $4.0 $21.3 Estimated Annualized EPS Impact $0.12 $0.26 $0.04 $0.05 $0.09 $0.47 Balance Sheet Repositioning The Company has completed investment sales over the past several quarters as part of strategic repositioning of the balance sheet. Estimated annualized profitability improvements assumes all proceeds invested to fund new loans or investment purchases.

7 $113,456 $94,748 $86,463 $78,770 Median household income 4.3% 3.5% 9.9% 4.4% 0.3% 9.7% 3.2% 7.3% 13.3% 4.2% 2.4% 8.8% Seattle MSA Portland MSA Boise MSA USA Unemployment rate 2025-2030 Projected Population Growth 2025-2030 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 2025 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 $2,319 48.6% Portland OR-WA $728 15.2% Mount Vernon WA $258 5.4% Olympia WA $187 3.9% Yakima WA $102 2.1% Bellingham WA $183 3.8% Eugene OR $80 1.7% Boise ID $80 1.7% Other $838 17.6% Deposits by MSA Seattle WA $2,545 44.0% Portland OR-WA $841 14.6% Mount Vernon WA $332 5.7% Olympia WA $499 8.6% Longview WA $152 2.6% Oak Harbor WA $554 9.6% Yakima WA $226 3.9% Bellingham WA $169 2.9% Other $466 8.1%

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. – 12 banks between $200 million and $500 million in assets – 11 banks between $500 million and $1.0 billion in assets – 13 banks between $1.0 billion and $3.5 billion in assets • Target metrics include 15% IRR and earnback of < 3 years. Bank headquarters

10 $1,712 $3,651 $3,879 $4,113 $4,238 $5,553 $6,615 $7,432 $6,980 $7,175 $7,106 $7,130 $7,071 $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 $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 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 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 Bank Acquisitions and Team Additions Bank Acquisition Team Addition

FINANCIAL UPDATE

13 LOAN PORTFOLIO Loan Portfolio Composition $196 $171 $165 $167 $172 $344 $375 $403 $393 $384$294 $414 $479 $453 $433 $693 $718 $843 $851 $831 $937 $959 $1,003 $985 $1,015 $1,587 $1,698 $1,909 $1,916 $1,940 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 New Loan Commitments $25 $24 $21 $18 $20$27 $2 $— $— $— $63 $35 $85 $64 $88$87 $128 $101 $59 $49 $68 $90 $130 $60 $111 Consumer Residential real estate Construction & land development Commercial and Industrial (C&I) Commercial Real Estate (CRE) Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025

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

15 COMMERCIAL LOAN EXPOSURE Commercial Business Loans by Industry Exposure Industry Amount WARR at 06/30/25 Real estate, rental and leasing $2,106 4.5 Health care and social assistance 342 4.3 Accommodation and food services 184 5.1 Retail trade 150 4.7 Construction 163 4.9 Other services (except Public administration) 119 4.6 Manufacturing 90 5.0 All other industries 632 4.4 Total $3,786 4.5 CRE Loans only by Collateral Type Collateral Type Amount WARR at 06/30/25 Office $576 4.3 Industrial 508 4.5 Retail store / shopping center 314 4.7 Multi-family 449 4.6 Mixed use property 165 4.6 Motel / hotel 144 5.0 Single purpose 124 4.7 Warehouse 129 4.5 Mini-storage 162 4.2 Recreational / school 82 5.0 Other 302 4.6 Total $2,955 4.5 WARR = Weighted average risk rating Categorized by NAICS code. Office - Owner-occupied CRE 10.0% Office - Non-owner occupied CRE 9.5% Industrial 17.2% Retail store / shopping center 10.6% Multi-family 15.2% Mixed use property 5.6% Motel / hotel 4.9% Single purpose 4.2% Warehouse 4.4% Mini-storage 5.5% Recreational / school 2.8% Other 10.1% Real estate, rental and leasing 55.6% Health care and social assistance 9.0% Accommodation and food services 4.9% Retail trade 4.0% Construction 4.3% Other Services (except Public administration) 3.1% Manufacturing 2.4% All other industries 16.7%

16 CHANGES IN LOANS RECEIVABLE $4,765 $140 $(59) $(51) $(20) $4,775 Loans receivable at March 31, 2025 Loans originated Prepayments Maturities / Payoffs Net advances/ payments Loans receivable at June 30, 2025 $4,802 $96 $(80) $(47) $(6) $4,765 Loans receivable at December 31, 2024 Loans originated Prepayments Maturities / Payoffs Net advances/ payments Loans receivable at March 31, 2025 Change in loans - Q2 2025 Change in loans - Q1 2025

17 CRE OFFICE CRE Office Loans by Size Size WARR(2) # of Loans Total Balance(1) Average Balance Per Loan(1) >$10 Million 3.3 5 $ 74,780 $ 14,956 $5-$10 Million 4.0 14 88,424 6,316 $2-$5 Million 4.4 47 143,181 3,046 <$2 Million 4.6 460 270,046 587 TOTAL 4.3 526 $ 576,431 $ 1,096 Quality of CRE Office Portfolio: • 81.0% of loans have recourse to owner • 51.3% of loans are owner occupied which are considered to have a lower risk profile • 24.7% 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 24.7% Professional, Scientific, and Technical Services 3.3% Finance and Insurance 2.7% Other Services (except Public Administration) 3.1% Accommodation and Food Services 1.0% All Other 65.2% (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% 0.22% 0.00% 0.03% 0.04% 2022 2023 2024 2025 YTD Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 (0.10)% 0.00% 0.10% 0.20% 0.30% Nonaccrual Loans $6 $4 $4 $4 $10 Nonaccrual loans Nonaccrual loans to loans receivable 2022 2023 2024 Q1 2025 Q2 2025 0.15% 0.10% 0.08% 0.09% 0.21% NONACCRUAL LOANS AND NET CHARGE-OFFS

19 CRITICIZED LOANS $135 $150 $179 $178 $213 $60 $65 $64 $60 $89 $69 $80 $111 $114 $114 Substandard - nonaccrual Substandard - accrual Special mention 2022 2023 2024 Q1 2025 Q2 2025 Criticized Loans by Loan Segment Commercial & industrial 36.1% Owner- occupied CRE 15.5% Non-owner occupied CRE 29.9% Residential real estate 1.0% Construction & land development 16.8% Consumer 0.7% Criticized Loans by Collateral Type Motel/Hotel 7.5% Office 6.0% Multi-Family 12.0% Retail Store/Shopping Center 7.4% Mixed Use Property 6.7% Elder Care 4.9% Farm-Bldgs/Land 5.4% Industrial 2.5% Duplex/Tri-Plex/4-Plex 2.7% Other CRE 17.7% Non-CRE 27.2% $6 $4 $4 $4 $10

20 ACL on Loans $42,986 $47,999 $52,468 $52,160 $52,529 1.06% 1.11% 1.09% 1.09% 1.10% ACL on loans ($) ACL on loans / Loans (%) 2022 2023 2024 Q1 2025 Q2 2025 ALLOWANCE FOR CREDIT LOSSES ("ACL") ON LOANS $52,160 $(429) $814 $(36) $20 $52,529 March 31, 2025 Change in loan balance Change in collective rate Change in rate and balance Individually evaluated loans June 30, 2025 Change in ACL on Loans - Q2 2025 Dollars in thousands

21 CRITICIZED LOANS AND NET CHARGE-OFF HISTORY Criticized Loans to Total Loans 3.63% 3.79% 6.50% 4.81% 3.34% 3.45% 3.73% 3.74% 2.19% 2.05% 3.47% 2.63% 1.96% 2.32% 2.66% 2.82% Heritage Peer Median 2018 2019 2020 2021 2022 2023 2024 Q1 2025 Net Charge-offs to Average Loans 0.06% 0.09% 0.07% 0.01% (0.03)% (0.01)% 0.06% 0.02% 0.07% 0.11% 0.05% 0.03% 0.02% 0.07% 0.05% 0.04% Heritage Peer Median 2018 2019 2020 2021 2022 2023 2024 Q1 2025 (1) Criticized loans includes loans graded special mention or worse (2) Peer Median is the median of 17 identified peer banks and is as of March 31, 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.

22 Average Deposit Balances and Cost of Total Deposits $6,322 $5,706 $5,618 $5,761 $5,555 $5,675 $5,715 $5,744 $5,779 0.11% 0.69% 1.34% 1.39% 1.34% 1.42% 1.39% 1.38% 1.40% 1.89% 2.02% 1.98% 1.92% 1.94% 0.17% 1.03% 1.90% 1.93% Average deposits Cost of total deposits Cost of int-bearing deposits 2022 2023 2024 2025 YTD Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 DEPOSITS Deposit Composition 35.5% 30.6% 29.1% 27.7% 27.4% 30.9% 28.7% 25.8% 26.1% 25.7% 17.9% 19.5% 20.5% 21.9% 22.6% 10.5% 8.7% 7.4% 7.4% 7.3% 5.2% 12.4% 17.2% 16.9% 17.0% Noninterest demand deposits Interest bearing demand deposits Money market accounts Savings accounts Certificates of deposit 2022 2023 2024 Q1 2025 Q2 2025

23 DEPOSIT COMPOSITION Customer Deposits by Relationship Size $749 $377 $1,419 $1,453 $1,786 Over $10MM $5MM-$10MM $1MM-5MM $250K-$1MM Less than $250K Consumer Accounts vs. Business Accounts 25% 58% 17% Consumer Commercial CDs Insured vs. Uninsured 41% 59% Insured Uninsured Deposit portfolio as of June 30, 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 $1,346 $1,659 $1,572 $1,468 $1,414 $1,346 $1,203 $178 $33 $85 $28 $56 2.48% 3.02% 3.33% 3.36% 3.38% 3.34% 3.29% 3.34% 3.38% Portfolio yield New purchases 2022 2023 2024 2025 YTD Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 INVESTMENT PORTFOLIO Portfolio Duration 4.93 4.85 4.55 4.68 4.08 3.37 2.33 3.85 4.81 4.56 4.55 4.59 4.68 4.04 3.76 Duration - total portfolio Duration - new purchases only (1) 2022 2023 2024 2025 YTD Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 (1) No investments were purchased during Q2 2024, Q3 2024 or Q4 2024

25 $42 $41 $49 $37 $37 $33 $56 $43 $34 $28 $56 $87 $31 $30 $38 $27 $27 $23 $47 $34 $25 $20 $48 $79 $11 $11 $11 $10 $10 $10 $9 $9 $9 $8 $8 $8 Interest Principal Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026 Q1 2027 Q2 2027 Q3 2027 Q4 2027 Q1 2028 Q2 2028 INVESTMENT CASHFLOWS Investment cashflows(1) are estimated to be $543 million through Q2 of 2028. (1) Cashflow estimates based on third-party bond accounting service

26 INVESTMENT PORTFOLIO HTM Investment by Type US government and agencies 20.2% Residential CMO and MBS 34.9% Commercial CMO and MBS 44.9% Available for sale ("AFS") and held to maturity ("HTM") investment securities percentages are based on fair value as of June 30, 2025 unless otherwise noted Strong Credit Quality of Portfolio: AFS Securities • 89.9% of AFS in U.S. government and agency securities • Only 1.5% of AFS are rated less than AA HTM Securities • All HTM investments are U.S. government and agency securities • 100% HTM portfolio pledged for public deposits and Federal Reserve Bank borrowings AFS Investments Pledged 0.1% 99.9% Pledged Not pledged AFS Investment by Type US government and agencies 1.8% Municipal securities 7.6% Residential CMO and MBS 48.3% Commercial CMO and MBS 39.8% Corporate obligations 1.5% Other asset-backed securities 1.0%

27 Net Interest Margin 3.33% 3.56% 3.31% 3.47% 3.27% 3.30% 3.36% 3.44% 3.51% 2022 2023 2024 2025 YTD Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 NET INTEREST MARGIN Quarterly Change in Net Interest Margin 3.44% 0.05% (0.01)% 0.02% (0.05)% 0.06% 3.51% QTD Q1 2025 Loans Investments Interest earning deposits Deposits Borrowings QTD Q2 2025 Net Interest Income $219,385 $225,155 $209,364 $108,673 $51,113 $52,958 $53,763 $53,690 $54,983 2022 2023 2024 2025 YTD Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025

28 Adjustable Rate Loans - Repricing Schedule $1,055 $166 $179 $194 $245 $382 $106 6.88% 4.30% 4.26% 5.93% 6.13% 6.17% 5.06% 6.93% 6.52% 6.35% 6.17% 6.44% 6.31% 6.70% Floating and Adjustable Rate Loans Wtd Avg Rate (1) Wtd Avg Rate if Repriced (2) < 3 Months 3 - 12 Months 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years > 5 Years LOAN MATURITY AND REPRICING (1) Weighted Average Rate as of June 30, 2025 and repricing period signifies the sooner of the next scheduled reprice date or maturity (2) Weighted Average Rate if Repriced as of June 30, 2025 and assumes same index and margin Adjustable Rate Loans • $2.3 billion in total • 53% tied to FHLB index, 20% tied to Prime, 26% tied to SOFR Fixed Rate Loans - Maturity Schedule $97 $137 $148 $215 $197 $341 $1,306 5.13% 5.37% 4.70% 5.09% 5.21% 4.99% 4.43% 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% 0.74% 0.80% 0.63% 0.66% 0.79% 0.70% 1.12% 0.99% 0.88% 1.00% 0.89% 0.87% 0.99% 0.97% 1.03% ROAA Adjusted ROAA (1) 2022 2023 2024 2025 YTD Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Noninterest Expense/Avg. Assets 2.06% 2.33% 2.22% 2.35% 2.21% 2.18% 2.20% 2.36% 2.34% 2022 2023 2024 2025 YTD Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 ROAA = Return on average assets (1) Represents a non-GAAP financial measure

30 $81.9 $61.8 $43.3 $26.1 $81.8 $70.9 $62.9 $35.1 Net income Adjusted Net income (1) 2022 2023 2024 2025 YTD Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 $14.2 $11.4 $11.9 $13.9 $12.2 $15.6 $15.7 $17.9 $17.0 $18.1 PROFITABILITY TRENDS ROAE, ROATCE(1) and Adjusted ROATCE(1) Net Income and Adjusted Net Income(1), in millions 14.92% 12.76% 10.53% 11.40% 10.74% 10.42% 11.59% 11.21% 11.59%14.94% 11.15% 7.31% 8.52% 9.74% 7.62% 7.81% 9.22% 7.85% 10.08% 7.55% 5.06% 6.03% 6.75% 5.30% 5.46% 6.51% 5.57% ROAE ROATCE (1) Adjusted ROATCE (1) 2022 2023 2024 2025 YTD Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 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% 8.2% 8.8% 9.0% 9.3% 9.4% Stockholders' equity to total assets (GAAP) Tangible common equity to tangible assets(1) 2022 2023 2024 Q1 2025 Q2 2025 12.8% 12.9% 12.0% 12.2% 12.2% 9.7% 10.0% 10.0% 10.2% 10.3% 14.0% 14.1% 13.3% 13.6% 13.6% Total Risk Based Capital Tier 1 Leverage Ratio Common Equity Tier 1 2022 2023 2024 Q1 2025 Q2 2025 Regulatory Capital Ratios(2)

32 LIQUIDITY POSITION (1) Includes FHLB borrowing availability of $1.24 billion at June 30, 2025 based on pledged assets, however, maximum credit capacity is 45% of the Bank's total assets one quarter in arrears or $3.21 billion Liquidity position at June 30, 2025: • Sufficient liquidity to cover estimated uninsured deposits of $2.4 billion. • Access to brokered deposits of $765 million per internal company policy. Liquidity Sources $2,408 $2,525 $2,345 $2,542 $2,379 $943 $1,068 $976 $1,084 $978 $279 $288 $360 $366 $346 $927 $848 $746 $698 $656 $114 $176 $117 $249 $254 $145 $145 $145 $145 $145 116.2% 112.6% 103.1% 109.3% 100.4% FHLB borrowing availability (1) FRB borrowing availability Unencumbered investment securities available for sale at fair value Cash and cash equivalents Fed funds lines % of uninsured deposits covered by liquidity sources Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025

SHAREHOLDER RETURN

34 TOTAL SHAREHOLDER RETURN Stock Summary(2) Ticker HFWA Exchange Nasdaq Stock price $25.31 Market capitalization (in millions) $863.2 Dividend yield (regular dividend only) 3.79 % Average Daily Volume (3 month) Average daily volume (shares) 210,966 Average daily volume ($000s) $5,340 52-Week High and Low Price 52-week high (November 25, 2024) $27.58 52-week low (July 5, 2024) $17.04 Per Share Tangible book value per share(1) $18.99 EPS - 2025E $2.03 EPS - 2026E $2.26 Number of research analysts 6 Valuation Ratios Price / Tangible book value(1) 133.3 % Price / 2025E EPS 12.5 Price / 2026E EPS 11.2 Dividends Per Share Declared(3) 0.72 0.61 0.72 0.84 0.80 0.81 0.84 0.88 0.92 0.72 $0.11 $0.12 $0.15 $0.18 $0.20 $0.20 $0.21 $0.22 $0.23 $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 $0.25 $0.10 $0.10 $0.10 Q1 Q2 Q3 Q4 Special dividends 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025(1) Represents a non-GAAP financial measure (2) Market information as of July 7, 2025 and earnings per share and valuation ratios are based on analysts consensus (3) Dividend information as of July 23, 2025 $2.31 $2.01 $1.80$2.31 $1.75 $1.24 $0.45 $0.45 $0.51 $0.49 $0.53 $0.41 $0.33 $0.34 $0.40 $0.36 Diluted EPS Adjusted Diluted EPS(1) 2022 2023 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 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 YTD Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Adjusted Net Income and Adjusted Return on Average Assets ("ROAA"): Net income (GAAP) $ 81,875 $ 61,755 $ 43,258 $ 26,126 $ 14,159 $ 11,423 $ 11,928 $ 13,911 $ 12,215 Exclude (gain) loss on sale of investment securities, net 256 12,231 22,742 10,741 1,921 6,945 3,903 3,887 6,854 Exclude gain on sale of branch including related deposits, net — (610) — — — — — — — Exclude gain on sale of premise and equipment (403) — (1,552) (8) (49) (1,480) (23) (3) (5) Exclude tax effect of adjustments 31 (2,440) (4,450) (2,254) (393) (1,148) (815) (816) (1,438) 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 $ 35,120 $ 15,638 $ 15,740 $ 17,872 $ 16,979 $ 18,141 Average total assets $ 7,321,455 $ 7,140,024 $ 7,133,046 $ 7,074,930 $7,106,791 $7,182,921 $7,149,294 $7,103,227 $7,046,943 ROAA, annualized (GAAP) 1.12 % 0.86 % 0.61 % 0.74 % 0.80 % 0.63 % 0.66 % 0.79 % 0.70 % Adjusted ROAA, annualized (non-GAAP) 1.12 % 0.99 % 0.88 % 1.00 % 0.89 % 0.87 % 0.99 % 0.97 % 1.03 %

37 NON-GAAP FINANCIAL MEASURES 2022 2023 2024 2025 YTD Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Return on Average Tangible Common Equity ("ROATCE") and Adjusted ROATCE: Net income (GAAP) $ 81,875 $ 61,755 $ 43,258 $ 26,126 $ 14,159 $ 11,423 $ 11,928 $ 13,911 $ 12,215 Add amortization of intangible assets 2,750 2,434 1,640 605 421 399 399 303 302 Exclude tax effect of adjustment (578) (511) (344) (127) (88) (84) (84) (64) (63) Tangible net income (non-GAAP) $ 84,047 $ 63,678 $ 44,554 $ 26,604 $ 14,492 $ 11,738 $ 12,243 $ 14,150 $ 12,454 Tangible net income (non-GAAP) $ 84,047 $ 63,678 $ 44,554 $ 26,604 $ 14,492 $ 11,738 $ 12,243 $ 14,150 $ 12,454 Exclude (gain) loss on sale of investment securities, net 256 12,231 22,742 10,741 1,921 6,945 3,903 3,887 6,854 Exclude gain on sale of branch including related deposits, net — (610) — — — — — — — Exclude gain on sale of premise and equipment (403) — (1,552) (8) (49) (1,480) (23) (3) (5) Exclude tax effect of adjustments 31 (2,440) (4,450) (2,254) (393) (1,148) (815) (816) (1,438) 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 $ 35,598 $ 15,971 $ 16,055 $ 18,187 $ 17,218 $ 18,380 Average stockholders' equity (GAAP) $ 811,942 $ 818,042 $ 854,172 $ 873,255 $ 843,438 $ 857,799 $ 868,308 $ 866,629 $ 879,808 Exclude average intangible assets (249,566) (246,965) (244,910) (243,797) (245,106) (244,706) (244,302) (243,945) (243,651) Average tangible common stockholders' equity (non-GAAP) $ 562,376 $ 571,077 $ 609,262 $ 629,458 $ 598,332 $ 613,093 $ 624,006 $ 622,684 $ 636,157 ROAE, annualized (GAAP) 10.08 % 7.55 % 5.06 % 6.03 % 6.75 % 5.30 % 5.46 % 6.51 % 5.57 % ROATCE, annualized (non-GAAP) 14.94 % 11.15 % 7.31 % 8.52 % 9.74 % 7.62 % 7.81 % 9.22 % 7.85 % Adjusted ROATCE, annualized (non- GAAP) 14.92 % 12.76 % 10.53 % 11.40 % 10.74 % 10.42 % 11.59 % 11.21 % 11.59 % Dollars in thousands

38 NON-GAAP FINANCIAL MEASURES 2022 2023 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Diluted Earnings per Share and Adjusted Diluted Earnings per Share: Net income (GAAP) $ 81,875 $ 61,755 $ 43,258 $ 14,159 $ 11,423 $ 11,928 $ 13,911 $ 12,215 Exclude (gain) loss on sale of investment securities, net 256 12,231 22,742 1,921 6,945 3,903 3,887 6,854 Exclude gain on sale of branch including related deposits, net — (610) — — — — — — Exclude gain on sale of premise and equipment (403) — (1,552) (49) (1,480) (23) (3) (5) Exclude tax effect of adjustments 31 (2,440) (4,450) (393) (1,148) (815) (816) (1,438) Exclude BOLI restructuring costs included in BOLI Income — — 508 — — 508 — — Exclude tax expense related to BOLI restructuring — — 2,371 — — 2,371 — 515 Adjusted net income (non-GAAP) $ 81,759 $ 70,936 $ 62,877 $ 15,638 $ 15,740 $ 17,872 $ 16,979 $ 18,141 Average number of diluted shares outstanding 35,463,896 35,258,189 34,899,036 34,919,395 34,658,674 34,553,139 34,506,238 34,446,710 Diluted earnings per share (GAAP) $ 2.31 $ 1.75 $ 1.24 $ 0.41 $ 0.33 $ 0.34 $ 0.40 $ 0.36 Adjusted diluted earnings per share (non-GAAP) $ 2.31 $ 2.01 $ 1.80 $ 0.45 $ 0.45 $ 0.51 $ 0.49 $ 0.53 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 Q1 Q2 Total stockholders' equity (GAAP) $ 881,515 $ 888,212 Exclude intangible assets (243,789) (243,487) Tangible common equity (non-GAAP) $ 637,726 $ 644,725 Shares outstanding 34,105,516 33,953,194 Book value per share (GAAP) $ 25.85 $ 26.16 Tangible book value per share (non-GAAP) $ 18.70 $ 18.99 NON-GAAP FINANCIAL MEASURES Dollars in thousands

40 NON-GAAP FINANCIAL MEASURES Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Efficiency Ratio and Adjusted Efficiency Ratio Total noninterest expense (GAAP) $ 39,096 $ 39,290 $ 39,540 $ 41,383 $ 41,085 Net interest income (GAAP) $ 51,113 $ 52,958 $ 53,763 $ 53,690 $ 54,983 Total noninterest income (GAAP) $ 5,246 $ 1,837 $ 3,290 $ 3,903 $ 1,517 Exclude (gain) loss on sale of investment securities, net 1,921 6,945 3,903 3,887 6,854 Exclude gain on sale of premise and equipment (49) (1,480) (23) (3) (5) Exclude BOLI restructuring costs included in BOLI Income — — 508 — — Adjusted total non interest income (non-GAAP) $ 7,118 $ 7,302 $ 7,678 $ 7,787 $ 8,366 Efficiency ratio (GAAP) 69.37 % 71.70 % 69.30 % 71.85 % 72.72 % Adjusted efficiency ratio (non-GAAP) 67.14 % 65.20 % 64.35 % 67.31 % 64.86 % Dollars in thousands

41 As of Period End or for the Three Months Ended June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025 June 30, 2025 Profitability: Net income $ 14,159 $ 11,423 $ 11,928 $ 13,911 $ 12,215 Adjusted net income(1) $ 15,638 $ 15,740 $ 17,872 $ 16,979 $ 18,141 Diluted earnings per share $ 0.41 $ 0.33 $ 0.34 $ 0.40 $ 0.36 Adjusted diluted earnings per share (1) $ 0.45 $ 0.45 $ 0.51 $ 0.49 $ 0.53 Return on average assets 0.80 % 0.63 % 0.66 % 0.79 % 0.70 % Adjusted return on average assets(1) 0.89 % 0.87 % 0.99 % 0.97 % 1.03 % Return on average common equity 6.75 % 5.30 % 5.46 % 6.51 % 5.57 % Return on average tangible common equity(1) 9.74 % 7.62 % 7.81 % 9.22 % 7.85 % Adjusted return on average tangible common equity(1) 10.74 % 10.42 % 11.59 % 11.21 % 11.59 % Net interest margin 3.27 % 3.30 % 3.36 % 3.44 % 3.51 % Efficiency ratio 69.4 % 71.7 % 69.3 % 71.9 % 72.7 % Adjusted efficiency ratio(1) 67.1 % 65.2 % 64.4 % 67.3 % 64.9 % Noninterest expense to average total assets 2.21 % 2.18 % 2.20 % 2.36 % 2.34 % Balance Sheet: Total assets $ 7,059,857 $ 7,153,363 $ 7,106,278 $ 7,129,862 $ 7,070,641 Loans receivable $ 4,532,615 $ 4,679,479 $ 4,802,123 $ 4,764,848 $ 4,774,855 Total deposits $ 5,515,652 $ 5,708,492 $ 5,684,613 $ 5,845,335 $ 5,784,413 Loan to deposit ratio 82.2 % 82.0 % 84.5 % 81.5 % 82.5 % Capital: Book value per share $ 24.66 $ 25.61 $ 25.40 $ 25.85 $ 26.16 Tangible book value per share(1) $ 17.56 $ 18.45 $ 18.22 $ 18.70 $ 18.99 Leverage ratio 10.1 % 9.9 % 10.0 % 10.2 % 10.3 % Total capital ratio 13.9 % 13.6 % 13.3 % 13.6 % 13.6 % Credit Quality: Nonperforming assets to total assets 0.12 % 0.13 % 0.07 % 0.06 % 0.26 % ACL on loans to loans receivable 1.13 % 1.10 % 1.09 % 1.09 % 1.10 % Dollars in thousands (1) Represents a non-GAAP financial measure QUARTERLY FINANCIAL STATISTICS

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