Equibles

8-K

HERITAGE FINANCIAL CORP /WA/ (HFWA)

8-K 2021-07-23 For: 2021-07-22
View Original
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 22, 2021

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 NASDAQ

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 22, 2021, Heritage Financial Corporation (“Heritage”) issued a press release announcing its financial results for the second quarter and year ended June 30, 2021.

A copy of the release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

Item 7.01    Regulation FD Disclosure

Heritage is filing an investor slide presentation that it reviewed in conjunction with its earnings release conference call on July 22, 2021.

A copy of the presentation materials is furnished herewith as Exhibit 99.2 and is incorporated herein by reference.

Item 8.01    Other Events

On July 22, 2021, Heritage issued a press release announcing a regular quarterly cash dividend of $0.20 per common share. The dividend will be paid on August 18, 2021 to shareholders of record at the close of business on August 4, 2021.

A copy of the release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01     Financial Statements and Exhibits

(d) Exhibits

The following exhibit is being filed herewith and this list shall constitute the exhibit index:

Exhibit 99.1 Press Release dated July 22, 2021 announcing financial results for the second quarter and year ended June 30, 2021 and cash dividend.
Exhibit 99.2 Heritage Financial Corporation Presentation Materials
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 22, 2021 /S/    JEFFREY J. DEUEL
Jeffrey J. Deuel
President and Chief Executive Officer
(Duly Authorized Officer)

Document

hfwarevisedlogoa01a02a.jpg

FOR IMMEDIATE RELEASE

DATE: July 22, 2021

HERITAGE FINANCIAL ANNOUNCES SECOND QUARTER 2021 RESULTS AND DECLARES REGULAR CASH DIVIDEND

•Net income was $32.7 million, or $0.90 per diluted share, for the quarter ended June 30, 2021, compared to $25.3 million, or $0.70 per diluted share, for the linked-quarter ended March 31, 2021 and a net loss of $6.1 million, or $(0.17) per diluted share, for the quarter ended June 30, 2020.

•Reversal of provision for credit losses was $14.0 million for the quarter ended June 30, 2021 compared to $7.2 million for the linked-quarter ended March 31, 2021 and a provision for credit loss of $28.6 million for the quarter ended June 30, 2020.

•The ratio of nonperforming assets to total assets decreased to 0.50% at June 30, 2021 compared to 0.75% at March 31, 2021 and 0.88% at December 31, 2020.

•Noninterest expense to average total assets, annualized, was 2.06% for the quarter ended June 30, 2021 compared to 2.22% for the linked-quarter ended March 31, 2021 and 2.36% for the quarter ended June 30, 2020.

•Capital remains strong with a Tier 1 leverage ratio of 9.1% and a total risk-based capital ratio of 15.1% at June 30, 2021.

•Declared a regular cash dividend of $0.20 per common share on July 21, 2021.

•Noninterest demand deposits represented 37.2% of total deposits at June 30, 2021 compared to 36.6% at March 31, 2021 and 35.4% at December 31, 2020.

•Heritage announces plan to close and consolidate four branches on October 29, 2021, bringing the total branch count to 49, a reduction of 21% from 62 branches at September 30, 2020.

Olympia, WA - Heritage Financial Corporation (NASDAQ GS: HFWA) (the “Company” or “Heritage”), the parent company of Heritage Bank ("Bank"), today reported that the Company had net income of $32.7 million for the quarter ended June 30, 2021 compared to $25.3 million for the linked-quarter ended March 31, 2021 and a net loss of $6.1 million for the quarter ended June 30, 2020. Diluted earnings per share for the quarter ended June 30, 2021 were $0.90 compared to $0.70 for the linked-quarter ended March 31, 2021 and a loss per share of $0.17 for the quarter ended June 30, 2020.

Jeffrey J. Deuel, President and Chief Executive Officer of Heritage, commented, "We are appreciative the Governors of Washington and Oregon, where our branches are located, allowed us to open up the region at the end of June. Most of our remote employees will return to the office over the summer and substantially all of our employees will have settled into their go-forward working environment by Labor Day.

We are also very pleased with our financial performance this quarter. We continue to effectively manage risk while reducing the expense base and deploying digital solutions to create efficiencies and enhance the customer experience.

Further, we are gratified with the success of our ongoing efforts to have a positive impact on housing in our local communities. Recently, we were selected by Mercy Housing Northwest to provide $14 million of construction financing and a $16 million equity investment in a new affordable housing development. The project located in Bellingham, Washington consists of 77 units of family housing as well as an Early Learning Center and will be known as Barkley Family Housing.”

Financial Highlights

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

As of Period End or for the Three Months Ended
June 30,<br>2021 March 31,<br>2021 June 30,<br>2020
(Dollars in thousands, except per share amounts)
Net income (loss) $ 32,702 $ 25,344 $ (6,139)
Pre-tax, pre-provision income (1) $ 26,166 $ 23,247 $ 21,488
Diluted earnings per share $ 0.90 $ 0.70 $ (0.17)
Return on average assets (2) 1.85 % 1.51 % (0.39) %
Pre-tax, pre-provision return on average assets (1) (2) 1.48 % 1.39 % 1.37 %
Return on average common equity (2) 15.69 % 12.43 % (3.06) %
Return on average tangible common equity (1) (2) 22.94 % 18.37 % (3.96) %
Net interest margin (2) 3.44 % 3.51 % 3.64 %
Cost of total deposits (2) 0.10 % 0.12 % 0.26 %
Efficiency ratio 58.18 % 61.57 % 63.31 %
Noninterest expense to average total assets (2) 2.06 % 2.22 % 2.36 %
Total assets $ 7,105,672 $ 7,028,392 $ 6,562,359
Loans receivable, net $ 4,155,968 $ 4,531,644 $ 4,594,832
Total deposits $ 6,061,706 $ 6,019,698 $ 5,567,733
Loan to deposit ratio (3) 69.4 % 76.3 % 83.8 %
Book value per share $ 23.77 $ 22.99 $ 22.10
Tangible book value per share (1) $ 16.76 $ 15.95 $ 14.98

(1) See Non-GAAP Financial Measures section herein.

(2) Annualized.

(3) Loans receivable divided by deposits.

SBA PPP Loans

The Company has supported its community and customers during the COVID-19 pandemic through its participation in the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”). The Company has identified its PPP loans separately in two tranches based on the date of origination with the first tranche comprised of the SBA PPP loans originated in accordance with the Coronavirus Aid, Relief, and Economic Security Act enacted on March 27, 2020 ("CARES Act"), as amended ("PPP1"), and the second tranche comprised of PPP loans originated under the SBA's PPP in accordance with the Consolidated Appropriations Act of 2021 ("CA Act") enacted on December 27, 2020, as amended ("PPP2"). PPP1 and PPP2 ended on August 8, 2020 and May 31, 2021, respectively.

The following are key statistics of the Company's PPP loan activity for both tranches since inception:

As of June 30, 2021
PPP1 PPP2 Total PPP
(Dollars in thousands)
Total number of funded loans 4,642 2,542 7,184
Total amount funded $ 897,353 $ 380,014 $ 1,277,367
Average funded loan size $ 193 $ 149 $ 178
Total net fees deferred at funding $ 28,805 $ 16,041 $ 44,846

The following table summarizes the activity for both tranches of the SBA's PPP as of and for the period indicated:

As of or for the Three Months Ended
June 30, 2021
PPP1 PPP2 Total PPP
(In thousands)
Net deferred fees recognized during the period $ 6,353 $ 1,674 $ 8,027
Net deferred fees unrecognized as of period end 2,555 13,810 16,365
Principal payments received during the period, including forgiveness payments from the SBA 357,257 18,392 375,649
Amortized cost as of period end 196,437 347,813 544,250

Balance Sheet

Investment securities available for sale increased $156.0 million, or 17.5%, to $1.05 billion at June 30, 2021 from $893.6 million at March 31, 2021 primarily as a result of purchases to deploy excess cash and cash equivalents into higher yielding assets.

Loans receivable decreased compared to March 31, 2021 due primarily to a decrease in SBA PPP loans as a result of forgiveness payments received from the SBA. The following table summarizes the Company's loans receivable, net at the dates indicated:

June 30, 2021 March 31, 2021 Change
Balance % of Total Balance % of Total Amount %
(Dollars in thousands)
Commercial business:
Commercial and industrial $ 651,915 15.5 % $ 693,539 15.1 % $ (41,624) (6.0) %
SBA PPP 544,250 12.9 886,761 19.3 (342,511) (38.6)
Owner-occupied CRE 865,662 20.6 881,168 19.2 (15,506) (1.8)
Non-owner occupied CRE 1,425,238 33.8 1,427,953 31.1 (2,715) (0.2)
Total commercial business 3,487,065 82.8 3,889,421 84.7 (402,356) (10.3)
Residential real estate 120,148 2.9 114,856 2.5 5,292 4.6
Real estate construction and land development:
Residential 88,601 2.1 79,878 1.7 8,723 10.9
Commercial and multifamily 239,979 5.7 217,815 4.7 22,164 10.2
Total real estate construction and land development 328,580 7.8 297,693 6.4 30,887 10.4
Consumer 271,737 6.5 293,899 6.4 (22,162) (7.5)
Loans receivable 4,207,530 100.0 % 4,595,869 100.0 % (388,339) (8.4)
Allowance for credit losses on loans (51,562) (64,225) 12,663 19.7
Loans receivable, net $ 4,155,968 $ 4,531,644 $ (375,676) (8.3) %

Total deposits increased slightly from March 31, 2021 with growth concentrated in noninterest demand deposits. The following table summarizes the Company's total deposits at the dates indicated:

June 30, 2021 March 31, 2021 Change
Balance % of Total Balance % of Total Amount %
(Dollars in thousands)
Noninterest demand deposits $ 2,256,341 37.2 % $ 2,205,562 36.6 % $ 50,779 2.3 %
Interest bearing demand deposits 1,807,033 29.8 1,796,949 29.9 10,084 0.6
Money market accounts 1,030,164 17.0 1,046,202 17.4 (16,038) (1.5)
Savings accounts 593,269 9.8 584,582 9.7 8,687 1.5
Total non-maturity deposits 5,686,807 93.8 5,633,295 93.6 53,512 0.9
Certificates of deposit 374,899 6.2 386,403 6.4 (11,504) (3.0)
Total deposits $ 6,061,706 100.0 % $ 6,019,698 100.0 % $ 42,008 0.7 %

The Company and Heritage Bank continue to maintain capital levels in excess of the applicable regulatory requirements for them both to be categorized as “well-capitalized”. The following table summarizes capital ratios for the Company at the dates indicated:

June 30,<br>2021 March 31,<br>2021 Change
Capital Ratios:
Stockholders' equity to total assets 12.0 % 11.8 % 0.2 %
Tangible common equity to tangible assets (1) 8.8 8.5 0.3
Common equity Tier 1 capital to risk-weighted assets (2) 13.6 12.8 0.8
Tier 1 leverage capital to average quarterly assets (2) 9.1 9.1 —
Tier 1 capital to risk-weighted assets (2) 14.0 13.2 0.8
Total capital to risk-weighted assets (2) 15.1 14.5 0.6

(1) See Non-GAAP Financial Measures section herein.

(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 decreased $12.7 million to $51.6 million at June 30, 2021 due primarily to a reversal of provision for credit losses on loans of $12.8 million during the quarter following continued improvements in the economic forecast as compared to the forecast for the linked-quarter ended March 31, 2021. The reversal of provision for credit losses on unfunded commitments of $1.2 million was also due primarily to the improvements in the economic forecast.

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

As of Period End or for the Three Months Ended As of Period End or for the Three Months Ended As of Period End or for the Three Months Ended
June 30, 2021 March 31, 2021 June 30, 2020
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 $ 64,225 $ 3,617 $ 67,842 $ 70,185 $ 4,681 $ 74,866 $ 47,540 $ 1,990 $ 49,530
(Reversal of) provision for credit losses (12,821) (1,166) (13,987) (6,135) (1,064) (7,199) 25,941 2,622 28,563
Net recoveries (charge-offs) 158 — 158 175 — 175 (1,980) — (1,980)
Balance, end of period $ 51,562 $ 2,451 $ 54,013 $ 64,225 $ 3,617 $ 67,842 $ 71,501 $ 4,612 $ 76,113

Credit Quality

Nonperforming assets decreased to 0.50% of total assets at June 30, 2021 compared to 0.75% of total assets at March 31, 2021 due primarily to a decrease in nonaccrual loans of $17.5 million during the quarter ended June 30, 2021. Nonperforming assets

at both June 30, 2021 and March 31, 2021 consisted only of nonaccrual loans. Changes in nonaccrual loans during the periods indicated were as follows:

Three Months Ended
June 30,<br>2021 March 31,<br>2021 June 30,<br>2020
(In thousands)
Balance, beginning of period $ 52,868 $ 58,092 $ 34,163
Additions to nonaccrual loan classification 401 468 993
Net principal payments and transfers to accruing status (2,093) (3,119) (891)
Payoffs (15,835) (2,571) (608)
Charge-offs — (2) (29)
Balance, end of period $ 35,341 $ 52,868 $ 33,628

The decrease in nonaccrual loans was due primarily to payoffs, including a payoff of an agricultural business relationship of $10.7 million which was initially classified as nonaccrual during the three months ended September 30, 2019. The Company also recovered $1.5 million of interest and fees on loans related to this payoff.

Net Interest Income and Net Interest Margin

Net interest income increased $2.0 million, or 3.9%, for the quarter ended June 30, 2021 compared to the linked-quarter ended March 31, 2021 due primarily to an increase in the loan yield. Loan yield benefited from the impact of SBA PPP loan forgiveness, which prompted the recognition of the remaining net deferred fees outstanding for the underlying forgiven SBA PPP loans, and recoveries of $2.0 million of interest and fees on loans classified as nonaccrual, including $1.5 million related to the full payoff of the agricultural business relationship discussed above.

Net interest income increased $4.0 million, or 7.9%, compared to the quarter ended June 30, 2020 due primarily to the increases in loan yield discussed above and secondarily due to the Bank decreasing deposit rates following decreases in short-term market interest rates.

Net interest margin decreased to 3.44% for the quarter ended June 30, 2021 as compared to 3.51% for the linked-quarter ended March 31, 2021 due primarily to a change in the mix of total interest earning assets, including an increase in the balance of average interest earning deposits yielding 11 basis points, and the impact to yields in a persistent, low-rate environment, offset partially by the benefit to loan yield from SBA PPP loan forgiveness and recoveries of interest and fees on loans classified as nonaccrual discussed above.

Net interest margin decreased from 3.64% for the same period in 2020 due primarily to the change in the mix of total interest earning assets, including a significant increase in average interest earning deposits to 15.2% of total earning assets at June 30, 2021 compared to 3.3% at June 30, 2020, and decreases in yields on interest earning assets over the past year following decreases in short-term market rates during the quarter ended March 31, 2020. The decrease in net interest margin was offset partially by a decrease in the cost of total interest bearing deposits reflecting the decreases in short-term market rates.

The following table presents the loan yield and the impacts of SBA PPP loans and the incremental accretion on purchased loans on this financial measure for the periods presented below:

Three Months Ended
June 30,<br>2021 March 31,<br>2021 June 30,<br>2020
Non-GAAP Measure:(1)
Loan yield (GAAP) 4.62 % 4.47 % 4.38 %
Exclude impact from SBA PPP loans (0.12) 0.01 0.24
Exclude impact from incremental accretion on purchased loans(2) (0.05) (0.12) (0.06)
Loan yield, excluding SBA PPP loans and incremental accretion on purchased loans (non-GAAP) 4.45 % 4.36 % 4.56 %

(1) See Non-GAAP Financial Measures section.

(2) Represents the amount of interest income recorded on purchased loans in excess of the contractual stated interest rate in the individual loan notes due to incremental accretion of purchased discount or premium. Purchased discount or premium is the difference between the contractual loan balance and the fair value of acquired loans at the acquisition date, or as modified by the adoption of Accounting Standards Update ("ASU") 2016-13. The purchased discount is accreted into income over the remaining life of the loan. The impact of incremental accretion on loan yield will change during any period based on the volume of prepayments, but it is expected to decrease over time as the balance of the purchased loans decreases.

The impact to loan yield from recoveries of interest and fees on loans classified as nonaccrual was 18 and five basis points during the three months ended June 30, 2021 and March 31, 2021, respectively.

Noninterest Income

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

Three Months Ended Linked-quarter Change Prior Year Quarter Change
June 30,<br>2021 March 31,<br>2021 June 30,<br>2020 Change % Change Change % Change
(Dollar amounts in thousands)
Service charges and other fees $ 4,422 $ 4,000 $ 3,600 $ 422 10.6 % $ 822 22.8 %
Gain on sale of investment securities, net — 29 409 (29) (100.0) (409) (100.0)
Gain on sale of loans, net 1,003 1,370 1,135 (367) (26.8) (132) (11.6)
Interest rate swap fees 209 152 769 57 37.5 (560) (72.8)
Bank owned life insurance income 717 656 645 61 9.3 72 11.2
Other income 1,946 2,044 1,690 (98) (4.8) 256 15.1
Total noninterest income $ 8,297 $ 8,251 $ 8,248 $ 46 0.6 % $ 49 0.6 %

Noninterest income increased from the linked-quarter ended March 31, 2021 due primarily to an increase in service charges and other fees due mostly to higher interchange income and increased deposit fee income, offset partially by a decrease in gain on sale of loans due primarily to lower sales volume.

Noninterest income increased from the same period in 2020 due primarily to an increase in service charges and other fees also due mostly to higher interchange income and increased deposit fee income, offset partially by fewer executions of interest rate swap contracts and a reduced gain on sale of investment securities due to fewer sales.

Noninterest Expense

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

Three Months Ended Linked-quarter Change Prior Year Quarter Change
June 30,<br>2021 March 31,<br>2021 June 30,<br>2020 Change % Change Change % Change
(Dollar amounts in thousands)
Compensation and employee benefits $ 22,088 $ 22,461 $ 21,927 $ (373) (1.7) % $ 161 0.7 %
Occupancy and equipment 4,091 4,454 4,335 (363) (8.1) (244) (5.6)
Data processing 3,998 3,812 3,517 186 4.9 481 13.7
Marketing 892 669 696 223 33.3 196 28.2
Professional services 1,102 1,331 2,169 (229) (17.2) (1,067) (49.2)
State/municipal business and use tax 991 972 905 19 2.0 86 9.5
Federal deposit insurance premium 339 589 238 (250) (42.4) 101 42.4
Other real estate owned, net — — (170) — — 170 100.0
Amortization of intangible assets 797 797 903 — — (106) (11.7)
Other expense 2,098 2,157 2,553 (59) (2.7) (455) (17.8)
Total noninterest expense $ 36,396 $ 37,242 $ 37,073 $ (846) (2.3) % $ (677) (1.8) %

Noninterest expense decreased from the linked-quarter ended March 31, 2021 due to a decrease in occupancy and equipment expense primarily as a result of branch closings during the quarter ended March 31, 2021; lower federal deposit insurance premium expense as a result of a decrease in the quarterly assessment rate; and a decrease in professional services expense which was elevated during the linked-quarter ended March 31, 2021 due to our participation in SBA PPP2.

Noninterest expense decreased compared to the quarter ended June 30, 2020 due primarily to a decrease in professional services expense due to costs incurred during the quarter ended June 30, 2020 related to the launch of the new mobile and

online commercial banking platform, "Heritage Direct". The decrease in noninterest expense was offset partially by an increase in data processing as the Bank continues to invest in technology.

Income Tax Expense

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

Three Months Ended Linked-quarter Change Prior Year Quarter Change
June 30,<br>2021 March 31,<br>2021 June 30,<br>2020 Change % Change Change % Change
(Dollar amounts in thousands)
Income (loss) before income taxes $ 40,153 $ 30,446 $ (7,075) $ 9,707 31.9 % $ 47,228 667.5 %
Income tax expense (benefit) $ 7,451 $ 5,102 $ (936) $ 2,349 46.0 % $ 8,387 896.0 %
Effective income tax rate 18.6 % 16.8 % (13.2) % 1.8 % 10.7 % 31.8 % 240.9 %

Income tax expense and the effective income tax rate both increased for the quarter ended June 30, 2021 compared to the linked-quarter ended March 31, 2021 due primarily to an increase in estimated annual pre-tax income for the year ended December 31, 2021, which decreased the impact of favorable permanent tax items such as tax-exempt investments, investments in bank owned life insurance, and low-income housing tax credits.

Income tax expense (benefit) and the effective income tax rate both increased from the quarter ended June 30, 2020 due primarily to income before income taxes recognized during the quarter ended June 30, 2021 compared to a loss before income taxes recognized for the quarter ended June 30, 2020.

Dividend

On July 21, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.20 per share. The dividend is payable on August 18, 2021 to shareholders of record as of the close of business on August 4, 2021.

Earnings Conference Call

The Company will hold a telephone conference call to discuss this earnings release on July 22, 2021 at 11:00 a.m. Pacific time. To access the call, please dial (844) 291-6362 -- access code 1137604 a few minutes prior to 11:00 a.m. Pacific time. The call will be available for replay through August 5, 2021 by dialing (866) 207-1041 -- access code 4937664.

About Heritage Financial

Heritage Financial Corporation is an Olympia-based bank holding company with Heritage Bank, a full-service commercial bank, as its sole wholly-owned banking subsidiary. Heritage Bank has a branching network of 53 banking offices in Washington and Oregon. Heritage Bank does business under the Whidbey Island Bank name on Whidbey Island. Heritage’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

Jeffrey J. Deuel, President and Chief Executive Officer, (360) 943-1500

Donald J. Hinson, Executive Vice President and Chief Financial Officer, (360) 943-1500

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements often include words such as "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements. The COVID-19 pandemic is adversely affecting us, our customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects is uncertain. Continued deterioration in general business and economic conditions, including increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of

our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and further increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways. Other factors that could cause or contribute to such differences include, but are not limited to: changes in the interest rate environment; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and other factors described in Heritage's 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-which are available on our website at www.heritagebanknw.com and on the SEC's website at www.sec.gov. The Company cautions 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 the Company 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. The Company does not undertake and specifically disclaims 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. These risks could cause our actual results for 2021 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect the Company’s operating and stock price performance.

HERITAGE FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(Dollar amounts in thousands, except shares)

June 30,<br>2021 March 31,<br>2021 December 31,<br>2020
Assets
Cash on hand and in banks $ 94,179 $ 93,306 $ 91,918
Interest earning deposits 1,170,754 841,010 651,404
Cash and cash equivalents 1,264,933 934,316 743,322
Investment securities available for sale, at fair value, net (amortized cost of $1,029,001, $876,357 and $770,195, respectively) 1,049,524 893,558 802,163
Loans held for sale 2,739 6,801 4,932
Loans receivable 4,207,530 4,595,869 4,468,647
Allowance for credit losses on loans (51,562) (64,225) (70,185)
Loans receivable, net 4,155,968 4,531,644 4,398,462
Other real estate owned — — —
Premises and equipment, net 82,835 84,533 85,452
Federal Home Loan Bank ("FHLB") stock, at cost 7,933 7,933 6,661
Bank owned life insurance 108,988 108,341 107,580
Accrued interest receivable 17,113 19,447 19,418
Prepaid expenses and other assets 163,206 188,589 193,301
Other intangible assets, net 11,494 12,291 13,088
Goodwill 240,939 240,939 240,939
Total assets $ 7,105,672 $ 7,028,392 $ 6,615,318
Liabilities and Stockholders' Equity
Deposits $ 6,061,706 $ 6,019,698 $ 5,597,990
Junior subordinated debentures 21,034 20,960 20,887
Securities sold under agreement to repurchase 46,429 36,503 35,683
Accrued expenses and other liabilities 120,519 124,080 140,319
Total liabilities 6,249,688 6,201,241 5,794,879
Common stock 572,060 571,204 571,021
Retained earnings 267,863 242,486 224,400
Accumulated other comprehensive income, net 16,061 13,461 25,018
Total stockholders' equity 855,984 827,151 820,439
Total liabilities and stockholders' equity $ 7,105,672 $ 7,028,392 $ 6,615,318
Shares outstanding 36,006,560 35,981,317 35,912,243

HERITAGE FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollar amounts in thousands, except per share amounts)

Three Months Ended Six Months Ended
June 30,<br>2021 March 31,<br>2021 June 30,<br>2020 June 30,<br>2021 June 30,<br>2020
Interest income
Interest and fees on loans $ 50,750 $ 49,524 $ 48,404 $ 100,274 $ 94,681
Taxable interest on investment securities 4,050 3,534 4,570 7,584 10,203
Nontaxable interest on investment securities 947 958 977 1,905 1,733
Interest on interest earning deposits 263 175 43 438 463
Total interest income 56,010 54,191 53,994 110,201 107,080
Interest expense
Deposits 1,524 1,728 3,417 3,252 7,633
Junior subordinated debentures 186 187 218 373 503
Other borrowings 35 38 46 73 80
Total interest expense 1,745 1,953 3,681 3,698 8,216
Net interest income 54,265 52,238 50,313 106,503 98,864
(Reversal of) provision for credit losses (13,987) (7,199) 28,563 (21,186) 36,509
Net interest income after (reversal of) provision for credit losses 68,252 59,437 21,750 127,689 62,355
Noninterest income
Service charges and other fees 4,422 4,000 3,600 8,422 7,976
Gain on sale of investment securities, net — 29 409 29 1,423
Gain on sale of loans, net 1,003 1,370 1,135 2,373 1,682
Interest rate swap fees 209 152 769 361 1,065
Bank owned life insurance income 717 656 645 1,373 1,530
Other income 1,946 2,044 1,690 3,990 4,058
Total noninterest income 8,297 8,251 8,248 16,548 17,734
Noninterest expense
Compensation and employee benefits 22,088 22,461 21,927 44,549 44,433
Occupancy and equipment 4,091 4,454 4,335 8,545 8,899
Data processing 3,998 3,812 3,517 7,810 7,044
Marketing 892 669 696 1,561 1,562
Professional services 1,102 1,331 2,169 2,433 3,546
State/municipal business and use taxes 991 972 905 1,963 1,662
Federal deposit insurance premium 339 589 238 928 238
Other real estate owned, net — — (170) — (145)
Amortization of intangible assets 797 797 903 1,594 1,806
Other expense 2,098 2,157 2,553 4,255 5,288
Total noninterest expense 36,396 37,242 37,073 73,638 74,333
Income (loss) before income taxes 40,153 30,446 (7,075) 70,599 5,756
Income tax expense (benefit) 7,451 5,102 (936) 12,553 (296)
Net income (loss) $ 32,702 $ 25,344 $ (6,139) $ 58,046 $ 6,052
Basic earnings (losses) per share $ 0.91 $ 0.70 $ (0.17) $ 1.61 $ 0.17
Diluted earnings (losses) per share $ 0.90 $ 0.70 $ (0.17) $ 1.60 $ 0.17
Dividends declared per share $ 0.20 $ 0.20 $ 0.20 $ 0.40 $ 0.40

HERITAGE FINANCIAL CORPORATION

FINANCIAL STATISTICS (Unaudited)

(Dollar amounts in thousands, except per share amounts)

Nonperforming Assets and Credit Quality Metrics:

Three Months Ended Six Months Ended
June 30,<br>2021 March 31,<br>2021 June 30,<br>2020 June 30,<br>2021 June 30,<br>2020
Allowance for Credit Losses on Loans:
Balance, beginning of period $ 64,225 $ 70,185 $ 47,540 $ 70,185 $ 36,171
Impact of CECL adoption — — — — 1,822
Adjusted balance, beginning of period 64,225 70,185 47,540 70,185 37,993
(Reversal of) provision for credit losses on loans (12,821) (6,135) 25,941 (18,956) 35,905
Charge-offs:
Commercial business (13) (1) (1,824) (14) (3,046)
Real estate construction and land development — (1) — (1) —
Consumer (120) (185) (431) (305) (806)
Total charge-offs (133) (187) (2,255) (320) (3,852)
Recoveries:
Commercial business 143 207 71 350 1,140
Residential real estate — — — — 3
Real estate construction and land development 4 16 7 20 21
Consumer 144 139 197 283 291
Total recoveries 291 362 275 653 1,455
Net recoveries (charge-offs) 158 175 (1,980) 333 (2,397)
Balance, end of period $ 51,562 $ 64,225 $ 71,501 $ 51,562 $ 71,501
Net recoveries (charge-offs) on loans to average loans, annualized 0.01 % 0.02 % (0.18) % 0.02 % (0.12) %
June 30,<br>2021 March 31,<br>2021 December 31,<br>2020
--- --- --- --- --- --- --- --- --- ---
Nonperforming Assets:
Nonaccrual loans:
Commercial business $ 34,209 $ 51,755 $ 56,786
Residential real estate 60 66 184
Real estate construction and land development 1,014 1,021 1,022
Consumer 58 26 100
Total nonaccrual loans 35,341 52,868 58,092
Other real estate owned — — —
Nonperforming assets $ 35,341 $ 52,868 $ 58,092
Restructured performing loans $ 55,391 $ 55,691 $ 52,872
Accruing loans past due 90 days or more 286 — —
Potential problem loans (1) 148,823 163,813 182,342
ACL on loans to:
Loans receivable 1.23 % 1.40 % 1.57 %
Loans receivable, excluding SBA PPP loans (2) 1.41 % 1.73 % 1.87 %
Nonaccrual loans 145.90 % 121.48 % 120.82 %
Nonperforming loans to loans receivable 0.84 % 1.15 % 1.30 %
Nonperforming assets to total assets 0.50 % 0.75 % 0.88 %

(1)Potential problem loans are loans classified as Special Mention or worse that are not classified as a troubled debt restructuring or nonaccrual loan and are not individually evaluated for credit loss, but which management is closely monitoring because the financial information of the borrower causes concern as to their ability to meet their loan repayment terms.

(2) See Non-GAAP Financial Measures section herein.

Average Balances, Yields, and Rates Paid:

Three Months Ended
June 30, 2021 March 31, 2021 June 30, 2020
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)
Interest Earning Assets:
Loans receivable, net (2) (3) $ 4,402,868 $ 50,750 4.62 % $ 4,490,499 $ 49,524 4.47 % $ 4,442,108 $ 48,404 4.38 %
Taxable securities 799,023 4,050 2.03 674,268 3,534 2.13 764,691 4,570 2.40
Nontaxable securities (3) 160,489 947 2.37 163,914 958 2.37 160,296 977 2.45
Interest earning deposits 964,791 263 0.11 713,885 175 0.10 185,399 43 0.09
Total interest earning assets 6,327,171 56,010 3.55 % 6,042,566 54,191 3.64 % 5,552,494 53,994 3.91 %
Noninterest earning assets 752,034 757,059 757,530
Total assets $ 7,079,205 $ 6,799,625 6,310,024
Interest Bearing Liabilities:
Certificates of deposit $ 381,417 $ 481 0.51 % $ 393,268 $ 559 0.58 % $ 513,539 $ 1,810 1.42 %
Savings accounts 591,616 89 0.06 560,094 95 0.07 476,312 115 0.10
Interest bearing demand and money market accounts 2,836,717 954 0.13 2,732,134 1,074 0.16 2,440,691 1,492 0.25
Total interest bearing deposits 3,809,750 1,524 0.16 3,685,496 1,728 0.19 3,430,542 3,417 0.40
Junior subordinated debentures 20,986 186 3.55 20,913 187 3.63 20,693 218 4.24
Securities sold under agreement to repurchase 43,259 35 0.32 40,074 38 0.38 23,702 39 0.66
FHLB advances and other borrowings — — — — — — 4,909 7 0.57
Total interest bearing liabilities 3,873,995 1,745 0.18 % 3,746,483 1,953 0.21 % 3,479,846 3,681 0.43 %
Noninterest demand deposits 2,246,929 2,091,359 1,883,227
Other noninterest bearing liabilities 122,520 134,762 139,412
Stockholders’ equity 835,761 827,021 807,539
Total liabilities and stockholders’ equity $ 7,079,205 $ 6,799,625 $ 6,310,024
Net interest income $ 54,265 $ 52,238 $ 50,313
Net interest spread 3.37 % 3.43 % 3.48 %
Net interest margin 3.44 % 3.51 % 3.64 %
Average interest earning assets to average interest bearing liabilities 163.32 % 161.29 % 159.56 %

(1)Annualized.

(2)The average loan balances presented in the table are net of the ACL on loans and include loans held for sale. Nonaccrual loans have been included in the table as loans carrying a zero yield.

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

Six Months Ended
June 30, 2021 June 30, 2020
Average<br>Balance Interest<br>Earned/<br>Paid Average<br><br>Yield/<br><br>Rate (1) Average<br>Balance Interest<br>Earned/<br>Paid Average<br><br>Yield/<br><br>Rate (1)
Interest Earning Assets:
Loans receivable, net (2) (3) $ 4,446,442 $ 100,274 4.55 % $ 4,095,340 $ 94,681 4.65 %
Taxable securities 736,990 7,584 2.08 790,189 10,203 2.60
Nontaxable securities (3) 162,192 1,905 2.37 141,224 1,733 2.47
Interest earning deposits 840,030 438 0.11 155,379 463 0.60
Total interest earning assets 6,185,654 110,201 3.59 % 5,182,132 107,080 4.16 %
Noninterest earning assets 754,533 752,986
Total assets $ 6,940,187 $ 5,935,118
Interest Bearing Liabilities:
Certificates of deposit $ 387,310 $ 1,040 0.54 % $ 520,774 $ 3,822 1.48 %
Savings accounts 575,942 184 0.06 455,386 303 0.13
Interest bearing demand and money market accounts 2,784,714 2,028 0.15 2,321,305 3,508 0.30
Total interest bearing deposits 3,747,966 3,252 0.17 3,297,465 7,633 0.47
Junior subordinated debentures 20,950 373 3.59 20,657 503 4.90
Securities sold under agreement to repurchase 41,676 73 0.35 21,474 72 0.67
FHLB advances and other borrowings — — — 2,949 8 0.55
Total interest bearing liabilities 3,810,592 3,698 0.20 % 3,342,545 8,216 0.49 %
Noninterest demand deposits 2,169,574 1,651,737
Other noninterest bearing liabilities 128,606 134,031
Stockholders’ equity 831,415 806,805
Total liabilities and stockholders’ equity $ 6,940,187 $ 5,935,118
Net interest income $ 106,503 $ 98,864
Net interest spread 3.39 % 3.67 %
Net interest margin 3.47 % 3.84 %
Average interest earning assets to average interest bearing liabilities 162.33 % 155.04 %

(1)Annualized.

(2)The average loan balances presented in the table are net of the ACL on loans and include loans held for sale. Nonaccrual loans have been included in the table as loans carrying a zero yield.

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

HERITAGE FINANCIAL CORPORATION

QUARTERLY FINANCIAL STATISTICS (Unaudited)

(Dollar amounts in thousands, except per share amounts)

Three Months Ended
June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 June 30,<br>2020
Earnings:
Net interest income $ 54,265 $ 52,238 $ 52,455 $ 49,678 $ 50,313
(Reversal of) provision for credit losses (13,987) (7,199) (3,133) 2,730 28,563
Noninterest income 8,297 8,251 11,285 8,210 8,248
Noninterest expense 36,396 37,242 38,562 36,045 37,073
Net income (loss) 32,702 25,344 23,882 16,363 (6,139)
Pre-tax, pre-provision net income (3) 26,166 23,247 25,178 21,843 21,488
Basic earnings (losses) per share $ 0.91 $ 0.70 $ 0.66 $ 0.46 $ (0.17)
Diluted earnings (losses) per share $ 0.90 $ 0.70 $ 0.66 $ 0.46 $ (0.17)
Average Balances:
Loans receivable, net (1) $ 4,402,868 $ 4,490,499 $ 4,540,962 $ 4,605,389 $ 4,442,108
Investment securities 959,512 838,182 813,312 860,198 924,987
Total interest earning assets 6,327,171 6,042,566 5,913,765 5,855,240 5,552,494
Total assets 7,079,205 6,799,625 6,675,477 6,620,980 6,310,024
Total interest bearing deposits 3,809,750 3,685,496 3,634,018 3,620,503 3,430,542
Total noninterest demand deposits 2,246,929 2,091,359 2,034,425 1,998,772 1,883,227
Stockholders' equity 835,761 827,021 808,999 799,738 807,539
Financial Ratios:
Return on average assets (2) 1.85 % 1.51 % 1.42 % 1.00 % (0.39) %
Pre-tax, pre-provision return on average assets (2)(3) 1.48 1.39 1.50 1.31 1.37
Return on average common equity (2) 15.69 12.43 11.74 8.28 (3.06)
Return on average tangible common equity (2) (3) 22.94 18.37 17.62 12.66 (3.96)
Efficiency ratio 58.18 61.57 60.50 62.27 63.31
Noninterest expense to average total assets (2) 2.06 2.22 2.30 2.17 2.36
Net interest margin (2) 3.44 3.51 3.53 3.38 3.64
Net interest spread (2) 3.37 3.43 3.44 3.26 3.48

(1) The average loan balances are net of the ACL on loans and include loans held for sale.

(2) Annualized.

(3) See Non-GAAP Financial Measures section herein.

As of Period End or for the Three Months Ended
June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 June 30,<br>2020
Select Balance Sheet:
Total assets $ 7,105,672 $ 7,028,392 $ 6,615,318 $ 6,685,889 $ 6,562,359
Loans receivable, net 4,155,968 4,531,644 4,398,462 4,593,390 4,594,832
Investment securities 1,049,524 893,558 802,163 834,492 879,927
Deposits 6,061,706 6,019,698 5,597,990 5,689,048 5,567,733
Noninterest demand deposits 2,256,341 2,205,562 1,980,531 1,989,247 1,999,754
Stockholders' equity 855,984 827,151 820,439 803,129 793,652
Financial Measures:
Book value per share $ 23.77 $ 22.99 $ 22.85 $ 22.36 $ 22.10
Tangible book value per share (1) 16.76 15.95 15.77 15.27 14.98
Stockholders' equity to total assets 12.0 % 11.8 % 12.4 % 12.0 % 12.1 %
Tangible common equity to tangible assets (1) 8.8 8.5 8.9 8.5 8.5
Loans to deposits ratio 69.4 76.3 79.8 82.0 83.8
Regulatory Capital Ratios:
Common equity Tier 1 capital to risk-weighted assets(2) 13.6 % 12.8 % 12.3 % 11.7 % 11.4 %
Tier 1 leverage capital to average assets(2) 9.1 % 9.1 % 9.0 % 8.8 % 9.1 %
Tier 1 capital to risk-weighted assets(2) 14.0 % 13.2 % 12.8 % 12.2 % 11.8 %
Total capital to risk-weighted assets(2) 15.1 % 14.5 % 14.0 % 13.4 % 13.1 %
Credit Quality Metrics:
ACL on loans to:
Loans receivable 1.23 % 1.40 % 1.57 % 1.57 % 1.53 %
Loans receivable, excluding SBA PPP loans (1) 1.41 1.73 1.87 1.93 1.88
Nonperforming loans 145.90 121.48 120.82 139.42 212.62
Nonperforming loans to loans receivable 0.84 1.15 1.30 1.13 0.72
Nonperforming assets to total assets 0.50 0.75 0.88 0.79 0.51
Net recoveries (charge-offs) on loans to average loans receivable 0.01 0.02 (0.03) (0.04) (0.18)
Criticized Loans by Credit Quality Rating:
Special Mention $ 100,317 $ 108,975 $ 132,036 $ 104,781 $ 60,498
Substandard 135,374 160,461 158,515 123,570 90,552
Other Metrics:
Number of banking offices 53 53 61 62 62
Average number of full-time equivalent employees 822 840 848 857 877
Deposits per branch $ 114,372 $ 113,579 $ 91,770 $ 91,759 $ 89,802
Average assets per full-time equivalent employee 8,607 8,098 7,873 7,727 7,195

(1) See Non-GAAP Financial Measures section herein.

(2) Current quarter ratios are estimates pending completion and filing of the Company’s regulatory reports.

HERITAGE FINANCIAL CORPORATION

NON-GAAP FINANCIAL MEAUSRES (Unaudited)

(Dollar amounts in thousands, except per share amounts)

This earnings release contains certain financial measures not presented in accordance with Generally Accepted Accounting Principles ("GAAP") in addition to financial measures presented in accordance with GAAP. The Company has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in the Company’s capital, performance and asset quality reflected in the current quarter and comparable period results and to facilitate comparison of its performance with the performance of its peers. These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for financial measures presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of the GAAP and non-GAAP financial measures are presented below.

The Company considers the tangible common equity to tangible assets ratio and tangible book value per share to be useful measurements of the adequacy of the Company’s capital levels.

June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 June 30,<br>2020
Tangible common equity to tangible assets and tangible book value per share:
Total stockholders' equity (GAAP) $ 855,984 $ 827,151 $ 820,439 $ 803,129 $ 793,652
Exclude intangible assets (252,433) (253,230) (254,027) (254,886) (255,746)
Tangible common equity (non-GAAP) $ 603,551 $ 573,921 $ 566,412 $ 548,243 $ 537,906
Total assets (GAAP) $ 7,105,672 $ 7,028,392 $ 6,615,318 $ 6,685,889 $ 6,562,359
Exclude intangible assets (252,433) (253,230) (254,027) (254,886) (255,746)
Tangible assets (non-GAAP) $ 6,853,239 $ 6,775,162 $ 6,361,291 $ 6,431,003 $ 6,306,613
Stockholders' equity to total assets (GAAP) 12.0 % 11.8 % 12.4 % 12.0 % 12.1 %
Tangible common equity to tangible assets (non-GAAP) 8.8 % 8.5 % 8.9 % 8.5 % 8.5 %
Shares outstanding 36,006,560 35,981,317 35,912,243 35,910,300 35,908,908
Book value per share (GAAP) $ 23.77 $ 22.99 $ 22.85 $ 22.36 $ 22.10
Tangible book value per share (non-GAAP) $ 16.76 $ 15.95 $ 15.77 $ 15.27 $ 14.98

The Company considers presenting the ratio of ACL on loans to loans receivable, excluding SBA PPP loans, to be a useful measurement in evaluating the adequacy of the Company's ACL on loans as the balance of SBA PPP loans is significant to the loan portfolio, however, since SBA PPP loans are guaranteed by the SBA, the Company has not provided an ACL on loans for these loans.

June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 June 30,<br>2020
ACL on loans to loans receivable, excluding SBA PPP loans:
Allowance for credit losses on loans $ 51,562 $ 64,225 $ 70,185 $ 73,340 $ 71,501
Loans receivable (GAAP) $ 4,207,530 $ 4,595,869 $ 4,468,647 $ 4,666,730 $ 4,666,333
Exclude SBA PPP loans (544,250) (886,761) (715,121) (867,782) (856,490)
Loans receivable, excluding SBA PPP loans (non-GAAP) $ 3,663,280 $ 3,709,108 $ 3,753,526 $ 3,798,948 $ 3,809,843
ACL on loans to loans receivable (GAAP) 1.23 % 1.40 % 1.57 % 1.57 % 1.53 %
ACL on loans to loans receivable, excluding SBA PPP loans (non-GAAP) 1.41 % 1.73 % 1.87 % 1.93 % 1.88 %

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.

Three Months Ended
June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 June 30,<br>2020
Return on average tangible common equity, annualized:
Net income (GAAP) $ 32,702 $ 25,344 $ 23,882 $ 16,636 $ (6,139)
Add amortization of intangible assets 797 797 859 860 903
Exclude tax effect of adjustment (167) (167) (180) (181) (190)
Tangible net income (non-GAAP) $ 33,332 $ 25,974 $ 24,561 $ 17,315 $ (5,426)
Average stockholders' equity (GAAP) $ 835,761 $ 827,021 $ 808,999 $ 799,738 $ 807,539
Exclude average intangible assets (252,956) (253,747) (254,587) (255,453) (256,338)
Average tangible common stockholders' equity (non-GAAP) $ 582,805 $ 573,274 $ 554,412 $ 544,285 $ 551,201
Return on average common equity, annualized (GAAP) 15.69 % 12.43 % 11.74 % 8.28 % (3.06) %
Return on average tangible common equity, annualized (non-GAAP) 22.94 % 18.37 % 17.62 % 12.66 % (3.96) %

The Company believes that presenting pre-tax pre-provision income, which reflects its profitability before income taxes and provision for credit losses, and the pre-tax, pre-provision return on average assets, are useful measurements in assessing its operating income and expenses by removing the volatility that may be associated with credit loss provisions. The Company also believes that during a crisis such as the COVID-19 pandemic, this information is useful as the impact of the pandemic on credit loss provisions of various institutions has varied based on the geography of the communities served by a particular institution and the decision to adopt or defer CECL methodology required by ASU 2016-13.

Three Months Ended
June 30,<br>2021 March 31,<br>2021 December 31,<br>2020 September 30,<br>2020 June 30,<br>2020
Pre-tax, pre-provision income and pre-tax, pre-provision return on average equity, annualized:
Net income (loss) (GAAP) $ 32,702 $ 25,344 $ 23,882 $ 16,636 $ (6,139)
Add income tax expense 7,451 5,102 4,429 2,477 (936)
Add (reversal of) provision for credit losses (13,987) (7,199) (3,133) 2,730 28,563
Pre-tax, pre-provision income (non-GAAP) $ 26,166 $ 23,247 $ 25,178 $ 21,843 $ 21,488
Average total assets (GAAP) $ 7,079,205 $ 6,799,625 $ 6,675,477 $ 6,620,980 $ 6,310,024
Return on average assets, annualized (GAAP) 1.85 % 1.51 % 1.42 % 1.00 % (0.39) %
Pre-tax, pre-provision return on average assets (non-GAAP) 1.48 % 1.39 % 1.50 % 1.31 % 1.37 %

The Company believes presenting loan yield excluding the effect of discount accretion on purchased loans is useful in assessing the impact of acquisition accounting on loan yield as the effect of loan discount accretion is expected to decrease as the acquired loans mature or roll off its balance sheet. Similarly, presenting loan yield excluding the effect of SBA PPP loans is useful in

assessing the impact of these special program loans that are anticipated to substantially decrease upon forgiveness by the SBA within a short time frame.

Three Months Ended
June 30,<br>2021 March 31,<br>2021 June 30,<br>2020
Loan yield, excluding SBA PPP loans and incremental accretion on purchased loans, annualized:
Interest and fees on loans (GAAP) $ 50,750 $ 49,524 $ 48,404
Exclude SBA PPP loans interest and fees (10,003) (9,136) (4,923)
Exclude incremental accretion on purchased loans (495) (1,075) (696)
Adjusted interest and fees on loans (non-GAAP) $ 40,252 $ 39,313 $ 42,785
Average loans receivable, net (GAAP) $ 4,402,868 $ 4,490,499 $ 4,442,108
Exclude average SBA PPP loans (777,156) (832,148) (667,390)
Adjusted average loans receivable, net (non-GAAP) $ 3,625,712 $ 3,658,351 $ 3,774,718
Loan yield, annualized (GAAP) 4.62 % 4.47 % 4.38 %
Loan yield, excluding SBA PPP loans and incremental accretion on purchased loans, annualized (non-GAAP) 4.45 % 4.36 % 4.56 %

18

investorpresentation0630

INVESTOR PRESENTATION Q2 2021

2 The COVID-19 pandemic is adversely affecting us, our customers, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects is uncertain. Other factors that could cause or contribute to such impact include, but are not limited to: • the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for credit losses ("ACL") on loans and provision for credit losses on loans that may be effected by deterioration in economic conditions, which may lead to increased losses and nonperforming assets in our loan portfolio, and may result in our ACL on loans no longer being adequate to cover actual losses, and require us to increase our ACL on loans; • changes in general economic conditions either nationally or in our market areas; • changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, our net interest margin and funding sources; • risks related to acquiring assets in or entering markets in which we have not previously operated and may not be familiar; • fluctuations in the demand for loans, the number of unsold homes and other properties and fluctuations in real estate values in our market areas; • results of examinations of us by the bank regulators, including the possibility that any such regulatory authority may, among other things, initiate an enforcement action against the Company or our bank subsidiary which could require us to increase our ACL on loans, write-down assets, change our regulatory capital position, affect our ability to borrow funds or maintain or increase deposits, or impose additional requirements on us, any of which could affect our ability to continue our growth through mergers, acquisitions or similar transactions and adversely affect our liquidity and earnings; • our ability to control operating costs and expenses; • increases in premiums for deposit insurance; • 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; • staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges; • disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; • our ability to retain key members of our senior management team; • costs and effects of litigation, including settlements and judgments; • our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames or at all, and any goodwill charges related thereto and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, which might be greater than expected; • increased competitive pressures among financial service companies; • adverse changes in the securities markets; • inability of key third-party providers to perform their obligations to us; • changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the FASB, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; and • other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services, including from the COVID-19 pandemic, and the other risks detailed from time to time in our filings with the SEC including our Annual Form 10-K and Quarterly Form 10-Qs. The Company cautions readers not to place undue reliance on any forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. The Company does not undertake and specifically disclaims 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. These risks could cause our actual results for future periods to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect the Company’s operating results and stock price performance. All dollars throughout the entire presentation are in thousands unless otherwise noted, except per share amounts. FORWARD LOOKING STATEMENTS

COMPANY OVERVIEW

4 OVERVIEW Overview NASDAQ symbol HFWA Stock price $23.90 Market capitalization $859.5 million Institutional ownership 81.0% Headquarters Olympia, WA # of branches 53 Year established 1927 Q2 2021 Financial Highlights Assets $7.11 billion Deposits $6.06 billion Loans receivable $4.21 billion Net income $32.7 million Pre-tax, pre-provision income (non-GAAP) $26.2 million Net interest margin 3.44% Efficiency ratio 58.18% Tier 1 leverage ratio 9.1% Total risk based capital ratio 15.1% – Map obtained from S&P Global Market Intelligence; certain locations of branches overlap on the map. – Market information as of July 9, 2021. – Refer to Appendix for calculation of non-GAAP financial measure. HFWA Branch

5 COMPANY STRATEGY Active and disciplined in M&A Ÿ Be the "acquirer of choice" in the Pacific Northwest Ÿ Most acquisitive bank in Oregon and Washington since 2012 with 5 acquisitions Ÿ Target Metrics = IRR of >15% with earnbacks < 3 years 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 Ÿ Disciplined approach to concentration risk and active portfolio management Improve operational efficiencies and rationalize branch network Ÿ Achieving increased efficiencies with operational scale, internal focus on improving processes and technology solutions, including improvement in the overhead ratio to 2.06% during the quarter ended June 30, 2021 compared to 2.36% for the comparable quarter in 2020 Ÿ Closed/Consolidated 31 branches since beginning of 2010 and announced upcoming consolidation of an additional four branches during Q4 2021 Generate stable profitability and risk adjusted returns Ÿ 1.85% return on average assets for the quarter ended June 30, 2021 Ÿ Five-year growth in tangible book value (non-GAAP) of $4.66, or 38.5%, to $16.76 at June 30, 2021 from $12.10 at June 30, 2016 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 Focus on core deposits is key to franchise value over the long term Ÿ 37.2% noninterest demand deposits to total deposits Ÿ Noninterest demand deposit CAGR of 23% since 2016 Ÿ 0.10% cost of total deposits; top 20% performance among US publicly traded banks Proactive capital management Ÿ History of increasing regular dividends and utilizing special dividends to manage capital Ÿ Approved stock repurchase plan with 1.6 million shares available to repurchase as of June 30, 2021 Ÿ Strong capital ratios: Tier 1 leverage ratio = 9.1%; Total risk based capital ratio = 15.1% – Financial information reflects results as of or for the quarter ended June 30, 2021. – Refer to Appendix for calculation of non-GAAP financial measure. – Comparable cost of total deposits information provided by S&P Global Market Intelligence for the quarter ended March 31, 2021 and includes banks nationwide with shares on NASDAQ or NYSE and total assets less than $100 billion. – Current quarter capital ratios are estimates pending completion and filing of the Company's regulatory reports.

6 TECHNOLOGY INVESTMENT Objective: Invest in technology to enable Community Banking at Scale 2020 Accomplishments Keeping strategic systems current Ÿ Implemented “Heritage Direct,” a state of the art online/mobile treasury management platform Ÿ Upgraded ACH, wires, positive pay, and remote deposit capture platforms Ÿ Enabled en masse remote work, allowing bankers access from anywhere 2021 Focus Automating the back office Ÿ Completion of bank-wide business process management solution which will enable real- time transparency into every major process across the company Ÿ Deploy and further develop proprietary customer relationship management tools, including Commercial Loan Origination and Treasury Management Origination solutions on the Bank's proprietary application framework Ÿ Upgrade online account opening and call center platforms to implement true omni-channel experiences and more options for customer service engagement 2022+ Roadmap Personalized customer experiences Ÿ Systems integrations to enable automation and transparency of “customer journeys” through all key banking activities Ÿ Customize online banking and call center platforms to leverage data to drive personalized and omni-channel experiences Key Outcomes Integrated systems, automation & personalization Ÿ Ability for customer to seamlessly switch channels to bank when/where/how they want Ÿ Next generation front & back office integration delivering efficiency, consistency and scalability Ÿ Application programming interface ("API") based strategy positions Heritage to support Open Banking

7 ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG") PRACTICES We are committed to environmental and sustainability efforts, our human capital, our customers and strengthening the communities and markets in which we operate. Environment and Sustainability Ÿ Have a Green Team Committee focused on sustainability Ÿ Participating in an energy-saving pilot program with our Hillsboro branch in partnership with Energy Trust of Oregon and Strategic-Energy Management Ÿ Continually reducing our carbon footprint through branch consolidations and focus on recycling Ÿ Achieved a Gold Sustainability at Work certification for the Portland office Social Responsibility and Human Capital Ÿ Have a DEI ("Diversity, Equity, and Inclusion") Plan, a DEI Statement, a DEI Council and a DEI Officer who has been certified by the National Diversity Council Ÿ Focusing on the safety, health and wellness of our employees through the COVID-19 pandemic by continually monitoring and adapting operations to guidance from the Centers for Disease Control and state/local health authorities Ÿ Assisted customers during the pandemic by providing fee waivers, loan modifications, and loans through the Small Business Administration's Paycheck Protection Program ("SBA PPP") Ÿ Donated $1.5 million in 2020 through our Heritage Helps community investment and giving program, focused on driving positive impact in the areas of: business and economic development; education and youth development; environmental stewardship; social equity, health, and human services Ÿ Contributed more than $67 million to affordable housing projects in 2020 and $38 million through June 30, 2021 Governance Ÿ Committed to effective corporate governance which serves the interests of the Company, its shareholders, employees, and communities Ÿ Supervised by an engaged Board who actively monitor the policies and business strategies of the Company Ÿ Have effective governance practices including Corporate Governance Guidelines, Committee Charters, Stock Ownership Guidelines, a Code of Ethics Policy and a Whistleblower Policy

8 6.8% 14.0% $97,067 5.6% 13.8% $83,746 2.9% 9.0% $67,761 Seattle MSA Portland MSA USA 2021-2026 proj, population growth 2021-2026 Proj. median household income growth Median household income $97,067 $83,746 $67,761 STRONG AND DIVERSE ECONOMIC LANDSCAPE Market Highlights Major Employers in the Pacific Northwest Market Demographics Seattle MSA Portland MSA 5.1% $424.8B 13.0% Unemployment rate in May 2021 (compared to 5.2% for Washington state and 5.8% for USA) 2019 GDP 2021-2026 proj. growth in household income for Washington state 5.3% $174.9B 12.8% Unemployment rate in May 2021 (compared to 5.8% for Oregon state and 5.8% for USA) 2019 GDP 2021-2026 proj. growth in household income for Oregon state – Economic data obtained from www.bls.gov, www.bea.gov and S&P Market Intelligence.

9 SEATTLE MSA FUNDS UNDER MANAGEMENT Funds Under Management = Loans + Deposits $2,770 $2,941 $3,845 $4,020 $4,960 $5,309 $5,269 $1,294 $1,415 $1,850 $1,909 $1,936 $1,945 $1,938 $374 $467 $303$1,476 $1,526 $1,995 $2,111 $2,650 $2,897 $3,028 Non-SBA PPP loans SBA PPP loans Deposits 2016 2017 2018 2019 2020 Q1 2021 Q2 2021 – Map obtained from S&P Global Market Intelligence. – Prior period information includes branches that were closed or consolidated prior to June 30, 2021. – Loan information is provided gross of deferred fees and/or costs and acquired discount and/or premium. HFWA Branch

10 $43 $112 $856 $907 $1,269 $1,345 $1,223 $379 $409 $432 $442 $430 $161 $181 $97 $477 $498 $676 $722 $696 Non-SBA PPP loans SBA PPP loans Deposits 2016 2017 2018 2019 2020 Q1 2021 Q2 2021 PORTLAND MSA FUNDS UNDER MANAGEMENT Funds Under Management = Loans + Deposits HFWA Branch – Map obtained from S&P Global Market Intelligence. – Prior period information includes branches that were closed or consolidated prior to June 30, 2021. – Loan information is provided gross of deferred fees and/or costs and acquired discount and/or premium.

11 FUTURE GROWTH OPPORTUNITIES – Map obtained from S&P Global Market Intelligence. – Certain locations of bank headquarters overlap on the map. – Target financial information as of the most recent quarter publicly available. • HFWA positioned to be the acquiror of choice in the Pacific Northwest. • Significant number of banks remaining in HFWA footprint; further consolidation is expected. – 8 banks between $150 and $500 million in assets – 9 banks between $500 million and $1.0 billion in assets – 9 banks between $1.0 and $3.0 billion in assets • Financial parameters include 15% IRR and earnback of < 3 years. • Preferred targets have commercial relationship banking focus with efficient branch network along the I-5 corridor. Target bank headquarters

12 Acquired Puget Sound Bancorp $639MM in assets Premier Commercial Bancorp $440MM in assets $1,015 $812 $1,369 $1,346 $1,340 $1,712 $3,651 $3,879 $4,113 $4,238 $5,553 $6,615 $7,028 $7,106 $556 $319 $1,747 $1,079 $12.21 $12.99 $13.10 $13.16 $13.31 $15.02 $15.68 $16.08 $16.88 $20.63 $22.10 $22.85 $22.99 $23.77 $11.00 $12.03 $12.16 $12.23 $11.40 $10.73 $11.41 $11.86 $12.70 $13.54 $15.07 $15.77 $15.95 $16.76 Organic Acquired Assets Book value per share Tangible book value per share (non-GAAP) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 2021 Q2 2021 HISTORICAL GROWTH ORGANIC AND ACQUISITIVE Completed 2 FDIC deals Pierce Commercial Bank $211MM in assets Cowlitz Bank $345MM in assets Merged with Washington Banking Company $1.7B in assets Acquired Valley Community Bancshares $254MM in assets Northwest Commercial Bank $65MM in assets – Refer to Appendix for calculation of non-GAAP financial measure.

13 DEPOSIT MARKET SHARE Washington & Oregon - 2008 Washington & Oregon - 2013 Washington & Oregon - 2020 Rank Institution (State) Deposits in Market (in thousands) Market Share Rank Institution (State) Deposits in Market (in thousands) Market Share Rank Institution (State) Deposits in Market (in thousands) Market Share 1 Bank of America Corporation (NC) $32,880,496 20.36% 1 Bank of America Corporation (NC) $34,290,015 19.44% 1 Bank of America Corporation (NC) $53,875,256 22.05% 2 U.S. Bancorp (MN) 18,200,191 11.27% 2 U.S. Bancorp (MN) 24,912,264 14.12% 2 U.S. Bancorp (MN) 39,363,813 16.11% 3 Washington Mutual Inc. (WA) 18,044,059 11.17% 3 Wells Fargo & Co. (CA) 22,985,222 13.03% 3 Wells Fargo & Co. (CA) 37,357,367 15.29% 4 Wells Fargo & Co. (CA) 13,983,430 8.66% 4 JPMorgan Chase & Co. (NY) 15,638,062 8.87% 4 JPMorgan Chase & Co. (NY) 33,918,863 13.88% 5 KeyCorp (OH) 11,282,327 6.99% 5 KeyCorp (OH) 11,805,664 6.69% 5 KeyCorp (OH) 20,339,619 8.33% 6 Sterling Financial Corp. (WA) 6,314,532 3.91% 6 Washington Federal Inc. (WA) 6,216,841 3.52% 6 Umpqua Holdings Corp. (OR) 16,007,112 6.55% 7 Washington Federal Inc. (WA) 4,697,167 2.91% 7 Columbia Banking System Inc. (WA) 5,840,021 3.31% 7 Columbia Banking System Inc. (WA) 12,461,960 5.10% 8 Umpqua Holdings Corp. (OR) 3,683,451 2.28% 8 Umpqua Holdings Corp. (OR) 5,499,385 3.12% 8 Banner Corp. (WA) 9,267,305 3.79% 9 Banner Corp. (WA) 3,511,650 2.17% 9 Sterling Financial Corp. (WA) 5,203,136 2.95% 9 Washington Federal Inc. (WA) 8,458,020 3.46% 10 Frontier Financial Corp. (WA) 3,303,562 2.05% 10 Mitsubishi UFJ Financial Group Inc. 3,474,540 1.97% 10 W.T.B. Financial Corp. (WA) 6,521,602 2.67% 11 Columbia Banking System Inc. (WA) 2,401,217 1.49% 11 Banner Corp. (WA) 3,255,301 1.85% 11 Heritage Financial Corp. (WA) 5,587,287 2.29% 12 W.T.B. Financial Corp. (WA) 2,355,857 1.46% 12 W.T.B. Financial Corp. (WA) 3,180,411 1.80% 12 HomeStreet Inc. (WA) 3,935,194 1.61% 13 West Coast Bancorp (OR) 2,082,385 1.29% 13 HomeStreet Inc. (WA) 1,612,978 0.91% 13 BNP Paribas 3,236,708 1.32% 14 HomeStreet Inc. (WA) 1,268,125 0.79% 14 SKBHC Holdings LLC (WA) 1,550,759 0.88% 14 Mitsubishi UFJ Financial 2,986,808 1.22% 15 Cascade Bancorp (OR) 1,142,435 0.71% 15 Washington Banking Co. (WA) 1,410,804 0.80% 15 First Interstate BancSystem (MT) 2,920,782 1.20% 16 AmericanWest Bancorp. (WA) 1,100,332 0.68% 16 Yakima Federal S&L Assoc. (WA) 1,402,048 0.79% 16 HSBC Holdings 2,094,816 0.86% 17 Horizon Financial Corp. (WA) 1,097,107 0.68% 17 BNP Paribas SA 1,314,955 0.75% 17 Peoples Bancorp (WA) 2,042,495 0.84% 18 Yakima Federal S&L Assoc. (WA) 1,094,393 0.68% 18 Heritage Financial Corp. (WA) 1,227,045 0.70% 18 FS Bancorp Inc. (WA) 1,618,253 0.66% 19 BNP Paribas SA 1,001,691 0.62% 19 Peoples Bancorp (WA) 1,119,301 0.63% 19 Cashmere Valley Bank (WA) 1,585,447 0.65% 20 Cascade Financial Corp. (WA) 993,356 0.62% 20 Cashmere Valley Bank (WA) 1,094,353 0.62% 20 East West Bancorp Inc. (CA) 1,498,607 0.61% 21 City Bank (WA) 955,179 0.59% 21 Pacific Continental Corp. (OR) 1,074,590 0.61% 21 First Repub Bank (CA) 1,399,364 0.57% 22 Columbia Bancorp (OR) 939,992 0.58% 22 Opus Bank (CA) 968,148 0.55% 22 Yakima FS&LA (WA) 1,376,884 0.56% 23 Venture Financial Group Inc. (WA) 916,882 0.57% 23 East West Bancorp Inc. (CA) 924,708 0.52% 23 Zions Bancorp. NA (UT) 1,342,480 0.55% 24 First Financial Northwest Inc. (WA) 867,502 0.54% 24 Olympic Bancorp Inc. (WA) 807,112 0.46% 24 Timberland Bancorp Inc. (WA) 1,319,048 0.54% 25 Peoples Bancorp (WA) 845,949 0.52% 25 HSBC Holdings PLC 801,732 0.45% 25 Coastal Financial Corp. (WA) 1,312,246 0.54% 26 Cashmere Valley Financial Corp. (WA) 841,611 0.52% 26 Cascade Bancorp (OR) 799,971 0.45% 26 Olympic Bancorp Inc. (WA) 1,214,210 0.50% 27 Heritage Financial Corp. (WA) 802,020 0.50% 27 Zions Bancorp. NA (UT) 774,168 0.44% 27 First Northwest Bancorp (WA) 1,181,630 0.48% 28 Liberty Financial Group Inc. (OR) 778,222 0.48% 28 Skagit Bancorp Inc. (WA) 666,659 0.38% 28 Riverview Bancorp Inc. (WA) 1,167,155 0.48% 29 Washington Banking Co. (WA) 733,643 0.45% 29 Riverview Bancorp Inc. (WA) 660,249 0.37% 29 First Financial Northwest Inc (WA) 1,147,742 0.47% 30 First Indep. Investment Group Inc. (WA) 684,404 0.42% 30 First Financial Northwest Inc. (WA) 642,130 0.36% 30 Pacific Premier Bancorp (CA) 1,008,108 0.41% 31 Pacific Continental Corp. (OR) 676,993 0.42% 31 First Fed. S&L Assoc. of Port Angeles (WA) 598,820 0.34% 31 Pacific Financial Corp. (WA) 995,159 0.41% 32 PremierWest Bancorp (OR) 664,006 0.41% 32 Timberland Bancorp Inc. (WA) 596,187 0.34% 32 Citizens Bancorp (OR) 798,620 0.33% 33 Riverview Bancorp Inc. (WA) 630,220 0.39% 33 Pacific Financial Corp. (WA) 591,430 0.34% 33 Glacier Bancorp Inc. (MT) 732,045 0.30% 34 Olympic Bancorp Inc. (WA) 626,828 0.39% 34 Baker Boyer Bancorp (WA) 467,717 0.27% 34 Sound Financial Bancorp Inc. (WA) 698,527 0.29% 35 Zions Bancorp. NA (UT) 571,565 0.35% 35 Olympia Federal S&L Association (WA) 464,913 0.26% 35 First Citizens BancShares Inc. (NC) 649,359 0.27% 36 Whitman Bancorp. Inc. (WA) 527,546 0.33% 36 Home Federal Bancorp Inc. (ID) 451,386 0.26% 36 Olympia FS&LA (WA) 616,144 0.25% 37 Washington First Financial Group Inc. (WA) 514,572 0.32% 37 First Citizens BancShares Inc. (NC) 415,562 0.24% 37 Seattle Bank (WA) 606,235 0.25% 38 First Fed. S&L Assoc. of Port Angeles (WA) 495,891 0.31% 38 Citizens Bancorp (OR) 404,324 0.23% 38 Cathay General Bancorp (CA) 600,144 0.25% 39 Skagit Bancorp Inc. (WA) 486,490 0.30% 39 Coastal Financial Corp. (WA) 349,343 0.20% 39 Baker Boyer Bancorp (WA) 598,602 0.25% 40 Timberland Bancorp Inc. (WA) 480,261 0.30% 40 Evergreen Federal Bank (OR) 335,918 0.19% 40 Summit Bank (OR) 587,947 0.24% Total For Institutions In Market $161,492,273 Total For Institutions In Market $176,371,225 Total For Institutions In Market $294,671,611 Out of 148 Institutions Out of 120 Institutions Out of 85 Institutions – Data obtained from S&P Global Market Intelligence as of June 30 for the year indicated.

FINANCIAL UPDATE

15 FINANCIAL UPDATE – Q2 2021 • Net income was $32.7 million, or $0.90 per diluted share, for the quarter ended June  30, 2021, compared to $25.3 million, or $0.70 per diluted share, for the linked-quarter ended March 31, 2021 and a net loss of $6.1 million, or $(0.17) per diluted share, for the quarter ended June 30, 2020. • Reversal of provision for credit losses was $14.0 million for the quarter ended June 30, 2021 compared to $7.2 million for the linked-quarter ended March 31, 2021 and a provision for credit loss of $28.6 million for the quarter ended June 30, 2020. • The ratio of nonperforming assets to total assets decreased to 0.50% at June 30, 2021 compared to 0.75% at March 31, 2021 and 0.88% at December 31, 2020. • Noninterest expense to average total assets, annualized, was 2.06% for the quarter ended June 30, 2021 compared to 2.22% for the linked-quarter ended March 31, 2021 and 2.36% for the quarter ended June 30, 2020. • Capital remains strong with a Tier 1 leverage ratio of 9.1% and a total risk-based capital ratio of 15.1% at June 30, 2021. • Declared a regular cash dividend of $0.20 per common share on July 21, 2021. • Noninterest demand deposits represented 37.2% of total deposits at June 30, 2021 compared to 36.6% at March 31, 2021 and 35.4% at December 31, 2020. • Heritage announces plan to close and consolidate four branches on October 29, 2021, bringing the total branch count to 49, a reduction of 21% from 62 branches at September 30, 2020. – Current quarter capital ratios are estimates pending completion and filing of the Company's regulatory reports.

16 $3,656 $3,773 $4,474 $4,670 $4,675 $4,474 $4,603 $4,210 5.14% 5.17% 4.44% 4.62% 4.38% 4.12% 4.39% 4.47% 4.62%4.63% 4.45% 4.42% 4.48% 4.50% Total loans Loan yield Loan yield, excl. SBA PPP (non-GAAP) 2018 2019 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Loan Balances and Loan Yields Commercial & industrial 15.5% SBA PPP 12.9% Owner- occupied CRE 20.6% Non-owner occupied CRE 33.8% Residential real estate 2.9% Construction & land development 7.8% Consumer 6.5% LOAN PORTFOLIO Loan Portfolio Composition Loan Portfolio Repricing Schedule (excluding SBA PPP loans) 38.9% 35.0% 33.1% 32.9% 32.2% 25.1% 22.8% 21.1% 21.1% 21.6% 36.0% 42.2% 45.8% 46.0% 46.2% Fixed rate Floating (monthly repricing) Adjustable (>1 month repricing) 2018 2019 2020 Q1 2021 Q2 2021 – Total loans includes loans held for sale. – Loan yield includes the average balance of loans receivable, net and loans held for sale. – Refer to Appendix for calculation of non-GAAP financial measure.

17 New Commitments Originated (in millions) $19 $19 $18 $16 $23$20 $9 $17 $12 $22 $212 $192 $164 $226 $152 $8 $353 $27 Consumer Residential Commercial, excl. SBA PPP SBA PPP Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 LOAN PRODUCTION $887 – Q2 2020 SBA PPP bar not to scale. $0

18 CHANGES IN LOANS RECEIVABLE Change in Loans - Q2 2021 $4,595,869 $26,689 $(375,649) $110,517 $(134,231) $(33,934) $4,391 $13,878 $4,207,530 Loans receivable at March 31, 2021 PPP loans originated PPP prepayments and payoffs Loans originated Prepayments Payoffs Net advances/ payments Change in net deferred fee and acquired discount Loans receivable at June 30, 2021

19 COMMERCIAL LOAN EXPOSURE Real estate and rental and leasing 48.7% Health care and social assistance 9.7% Accommodation and food services 6.7% Retail trade 5.2% Construction 4.9% Other Services (except Public administration) 3.8% Manufacturing 3.6% All other industries 17.4% Commercial Business Loans by Industry Exposure Industry Amount WARR at 12/31/20 WARR at 3/31/21 WARR at 6/30/21 Real estate and rental and leasing $1,432,780 4.52 4.52 4.46 Health care and social assistance 286,168 4.56 4.56 4.56 Accommodation and food services 196,259 6.27 6.29 6.47 Retail trade 154,100 4.63 4.66 4.68 Construction 144,447 4.66 4.67 4.68 Other services (except Public administration) 113,038 4.86 4.84 4.80 Manufacturing 105,636 5.21 5.23 4.94 All other industries 510,388 4.70 4.69 4.54 Total $2,942,816 4.73 4.72 4.67 CRE Loans only by Collateral Type Collateral Type Amount WARR at 12/31/20 WARR at 3/31/21 WARR at 6/30/21 Office $492,528 4.52 4.49 4.46 Industrial 317,644 4.45 4.48 4.51 Retail store / shopping center 254,448 4.79 4.81 4.74 Multi-family 187,661 4.38 4.41 4.39 Mixed use property 163,356 4.77 4.79 4.75 Motel / hotel 152,663 6.20 6.20 6.19 Single purpose 130,070 4.82 4.86 4.84 Warehouse 129,349 4.62 4.65 4.58 Mini-storage 121,697 4.20 4.21 4.19 Recreational / school 73,913 5.14 5.12 5.13 Other 267,572 4.62 4.62 4.63 Total $2,290,901 4.70 4.70 4.68 – Categorized by NAICS code. – Excludes SBA PPP loans. – WARR = Weighted average risk rating. Office 21.5% Industrial 13.9% Retail store / shopping center 11.1% Multi-family 8.2% Mixed use property 7.1% Motel / hotel 6.7% Single purpose 5.7% Warehouse 5.6% Mini-storage 5.3% Recreational / school 3.2% Other 11.7%

20 No data to display PPP2 PPP1 Key statistics from inception of the SBA's PPP through June 30, 2021 SBA PPP LOANS As of June 30, 2021 PPP1 PPP2 Total PPP Total number of funded loans 4,642 2,542 7,184 Total amount funded $ 897,353 $ 380,014 $ 1,277,367 Average funded loan size $ 193 $ 149 $ 178 Total net fees deferred at funding $ 28,805 $ 16,041 $ 44,846 Net deferred fees unrecognized as of period end $ 2,555 $ 13,810 $ 16,365 Change in SBA PPP - Q2 2021 $886,761 $25,111 $(375,649) $6,353 $1,674 $544,250 Q1 2021 Am. Cost Additions Payments PPP1 net fee amortized PPP2 net fee amortized Q2 2021 Am. Cost $196,437 $547,435 $339,326 $347,813 $(357,257) $(18,392) DO NOT ADJUST THE BOXES IN THE SBA PPP WALK. THEYRE CALIBRATED TO EXPORT CORRECTLY INTO PDF

21 HIGHER RISK INDUSTRIES WITH ENHANCED MONITORING – Categorized by NAICS code and excluding SBA PPP loans. Hotels and other accomodation Restaurants and other food service Recreation and fitness related activities Amortized cost 136,447 56,474 32,865 % of Loans receivable, excluding SBA PPP 3.7% 1.5% 0.9% Unfunded commitment 9,305 2,717 701 % Secured by real estate 92.6% 69.3% 66.1% Weighted average risk rating 6.82 6.75 6.35 Average non-zero balance loan size 3,688 304 1,133 Amortized cost classified as nonaccrual 3,623 6,144 899 Amortized cost classified as performing TDR 24,565 2,902 9 Amortized cost of criticized loans 71,037 17,198 15,846 Past due 30+ days on accrual status — — — Still in COVID-related payment deferral 22,594 3,665 —

22 $15,679 $45,366 $58,092 $52,868 $35,341 $13,696 $44,525 $1,983 $841 Nonaccrual loans OREO Nonperforming assets to total assets 2018 2019 2020 Q1 2021 Q2 2021 0.29% 0.82% 0.88% 0.75% 0.50% NONPERFORMING ASSETS

23– Refer to Appendix for calculation of non-GAAP financial measure. $35,042 $36,171 $70,185 $64,225 $51,562 ACL % ACL/Loans % ACL/Loans excl. SBA PPP (non-GAAP) 2018 2019 2020 Q1 2021 Q2 2021 0.96% 0.96% 1.57% 1.40% 1.23% 1.87% 1.73% 1.41% ALLOWANCE FOR CREDIT LOSSES ("ACL")

24 $4,432 $4,583 $5,598 $5,568 $5,689 $5,598 $6,020 $6,062 0.25% 0.37% 0.23% 0.26% 0.19% 0.14% 0.12% 0.10% Total deposits Cost of total deposits 2018 2019 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Deposit Composition DEPOSITS Deposit Composition Noninterest demand deposits 37.2% Interest bearing demand deposits 29.8% Money market accounts 17.0% Savings accounts 9.8% Certificates of deposit 6.2% Deposit Balances and Cost of Total Deposits 30.7% 31.6% 35.4% 36.6% 37.2% 29.7% 29.4% 30.7% 29.9% 29.8% 17.3% 16.4% 17.2% 17.4% 17.0% 11.8% 11.2% 9.6% 9.7% 9.8% 10.5% 11.4% 7.1% 6.4% 6.2% Noninterest demand deposits Interest bearing demand deposits Money market accounts Savings accounts Certificates of deposit 2018 2019 2020 Q1 2021 Q2 2021

25 2.7 2.6 2.7 3.7 4.2 Adjusted duration (in years) Yield Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Portfolio Duration & Yield INVESTMENT PORTFOLIO Investment Portfolio Composition US government and agencies 9.9% Municipal securities 21.8% Residential CMO and MBS 24.7% Commercial CMO and MBS 40.2% Corporate obligations 0.7% Other asset-backed securities 2.7% – Adjusted duration (in years) determined based on the next fully-indexed rate adjustment date. 2.41% 2.23% 2.18% 2.17% 2.09%

26 4.29% 4.22% 3.63% 3.64% 3.38% 3.53% 3.51% 3.44%4.11% 4.12% 3.57% 3.59% 3.32% 3.48% 3.44% 3.41% Core NIM Accretion 2018 2019 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 NET INTEREST MARGIN Net Interest Margin Average Interest Earning Assets Composition 78.3% 77.6% 67.6% 68.0% 63.9% 62.8% 60.5% 57.3% 10.7% 12.0% 14.7% 13.9% 13.8% 12.3% 19.9% 20.3% 16.0% 16.7% 14.7% 13.8% 13.9% 15.2% 1.8% 2.1% 3.3% 6.7% 9.5% 11.8% 15.2% Interest earning deposits Investment securities SBA PPP loans Loans receivable, net, excl. SBA PPP (Non-GAAP) 2018 2019 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Change in Net Interest Margin - Q2 2021 3.51% 0.09% 0.03% (0.15)% (0.04)% 0.00% 3.44% Q1 2021 NIM Nonaccrual loan recoveries PPP loans Loan yields Accretion Other Q2 2021 NIM 5.7% – Refer to Appendix for calculation of non-GAAP financial measure. – Other includes net impact of taxable securities, non-taxable securities, interest earning deposits and total interest bearing liabilities.

27 $(6.1) $16.6 $23.9 $25.3 $32.7 $21.5 $21.8 $25.2 $23.2 $26.2 $53.1 $67.6 $46.6 $69.4 $85.4 $89.3 Net income (loss) PTPP income (non-GAAP) 2018 2019 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 PROFITABILITY TRENDS Return on Average Tangible Common Equity (non-GAAP) Noninterest Expense/Avg. Assets Return on Average Assets 1.07% 1.25% 0.74% (0.39)% 1.00% 1.42% 1.51% 1.85% 2018 2019 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Net Income and Pre-tax, Pre-provision Income (non-GAAP), in millions 12.28% 13.35% 8.98% (3.96)% 12.66% 17.62% 18.37% 22.94% 2018 2019 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 3.00% 2.71% 2.37% 2.36% 2.17% 2.30% 2.22% 2.06% 2018 2019 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 – Refer to Appendix for calculation of non-GAAP financial measures.

28 12.9% 12.8% 14.0% 14.5% 15.1% 10.0% 10.0% 10.0% 10.0% 10.0% 2.9% 2.8% 4.0% 4.5% 5.1% Well-capitalized Excess capital 2018 2019 2020 Q1 2021 Q2 2021 – Current quarter ratios are estimates pending completion and filing of the Company's regulatory reports. – Refer to Appendix for calculation of non-GAAP financial measures. – Well-capitalized represents FDIC well-capitalized ratio threshold for banks. The minimum capital ratio requirement for Tier 1 leverage and Total risk based capital is 4.0% and 8.0%, respectively. – Brokered CD capacity limited to 15% of total deposits in accordance with Bank's Asset and Liability Management policy. 10.5% 10.6% 9.0% 9.1% 9.1% 5.0% 5.0% 5.0% 5.0% 5.0% 5.5% 5.6% 4.0% 4.1% 4.1% Well-capitalized Excess capital 2018 2019 2020 Q1 2021 Q2 2021 CAPITAL AND SOURCES OF LIQUIDITY Tier 1 Leverage Ratio Total Risk Based Capital Equity Ratios Primary and Secondary Sources of Liquidity 10.0% 9.7% 9.6% 9.9% 10.4% 8.9% 8.5% 8.8% 14.3% 14.6% 12.4% 11.8% 12.0% Stockholders' equity to total assets TCE, excluding PPP loans (non-GAAP) TCE (non-GAAP) 2018 2019 2020 Q1 2021 Q2 2021 Source June 30, 2021 Cash and cash equivalents $1,264,933 Unencumbered securities 826,843 FHLB and FRB borrowing availability 1,064,095 Fed fund lines 215,000 Brokered CD capacity 909,256 Total $4,280,127

SHAREHOLDER RETURN

30 TOTAL SHAREHOLDER RETURN Stock Summary Ticker HFWA Exchange NASDAQ Stock price $23.90 Market capitalization (in millions) $859.5 Dividend yield (regular dividend only) 3.35% Average Daily Volume (3 month) Average daily volume (shares) 129,906 Average daily volume ($000s) $3,105 52-Week High and Low Price 52-week high (3/12/2021) 30.86 52-week low (7/14/2020) 17.36 Per Share Tangible book value per share $15.95 EPS - 2021E $2.09 EPS - 2022E $1.60 Number of research analysts 6 Valuation Ratios Price / Tangible book value 149.8% Price / 2021E EPS 11.4x Price / 2022E EPS 14.9x Dividends Per Share Declared $0.50 $0.53 $0.72 $0.61 $0.72 $0.84 $0.80 $0.60 $0.08 $0.10 $0.11 $0.12 $0.15 $0.18 $0.20 $0.20$0.08 $0.11 $0.12 $0.13 $0.15 $0.18 $0.20 $0.20 $0.09 $0.11 $0.12 $0.13 $0.15 $0.19 $0.20 $0.20 $0.09 $0.11 $0.12 $0.13 $0.17 $0.19 $0.20 $0.16 $0.10 $0.25 $0.10 $0.10 $0.10 Q1 Q2 Q3 Q4 Special dividends 2014 2015 2016 2017 2018 2019 2020 2021 Total Return – Last 12 Months – Market information as of July 9, 2021. – Dividend information as of July 22, 2021.

APPENDIX - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

32 NON-GAAP FINANCIAL MEASURES 2018 2019 2020 2020 2021 Q2 Q3 Q4 Q1 Q2 Pre-tax, pre-provision income: Net income (loss) (GAAP) $53,057 $67,557 $46,570 $(6,139) $16,636 $23,882 $25,344 $32,702 Exclude income tax (benefit) expense 11,238 13,488 6,610 (936) 2,477 4,429 5,102 7,451 Exclude provision for (reversal of provision for) credit losses 5,129 4,311 36,106 28,563 2,730 (3,133) (7,199) (13,987) Pre-tax, pre-provision income (non-GAAP) $69,424 $85,356 $89,286 $21,488 $21,843 $25,178 $23,247 $26,166 Loan yield, excluding SBA PPP loans, annualized: Interest and fees on loans (GAAP) $175,466 $189,515 $192,417 $48,404 $47,647 $50,089 $49,524 $50,750 Exclude impact on loan yield from SBA PPP loan interest and fees — — (19,472) (4,923) (5,810) (8,739) (9,136) (10,003) Adjusted interest and fees on loans (non-GAAP) $175,466 $189,515 $172,945 $43,481 41,837 $41,350 $40,388 $40,747 Average loans receivable, net (GAAP) $3,414,424 $3,668,665 $4,335,564 $4,442,108 $4,605,389 $4,540,962 $4,490,499 $4,402,868 Exclude average SBA PPP loans — — (589,635) (667,390) (863,127) (822,460) (832,148) (777,156) Adjusted average loans receivable, net (non-GAAP) $3,414,424 $3,668,665 $3,745,929 $3,774,718 $3,742,262 $3,718,502 $3,658,351 $3,625,712 Loan yield, annualized (GAAP) 5.14 % 5.17 % 4.44 % 4.38 % 4.12 % 4.39 % 4.47 % 4.62 % Loan yield, excluding SBA PPP loans, annualized (non-GAAP) 5.14 % 5.17 % 4.62 % 4.63 % 4.45 % 4.42 % 4.48 % 4.50 % Net interest margin, excluding incremental accretion on purchased loans, annualized: Net interest income (GAAP) $186,993 $199,682 $200,997 $50,313 $49,678 $52,455 $52,238 $54,265 Exclude incremental accretion on purchased loans (7,964) (4,876) (3,446) (696) (944) (795) (1,075) (495) Adjusted net interest income (non-GAAP) $179,029 $194,806 $197,551 $49,617 $48,734 $51,660 $51,163 $53,770 Average total interest earning assets, net $4,358,643 $4,729,885 $5,535,236 $5,552,494 $5,855,240 $5,913,765 $6,042,566 $6,327,171 Net interest margin, annualized (GAAP) 4.29 % 4.22 % 3.63 % 3.64 % 3.38 % 3.53 % 3.51 % 3.44 % Net interest margin, excluding incremental accretion on purchased loans, annualized (non-GAAP) 4.11 % 4.12 % 3.57 % 3.59 % 3.32 % 3.48 % 3.44 % 3.41 %

33 2018 2019 2020 2020 2021 Q2 Q3 Q4 Q2 Q2 Return on average tangible common equity: Net income (loss) (GAAP) $53,057 $67,557 $46,570 $(6,139) $16,636 $23,882 $25,344 $32,702 Add amortization of intangible assets 3,819 4,001 3,525 903 860 859 797 797 Exclude tax effect of adjustment (802) (840) (740) (190) (181) (180) (167) (167) Tangible net income (loss) (non-GAAP) $56,074 $70,718 $49,355 $(5,426) $17,315 $24,561 $25,974 $33,332 Average stockholders' equity (GAAP) $687,094 $789,502 $805,580 $807,539 $799,738 $808,999 $827,021 $835,761 Exclude average intangible assets (230,282) (259,667) (255,898) (256,338) (255,453) (254,587) (253,747) (252,956) Average tangible common stockholders' equity (non- GAAP) $456,812 $529,835 $549,682 $551,201 $544,285 $554,412 $573,274 $582,805 Return on average equity, annualized (GAAP) 7.72 % 8.56 % 5.78 % (3.06) % 8.28 % 11.74 % 12.43 % 15.69 % Return on average tangible common equity, annualized (non-GAAP) 12.28 % 13.35 % 8.98 % (3.96) % 12.66 % 17.62 % 18.37 % 22.94 % NON-GAAP FINANCIAL MEASURES

34 2018 2019 2020 2021 Q1 Q2 Tangible common equity to tangible assets: Total stockholders' equity (GAAP) $760,723 $809,311 $820,439 $827,151 $855,984 Exclude intangible assets (261,553) (257,552) (254,027) (253,230) (252,433) Tangible common equity (non-GAAP) $499,170 $551,759 $566,412 $573,921 $603,551 Total assets (GAAP) $5,316,927 $5,552,970 $6,615,318 $7,028,392 $7,105,672 Exclude intangible assets (261,553) (257,552) (254,027) (253,230) (252,433) Tangible assets (non-GAAP) $5,055,374 $5,295,418 $6,361,291 $6,775,162 $6,853,239 Total assets (GAAP) $5,316,927 $5,552,970 $6,615,318 $7,028,392 $7,105,672 Exclude intangible assets (261,553) (257,552) (254,027) (253,230) (252,433) Exclude SBA PPP loans — — (715,121) (886,761) (544,250) Tangible assets, excluding SBA PPP loans (non-GAAP) $5,055,374 $5,295,418 $5,646,170 $5,888,401 $6,308,989 Stockholders' equity to total assets (GAAP) 14.3 % 14.6 % 12.4 % 11.8 % 12.0 % Tangible common equity to tangible assets (non-GAAP) 9.9 10.4 8.9 8.5 8.8 Tangible common equity to tangible assets, excluding SBA PPP loans (non-GAAP) 9.9 10.4 10.0 9.7 9.6 ACL on loans to loans receivable, excluding SBA PPP loans: Allowance for credit losses on loans $35,042 $36,171 $70,185 $64,225 $51,562 Loans receivable (GAAP) $3,654,160 $3,767,879 $4,468,647 $4,595,869 $4,207,530 Exclude SBA PPP loans — — (715,121) (886,761) (544,250) Loans receivable, excluding SBA PPP (non-GAAP) $3,654,160 $3,767,879 $3,753,526 $3,709,108 $3,663,280 ACL on loans to Loans receivable (GAAP) 0.96 % 0.96 % 1.57 % 1.40 % 1.23 % ACL on loans to Loans receivable, excluding SBA PPP loans (non-GAAP) 0.96 % 0.96 % 1.87 % 1.73 % 1.41 % NON-GAAP FINANCIAL MEASURES

35 2009 2010 2011 2012 2013 2014 2015 Tangible book value per share: Total stockholders' equity (GAAP) $158,498 $202,279 $202,520 $198,938 $215,762 $454,506 $469,970 Exclude intangible assets (13,358) (14,965) (14,525) (14,098) (30,980) (129,918) (127,818) Exclude preferred stock (23,487) — — — — — — Tangible common equity (non-GAAP) $121,653 $187,314 $187,995 $184,840 $184,782 $324,588 $342,152 Shares outstanding 11,057,972 15,568,471 15,456,297 15,117,980 16,210,747 30,259,838 29,975,439 Book value per share (GAAP) $12.21 $12.99 $13.10 $13.16 $13.31 $15.02 $15.68 Tangible book value per share (non-GAAP) $11.00 $12.03 $12.16 $12.23 $11.40 $10.73 11.41 2016 2017 2018 2019 2020 2021 Tangible book value per share (continued): Q1 Q2 Total stockholders' equity (GAAP) $481,763 $505,305 $760,723 $809,311 $820,439 $827,151 $855,984 Exclude intangible assets (126,403) (125,117) (261,553) (257,552) (254,027) (253,230) (252,433) Tangible common equity (non-GAAP) $355,360 $380,188 $499,170 $551,759 $566,412 $573,921 $603,551 Shares outstanding 29,954,931 29,927,746 36,874,055 36,618,729 35,912,243 35,981,317 36,006,560 Book value per share (GAAP) $16.08 $16.88 $20.63 $22.10 $22.85 $22.99 $23.77 Tangible book value per share (non-GAAP) $11.86 $12.70 $13.54 $15.07 $15.77 $15.95 $16.76 NON-GAAP FINANCIAL MEASURES

QUESTIONS AND ANSWERS

Report a Problem

Category
Description
Email (optional, for follow-up)