HERITAGE FINANCIAL CORP WA

The FHLB functions as a member-owned cooperative providing credit for member financial institutions. Advances are made pursuant to several different programs. Each credit program has its own interest rate and range of maturities. Limitations on the amount of advances are based on a percentage of the Bank's assets or on the FHLB’s assessment of the institution’s creditworthiness. At June 30, 2024, the Bank maintained a credit facility with the FHLB with available borrowing capacity of $1.34 billion. The Bank had $400.0 million FHLB advances outstanding at June 30, 2024, and no FHLB advances outstanding at December 31, 2023. Advances from the FHLB may be collateralized by FHLB stock owned by the Bank, deposits at the FHLB, certain commercial and residential real estate loans, investment securities or other assets. All FHLB advances at June 30, 2024 are short-term and mature in less than one year.

The Bank maintains a credit facility with the FRB through the Discount Window with available borrowing capacity of $278.6 million at June 30, 2024. The Bank had $100.0 million in BTFP borrowings outstanding at June 30, 2024, and $500.0 million at December 31, 2023. The entire amount of BTFP borrowings of $100.0 million mature in January 2025.

In addition to funds obtained in the ordinary course of business, the Company assumed trust preferred securities and junior subordinated debentures as part of a prior acquisition. For regulatory capital purposes, the trust preferred securities are included in Tier 2 capital. The junior subordinated debentures outstanding were $21.9 million as of June 30, 2024, and $21.8 million as of December 31, 2023, net of unaccreted discount.

The Bank maintains available unsecured federal funds lines with four correspondent banks totaling $145.0 million, with no outstanding borrowings at June 30, 2024.