HERITAGE FINANCIAL CORP /WA/

For the period ended Jun 30, 2026. Filed Aug 7, 2026.

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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Jun 30, 2026 · Filed Aug 7, 2026

HFWA$28.39-0.6%Stored close · as of Nov 6, 2026

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Contents

NONINTEREST EXPENSE OVERVIEW

Noninterest Expense

Comparison of three months ended June 30, 2026 to the comparable period in the prior year

The following table presents changes in the key components of noninterest expense for the periods indicated:

Three Months EndedJune 30, · Change
	2026	2025	$	%
(Dollars in thousands)
Compensation and employee benefits	$35,769	$25,467	$10,302	40.5%
Occupancy and equipment	6,014	4,840	1,174	24.3
Data processing	10,218	3,666	6,552	178.7
Marketing	437	336	101	30.1
Professional services	939	1,122	(183)	(16.3)
State/municipal business and use taxes	1,801	1,205	596	49.5
Federal deposit insurance premium	881	810	71	8.8
Other real estate owned, net	44	—	44	100.0
Amortization of intangible assets	2,957	302	2,655	879.1
Other expense	5,264	3,337	1,927	57.7
Total noninterest expense	$64,324	$41,085	$23,239	56.6%

Noninterest expense increased $23.2 million, to $64.3 million during the three months ended June 30, 2026, compared to $41.1 million during the same period in 2025. The increase was primarily due to expenses from the Merger, including increases related to compensation and employee benefits due to increased headcount, severance expense, occupancy and equipment expense primarily due to additional rent expense, and additional data processing expense due to an increase in transactional accounts and balances. Noninterest expense also increased due to an increase in the amortization of intangible assets of $2.7 million, relating to the Merger. Total Merger-related expenses incurred during the three months ended June 30, 2026 were $7.5 million and consisted of severance expense, professional fees, core conversion costs and contract termination costs.

The following table presents the merger costs included in noninterest expense for the period indicated:

	Three Months EndedJune 30,
	2026
(Dollars in thousands)
Compensation and employee benefits	$1,481
Data processing	4,924
Professional services	128
Other expense	960
Total noninterest expense	$7,493

Comparison of the six months ended June 30, 2026 to the comparable period in the prior year

The following table presents changes in the key components of noninterest expense for the periods indicated:

Six Months EndedJune 30, · Change
	2026	2025	$	%
(Dollars in thousands)
Compensation and employee benefits	$69,741	$51,266	$18,475	36.0%
Occupancy and equipment	11,344	9,766	1,578	16.2
Data processing	15,311	7,563	7,748	102.4
Marketing	820	671	149	22.2
Professional services	3,781	1,856	1,925	103.7
State/municipal business and use taxes	3,475	2,425	1,050	43.3
Federal deposit insurance premium	1,918	1,622	296	18.2
Other real estate owned, net	48	—	48	100.0
Amortization of intangible assets	5,015	605	4,410	728.9
Other expense	9,422	6,694	2,728	40.8
Total noninterest expense	$120,875	$82,468	$38,407	46.6%

Noninterest expense increased $38.4 million, to $120.9 million during the six months ended June 30, 2026, compared to $82.5 million during the same period in 2025. The increase was primarily due to expenses from the Merger, including increases related to compensation and employee benefits due to increased headcount, severance expense, occupancy and equipment expense primarily due to additional rent expense, and additional data processing expense due to an increase in transactional accounts and balances. Noninterest expense also increased due to an increase in the amortization of intangible assets of $4.4 million, relating to the Merger. Total Merger-related expenses incurred during the six months ended June 30, 2026 were $12.7 million and consisted of severance expense, professional fees, core conversion costs and contract termination costs.

The following table presents the merger costs included in noninterest expense for the period indicated:

	Six Months EndedJune 30,
	2026
(Dollars in thousands)
Compensation and employee benefits	$4,214
Data processing	5,415
Professional services	1,996
Other expense	1,046
Total noninterest expense	$12,671

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