HERITAGE FINANCIAL CORP /WA/
For the period ended Sep 30, 2026. Filed Nov 6, 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.
Sep 30, 2026 · Filed Nov 6, 2026
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INVESTMENT ACTIVITIES OVERVIEW
Investment Activities
Our investment policy is established by the Board and monitored by the Risk and Technology Committee of the Board. It is designed primarily to provide and maintain liquidity, generate a favorable return on investments without incurring undue interest rate and credit risk, and complement the Company's lending activities. The policy permits investment in various types of liquid assets permissible under applicable regulations. Purchase of investments in sub-investment grade bonds is not permitted under the policy.
The following table provides information regarding our investment securities at the dates indicated:
| September 30, 2026 · December 31, 2025 · Change | ||||||
|---|---|---|---|---|---|---|
| Balance | % ofTotal | Balance | % ofTotal | $ | % | |
| (Dollars in thousands) | ||||||
| Investment securities available for sale, at fair value: | ||||||
| U.S. government and agency securities | $11,272 | 0.7% | $11,702 | 0.9% | $(430) | (3.7)% |
| Municipal securities | 55,203 | 3.4 | 51,423 | 4.0 | 3,780 | 7.4 |
| Residential CMO and MBS(1) | 491,405 | 30.7 | 275,268 | 21.5 | 216,137 | 78.5 |
| Commercial CMO and MBS(1) | 348,255 | 21.8 | 252,164 | 19.7 | 96,091 | 38.1 |
| Corporate obligations | 23,052 | 1.4 | 10,532 | 0.8 | 12,520 | 118.9 |
| Other asset-backed securities | 18,449 | 1.2 | 6,433 | 0.5 | 12,016 | 186.8 |
| Total | $947,636 | 59.2% | $607,522 | 47.4% | $340,114 | 56.0% |
| September 30, 2026 · December 31, 2025 · Change | ||||||
|---|---|---|---|---|---|---|
| Balance | % ofTotal | Balance | % ofTotal | $ | % | |
| (Dollars in thousands) | ||||||
| Investment securities held to maturity, at amortized cost: | ||||||
| U.S. government and agency securities | $151,385 | 9.5% | $151,319 | 11.8% | $66 | —% |
| Residential CMO and MBS(1) | 200,760 | 12.5 | 217,707 | 17.0 | (16,947) | (7.8) |
| Commercial CMO and MBS(1) | 301,678 | 18.8 | 305,081 | 23.8 | (3,403) | (1.1) |
| Total | $653,823 | 40.8% | $674,107 | 52.6% | $(20,284) | (3.0)% |
| Total investment securities | $1,601,459 | 100.0% | $1,281,629 | 100.0% | $319,830 | 25.0% |
(1)U.S. government agency and government-sponsored enterprise CMO and MBS obligations.
Total investment securities increased $319.8 million, or 25.0%, to $1.60 billion at September 30, 2026 from $1.28 billion at December 31, 2025. The increase was primarily due to the acquisition of investment securities balances of $312.0 million in the Merger. The Company repositioned a portion of the acquired portfolio during the nine months ended September 30, 2026, with sales of $231.6 million and purchases of $406.0 million. Purchases exceeded sales in the repositioning due to the investment of excess cash acquired in the Merger, which was a result of the sale of investment securities by Olympic during the month preceding the Merger. Investment maturities and repayments totaled $126.3 million during the nine months ended September 30, 2026.
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