HERITAGE FINANCIAL CORP /WA/

Stockholders' Equity

Total stockholders' equity increased $162.3 million, or 17.6%, to $1.08 billion at September 30, 2026, compared to $921.5 million at December 31, 2025 due primarily to stock issued as consideration in the Merger. The Company’s stockholders' equity to assets ratio was 12.7% at September 30, 2026 and 13.2% at December 31, 2025.

The following table summarizes changes in stockholders' equity for the Company for the period indicated:

The Company has historically paid cash dividends to its common shareholders. Payments of future cash dividends, if any, will be at the discretion of our Board after taking into account various factors, including our business, operating results and financial condition, capital requirements, current and anticipated cash needs, plans for expansion, any legal or contractual limitation on our ability to pay dividends and other relevant factors. Dividends on common stock from the Company depend substantially upon the receipt of dividends from the Bank, which is the Company’s predominant source of income. On October 21, 2026, the Board declared a regular quarterly dividend of $0.25 per common share payable on November 18, 2026 to shareholders of record on November 4, 2026.

On October 21, 2026, the Company's Board of Directors approved a new stock repurchase program the Repurchase Program, authorizing the repurchase of up to 5% of the Company's outstanding common shares or approximately 2.05 million shares. The number, timing and price of shares repurchased will depend on business and market conditions, and other factors, including opportunities to deploy the Company's capital. The Repurchase Program superseded a previous stock repurchase program, authorized in April 2024, under which 83,006 shares remained available for repurchase as of September 30, 2026. The Company is not obligated to repurchase any shares of its common stock, and other than repurchases that have been completed to date, there is no assurance that the Company will do so. The Company may, in its discretion, begin, suspend or terminate repurchases at any time prior to the Repurchase Program’s expiration, without any prior notice.