FOR IMMEDIATE RELEASE

DATE: October 21, 2021

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

•Net income was $20.6 million, or $0.58 per diluted share, for the quarter ended September 30, 2021, compared to $32.7 million, or $0.90 per diluted share, for the linked-quarter ended June 30, 2021 and $16.6 million, or $0.46 per diluted share, for the quarter ended September 30, 2020.

•Reversal of provision for credit losses was $3.1 million for the quarter ended September 30, 2021 compared to $14.0 million for the linked-quarter ended June 30, 2021 and a provision for credit loss of $2.7 million for the quarter ended September 30, 2020.

•The ratio of nonperforming assets to total assets decreased to 0.36% at September 30, 2021 compared to 0.50% at June 30, 2021 and 0.88% at December 31, 2020.

•Noninterest expense to average total assets, annualized, was 2.04% for the quarter ended September 30, 2021 compared to 2.06% for the linked-quarter ended June 30, 2021 and 2.17% for the quarter ended September 30, 2020.

•Capital remains strong with a Tier 1 leverage ratio of 8.8% and a total risk-based capital ratio of 14.8% at September 30, 2021.

•Declared a regular cash dividend of $0.21 per common share on October 20, 2021, an increase of 5.0% from the $0.20 regular cash dividend per common share declared during the prior quarter.

•Repurchased 841,088 shares at a weighted average price of $24.54 during the quarter ended September 30, 2021.

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 $20.6 million for the quarter ended September 30, 2021 compared to $32.7 million for the linked-quarter ended June 30, 2021 and $16.6 million for the quarter ended September 30, 2020. Diluted earnings per share for the quarter ended September 30, 2021 were $0.58 compared to $0.90 for the linked-quarter ended June 30, 2021 and $0.46 for the quarter ended September 30, 2020.

Jeffrey J. Deuel, President and Chief Executive Officer of Heritage, commented, “Given the ongoing challenging environment resulting from COVID-19 and its related variants, we are pleased with our performance in the third quarter. Credit quality continues to improve and while loan growth was slow over the summer following the reopening of businesses in Oregon and Washington at the end of June, we are gratified to see the hard work of our team resulting in a growing pipeline with closed loan volume continuing to ramp-up as we head into the fall. We also continue to focus on expense management and deploying digital solutions to create efficiencies and enhance our customer's banking experience.

Further, we are delighted with the success of our ongoing efforts to positively impact housing in the communities we serve. Recently, we were selected by Catholic Housing Services to provide $13 million of construction financing for a new affordable housing development. The project is located in Mount Vernon, Washington and consists of 70 units of permanent supportive housing. It is the first supportive housing project to be built in Skagit County.

We are also proud to announce the formation of the Heritage Bank Community Development Entity ("HBCDE"), a subsidiary certified by the Community Development Financial Institutions Fund of the United States Department of Treasury as a Community Development Entity to provide loans, investments and services to low-income communities which has been funded with a $50 million investment from Heritage Bank.”

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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
			September 30, 2021						June 30, 2021						September 30, 2020
			(Dollars in thousands, except per share amounts)
Net income			$	20,592					$	32,702					$	16,636
Pre-tax, pre-provision income (1)			$	22,440					$	26,166					$	21,843
Diluted earnings per share			$	0.58					$	0.90					$	0.46
Return on average assets (2)			1.13		%				1.85		%				1.00		%
Pre-tax, pre-provision return on average assets (1) (2)			1.23		%				1.48		%				1.31		%
Return on average common equity (2)			9.55		%				15.69		%				8.28		%
Return on average tangible common equity (1) (2)			13.93		%				22.94		%				12.66		%
Net interest margin (2)			3.15		%				3.44		%				3.38		%
Cost of total deposits (2)			0.09		%				0.10		%				0.19		%
Efficiency ratio			62.35		%				58.18		%				62.27		%
Noninterest expense to average total assets (2)			2.04		%				2.06		%				2.17		%
Total assets			$	7,259,038					$	7,105,672					$	6,685,889
Loans receivable, net			$	3,905,567					$	4,155,968					$	4,593,390
Total deposits			$	6,215,558					$	6,061,706					$	5,689,048
Loan to deposit ratio (3)			63.6		%				69.4		%				82.0		%
Book value per share			$	24.13					$	23.77					$	22.36
Tangible book value per share (1)			$	16.97					$	16.76					$	15.27

    (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 SBA 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 SBA 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"). The SBA PPP ended on May 31, 2021.

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

			As of September 30, 2021
			PPP1						PPP2						Total SBA 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

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The following table summarizes the activity for both tranches as of and for the period indicated:

			As of or for the Three Months Ended
			September 30, 2021
			PPP1						PPP2						Total SBA PPP
			(In thousands)
Net deferred fees recognized during the period			$	2,276					$	4,754					$	7,030
Net deferred fees unrecognized as of period end			280						9,055						9,335
Principal payments received during the period, including forgiveness payments from the SBA			179,030						105,355						284,385
Amortized cost as of period end			19,683						247,213						266,896

Balance Sheet

Total investment securities increased $23.1 million, or 2.2%, to $1.07 billion at September 30, 2021 from $1.05 billion at June 30, 2021 due primarily to purchases to deploy excess liquidity into higher yielding assets. Additionally, the Bank transferred investment securities classified as available for sale with a fair value of $244.8 million to investment securities classified as held to maturity during the quarter ended September 30, 2021.

Loans receivable decreased compared to June 30, 2021 due primarily to a decrease in SBA PPP loans as a result of forgiveness payments received from the SBA. Offsetting the decrease was an increase in commercial real estate ("CRE") loans which includes the transfer of completed projects from real estate construction and land development loans. The following table summarizes the Company's loans receivable, net at the dates indicated:

			September 30, 2021												June 30, 2021												Change
			Balance						% of Total						Balance						% of Total						Amount						%
			(Dollars in thousands)
Commercial business:
Commercial and industrial			$	652,776					16.5		%				$	651,915					15.5		%				$	861					0.1		%
SBA PPP			266,896						6.8						544,250						12.9						(277,354)						(51.0)
Owner-occupied CRE			907,568						23.0						865,662						20.6						41,906						4.8
Non-owner occupied CRE			1,459,795						36.8						1,425,238						33.8						34,557						2.4
Total commercial business			3,287,035						83.1						3,487,065						82.8						(200,030)						(5.7)
Residential real estate			125,697						3.2						120,148						2.9						5,549						4.6
Real estate construction and land development:
Residential			90,081						2.3						88,601						2.1						1,480						1.7
Commercial and multifamily			205,516						5.2						239,979						5.7						(34,463)						(14.4)
Total real estate construction and land development			295,597						7.5						328,580						7.8						(32,983)						(10.0)
Consumer			245,555						6.2						271,737						6.5						(26,182)						(9.6)
Loans receivable			3,953,884						100.0		%				4,207,530						100.0		%				(253,646)						(6.0)
Allowance for credit losses on loans			(48,317)												(51,562)												3,245						(6.3)
Loans receivable, net			$	3,905,567											$	4,155,968											$	(250,401)					(6.0)		%

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Total deposits increased slightly from June 30, 2021. The following table summarizes the Company's total deposits at the dates indicated:

			September 30, 2021												June 30, 2021																		Change
			Balance						% of Total						Balance						% of Total																								Amount						%
			(Dollars in thousands)
Noninterest demand deposits			$	2,299,248					37.0		%				$	2,256,341					37.2		%																						$	42,907					1.9		%
Interest bearing demand deposits			1,870,618						30.1						1,807,033						29.8																								63,585						3.5
Money market accounts			1,072,427						17.3						1,030,164						17.0																								42,263						4.1
Savings accounts			617,469						9.9						593,269						9.8																								24,200						4.1
Total non-maturity deposits			5,859,762						94.3						5,686,807						93.8																								172,955						3.0
Certificates of deposit			355,796						5.7						374,899						6.2																								(19,103)						(5.1)
Total deposits			$	6,215,558					100.0		%				$	6,061,706					100.0		%																						$	153,852					2.5		%

During the quarter ended September 30, 2021, the Company repurchased $20.6 million, or 841,088 shares of its common stock, at a weighted average price per share of $24.54. This represents approximately 2.3% of common stock outstanding at June 30, 2021. As of September 30, 2021, there were 802,188 shares available for repurchase under the current repurchase plan.

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:

			September 30, 2021						June 30, 2021						Change
Capital Ratios:
Stockholders' equity to total assets			11.7		%				12.0		%				(0.3)		%
Tangible common equity to tangible assets (1)			8.5						8.8						(0.3)
Common equity Tier 1 capital to risk-weighted assets (2)			13.3						13.6						(0.3)
Tier 1 leverage capital to average quarterly assets (2)			8.8						9.1						(0.3)
Tier 1 capital to risk-weighted assets (2)			13.8						14.0						(0.2)
Total capital to risk-weighted assets (2)			14.8						15.1						(0.3)

(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 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
			September 30, 2021																		June 30, 2021																		September 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			$	51,562					$	2,451					$	54,013					$	64,225					$	3,617					$	67,842					$	71,501					$	4,612					$	76,113
(Reversal of) provision for credit losses			(2,852)						(297)						(3,149)						(12,821)						(1,166)						(13,987)						2,320						410						2,730
Net (charge-offs) recoveries			(393)						—						(393)						158						—						158						(481)						—						(481)
Balance, end of period			$	48,317					$	2,154					$	50,471					$	51,562					$	2,451					$	54,013					$	73,340					$	5,022					$	78,362

The allowance for credit losses ("ACL") on loans decreased compared to June 30, 2021 due primarily to the reduction of the ACL on nonaccrual loans of $2.0 million following a decrease in nonaccrual loan balances of $9.4 million discussed below as well as changes in the loan mix as compared to the linked-quarter ended June 30, 2021. The reversal of provision for credit losses on unfunded commitments of $0.3 million was due primarily to the improvements in the economic forecast.

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Credit Quality

Nonperforming assets decreased to 0.36% of total assets at September 30, 2021 compared to 0.50% of total assets at June 30, 2021 due primarily to the return to accrual status of an owner-occupied CRE relationship of $7.0 million, which had related ACL on loans of $1.4 million at June 30, 2021. Nonperforming assets at both September 30, 2021 and June 30, 2021 consisted only of nonaccrual loans. Changes in nonaccrual loans during the periods indicated were as follows:

			Three Months Ended
			September 30, 2021						June 30, 2021									September 30, 2020
			(In thousands)
Balance, beginning of period			$	35,341					$	52,868								$	33,628
Additions to nonaccrual loan classification			293						401									20,852
Net principal payments and transfers to accruing status			(8,139)						(2,093)									(882)
Payoffs			(911)						(15,835)									(547)
Charge-offs			(690)						—									(447)
Balance, end of period			$	25,894					$	35,341								$	52,604

Net Interest Income and Net Interest Margin

Net interest income decreased $2.9 million, or 5.3%, for the quarter ended September 30, 2021 compared to the linked-quarter ended June 30, 2021 due primarily to a decrease in deferred SBA PPP loan fees recognized due to a decrease in the volume of forgiven SBA PPP loans. Additionally, interest income was higher during the quarter ended June 30, 2021 due to the recognition of $1.5 million of interest and fees on loans related to the full payoff of a nonaccrual loan relationship.

Net interest income increased $1.7 million, or 3.4%, compared to the quarter ended September 30, 2020 due primarily to the Bank decreasing deposit rates following decreases in short-term market interest rates.

Net interest margin decreased to 3.15% for the quarter ended September 30, 2021 as compared to 3.44% for the linked-quarter ended June 30, 2021 due primarily to the change in the mix of total interest earning assets, including an increase in the balance of lower yielding average interest earning deposits.

Net interest margin decreased from 3.38% for the same period in 2020 due primarily to the decrease in the yield on interest earning assets, offset partially by a decrease in the cost of total interest bearing liabilities.

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

			Three Months Ended
			September 30, 2021						June 30, 2021						September 30, 2020
Non-GAAP Measure:(1)
Loan yield (GAAP)			4.64		%				4.62		%				4.12		%
Exclude impact from SBA PPP loans			(0.38)						(0.12)						0.33
Exclude impact from incremental accretion on purchased loans(2)			(0.07)						(0.05)						(0.10)
Loan yield, excluding SBA PPP loans and incremental accretion on purchased loans (non-GAAP)			4.19		%				4.45		%				4.35		%

(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 two and 18 basis points during the quarter ended September 30, 2021 and June 30, 2021, respectively.

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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
			September 30, 2021						June 30, 2021						September 30, 2020						Change						% Change						Change						% Change
			(Dollar amounts in thousands)
Service charges and other fees			$	4,566					$	4,422					$	4,039					$	144					3.3		%				$	527					13.0		%
Gain on sale of investment securities, net			—						—						40						—						—						(40)						(100.0)
Gain on sale of loans, net			765						1,003						1,443						(238)						(23.7)						(678)						(47.0)
Interest rate swap fees			126						209						396						(83)						(39.7)						(270)						(68.2)
Bank owned life insurance income			647						717						909						(70)						(9.8)						(262)						(28.8)
Other income			2,124						1,946						1,383						178						9.1						741						53.6
Total noninterest income			$	8,228					$	8,297					$	8,210					$	(69)					(0.8)		%				$	18					0.2		%

Noninterest income remained relatively stable during the quarter ended September 30, 2021 compared to the linked-quarter ended June 30, 2021. Noninterest income increased from the same period in 2020 due primarily to an increase in other income as a result of gain on sale of branches held for sale and 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 of secondary market mortgage loans. Included in other income were gains on sale of $0.9 million and $0.7 million during the quarters ended September 30, 2021 and June 30 ,2021, respectively, from branches classified as held for sale as part of the Branch Consolidation Plan.

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
			September 30, 2021						June 30, 2021						September 30, 2020						Change						% Change						Change						% Change
			(Dollar amounts in thousands)
Compensation and employee benefits			$	22,176					$	22,088					$	21,416					$	88					0.4		%				$	760					3.5		%
Occupancy and equipment			4,373						4,091						4,348						282						6.9						25						0.6
Data processing			4,029						3,998						3,691						31						0.8						338						9.2
Marketing			775						892						755						(117)						(13.1)						20						2.6
Professional services			816						1,102						1,086						(286)						(26.0)						(270)						(24.9)
State/municipal business and use tax			1,071						991						964						80						8.1						107						11.1
Federal deposit insurance premium			550						339						848						211						62.2						(298)						(35.1)
Amortization of intangible assets			758						797						860						(39)						(4.9)						(102)						(11.9)
Other expense			2,618						2,098						2,077						520						24.8						541						26.0
Total noninterest expense			$	37,166					$	36,396					$	36,045					$	770					2.1		%				$	1,121					3.1		%

Noninterest expense increased slightly from the linked-quarter ended June 30, 2021 due primarily to an increase in occupancy and equipment expense related to the Branch Consolidation Plan discussed below as well as an increase in repairs and maintenance expense. Additionally, other expense increased primarily due to $0.2 million of lease impairment expense also related to the Branch Consolidation Plan.

Noninterest expense increased compared to the quarter ended September 30, 2020 due primarily to an increase in compensation and employee benefits from upward market pressure on salaries and wages and an increase in other expenses related to the Branch Consolidation Plan discussed below.

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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
			September 30, 2021						June 30, 2021						September 30, 2020						Change						% Change						Change						% Change
			(Dollar amounts in thousands)
Income before income taxes			$	25,589					$	40,153					$	19,113					$	(14,564)					(36.3)		%				$	6,476					33.9		%
Income tax expense			$	4,997					$	7,451					$	2,477					$	(2,454)					(32.9)		%				$	2,520					101.7		%
Effective income tax rate			19.5		%				18.6		%				13.0		%				0.9		%				4.8		%				6.5		%				50.0		%

Income tax expense decreased for the quarter ended September 30, 2021 compared to the linked-quarter ended June 30, 2021 and increased compared to the same period in 2020 reflecting the change in income before income taxes earned between the periods. The effective income tax rate increased between the same periods due primarily to an increase in the 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.

Branch Consolidation Plan

Heritage previously announced the plan to close and consolidate four branches. The branches will close on October 29, 2021, bringing the total branch count to 49, a reduction of 21% from 62 branches at September 30, 2020, including the consolidation of eight branches completed during the quarter ended March 31, 2021. The Company will integrate these locations into other branches within its network. These actions are a result of the Company’s increased focus on balancing physical locations and digital banking channels, driven by increased customer usage of online and mobile banking and a commitment to improve digital banking technology. All significant expenses related to the Branch Consolidation Plan for branches that will close on October 29, 2021 have been included in results of operations for the quarter ended September 30, 2021.

Dividend

On October 20, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.21 per share. The dividend is payable on November 17, 2021 to shareholders of record as of the close of business on November 3, 2021.

Earnings Conference Call

The Company will hold a telephone conference call to discuss this earnings release on October 21, 2021 at 11:00 a.m. Pacific time. To access the call, please dial (844) 200-6205 -- access code 212793 a few minutes prior to 11:00 a.m. Pacific time. The call will be available for replay through October 28, 2021 by dialing (866) 813-9403 -- access code 056393.

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 branch 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,

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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.

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HERITAGE FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(Dollar amounts in thousands, except shares)

			September 30, 2021						June 30, 2021						December 31, 2020
Assets
Cash on hand and in banks			$	86,954					$	94,179					$	91,918
Interest earning deposits			1,547,785						1,170,754						651,404
Cash and cash equivalents			1,634,739						1,264,933						743,322
Investment securities available for sale, at fair value (amortized cost of $744,336, $1,029,001 and $770,195, respectively)			761,526						1,049,524						802,163
Investment securities held to maturity, at amortized cost (fair value of $307,330, $0, and $0, respectively)			311,074						—						—
Total investment securities			1,072,600						1,049,524						802,163
Loans held for sale			2,636						2,739						4,932
Loans receivable			3,953,884						4,207,530						4,468,647
Allowance for credit losses on loans			(48,317)						(51,562)						(70,185)
Loans receivable, net			3,905,567						4,155,968						4,398,462
Other real estate owned			—						—						—
Premises and equipment, net			79,958						82,835						85,452
Federal Home Loan Bank ("FHLB") stock, at cost			7,933						7,933						6,661
Bank owned life insurance			109,634						108,988						107,580
Accrued interest receivable			14,802						17,113						19,418
Prepaid expenses and other assets			179,494						163,206						193,301
Other intangible assets, net			10,736						11,494						13,088
Goodwill			240,939						240,939						240,939
Total assets			$	7,259,038					$	7,105,672					$	6,615,318
Liabilities and Stockholders' Equity
Deposits			$	6,215,558					$	6,061,706					$	5,597,990
Junior subordinated debentures			21,107						21,034						20,887
Securities sold under agreement to repurchase			44,096						46,429						35,683
Accrued expenses and other liabilities			129,873						120,519						140,319
Total liabilities			6,410,634						6,249,688						5,794,879
Common stock			552,385						572,060						571,021
Retained earnings			281,285						267,863						224,400
Accumulated other comprehensive income, net			14,734						16,061						25,018
Total stockholders' equity			848,404						855,984						820,439
Total liabilities and stockholders' equity			$	7,259,038					$	7,105,672					$	6,615,318
Shares outstanding			35,166,599						36,006,560						35,912,243

9

HERITAGE FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollar amounts in thousands, except per share amounts)

			Three Months Ended																		Nine Months Ended
			September 30, 2021						June 30, 2021						September 30, 2020						September 30, 2021						September 30, 2020
Interest income
Interest and fees on loans			$	46,863					$	50,750					$	47,647					$	147,137					$	142,328
Taxable interest on investment securities			4,711						4,050						3,865						12,295						14,068
Nontaxable interest on investment securities			931						947						953						2,836						2,686
Interest on interest earning deposits			537						263						98						975						561
Total interest income			53,042						56,010						52,563						163,243						159,643
Interest expense
Deposits			1,444						1,524						2,639						4,696						10,272
Junior subordinated debentures			184						186						196						557						699
Other borrowings			36						35						50						109						130
Total interest expense			1,664						1,745						2,885						5,362						11,101
Net interest income			51,378						54,265						49,678						157,881						148,542
(Reversal of) provision for credit losses			(3,149)						(13,987)						2,730						(24,335)						39,239
Net interest income after (reversal of) provision for credit losses			54,527						68,252						46,948						182,216						109,303
Noninterest income
Service charges and other fees			4,566						4,422						4,039						12,988						12,015
Gain on sale of investment securities, net			—						—						40						29						1,463
Gain on sale of loans, net			765						1,003						1,443						3,138						3,125
Interest rate swap fees			126						209						396						487						1,461
Bank owned life insurance income			647						717						909						2,020						2,439
Other income			2,124						1,946						1,383						6,114						5,441
Total noninterest income			8,228						8,297						8,210						24,776						25,944
Noninterest expense
Compensation and employee benefits			22,176						22,088						21,416						66,725						65,849
Occupancy and equipment			4,373						4,091						4,348						12,918						13,247
Data processing			4,029						3,998						3,691						11,839						10,735
Marketing			775						892						755						2,336						2,317
Professional services			816						1,102						1,086						3,249						4,632
State/municipal business and use taxes			1,071						991						964						3,034						2,626
Federal deposit insurance premium			550						339						848						1,478						1,086
Other real estate owned, net			—						—						—						—						(145)
Amortization of intangible assets			758						797						860						2,352						2,666
Other expense			2,618						2,098						2,077						6,873						7,365
Total noninterest expense			37,166						36,396						36,045						110,804						110,378
Income before income taxes			25,589						40,153						19,113						96,188						24,869
Income tax expense			4,997						7,451						2,477						17,550						2,181
Net income			$	20,592					$	32,702					$	16,636					$	78,638					$	22,688
Basic earnings per share			$	0.58					$	0.91					$	0.46					$	2.19					$	0.63
Diluted earnings per share			$	0.58					$	0.90					$	0.46					$	2.18					$	0.63
Dividends declared per share			$	0.20					$	0.20					$	0.20					$	0.60					$	0.60
Average shares outstanding - basic			35,644,192						35,994,740						35,908,845						35,854,258						36,049,369
Average shares outstanding - diluted			35,929,518						36,289,464						35,988,734						36,152,052						36,193,615

10

HERITAGE FINANCIAL CORPORATION

FINANCIAL STATISTICS (Unaudited)

(Dollar amounts in thousands, except per share amounts)

Nonperforming Assets and Credit Quality Metrics:

			Three Months Ended																		Nine Months Ended
			September 30, 2021						June 30, 2021						September 30, 2020						September 30, 2021						September 30, 2020
Allowance for Credit Losses on Loans:
Balance, beginning of period			$	51,562					$	64,225					$	71,501					$	70,185					$	36,171
Impact of CECL adoption			—						—						—						—						1,822
Adjusted balance, beginning of period			51,562						64,225						71,501						70,185						37,993
(Reversal of) provision for credit losses on loans			(2,852)						(12,821)						2,320						(21,808)						38,225
Charge-offs:
Commercial business			(743)						(13)						(507)						(757)						(3,553)
Real estate construction and land development			—						—						—						(1)						—
Consumer			(204)						(120)						(335)						(509)						(1,141)
Total charge-offs			(947)						(133)						(842)						(1,267)						(4,694)
Recoveries:
Commercial business			385						143						80						735						1,220
Residential real estate			—						—						—						—						3
Real estate construction and land development			8						4						139						28						160
Consumer			161						144						142						444						433
Total recoveries			554						291						361						1,207						1,816
Net (charge-offs) recoveries			(393)						158						(481)						(60)						(2,878)
Balance, end of period			$	48,317					$	51,562					$	73,340					$	48,317					$	73,340
Net (charge-offs) recoveries on loans to average loans, annualized			(0.04)		%				0.01		%				(0.04)		%				—		%				(0.09)		%

			September 30, 2021						June 30, 2021						December 31, 2020
Nonperforming Assets:
Nonaccrual loans:
Commercial business			$	25,243					$	34,209					$	56,786
Residential real estate			51						60						184
Real estate construction and land development			571						1,014						1,022
Consumer			29						58						100
Total nonaccrual loans			25,894						35,341						58,092
Other real estate owned			—						—						—
Nonperforming assets			$	25,894					$	35,341					$	58,092
Restructured performing loans			$	60,684					$	55,391					$	52,872
Accruing loans past due 90 days or more			—						286						—
ACL on loans to:
Loans receivable			1.22		%				1.23		%				1.57		%
Loans receivable, excluding SBA PPP loans (1)			1.31		%				1.41		%				1.87		%
Nonaccrual loans			186.60		%				145.90		%				120.82		%
Nonperforming loans to loans receivable			0.65		%				0.84		%				1.30		%
Nonperforming assets to total assets			0.36		%				0.50		%				0.88		%

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

11

Average Balances, Yields, and Rates Paid:

			Three Months Ended
			September 30, 2021																		June 30, 2021																		September 30, 2020
			Average Balance						Interest Earned/ Paid						Average Yield/ Rate (1)						Average Balance						Interest Earned/ Paid						Average Yield/ Rate (1)						Average Balance						Interest Earned/ Paid						Average Yield/ Rate (1)
Interest Earning Assets:
Loans receivable, net (2) (3)			$	4,005,585					$	46,863					4.64		%				$	4,402,868					$	50,750					4.62		%				$	4,605,389					$	47,647					4.12		%
Taxable securities			893,374						4,711						2.09						799,023						4,050						2.03						697,128						3,865						2.21
Nontaxable securities (3)			157,907						931						2.34						160,489						947						2.37						163,070						953						2.32
Interest earning deposits			1,417,661						537						0.15						964,791						263						0.11						389,653						98						0.10
Total interest earning assets			6,474,527						53,042						3.25		%				6,327,171						56,010						3.55		%				5,855,240						52,563						3.57		%
Noninterest earning assets			740,433																		752,034																		765,740
Total assets			$	7,214,960																	$	7,079,205																	6,620,980
Interest Bearing Liabilities:
Certificates of deposit			$	365,278					$	407					0.44		%				$	381,417					$	481					0.51		%				$	466,920					$	1,133					0.97		%
Savings accounts			609,818						90						0.06						591,616						89						0.06						514,072						117						0.09
Interest bearing demand and money market accounts			2,881,567						947						0.13						2,836,717						954						0.13						2,639,511						1,389						0.21
Total interest bearing deposits			3,856,663						1,444						0.15						3,809,750						1,524						0.16						3,620,503						2,639						0.29
Junior subordinated debentures			21,060						184						3.47						20,986						186						3.55						20,766						196						3.75
Securities sold under agreement to repurchase			52,197						36						0.27						43,259						35						0.32						32,856						50						0.61
Total interest bearing liabilities			3,929,920						1,664						0.17		%				3,873,996						1,745						0.18		%				3,674,125						2,885						0.31		%
Noninterest demand deposits			2,300,795																		2,246,929																		1,998,772
Other noninterest bearing liabilities			128,537																		122,520																		148,345
Stockholders’ equity			855,708																		835,761																		799,738
Total liabilities and stockholders’ equity			$	7,214,960																	$	7,079,205																	$	6,620,980
Net interest income									$	51,378																	$	54,265																	$	49,678
Net interest spread															3.08		%																3.37		%																3.26		%
Net interest margin															3.15		%																3.44		%																3.38		%
Average interest earning assets to average interest bearing liabilities															164.75		%																163.32		%																159.36		%

(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.

12

			Nine Months Ended
			September 30, 2021																		September 30, 2020
			Average Balance						Interest Earned/ Paid						Average Yield/ Rate (1)						Average Balance						Interest Earned/ Paid						Average Yield/ Rate (1)
Interest Earning Assets:
Loans receivable, net (2) (3)			$	4,297,875					$	147,137					4.58		%				$	4,266,598					$	142,328					4.46		%
Taxable securities			789,691						12,295						2.08						758,941						14,068						2.48
Nontaxable securities (3)			160,748						2,836						2.36						148,560						2,686						2.42
Interest earning deposits			1,034,690						975						0.13						234,040						561						0.32
Total interest earning assets			6,283,004						163,243						3.47		%				5,408,139						159,643						3.94		%
Noninterest earning assets			749,781																		757,269
Total assets			$	7,032,785																	$	6,165,408
Interest Bearing Liabilities:
Certificates of deposit			$	379,885					$	1,447					0.51		%				$	502,691					$	4,955					1.32		%
Savings accounts			587,358						274						0.06						475,091						420						0.12
Interest bearing demand and money market accounts			2,817,353						2,975						0.14						2,428,148						4,897						0.27
Total interest bearing deposits			3,784,596						4,696						0.17						3,405,930						10,272						0.40
Junior subordinated debentures			20,987						557						3.55						20,693						699						4.51
Securities sold under agreement to repurchase			45,221						109						0.32						25,296						122						0.64
FHLB advances and other borrowings			—						—						—						1,959						8						0.55
Total interest bearing liabilities			3,850,804						5,362						0.19		%				3,453,878						11,101						0.43		%
Noninterest demand deposits			2,213,795																		1,768,260
Other noninterest bearing liabilities			128,584																		138,837
Stockholders’ equity			839,602																		804,433
Total liabilities and stockholders’ equity			$	7,032,785																	$	6,165,408
Net interest income									$	157,881																	$	148,542
Net interest spread															3.29		%																3.51		%
Net interest margin															3.36		%																3.67		%
Average interest earning assets to average interest bearing liabilities															163.16		%																156.58		%

(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.

13

HERITAGE FINANCIAL CORPORATION

QUARTERLY FINANCIAL STATISTICS (Unaudited)

(Dollar amounts in thousands, except per share amounts)

			Three Months Ended
			September 30, 2021						June 30, 2021						March 31, 2021						December 31, 2020						September 30, 2020
Earnings:
Net interest income			$	51,378					$	54,265					$	52,238					$	52,455					$	49,678
(Reversal of) provision for credit losses			(3,149)						(13,987)						(7,199)						(3,133)						2,730
Noninterest income			8,228						8,297						8,251						11,285						8,210
Noninterest expense			37,166						36,396						37,242						38,562						36,045
Net income			20,592						32,702						25,344						23,882						16,636
Pre-tax, pre-provision net income (3)			22,440						26,166						23,247						25,178						21,843
Basic earnings per share			$	0.58					$	0.91					$	0.70					$	0.66					$	0.46
Diluted earnings per share			$	0.58					$	0.90					$	0.70					$	0.66					$	0.46
Average Balances:
Loans receivable, net (1)			$	4,005,585					$	4,402,868					$	4,490,499					$	4,540,962					$	4,605,389
Investment securities			1,051,281						959,512						838,182						813,312						860,198
Total interest earning assets			6,474,527						6,327,171						6,042,566						5,913,765						5,855,240
Total assets			7,214,960						7,079,205						6,799,625						6,675,477						6,620,980
Total interest bearing deposits			3,856,663						3,809,750						3,685,496						3,634,018						3,620,503
Total noninterest demand deposits			2,300,795						2,246,929						2,091,359						2,034,425						1,998,772
Stockholders' equity			855,708						835,761						827,021						808,999						799,738
Financial Ratios:
Return on average assets (2)			1.13		%				1.85		%				1.51		%				1.42		%				1.00		%
Pre-tax, pre-provision return on average assets (2)(3)			1.23						1.48						1.39						1.50						1.31
Return on average common equity (2)			9.55						15.69						12.43						11.74						8.28
Return on average tangible common equity (2) (3)			13.93						22.94						18.37						17.62						12.66
Efficiency ratio			62.35						58.18						61.57						60.50						62.27
Noninterest expense to average total assets (2)			2.04						2.06						2.22						2.30						2.17
Net interest margin (2)			3.15						3.44						3.51						3.53						3.38
Net interest spread (2)			3.08						3.37						3.43						3.44						3.26

(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.

14

			As of Period End or for the Three Months Ended
			September 30, 2021						June 30, 2021						March 31, 2021						December 31, 2020						September 30, 2020
Select Balance Sheet:
Total assets			$	7,259,038					$	7,105,672					$	7,028,392					$	6,615,318					$	6,685,889
Loans receivable, net			3,905,567						4,155,968						4,531,644						4,398,462						4,593,390
Investment securities			1,072,600						1,049,524						893,558						802,163						834,492
Deposits			6,215,558						6,061,706						6,019,698						5,597,990						5,689,048
Noninterest demand deposits			2,299,248						2,256,341						2,205,562						1,980,531						1,989,247
Stockholders' equity			848,404						855,984						827,151						820,439						803,129
Financial Measures:
Book value per share			$	24.13					$	23.77					$	22.99					$	22.85					$	22.36
Tangible book value per share (1)			16.97						16.76						15.95						15.77						15.27
Stockholders' equity to total assets			11.7		%				12.0		%				11.8		%				12.4		%				12.0		%
Tangible common equity to tangible assets (1)			8.5						8.8						8.5						8.9						8.5
Loans to deposits ratio			63.6						69.4						76.3						79.8						82.0
Regulatory Capital Ratios:
Common equity Tier 1 capital to risk-weighted assets(2)			13.3		%				13.6		%				12.8		%				12.3		%				11.7		%
Tier 1 leverage capital to average assets(2)			8.8		%				9.1		%				9.1		%				9.0		%				8.8		%
Tier 1 capital to risk-weighted assets(2)			13.8		%				14.0		%				13.2		%				12.8		%				12.2		%
Total capital to risk-weighted assets(2)			14.8		%				15.1		%				14.5		%				14.0		%				13.4		%
Credit Quality Metrics:
ACL on loans to:
Loans receivable			1.22		%				1.23		%				1.40		%				1.57		%				1.57		%
Loans receivable, excluding SBA PPP loans (1)			1.31						1.41						1.73						1.87						1.93
Nonperforming loans			186.60						145.90						121.48						120.82						139.42
Nonperforming loans to loans receivable			0.65						0.84						1.15						1.30						1.13
Nonperforming assets to total assets			0.36						0.50						0.75						0.88						0.79
Net (charge-offs) recoveries on loans to average loans receivable			(0.04)						0.01						0.02						(0.03)						(0.04)
Criticized Loans by Credit Quality Rating:
Special Mention			$	90,554					$	100,317					$	108,975					$	132,036					$	104,781
Substandard			126,694						135,374						160,461						158,515						123,570
Other Metrics:
Number of banking offices			53						53						53						61						62
Average number of full-time equivalent employees			813						822						840						848						857
Deposits per branch			$	117,275					$	114,372					$	113,579					$	91,770					$	91,759
Average assets per full-time equivalent employee			8,877						8,607						8,098						7,873						7,727

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

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

15

HERITAGE FINANCIAL CORPORATION

NON-GAAP FINANCIAL MEASURES (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.

			September 30, 2021						June 30, 2021						March 31, 2021						December 31, 2020						September 30, 2020
Tangible common equity to tangible assets and tangible book value per share:
Total stockholders' equity (GAAP)			$	848,404					$	855,984					$	827,151					$	820,439					$	803,129
Exclude intangible assets			(251,675)						(252,433)						(253,230)						(254,027)						(254,886)
Tangible common equity (non-GAAP)			$	596,729					$	603,551					$	573,921					$	566,412					$	548,243
Total assets (GAAP)			$	7,259,038					$	7,105,672					$	7,028,392					$	6,615,318					$	6,685,889
Exclude intangible assets			(251,675)						(252,433)						(253,230)						(254,027)						(254,886)
Tangible assets (non-GAAP)			$	7,007,363					$	6,853,239					$	6,775,162					$	6,361,291					$	6,431,003
Stockholders' equity to total assets (GAAP)			11.7		%				12.0		%				11.8		%				12.4		%				12.0		%
Tangible common equity to tangible assets (non-GAAP)			8.5		%				8.8		%				8.5		%				8.9		%				8.5		%
Shares outstanding			35,166,599						36,006,560						35,981,317						35,912,243						35,910,300
Book value per share (GAAP)			$	24.13					$	23.77					$	22.99					$	22.85					$	22.36
Tangible book value per share (non-GAAP)			$	16.97					$	16.76					$	15.95					$	15.77					$	15.27

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.

			September 30, 2021						June 30, 2021						March 31, 2021						December 31, 2020						September 30, 2020
ACL on loans to loans receivable, excluding SBA PPP loans:
Allowance for credit losses on loans			$	48,317					$	51,562					$	64,225					$	70,185					$	73,340
Loans receivable (GAAP)			$	3,953,884					$	4,207,530					$	4,595,869					$	4,468,647					$	4,666,730
Exclude SBA PPP loans			(266,896)						(544,250)						(886,761)						(715,121)						(867,782)
Loans receivable, excluding SBA PPP loans (non-GAAP)			$	3,686,988					$	3,663,280					$	3,709,108					$	3,753,526					$	3,798,948
ACL on loans to loans receivable (GAAP)			1.22		%				1.23		%				1.40		%				1.57		%				1.57		%
ACL on loans to loans receivable, excluding SBA PPP loans (non-GAAP)			1.31		%				1.41		%				1.73		%				1.87		%				1.93		%

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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
			September 30, 2021						June 30, 2021						March 31, 2021						December 31, 2020						September 30, 2020
Return on average tangible common equity, annualized:
Net income (GAAP)			$	20,592					$	32,702					$	25,344					$	23,882					$	16,636
Add amortization of intangible assets			758						797						797						859						860
Exclude tax effect of adjustment			(159)						(167)						(167)						(180)						(181)
Tangible net income (non-GAAP)			$	21,191					$	33,332					$	25,974					$	24,561					$	17,315
Average stockholders' equity (GAAP)			$	855,708					$	835,761					$	827,021					$	808,999					$	799,738
Exclude average intangible assets			(252,159)						(252,956)						(253,747)						(254,587)						(255,453)
Average tangible common stockholders' equity (non-GAAP)			$	603,549					$	582,805					$	573,274					$	554,412					$	544,285
Return on average common equity, annualized (GAAP)			9.55		%				15.69		%				12.43		%				11.74		%				8.28		%
Return on average tangible common equity, annualized (non-GAAP)			13.93		%				22.94		%				18.37		%				17.62		%				12.66		%

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 the current expected credit losses ("CECL") methodology required by ASU 2016-13.

			Three Months Ended
			September 30, 2021						June 30, 2021						March 31, 2021						December 31, 2020						September 30, 2020
Pre-tax, pre-provision income and pre-tax, pre-provision return on average equity, annualized:
Net income (GAAP)			$	20,592					$	32,702					$	25,344					$	23,882					$	16,636
Add income tax expense			4,997						7,451						5,102						4,429						2,477
Add (reversal of) provision for credit losses			(3,149)						(13,987)						(7,199)						(3,133)						2,730
Pre-tax, pre-provision income (non-GAAP)			$	22,440					$	26,166					$	23,247					$	25,178					$	21,843
Average total assets (GAAP)			$	7,214,960					$	7,079,205					$	6,799,625					$	6,675,477					$	6,620,980
Return on average assets, annualized (GAAP)			1.13		%				1.85		%				1.51		%				1.42		%				1.00		%
Pre-tax, pre-provision return on average assets (non-GAAP)			1.23		%				1.48		%				1.39		%				1.50		%				1.31		%

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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
			September 30, 2021						June 30, 2021						September 30, 2020
Loan yield, excluding SBA PPP loans and incremental accretion on purchased loans, annualized:
Interest and fees on loans (GAAP)			$	46,863					$	50,750					$	47,647
Exclude interest and fees on SBA PPP loans			(8,042)						(10,003)						(5,810)
Exclude incremental accretion on purchased loans			(681)						(495)						(944)
Adjusted interest and fees on loans (non-GAAP)			$	38,140					$	40,252					$	40,893
Average loans receivable, net (GAAP)			$	4,005,585					$	4,402,868					$	4,605,389
Exclude average SBA PPP loans			(392,570)						(777,156)						(863,127)
Adjusted average loans receivable, net (non-GAAP)			$	3,613,015					$	3,625,712					$	3,742,262
Loan yield, annualized (GAAP)			4.64		%				4.62		%				4.12		%
Loan yield, excluding SBA PPP loans and incremental accretion on purchased loans, annualized (non-GAAP)			4.19		%				4.45		%				4.35		%

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