Heritage Financial 8K Regulation FD Disclosure | HFWA 6 Feb 15

Investor Presentation

February 2015

Brian Vance

Chief Executive Officer

Jeff Deuel

President and Chief Operating Officer

Don Hinson

Executive Vice President and Chief Financial Officer

Bryan McDonald

Executive Vice President and Chief Lending Officer

Exhibit 99.1

Forward-Looking Statements

This presentation contains forward-looking statements that are subject to risks and uncertainties, including, but not limited to:

The expected revenues, cost savings, synergies and other benefits from the Washington Banking merger and our other

merger and acquisition activities might not be realized within the anticipated time frames or at all, and costs or difficulties

relating to integration matters, including but not limited to, customer and employee retention might be greater than

expected;

The credit and concentration risks of lending activities;

Changes in general economic conditions, either nationally or in our market areas;

Competitive market pricing factors and interest rate risks;

Market interest rate volatility;

Balance sheet (for example, loans) concentrations;

Fluctuations in demand for loans and other financial services in our market areas;

Changes in legislative or regulatory requirements or the results of regulatory examinations;

The ability to recruit and retain key management and staff;

Risks associated with our ability to implement our expansion strategy and merger integration;

Stability of funding sources and continued availability of borrowings;

Adverse changes in the securities markets;

The inability of key third-party providers to perform their obligations to us;

Changes

accounting

policies

and

practices

and

the

use

estimates

determining

fair

value

certain

our

assets,

which

estimates

may

prove

incorrect

and

result

significant

declines

valuation;

and

These and other risks as may be detailed from time to time in our filings with the Securities and Exchange Commission.

The Company cautions readers not to place undue reliance on any forward-looking statements. Moreover, you should treat these

statements as speaking only as of the date they are made and based only on information then actually known to the Company. 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 2014 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.

Overview

NASDAQ Symbol

HFWA

Market Capitalization

$481.7 million

Institutional Ownership

75.3%

Total Assets

$3.5 billion

Headquarters

Olympia, WA

# of Branches

Year Established

1927

Note: Financial information as of 12/31/2014 and market information as of 2/2/2015

Three banks, one charter

Transformational Merger with WBCO in 2014

Merger of Heritage Financial Corporation and Washington Banking Company

combined two quality community banks to create a $3.5+ billion franchise

Logical geographic fit

Created significant operational scale and efficiencies

Effective use of capital with improved returns on tangible common equity

Positioned to expand in metro markets

Completed merger on May 1, 2014

Completed system conversion onto Heritage’s core system on October 5, 2014

Achieving targeted merger related cost savings –

full benefit expected to be

recognized in early 2015

Rank

Total

WA -

Institution (State)

Number of

Branches

Deposits in

Market

Bank of America Corp. (NC)

189

25,422,347

+3.6%

20.68%

Wells Fargo & Co. (CA)

159

14,569,387

+7.5%

11.85%

U.S. Bancorp (MN)

189

12,940,872

+0.8%

10.53%

JPMorgan Chase & Co. (NY)

211

12,235,289

+10.0%

9.95%

KeyCorp (OH)

162

8,935,023

+4.4%

7.27%

Umpqua Holdings Corp. (OR)

110

5,101,869

+13.7%

4.15%

Washington Federal Inc. (WA)

4,916,698

-2.5%

4.00%

Banner Corp. (WA)

4,029,793

+7.7%

3.28%

Columbia Banking System Inc. (WA)

3,655,191

+3.2%

2.97%

W.T.B. Financial Corp. (WA)

3,192,886

+4.3%

2.60%

Mitsubishi UFJ Finl Grp Inc.

3,098,038

+0.6%

2.52%

Heritage Financial Corp. (WA)

2,853,726

+1.2%

2.32%

HomeStreet Inc. (WA)

1,905,969

+9.9%

1.55%

Yakima FS&LA (WA)

1,367,785

-2.4%

1.11%

Peoples Bancorp (WA)

1,179,743

+5.4%

0.96%

Cashmere Valley Bank (WA)

1,148,312

+4.9%

0.93%

Opus Bank (CA)

1,070,464

+10.6%

0.87%

East West Bancorp Inc. (CA)

1,008,752

+9.1%

0.82%

Olympic Bancorp Inc. (WA)

846,053

+4.8%

0.69%

Zions Bancorp. (UT)

727,672

+1.0%

0.59%

Skagit Bancorp Inc. (WA)

686,204

+2.9%

0.56%

Riverview Bancorp Inc. (WA)

618,304

+4.5%

0.50%

First FS&LA of Port Angeles (WA)

602,816

+0.7%

0.49%

Timberland Bancorp Inc. (WA)

598,670

+0.4%

0.49%

Pacific Financial Corp. (WA)

585,507

+4.9%

0.48%

Total For Institutions In Market

1,826

$ 122,930,458

+4.4%

Out of 88 Institutions

Washington - Top 25

Deposit

Growth

(1-Year)

Deposit Market Share

Source: SNL Financial, deposit market share data as of 6/30/2014

Note: All dollars in thousands

HFWA

ranked

for

deposit

market

share in Washington among banks

headquartered in the state

Strong and Diverse Economic Landscape

Headquartered in Western Washington

Major Operations in Western Washington

Thriving local economy with job growth in technology

and aerospace sectors

Seattle

economy

ranks

largest

the

country

GDP, which increased 4.1% since 2013

Seattle’s population grew 5.2% from 2010 to 2014

Washington

per

capita

income

2013

ranked

the United States at $47,031, 6.3% higher than the

national average

Nine Fortune 500 companies headquartered in

Washington, including Amazon, Costco, Microsoft and

Starbucks

Significant increase in new construction coupled with

improving economic conditions have led to an

improving real estate market

Number of Seattle building permits increased

by 20% year-to-date*

Number of Washington building permits

increased 7% overall year-to-date*

Seattle home prices increased 6% in

September 2014 versus September 2013

Note: Information for Seattle MSA, where available

Source:

U.S.

Department

Commerce,

Federal

Reserve

Bank

St.

Louis,

Office

Financial

Management,

U.S. Census Bureau, City of Seattle, Puget Sound Economic Forecaster, National Association of Home

Builders, S&P Case-Shiller

*Information as of 10/31/2014

Fort Lewis

McChord Air Force Base

Historical Growth –

Organic and Acquisitive

Source: Company financials, as of 12/31/2014

Note: All dollars in millions

Acquired North Pacific

Bancorporation

Acquired Washington

Independent

Bancshares Inc.

Acquired Western

Washington Bancorp

Completed 2 FDIC deals -

Pierce Commercial Bank and

Cowlitz Bank acquiring $211M

and $345M in deposits,

respectively

Acquired Valley Community

Bancshares, Inc. with $254M in

assets and Northwest Commercial

Bank with $65M in assets

Merger with

Washington Banking

Company

In addition to organic growth, HFWA has completed 6 whole bank mergers and 2 FDIC-assisted transactions since 1998

Financial Update –

Q4 2014

Source: Company financials, as of 12/31/2014

Net income of $7.3 million, or $0.24 diluted earnings per share

Return on average assets of 0.83% and return on average tangible

common equity of 8.85%

Net interest margin of 4.74%, which increased by 42 basis points

from prior quarter. Excluding the impact from accretion on

purchased loans, the net interest margin was 3.86% which increased by 3 basis points from prior quarter

Gross loans held for investment increased to $2.125 billion vs. $2.064 billion in prior quarter, or annualized growth of 11.8%

Total deposits of $2.9 billion, which includes noninterest bearing deposits of 24.4% and non-maturity deposits of 81.9% of the total

deposit balance, respectively

Total noninterest bearing demand deposits increased to $709.7 billion vs. $694.4 billion in prior quarter, or annualized growth of 8.8%

Total assets of $4.6 million per FTE employee vs. $4.4 million from prior quarter

Nonperforming noncovered assets decreased by 38.5%, to $9.7 million at December 31, 2014 vs. $15.8 million in prior quarter

Tangible book value per share of $10.73 vs. $10.62 from prior quarter, an increase of $0.11 per share

Dividends per share of $0.25, including a regular dividend of $0.09 and special dividend of $0.16

Loan Portfolio

Loan Portfolio Trends

Loan Portfolio Mix -

% of Total*

Source: Company financials, as of 12/31/2014

Note: All dollars in millions

*Includes non-covered and covered loans

**Excludes impact from incremental accretion on purchased loans

Total CRE of 48.8% of total loans

Total C&I and owner-occupied CRE of 47.5% of total

loans

Core yield on loans of 5.03% in Q4 2014**

Total loans of $2.3 billion, including $126.2 million

of covered loans remaining in loan portfolio from

FDIC-assisted acquisitions

$244.9 million of loan originations in Q4 2014

Deposit Profile

Deposit Trends

Deposit Mix -

% of Total

Source: Company financials, as of 12/31/2014

Note: All dollars in millions

Noninterest bearing demand of 24.4% of total

deposits

Non-maturity deposits of 81.9% of total deposits

Cost of total deposits of 0.20% in Q4 2014

Net Interest Margin Trends

Net Interest Margin (Core vs. Accretion)*

Source: Company financials, as of 12/31/2014

*Impact on net interest margin from incremental accretion on purchased loans

5.19%

4.82%

4.67%

4.58%

4.48%

4.55%

4.32%

4.74%

Cash and Investment Securities Portfolio

Cash and Investment Securities

Investment Portfolio Mix

Source: Company financials, as of 12/31/2014

Note: All dollars in millions

Total cash and investment securities of $910 million, or

26.3% of total assets

Average yield on taxable investment securities of

1.94% in Q4 2014

Average yield on non-taxable investment securities of

1.98% in Q4 2014

Non-Interest Expense

Source: Company financials, as of 12/31/2014

Note: All dollars in thousands

Non-Interest Expense Detail and Efficiency Ratio

Credit Quality Trends

Source: Company financials, as of 12/31/2014

Note: All dollars in thousands

Note: Excludes purchased covered loans

Loan Loss Reserve and LLR/Loans

Net Charge

Offs and NCOs/Avg. Loans

Provision Expense

NPAs / Assets

Capital Ratio Trends

Source: Company financials, as of 12/31/2014

Tier -

1 Capital Ratio

Tangible Common Equity Ratio

Risk Based Capital Ratio

Leverage Ratio

Profitability Trends

Source: Company financials, as of 12/31/2014

Note: All dollars in thousands, except per share

Earnings Per Share

ROAA

ROATCE

Net Income

Total Shareholder Return

Total Return* –

Last Twelve Months

Source: SNL Financial, as of 2/2/2015

Note: SNL U.S. Bank $1B-$5B index includes banks nationwide with total assets of

$1.0 billion to $5.0 billion

*Total return includes stock price appreciation and reinvested dividends

**Average Street EPS estimates, per FactSet Research Systems, Inc.

***Dividends based on date declared

Ticker

HFWA

Exchange

NASDAQ

Stock Price

15.92

Market Cap. ($MM)

481.7

Dividend Yield (Regular Div. Only)

2.51%

Average Daily Volume (3 Mo.)

Avg. Daily Volume (Shares)

71,611

Avg. Daily Volume ($000s)

1,140

52-Week High / Low Price

52-Week High (3/05/2014)

18.39

52-Week Low (5/16/2014)

15.19

Per Share

Tg. Book Value Per Share

10.73

EPS -

2015E**

1.24

EPS -

2016E**

1.31

Number of Research Analysts

Valuation Ratios

Price / Tg. Book Value

148.4%

Price / 2015E EPS**

12.8x

Price / 2016E EPS**

12.2x

Dividends Per Share***

HFWA Investment Thesis

Western Washington geographic footprint with vibrant economy and

attractive long-term demographics

Continued focus on growth trends and capital management

Grow organically and continue to evaluate M&A opportunities

Return

capital

shareholders

via

dividends

and

stock

buybacks,

appropriate

Benefits of merger with Washington Banking Company expected to be

reflected in HFWA’s 2015 results

Attractive valuation

Appendix

***

****

Historical Financial Highlights

Source: Company financials, as of 12/31/2014

Note: All dollars in thousands

Note: All credit quality information excludes covered loans

Last 5 Quarters

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Balance Sheet

Total Assets

1,659,038

1,662,473

3,391,579

3,451,320

3,459,916

Asset Growth (Anlzd. vs. Prior Period)

-3.7%

0.8%

416.0%

7.0%

1.0%

Gross Loans (Incl. HFS)

1,231,920

1,237,037

2,236,572

2,207,524

2,256,659

Loan Growth (Anlzd. vs. Prior Period)

-1.6%

1.7%

323.2%

-5.2%

8.9%

Total Deposits

1,399,189

1,404,214

2,866,542

2,903,069

2,906,331

Deposit Growth (Anlzd. vs. Prior Period)

-7.5%

1.4%

416.6%

5.1%

0.4%

Net Loans / Deposits Ratio

86.0%

77.0%

75.1%

76.7%

Cash and Securities / Total Assets

20.8%

20.9%

25.1%

27.4%

26.3%

Noninterest Bearing Deposits (% of Total)

25.0%

25.1%

23.3%

23.7%

24.4%

Non-CDs (% of Total)

77.9%

78.8%

78.3%

80.1%

81.9%

Capital Adequacy

Tangible Common Equity

184,782

185,593

319,476

321,179

324,588

Tangible Common Equity Ratio

11.3%

11.5%

9.8%

9.7%

Leverage Ratio

11.3%

11.5%

12.6%

10.3%

Risk Based Capital Ratio

16.8%

16.6%

15.7%

15.9%

15.1%

Credit Quality Ratios

NPAs / Total Assets

0.76%

0.97%

0.58%

0.48%

0.29%

NCOs / Avg. Loans

0.11%

-0.06%

0.18%

0.13%

0.27%

Loan Loss Reserves / Gross Loans

1.94%

1.08%

1.04%

Income Statement and Performance Ratios

Net Interest Income

17,646

16,741

28,596

33,307

36,780

Net Income

710

2,543

4,148

7,068

7,255

ROAA

0.17%

0.62%

0.59%

0.82%

0.83%

Net Interest Margin

4.58%

4.48%

4.55%

4.32%

4.74%

Noninterest Expense / Avg. Assets

4.38%

3.63%

3.85%

3.27%

3.36%

Assets Per Employee

4,448

4,644

4,192

4,352

4,626

Efficiency Ratio

92.2%

77.6%

80.9%

73.1%

71.9%

Discounts on Acquired Loans

Total Discount on Acquired Loans

$29.7 million remaining loan discount on acquired loans, including covered and non-covered portfolios

Source: Company information, as of 12/31/2014

Note: All dollars in thousands

Covered

Non-

Covered

Total

12/31/2013

Loan Balance

64,788

198,384

263,172

Remaining Loan Mark

1,034

7,503

8,537

Recorded Investment

63,754

190,881

254,635

Discount %

1.60%

3.78%

3.24%

3/31/2014

Loan Balance

62,450

188,461

250,911

Remaining Loan Mark

976

6,809

7,785

Recorded Investment

61,474

181,652

243,126

Discount %

1.56%

3.61%

3.10%

6/30/2014

Loan Balance

174,187

1,055,584

1,229,771

Remaining Loan Mark

14,519

31,096

45,615

Recorded Investment

159,668

1,024,488

1,184,156

Discount %

8.34%

2.95%

3.71%

9/30/2014

Loan Balance

149,673

995,910

1,145,583

Remaining Loan Mark

10,840

24,933

35,773

Recorded Investment

138,833

970,977

1,109,810

Discount %

7.24%

2.50%

3.12%

12/31/2014

Loan Balance

131,882

927,231

1,059,113

Remaining Loan Mark

5,682

24,025

29,707

Recorded Investment

126,200

903,206

1,029,406

Discount %

4.31%

2.59%

2.80%

Total Acquired Loans

Heritage Financial (HFWA) 8-KRegulation FD Disclosure