EXHIBIT 99.2
[RYAN, BECK LOGO]
Dear Sir/Madam:
At the request of Heritage Bank and Heritage Financial Corporation, we are
enclosing materials regarding the offering of Heritage Financial Corporation
common stock. The materials include a Prospectus and Question and Answer
Brochure describing the stock offering. Ryan, Beck & Co., Inc., has been
retained by Heritage Financial Corporation as selling agent in connection with
the stock offering.
We have been asked to forward these materials to you in view of certain
regulatory requirements and the securities laws of your state.
Sincerely,
[LOGO TO COME]
Ryan, Beck & Co.
THIS LETTER IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS. THE SHARES OF
COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE SAVINGS ASSOCIATION
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
NOTE: To accompany one of the preceding letters for prospects in states where
the offer must be made by a broker-dealer.
[HERITAGE FINANCIAL LOGO]
LETTER TO MEMBERS ELIGIBLE TO VOTE
Dear Customer:
It is my pleasure to inform you of an investment opportunity and to request
your vote on our Plan of Conversion (the "Plan"). In connection with the Plan,
we will change from a mutual holding company corporate structure to a fully
stockholder-owned structure (the "Conversion"). To effect the change, Heritage
Financial Corporation, a company that we recently organized to serve as the
Bank's parent company, is conducting a stock offering of up to shares
of its common stock at a purchase price of $10 per share.
THE VOTE:
YOUR VOTE IS IMPORTANT IN ORDER FOR US TO IMPLEMENT THE PLAN. We have
received conditional regulatory approval of our Plan, but we must also receive
the approval of the Bank's customers eligible to vote on the Plan. Included
herein is a Proxy Statement describing the Plan of Conversion and business
reasons for the change in corporate structure. We have also included a
Question and Answer Brochure. PLEASE VOTE AND SIGN THE ENCLOSED PROXY CARD(S).
PLEASE MAIL THE CARD(S) IN THE ENCLOSED PROXY REPLY ENVELOPE, TO BE RECEIVED
BY P.M., PACIFIC TIME, ON DECEMBER , 1997.
NOT VOTING MUST BE TREATED THE SAME AS VOTING "AGAINST" THE PLAN, SO YOUR
VOTE IS VERY IMPORTANT. I HOPE YOU WILL VOTE "FOR".
VOTING DOES NOT OBLIGATE YOU TO PURCHASE STOCK IN THE OFFERING.
THE PLAN WILL NOT RESULT IN CHANGES IN THE ACCOUNT NUMBERS OR TERMS OF YOUR
DEPOSIT ACCOUNTS OR LOANS. YOUR DEPOSIT ACCOUNTS WILL CONTINUE TO BE INSURED
BY THE FDIC.
THE PLAN DOES NOT INVOLVE ANY OUTSIDE COMPANIES OR PERSONS. OUR CUSTOMERS
WILL CONTINUE TO ENJOY THE SAME SERVICES IN THE SAME OFFICES WITH THE SAME
STAFF AND BOARD OF DIRECTORS.
THE STOCK OFFERING:
AS AN ELIGIBLE DEPOSITOR OR BORROWER OF HERITAGE BANK, YOU HAVE A PURCHASE
PRIORITY (BUT NO OBLIGATION TO BUY) IN THE OFFERING. Please read the enclosed
Prospectus carefully before making an investment decision. If you would like
to place an order for common stock, you may do so WITHOUT PAYING A COMMISSION.
Please complete the enclosed Stock Order Form and return it in the Order Reply
Envelope, along with payment or authorization to withdraw funds (WITHOUT
PENALTY FOR EARLY WITHDRAWAL) from any Heritage Bank deposit account(s) that
you may have. ORDERS MUST BE RECEIVED BY THE BANK BY 10:00 A.M., PACIFIC TIME,
ON DECEMBER , 1997.
(over)
If you wish to purchase common stock through an existing Heritage Bank IRA
or any other IRA you may have, please be sure to call the Stock Information
Center within the first two weeks of the Offering period, as IRA-related
procedures require additional processing time.
Upon consummation of the Offering, we expect that Heritage Financial common
stock will be listed on the Nasdaq National Market under the symbol "HFWA".
Our Board of Directors believes that this transaction is in the best
interests of our customers. The net proceeds of the Offering will be available
for lending and investing, and the additional capital will support continued
growth and expansion of products and services.
IF YOU HAVE ANY QUESTIONS, PLEASE REFER TO THE ENCLOSED QUESTION AND ANSWER
BROCHURE OR CALL OUR STOCK INFORMATION CENTER AT A NUMBER SHOWN BELOW.
I hope that you will take advantage of this opportunity to share in our
future.
Sincerely,
/s/ Donald V. Rhodes
Donald V. Rhodes
Chairman of the Board, President and Chief Executive Officer
THIS LETTER IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS. THE SHARES OF
COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE SAVINGS ASSOCIATION
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
- -------------------------------------------------------------------------------
STOCK INFORMATION CENTER
(888) 849-1078 OR (360) 705-9190
9:00 A.M. TO 4:00 P.M., MONDAY THROUGH FRIDAY
LOCATED AT HERITAGE BANK'S MAIN OFFICE
LETTER TO MEMBERS ELIGIBLE TO VOTE
Page 2
[HERITAGE FINANCIAL LOGO]
LETTER TO REGISTERED PUBLIC STOCKHOLDERS
Dear Stockholder:
As you know, Heritage Bank conducted an initial stock offering in early 1994
in connection with reorganizing into the mutual holding company form of
organization. We are now completing the transition to full public ownership
through another stock offering. Pursuant to a Plan of Conversion (the "Plan"),
our holding company will convert from the mutual form (no stockholders) to a
stockholder-owned holding company, Heritage Financial Corporation. In
connection with the Plan, Heritage Financial is offering for sale up to
4,140,000 shares of its common stock at a purchase price of $10 per share.
In addition to the shares of Heritage Financial common stock that are for
sale in the Offering, additional shares are designated for exchange. Shares of
Heritage Bank common stock owned by you and other public stockholders at the
conclusion of the transaction will be exchanged for shares of Heritage
Financial common stock (the "Exchange"). Additionally, the mutual holding
company's shares of Heritage Bank stock will be canceled. As soon as
practicable after the consummation of the transaction, each stockholder of
Heritage Bank common stock will receive a transmittal form explaining the
procedure for effecting the Exchange.
We are pleased to inform you that we have received conditional approval for
Heritage Financial common stock to be listed on the Nasdaq National Market
under the symbol "HFWA".
The Plan of Conversion requires the approval of the Bank's stockholders.
Included herein is a Proxy Statement describing the Plan of Conversion and
business reasons for the transaction. We have also included a Question and
Answer Brochure. PLEASE VOTE AND SIGN THE ENCLOSED PROXY CARD. PLEASE MAIL THE
CARD IN THE ENCLOSED PROXY REPLY ENVELOPE, TO BE RECEIVED BY :00 P.M.,
PACIFIC TIME, ON , 1997.
ON BEHALF OF THE BOARD OF DIRECTORS I URGE YOU TO VOTE "FOR" THE PLAN.
YOU HAVE THE OPPORTUNITY TO PURCHASE HERITAGE FINANCIAL COMMON STOCK IN THE
OFFERING. AS A STOCKHOLDER OF THE BANK ON , 1997, YOU HAVE A PURCHASE
PREFERENCE OVER MEMBERS OF THE GENERAL PUBLIC. Please read the enclosed
Prospectus carefully before making an investment decision. If you choose to
participate in the Offering, you may do so WITHOUT PAYING A COMMISSION. Please
complete the enclosed Stock Order Form and return it in the Order Reply
Envelope, along with payment or authorization to withdraw funds (WITHOUT
PENALTY FOR EARLY WITHDRAWAL) from any Heritage Bank deposit account(s) that
you may have. ORDERS MUST BE RECEIVED BY THE BANK BY 10:00 A.M., PACIFIC TIME,
ON , 1997.
If you wish to purchase common stock through an existing Heritage Bank IRA
or any other IRA you may have, please be sure to call the Stock Information
Center within the first two weeks of the Offering period, as IRA-related
procedures require additional processing time.
(over)
LETTER TO REGISTERED PUBLIC STOCKHOLDERS
Page 2
The Board of Directors believes that the conversion of the mutual holding
company and the related Offering and Exchange are consistent with the goal of
enhancing value for stockholders. The net proceeds of the Offering will be
available for lending and investing, and the additional capital will support
continued growth.
IF YOU HAVE ANY QUESTIONS, PLEASE REFER TO THE ENCLOSED QUESTION AND ANSWER
BROCHURE OR CALL THE STOCK INFORMATION CENTER AT A NUMBER SHOWN BELOW.
We look forward to continued association with you as a Heritage Financial
stockholder.
Sincerely,
/s/ Donald V. Rhodes
Donald V. Rhodes
Chairman of the Board, President and Chief Executive Officer
THIS LETTER IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS. THE SHARES OF
COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE SAVINGS ASSOCIATION
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
- -------------------------------------------------------------------------------
STOCK INFORMATION CENTER
(888) 849-1078 OR (360) 705-9190
9:00 A.M. TO 4:00 P.M., MONDAY THROUGH FRIDAY
LOCATED AT HERITAGE BANK'S MAIN OFFICE
[HERITAGE FINANCIAL LOGO]
LETTER TO CLOSED ACCOUNTS (Can Buy, Not Vote)
Dear Friend:
It is my pleasure to inform you of an investment opportunity. As you may
know, Heritage Bank concluded an initial stock offering in 1994. We are now
conducting another stock offering. Heritage Financial Corporation, a company
that we recently organized to serve as the Bank's parent company, is
conducting a stock offering of up to 4,140,000 shares of its common stock at a
purchase price of $10 per share.
AS AN ELIGIBLE DEPOSITOR OF HERITAGE BANK ON JUNE 30, 1996, WHOSE ACCOUNT
WAS CLOSED THEREAFTER, YOU HAVE A PURCHASE PRIORITY IN THE OFFERING. Enclosed
please find a Prospectus, Stock Order Form, Question and Answer Brochure and
Reply Envelope. Please read the Prospectus carefully before making an
investment decision. If you choose to participate in the Offering, you may do
so WITHOUT PAYING A COMMISSION. Please complete the enclosed Stock Order Form
and return it in the enclosed Reply Envelope, along with payment. ORDERS MUST
BE RECEIVED BY THE BANK BY 10:00 A.M., PACIFIC TIME, ON , 1997.
If you wish to purchase common stock through an IRA, please be sure to call
the Stock Information Center within the first two weeks of the Offering
period, as IRA-related procedures require additional processing time.
Upon consummation of the Offering, we expect that Heritage Financial common
stock will be listed on the Nasdaq National Market under the symbol "HFWA".
IF YOU HAVE ANY QUESTIONS, PLEASE REFER TO THE ENCLOSED QUESTION AND ANSWER
BROCHURE OR CALL THE STOCK INFORMATION CENTER AT A NUMBER SHOWN BELOW.
I hope that you will take advantage of this opportunity to share in our
future.
Sincerely,
/s/ Donald V. Rhodes
Donald V. Rhodes
Chairman of the Board, President and Chief Executive Officer
THIS LETTER IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS. THE SHARES OF
COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE SAVINGS ASSOCIATION
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
- -------------------------------------------------------------------------------
STOCK INFORMATION CENTER
(888) 849-1078 OR (360) 705-9190
9:00 A.M. TO 4:00 P.M., MONDAY THROUGH FRIDAY
LOCATED AT HERITAGE BANK'S MAIN OFFICE
[HERITAGE FINANCIAL LOGO]
POTENTIAL INVESTOR LETTER (CALL-INS)
Dear Friend:
It is my pleasure to inform you of an investment opportunity. Heritage
Financial Corporation, a company that we recently organized to serve as the
Bank's parent company, is conducting a stock offering of up to 4,140,000
shares of its common stock at a purchase price of $10 per share.
Enclosed please find a Prospectus, Stock Order Form, Question and Answer
Brochure and Reply Envelope. Please read the Prospectus carefully before
making an investment decision. If you choose to participate in the Offering,
you may do so WITHOUT PAYING A COMMISSION. Please complete the Stock Order
Form and return it in the enclosed Reply Envelope, along with payment. ORDERS
MUST BE RECEIVED BY THE BANK BY 10:00 A.M., PACIFIC TIME, ON , 1997.
If you wish to purchase common stock through an IRA, please be sure to call
the Stock Information Center within the first two weeks of the Offering
period, as IRA-related procedures require additional processing time.
Upon consummation of the Offering, we expect that Heritage Financial common
stock will be listed on the Nasdaq National Market under the symbol "HFWA".
IF YOU HAVE ANY QUESTIONS, PLEASE REFER TO THE ENCLOSED QUESTION AND ANSWER
BROCHURE OR CALL THE STOCK INFORMATION CENTER AT A NUMBER SHOWN BELOW.
Thank you for your interest in Heritage Bank.
Sincerely,
/s/ Donald V. Rhodes
Donald V. Rhodes
Chairman of the Board, President and Chief Executive Officer
THIS LETTER IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS. THE SHARES OF
COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE SAVINGS ASSOCIATION
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
- -------------------------------------------------------------------------------
STOCK INFORMATION CENTER
(888) 849-1078 OR (360) 705-9190
9:00 A.M. TO 4:00 P.M., MONDAY THROUGH FRIDAY
LOCATED AT HERITAGE BANK'S MAIN OFFICE
LOBBY POSTER (optional)
[HERITAGE FINANCIAL LOGO]
HOLDING COMPANY FOR HERITAGE BANK
UP TO 4,140,000 SHARES
COMMON STOCK
$10 PER SHARE
PURCHASE PRICE
WE ARE CONDUCTING AN OFFERING OF COMMON STOCK!
If you have any questions or would like to obtain a copy of the Prospectus,
please call our Stock Information Center at (888) 849-1078 or (360) 705-9190,
from 9:00 a.m. to 4:00 p.m., Monday through Friday.
Our Stock Information Center is located in our main office.
THIS NOTICE IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY THESE SECURITIES. THE OFFER IS MADE ONLY BY THE PROSPECTUS. THE SHARES OF
COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE SAVINGS ASSOCIATION
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
TOMBSTONE NEWSPAPER ADVERTISEMENT (optional)
[HERITAGE FINANCIAL LOGO]
HOLDING COMPANY FOR HERITAGE BANK
UP TO 4,140,000 SHARES
COMMON STOCK
$10 PER SHARE
PURCHASE PRICE
Heritage Financial Corporation, newly organized to be the holding company of
Heritage Bank, is conducting an offering of common stock. Shares may be
purchased directly from Heritage Financial during the offering period.
THIS OFFERING EXPIRES ON , 1997
To receive a Prospectus, please call the Stock Information Center at (888)
849-1078 or (360) 705-9190, from 9:00 a.m. to 4:00 p.m., Monday through
Friday.
THIS ADVERTISEMENT IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN
OFFER TO BUY THESE SECURITIES. THE OFFER IS MADE ONLY BY THE PROSPECTUS. THE
SHARES OF COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE SAVINGS
ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
CUSTOMER PROXYGRAM--PLAN OF CONVERSION
[YELLOW PAPER]
REMINDER
WE NEED YOUR VOTE!
(NOT VOTING MUST BE CONSIDERED AS VOTING AGAINST THE PLAN)
In order to implement the Plan, we must receive a majority of our
customers' votes IN FAVOR of the Plan, which authorizes our Stock
Offering.
We recently mailed to you a large envelope including a Proxy
Statement describing our Plan. If you have not returned the proxy
card(s) that we included with the Proxy Statement, please vote, sign,
and mail the enclosed replacement proxy card, using the enclosed Reply
Envelope.
VOTING DOES NOT OBLIGATE YOU TO PURCHASE STOCK IN OUR STOCK OFFERING.
If you recently mailed your proxy card(s), please accept our thanks
and disregard this request.
Thank you for your cooperation.
WE HOPE YOU WILL VOTE FOR THE PLAN OF CONVERSION
---
QUESTIONS?
Please call our Stock Information Center at (888) 849-1078 or (360) 705-
9190, 9:00 a.m. to 4:00 p.m., Monday through Friday.
THIS LETTER IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY THESE SECURITIES. THE OFFER IS MADE ONLY BY THE PROSPECTUS. THE SHARES OF
COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE SAVINGS ASSOCIATION
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
[STOCK ORDER ACKNOWLEDGEMENT LETTER]
Name:
Address:
Dear Friend:
We are pleased to confirm receipt of your remittance (and/or authorized
account withdrawal) of $ and your order for the purchase of Heritage
Financial Corporation common stock. THIS NOTICE HOWEVER, CANNOT CONFIRM THE
NUMBER OF SHARES THAT YOU WILL RECEIVE AT THE CONCLUSION OF THE OFFERING. The
procedure for allocation of common stock depends on the orders received and is
described in detail in the Heritage Financial Prospectus, dated , 1997.
Allocations will be made after the conclusion of the offering period, ,
1997. Your stock certificate will be registered in the name(s) shown above.
Please verify the spelling and accuracy of your name and address.
If this information is incorrect, please contact our Stock Information
Center at (888) 849-1078 or (360) 705-9190.
STOCK INFORMATION CENTER
9:00 A.M. TO 4:00 P.M., MONDAY THROUGH FRIDAY
LOCATED AT HERITAGE BANK'S MAIN OFFICE
NOTE: To be mailed by data processing agent.
[HERITAGE FINANCIAL LOGO]
"BLUE SKY" LETTER FOR MEMBERS AND INDIVIDUAL PUBLIC STOCKHOLDERS
Dear Friend:
I am pleased to request your vote on our Plan of Conversion (the "Plan"). As
you may know, Heritage Bank conducted an initial stock offering in 1994 in
connection with reorganizing into the mutual holding company form of
organization. We are now conducting another stock offering. In connection with
the Plan, Heritage Financial is conducting a stock offering, and our holding
company will convert from the mutual form (no stockholders) to a stockholder-
owned holding company. We have named the new company Heritage Financial. In
connection with the Plan, Heritage Financial is offering for sale up to
4,140,000 shares of its common stock at a purchase price of $10 per share.
YOUR PARTICIPATION IS IMPORTANT IN ORDER TO ACCOMPLISH THIS TRANSACTION. We
have received conditional regulatory approval of our Plan, subject to the
approval of the Bank's depositors and stockholders. Included herein is a Proxy
Statement describing the Plan of Conversion and business reasons for the
transaction. We have also included a Question and Answer Brochure. PLEASE VOTE
AND SIGN THE ENCLOSED PROXY CARD(S) AND PROMPTLY RETURN THEM, USING THE
ENCLOSED REPLY ENVELOPE.
YOUR VOTE IS VERY IMPORTANT; ON BEHALF OF THE BOARD OF DIRECTORS I URGE YOU
TO VOTE "FOR" THE PLAN.
THERE WILL BE NO CHANGE IN THE TERMS OF YOUR DEPOSIT ACCOUNTS OR LOANS. YOUR
DEPOSIT ACCOUNTS WILL CONTINUE TO BE INSURED BY THE FDIC.
OUR CUSTOMERS WILL CONTINUE TO ENJOY THE SAME SERVICES IN THE SAME OFFICES
WITH THE SAME STAFF AND BOARD OF DIRECTORS.
Although you may vote on the Plan, unfortunately, Heritage Financial is
unable to offer or sell its common stock to you. The small number of members
in your state makes it impractical to register or qualify Heritage Financial,
its officers, directors or employees under your state securities laws.
(over)
"BLUE SKY" LETTER FOR MEMBERS AND INDIVIDUAL PUBLIC STOCKHOLDERS
Page 2
If you have any questions about your voting rights or the Plan, please call
the Stock Information Center at a number shown below.
Sincerely,
/s/ Donald V. Rhodes
Donald V. Rhodes
Chairman of the Board, President and Chief Executive Officer
THIS LETTER IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS. THE SHARES OF
COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE SAVINGS ASSOCIATION
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
- -------------------------------------------------------------------------------
STOCK INFORMATION CENTER
(888) 849-1078 OR (360) 705-9190
9:00 A.M. TO 4:00 P.M., MONDAY THROUGH FRIDAY
LOCATED AT HERITAGE BANK'S MAIN OFFICE
[HERITAGE FINANCIAL LOGO]
LETTER TO "STREET NAME" BENEFICIAL OWNERS
Dear Stockholder:
As you know, Heritage Bank conducted an initial stock offering in early 1994
in connection with reorganizing into the mutual holding company form of
organization. We are now completing the transition to full public ownership
through another stock offering. Pursuant to a Plan of Conversion, our holding
company will convert from the mutual form (no stockholders) to a stockholder-
owned holding company, Heritage Financial Corporation. In connection with the
Plan, Heritage Financial is offering for sale up to 4,140,000 shares of common
stock at a purchase price of $10 per share.
In addition to the shares of Heritage Financial common stock that are for
sale in the Offering, additional shares are designated for exchange. Shares of
Heritage Bank common stock owned by you and other public stockholders at the
conclusion of the transaction will be exchanged for shares of Heritage
Financial common stock (the "Exchange"). Additionally, the mutual holding
company's shares of Heritage Bank will be canceled.
We are pleased to inform you that we have received conditional approval for
Heritage Financial common stock to be listed on the Nasdaq National Market
under the symbol "HFWA".
The Plan of Conversion requires the approval of the Bank's stockholders.
Included herein is a Proxy Statement and Prospectus describing the Plan of
Conversion and business reasons for the transaction. We have also included a
Question and Answer Brochure. PLEASE VOTE AND SIGN THE ENCLOSED PROXY CARD AND
PROMPTLY RETURN THEM, USING THE ENCLOSED REPLY ENVELOPE.
ON BEHALF OF THE BOARD OF DIRECTORS I URGE YOU TO VOTE "FOR" THE PLAN.
The Board of Directors believes that the conversion of the mutual holding
company and the related Offering and Exchange are consistent with the goal of
enhancing value for stockholders. The net proceeds of the Offering will be
available for lending and investing, and the additional capital will support
continued growth.
IF YOU HAVE ANY QUESTIONS, PLEASE REFER TO THE ENCLOSED QUESTION AND ANSWER
BROCHURE OR CALL THE STOCK INFORMATION CENTER AT A NUMBER SHOWN BELOW.
If you would like to receive a Stock Order Form, please call the Stock
Information Center. The Offering will conclude on .
(over)
LETTER TO "STREET NAME" BENEFICIAL OWNERS
Page 2
We look forward to continued association with you as a Heritage Financial
stockholder.
Sincerely,
/s/ Donald V. Rhodes
Donald V. Rhodes
Chairman of the Board, President and Chief Executive Officer
THIS LETTER IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS. THE SHARES OF
COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE SAVINGS ASSOCIATION
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
- -------------------------------------------------------------------------------
STOCK INFORMATION CENTER
(888) 849-1078 OR (360) 705-9190
9:00 A.M. TO 4:00 P.M., MONDAY THROUGH FRIDAY
LOCATED AT HERITAGE BANK'S MAIN OFFICE
(NOTE: This letter is used for all beneficial owners whose mailing must be
done through proxy delivery channels.)
PRESS RELEASE--EFFECTIVE DATE
CONTACT: DONALD V. RHODES, CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
TELEPHONE: (360) 943-1500
FOR IMMEDIATE RELEASE
, 1997
- -------------------------------------------------------------------------------
HERITAGE BANK ANNOUNCES COMMENCEMENT OF STOCK OFFERING.
OLYMPIA, WASHINGTON: Donald V. Rhodes, Chairman, President and CEO of
Heritage Bank, announced today that Heritage Financial, the proposed holding
company for the Bank, has received regulatory approval to conduct an offering
of common stock pursuant to an amended Plan of Conversion. In accordance with
the Plan, Heritage Financial Corporation, M.H.C., mutual holding company of
Heritage Bank, will merge with Heritage Bank, which will become a wholly-owned
subsidiary of Heritage Financial, a newly-chartered corporation. The mutual
holding company owns 66% of Heritage Bank's outstanding shares of common
stock. The remaining 34% of the outstanding shares are owned by Heritage
Bank's public stockholders. At the conclusion of the transaction, the mutual
holding company will cease to exist, and its shares of Heritage Bank will be
canceled.
In connection with the Conversion, Heritage Financial is offering for sale
between 3,060,000 and 4,140,000 shares of common stock (subject to a possible
15% increase) at a purchase price of $10 per share. The amount and pricing of
the stock is based on an independent appraisal of the organization, estimated
to be $53.0 million at August 15, 1997.
The FDIC, the State of Washington and the Federal Reserve Board have granted
contingent approval of various regulatory applications, and the Securities and
Exchange Commission has declared effective the Registration Statement for the
offering of Heritage Financial common stock. The Plan is also subject to the
approval of depositors and stockholders of Heritage Bank, both as of ,
199 .
The common stock is being offered on a priority basis in a Subscription
Offering to (1) eligible depositors of Heritage Bank on , 199 and (2)
eligible depositors on , 199 . Shares not sold in the Subscription
Offering will be offered in a concurrent Public Stockholders Offering to
public stockholders of Heritage Bank as of , 199 . Any remaining shares
will be available to the general public in a concurrent Community Offering.
The best efforts offering, which is being managed by Ryan, Beck & Co., Inc.,
is expected to conclude on , 1997.
In addition to the shares of stock that are for sale in the Offering, up to
shares of Heritage Financial common stock (subject to a possible 15%
increase) will be exchanged for outstanding shares of Heritage Bank's common
stock. It is presently expected that each share of stock of the Bank held by
the public stockholders will be exchanged for between approximately
and shares of common stock of Heritage Financial (the "Exchange Ratio"),
based on the offering range of between and shares. The Exchange Ratio
may change significantly as a result of updates of the independent appraisal
or regulatory review of the transaction. The final Exchange Ratio will be
determined based upon the number of shares sold in the offering and the public
stockholders' ownership interest in the Bank at the conclusion of the
transaction. As a result of the exchange of shares, public stockholders of the
Bank will own approximately % of Heritage Financial. The dilution of
ownership interest from % reflects a downward adjustment, pursuant to FDIC
policy, to take into account the amount of various assets of the mutual
holding company and dividends declared by the Bank and waived by the mutual
holding company. In order to effect the exchange of shares, the public
stockholders will automatically receive transmittal forms shortly after the
conclusion of the offering.
(over)
PRESS RELEASE--EFFECTIVE DATE
Page 2
Heritage Bank is a Washington chartered stock savings bank headquartered in
Olympia. It has a branch offices in . Heritage Savings emphasizes
traditional deposit and mortgage loan products. At , 199 , Heritage Savings
had unaudited total assets, deposits, and stockholders' equity of
approximately $ million, $ million and $ million, respectively.
After the Conversion, Heritage Bank will operate as a subsidiary of Heritage
Financial. Its deposits will continue to be insured by the FDIC. Heritage
Financial has applied to have its common stock listed on the Market under
the symbol "HFWA" upon consummation of the transaction.
Further information, including the details of the offering and business and
financial information about the Bank and Heritage Financial, is described in
the Prospectus. The Prospectus should be received by the Bank's depositors and
public stockholders on or about , 1997. Copies of the Prospectus will be
available after that date by calling (888) 849-1078 or (360) 705-9190.
THIS RELEASE IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO
BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS WHEN ACCOMPANIED BY
A STOCK ORDER FORM. THE SHARES OF COMMON STOCK ARE NOT SAVINGS ACCOUNTS OR
SAVINGS DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE SAVINGS ASSOCIATION INSURANCE FUND OR ANY OTHER GOVERNMENT
AGENCY.