Heritage Financial's Business Segments

Heritage Financial Corporation is a bank holding company that was incorporated in the State of Washington in August 1997. We were organized for the purpose of acquiring all of the capital stock of Heritage Savings Bank upon our reorganization from the mutual holding company form of organization to the stock holding company form of organization. Effective September 1, 2004, Heritage Savings Bank switched its charter from a state chartered savings bank to a state chartered commercial bank and changed its legal name from Heritage Savings Bank to Heritage Bank (the "Bank"). The Company acquired Central Valley Bank in March 1999 and changed its charter from a nationally chartered commercial bank to a state chartered commercial bank effective September 1, 2005. In 1998, the Company acquired North Pacific Bank. In June 2006, the Company completed the acquisition of Western Washington Bancorp and its wholly owned subsidiary, Washington State Bank, N.A., at which time Washington State Bank, N.A. was merged into Heritage Bank.

Heritage Financial Corp is a diversified financial services company that provides a wide range of banking, investment, and insurance solutions to its clients. Given its comprehensive suite of offerings, the company operates primarily within one aggregated operating segment. This structure allows for the effective management of its diverse revenue streams, although the operations are reviewed and assessed uniformly at a corporate level. Below is an extensive description of the various products and services that Heritage Financial Corp offers:

Banking Services
1. Retail Banking:
- Checking and Savings Accounts: The company offers a variety of checking accounts tailored to different customer needs, including options that provide interest, online banking features, and low or no monthly fees.
- Certificates of Deposit (CDs): Various term lengths with competitive interest rates, allowing customers to save money with guaranteed returns over time.
- Consumer Loans: Personal loans for various needs including auto loans, home improvement loans, and debt consolidation services.
- Mortgages: A range of mortgage products including fixed-rate, adjustable-rate, FHA loans, and VA loans aimed at both first-time homebuyers and seasoned investors.

2. Business Banking:
- Business Checking and Savings Accounts: Tailored services for businesses that often include features such as cash management tools, merchant services, and competitive interest rates on savings.
- Commercial Loans: Financing options for businesses, including term loans, lines of credit, and financing for real estate purchases.
- Small Business Administration (SBA) Loans: Specialized loan products aimed at supporting small business growth through government-backed initiatives.

Investment Services
1. Wealth Management:
- Investment Advisory Services: Personalized investment management and strategic guidance tailored to individual client goals and risk tolerance.
- Retirement Planning: Comprehensive retirement strategy services to help clients navigate their financial future, including IRA accounts and pension planning.

2. Brokerage Services:
- Securities Trading: Access to a range of investment vehicles, including stocks, bonds, ETFs, and mutual funds, managed through an online platform or by financial advisors.

3. Financial Planning:
- Holistic Financial Planning: A full spectrum financial assessment that includes budgeting, asset management, tax planning, and estate planning to align with client financial goals.

Insurance Products
1. Personal Insurance:
- Homeowners Insurance: Coverage options protecting against losses from fire, theft, and other hazards.
- Auto Insurance: Comprehensive and liability insurance policies that cover vehicles and drivers.

2. Life Insurance:
- Term Life Insurance: Policies that provide coverage for a specified period, ensuring financial protection for beneficiaries.
- Permanent Life Insurance: Policies that provide lifelong coverage with an investment component, such as whole life or universal life insurance.

3. Business Insurance:
- Liability Insurance: Protection against claims resulting from injuries and damage to people or property.
- Workers Compensation Insurance: Coverage ensuring compensation for employees in the event of workplace injuries.

Additional Services
1. Online Banking:
- A suite of online services that include account management, bill payments, fund transfers, and mobile banking applications, enhancing accessibility and convenience for clients.

2. Financial Education and Resources:
- Programs designed to educate clients about financial literacy, covering topics such as budgeting, investing, and retirement planning. Workshops and seminars may be offered to improve customer understanding of financial products.

3. Community Banking Initiatives:
- Heritage Financial Corp is committed to community engagement through local partnerships, sponsorships, and initiatives that support economic development in the regions it serves.

Consolidation of Operations
Heritage Financial Corp operates with efficiency by consolidating its various offerings into one cohesive segment. Despite the differing nature of its services, management maintains that the financial performance metrics and operational strategies are similar enough to warrant this aggregation. The focus on a unified operating segment allows the company to streamline decision-making processes and allocate resources effectively across its comprehensive range of financial service solutions.

In summary, Heritage Financial Corp’s extensive lineup of banking, investment, and insurance products and services is designed to cater to a diverse clientele, from individual consumers to businesses. The company’s operational strategy emphasizes the integration of these offerings while maintaining a singular focus on overall financial performance and customer satisfaction.