Heritage Financial Posts Higher Year-Over-Year Diluted EPS and Net Income on Both the Quarter and the Six-Month Year-to-Date Period

Bottom line

For the three-month reporting period and the six-month year-to-date period, Heritage Financial Corporation reported higher diluted earnings per share and higher net income attributable to the parent than in the prior-year comparative windows, on both a quarter and a year-to-date basis. Earnings Per Share, Diluted was $0.42 per diluted share USD/SHARES for the three-month reporting period, compared with $0.36 per diluted share USD/SHARES for the prior-year comparative three-month reporting period; the same measure was $0.9 per diluted share USD/SHARES for the six-month year-to-date period, against $0.76 per diluted share USD/SHARES for the prior-year comparative six-month period. Net Income (Loss) Attributable to Parent was $17,546,000 USD for the three-month reporting period versus $12,215,000 USD for the prior-year comparative quarter, and $36,493,000 USD for the six-month year-to-date period versus $26,126,000 USD for the prior-year comparative six-month period. The authorized direction on each of these four measurements is higher than the prior period, and each remains a profit rather than a loss in both the current and prior windows.

- The filing introduces a proposed merger under which Olympic will be merged with and into Heritage, and immediately thereafter Olympic's bank subsidiary, Kitsap Bank, will be merged with and into Heritage's bank subsidiary, Heritage Bank, with each Olympic capital stock share to be exchanged for a stated number of Heritage common stock shares; the filing also notes a fixed exchange ratio, so the merger consideration will fluctuate with Heritage's stock price until closing, and a termination fee payable under specified circumstances. - The cautionary note regarding forward-looking statements flags that actual results may differ, possibly materially, from current expectations or projections, and lists risk factors including economic and interest-rate conditions, inflation and monetary policy, cybersecurity and information-technology events, and legislative or regulatory changes.

- No analyst commentary is provided in the filing evidence; the only forward-looking color is management's own cautionary language.

- None identified within the filing evidence for the reported diluted-EPS or net-income figures on either reported window.

- The filing evidence does not disclose segment-level detail for this dimension. The filing evidence does not disclose segment-level detail for this dimension. - The filing evidence contains no peer or industry comparison. The filing evidence contains no peer or industry comparison. - The filing evidence does not attribute this change to any single cause.

This interim filing is filed by HERITAGE FINANCIAL CORP /WA/ (ticker HFWA, CIK 0001046025) on form 10-Q for fiscal period period-ended-2026-06-30, under accession 0001628280-26-054673, covering the three-month reporting period and the six-month year-to-date period together with their prior-year comparatives. Readers interested in how a different community bank framed a similar interim result can compare with C&F Financial Posts Higher Year-Over-Year Revenue, Net Income, and Diluted EPS on Both Reported Windows in period-ended-2026-06-30 10-Q or WSFS Financial Corporation Posts Higher Year-Over-Year Diluted EPS and Net Income for Both the Quarter and the Six-Month Year-to-Date Period.

Financial performance

- Net Income (Loss) Attributable to Parent for the three months ended June 30, 2026 came in at $17,546,000 USD, higher than the prior-year comparative figure of $12,215,000 USD for the three months ended June 30, 2025, keeping the company in profit on both reported sides. - Net Income (Loss) Attributable to Parent for the six months ended June 30, 2026 came in at $36,493,000 USD, higher than the prior-year comparative figure of $26,126,000 USD for the six months ended June 30, 2025, also remaining in profit across both windows.

36 per diluted share USD/SHARES for the three months ended June 30, 2025. 76 per diluted share USD/SHARES for the six months ended June 30, 2025, with profit preserved on both reported sides. - The filing evidence does not attribute this change to any single cause.

- The filing evidence contains no peer or industry comparison. - The filing evidence does not disclose segment-level detail for this dimension. - From an accounting-context standpoint, the filing — identified by 10-Q period-ended-2026-06-30 under accession 0001628280-26-054673 for HERITAGE FINANCIAL CORP /WA/ (HFWA, 0001046025) — is presented in line with Generally Accepted Accounting Principles and references a stockholders' equity note covering preferred stock terms, captured in the cited note.

- The cautionary note language regarding forward-looking statements frames results as management's current expectations rather than guarantees, and the breadth of enumerated risk factors — covering macro conditions, interest-rate moves, inflation and Federal Reserve policy responses, cybersecurity and third-party vendor exposure, and legislative or regulatory change — is the qualitative backdrop the reader should weigh against the reported EPS and net-income comparisons. - Reported figures move directionally the same way on the three-month window as on the six-month year-to-date window, so quarter-over-quarter and year-over-year readings are mutually reinforcing within this section, with profitability preserved on every reported side and no segment-level breakdown offered by the filing evidence.

Operating drivers and segments

the filing for HERITAGE FINANCIAL CORP /WA/ (HFWA), filed under 10-Q for period-ended-2026-06-30 via accession 0001628280-26-054673 by CIK 0001046025, does not disclose segment-level revenue, net income, or margin detail for the three-month window the three months ended June 30, 2026 or the six-month year-to-date window the six months ended June 30, 2026. The filing evidence does not disclose segment-level detail for this dimension. Within the consolidated income statement, the only profitability line item supported by the FACT catalog for this section is Net Income (Loss) Attributable to Parent, which is reported as $17,546,000 for the three months ended June 30, 2026 and $36,493,000 for the six months ended June 30, 2026, with the prior-year comparatives being $12,215,000 for the three months ended June 30, 2025 and $26,126,000 for the six months ended June 30, 2025. No stand-alone net interest margin, efficiency ratio, noninterest income ratio, or pre-provision net revenue figure is supplied in the FACT catalog for this section, so cross-driver evidence on margin compression or expansion cannot be presented here. The accompanying source narrative is glossary and forward-looking commentary, not a segment performance table, and the only numbered reference threaded through the filing passage is the preferred-stock disclosure in the cited note Note 12, which is a capital-structure item rather than a profitability segment.

Management's narrative focuses on the announced Olympic transaction, which is described as a stock-for-stock combination of Olympic and Olympic's bank subsidiary, Kitsap Bank, with Heritage's bank subsidiary, Heritage Bank, and includes a fixed exchange ratio of Heritage common stock for each Olympic share, a potential termination fee payable under specified circumstances, and the customary forward-looking statement framework. The narrative does not attribute the reported changes in Net Income (Loss) Attributable to Parent to any specific operating driver, segment, or one-time item. The filing evidence does not attribute this change to any single cause. Readers looking for a like-for-like peer benchmark within the filing also cannot rely on the document for context, as The filing evidence contains no peer or industry comparison. Given the catalog's scope, the only independent check on the reported direction is the authorized Year-over-Year comparison framework: Net Income (Loss) Attributable to Parent moved upward on both reported windows relative to the prior-year periods, transitioning profit to profit on a higher base for the three months ended June 30, 2026 versus the three months ended June 30, 2025 and for the six months ended June 30, 2026 versus the six months ended June 30, 2025; the diluted EPS line carried the same authorized direction and transition on both reported windows. No independent recomputation of growth, spread, or return is offered here, and no causality is offered here. The Olympic discussion is governance and strategic context rather than a Q-and-A shift in the income statement, and the forward-looking caveats cover macro, interest-rate, credit, regulatory, and cybersecurity risks, none of which are quantified in the FACT catalog for this section.

Cash flow and capital

- Reported facts: For the six-month year-to-date period, Net Cash Provided by (Used in) Operating Activities was $37,057,000 USD, compared with $41,767,000 USD in the prior-year comparative window; Net Cash Provided by (Used in) Investing Activities was $87,584,000 USD versus $137,028,000 USD; and Net Cash Provided by (Used in) Financing Activities was -$153,355,000 USD versus -$41,799,000 USD. On the balance sheet at the period end, Cash and Cash Equivalents, at Carrying Value stood at $204,375,000 USD and Accounts Payable and Other Accrued Liabilities at $93,421,000 USD.

Capital allocation outflows during the half-year included Payments to Acquire Property, Plant, and Equipment of $3,296,000 USD (against $2,770,000 USD), Payments of Ordinary Dividends, Common Stock of $18,044,000 USD (against $16,350,000 USD), and Payments for Repurchase of Common Stock of $11,072,000 USD (against $5,449,000 USD). - Management explanation: The filing's basis-of-presentation narrative warns that prior-period results reflect Heritage's standalone operations only, because the Company completed the Olympic / Kitsap Bank acquisition in early January and the consolidated results thereafter are not directly comparable to pre-acquisition windows.

No management commentary in the cited excerpt attributes the half-year cash flow movements to any single cause. - Analyst inference: Relative to the prior-year half-year, the authorized direction for operating cash flow is decrease, for investing cash flow is decrease, and for financing cash flow is decrease; the authorized direction for capital expenditures, dividends, and share repurchases is increase. Within those authorized directional bands, the year-over-year capital-allocation mix continues to funnel cash toward dividends and repurchases in addition to property, plant, and equipment, while the operating, investing, and financing cash flow lines move in line with the pre-authorized direction sign.

The acquisition context above frames why the prior-period comparability is limited, but no quantified bridge to the merger is supplied in this excerpt. - Counter-evidence: None within the text — the only narrative caveat is the non-comparability of pre- and post-merger periods, which constrains the inferences one can draw rather than contradicting them. - Unknowns: The drivers of the year-over-year movement in each of the three cash-flow subtotals are not stated in the cited excerpt; any segment-level allocation of investing or financing cash flow is not disclosed here.

The filing evidence does not attribute this change to any single cause. The filing evidence contains no peer or industry comparison. The filing evidence does not disclose segment-level detail for this dimension.

The relationship between the merger purchase price and the investing-activities line, the composition of financing inflows versus outflows, and the reconciliation from net income to operating cash flow are not visible in the supplied text.

Peer and historical context

In the year-over-year framing available from the filing, HERITAGE FINANCIAL CORP /WA/'s reported earnings lines improved on both reported windows. Net Income (Loss) Attributable to Parent was a profit on the three-month window ending the three months ended June 30, 2026 and remained a profit on the comparable the three months ended June 30, 2025 window, with the authorized direction reading as an increase rather than a transition between profit and loss. The same profit-to-profit, higher-than-prior pattern holds for the six-month year-to-date window, where the current-period profit of $36,493,000 is read against the prior-period profit of $26,126,000. The Net Cash Provided by (Used in) Operating Activities line, by contrast, is read as a decrease for the six-month year-to-date, with the current-period positive value of $37,057,000 lower than the prior-period positive value of $41,767,000. Because the frame holds only the directional authorization, no magnitude can be drawn from the comparison itself; the relation is qualitative. Readers reviewing similar community-bank filings on the same platform, such as WSFS Financial Corporation Posts Higher Year-Over-Year Diluted EPS and Net Income for Both the Quarter and the Six-Month Year-to-Date Period and First Commonwealth Posts Higher Year-Over-Year Diluted EPS and Net Income on Both the Quarter and the Six-Month Year-to-Date Period, will see the same profit-to-profit transition on both windows, mirroring the current company's earnings trajectory even though no peer-level figures are quoted in this filing.

The earnings-line improvement sits alongside a softer operating-cash-flow reading, suggesting that the two top-line and bottom-line comparisons are not moving in the same direction. From the cited note on policy changes, the company early adopted an accounting standards update covering purchased seasoned loans in conjunction with the Merger, which is a structural event that can shape reported earnings independent of underlying performance.

Scenario analysis

- Reported fact: Net Income (Loss) Attributable to Parent was $36,493,000 USD for the six-month period the six months ended June 30, 2026 and $17,546,000 USD for the three-month period the three months ended June 30, 2026. - Machine-authorised comparison: Net Income (Loss) Attributable to Parent moved higher on a year-over-year basis for both reported windows; the prior comparators were $26,126,000 USD for the six months ended June 30, 2025 and $12,215,000 USD for the three months ended June 30, 2025. The transition in both windows is profit to profit. - Analyst inference: Under a base reading, the higher reported net income across both windows is the anchor that links the quarter and the year-to-date period; nothing in the filing evidence assigns the move to a single driver, so the driver question is left to the The filing evidence does not attribute this change to any single cause. line rather than narrated.

- Reported fact: Earnings Per Share, Diluted is authorised to read as higher year over year on both windows, with the transition profit to profit preserved; this sits on top of the higher Net Income (Loss) Attributable to Parent shown above. - Counter-evidence check: Operating cash flow for the six months ended June 30, 2026 is authorised to read as lower year over year against the six months ended June 30, 2025 (both positive), and Net Cash Provided by (Used in) Financing Activities is authorised to read as a larger use year over year (both negative). Investing cash flow is also authorised to read as lower year over year (both positive). - Analyst inference: A constructive upside read combines the higher diluted EPS trajectory with the offsetting pattern that two of the three cash-flow categories are authorised to read lower year over year and one is authorised to read as a larger cash outflow year over year; the same driver caveat applies, so the upside framing leans on EPS and net income direction rather than on a single cash-flow read. The preferred-stock disclosure in the cited note (Note 12) describes capital structure but does not by itself shift the scenario, since the filing evidence does not assign movement to that line.

- Reported fact: Payments of Ordinary Dividends, Common Stock and Payments for Repurchase of Common Stock for the six months ended June 30, 2026 are both authorised to read as higher year over year against the six months ended June 30, 2025, alongside Payments to Acquire Property, Plant, and Equipment authorised to read as higher year over year. APIC, Share-based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition is also authorised to read as higher year over year on both windows. - Counter-evidence check: The downside lens treats the heavier shareholder-return and capex outlays as the friction against the higher reported net income; the same year-over-year profitability direction still applies, so the scenario is a margin-pressure framing rather than a loss framing. - Unknowns: The filing evidence does not separate segment-level pressure and contains no peer or industry comparison, so segment and peer context are marked as The filing evidence does not disclose segment-level detail for this dimension. and The filing evidence contains no peer or industry comparison. respectively rather than narrated. - Cause statement: The filing evidence does not attribute this change to any single cause. - Cross-reference: For a parallel community-bank read on a similar pattern, see WSFS Financial Corporation Posts Higher Year-Over-Year Diluted EPS and Net Income for Both the Quarter and the Six-Month Year-to-Date Period; the peer-comparison framing itself is not authorised here and remains The filing evidence contains no peer or industry comparison..

Risks and what to watch

- The headline profitability comparison for this filing is unambiguously favorable: net income attributable to the parent is reported as a profit on the three-month reporting period the three months ended June 30, 2026, the six-month year-to-date period the six months ended June 30, 2026, and on both prior-year comparative windows the three months ended June 30, 2025 and the six months ended June 30, 2025. " On those reported grounds the bottom-line print on the three-month reporting period is higher than on the prior-year comparative, and the six-month year-to-date print is also higher than on the prior-year comparative.

Diluted earnings per share carry the same authorized shape — higher than the prior-year comparative on each window, both sides reported as profit. Reported facts: $17,546,000 $36,493,000 $12,215,000 $26,126,000. - Management explanations in the quoted source narrative are limited to commentary on pending accounting standard updates.

The Company does not expect the adoption of those pending ASUs to have a material impact on its business operations or Consolidated Statements of Financial Condition. Management also describes the mechanics of a new gross-up model for purchased seasoned loans and the removal of prescriptive software-development stage references, again without a quantified impact. No management explanation is offered for the year-over-year movement in net income itself, and the source narrative offers no commentary on credit, funding, or margin drivers.

For any causal read on the net-income swing, The filing evidence does not attribute this change to any single cause.. - Analyst inference must stay within the reported comparisons. Those authorize a higher financing outflow on a six-month year-to-date basis relative to the prior-year comparative (negative both sides, authorized direction "decrease"), a smaller positive operating cash inflow relative to the prior-year comparative, and a smaller positive investing cash inflow relative to the prior-year comparative — meaning the cash-flow trio is moving in directions that do not all align with the higher earnings print.

Authorized increases are recorded for ordinary common-stock dividend payments, common-stock repurchase payments, and property, plant, and equipment acquisitions, each on a six-month year-to-date basis relative to the prior-year comparative. A restricted-stock-unit cost recognition item is also authorized as higher on both the quarter and the six-month year-to-date comparisons. - Counter-evidence available inside the filing evidence is thin.

The filing evidence contains no peer or industry comparison. applies directly, so no outside-benchmark read on whether the higher net income merely tracks the broader regional banking cohort or outpaces it can be supported. The filing evidence does not disclose segment-level detail for this dimension.

also applies, so any read that decomposes the result by line of business, geography, or loan portfolio is unsupported by the filing evidence. The cited note on stockholders' equity (Note 12) discloses only the no-par-value preferred-stock authorization envelope and does not itself rebut the higher net-income print. - Unknowns that the next period could narrow include whether operating-cash generation re-converges with the higher earnings print, whether the smaller positive investing inflow reflects portfolio repositioning or a runoff, whether the larger financing outflow is durable across the rest of the fiscal year, and whether the higher restricted-stock-unit cost recognition continues to scale with the higher earnings.

The pending accounting standards flagged by management are the other open variable — none is disclosed as material by the Company, but each becomes binding only after the cited effective dates. - Metrics to watch in the next reporting window: net income attributable to the parent on the three-month reporting period and on the year-to-date basis; diluted earnings per share on the same windows; the trio of operating, investing, and financing cash flows; ordinary dividend and common-stock repurchase payments; property, plant, and equipment acquisitions; and the restricted-stock-unit cost recognition item — all on a year-to-date basis.

For a sector cross-check once peer prints are available, Arrow Financial Reports Higher Diluted EPS and Net Income Across Both Reported Windows in Interim Filing is the closest topical peer in the inventory.