Heritage Bank 2021 Community Investment Report by HeritageBankNW

WHEN NEIGHBORS HELP NEIGHBORS, THE WHOLE COMMUNITY BENEFITS. AND THAT’S TRUE PROSPERITY.

2021 Community Investment Report

Heritage has been in business for 95 years. We’ve seen our way through every economic storm, from the great depression to the great recession. Through it all, we’ve stayed focused on the fundamentals of banking and remained dedicated to our customers, our employees, our shareholders and the communities we serve. As a community bank, our focus is on building long-term personal relationships. It’s the way we do business. That’s why we’re proud to have team members involved in diverse and varied civic projects that serve and improve the communities where we live and work. Not only are our employees there for our customers as banking resources and advisors, but they’re contributing thousands of volunteer hours as financial educators, small business mentors, job-skills coaches and nonprofit board members. We believe our responsibility extends far beyond volunteering and financial support for the communities we serve. Banks should also be advocates for public policy that removes barriers and creates opportunities, whether that’s through wage fairness, affordable housing programs or better access to financial services. We want everyone to achieve their financial goals. That’s why we strive to improve our communities by driving positive economic growth for businesses and individuals at all income levels. On the following pages, you’ll read about the formation of a new Heritage Bank loan fund intended to revitalize economically distressed areas; three new large grants that will help fund new and existing projects so local nonprofits can continue to provide services to youth, low-income individuals and other community members; our Diversity, Equity and Inclusion (DEI) Council’s dedication to helping us deepen our collective understanding of racial equity and economic inclusion; and all of the other things we have underway to help fuel economic prosperity and improve the lives of those around us.

Jeff Deuel, President and CEO

2021 Community Investment Report

Our Mission Heritage Bank is committed to improving our communities by driving impact in the areas of:

Business & Economic Development

Education & Youth Environmental Development Stewardship

We will pursue all of our community work and support with a holistic focus on equity and inclusion. Our thriving company culture engages our employees and inspires them to serve our communities in the pursuit of positive change.

TYPES OF SUPPORT Sponsorships & donations Corporate match

Employee donations & volunteering

Health & Human Services

Social Equity

Social Responsibility

At Heritage, we place a high priority on operating in a responsible and respectful manner. We are committed to environmental and sustainability efforts, to our people, our customers and strengthening the communities and markets in which we operate our business. We use the Sustainability Accounting Standards Board Commercial Bank framework to identify specific areas of focus. We also follow guidance published by Ceres to identify risks and to further develop our environmental, social and governance platform.

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Environment & Sustainability REDUCE, REUSE, RECYCLE We demonstrate environmental responsibility in various ways, including: Continually reducing our carbon footprint with the consolidation of facilities Using green janitorial products Replacing standard light bulbs with LED bulbs that have a longer life and use less energy Repurposing existing furniture whenever possible instead of buying new Recycling at all locations across our entire footprint

STRATEGIC ENERGY MANAGEMENT PROGRAM In 2020, our Hillsboro location joined the Strategic Energy Management (SEM) Program offered through the Energy Trust of Oregon. The program provides tools and education that helps us track usage and energy savings. As a participant, we learn how our business uses energy and identify where waste is happening. We are excited for this opportunity to learn how to reduce our carbon footprint and expand to other Heritage locations in Washington and Oregon.

2021 Community Investment Report

ECOCHALLENGE SUSTAINABLE PRACTICES We are focused on sustainability throughout our everyday business practices by: Using technology that provides for a paperless environment and transactional efficiencies eCycling old technology equipment (24 tons to date) to avoid filling landfills 31,355 plastic bottles saved from entering landfills using bottle filling stations

Employees teamed up for the first-ever Heritage Helps Ecochallenge where they turned intention into action for environmental and social good. From June 14-July 2, they created new habits by selecting actions that complimented their lifestyle and passions—like reducing their carbon footprint, replacing a meal with meatless options, swapping to reusable drinkware and more! In just one month, 169 employees and 29 teams completed 4,354 actions, resulting in: 10,027 gallons of water saved 2,571 pounds of CO2 saved

Energy-saving program in partnership with Energy Trust of Oregon and SEM at our Hillsboro & Tanasbourne locations

2,190 plastic items not sent to the landfill

Achieving a Gold Sustainability at Work Certification for the Portland office

90 pounds of waste composted

Having a management-led Green Team Committee focused on bank-wide sustainability

972 miles not traveled by car 493 meatless or vegan meals consumed 89 lightbulbs replaced 77 pounds of paper saved “This EcoChallenge was such a fun way to encourage everyone as a company to make a difference for the environment!” HeritageBankNW.com

Our Culture & Our People Heritage’s success depends on the success of its people. As a result, Heritage is focused on the following to enhance employee empowerment: Thorough human capital and talent management A range of virtual and in-house courses offered through Heritage Bank University Professional development opportunities, including Ken Blanchard Companies, Washington Bankers Association, Oregon Bankers Association and Pacific Coast Banking School Situational leadership training that focuses on communication and employee engagement A collaborative culture that enables employees to reach their full potential Listening to our employees through various forms of communication, such as quarterly all-employee calls and surveys where employees can share feedback directly with leadership throughout the year Work/life balance, including telecommuting and virtual meetings Competitive pay and benefits, with up to eight hours of paid time each year for employees to volunteer at the organizations of their choice

2021 Community Investment Report

“We want our culture to be the best culture. We want customers to know we’re an exceptional place to bank, and part of that is because we value and recognize our people.” – Kelli Wilson, SVP, Branch Banking

Celebrate Great Celebrating employees has always been an important part of the Heritage culture. During our annual Employee Appreciation Days, hundreds of award nominations were manually gathered and vetted. And while employees loved the awards, we knew we wanted the ability to recognize them year-round. So, we partnered with O.C. Tanner to create the Celebrate Great platform, which allows both leaders and peers to send eCards and submit award nominations whenever they see great work happening. Milestone anniversaries and retirements are also celebrated through a printed keepsake yearbook in addition to being able to select an award.

“Celebrate Great serves as an ambassador of our culture across all regions and to all teams. It reinforces our core values with every entry celebrating successes and recognizing peer accomplishments.” - Sabrina Robison, SVP, Chief Human Resources Officer

The Wall of Fame (like a social media platform) allows everyone in the bank to read, comment and like employee celebrations instantaneously. Kelli Wilson, senior vice president of branch banking, schedules time every Friday to read and comment on the recognition given to employees in her division. The executive leadership team (including the board of directors) has also used the platform to recognize employees through custom eCards and a personalized message.

As employees work in different locations, Celebrate Great is a way for everyone in the company to stay connected and share stories of what employees are doing and how they continue to take care of our customers. We look forward to expanding the program in the future and including other types of recognition. Over 8,000 eCards sent 96% of employees have used the platform 98% of yearbooks include leader comments 99% of yearbooks include peer comments 84% of employees feel the bank goes to great lengths to recognize great work

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Our Customers & Our Communities We strive to improve our communities by driving positive economic growth for businesses and individuals of all income levels while ensuring the privacy and security of customer information. We continuously demonstrate our commitment to our customers and the communities, as exemplified by the array of loan, deposit accounts and service options that we offer. Digital banking services that are secure, cost-effective and sustainable: –

Online & mobile banking

–

Online statements

–

Online bill pay

Deposit products, such as Fresh Start Checking, that provide our customers the opportunity to reestablish a positive checking account history Flexible mortgage lending options, such as RDA, FHA, VA and first-time homebuyer loans Flexible small business lending options: – –

In-house quick-decision small business lending

Small Business Administration lending (primarily 7(a) and 504 programs)

Community development loans, investments and grants with a focus on: –

– –

Affordable housing and community services: Working with multiple stakeholders to maximize lending and tax credits to construct multi-family housing and wellness facilities for those most in need, such as struggling families, homeless youth, elders, disabled persons and veterans Economic development: Partnering with the SBA for higher dollar small business lending

Revitalization and stabilization: Main Street Tax Credit program and lending in opportunity zones

2021 Community Investment Report

Heritage in the Community In August, a group of employees got together and packed over 100 bags filled with snacks that United Way of Pierce County distributed to children at summer meal sites.

Loan production assistants, Irene Baker and Susana Maria, volunteered to ring the bell for Salvation Army at Cabela’s in Yakima, Washington. They both said they had a blast and it was a great experience.

The theme for Earth Day on April 22 was Restore Our Earth. Commercial banking officers Kathy Swift and Kristen Connor— along with 68 others—came together with SOLVE to collect over 2,000 pounds of trash. They filled a 10 cubic yard dumpster to the top! HeritageBankNW.com

Diversity, Equity & Inclusion We recognize and appreciate the importance of creating an environment where all employees feel valued, included and empowered to do their best work. We recognize that each employee’s unique experiences, perspectives and viewpoints add value to our ability to be the leading commercial community bank in the Pacific Northwest. We have a Diversity, Equity and Inclusion (DEI) plan, statement, council and officer who has been certified by the National Diversity Council. The DEI Council is made up of a diverse group of employees and is a critical driver in fostering organizational change and establishing a dedicated focus on DEI priorities.

2021 ACTIVITIES Formal diversity statement published Personal pronoun email signature guidelines available for employee use Submitted first FDIC Diversity Self-Assessment Conducted unconscious bias training for managers and employees Coordinated DEI training for our board of directors Published monthly articles highlighting DEI issues and events Instituted tracking of minority- and women-owned bank suppliers Designed and launched the custom course Our Differences Make Us Stronger for newly hired employees Launched the first two modules of the Inclusion Insights video training series

CELEBRATIONS Black History Month | Women’s History Month | Arab American

National Native American Heritage Month

2021 Community Investment Report

Awards

2021 ABA Foundation

COMMUNITY COMMITMENT

WINNER

2021 ABA FOUNDATION COMMUNITY COMMITMENT AWARD AFFORDABLE HOUSING In October, we were recognized by the American Bankers Association (ABA) for our partnership with Plymouth Housing and the building of Kristen Benson Place in Seattle—a new complex with 91 studio apartments for single adults who have stabilized after homelessness. We financed a $15,160,000 construction loan and provided an equity investment of over $21,000,000 to help build the apartments. This is the second of eight new buildings that Plymouth Housing plans to build to address chronic homelessness in the community. With our help, they are well on their way to their goal of developing an additional 500 apartments within the next four years.

OTHER AWARDS “Washington’s Best Workplace” by Puget Sound Business Journal “America’s Best Banks - #1 Best Small Bank by State (WA)” by Newsweek “Best of the South Sound – Large Business” by South Sound Magazine “America’s Best Banks in Each State – #3” by Forbes “Top Corporate Philanthropists” by Puget Sound Business Journal

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Corporate Match Program Heritage Bank will match each employee’s donation dollarfor-dollar to the community organization of their choice, up to $100 each year. In 2021, the bank matched $42,766 in employee donations through efforts such as these.

MATCH MADNESS For three weeks in March and November, employees’ donations were matched two to one. They donated to their favorite organizations or ones that may have been impacted by the pandemic. –

Employee Donations: $8,722

–

Bank Match: $18,644

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Number of Employees: 103

UNITED WAY EMPLOYEE PLEDGE CAMPAIGN

Our United Way Employee Pledge Campaign is a long-time tradition that started back when employees had to fill out a physical form and send it in. Today, our employees continue to give back in a big way, donating over $40,000 to the local United Way chapters throughout Washington and Oregon. –

Goal: $40,000

–

Employee Pledge: $40,024

–

Bank Match: $15,000

–

Total: $55,024

–

Number of Employees: 235 $60,000 $50,000 $40,000

$30,000

Bank Match

$20,000 $10,000

Employee Donations

2021 Community Investment Report

$20,000 $10,000 $0

Bank Match

FUNDRAISING GOAL

Employee Donations

Education & Youth Development $431,509 Health & Human Services $425,395 Business & Economic Development $240,495 Environmental Stewardship & $75,900 Social Equity $69,250 Other $16,600

CORPORATE GIVING

$1,259,149 to 486 organizations including: –

Tacoma Housing Authority

–

Homestead Community Land Trust

–

Thurston County Food Bank

–

Evergreen Business Capital

–

South Puget Sound Community College

–

Sea-Mar Community Health Centers

–

United Way HeritageBankNW.com

Large Grants COMMUNITY ACTION

P:EAR

Community Action has been serving the needs of low-income and poverty-stricken individuals in Washington County, Oregon since 1965. They serve over 27,000 residents each year, working to create opportunities for people and communities to thrive. They provide a variety of services, including housing stabilization, family development, early childhood development (Head Start), utility assistance and energy conservation, emergency shelters and food banks.

Located in Portland, Oregon, p:ear supports youth struggling with homelessness and works to create opportunities for them to grow into heathy young adults. Through their education, arts, recreation and innovative job training programs, they’ve engaged over 5,000 homeless youth from a variety of economic, racial, ethnic and cultural backgrounds.

One of their newer programs, called the Family Development Fund, addresses issues outside of their already established programs to further help community members successfully move out of hopelessness. Funds are used for one-time or short-term family needs. The need could be as simple as providing registration renewal for a vehicle needed for transportation to and from work. We’ve committed $45,000 over three years to Community Action, which will place funds where they’re most needed, while expanding options to the greater community. Employees at Heritage also support Community Action through numerous activities, including providing coats, boots and books for preschool-aged children as well as food items for their local pantry.

2021 Community Investment Report

Because they’re located where the youth that they serve are, moving isn’t an option. So we’ve committed $100,000 over five years to help p:ear purchase their current building. This will help ensure the organization continues to have a secure and safe place for youth to visit, find support and hopefully a more meaningful and healthy life. They will also be able to continue offering the amenities the neighborhood has come to enjoy, including their student-run coffee shop and First Thursday Art Gallery openings.

OTHER LARGE GRANTS

HOMESTEAD COMMUNITY LAND TRUST Last year, we partnered with Homestead Community Land Trust to provide more affordable housing options within our communities. Homestead is a nonprofit that has been serving the Puget Sound area for 29 years. They build new homes or rehab existing ones and then sell them at subsidized prices to what would be deemed affordable for modest income households. Buyers then agree to restrict their equity gain so they can pass on an affordable price if or when they decide to sell. The organization’s model (or the “community land trust model”) is to sell homeowners the structure of the home while retaining the land in trust. Homestead also combines housing development with counseling, education and other support activities to create a growing inventory of permanently affordable homes in the region. As a result, their rate of foreclosure is less than 1%. To support their mission, we committed $50,000 over the next two years. The money will be used to expand Homestead’s capacity so they can build and maintain more affordable homes. The organization has a plan to build 100 homes over the next six years. They have five projects in active development and three more opportunities to build secured through partnerships with private landowners, other nonprofits and community partners like Heritage. Homestead has 225 homes in trust, located in areas considered most vulnerable to displacement as our region’s growth continues.

“It’s hard to explain the sense of vulnerability that working-class renters live with in this region, as we’re pushed further and further from our communities and our jobs. When we actually were selected to buy a unit…it felt like a miracle. Every day now, I wake up with a sense of relief that my family has a secure home.”

Black United Fund of Oregon $16,000 over two years Evergreen Business Capital $75,000 over three years Imagine Children’s Museum $30,000 over three years Lacey Food Bank $85,000 over three years Pierce College Foundation $50,000 over five years Portland Homeless Family Solutions $30,000 over three years Saint Martin’s University $50,000 over five years Shelton YMCA $50,000 over five years South Puget Sound Community College $95,000 over three years Unite Oregon $30,000 over three years

– Susan, Homestead Homeowner

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COVID-19 Response PAYCHECK PROTECTION PROGRAM LOAN ASSISTANCE Businesses are the roots of our communities. They give so much life to the people and places we call home. That’s why our bankers immediately stepped up to help their clients navigate the challenging Paycheck Protection Program (PPP). Being there for those that make the Pacific Northwest the one-of-a-kind place it is, is what we believe banking is all about. Because in the end—business is all of us.

PPP LOAN ASSISTANCE BY THE NUMBERS

March 2020—May 2021

AVERAGE LOAN SIZE

$178,000

$1.27 BILLION

RO UN D1

CU ST NE O W M ER S

LOANS

7,184

AN ESTIMATED 100,000+ JOBS WERE IMPACTED BY THESE LOANS

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ROU N

We’ve been working hard for the good of our communities. Here’s what providing funding to local small businesses looks like:

Our asset size: $7.4 billion (as of December 31, 2021)

2021 Community Investment Report

The Washington Economic Development Association (WEDA) named the Small Business Flex Fund the Economic Development Project Of The Year (Business Retention/ Expansion). This award celebrates the successful creation or completion of a creative, economically significant and/ or model project in a community or region. The project could be one that has retained jobs, was particularly difficult to achieve, was extraordinarily competitive, had multiple partners or contributed to community well-being.

Heritage Bank has funded $1,238,329.27 of these loans. Washington’s Flex Fund has had the best conversion rate compared to similar programs in other states (like New York and California), at one loan funded for every 11.9 applicants - with other states closer to one loan per 18 applicants. This means more capital in the hands of businesses that need it most. Information courtesy Washington Small Business Flex Fund, smallbusinessflexfund.org

80%

of organizations funded through this program have diverse ownership

Many small businesses and nonprofits in Washington state experience significant barriers to accessing the financial resources they need to develop and grow, and the COVID-19 pandemic only made things harder. This is especially true for organizations in low-income areas and those led by women and people of color. Whether they are childcare centers, healthcare service providers, restaurants, local farms or community-based nonprofits, these small and local organizations provide essential goods and services while creating jobs that contribute to the health of our statewide economy. And yet they face unique challenges when trying to get the money they need to sustain or grow. That’s why the Small Business Flex Fund was created, a new loan program designed to help small businesses access funds at competitive interest rates. Heritage Bank is one of several financial institutions that can offer a loan through the Small Business Flex Fund. The fund also works with and through local Community Development Financial Institutions (CDFIs) which have been serving the types of under-resourced communities and underbanked businesses the Small Business Flex Fund aims to help, for decades. The Flex Fund also provides at-the-ready technical assistance support with financial literacy, document preparation, language services, business plan writing, credit score consultation, and other administrative needs to increase an applicant’s chances of hearing ‘yes’ to their loan application. HeritageBankNW.com

Employee Spotlights CARMEN GOERS RECEIVES KING COUNTY MARTIN LUTHER KING MEDAL OF DISTINGUISHED SERVICE AWARD On October 28, 2021, Carmen Goers, commercial lending officer in Kent, was presented the Martin Luther King Medal of Distinguished Service award from the King County Council Member Reagan Dunn from District 9. This award recognizes individuals whose work has answered the question asked by Dr. Martin Luther King, Jr., “What are you doing for others?”

“My family and I moved to South King County in 2000 after completing military service. This is where we desired to raise our young family. Since relocating, I’ve volunteered in many areas, from PTA to coaching sports teams and volunteering on many fundraising committees for many causes, including the Kent YMCA Major Gifts Committee. My grandmother would often say, ‘Make yourself useful.’ This is where my volunteerism and community engagement began because we all can make a positive impact to make our communities stronger. I value the impact nonprofits and social service agencies bring to the community, and I am excited to volunteer alongside other community champions to help build a strong community. Some of my favorite volunteer work is serving with Eileen & Callie’s Place Celebrate 18! event. This is a day when we host up to 100 girls aging out of foster care. Celebrating their 18th birthday with makeovers, shopping and a community dinner.

2021 Community Investment Report

I am honored and pleased to receive this year’s King County Martin Luther King Medal of Distinguished Service award. I believe that through the support of others, everyone can be a better version of themselves.” CURRENT COMMUNITY SERVICE: Special Events Center Public Facilities District Board of Directors (2016— ) Human Services Committee (2020— ) & Committee Chair (2021) South Sound Chambers of Commerce Legislative Coalition (2007–2011, 2014— ), Coalition Chairperson (2016–2018) and formerly Secretary/ Treasurer (2018–2021) Christian Faith Center Women’s Prison Ministry Team (2008— ) Pacific Christian Academy (Christian Faith School) Board of Trustees (2011— ), President (2018–2021) Kent Chamber of CommerceGovernment Affairs Chair (2014— )

PREVIOUS COMMUNITY SERVICE: Eileen & Callie’s Place Board of Directors-President (2020) Burien Business and Economic Development Partnership Board Member (2009–2015) Ventures (formerly Washington Community Alliance for Self-Help) Board Member (2003–2008, Chair 2005–2007) New Horizon School Board of Directors-Treasurer/Finance Committee Chair (2018–2021)

Austin Patjens, our SBA business development officer, was named one of South Sound Business’ 40 Under 40 honoring young professionals in the south Puget Sound, Washington, area.

Tamara Brown American Leadership Forum Fellow Tamara Brown, one of our relationship banking officers, was selected by the American Leadership Forum (ALF) Oregon to participate in their Fellows Program. Of the many goals, the program hopes to help inspire leaders to a lifetime of active public engagement, acting as ongoing catalysts for addressing a range of issues that affect the state and its communities.

SHARON WYNDE GRADUATE OF OBA EDP In February, Sharon Wynde, one of our commercial banking officers, graduated from the Oregon Bankers Association Executive Development Program, an intensive, year-long program designed to challenge and develop the rising stars in a bank’s management ranks. Thankfully, the graduating class was still able to have a virtual graduation ceremony and celebrate all their hard work.

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Affordable Housing With nearly half of all U.S. renters paying more than 30% of their income on housing, and nearly a third paying more than half, it’s increasingly important to support the development and preservation of affordable living. Stable housing isn’t a luxury, it’s a necessity. It improves quality of life and is the foundation for better health, financial freedom, security and population diversity. Our teams are passionate about affordable housing because it’s an important need, and we want to improve the quality of our communities so they can thrive for years to come.

ELIZABETH THOMAS HOMES – SEATTLE, WA

Catholic Housing Services and Equity Alliance of Washington worked together to develop Elizabeth Thomas Homes,

located in the Rainier Beach neighborhood of Seattle, WA. The building will include 119 new units, half of which will be family units with two or three bedrooms, which are larger than those typically seen in affordable housing complexes. The building will also include a ground floor plaza as well as retail space. The new homes will be available to residents who have fallen victim to displacement due to the rising cost of living and are between 50-60% of the

Area Median Income. The City of Seattle’s Community Preference Policy also gives priority to families that have ties to the neighborhood, allowing longstanding community members to remain in the neighborhood that they know as home. The project was completed in partnership with the City of Seattle and Washington State Department of Commerce, both of which provided funding, as well as a $31,186,380 construction loan from Heritage Bank.

OTHER AFFORDABLE HOUSING PROJECTS Skagit Permanent Supportive Housing, Catholic Housing Services of Western WA, Mount Vernon, WA New construction of 70 permanent homes | $13,000,000 construction loan Heartwood Apartments, Community Roots Housing, Seattle, WA New construction of 113 permanent homes | $13,000,000 construction loan Bremer, Community Roots Housing, Seattle, WA Substantial rehab of 49 affordable homes | $1,940,000 construction loan Boylston Howell, Community Roots Housing, Seattle, WA Substantial rehab of 30 affordable homes | $920,000 construction loan John Carney, Community Roots Housing, Seattle, WA Substantial rehab of 27 affordable homes | $1,411,000 construction loan Plum Meadows, Vancouver Housing Authority, Vancouver, WA Substantial rehab of 162 affordable homes | $22,500,000 construction loan

2021 Community Investment Report

included the City of Bellingham and the Washington State Department of Commerce.

HARVEY RICE HERITAGE PROJECT – PORTLAND, OR

BARKLEY FAMILY HOUSING – BELLINGHAM, WA

On August 26, 2021, Mercy Housing Northwest celebrated the groundbreaking of Barkley Family Housing in the Barkley Village neighborhood of Bellingham, WA. The building will be approximately 95,000 square feet with a concrete parking garage and will offer 77 affordable homes for families. Larger units will also be available to accommodate larger households. The property will have a seven-classroom early learning center on the ground floor, which will be operated by the Whatcom Family YMCA. Heritage Bank provided a $14,250,000 construction loan and $1,050,000 in permanent financing as well as an equity investment of $16,225,000 through our proprietary fund with Enterprise Community Partners. Additional funders

Portland is consistently ranked among the fastest gentrifying cities in the country. So, Sabin Community Development Corporation announced plans for the Harvey Rice Heritage project, a two-building development in northeast Portland that will provide housing for communities of color. The two buildings will be named after Black northeast Portland artists: Isaka ShamsudDin and Charlotte Lewis. The Isaka Shamsud-Din building will have 29 units and will be an extension of Sabin’s already existing nine-unit property. The Charlotte Lewis building will be comprised of two three-story buildings with 12 twoand three-bedroom family units. Heritage Bank provided a $14,300,000 construction loan as well as an equity investment of $11,670,000. All 41 units will be available to families and seniors under the City of Portland’s Preference Policy, which allows African Americans displaced by gentrification to return to the historic north Alberta community.

WE CELEBRATED THE OPENING OF THESE BUILDINGS IN 2021 Plymouth Housing’s Kristin Benson Place Permanent supportive housing Yakima Housing Authority’s Chuck Austin Place Permanent supportive housing for homeless veterans Tacoma Housing Authority’s Rise at 19th Affordable housing Rise at 19th (Image: Tacoma Housing Authority)

Tacoma Housing Authority’s Arlington Youth Center Housing for homeless youth Homestead Community Land Trust’s Willowcrest Homes Affordable homes for purchase

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Heritage Bank Community Development Entity (HBCDE) FINANCING FOR VALUABLE COMMUNITY DEVELOPMENT PROJECTS These loans are about more than just financing businesses in economically stressed areas. It’s about breathing new life into neglected and underserved lowincome communities.

which will encourage investments in low-income communities through a subsidized loan fund offering payment amounts that average 50% of conventional loan alternatives.

Our motto has always been that when banks and neighbors work together, great communities grow stronger. As we continue to watch local businesses struggle with the pandemic and current economic conditions, we know it’s our responsibility to respond with new strategies to help.

The program was funded with $50 million dollars from Heritage and encourages investment in small businesses and commercial real estate located in often underserved communities. As one of only a handful of CDEs in Washington and Oregon that’s able to facilitate these loans, we can offer better rates and terms with more flexibility than the market.

One of the ways we’re doing this is through the creation of our own Community Development Entity (CDE)

“We knew we had to think outside the box when it came to new ways to support the businesses and nonprofits that we serve. Forming a CDE was a way we could continue investing our resources in communities that support an improved quality of life and economic vibrancy.” – Bryan McDonald, President & COO 22

2021 Community Investment Report

Approximately 60% of our existing loans serve small- to medium-sized businesses, ranging from manufacturers to distributors to professional services. We understand the decision-making process that businesses go through when deciding how to grow and where to locate. When considering moving to a low-income community, many businesses cite unproven demand and uncertainty around finding workers as key considerations. Businesses that

qualify for a loan through the program must offer accessible jobs to ensure the local community members are benefiting from the project. We hold the uncompromising belief that the answer to community prosperity is driven by diverse groups of people, including those in low-income communities. Importantly, issues of equity continue to affect many Americans, especially minority- and women-owned businesses. We actively work alongside our communities to build networks of local leaders to provide community services, such as providing children and young adults with financial education or serving on nonprofit boards; by revitalizing or stabilizing low- to moderateincome geographies; by providing affordable housing opportunities and investments; and through our active philanthropic granting and sponsorships to local nonprofits. As such, we seek to provide services, investments and loans that fulfil our communities’ credit needs.

HBCDE, LLC, a subsidiary of Heritage Bank, has been 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.

HERITAGE VOLUNTEERS In 2021, 40 Heritage employees donated

Business & Economic Development 111 hours

Health & Human Services 222 hours

1,295 hours to

72 organizations to complete 550 acts

of service within our local communities.

Social Equity 13 hours Education & Youth Development 191 hours

The organizations we donated the most hours to included local food banks, chambers of commerce, rotary clubs and:

Environmental Stewardship 3 hours Other 10

Our employees who volunteered the most hours included: Carmen Goers – 172.5 hours Brett Willis – 110 hours Marlene Johanson – 105.5 hours HeritageBankNW.com

Heritage Bank believes in the possibilities for each and every person— and the power of community to improve the lives of those around us. Learn more about our commitment to community at HeritageBankNW.com/community

CONNECT WITH US 800.455.6126

Support@HeritageBankNW.com HeritageBankNW.com

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