HERITAGE FINANCIAL CORP /WA/HFWA

HERITAGE FINANCIAL CORP /WA/ Commitments Disclosure

10-KFiled Feb 27, 20261 min read
Commitments and Contingencies
(a) Commitments to Extend Credit
In the ordinary course of business, the Company may enter into various types of transactions that include commitments to extend credit that are not included in its Consolidated Financial Statements. The Company applies the same credit standards to these commitments as it uses in all its lending activities and has included these commitments in its lending risk evaluations. The majority of the commitments presented below are variable rate. Loan commitments can be either revolving or non-revolving. The Company’s exposure to credit and market risk under commitments to extend credit is represented by the amount of these commitments.
The following table presents outstanding commitments to extend credit, including letters of credit, at the dates indicated:
 December 31, 2025December 31, 2024
 (Dollars in thousands)
Commercial business:
Commercial and industrial$554,438 $591,863 
Owner-occupied CRE12,169 14,778 
Non-owner occupied CRE38,954 23,100 
Total commercial business605,561 629,741 
Real estate construction and land development:
Residential56,487 28,353 
Commercial and multifamily
199,742 174,606 
Total real estate construction and land development256,229 202,959 
Consumer339,999 348,373 
Total outstanding commitments$1,201,789 $1,181,073 

Historical Timeline

Fiscal YearFiled
2025Feb 27, 2026Showing above
2024Feb 27, 2025
2022Feb 24, 2023
2021Feb 25, 2022
2019Feb 28, 2020
2018Mar 1, 2019
2017Feb 28, 2018
2016Mar 9, 2017
2015Mar 10, 2016

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

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