Heritage Bank Completes Merger with Northwest Commercial Bank

Heritage Financial Corporation (NASDAQ: HFWA), the parent company of Heritage Bank, today announced the closing of its previously announced acquisition of Northwest Commercial Bank ("NCB") located in Lakewood, Washington, effective January 9, 2013.  The NCB shareholders approved the merger on November 27, 2012 and all required regulatory approvals have been obtained.  (Logo:  http://photos.prnewswire.com/prnh/20110127/SF37289LOGO) The NCB shareholders' cash consideration is $5.50 per share.  The shareholders can potentially receive additional consideration based on an earn-out structure, which could provide up to an additional $3.34 per NCB share. Kurt F. Graff, President and Chief Executive Officer of NCB will be retained by Heritage Bank as NCB's shareholder representative through December 31, 2013 to manage the asset related to the earn-out on behalf of the NCB shareholders.  In conjunction with the completion of the transaction, NCB has fully repaid the approximate $2.1 million of preferred stock and warrants previously issued to the U.S. Department of Treasury under the Troubled Asset Relief Program. In accordance with the terms of the merger agreement, the Lakewood and Auburn branches of NCB are now branches of Heritage Bank.  The Lakewood branch will be consolidated into the existing Heritage See full press release