Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to ensure that information the Company must disclose in its reports filed or submitted under the Exchange Act, is recorded, processed, summarized, and reported on a timely basis. Our management has evaluated, with the participation and under the supervision of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, the Company’s disclosure controls and procedures are effective in ensuring that information relating to the Company, including its consolidated subsidiaries, required to be disclosed in reports that it files under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Internal Control Over Financial Reporting
(a) Management’s report on internal control over financial reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control system is designed to provide reasonable assurance to our management and the board of directors regarding the preparation and fair presentation of published financial statements. Nonetheless, all internal control systems, no matter how well designed, have inherent limitations. Even systems determined to be effective as of a particular date can provide only reasonable assurance with respect to financial statement preparation and presentation and may not eliminate the need for restatements.
The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the 2013 Internal Control—Integrated Framework . Based on our assessment, we believe that, as of December 31, 2021, the Company’s internal control over financial reporting is effective based on these criteria.
Crowe LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2021, and their report is included in Item 8. Financial Statements And Supplementary Data.
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(b) Attestation report of the registered public accounting firm.
See Item 8. Financial Statements And Supplementary Data.
(c) Changes in internal control over financial reporting.
There were no significant changes in the Company’s internal control over financial reporting during the fourth quarter of the period covered by this Form 10-K that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information concerning directors of the registrant is incorporated by reference to the section entitled “Proposal 1 - Election of Directors” of our Proxy Statement.
For information regarding the executive officers of the Company, see Item 1. Business—Executive Officers.
The required information with respect to compliance with Section 16(a) of the Exchange Act is incorporated by reference to the section entitled “Security Ownership of Certain Beneficial Owners and Management” of the Proxy Statement.
The Company has adopted a written Code of Ethics that applies to our directors, officers and employees. The Code of Ethics can be accessed electronically by visiting the Company’s website at www.hf-wa.com in the section titled Overview: Governance Documents.
The Audit and Finance Committee of our board of directors retains our independent auditors, reviews and approves the scope and results of the audits with the auditors and management, monitors the adequacy of our system of internal controls and reviews the annual report, auditors’ fees and non-audit services to be provided by the independent auditors. The members of our Audit Committee are Deborah J. Gavin, chair of the committee, Brian S. Charneski, Trevor D. Dryer, Jeffery S. Lyon, Gragg E. Miller, and Anthony B. Pickering, all of whom are considered “independent” as defined by the SEC. Our board of directors has determined Mrs. Gavin meets the definition of a financial expert as determined by the requirements of the SEC.
ITEM 11. EXECUTIVE COMPENSATION
Information concerning executive and director compensation and certain matters regarding participation in the Company’s Compensation Committee required by this item is incorporated by reference to the headings “Executive Compensation,” “Director Compensation,” “Report of the Compensation Committee,” and "CEO Pay Ratio" of the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information concerning security ownership of certain beneficial owners and management is incorporated by reference to the section entitled “Security Ownership of Certain Beneficial Owners and Management” of the Proxy Statement.
The following table summarizes the consolidated activity within the Company’s stock-based compensation plans as of December 31, 2021, all of which were approved by shareholders.
Plan Category Number of
securities
to be issued
upon vesting of restricted stock awards Number of
securities
to be issued
upon vesting of restricted stock units Number of
securities
to be issued
upon exercise of outstanding
options Number of
securities
remaining
available for
future issuance
under equity
compensation
plans
Equity compensation plans, all of which are approved by security holders — 315,014 — 522,228
ITEM 13. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information concerning certain relationships and related transactions is incorporated by reference to the sections entitled “Meetings and Committees of the Board of Directors" and "Corporate Governance” of the Proxy Statement.
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Our common stock is listed on the NASDAQ Global Select Market. In accordance with NASDAQ requirements, at least a majority of our directors must be independent directors. The board of directors has determined that 12 of our 13 directors are independent.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Information concerning principal accounting fees and services is incorporated by reference to the section entitled “Proposal 3 - Ratification of the Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as a part of this report:
(1) Financial Statements: The Consolidated Financial Statements are included in Part II. Item 8. Financial Statements And Supplementary Data.
(2) Financial Statements Schedules: All schedules are omitted because they are not required or applicable, or the required information is shown in the Consolidated Financial Statements or Notes.
(3) Exhibits: Included in schedule below.
Incorporated by Reference
Exhibit No.
Description of Exhibit Form Exhibit Filing Date/Period End Date
3.1 Amended and Restated Articles of Incorporation
8-K 3.1(B) 05/18/2010
3.2 Amendment to Amended and Restated Articles of Incorporation
S-14A - 03/18/2011
3.3 Amended and Restated Bylaws of the Company
8-K 3.3 06/30/2020
4.1 Form of Certificate of Company's Common Stock (3)
S-1/A - 10/29/1997
4.2 Description of Capital Stock of Capital Stock (1)
10.1* Annual Incentive Compensation Plan
10-K 10.5 03/09/2017
10.2* Amended 2014 Omnibus Equity Plan
8-K 99.2 02/01/2017
10.3* 2014 Omnibus Equity Plan
DEF 14A - 06/11/2014
10.4* Form of Performance-Based Restricted Stock Unit Award Agreement under the Heritage Financial Corporation 2014 Omnibus Equity Plan
8-K 99.4 02/01/2017
10.5* Form of Restricted Stock Unit Award Agreement under the Heritage Financial Corporation 2014 Omnibus Equity Plan
8-K 99.3 02/01/2017
10.6* Employment Agreement by and between Heritage and Jeffery J. Deuel
8-K 10.1 07/01/2019
10.7* Deferred Compensation Plan and Participation Agreement by and between Heritage and Jeffrey J. Deuel
8-K 10.6 09/07/2012
10.8* Deferred Compensation Plan and Participation Agreement - Addendum by and between Heritage and Jeffrey J. Deuel
8-K 10.2 12/22/2016
10.9* Deferred Compensation Plan and Participation Agreement - Addendum by and between Heritage and Jeffrey J. Deuel
10-Q 10.15 11/06/2019
10.10* Employment Agreement by and between Heritage and Donald J. Hinson
10-Q 10.22 11/06/2019
10.11* Deferred Compensation Plan and Participation Agreement by and between Heritage and Donald J. Hinson
8-K 10.7 09/07/2012
10.12* Deferred Compensation Plan and Participation Agreement - Addendum by and between Heritage and Donald J. Hinson
8-K 10.3 12/22/2016
10.13* Deferred Compensation Plan and Participation Agreement - Addendum by and between Heritage and Donald J. Hinson
10-Q 10.16 11/06/2019
10.14* Employment Agreement by and between Heritage and Bryan McDonald
10-Q 10.33 11/06/2019
10.15* Deferred Compensation Plan and Participation Agreement by and between Heritage and Bryan D. McDonald
10-K 10.16 03/11/2015
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10.16* Deferred Compensation Plan and Participation Agreement - Addendum by and between Heritage and Bryan D. McDonald
8-K 10.4 12/22/2016
10.17* Deferred Compensation Plan and Participation Agreement - Addendum by and between Heritage and Bryan D. McDonald
10-Q 10.27 11/06/2019
10.18* Addendum to Employment Agreement - Bryan D. McDonald
8-K 10.1 07/06/2021
10.19* Employment Agreement by and between Heritage and Cindy Huntley
10-Q 10.35 11/06/2019
10.20* Deferred Compensation Plan and Participation Agreement by and between Heritage and Cindy Huntley
10-Q 10.36 11/06/2019
10.21* Employment Agreement by and between Heritage and William Glasby
10-Q 10.37 11/06/2019
10.22* Form of Split Dollar Agreements
10-Q 10.17 08/06/2015
10.23* Form of First Amendment to Split Dollar Agreements
10-Q 10.34 05/09/2019
10.24* Employment Agreement by and between Heritage and Tony Chalfant
8-K 10.1 06/30/2020
10.25* Deferred Compensation Plan and Participation Agreement by and between Heritage and Tony Chalfant
8-K 10.3 06/30/2020
10.26* Form of Split Dollar Agreement, dated May 3, 2021, by and between Heritage Bank and Tony Chalfant
10-Q 10.34 05/05/2021
14.0 Code of Ethics and Conduct Policy (2)
21.0 Subsidiaries of the Company (1)
23.0 Consent of Independent Registered Public Accounting Firm (1)
24.0 Power of Attorney (1)
31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (1)
31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (1)
32.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1)
101.INS XBRL Instance Document (1)
101.SCH XBRL Taxonomy Extension Schema Document (1)
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document (1)
101.DEF XBRL Taxonomy Extension Definition Linkbase Document (1)
101.LAB XBRL Taxonomy Extension Label Linkbase Document (1)
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document (1)
*Indicates management contract or compensatory plan or arrangement.
(1) Filed herewith.
(2) Registrant elects to satisfy Regulation S-K §229.406(c) by posting its Code of Ethics on its website at www.HF-WA.com in the section titled Overview: Governance Documents.
(3) Exhibit not previously filed in electronic format.
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 24, 2022.
HERITAGE FINANCIAL CORPORATION
(Registrant)
/S/ JEFFREY J. DEUEL
Jeffrey J. Deuel
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February 24, 2022.
Principal Executive Officer:
/S/ JEFFREY J. DEUEL
Jeffrey J. Deuel
President and Chief Executive Officer
Principal Financial Officer:
/S/ DONALD J. HINSON
Donald J. Hinson
Executive Vice President and Chief Financial Officer
Jeffrey J. Deuel, pursuant to a power of attorney that is being filed with the Form 10-K, has signed this report as attorney in fact for the following directors who constitute a majority of the board of directors.
Brian S. Charneski
John A. Clees
Trevor D. Dryer
Kimberly T. Ellwanger
Deborah J. Gavin
Gail B. Giacobbe
Jeffrey S. Lyon
Gragg E. Miller
Anthony B. Pickering
Frederick B. Rivera
Brian L. Vance
Ann Watson
/S/ JEFFREY J. DEUEL
Jeffrey J. Deuel
Attorney-in-Fact
February 24, 2022
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