Exhibit 99.1

HERITAGE FINANCIAL ANNOUNCES FIRST

QUARTER 2011 RESULTS AND HIGHLIGHTS

Olympia, WA - HERITAGE FINANCIAL CORPORATION (NASDAQ GS: HFWA) Brian L. Vance, President and CEO of Heritage Financial Corporation (“Company” or “Heritage”), today reported net income for the quarter ended March 31, 2011 of $764,000 compared to net income of $696,000 for the quarter ended March 31, 2010 and $9.8 million for the linked-quarter ended December 31, 2010. The net income applicable to common shareholders for the quarter ended March 31, 2011 was $0.05 per diluted common share, compared to $0.03 per diluted common share for the quarter ended March 31, 2010 and $0.77 per diluted common share for the linked-quarter ended December 31, 2010. The decrease in earnings from the linked-quarter ended December 31, 2010 was substantially attributable to the gain on bank acquisitions in connection with the acquisition of Pierce Commercial Bank in November 2010.

Mr. Vance commented, “While our first quarter 2011 performance was somewhat muted by ongoing expenses related to our acquisitions such as acquired asset loss provisions and certain overhead expenses, we are pleased with our overall core performance. As we have previously communicated, we are consciously executing our growth strategies by building out our Pacific Northwest franchise with acquisitions, de novo branches, new lenders, new product lines and our recently announced branch acquisition. While we execute our growth strategies, we expect to incur higher expenses as evidenced by our current efficiency ratio exceeding 70%. We are confident that these strategies will produce long term positive results and expenses will be more in line with our revenue as our legacy performance metrics would suggest.”

Balance Sheet

The Company’s total assets decreased $32.7 million to $1.34 billion at March 31, 2011 from $1.37 billion at December 31, 2010 due substantially to a decrease in acquired certificate of deposit balances. Total certificate of deposit balances decreased $44.2 million to $358.8 million at March 31, 2011 from $402.9 million at December 31, 2010. Of this decrease, $32.6 million was related to certificate of deposit accounts assumed in the Cowlitz Bank and Pierce Commercial Bank acquisitions (“Cowlitz and Pierce Acquisitions”) including $14.7 million of internet

certificate of deposit accounts which were repriced at the time of acquisition. Total non-maturity deposits increased $7.6 million to $740.9 million at March 31, 2011 from $733.3 million at December 31, 2010. As a result, non-maturity deposits to total deposits increased to 67.4% at March 31, 2011 from 64.5% at December 31, 2010.

Total originated loans (including loans held for sale) increased $10.9 million to $753.7 million at March 31, 2011 from $742.8 million at December 31, 2010. At March 31, 2011, real estate construction loans accounted for $59.9 million, or 8.0% of total originated loans, of which $26.9 million were single-family residential construction loans.

At March 31, 2011, the Company’s stockholders’ equity to total assets increased to 15.2% compared to 14.8% at December 31, 2010. The Company and its subsidiary banks continue to maintain capital levels significantly in excess of applicable regulatory requirements to be categorized as “well-capitalized”. The Company had Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios at March 31, 2011 of 14.1%, 20.6% and 21.9%, respectively, as compared to 13.9%, 20.2% and 21.4% at December 31, 2010, respectively.

Mr. Vance continued, “We continue to be pleased with our non-maturity deposit growth which improved to a very strong 67.4% of total deposits. We have diligently managed the deposit mix of our acquired banks by exiting higher priced non-relationship CDs while at the same time increasing the more desirable relationship deposit accounts as evidenced in the non-maturity deposit growth. We are also pleased with increasing loan production coming from our new lenders as well as from our legacy lenders.”

Credit Quality

The allowance for loan losses on originated loans at March 31, 2011 decreased by $680,000 to $21.4 million from $22.1 million at December 31, 2010. Nonperforming originated assets were $32.9 million, or 2.7% of total originated assets, at March 31, 2011, compared to $29.9 million, or 2.4% of total originated assets, at December 31, 2010. Potential problem originated loans were $50.1 million at March 31, 2011, a decrease from $56.1 million at December 31, 2010. The Company believes that its allowance for loan losses is adequate to provide for probable losses based on an evaluation of known and inherent risk in the loan portfolio at March 31, 2011.

Nonperforming originated loans to total originated loans was 3.4% at March 31, 2011, an increase from 3.2% at December 31, 2010 and a decrease from 3.7% March 31, 2010. The allowance for loan losses to nonperforming originated loans was 83.2% at March 31, 2011 compared to 93.2% at December 31, 2010 and 88.2% at March 31, 2010. The increase in nonperforming originated loans is due to the restructuring of a $5.0 million loan on a condominium construction project partially offset by $3.3 million in net charge-offs during the quarter ended March 31, 2011. Of these charge-offs, $2.6 million related to nonperforming construction loans and $514,000 related to nonperforming commercial loans.

Mr. Vance added, “Although our first quarter 2011 credit metrics declined slightly from our previous quarter, I continue to be comfortable with our overall credit metrics. We aggressively manage our problem loan detection and risk grading processes to minimize our ultimate loss exposure. This process sometimes leads to variable results which we believe is typical when properly managing problem loans in any difficult credit cycle. Our allowance coverage remains at a very strong 83.2%.”

“Our Pacific Northwest economy can best be described as ‘one step forward and one step backward.’ For instance, we are encouraged by positive announcements from major area employers and improving unemployment rates to then face the difficult reality of substantially increasing fuel prices and the likely negative impact these costs will have on area businesses. Additionally, we continue to see a buildup in the inventory of unsold homes in our area and home values have continued to deteriorate and new home sales have further declined. We have not yet had a sustained economic recovery in the Pacific Northwest.”

Operating Results

Net interest income increased $4.9 million, or 46.2%, to $15.6 million for the quarter ended March 31, 2011 compared with $10.7 million during the same period in 2010. This increase was primarily a result of the increased earning assets acquired in the Cowlitz and Pierce acquisitions. Heritage’s net interest margin for the quarter ended March 31, 2011 increased to 5.08% from 4.58% for the same period in 2010. The increase in net interest margin was due primarily to increased loan yields as a result of discount accretion on the loan portfolios acquired in the Cowlitz and Pierce Acquisitions. The effect on the net interest margin of discount accretion on the acquired loan portfolio for the quarter ended March 31, 2011 was approximately 32 basis points. Interest reversals on nonaccrual originated loans impacting the net interest margin for the quarter ended March 31, 2011 were approximately nine basis points compared to 15 basis points for the prior year quarter ended March 31, 2010.

The provision for loan losses on originated loans decreased $1.2 million, or 30.8% to $2.6 million for the quarter ended March 31, 2011 from $3.8 million for the quarter ended March 31, 2010 and decreased $300,000, or 10.4%, from $2.9 million for the linked quarter ended December 31, 2010. The Company had net charge-offs of $3.3 million for the quarter ended March 31, 2011 compared to $6.0 million for the quarter ended December 31, 2010 and $5.1 million for the quarter ended March 31, 2010.

The provision for loan losses on purchased loans totaled $1.8 million for the quarter ended March 31, 2011. This provision was due substantially to the decrease of estimated cash flows in certain pools of acquired loans from the original cash flow estimations. As of the acquisition dates, purchased loans were recorded at their estimated fair value, incorporating our estimate of future expected cash flows until the ultimate resolution of these credits. To the extent actual or projected cash flows are less than originally estimated, additional provisions for loan losses on the purchased loan portfolios will be recognized immediately into earnings. Provisions on the purchased covered loans, however, would be mostly offset by a corresponding increase in the Federal Deposit Insurance Corporation (“FDIC”) indemnification asset recognized within non-interest income. To the extent actual or projected cash flows are more than originally estimated, the increase in cash flows is prospectively recognized in interest income. The increase in interest income, however, would be mostly offset by a corresponding decrease in the FDIC indemnification asset recognized prospectively within non-interest income.

Cash flows on pools of acquired loans are re-estimated on a quarterly basis. Although there was a decrease in estimated cash flows in certain pools of acquired loans during the quarter ended March 31, 2011, cash flow estimations increased from the original cash flow estimations for the majority of the pools, resulting in an aggregate increase. As a result of the re-estimation performed during the quarter ended March 31, 2011, the increase in cash flows will prospectively increase interest income and decrease non-interest income. However, this effect is subject to the results of future quarterly cash flow re-estimations.

Donald J. Hinson, Senior Vice President and Chief Financial Officer commented, “We are pleased with the cash flow performance of the acquired loan portfolios. However, due to the accounting rules associated with acquired loans, we are likely to experience volatility over the next few quarters in reported net interest margin, provision for loans losses and non-interest income, as quarterly cash flow re-estimations are performed.”

Non-interest income increased $1.3 million to $3.5 million for the quarter ended March 31, 2011 compared to $2.2 million for the same period in 2010. The increase was due substantially to the FDIC loss sharing income (net of expenses) in the amount of $800,000. In addition, service charges on deposits for the quarter ended March 31, 2011 increased $213,000 from the same period in the prior year due to increases in deposit accounts as a result of the Cowlitz and Pierce Acquisitions.

Non-interest expense increased $5.6 million or 69.1% to $13.7 million during the quarter ended March 31, 2011 compared to $8.1 million for the quarter ended March 31, 2010. The increase for the three months ended March 31, 2011 compared to the same period in the prior year was due to increased salaries and benefits expense in the amount of $2.6 million, increased occupancy and equipment expense of $819,000, increased other real estate owned expense (including valuation adjustments), relating to other real estate owned of $491,000, increased data processing of $403,000, and increased professional services of $347,000. With the exception of expenses relating to other real estate owned, these increases were substantially due to the Cowlitz and Pierce acquisitions.

Dividend

On May 2, 2011, the Company’s Board of Directors declared a dividend of $0.03 per share payable on May 27, 2011 to shareholders of record on May 13, 2011.

Earnings Conference Call

The Company will hold a telephone conference call to discuss this earnings release on May 3, 2011, at 11:00 a.m. Pacific time. To access the call, please dial (800) 230-1059 a few minutes prior to 11:00 a.m. Pacific time. The call will be available for replay through May 17, 2011, by dialing (800) 475-6701 — access code 198080.

About Heritage Financial

Heritage Financial Corporation is a bank holding company headquartered in Olympia, Washington. The Company operates two community banks, Heritage Bank and Central Valley Bank. Heritage Bank serves western Washington and the greater Portland, Oregon area through its twenty-six full-service banking offices and its Online Banking Website www.HeritageBankWA.com. Central Valley Bank serves Yakima and Kittitas counties in central Washington through its six full-service banking offices and its Online Banking Website www.CVBankWA.com. Additional information about Heritage Financial Corporation is available on its Internet Website www.HF-WA.com.

Non-GAAP Financial Measures

This news release contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (GAAP). These measures include average tangible common equity, tangible book value per share and tangible common equity to tangible assets. Tangible common equity (tangible book value) excludes preferred stock, goodwill and other intangible assets. Tangible assets exclude goodwill and other intangible assets. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in the Company’s capital reflected in the current quarter and year-to-date results. Where applicable, the Company has also presented comparable capital information using GAAP financial measures. Reconciliations of the GAAP and non-GAAP financial measures are presented below.

Forward-Looking Statements

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements that are subject to risks and uncertainties, including, but not limited to: the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes and other properties and fluctuations in real estate values in our market areas; results of examinations of us by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and of our bank subsidiaries by the Federal Deposit Insurance Corporation (the “FDIC”), the Washington State Department of Financial Institutions, Division of Banks (the “Washington DFI”) or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our reserve for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings; legislative or regulatory changes that adversely affect our business including changes in regulatory policies and principles, including the interpretation of regulatory capital or other rules including changes from the Dodd-Frank Wall Street Reform and Consumer Protection Act and regulations that have been or will be promulgated thereunder; our ability to control operating costs and expenses; the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risk associated with the loans on our balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges; computer systems on which we depend could fail or experience a security breach; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to implement our expansion strategy; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we have acquired including the Cowlitz Bank and Pierce Commercial Bank transactions or may in the future acquire into our operations and our ability to realize related revenue synergies and cost savings

within expected time frames and any goodwill charges related thereto; risks relating to acquiring assets or entering markets in which we have not previously operated and may not be familiar, changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and other risks detailed from time to time in our filings with the Securities and Exchange Commission.

The Company cautions readers not to place undue reliance on any forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for 2011 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect the Company’s operating and stock price performance.

HERITAGE FINANCIAL CORPORATION

CONDENSED STATEMENTS OF FINANCIAL CONDITION

(Dollar amounts in thousands; unaudited)

HERITAGE FINANCIAL CORPORATION

CONDENSED STATEMENTS OF INCOME (LOSS)

(Dollar amounts in thousands, except per share amounts; unaudited)

HERITAGE FINANCIAL CORPORATION

FINANCIAL STATISTICS

(Dollar amounts in thousands, except per share amounts; unaudited)

HERITAGE FINANCIAL CORPORATION

FINANCIAL STATISTICS

(Dollar amounts in thousands, except per share amounts; unaudited)

HERITAGE FINANCIAL CORPORATION

FINANCIAL STATISTICS

(Dollar amounts in thousands, except per share amounts; unaudited)

HERITAGE FINANCIAL CORPORATION

FINANCIAL STATISTICS

(Dollar amounts in thousands; unaudited)