<PAGE>   1

As filed with the Securities and Exchange Commission on June 22, 1998.
                                                       Registration No. 333-____

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                           --------------------------
                                    FORM S-8
                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933
                           --------------------------
                         HERITAGE FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

                   WASHINGTON                                   91-1857900
 (State or other jurisdiction of incorporation               (I.R.S. Employer
                or organization)                          Identification Number)

                 201 5TH AVENUE S.W., OLYMPIA, WASHINGTON 98501
          (Address, including zip code, and telephone number, including
             area code of registrant's principal executive offices)

                1997 STOCK OPTION AND RESTRICTED STOCK AWARD PLAN
                            (Full title of the plan)

                                DONALD V. RHODES
                 CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
                         HERITAGE FINANCIAL CORPORATION
                               201 5TH AVENUE S.W.
                            OLYMPIA, WASHINGTON 98501
                                 (360) 943-1500

                          Copies of communications to:

                            SANDRA L. GALLAGHER, ESQ.
         GORDON, THOMAS, HONEYWELL, MALANCA, PETERSON & DAHEIM, P.L.L.C.
                             2200 WELLS FARGO PLAZA
                            TACOMA, WASHINGTON 98402
                                 (206) 572-5050

  (Name, address, including zip code and telephone number, including area code,
                             of agent for service)

                         CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
                                                                                     Proposed Maximum
Title of Securities to be         Amount to be         Maximum Offering Price       Aggregate Offering       Amount of Registration
        Registered               Registered (1)             Per Share(2)                 Price(2)                      Fee
------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                   <C>                          <C>                      <C>      
Common stock, no par value           257,460                   $13.69                 $3,524,627.40                $1,039.77
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The registration statement also includes an indeterminable number of
additional shares that may become issuable as a result of terminated, expired or
surrendered options for Common Stock, or pursuant to the antidilution provisions
of the plan. This Registration Statement covers, pursuant to Rule 416(a), any
increases in the number of shares offered under the Plan to prevent dilution
resulting from stock splits, stock dividends or similar transactions.


<PAGE>   2
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (h), based upon the average of the high and low
prices reported on June 22, 1998, as reported on the Nasdaq Stock Market.


                                     - 2 -
<PAGE>   3
                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

        The documents containing the information required by Part I of this
registration statement on Form S-8 (the "Registration Statement") will be sent
or given to Plan participants as specified by Rule 428(b)(1) under the
Securities Act. Such documents and the documents incorporated by reference
herein pursuant to Item 3 of Part II hereof, taken together, constitute a
prospectus that meets the requirements of Section 10(a) of the Securities Act.


                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.     INCORPORATION OF DOCUMENTS BY REFERENCE

      The following documents have been filed with the Commission by Heritage
Financial Corporation (the "Company") and are incorporated herein by reference
and made a part hereof:

      1.    The Company's Prospectus filed with the Commission on November 12,
            1997 pursuant to Rule 424(b) under the Act containing audited
            financial statements for the years ending June 30, 1997, 1996 and
            1995 of Heritage Savings Bank and Subsidiaries.

      2.    The description of the Common Stock of the Company contained in the
            Company's Registration Statement on Form 8-A filed with the
            Commission.

      3.    All reports filed by the Company pursuant to Section 13 or 15(d) of
            the Securities Exchange Act of 1934 since the end of the fiscal year
            covered by the financial statements in the Prospectus referred to in
            paragraph 1 above.

      4.    All documents filed by the Company pursuant to Sections 13(a),
            13(c), 14 and 15(d) of the Securities Exchange Act of 1934
            subsequent to the date hereof and prior to the filing of a
            post-effective amendment which indicates that all securities offered
            have been sold or which deregisters all securities then remaining
            unsold shall be deemed to be incorporated by reference herein and to
            be part hereof from the date of the filing of such documents.

ITEM 4.     DESCRIPTION OF SECURITIES

      Not applicable.


                                     - 3 -
<PAGE>   4
ITEM 5.     INTERESTS OF NAMED EXPERTS AND COUNSEL

      The validity of the Common stock to be offered hereby will be passed upon
for the Company by Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim,
P.L.L.C. attorneys who are members or who are employed by Gordon, Thomas,
Honeywell, Malanca, Peterson & Daheim who have provided advice with respect to
this matter in the aggregate own, directly and indirectly 64,141 shares of the
common stock of the Company.

ITEM 6.     INDEMNIFICATION OF DIRECTORS AND OFFICERS

      The Washington Business Corporation Act, RCW Chapter 23B.08, authorizes
indemnification of directors, officers and employees under certain
circumstances. The Company's Articles of Incorporation provide, among other
things, for the indemnification of directors, and authorize the Board to pay
reasonable expenses incurred by, or to satisfy a judgment or fine against, a
current or former director in connection with any personal legal liability
incurred by the individual while acting for the Company within the scope of his
or her employment, and which was not the result of conduct finally adjudged to
be "egregious" conduct. "Egregious" conduct is defined as intentional
misconduct, a knowing violation of law, or participation in any transaction from
which the person will personally receive a benefit in money, property or
services to which that person is not legally entitled. The Articles of
Incorporation also include a provision that limits the liability of directors of
the Company from any personal liability to the Company or its shareholders for
conduct not found to have been egregious. The Company has purchased an officers
and directors liability insurance policy which provides for insurance of
directors and officers of the Company against certain liabilities they may incur
in their capacities as such.

ITEM 7.     EXEMPTION FROM REGISTRATION CLAIMED

      Not Applicable

ITEM 8.     EXHIBITS

Exhibit No.   Exhibits

      4.1   Articles of Incorporation filed as an exhibit to the Company's
            Registration Statement on Form S-1 (Registration No. 333-35573) and
            incorporated by this reference.

      5.1   Opinion of Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim,
            P.L.L.C. as to the legality of the securities being registered
            (including consent of counsel).*

      23.1  Consent of KPMG Peat Marwick LLP.*


                                     - 4 -
<PAGE>   5
      23.2  Consent of Counsel (included in the opinion of Gordon, Thomas,
            Honeywell, Malanca, Peterson & Daheim, P.L.L.C. filed as Exhibit
            5.1)*

      24    Power of Attorney pursuant to which certain Directors have signed
            this Form S-8 Registration Statement*

      99.1  1997 Stock Option and Restricted Stock Award Plan*
------------
* Filed herewith


ITEM 9.     UNDERTAKINGS

(a)   The Company hereby undertakes:

      (1)   To file, during any period in which offers or sales are being made,
            a post-effective amendment to this registration statement:

            (i)   to include any prospectus required by Section 10(a)(3) of the
                  Securities Act of 1933;

            (ii)  to reflect in the prospectus any facts or events arising after
                  the effective date of the registration statement (or the most
                  recent post-effective amendment thereof) which, individually
                  or in the aggregate, represent a fundamental change in the
                  information set forth in the registration statement;

            (iii) to include any material information with respect to the plan
                  of distribution not previously disclosed in the registration
                  statement or any material change to such information in the
                  registration statement;

                  Provided, however, that paragraph (a)(1)(i) and (a)(1)(ii)
                  shall not apply if the information required to be included in
                  a post-effective amendment by those paragraphs is contained in
                  periodic reports filed by the Company pursuant to section 13
                  or section 15(d) of the Securities Exchange Act of 1934 that
                  are incorporated by reference in this registration statement.

      (2)   That, for the purpose of determining any liability under the
            Securities Act of 1933, each such post-effective amendment shall be
            deemed to be a new registration statement relating to the securities
            offered therein, and the offering of such securities at that time
            shall be deemed to be the initial bona fide offering thereof.

      (3)   To remove from registration by means of a post-effective amendment
            any of the securities being registered which remain unsold at the
            termination of the offering.

(b)   The undersigned Company hereby undertakes that, for purposes of
      determining any liability under the Securities Act of 1933, each filing of
      the Company's annual report pursuant to Section 


                                     - 5 -
<PAGE>   6
      13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
      applicable, each filing of an employee benefit plan's annual report
      pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
      incorporated by reference in the registration statement shall be deemed to
      be a new registration statement relating to the securities offered
      therein, and the offering of such securities at that time shall be deemed
      to be the initial bona fide offering thereof.

(c)   Insofar as indemnification for liabilities arising under the Securities
      Act of 1933 may be permitted to directors, officers and controlling
      persons of the Company pursuant to the foregoing provisions, or otherwise,
      the Company has been advised that in the opinion of the Securities and
      Exchange Commission such indemnification is against public policy as
      expressed in the Act and is therefore, unenforceable. In the event that a
      claim for indemnification against such liabilities (other than the payment
      by the Company of expenses incurred or paid by a director, officer or
      controlling persons of the Company in the successful defense of any
      action, suit or proceeding) is asserted by such director, officer or
      controlling persons in connection with the securities being registered,
      the Company will, unless in the opinion of its counsel the matter has been
      settled by controlling precedent, submit to a court of appropriate
      jurisdiction the question whether such indemnification by it is against
      public policy as expressed in the Act and will be governed by the final
      adjudication of such issue.


                                     - 6 -
<PAGE>   7
SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Olympia, State of Washington, on June 23, 1998.

                              HERITAGE FINANCIAL CORPORATION
                              (Registrant)



                              By:/s/ Donald V. Rhodes
                                 --------------------------------------
                                 Donald V. Rhodes
                                 Chairman, President and Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated, on June 23, 1998.

      Signature                                                   Title


/s/  Donald V. Rhodes                    Chairman, President and Chief
-------------------------------------    Executive  Officer
Donald V. Rhodes                         


/s/  James Hastings                      Senior Vice President
-------------------------------------    Treasurer
James Hastings                           

Donald V. Rhodes                         Director
Lynn M. Brunton                          Director
John A. Clees                            Director
Daryl D. Jensen                          Director
H. Edward Odegard                        Director
James P. Senna                           Director
Philip S. Weigand                        Director

      Donald V. Rhodes, by signing his name hereto, does hereby sign this
document in his capacity as a director and pursuant to powers of attorney duly
executed by the persons named, filed with the Securities and Exchange Commission
as an exhibit to this document, on behalf of such persons, all in the capacities
and on the date stated, such persons including a majority of the directors of
the registrant.

                                       /s/  Donald V. Rhodes
                                       -----------------------------------------
                                       Donald V. Rhodes
                                       Attorney-in-Fact
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 15564}]
{"company-data": {"conformed-name": "HERITAGE FINANCIAL CORP /WA/", "cik": "0001046025", "assigned-sic": "6036", "state-of-incorporation": "WA", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-57513", "film-number": "98652647"}, "business-address": {"street1": "201 5TH AVE SW", "street2": "P O BOX 1578", "city": "OLYMPIA", "state": "WA", "zip": "98507", "phone": "3609431500"}, "mail-address": {"street1": "201 5TH AVE SW", "street2": "P O BOX 1578", "city": "OLYMPIA", "state": "WA", "zip": "98507"}}
1

As filed with the Securities and Exchange Commission on June 22, 1998.
                                                       Registration No. 333-____

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                           --------------------------
                                    FORM S-8
                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933
                           --------------------------
                         HERITAGE FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

                   WASHINGTON                                   91-1857900
 (State or other jurisdiction of incorporation               (I.R.S. Employer
                or organization)                          Identification Number)

                 201 5TH AVENUE S.W., OLYMPIA, WASHINGTON 98501
          (Address, including zip code, and telephone number, including
             area code of registrant's principal executive offices)

                1997 STOCK OPTION AND RESTRICTED STOCK AWARD PLAN
                            (Full title of the plan)

                                DONALD V. RHODES
                 CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
                         HERITAGE FINANCIAL CORPORATION
                               201 5TH AVENUE S.W.
                            OLYMPIA, WASHINGTON 98501
                                 (360) 943-1500

                          Copies of communications to:

                            SANDRA L. GALLAGHER, ESQ.
         GORDON, THOMAS, HONEYWELL, MALANCA, PETERSON & DAHEIM, P.L.L.C.
                             2200 WELLS FARGO PLAZA
                            TACOMA, WASHINGTON 98402
                                 (206) 572-5050

  (Name, address, including zip code and telephone number, including area code,
                             of agent for service)

                         CALCULATION OF REGISTRATION FEE
====================================================================================================================================
                                                                                     Proposed Maximum
Title of Securities to be         Amount to be         Maximum Offering Price       Aggregate Offering       Amount of Registration
        Registered               Registered (1)             Per Share(2)                 Price(2)                      Fee
------------------------------------------------------------------------------------------------------------------------------------
Common stock, no par value           257,460                   $13.69                 $3,524,627.40                $1,039.77
------------------------------------------------------------------------------------------------------------------------------------
(1) The registration statement also includes an indeterminable number of
additional shares that may become issuable as a result of terminated, expired or
surrendered options for Common Stock, or pursuant to the antidilution provisions
of the plan. This Registration Statement covers, pursuant to Rule 416(a), any
increases in the number of shares offered under the Plan to prevent dilution
resulting from stock splits, stock dividends or similar transactions.
2
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (h), based upon the average of the high and low
prices reported on June 22, 1998, as reported on the Nasdaq Stock Market.

                                     - 2 -
3
                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

        The documents containing the information required by Part I of this
registration statement on Form S-8 (the "Registration Statement") will be sent
or given to Plan participants as specified by Rule 428(b)(1) under the
Securities Act. Such documents and the documents incorporated by reference
herein pursuant to Item 3 of Part II hereof, taken together, constitute a
prospectus that meets the requirements of Section 10(a) of the Securities Act.

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.     INCORPORATION OF DOCUMENTS BY REFERENCE

      The following documents have been filed with the Commission by Heritage
Financial Corporation (the "Company") and are incorporated herein by reference
and made a part hereof:

      1.    The Company's Prospectus filed with the Commission on November 12,
            1997 pursuant to Rule 424(b) under the Act containing audited
            financial statements for the years ending June 30, 1997, 1996 and
            1995 of Heritage Savings Bank and Subsidiaries.

      2.    The description of the Common Stock of the Company contained in the
            Company's Registration Statement on Form 8-A filed with the
            Commission.

      3.    All reports filed by the Company pursuant to Section 13 or 15(d) of
            the Securities Exchange Act of 1934 since the end of the fiscal year
            covered by the financial statements in the Prospectus referred to in
            paragraph 1 above.

      4.    All documents filed by the Company pursuant to Sections 13(a),
            13(c), 14 and 15(d) of the Securities Exchange Act of 1934
            subsequent to the date hereof and prior to the filing of a
            post-effective amendment which indicates that all securities offered
            have been sold or which deregisters all securities then remaining
            unsold shall be deemed to be incorporated by reference herein and to
            be part hereof from the date of the filing of such documents.

ITEM 4.     DESCRIPTION OF SECURITIES

      Not applicable.

                                     - 3 -
4
ITEM 5.     INTERESTS OF NAMED EXPERTS AND COUNSEL

      The validity of the Common stock to be offered hereby will be passed upon
for the Company by Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim,
P.L.L.C. attorneys who are members or who are employed by Gordon, Thomas,
Honeywell, Malanca, Peterson & Daheim who have provided advice with respect to
this matter in the aggregate own, directly and indirectly 64,141 shares of the
common stock of the Company.

ITEM 6.     INDEMNIFICATION OF DIRECTORS AND OFFICERS

      The Washington Business Corporation Act, RCW Chapter 23B.08, authorizes
indemnification of directors, officers and employees under certain
circumstances. The Company's Articles of Incorporation provide, among other
things, for the indemnification of directors, and authorize the Board to pay
reasonable expenses incurred by, or to satisfy a judgment or fine against, a
current or former director in connection with any personal legal liability
incurred by the individual while acting for the Company within the scope of his
or her employment, and which was not the result of conduct finally adjudged to
be "egregious" conduct. "Egregious" conduct is defined as intentional
misconduct, a knowing violation of law, or participation in any transaction from
which the person will personally receive a benefit in money, property or
services to which that person is not legally entitled. The Articles of
Incorporation also include a provision that limits the liability of directors of
the Company from any personal liability to the Company or its shareholders for
conduct not found to have been egregious. The Company has purchased an officers
and directors liability insurance policy which provides for insurance of
directors and officers of the Company against certain liabilities they may incur
in their capacities as such.

ITEM 7.     EXEMPTION FROM REGISTRATION CLAIMED

      Not Applicable

ITEM 8.     EXHIBITS

Exhibit No.   Exhibits

      4.1   Articles of Incorporation filed as an exhibit to the Company's
            Registration Statement on Form S-1 (Registration No. 333-35573) and
            incorporated by this reference.

      5.1   Opinion of Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim,
            P.L.L.C. as to the legality of the securities being registered
            (including consent of counsel).*

      23.1  Consent of KPMG Peat Marwick LLP.*

                                     - 4 -
5
      23.2  Consent of Counsel (included in the opinion of Gordon, Thomas,
            Honeywell, Malanca, Peterson & Daheim, P.L.L.C. filed as Exhibit
            5.1)*

      24    Power of Attorney pursuant to which certain Directors have signed
            this Form S-8 Registration Statement*

      99.1  1997 Stock Option and Restricted Stock Award Plan*
------------
* Filed herewith

ITEM 9.     UNDERTAKINGS

(a)   The Company hereby undertakes:

      (1)   To file, during any period in which offers or sales are being made,
            a post-effective amendment to this registration statement:

            (i)   to include any prospectus required by Section 10(a)(3) of the
                  Securities Act of 1933;

            (ii)  to reflect in the prospectus any facts or events arising after
                  the effective date of the registration statement (or the most
                  recent post-effective amendment thereof) which, individually
                  or in the aggregate, represent a fundamental change in the
                  information set forth in the registration statement;

            (iii) to include any material information with respect to the plan
                  of distribution not previously disclosed in the registration
                  statement or any material change to such information in the
                  registration statement;

                  Provided, however, that paragraph (a)(1)(i) and (a)(1)(ii)
                  shall not apply if the information required to be included in
                  a post-effective amendment by those paragraphs is contained in
                  periodic reports filed by the Company pursuant to section 13
                  or section 15(d) of the Securities Exchange Act of 1934 that
                  are incorporated by reference in this registration statement.

      (2)   That, for the purpose of determining any liability under the
            Securities Act of 1933, each such post-effective amendment shall be
            deemed to be a new registration statement relating to the securities
            offered therein, and the offering of such securities at that time
            shall be deemed to be the initial bona fide offering thereof.

      (3)   To remove from registration by means of a post-effective amendment
            any of the securities being registered which remain unsold at the
            termination of the offering.

(b)   The undersigned Company hereby undertakes that, for purposes of
      determining any liability under the Securities Act of 1933, each filing of
      the Company's annual report pursuant to Section 

                                     - 5 -
6
      13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
      applicable, each filing of an employee benefit plan's annual report
      pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
      incorporated by reference in the registration statement shall be deemed to
      be a new registration statement relating to the securities offered
      therein, and the offering of such securities at that time shall be deemed
      to be the initial bona fide offering thereof.

(c)   Insofar as indemnification for liabilities arising under the Securities
      Act of 1933 may be permitted to directors, officers and controlling
      persons of the Company pursuant to the foregoing provisions, or otherwise,
      the Company has been advised that in the opinion of the Securities and
      Exchange Commission such indemnification is against public policy as
      expressed in the Act and is therefore, unenforceable. In the event that a
      claim for indemnification against such liabilities (other than the payment
      by the Company of expenses incurred or paid by a director, officer or
      controlling persons of the Company in the successful defense of any
      action, suit or proceeding) is asserted by such director, officer or
      controlling persons in connection with the securities being registered,
      the Company will, unless in the opinion of its counsel the matter has been
      settled by controlling precedent, submit to a court of appropriate
      jurisdiction the question whether such indemnification by it is against
      public policy as expressed in the Act and will be governed by the final
      adjudication of such issue.

                                     - 6 -
7
SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Olympia, State of Washington, on June 23, 1998.

                              HERITAGE FINANCIAL CORPORATION
                              (Registrant)

                              By:/s/ Donald V. Rhodes
                                 --------------------------------------
                                 Donald V. Rhodes
                                 Chairman, President and Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated, on June 23, 1998.

      Signature                                                   Title

/s/  Donald V. Rhodes                    Chairman, President and Chief
-------------------------------------    Executive  Officer
Donald V. Rhodes                         

/s/  James Hastings                      Senior Vice President
-------------------------------------    Treasurer
James Hastings                           

Donald V. Rhodes                         Director
Lynn M. Brunton                          Director
John A. Clees                            Director
Daryl D. Jensen                          Director
H. Edward Odegard                        Director
James P. Senna                           Director
Philip S. Weigand                        Director

      Donald V. Rhodes, by signing his name hereto, does hereby sign this
document in his capacity as a director and pursuant to powers of attorney duly
executed by the persons named, filed with the Securities and Exchange Commission
as an exhibit to this document, on behalf of such persons, all in the capacities
and on the date stated, such persons including a majority of the directors of
the registrant.

                                       /s/  Donald V. Rhodes
                                       -----------------------------------------
                                       Donald V. Rhodes
                                       Attorney-in-Fact