Heritage Financial Corp. (HFWA)
NASDAQ:HFWA
Want to see HFWA full AI Analyst Report?
Top Page
Heritage Financial
(NASDAQ:HFWA)
Select Model
Select Model
Rating:76Outperform
Price Target:
$31.00
â–²(12.77% Upside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by solid financial performance and balance-sheet conservatism, supported by a constructive technical uptrend. Valuation is helped by a reasonable P/E and a ~3.5% dividend yield. Earnings-call positives (NIM expansion outlook, loan growth pipeline, strong credit) are partially tempered by near-term merger-related expense pressure and a modest capital ratio decline.
Positive Factors
Conservative balance sheet
Very low leverage and materially higher equity provide durable loss-absorbing capacity and funding flexibility. That conservatism supports resilience through credit cycles, underpins regulatory standing, and permits disciplined lending and capital allocation over the next several quarters.
Negative Factors
Elevated merger-related expenses
Sustained higher noninterest expense through integration will compress operating leverage and near-term profitability, reducing free cash flow and damping ROE until synergies and cost reductions are realized. This limits capital return flexibility over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Very low leverage and materially higher equity provide durable loss-absorbing capacity and funding flexibility. That conservatism supports resilience through credit cycles, underpins regulatory standing, and permits disciplined lending and capital allocation over the next several quarters.
Read all positive factors
Heritage Financial (HFWA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.12B
Dividend Yield3.91%
Average Volume (3M)200.76K
Price to Earnings (P/E)13.3
Beta (1Y)0.73
Revenue Growth8.28%
EPS Growth37.82%
CountryUS
Employees757
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)2.06
Shares Outstanding41,218,820
10 Day Avg. Volume243,114
30 Day Avg. Volume200,762
Financial Highlights & Ratios
PEG Ratio0.21
Price to Book (P/B)0.87
Price to Sales (P/S)2.39
P/FCF Ratio9.38
Enterprise Value/Market Cap0.77
Enterprise Value/Revenue2.45
Enterprise Value/Gross Profit3.28
Enterprise Value/Ebitda10.19
Forecast
1Y Price Target
$32.00Price Target Upside16.41% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.19
Revenue Forecast (FY)$346.44M
Heritage Financial Business Overview & Revenue Model
Company Description
Heritage Financial Corporation operates as the bank holding company for Heritage Bank that provides various financial services to small and medium sized businesses and individuals in the United States. The company accepts various deposit products,...
How the Company Makes Money
Heritage Financial primarily makes money through its banking subsidiary by earning interest and fees associated with traditional banking activities. A major revenue source is net interest income: the company collects interest on loans and other in...
Heritage Financial Earnings Call Summary
Earnings Call Date:Apr 23, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 16, 2026
Earnings Call Sentiment Positive
The call conveyed a largely constructive message: the completed Olympic Bancorp merger meaningfully increased scale (loans, deposits, yields) and drove NIM expansion while credit quality remained strong. Key near-term negatives are elevated merger-related expenses, a decrease in TCE, deposit softness excluding the acquisition, and some sector watch points in C&I and CRE. Management provided clear integration and expense guidance, expects margin progression toward ~4%, and sees a growing loan pipeline supporting mid-single-digit growth. Overall, positives (merger benefits, margin improvement, stable credit metrics, pipeline strength) outweigh the near-term expense and capital pressures.Positive Updates
Merger with Olympic Bancorp Completed
Closed merger with Olympic Bancorp in Q1, adding $954 million of loans and $1.39 billion of deposits, strengthening presence in the Puget Sound market and increasing scale.
Negative Updates
Elevated Noninterest Expense from Merger
Noninterest expense increased materially due to merger-related costs: $5.2 million in Q1 (versus $385,000 prior quarter) and intangible amortization rose to $2.1 million from $285,000. Expect elevated quarterly noninterest expense averaging ~$64M-$65M in Q2-Q3 before falling to ~$56M-$57M in Q4.
Read all updates
Q1-2026 Updates
Positive
Negative
Merger with Olympic Bancorp Completed
Closed merger with Olympic Bancorp in Q1, adding $954 million of loans and $1.39 billion of deposits, strengthening presence in the Puget Sound market and increasing scale.
Read all positive updates
Company Guidance
Management guided that merger- and conversion-related expenses will keep quarterly noninterest expense elevated to roughly $64–65 million in Q2 and Q3 before declining to about $56–57 million in Q4 (or, excluding merger-related charges, about $57–58M in Q2–Q3 and ~$55M by Q4); they expect continued net interest margin expansion from 3.96% in Q1 (3.72% in Q4, 3.44% a year ago) toward ~4.0% by year-end, supported by a Q1 loan yield of 5.73% (up 19 bps q/q, ~6 bps of which was interest recovery) and a 17 bp increase in investment yield. Balance-sheet guidance contemplates mid‑single‑digit annualized loan growth over the next couple of quarters (Q1 loans rose $939M, including $954M from Olympic; Heritage loans ex‑Olympic +$20M), deposits increased $1.33B (including $1.39B from Olympic) with cost of interest‑bearing deposits down to 1.71% (March ~1.68%) and expected to hover around ~1.70%, and the bank will manage capital (TCE 9.6% vs. 10.1% prior) while maintaining strong credit metrics (allowance 1.06% down from 1.10% with a $1.03M provision reversal, nonaccruals $15M or 0.26% of loans, and net charge‑offs $552K annualized or 0.04%).Heritage Financial Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
81
Very Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 354.07M | 335.97M | 317.19M | 303.13M | 257.05M | 247.45M |
| Gross Profit | 264.76M | 243.35M | 210.56M | 239.54M | 250.40M | 269.78M |
| EBITDA | 85.13M | 79.64M | 55.49M | 78.52M | 102.53M | 101.88M |
| Net Income | 72.57M | 67.53M | 43.26M | 61.76M | 81.88M | 98.03M |
Balance Sheet | ||||||
| Total Assets | 8.50B | 6.97B | 7.11B | 7.17B | 6.98B | 7.43B |
| Cash, Cash Equivalents and Short-Term Investments | 1.10B | 660.11M | 881.49M | 1.36B | 1.44B | 2.62B |
| Total Debt | 42.42M | 42.35M | 405.06M | 521.76M | 68.07M | 72.02M |
| Total Liabilities | 7.38B | 6.05B | 6.24B | 6.32B | 6.18B | 6.58B |
| Stockholders Equity | 1.12B | 921.50M | 863.53M | 853.26M | 797.89M | 854.43M |
Cash Flow | ||||||
| Free Cash Flow | 80.25M | 85.66M | 61.02M | 99.15M | 90.44M | 66.51M |
| Operating Cash Flow | 89.53M | 94.82M | 64.48M | 109.52M | 94.46M | 69.53M |
| Investing Cash Flow | 198.42M | 186.75M | -85.90M | -93.45M | -1.21B | 163.76M |
| Financing Cash Flow | -268.48M | -165.58M | -86.45M | 105.31M | -506.38M | 746.68M |
Heritage Financial Technical Analysis
Positive
27.49
Price Trends
26.33
Positive
26.04
Positive
24.59
Positive
Market Momentum
<0.01
Positive
54.18
Neutral
50.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HFWA, the sentiment is Positive. The current price of 27.49 is above the 20-day moving average (MA) of 26.95, above the 50-day MA of 26.33, and above the 200-day MA of 24.59, indicating a bullish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 54.18 is Neutral, neither overbought nor oversold. The STOCH value of 50.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HFWA.
Heritage Financial Risk Analysis
Heritage Financial disclosed 42 risk factors in its most recent earnings report. Heritage Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Heritage Financial Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $1.13B | 7.07 | 10.95% | 0.38% | 9.48% | 37.91% | |
77 Outperform | $1.22B | 11.49 | 13.37% | 1.70% | 6.23% | 2.16% | |
76 Outperform | $1.12B | 13.27 | 7.58% | 3.91% | 8.28% | 37.82% | |
76 Outperform | $912.50M | 10.13 | 13.73% | 3.39% | 5.37% | 40.00% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $986.27M | 11.20 | 7.46% | 4.73% | 7.25% | 49.05% | |
63 Neutral | $940.87M | 8.07 | -20.89% | 3.50% | -71.38% | -406.48% |
* Financial Sector Average
HFWA
Heritage Financial
27.17
4.91
22.07%
CFFN
Capitol Federal Financial
7.78
2.44
45.67%
CPF
Central Pacific Financial
34.96
9.18
35.62%
HBNC
Horizon Bancorp
18.33
3.82
26.31%
MCB
Metropolitan Bank Holding
90.86
26.22
40.57%
AMAL
Amalgamated Bank
40.91
11.12
37.35%
Heritage Financial Corporate Events
Executive/Board ChangesShareholder Meetings
Heritage Financial Shareholders Approve Directors and Executive Pay
Positive
May 8, 2026
Heritage held its annual meeting of shareholders on May 7, 2026, with 35,533,585 of 41,131,100 eligible common shares represented, establishing a quorum and underscoring strong investor participation. Shareholders elected 11 directors, including S...
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Heritage Financial Declares Dividend, Highlights Olympic Bancorp Integration
Positive
Apr 23, 2026
Heritage Financial reported first quarter 2026 net income of $18.9 million, or $0.48 per diluted share, down from the prior quarter but up from a year earlier, with adjusted diluted EPS of $0.59 and a higher net interest margin of 3.96% supported ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.