Heritage Financial (HFWA) AI Stock Analysis

• Market Cap: $801.14M
• Dividend Yield: 4%
• Average Volume (3M): 156.97K
• Price to Earnings (P/E): 16.4
• Beta (1Y): 0.75
• Revenue Growth: 6.92%
• EPS Growth: 13.94%
• Country: US
• Employees: 757
• Sector: Financial
• Sector Strength: 75
• Industry: Banks - Regional
• EPS (TTM): 0.36
• Shares Outstanding: 34,105,515
• 10 Day Avg. Volume: 161,206
• 30 Day Avg. Volume: 156,968
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $26.50
• Price Target Upside: 12.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 72 Outperform
• Price Target: $26.00 ▲(10.69%Upside)

Heritage Financial's overall score reflects strong financial performance and a positive earnings outlook, supported by solid valuation metrics. The leadership transition further bolsters confidence. While technical indicators suggest caution, the company's long-term fundamentals remain strong.

Heritage Financial Business Overview & Revenue Model

Company Description

Heritage Financial Corporation (HFWA) is a bank holding company headquartered in Olympia, Washington. It operates through its wholly-owned subsidiary, Heritage Bank, which provides a wide range of financial services including personal and commercial banking, mortgage lending, and investment services. The company primarily serves customers in the Pacific Northwest region of the United States, focusing on small to medium-sized businesses and retail clients.

How the Company Makes Money

Heritage Financial makes money primarily through interest income generated from its loan portfolio, which includes commercial and consumer loans. The company also earns revenue from non-interest income sources such as service charges on deposit accounts, fees from mortgage banking activities, and income from investment securities. Additionally, Heritage Financial may benefit from partnerships with other financial institutions or service providers, enhancing its product offerings and revenue potential. Overall, the company's earnings are influenced by factors such as interest rate fluctuations, credit quality of its borrowers, and regional economic conditions.

Heritage Financial Financial Statement Overview

Summary

Heritage Financial maintains a stable financial position with a strong balance sheet and efficient operations. However, inconsistent revenue growth and declining profitability margins indicate areas for improvement. The cash flow is stable but shows signs of pressure.

Income Statement

Heritage Financial shows a mixed performance in its income statement. Gross profit margins are stable, indicating good cost management. However, net profit margin has decreased from the previous year, reflecting lower profitability. Revenue growth is inconsistent, with recent declines indicating potential challenges. EBIT margins are strong, suggesting efficient operations, although EBITDA margins are not applicable due to zero EBITDA reported.

Balance Sheet

The balance sheet for Heritage Financial is strong, with a zero total debt indicating no leverage risk. The equity ratio is robust, showcasing financial stability and a strong asset base. Return on equity is positive, albeit lower than previous years, suggesting some efficiency concerns. Overall, the company's balance sheet reflects solid financial health with ample equity support.

Cash Flow

Cash flow analysis reveals a slight decline in operating cash flow, yet free cash flow remains positive, indicating operational efficiency. Free cash flow growth is negative, reflecting challenges in maintaining cash generation levels. The operating cash flow to net income ratio is stable, but the declining free cash flow to net income ratio suggests potential pressure on liquidity.

Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Heritage Financial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 23.49
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HFWA, the sentiment is Negative. The current price of 23.49 is below the 20-day moving average (MA) of 24.90, below the 50-day MA of 23.95, and below the 200-day MA of 23.78, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 40.36 is Neutral, neither overbought nor oversold. The STOCH value of 21.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HFWA.

Heritage Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BHRB	79 Outperform	$943.09M	9.12	14.19%	3.47%	113.60%	1224.71%
FMBH	75 Outperform	$930.29M	11.01	9.87%	2.48%	5.18%	13.05%
CFFN	72 Outperform	$824.69M	13.22	5.92%	5.48%	6.49%	―
HFWA	72 Outperform	$801.14M	16.40	5.69%	4.00%	6.92%	13.94%
Sector *	68 Neutral	$17.09B	11.26	9.71%	3.70%	11.16%	-4.08%
AMTB	67 Neutral	$847.87M	―	1.26%	1.78%	-6.83%	-131.00%
UVSP	66 Neutral	$858.03M	10.85	9.02%	2.86%	5.97%	12.97%

Heritage Financial Corporate Events

Heritage Financial Reports Q2 2025 Earnings and Dividend

On July 24, 2025, Heritage Financial Corporation announced its second quarter results, reporting a net income of $12.2 million, a decrease from the previous quarter’s $13.9 million. The company declared a regular quarterly cash dividend of $0.24 per share, to be paid on August 20, 2025. The quarter included a pre-tax loss of $6.9 million from the sale of investment securities as part of a strategic balance sheet repositioning, impacting earnings per share by $0.15. Despite these losses, Heritage Financial saw growth in core earnings, attributed to increased yields on loans and investment securities, and a $100 million increase in total deposits since the end of 2024. The company remains optimistic about future profitability and sustainable long-term returns for shareholders.

The most recent analyst rating on (HFWA) stock is a Buy with a $26.00 price target. To see the full list of analyst forecasts on Heritage Financial stock, see the HFWA Stock Forecast page.

Heritage Financial Announces New CEO Appointment

On May 6, 2025, Heritage Financial Corporation announced the completion of its CEO succession plan, with Bryan D. McDonald assuming the roles of President and CEO of both the company and Heritage Bank. This transition follows the retirement of Jeffrey J. Deuel, who will continue in an advisory role until 2027. The appointment aims to ensure a seamless leadership transition, enhancing shareholder value and maintaining the company’s focus on quality customer service and community support.