NasdaqGS:HFWA

Stock Analysis Report

Executive Summary

Heritage Financial Corporation operates as the bank holding company for Heritage Bank that provides various financial services to businesses and individuals in the United States.

Snowflake

Fundamentals

Flawless balance sheet with proven track record and pays a dividend.


Similar Companies

Share Price & News

How has Heritage Financial's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

2.6%

HFWA

4.8%

US Banks

2.3%

US Market


1 Year Return

-20.1%

HFWA

0.04%

US Banks

5.6%

US Market

Return vs Industry: HFWA underperformed the US Banks industry which returned 0% over the past year.

Return vs Market: HFWA underperformed the US Market which returned 5.6% over the past year.


Shareholder returns

HFWAIndustryMarket
7 Day2.6%4.8%2.3%
30 Day-5.2%-0.5%-1.0%
90 Day-8.3%2.0%-0.7%
1 Year-17.9%-20.1%2.9%0.04%7.9%5.6%
3 Year57.8%45.2%51.5%41.1%45.6%36.3%
5 Year86.1%60.5%70.9%52.3%65.8%47.6%

Price Volatility Vs. Market

How volatile is Heritage Financial's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Heritage Financial undervalued compared to its fair value and its price relative to the market?

2.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: HFWA ($26.55) is trading below our estimate of fair value ($27.09)

Significantly Undervalued: HFWA is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: HFWA is poor value based on its PE Ratio (15.2x) compared to the Banks industry average (12.6x).

PE vs Market: HFWA is good value based on its PE Ratio (15.2x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: HFWA is poor value based on its PEG Ratio (2.5x)


Price to Book Ratio

PB vs Industry: HFWA is overvalued based on its PB Ratio (1.2x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is Heritage Financial forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

6.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HFWA's forecast earnings growth (6.2% per year) is above the savings rate (2.7%).

Earnings vs Market: HFWA's earnings (6.2% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: HFWA's earnings are forecast to grow, but not significantly.

Revenue vs Market: HFWA's revenue (4% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: HFWA's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: HFWA's Return on Equity is forecast to be low in 3 years time (8.6%).


Next Steps

Past Performance

How has Heritage Financial performed over the past 5 years?

20.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: HFWA's earnings have grown by 20% per year over the past 5 years.

Accelerating Growth: HFWA's earnings growth over the past year (55.6%) exceeds its 5-year average (20% per year).

Earnings vs Industry: HFWA earnings growth over the past year (55.6%) exceeded the Banks industry 31.8%.


Return on Equity

High ROE: HFWA's Return on Equity (8.1%) is considered low.


Return on Assets

ROA vs Industry: HFWA has a higher Return on Assets than the Banks industry average last year.


Return on Capital Employed

ROCE Improving: Insufficient data to calculate HFWA's Return on Capital Employed to determine if it has improved over the past 3 years.


Next Steps

Financial Health

How is Heritage Financial's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: HFWA has a low level of unsold assets or inventory.

Debt Coverage by Assets: HFWA's debt is covered by short term assets (assets are 1.925440x debt).


Financial Institutions Analysis

Asset Level: HFWA's level of assets compared to its equity is low.

Allowance for Bad Loans: HFWA has a sufficient allowance for bad loans.

Low Risk Liabilities: HFWA's liabilities are made up of primarily low risk sources of funding.

Loan Level: HFWA has an acceptable proportion of non-loan assets held.

Low Risk Deposits: HFWA's loans are broadly funded by customer deposits.

Level of Bad Loans: HFWA has an appropriate level of bad loans (0.52%)


Next Steps

Dividend

What is Heritage Financial's current dividend yield, its reliability and sustainability?

3.24%

Current Dividend Yield


Dividend Yield vs Market

company3.2%marketbottom25%1.5%markettop25%3.8%industryaverage3.0%forecastin3Years3.1%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: HFWA's dividend (3.24%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: HFWA's dividend (3.24%) is low compared to the top 25% of dividend payers in the US market (3.76%).

Stable Dividend: HFWA's dividend payments have been volatile in the past 10 years.

Growing Dividend: HFWA's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (38.9%), HFWA's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HFWA's dividends in 3 years are forecast to be well covered by earnings (46.6% payout ratio).


Next Steps

Management

What is the CEO of Heritage Financial's salary, the management and board of directors tenure and is there insider trading?

7.4yrs

Average management tenure


CEO

Jeff Deuel (60yo)

0.3yrs

Tenure

US$878,123

Compensation

Mr. Jeffrey J. Deuel, also known as Jeff, is the Chief Executive Officer and Director of Heritage Financial Corporation since July 1, 2019. Mr. Deuel has been President of Heritage Financial Corporation si ...


CEO Compensation Analysis

Compensation vs. Market: Jeff has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the US market.

Compensation vs Earnings: Jeff's compensation has increased by more than 20% in the past year.


Management Age and Tenure

7.4yrs

Average Tenure

58yo

Average Age

Experienced Management: HFWA's management team is seasoned and experienced (7.4 years average tenure).


Board Age and Tenure

5.4yrs

Average Tenure

64yo

Average Age

Experienced Board: HFWA's board of directors are considered experienced (5.4 years average tenure).


Insider Trading

Insider Buying: HFWA insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$106,68011 Sep 19
Bryan McDonald
EntityIndividual
Role
Chief Operating Officer
Chief Operating Officer
Shares4,000
Max PriceUS$26.67
SellUS$60,98010 Sep 19
Brian Vance
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares2,274
Max PriceUS$26.82
SellUS$28,54814 Jun 19
Lisa Banner
EntityIndividual
Shares976
Max PriceUS$29.25
SellUS$119,42230 Apr 19
Brian Vance
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares3,885
Max PriceUS$30.74
SellUS$429,42415 Mar 19
Brian Vance
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares13,621
Max PriceUS$31.53
SellUS$103,27106 Feb 19
Donald Hinson
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares3,268
Max PriceUS$31.60
SellUS$518,37828 Nov 18
Brian Vance
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares15,000
Max PriceUS$34.74
SellUS$44,34716 Nov 18
Lisa Banner
EntityIndividual
Shares1,326
Max PriceUS$33.44

Ownership Breakdown


Management Team

  • Brian Vance (65yo)

    Executive Chairman

    • Tenure: 0.3yrs
    • Compensation: US$1.43m
  • Don Hinson (58yo)

    Executive VP & CFO

    • Tenure: 12.1yrs
    • Compensation: US$590.47k
  • Kaylene Lahn (47yo)

    Senior VP & Corporate Secretary

    • Tenure: 11.1yrs
  • Jeff Deuel (60yo)

    President

    • Tenure: 0.3yrs
    • Compensation: US$878.12k
  • Bryan McDonald (47yo)

    Chief Operating Officer

    • Tenure: 0yrs
    • Compensation: US$656.49k
  • Sabrina Robison

    Senior VP & Chief Human Resources Officer

    • Tenure: 17.8yrs
  • Cindy Huntley

    Executive VP & Director of Retail Banking - Heritage Bank

    • Tenure: 3.7yrs
  • Tom Henning

    Executive VP & Chief Risk Officer of Haritage Bank

    • Tenure: 0yrs
  • Bill Glasby

    Executive VP & CTO

    • Tenure: 2.8yrs

Board Members

  • Brian Vance (65yo)

    Executive Chairman

    • Tenure: 0.3yrs
    • Compensation: US$1.43m
  • Tony Pickering (72yo)

    Independent Director

    • Tenure: 5.4yrs
    • Compensation: US$72.03k
  • John Clees (71yo)

    Independent Director

    • Tenure: 14.3yrs
    • Compensation: US$83.03k
  • Brian Charneski (57yo)

    Lead Independent Director

    • Tenure: 0.3yrs
    • Compensation: US$91.03k
  • Jeff Lyon (66yo)

    Independent Director

    • Tenure: 18.8yrs
    • Compensation: US$74.03k
  • Kimberly Ellwanger (60yo)

    Independent Director

    • Tenure: 13.8yrs
    • Compensation: US$79.53k
  • Ann Watson (57yo)

    Independent Director

    • Tenure: 7yrs
    • Compensation: US$82.03k
  • Gragg Miller (68yo)

    Independent Director

    • Tenure: 5.4yrs
    • Compensation: US$78.53k
  • Jeff Deuel (60yo)

    President

    • Tenure: 0.3yrs
    • Compensation: US$878.12k
  • Debbie Gavin (63yo)

    Independent Director

    • Tenure: 5.4yrs
    • Compensation: US$83.53k

Company Information

Heritage Financial Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Heritage Financial Corporation
  • Ticker: HFWA
  • Exchange: NasdaqGS
  • Founded: 1927
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$977.468m
  • Shares outstanding: 36.82m
  • Website: https://www.hf-wa.com

Number of Employees


Location

  • Heritage Financial Corporation
  • 201 Fifth Avenue SW
  • Olympia
  • Washington
  • 98501
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HFWANasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1998

Biography

Heritage Financial Corporation operates as the bank holding company for Heritage Bank that provides various financial services to businesses and individuals in the United States. The company accepts variou ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/16 23:36
End of Day Share Price2019/10/16 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.