Heritage Financial (NASDAQ:HFWA – Get Free Report) posted its earnings results on Thursday. The financial services provider reported $0.55 earnings per share for the quarter, topping analysts’ consensus estimates of $0.50 by $0.05, Zacks reports. Heritage Financial had a net margin of 20.44% and a return on equity of 8.78%. The firm had revenue of $86.51 million for the quarter, compared to analyst estimates of $86.11 million.
Here are the key takeaways from Heritage Financial’s conference call:
- Net interest margin improved to 4.05%, up from 3.99% in Q2, while net interest income increased $2.4 million; management expects asset repricing and higher reinvestment yields to support further improvement.
- Loans grew $133 million and deposits rose $148 million during Q3, supported by strong production and customer additions. Management expects loan growth in the mid-single-digit annualized range over the next couple of quarters.
- Credit stress increased, with non-accrual loans rising $16.6 million to $32 million and criticized loans increasing to $246 million, or 4.19% of total loans. Net charge-offs remained low, however, at an annualized 0.03% of loans.
- The Kitsap Bank systems conversion was completed, reducing merger-related costs and bringing expected Q4 expenses to $55 million-$56 million, but core costs are expected to rise in 2027, including approximately $3 million for a commercial online banking project.
- Management plans to be less active with share repurchases in Q4 because the non-owner-occupied commercial real estate concentration increased to 308%, while the tangible common equity ratio declined to 9.3% amid larger unrealized investment-portfolio losses.
Heritage Financial Stock Up 3.0%
Heritage Financial stock opened at $28.52 on Friday. The firm has a market cap of $1.17 billion, a price-to-earnings ratio of 13.58 and a beta of 0.50. Heritage Financial has a 52-week low of $21.32 and a 52-week high of $31.25. The company has a debt-to-equity ratio of 0.17, a quick ratio of 0.83 and a current ratio of 0.83. The firm has a 50 day moving average price of $28.30 and a two-hundred day moving average price of $28.35.
Heritage Financial Announces Dividend
The company also recently declared a quarterly dividend, which will be paid on Wednesday, November 18th. Shareholders of record on Wednesday, November 4th will be issued a dividend of $0.25 per share. The ex-dividend date is Wednesday, November 4th. This represents a $1.00 annualized dividend and a yield of 3.5%. Heritage Financial’s dividend payout ratio (DPR) is presently 47.62%.
More Heritage Financial News
Here are the key news stories impacting Heritage Financial this week:
- Positive Sentiment: New 2 million-share buyback: Heritage Financial authorized the repurchase of up to 2 million shares, representing approximately 5% of shares outstanding. The program could support earnings per share and signal that management views the stock as attractively valued. Heritage Financial Corporation announces an Equity Buyback
- Positive Sentiment: Dividend maintained: The company declared a quarterly cash dividend of $0.25 per share, or $1.00 annualized, implying a yield of about 3.5%. Shareholders of record on November 4 will receive the dividend on November 18. Heritage Financial Announces Third Quarter 2026 Results and Dividend
- Positive Sentiment: Revenue and adjusted EPS exceeded one consensus measure: Third-quarter revenue was $86.5 million versus an $86.1 million estimate, while adjusted EPS was reported at $0.55 versus a $0.50 consensus estimate. Net income rose to $18.7 million, or $0.46 per diluted share, from $17.5 million, or $0.42, in the second quarter. Heritage Financial Q3 Adjusted Earnings Fall, Revenue Rise
- Neutral Sentiment: Results were mixed against estimates: Adjusted EPS declined from $0.57 in the second quarter and was slightly below a separate Zacks consensus estimate of $0.57, while revenue increased. This may limit the positive reaction to the earnings report. Heritage Financial Lags Q3 Earnings Estimates
- Negative Sentiment: Higher near-term expenses expected: Management projects fourth-quarter noninterest expense of $55 million to $56 million following the Kitsap systems conversion. Implementation and integration costs could pressure near-term profitability, even though the conversion may provide longer-term operating benefits. Heritage Financial Expects Q4 Noninterest Expense
Insider Transactions at Heritage Financial
In related news, EVP Matthew T. Ray sold 3,692 shares of the firm’s stock in a transaction that occurred on Thursday, August 13th. The stock was sold at an average price of $30.10, for a total transaction of $111,129.20. Following the completion of the sale, the executive vice president owned 22,735 shares of the company’s stock, valued at $684,323.50. This trade represents a 13.97% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at the SEC website. Also, EVP Tony Chalfant sold 3,234 shares of Heritage Financial stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $29.92, for a total value of $96,761.28. Following the completion of the sale, the executive vice president owned 20,362 shares of the company’s stock, valued at approximately $609,231.04. The trade was a 13.71% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last 90 days, insiders sold 22,004 shares of company stock worth $657,200. Corporate insiders own 1.49% of the company’s stock.
Wall Street Analysts Forecast Growth
HFWA has been the subject of several analyst reports. Weiss Ratings reaffirmed a “buy (b)” rating on shares of Heritage Financial in a research note on Friday, October 2nd. Capital One Financial set a $33.00 price objective on shares of Heritage Financial in a research note on Tuesday, September 22nd. Keefe, Bruyette & Woods increased their price objective on Heritage Financial from $31.00 to $32.00 and gave the company a “market perform” rating in a report on Monday, July 27th. DA Davidson raised their target price on Heritage Financial from $32.00 to $34.00 and gave the stock a “buy” rating in a research report on Friday, July 24th. Finally, Stephens raised their target price on Heritage Financial from $30.00 to $32.00 and gave the stock an “equal weight” rating in a research report on Tuesday, July 28th. Four equities research analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, the stock currently has an average rating of “Hold” and a consensus price target of $32.67.
Read Our Latest Report on Heritage Financial
Heritage Financial Company Profile
Heritage Financial Corporation (NASDAQ: HFWA) is a bank holding company headquartered in Olympia, Washington. The company operates primarily through Heritage Bank, a community-focused financial institution serving businesses, individuals and organizations in Washington and Oregon.
Heritage Bank provides commercial and residential real estate lending, business and consumer loans, deposit accounts, cash-management and treasury services, online and mobile banking, and other traditional banking products.
Read More
- Five stocks we like better than Heritage Financial
- Microsoft’s Earnings Problem: Even Great May Not Be Enough
- 3 Stocks With Yields Big Enough to Make Election Volatility Easier to Stomach
- Is Texas Instruments Setting Up for Its Next Big Breakout?
- Pegasystems’ Q3 Miss Exposed the Problem Standing Between AI and Cash Flow
Receive News & Ratings for Heritage Financial Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Heritage Financial and related companies with MarketBeat.com's FREE daily email newsletter.
