At a glance
Heritage Financial Corporation is worth $1.17B, about 15 times its fiscal 2025 earnings. Revenue grew 13.5% to $246.1M in fiscal 2025, with 27.4% kept as profit; over 5 years it has grown 0.7% a year. It pays a 3.38% dividend yield, raised every year for at least 5 years, and returned $214.7M to shareholders in dividends and buybacks over FY2021–FY2025. The stock returned +27.4% over the past year with dividends reinvested and +7.2% a year over five years, against +11.5% and +11.7% for the S&P 500. At its worst it fell 32.5% in the 2020 crash (S&P 500: 33.7%) and 11.2% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 10 months and 6 months after the lows.
The business in plain English
Heritage Financial owns Heritage Bank, a community bank based in Olympia, Washington, that began as a savings bank in 1927. As of December 31, 2025, it ran 50 branches across Washington, the Portland and Eugene areas of Oregon, and Boise, Idaho, plus a loan office in Spokane. On January 31, 2026, it completed its purchase of Olympic Bancorp, adding Kitsap Bank's 16 branches and about $1.6 billion of assets.
Its core customers are small and medium-sized businesses and their owners, and it also gathers deposits from the general public. At the end of 2025, commercial business loans totaled $3.91 billion, or 81.7% of all loans. These include credit lines, equipment financing and commercial real estate loans. The bank also makes construction, land development and consumer loans, and offers investment advice through a wealth management team.
Heritage makes most of its money from net interest income: the gap between what it earns on loans and securities and what it pays on deposits and borrowings. In 2025 that came to $224.4 million, against $21.7 million of noninterest income such as fees. Heritage reports one business segment and no revenue split by region. Accounts without fixed terms, such as checking and savings, made up 84.1% of deposits at year-end 2025, limiting reliance on pricier certificates of deposit.
Price history
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HFWA +27.4% over the year to Oct 28, 2026, total return with dividends reinvested.
Latest results
- In Q2 FY2026 (ended Jun 30, 2026), revenue was $84.1M, up 48.9% from a year earlier, and net income was $17.5M (+43.6%).
- For fiscal 2025, revenue was $246.1M (+13.5% year over year; +0.7% a year from FY2020 to FY2025) with a 27.4% net margin.
Financial health check
| Revenue growth a year (FY2020–FY2025) | +0.7% watch |
|---|---|
| Return on equity | 7.3% weak |
| Net income / revenue | 27.4% good |
| Deposits | $7.04B |
| Loans | $5.69B |
| Fiscal year | Revenue | Net income | Free cash flow |
|---|---|---|---|
| FY2020 | $238.2M | $46.6M | — |
| FY2021 | $240.4M | $98.0M | — |
| FY2022 | $249.0M | $81.9M | — |
| FY2023 | $243.8M | $61.8M | — |
| FY2024 | $216.8M | $43.3M | — |
| FY2025 | $246.1M | $67.5M | — |
Valuation snapshot
| Market value | $1.17B |
|---|---|
| P/E ratio | 14.6 |
| Dividend yield | 3.38% |
Rank among 1514 US companies
Market value at each year end
Heritage Financial’s market value went from $771.1M at the end of 2016 to $1.17B on Oct 28, 2026, up 52%; since the end of 2025 it is up 46%.
Show as a table
| Year end | Market value | Change |
|---|---|---|
| Oct 28, 2026 | $1.17B | +46.1% |
| 2025 | $803.1M | -4.0% |
| 2024 | $836.8M | +12.1% |
| 2023 | $746.5M | -30.6% |
| 2022 | $1.08B | +25.1% |
| 2021 | $859.5M | +2.3% |
| 2020 | $839.9M | -18.9% |
| 2019 | $1.04B | -5.4% |
| 2018 | $1.10B | +18.9% |
| 2017 | $921.8M | +19.5% |
| 2016 | $771.1M |
Price behavior
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | |
|---|---|---|---|---|---|
| HFWA price data to Oct 28, 2026 | +24.5% | +27.4% | +25.6% | +7.2% | +8.3% |
Show as a table
| Year | Price data |
|---|---|
| 2026 (to date) | +24.5% |
| 2025 | +0.6% |
| 2024 | +19.7% |
| 2023 | -26.9% |
| 2022 | +29.3% |
| 2021 | +7.9% |
| 2020 | -14.0% |
| 2019 | -2.0% |
| 2018 | -1.6% |
| 2017 | +21.9% |
| 2016 | +42.3% |
| 2015 | +10.6% |
| 2014 | +5.7% |
| 2013 | +19.7% |
| 2012 | +23.7% |
| 2011 | -6.8% |
| 2010 | +1.0% |
| 2009 | +13.4% |
| 2008 | -35.3% |
| 2007 | -16.9% |
| 2006 | +4.8% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Lost 56.3% over that stretch · deepest drop along the way 57.3%, back to its old high 75.7 months after the low |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 32.1% over that stretch · deepest drop along the way 32.5%, back to its old high 9.9 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Gained 19.6% over that stretch · deepest drop along the way 11.2%, back to its old high 6.4 months after the low |
Insider activity
Form 4 filings from 2025-10-29 to 2026-10-29 (25 read): 0 open-market purchases and 9 sales ($1.3M).
| Date | Insider | Type | Value |
|---|---|---|---|
| Sep 3, 2026 | Brian Charneski Director | sell | $399K |
| Aug 5, 2026 | Jeffrey S Lyon Director | sell | $300K |
| May 1, 2026 | Sabrina C Robison EVP Chief HR Officer | sell | $130K |
| Jul 30, 2026 | Kelli Ann Wilson EVP Chief Banking Officer | sell | $112K |
| Aug 13, 2026 | Matthew T. Ray EVP Chief Lending Officer | sell | $111K |
Who owns it
Large shareholders (13G filings)
| BlackRock, Inc. | 14.3% | Sep 30, 2026 |
| Jennison Associates LLC | 8.8% | Sep 30, 2026 |
| PRUDENTIAL FINANCIAL INC | 8.3% | Mar 31, 2025 |
| Victory Capital Management, Inc. | 6.02% | Mar 31, 2026 |
| Dimensional Fund Advisors LP | 5.5% | Sep 30, 2026 |
| Vanguard Capital Management | 5.24% | Mar 31, 2026 |
| AllianceBernstein L.P. | 4.4% | Dec 31, 2024 |
ETFs with the most weight in HFWA
| XVOL Acruence Active Hedge U.S. Equity ETF | 3.34% |
| OASC OneAscent Small Cap Core ETF | 0.76% |
| SVAL iShares US Small Cap Value Factor ETF | 0.58% |
| QABA First Trust NASDAQ ABA Community Bank Index Fund | 0.42% |
| HEJD VictoryShares Hedged Equity Income ETF | 0.4% |
| PSCF Invesco S&P SmallCap Financials ETF | 0.23% |
| BSVO EA Bridgeway Omni Small-Cap Value ETF | 0.22% |
| KRE SPDR S&P Regional Banking ETF | 0.16% |
What could go wrong
- Most loans go to businesses. Commercial business loans were 81.7% of loans at December 31, 2025. These carry more risk than other loan types, and large loans to certain borrowers mean a single default could cause outsized losses.
- Tied to one regional economy. All branches sit in Washington, Oregon and Idaho. A downturn there, or falling real estate values that weaken loan collateral, could raise loan losses, with no other regions to cushion the blow.
- Growth by acquisition can backfire. Heritage issued 7,167,600 new shares to acquire Olympic Bancorp in January 2026. Acquisitions can dilute existing owners, may disappoint, and could force write-downs of goodwill, the premium paid over an acquired bank's net assets.
- Losses on its securities portfolio. Heritage held $1.28 billion of investment securities at year-end 2025. Rising rates lower their market value, which can reduce shareholders' equity. Heritage has also sold securities at a loss to reshape its holdings.
- Keeping low-cost, steady deposits. Deposits are Heritage's main source of funding. If customers move money to higher-paying rivals, or trouble at other banks shakes confidence, it may need costlier funding, which would squeeze profits.
- Interest rate shifts can squeeze margins. Earnings depend mainly on the gap between what Heritage earns on loans and what it pays depositors. These rates can move at different speeds, and competition for deposits can narrow that gap.
Recent events
- Quarterly results released; Investor presentation or announcement; Other company announcement
- Quarterly results released; Investor presentation or announcement; Other company announcement
- Shareholder vote results
- Quarterly results released; Investor presentation or announcement; Other company announcement
- Other company announcement
- Acquisition or sale of assets completed; Investor presentation or announcement
- Quarterly results released; Investor presentation or announcement
- Shareholder vote results
- Other company announcement
- Other company announcement
For income and retirement investors
Heritage raised its dividend in each of the five years through 2025, from $0.80 a share in 2020 to $0.96 in 2025, about 3.7% growth a year. Dividends used 48.3% of 2025 earnings, and the dividend yield was 3.38% as of October 28, 2026. The 10-K notes that dividend policy may change. Share buybacks totaled about $61.0 million from 2021 through 2025, yet the share count rose 16.3% between October 2021 and July 2026, largely because Heritage issued 7,167,600 shares to acquire Olympic Bancorp.
The stock has fallen hard in major downturns. In the 2008 financial crisis it dropped 57.3% and took about 76 months to recover. In the 2020 COVID crash it fell 32.5% and recovered in about 10 months. It held up better in the 2022 bear market, with a worst drop of 11.2%, but lost 26.9% in calendar 2023. A single stock carries more risk than a diversified fund.
Questions investors ask
Does Heritage Financial raise its dividend every year?
It has in each of the last five years. Dividends per share rose from $0.80 in 2020 to $0.96 in 2025, about 3.7% a year. In 2025, dividends used 48.3% of earnings, and the dividend yield was 3.38% as of October 28, 2026. The 10-K warns that dividend policy may change, and the parent company relies largely on dividends from Heritage Bank for its cash.
How does Heritage Financial make money?
Mainly by lending. Heritage Bank gathers deposits and lends to small and medium-sized businesses and their owners in Washington, Oregon and Idaho. In 2025 it earned $224.4 million of net interest income, which is interest received on loans and securities minus interest paid on deposits and borrowings. Fees and other noninterest income added $21.7 million. Commercial business loans made up 81.7% of its loans at December 31, 2025.
Did Heritage Financial acquire Kitsap Bank?
Yes. On January 31, 2026, Heritage completed its acquisition of Olympic Bancorp, the parent of Kitsap Bank. Olympic shareholders received 45 Heritage shares for each Olympic share, or 7,167,600 shares in total, worth about $185.0 million at the January 30, 2026 closing price. Olympic brought roughly $1.6 billion of assets, $0.9 billion of loans and $1.4 billion of deposits. Its 16 branches operate under the Kitsap Bank name as a division of Heritage Bank.
What is Heritage Financial's P/E ratio?
About 14.6 as of October 28, 2026, based on 2025 diluted earnings of $1.96 per share. The P/E ratio is the share price divided by a year's earnings per share. Those 2025 earnings exclude Kitsap Bank, which joined in January 2026. Return on equity, a measure of profit relative to shareholders' capital, was 7.3% in 2025. Earnings have been uneven: net income fell from $98.0 million in 2021 to $43.3 million in 2024, then rose 56.1% to $67.5 million in 2025.
Is Heritage Financial well capitalized?
Yes, by regulators' standards. As of December 31, 2025, Heritage Bank's capital ratios exceeded the levels regulators require to be called well capitalized. The company's common equity tier 1 ratio, a core measure of the capital cushion against losses, was 12.7%, and its leverage ratio, which compares capital with total assets, was 10.8%. It held $233.1 million in cash and $1.28 billion in investment securities. Strong capital does not shield the stock price, though: the shares fell 57.3% in the 2008 financial crisis.