DCF Tool

HFWA

Heritage Financial Corp. – Savings Institutions
Heritage Financial Corporation is an Olympia-based bank holding company with Heritage Bank, a full-service commercial bank, as its sole wholly-owned banking subsidiary. Heritage Bank has a branching network of 61 banking offices in Washington and Oregon. Heritage Bank also does business under the Whidbey Island Bank name on Whidbey Island.
Analysis Results
Intrinsic Value $128.62
Latest Price $26.12
Relative Value 80% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 13.2%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 5.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 13.2%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 123 116
2023 140 125
2024 158 133
2025 179 143
2026 202 153
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 5400 million. This corresponds to a present value of 3850 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 669 million. Adding in the terminal value gives a total present value of 4510 million.

There are presently 35.1 million outstanding shares, so the intrinsic value per share is 128.62.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 6,973,997,000
Current Cash 0
Current Liabilities 6,577,980,000
Current Debt 0
Non-Cash Working Capital (NCWC) 396,017,000
Change in NCWC 29,298,000
EBIT 120,507,000
Tax Provision 22,472,000
Depreciation and Amortization -18,628,000
Capital Expenditure -3,018,000
Unlevered Free Cash Flow 105,687,000
Current Assets 6,161,598,000
Current Cash 0
Current Liabilities 5,794,879,000
Current Debt 0
Non-Cash Working Capital (NCWC) 366,719,000
Change in NCWC 13,682,000
EBIT 53,180,000
Tax Provision 6,610,000
Depreciation and Amortization 7,137,000
Capital Expenditure -6,997,000
Unlevered Free Cash Flow 60,392,000
Current Assets 5,096,696,000
Current Cash 0
Current Liabilities 4,743,659,000
Current Debt 0
Non-Cash Working Capital (NCWC) 353,037,000
Change in NCWC 36,638,000
EBIT 81,045,000
Tax Provision 13,488,000
Depreciation and Amortization 12,170,000
Capital Expenditure -13,041,000
Unlevered Free Cash Flow 103,324,000
Current Assets 4,872,603,000
Current Cash 0
Current Liabilities 4,556,204,000
Current Debt 0
Non-Cash Working Capital (NCWC) 316,399,000
Change in NCWC 76,974,000
EBIT 64,087,000
Tax Provision 11,030,000
Depreciation and Amortization 13,627,000
Capital Expenditure -23,265,000
Unlevered Free Cash Flow 120,393,000
Current Assets 3,844,390,000
Current Cash 0
Current Liabilities 3,604,965,000
Current Debt 0
Non-Cash Working Capital (NCWC) 239,425,000
Change in NCWC 26,649,000
EBIT 60,147,000
Tax Provision 18,356,000
Depreciation and Amortization 11,990,000
Capital Expenditure -3,063,000
Unlevered Free Cash Flow 77,367,000
Current Assets 3,609,994,000
Current Cash 0
Current Liabilities 3,397,218,000
Current Debt 0
Non-Cash Working Capital (NCWC) 212,776,000
Change in NCWC -442,000
EBIT 52,721,000
Tax Provision 13,803,000
Depreciation and Amortization 14,124,000
Capital Expenditure -6,722,000
Unlevered Free Cash Flow 45,878,000
Current Assets 3,394,040,000
Current Cash 0
Current Liabilities 3,180,822,000
Current Debt 0
Non-Cash Working Capital (NCWC) 213,218,000
Change in NCWC 4,287,000
EBIT 47,362,000
Tax Provision 13,818,000
Depreciation and Amortization 16,067,000
Capital Expenditure -1,821,000
Unlevered Free Cash Flow 53,139,467
Current Assets 3,212,175,000
Current Cash 0
Current Liabilities 3,003,244,000
Current Debt 0
Non-Cash Working Capital (NCWC) 208,931,000
Change in NCWC 68,797,000
EBIT 27,919,000
Tax Provision 6,905,000
Depreciation and Amortization 14,802,000
Capital Expenditure -3,940,000
Unlevered Free Cash Flow 100,673,000
Current Assets 1,583,410,000
Current Cash 0
Current Liabilities 1,443,276,000
Current Debt 0
Non-Cash Working Capital (NCWC) 140,134,000
Change in NCWC 5,029,000
EBIT 13,769,000
Tax Provision 4,593,000
Depreciation and Amortization 5,954,000
Capital Expenditure -5,205,000
Unlevered Free Cash Flow 15,083,348
Current Assets 1,281,707,000
Current Cash 0
Current Liabilities 1,146,602,000
Current Debt 0
Non-Cash Working Capital (NCWC) 135,105,000
Change in NCWC -8,849,000
EBIT 19,439,000
Tax Provision 6,178,000
Depreciation and Amortization 4,717,000
Capital Expenditure -3,859,000
Unlevered Free Cash Flow 5,270,000

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