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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Heritage Financial's Sloan Ratio for the quarter that ended in Mar. 2026 was -2.53%.
As of Mar. 2026, Heritage Financial has a Sloan Ratio of -2.53%, indicating the company is in the safe zone and there is no funny business with accruals.
Heritage Financial (NAS:HFWA) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Mar. 2026, Heritage Financial has a Sloan Ratio of -2.53%, indicating the company is in the safe zone and there is no funny business with accruals.
Heritage Financial Sloan Ratio % Related Terms
Heritage Financial Sloan Ratio % Historical Data
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The historical data trend for Heritage Financial's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
HFWA vs OSBC, UVSP, PFBC: Sloan Ratio % Comparison
For the Banks - Regional subindustry, Heritage Financial's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Heritage Financial Sloan Ratio % vs Banks Industry
For the Banks industry and Financial Services sector, Heritage Financial's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Heritage Financial's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Heritage Financial's Sloan Ratio for the fiscal year that ended in Dec. 2025 is calculated as
Heritage Financial's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was 12.215 (Jun. 2025 ) + 19.169 (Sep. 2025 ) + 22.237 (Dec. 2025 ) + 18.947 (Mar. 2026 ) = $72.6 Mil.
Heritage Financial's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 22.514 (Jun. 2025 ) + 25.067 (Sep. 2025 ) + 27.985 (Dec. 2025 ) + 13.969 (Mar. 2026 ) = $89.5 Mil.
Heritage Financial's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was 57.847 (Jun. 2025 ) + 26.65 (Sep. 2025 ) + 23.072 (Dec. 2025 ) + 90.854 (Mar. 2026 ) = $198.4 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Heritage Financial (HFWA) has a Sloan Ratio % of -2.53% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Heritage Financial and its competitors.
Is Heritage Financial's Sloan Ratio % too high?
Heritage Financial's current Sloan Ratio % is -2.53%. Overall, Heritage Financial has a GF Score™ of 61/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Heritage Financial's Sloan Ratio % compare to OSBC and UVSP?
Heritage Financial's Sloan Ratio % of -2.53% can be compared against companies in the Banks industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Banks company?
A good Sloan Ratio % depends on the Banks industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Heritage Financial and its competitors. Heritage Financial's current Sloan Ratio % is -2.53%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Heritage Financial stock overvalued right now?
Based on GuruFocus' analysis, Heritage Financial (HFWA) is currently considered Fairly Valued. The stock's GF Value™ is $27.81, compared to a current price of $30.02 — trading 7.9% above its estimated fair value. The current Sloan Ratio % is -2.53%. Heritage Financial's overall GF Score™ is 61/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Heritage Financial (HFWA), the current Sloan Ratio % is -2.53% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Heritage Financial (HFWA) Overvalued in 2026?
Based on GuruFocus' analysis, Heritage Financial stock appears to be overvalued.
The current stock price of $30.02 is trading 7.9% above its estimated GF Value™ of $27.81.
GuruFocus considers Heritage Financial to be Fairly Valued.
Key valuation signals for HFWA:
Sloan Ratio %: -2.53%
GF Value™: $27.81 vs. price of $30.02 (7.9% above fair value)
No single metric tells the full story. See the HFWA stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Heritage Financial Corp is a bank holding company. The company, through its subsidiary, provides commercial lending and deposit relationships with small businesses and their owners in its market areas and attracts deposits from the general public. It accepts various deposit products, such as non-interest demand accounts, money market accounts, savings accounts, and certificates of deposit. Besides, the Bank also makes real estate construction loans, land development loans, and consumer loans, and originates first mortgage loans on residential properties mainly located in its market area. Geographically, all the business activity functions through the region of the United States.
61GF Score
Get the complete analysis for HFWA
Sloan Ratio % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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