Heritage Financial Corporation (HFWA)
Financial leverage ratio
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 7,106,280 | 7,153,360 | 7,059,860 | 7,091,280 | 7,174,960 | 7,150,590 | 7,115,410 | 7,236,810 | 6,980,100 | 7,200,310 | 7,316,470 | 7,483,810 | 7,432,410 | 7,259,040 | 7,105,670 | 7,028,390 | 6,615,320 | 6,685,890 | 6,562,360 | 5,587,300 |
| Total stockholders’ equity | US$ in thousands | 863,527 | 874,514 | 850,507 | 847,580 | 853,261 | 813,546 | 819,733 | 826,082 | 797,893 | 776,702 | 805,366 | 821,449 | 854,432 | 848,404 | 855,984 | 827,151 | 820,439 | 803,129 | 793,652 | 798,438 |
| Financial leverage ratio | 8.23 | 8.18 | 8.30 | 8.37 | 8.41 | 8.79 | 8.68 | 8.76 | 8.75 | 9.27 | 9.08 | 9.11 | 8.70 | 8.56 | 8.30 | 8.50 | 8.06 | 8.32 | 8.27 | 7.00 |
December 31, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $7,106,280K ÷ $863,527K
= 8.23
The financial leverage ratio of Heritage Financial Corporation has shown a fluctuating trend over the reported periods. Starting at 7.00 in March 2020, the ratio increased to 9.27 by September 2022 before slightly decreasing. The ratio stood at 8.23 by December 2024.
The financial leverage ratio measures the proportion of a company's debt to its equity, indicating the degree to which the company is financed by debt. A higher financial leverage ratio suggests higher financial risk and reliance on debt financing. In Heritage Financial Corporation's case, the ratio has generally increased over the years, indicating a growing reliance on debt to finance its operations.
It is essential for the company to carefully manage its leverage ratio to ensure financial stability and avoid potential risks associated with high debt levels, such as increased interest expenses and liquidity challenges. Monitoring this ratio is crucial for investors and stakeholders to assess the company's capital structure and financial health.