A bank's earnings performance has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, potentially making the bank better able to withstand financial shocks. Losses, on the other hand, take away from a bank's ability to do those things.
Heritage Bank of Commerce exceeded the national average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Heritage Bank of Commerce was 9.46 percent, above the national average of 8.10 percent.
The bank earned net income of $26.1 million on total equity of $286.8 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.96 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.