A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand financial shocks. However, banks that are losing money are less able to do those things.
Heritage Bank of St Tammany scored 6 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. Heritage Bank of St Tammany's most recent annualized quarterly return on equity was 4.13 percent, below the national average of 8.10 percent.
The bank recorded net income of $528,000 on total equity of $17.7 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.49 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.