A bank's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the bank, expanding its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.
Heritage Bank underperformed the average on Bankrate's earnings test, achieving a score of 4 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 was 1.18 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $42,000 on total equity of $3.4 million. The bank experienced an annualized return on average assets, or ROA, of 0.11 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.