A bank's ability to earn money has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, potentially making the bank better prepared to withstand economic shocks. Losses, on the other hand, take away from a bank's ability to do those things.
Heritage Bank scored 8 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for Heritage Bank was 3.22 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $194,000 on total equity of $6.1 million. The bank experienced an annualized return on average assets, or ROA, of 0.36 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.