A bank's earnings performance has an effect on its long-term survivability. Earnings can be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank better able to withstand financial trouble. Conversely, losses diminish a bank's ability to do those things.
On Bankrate's earnings test, Heritage Bank scored 8 out of a possible 30, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. Heritage Bank's most recent annualized quarterly return on equity was 3.22 percent, below the national average of 8.10 percent.
The bank recorded net income of $1.3 million on total equity of $43.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.29 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.