How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.
On Bankrate's earnings test, Heritage State Bank scored 6 out of a possible 30, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Heritage State Bank was 2.07 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $266,000 on total equity of $12.0 million. The bank reported an annualized return on average assets, or ROA, of 0.19 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.