A bank's earnings performance has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand economic trouble. Losses, on the other hand, diminish a bank's ability to do those things.
Habib American Bank beat the national average on Bankrate's earnings test, achieving a score of 22 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one widely used measure of a bank's earnings. Habib American Bank's most recent annualized quarterly return on equity was 12.62 percent, above the national average of 9.28 percent.
The bank reported net income of $7.0 million on total equity of $115.1 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.09 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but below the average for U.S. banks of 1.14 percent.