A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, potentially making the bank better prepared to withstand financial shocks. Conversely, losses lessen a bank's ability to do those things.
Hamlin Bank and Trust Company scored 14 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 16.52.
One important measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for Hamlin Bank and Trust Company was 6.82 percent, below the national average of 9.28 percent.
The bank earned net income of $2.8 million on total equity of $83.0 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.25 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.