A bank's ability to earn money affects its long-term survivability. Earnings can be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand financial trouble. However, banks that are losing money are less able to do those things.
Home Bank of California scored 26 out of a possible 30 on Bankrate's test of earnings, beating the national average of 16.52.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one widely used measure of a bank's earnings. Home Bank of California's most recent annualized quarterly return on equity was 18.13 percent, above the national average of 9.28 percent.
The bank recorded net income of $2.1 million on total equity of $23.9 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 2.76 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.