A bank's ability to earn money has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, diminish a bank's ability to do those things.
HomeStar Bank and Financial Services did above-average on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.
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 HomeStar Bank and Financial Services was 12.57 percent, above the national average of 9.28 percent.
The bank reported net income of $1.6 million on total equity of $26.7 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 0.92 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.