How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.
1st Bank in Hominy outperformed the average on Bankrate's test of earnings, achieving a score of 16 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important measure of a bank's earnings. 1st Bank in Hominy's most recent annualized quarterly return on equity was 7.07 percent, below the national average of 8.10 percent.
The bank recorded net income of $239,000 on total equity of $3.4 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.57 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.