A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in times of trouble. Conversely, losses take away from a bank's ability to do those things.
On Bankrate's earnings test, Eureka Homestead scored 0 out of a possible 30, falling short of the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Eureka Homestead was -0.21 percent, below the national average of 8.10 percent.
The bank reported net income of $-25,000 on total equity of $11.9 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of -0.03 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.