A bank's profitability has an effect on its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, lessen a bank's ability to do those things.
First Home Bank scored 26 out of a possible 30 on Bankrate's earnings test, better than the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for First Home Bank was 23.15 percent, above the national average of 8.10 percent.
The bank earned net income of $6.0 million on total equity of $34.1 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 2.90 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.