A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, potentially making the bank better able to withstand financial shocks. Losses, on the other hand, take away from a bank's ability to do those things.
Habib American Bank exceeded the national 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 (profit, essentially) by total equity, is one important way to measure a bank's earnings. Habib American Bank's most recent annualized quarterly return on equity was 10.96 percent, above the national average of 8.10 percent.
The bank earned net income of $12.6 million on total equity of $120.6 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.94 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.