A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, boosting its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand economic trouble. Conversely, losses diminish a bank's ability to do those things.
On Bankrate's earnings test, Harwood State Bank scored 14 out of a possible 30, failing to reach the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for Harwood State Bank was 6.54 percent, below the national average of 8.10 percent.
The bank earned net income of $221,000 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 0.55 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.