A bank's profitability has an effect on its long-term survivability. Earnings can be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money are less able to do those things.
Hawthorn Bank received below-average marks on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.
One key way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. Hawthorn Bank's most recent annualized quarterly return on equity was 5.19 percent, below the national average of 8.10 percent.
The bank earned net income of $7.3 million on total equity of $141.0 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.54 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.