A bank's ability to earn money has an effect on its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, potentially making the bank better prepared to withstand economic trouble. Banks that are losing money, however, have less ability to do those things.
On Bankrate's earnings test, Headwaters State Bank scored 18 out of a possible 30, exceeding the national average of 15.12.
One key measure of 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 Headwaters State Bank was 8.63 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $818,000 on total equity of $9.5 million. The bank experienced an annualized return on average assets, or ROA, of 1.26 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.