A bank's earnings performance affects its long-term survivability. Earnings can be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
Highland State Bank did above-average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Highland State Bank was 9.27 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $299,000 on total equity of $3.3 million. The bank experienced an annualized return on average assets, or ROA, of 0.90 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.