A bank's profitability affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand financial trouble. Conversely, losses take away from a bank's ability to do those things.
Hodge Bank & Trust Company exceeded the national average on Bankrate's test of earnings, achieving a score of 22 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important measure of a bank's earnings. Hodge Bank & Trust Company's most recent annualized quarterly return on equity was 13.07 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $1.5 million on total equity of $11.9 million. The bank had an annualized return on average assets, or ROA, of 2.23 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.