How profitable a bank is affects its safety and soundness. A bank can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, likely making the bank better able to withstand economic shocks. Banks that are losing money, however, are less able to do those things.
On Bankrate's test of earnings, Holcomb State Bank scored 14 out of a possible 30, below the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. Holcomb State Bank's most recent annualized quarterly return on equity was 6.90 percent, below the national average of 8.10 percent.
The bank earned net income of $1.2 million on total equity of $17.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.69 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.