A bank's profitability has an effect on its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, have less ability to do those things.
Home Bank of Arkansas fell short of the national average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Home Bank of Arkansas was -0.35 percent, below the national average of 8.10 percent.
The bank recorded net income of $-29,000 on total equity of $8.2 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of -0.04 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.