A bank's earnings performance has an effect on its long-term survivability. Earnings can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.
Home Exchange Bank scored 26 out of a possible 30 on Bankrate's test of earnings, above the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Home Exchange Bank was 17.91 percent, above the national average of 8.10 percent.
The bank earned net income of $2.9 million on total equity of $16.4 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.85 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.