A bank's earnings performance has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Conversely, losses diminish a bank's ability to do those things.
Home Federal Bank of Hollywood received below-average marks on Bankrate's test of earnings, achieving a score of 0 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Home Federal Bank of Hollywood was -8.38 percent, below the national average of 8.10 percent.
The bank reported net income of $-718,000 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 -1.65 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.