How profitable a bank is 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, likely making the bank better able to withstand financial shocks. However, banks that are losing money are less able to do those things.
Home Loan State Bank underperformed the average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Home Loan State Bank's most recent annualized quarterly return on equity was 5.41 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $441,000 on total equity of $8.3 million. The bank reported an annualized return on average assets, or ROA, of 0.42 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.