A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the bank better prepared to withstand financial shocks. Conversely, losses take away from a bank's ability to do those things.
Home State Bank, National Association fell short of the national average on Bankrate's earnings test, achieving a score of 12 out of a possible 30.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. Home State Bank, National Association's most recent annualized quarterly return on equity was 5.95 percent, below the national average of 8.10 percent.
The bank recorded net income of $4.2 million on total equity of $71.5 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.72 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.