A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, Home State Bank scored 26 out of a possible 30, better than the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. The most recent annualized quarterly return on equity for Home State Bank was 17.33 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $3.5 million on total equity of $21.0 million. The bank had an annualized return on average assets, or ROA, of 1.45 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.