How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic shocks. Banks that are losing money, however, are less able to do those things.
Homeland Community Bank scored 4 out of a possible 30 on Bankrate's earnings test, less than the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. Homeland Community Bank's most recent annualized quarterly return on equity was 1.58 percent, below the national average of 8.10 percent.
The bank recorded net income of $197,000 on total equity of $12.0 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.14 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.