How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand financial shocks. Conversely, losses take away from a bank's ability to do those things.
On Bankrate's test of earnings, Hometown Bank of Pennsylvania scored 8 out of a possible 30, less than the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. Hometown Bank of Pennsylvania's most recent annualized quarterly return on equity was 3.36 percent, below the national average of 8.10 percent.
The bank reported net income of $540,000 on total equity of $15.9 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.35 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.