A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, expanding its capital buffer, or be used to address problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
On Bankrate's earnings test, Howard Bank scored 14 out of a possible 30, lower than the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for Howard Bank was 6.80 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $7.7 million on total equity of $121.4 million. The bank experienced an annualized return on average assets, or ROA, of 0.70 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.