A bank's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the bank, boosting its capital cushion, or be used to address problematic loans, likely making the bank better able to withstand economic shocks. Conversely, losses reduce a bank's ability to do those things.
On Bankrate's test of earnings, State Bank of Herscher scored 4 out of a possible 30, below the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The most recent annualized quarterly return on equity for State Bank of Herscher was 1.61 percent, below the national average of 8.10 percent.
The bank recorded net income of $302,000 on total equity of $18.7 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.21 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.