How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.
The First National Bank of Harveyville fell behind the national average on Bankrate's earnings test, achieving a score of 6 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. The First National Bank of Harveyville's most recent annualized quarterly return on equity was 2.64 percent, below the national average of 8.10 percent.
The bank recorded net income of $37,000 on total equity of $1.4 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.26 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.