A bank's earnings performance has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Conversely, losses diminish a bank's ability to do those things.
On Bankrate's test of earnings, The Harvard State Bank scored 14 out of a possible 30, lower than the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. The Harvard State Bank's most recent annualized quarterly return on equity was 6.51 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $1.6 million on total equity of $24.1 million. The bank had 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.