A bank's profitability affects its safety and soundness. Earnings may be retained by the bank, boosting its capital cushion, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
The Hershey State Bank scored 16 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The most recent annualized quarterly return on equity for The Hershey State Bank was 7.97 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $984,000 on total equity of $12.7 million. The bank reported an annualized return on average assets, or ROA, of 1.36 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.