A bank's earnings performance affects its long-term survivability. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic shocks. Losses, on the other hand, lessen a bank's ability to do those things.
The Hopeton State Bank scored 4 out of a possible 30 on Bankrate's test of earnings, less than the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The Hopeton State Bank's most recent annualized quarterly return on equity was 1.61 percent, below the national average of 8.10 percent.
The bank recorded net income of $49,000 on total equity of $2.9 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.18 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.