A bank's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to address problematic loans, potentially making the bank better prepared to withstand financial shocks. Obviously, banks that are losing money are less able to do those things.
The Howard State Bank, Howard, Kansas received below-average marks on Bankrate's earnings test, achieving a score of 14 out of a possible 30.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for The Howard State Bank, Howard, Kansas was 6.66 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $356,000 on total equity of $5.3 million. The bank reported an annualized return on average assets, or ROA, of 0.67 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.