How profitable a bank is affects its long-term survivability. A bank can retain its earnings, increasing its capital cushion, or use them to address problematic loans, potentially making the bank more resilient in tough times. Obviously, banks that are losing money have less ability to do those things.
Andes State Bank beat the national average on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. Andes State Bank's most recent annualized quarterly return on equity was 8.21 percent, below the national average of 9.28 percent.
The bank earned net income of $106,000 on total equity of $2.6 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 0.80 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.