A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, potentially making the bank better able to withstand financial trouble. Losses, on the other hand, reduce a bank's ability to do those things.
The Baldwin State Bank fell short of the national average on Bankrate's test of earnings, achieving a score of 16 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 the total amount of equity. The Baldwin State Bank's most recent annualized quarterly return on equity was 7.19 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank recorded net income of $276,000 on total equity of $7.9 million. The bank had an annualized return on average assets, or ROA, of 0.76 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.