A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand financial shocks. Conversely, losses lessen a bank's ability to do those things.
Avon State Bank scored 12 out of a possible 30 on Bankrate's test of earnings, below the national average of 16.52.
One widely used way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Avon State Bank's most recent annualized quarterly return on equity was 5.83 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank recorded net income of $421,000 on total equity of $14.6 million. The bank reported an annualized return on average assets, or ROA, of 0.73 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.