How profitable a bank is has an effect on its long-term survivability. Earnings can be retained by the bank, boosting its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand financial shocks. However, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, Bank of Alapaha scored 18 out of a possible 30, beating out the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. Bank of Alapaha's most recent annualized quarterly return on equity was 9.10 percent, above the national average of 8.10 percent.
The bank earned net income of $1.5 million on total equity of $17.4 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.01 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.