How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic trouble. However, banks that are losing money have less ability to do those things.
Bank of Cherokee County scored 12 out of a possible 30 on Bankrate's test of earnings, below the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Bank of Cherokee County's most recent annualized quarterly return on equity was 5.64 percent, below the national average of 8.10 percent.
The bank earned net income of $514,000 on total equity of $9.3 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.50 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.