A bank's profitability affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing 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.
On Bankrate's earnings test, Bank of Dawson scored 16 out of a possible 30, beating the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Bank of Dawson's most recent annualized quarterly return on equity was 7.23 percent, below the national average of 8.10 percent.
The bank earned net income of $1.5 million on total equity of $20.6 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.32 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.