How profitable a bank is affects its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the bank better prepared to withstand economic shocks. Banks that are losing money, however, are less able to do those things.
Bank of DeSoto, National Association outperformed the average on Bankrate's test of earnings, achieving a score of 28 out of a possible 30.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Bank of DeSoto, National Association's most recent annualized quarterly return on equity was 18.53 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $3.7 million on total equity of $20.1 million. The bank experienced an annualized return on average assets, or ROA, of 1.87 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.