How profitable a bank is affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, likely making the bank better able to withstand financial trouble. Obviously, banks that are losing money have less ability to do those things.
Bank of Erath scored 4 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Bank of Erath was 1.36 percent, below the national average of 8.10 percent.
The bank recorded net income of $183,000 on total equity of $13.2 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.18 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.