How profitable a bank is affects its long-term survivability. Earnings may be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial shocks. Banks that are losing money, however, have less ability to do those things.
Bank of Gibson City fell short of the national average on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.
One important way to measure a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. Bank of Gibson City's most recent annualized quarterly return on equity was 6.10 percent, below the national average of 8.10 percent.
The bank earned net income of $580,000 on total equity of $9.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.74 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.