How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
On Bankrate's test of earnings, Bank of Kampsville scored 10 out of a possible 30, less than the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. Bank of Kampsville's most recent annualized quarterly return on equity was 5.01 percent, below the national average of 8.10 percent.
The bank earned net income of $876,000 on total equity of $17.7 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.81 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.