A bank's profitability has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand economic trouble. However, banks that are losing money have less ability to do those things.
Bank of Locust Grove outperformed the average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
One important 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 Locust Grove's most recent annualized quarterly return on equity was 9.54 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $396,000 on total equity of $4.3 million. The bank had an annualized return on average assets, or ROA, of 1.24 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.