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 more resilient in tough times. Obviously, banks that are losing money are less able to do those things.
Bank of Walnut Grove scored 12 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 16.52.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Bank of Walnut Grove was 5.82 percent, below the national average of 9.28 percent.
The bank recorded net income of $248,000 on total equity of $8.7 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.84 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.