How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, expanding its capital buffer, or use them to address problematic loans, potentially making the bank better prepared to withstand financial shocks. Obviously, banks that are losing money are less able to do those things.
Burton State Bank scored 12 out of a possible 30 on Bankrate's earnings test, below the national average of 15.12.
One key measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. Burton State Bank's most recent annualized quarterly return on equity was 5.62 percent, below the national average of 8.10 percent.
The bank reported net income of $415,000 on total equity of $7.5 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.72 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.