How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, likely making the bank better able to withstand economic trouble. Banks that are losing money, however, have less ability to do those things.
On Bankrate's test of earnings, Butte State Bank scored 8 out of a possible 30, less than the national average of 15.12.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The most recent annualized quarterly return on equity for Butte State Bank was 3.58 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $176,000 on total equity of $4.9 million. The bank had an annualized return on average assets, or ROA, of 0.45 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.