How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand economic shocks. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's earnings test, Byron State Bank scored 18 out of a possible 30, exceeding the national average of 16.52.
One widely used way to measure a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. Byron State Bank's most recent annualized quarterly return on equity was 9.02 percent, below the national average of 9.28 percent.
For the twelve months ended June 30, 2017, the bank reported net income of $255,000 on total equity of $5.8 million. The bank had an annualized return on average assets, or ROA, of 1.14 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and equal to the average for U.S. banks of 1.14 percent.