A bank's ability to earn money affects its long-term survivability. Earnings can be retained by the bank, boosting its capital buffer, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money are less able to do those things.
Cherokee State Bank scored 20 out of a possible 30 on Bankrate's test of earnings, beating the national average of 15.12.
One key way to measure 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 Cherokee State Bank was 11.57 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $2.7 million on total equity of $23.7 million. The bank had an annualized return on average assets, or ROA, of 1.27 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.