How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, boosting its capital cushion, 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.
Cleo State Bank fell short of the national average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. The most recent annualized quarterly return on equity for Cleo State Bank was 1.85 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $282,000 on total equity of $14.6 million. The bank reported an annualized return on average assets, or ROA, of 0.31 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.