A bank's ability to earn money affects its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or use them to address problematic loans, likely making the bank better prepared to withstand financial trouble. However, banks that are losing money have less ability to do those things.
On Bankrate's earnings test, Dacotah Bank scored 14 out of a possible 30, lower than the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. Dacotah Bank's most recent annualized quarterly return on equity was 6.70 percent, below the national average of 8.10 percent.
The bank recorded net income of $17.3 million on total equity of $263.5 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.74 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.