How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
Damariscotta Bank & Trust Co. scored 8 out of a possible 30 on Bankrate's earnings test, below the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Damariscotta Bank & Trust Co. was 3.61 percent, below the national average of 8.10 percent.
The bank reported net income of $629,000 on total equity of $17.6 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.33 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.