A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, potentially making the bank more resilient in times of trouble. Banks that are losing money, however, have less ability to do those things.
Davidson Trust Co. scored 8 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. Davidson Trust Co.'s most recent annualized quarterly return on equity was 3.87 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $200,000 on total equity of $5.4 million. The bank had an annualized return on average assets, or ROA, of 3.05 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.