A bank's profitability affects its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, likely making the bank better prepared to withstand financial trouble. Banks that are losing money, however, are less able to do those things.
On Bankrate's earnings test, Denmark State Bank scored 12 out of a possible 30, failing to reach the national average of 15.12.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for Denmark State Bank was 5.37 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $2.6 million on total equity of $48.4 million. The bank had an annualized return on average assets, or ROA, of 0.58 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.