How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. However, banks that are losing money are less able to do those things.
On Bankrate's earnings test, Gates Banking and Trust Company scored 18 out of a possible 30, beating the national average of 15.12.
One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. The most recent annualized quarterly return on equity for Gates Banking and Trust Company was 8.55 percent, above the national average of 8.10 percent.
The bank earned net income of $432,000 on total equity of $5.0 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.97 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.