A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. Losses, on the other hand, diminish a bank's ability to do those things.
Gruver State Bank underperformed the average on Bankrate's earnings test, achieving a score of 14 out of a possible 30.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. Gruver State Bank's most recent annualized quarterly return on equity was 6.28 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $463,000 on total equity of $7.4 million. The bank reported an annualized return on average assets, or ROA, of 0.66 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.