A bank's profitability affects its safety and soundness. 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 more resilient in times of trouble. Conversely, losses reduce a bank's ability to do those things.
Guaranty Bank and Trust Company fell short of the national average on Bankrate's test of earnings, achieving a score of 16 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Guaranty Bank and Trust Company's most recent annualized quarterly return on equity was 8.08 percent, below the national average of 9.28 percent.
The bank recorded net income of $1.2 million on total equity of $31.9 million for the twelve months ended June 30, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.95 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.