How profitable a bank is affects its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand financial shocks. However, banks that are losing money are less able to do those things.
On Bankrate's earnings test, Guaranty State Bank and Trust Company scored 16 out of a possible 30, beating the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. The most recent annualized quarterly return on equity for Guaranty State Bank and Trust Company was 7.94 percent, below the national average of 8.10 percent.
The bank recorded net income of $2.6 million on total equity of $34.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.94 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.