How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand economic trouble. However, banks that are losing money have less ability to do those things.
Idaho Trust Bank scored 0 out of a possible 30 on Bankrate's earnings test, lower than the national average of 15.12.
One important way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. Idaho Trust Bank's most recent annualized quarterly return on equity was -1.43 percent, below the national average of 8.10 percent.
The bank reported net income of $-254,000 on total equity of $17.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of -0.27 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.