How profitable a bank is has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
ITS Bank received below-average marks on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for ITS Bank was 4.87 percent, below the national average of 8.10 percent.
The bank recorded net income of $319,000 on total equity of $6.7 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 4.50 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.