A bank's profitability affects its safety and soundness. Earnings can be retained by the bank, boosting its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand financial shocks. Losses, on the other hand, lessen a bank's ability to do those things.
Kennebec Savings Bank scored 14 out of a possible 30 on Bankrate's earnings test, less than the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. Kennebec Savings Bank's most recent annualized quarterly return on equity was 6.77 percent, below the national average of 8.10 percent.
The bank reported net income of $8.3 million on total equity of $128.6 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.91 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.