How profitable a bank is has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.
Kinmundy Bank scored 22 out of a possible 30 on Bankrate's test of earnings, beating the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Kinmundy Bank's most recent annualized quarterly return on equity was 12.78 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $749,000 on total equity of $5.9 million. The bank experienced an annualized return on average assets, or ROA, of 1.62 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.