A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to address problematic loans, likely making the bank better able to withstand economic trouble. However, banks that are losing money are less able to do those things.
Legacy State Bank scored 2 out of a possible 30 on Bankrate's earnings test, less than the national average of 15.12.
One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Legacy State Bank's most recent annualized quarterly return on equity was 0.73 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $35,000 on total equity of $8.7 million. The bank reported an annualized return on average assets, or ROA, of 0.04 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.