How profitable a bank is affects its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the bank better able to withstand economic trouble. Obviously, banks that are losing money are less able to do those things.
Liberty State Bank outperformed the average on Bankrate's earnings test, achieving a score of 26 out of a possible 30.
Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. Liberty State Bank's most recent annualized quarterly return on equity was 17.69 percent, above the national average of 8.10 percent.
The bank earned net income of $1.7 million on total equity of $10.2 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 2.11 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.