A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the bank better able to withstand economic shocks. Losses, on the other hand, diminish a bank's ability to do those things.
On Bankrate's earnings test, Litchfield Bancorp scored 2 out of a possible 30, lower than the national average of 15.12.
One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity. Litchfield Bancorp's most recent annualized quarterly return on equity was 0.37 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank earned net income of $73,000 on total equity of $19.3 million. The bank reported an annualized return on average assets, or ROA, of 0.03 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.