How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial shocks. However, banks that are losing money are less able to do those things.
On Bankrate's test of earnings, Magnolia Bank, Incorporated scored 24 out of a possible 30, above the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Magnolia Bank, Incorporated was 16.24 percent, above the national average of 8.10 percent.
The bank recorded net income of $3.8 million on total equity of $23.8 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.80 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.