A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, likely making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.
McClave State Bank scored 22 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by total equity, is one important way to measure a bank's earnings. McClave State Bank's most recent annualized quarterly return on equity was 13.10 percent, above the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $580,000 on total equity of $4.7 million. The bank had an annualized return on average assets, or ROA, of 1.51 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.