A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in tough times. Banks that are losing money, however, are less able to do those things.
On Bankrate's earnings test, Northeast Missouri State Bank scored 20 out of a possible 30, beating the national average of 15.12.
Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Northeast Missouri State Bank was 10.48 percent, above the national average of 8.10 percent.
The bank recorded net income of $1.5 million on total equity of $14.7 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.43 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.