A bank's ability to earn money affects its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the bank better able to withstand financial shocks. Conversely, losses take away from a bank's ability to do those things.
Scottsburg Building and Loan Association fell short of the national average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.
One key way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. Scottsburg Building and Loan Association's most recent annualized quarterly return on equity was 2.70 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $336,000 on total equity of $12.5 million. The bank reported an annualized return on average assets, or ROA, of 0.36 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.