A bank's profitability has an effect on its long-term survivability. Earnings can be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank better prepared to withstand financial trouble. Conversely, losses diminish a bank's ability to do those things.
On Bankrate's earnings test, Security State Bank of Warroad scored 2 out of a possible 30, lower than the national average of 15.12.
Return on equity, calculated by dividing net income (profit, essentially) 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 Security State Bank of Warroad was 0.83 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank reported net income of $143,000 on total equity of $17.5 million. The bank reported an annualized return on average assets, or ROA, of 0.15 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.