How profitable a bank is has an effect on its safety and soundness. Earnings may be retained by the bank, increasing its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, reduce a bank's ability to do those things.
Security State Bank underperformed the average on Bankrate's earnings test, achieving a score of 12 out of a possible 30.
One important way to measure a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. Security State Bank's most recent annualized quarterly return on equity was 5.43 percent, below the national average of 8.10 percent.
The bank reported net income of $506,000 on total equity of $9.3 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 0.54 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.