How profitable a bank is affects its safety and soundness. Earnings may be retained by the bank, increasing its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand financial trouble. However, banks that are losing money have less ability to do those things.
Security State Bank exceeded the national average on Bankrate's earnings test, achieving a score of 16 out of a possible 30.
One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by the total amount of equity. Security State Bank's most recent annualized quarterly return on equity was 7.27 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $989,000 on total equity of $13.8 million. The bank reported an annualized return on average assets, or ROA, of 0.90 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.